Physician Practice Management Gone Wrong - Landmines

We are trial lawyers who defend physicians so why do we care about physician practice management?

Here's why.  We do not set up or recommend physician practice management systems but we DO pick up the pieces when a poor system is in place.  Cutting to the chase.  Your business contracts and structure should be fashioned by an attorney specialist and the PPM staffing and software should be selected by the attorney.  Of course, a lot of our clients inherit a system and there are often, maybe usually problems.   The general scope of PPM is broad. It is billing, scheduling and patient management plus some degree of marketing and client contact.  In real life the PPM system is the entire business side of the practice even if some parts are handled by third party vendors.

PPM failures can lead to employee lawsuits, malpractice actions, audits and sometime even criminal investigations.  Medical board actions are also on the table.

Who is the Boss?

Physician Practice Management has an individual in charge and it is difficult to truly assess the quality of candidates for this position unless you know the person and their history prior to hiring. The position is very “people” oriented and herein lies a danger as reliance on a single individual to run such critical parts of a medical practice is an “eggs in one basket” scenario. We recommend a periodic audit of the work of a PP manager to ensure that there are no recurrent/systematic errors, embezzlement or areas of needed improvement. Also there should be systems in place to allow a seamless replacement of the PP manager if she/he is ill or leaves.

The Software is Also the Boss

PPM software is available from many vendors. Programs include PracticeQ, MedicsPremier, Tebra, RXNT and there are many others. Our experience is that one on one, in the United States support is a key factor in selecting any business management software.  The other critical factor is REPORTS and audits.  You want to sit back, have a glass of wine and get information about your practice. The audit and audit trail feature must be fool proof because you need an expert to conduct regular audits (part of making it "fool proof" is to not do it yourself but use an outside auditor)

My Word is My Bond

In Breaking Bad, Clovis says "my word is my bond" when he wants to be trust and he tows the RV for the first time. Jesse repeats the phrase later to let people know that he is a stand up kind of guy.  While a doctor may not get taken out if he breaks his bond, the doctor may be sued, lose a patient and get bad reviews.  Your PPM software and HR practices often affect and effect whether you are perceived as keeping your word.  In medicine as in many professions, follow up is delegated or based upon reminders.  Patient satisfaction is based upon good results and also positive perceptions.  You are your office and keeping your promises is critical to your success.  

Bonds in the PPM context are a bit different.  While embezzlement is rare, it is not predicted or you would prevent it. We are aware that some practices bond employees but we have not seen that protection in place in any embezzlement case we have handled. A bond is insurance that reimburses the medical offices for losses. If you outsource billing or any financial matter consider asking the provide to post a bond.

Traveler's Insurance talks about bonds in this context.  "For example, an accountable care organization (ACO) contracts with the Centers for Medicare and Medicaid Services (CMS) to provide integrated healthcare services to Medicare patients. Associated doctors, hospitals and other providers agree to perform these services, and any cost over a set benchmark becomes the shared responsibility of the ACO and CMS. A commercial surety bond can be used to guarantee that the ACO will reimburse CMS for their portion of these costs."

What Can Go Wrong Besides Everything?

We get involved in practice management when things go wrong. Sloppy HR can lead to harassment complaints going unaddressed. Physician conduct that is completely innocent may be ignored by a practice manager when the “rules” (to avoid getting set up and sued), required some specific action. Patient communication starts with the very first contact and many MD’s think that because they have such a nice rapport with the patient that all is good. What they don’t know is that the patient had a rough interaction with the receptionist and nothing you do as the MD will fix that irritation. This generally has no longer term negative effect but it might lead to less patient referrals. In outlier cases (and we deal with the outliers), a negative feeling leads to a patient complaint to the medical board, a bad “Yelp” review or even a visit to a malpractice attorney.   

Should you hire a PPM company?

A PPM company is costly but in the best of scenarios it does its job and earns its keep.
Physician Practice Management Companies (PPMs) and Dental Practice Management Companies (DPMs) have become major players in the medical field since the early 1990's.

However, these are purely profit driven entities and you are simply the MD cog in the profit wheel. Staffing decisions and management structures may benefit you as the customer but they are primarily designed to generate profit for the PPM. Many times you share the same interests so their pursuit of profit means that they remain effective, compliant and profitable for you. However beware HR issues where they are afraid to fire someone who deserves to go (maybe needs to go) but they are afraid of a lawsuit. They hire additional staff, keep the deadwood and give you the bill.

Many of these entities have complex management structures that make it very difficult for the MD to audit. Beware too, the buyout scenario where your practice is acquired with the sale of goodwill that prevents you from competing should the arrangement not work out.

Still a good 3rd party is often better than a bad do it yourself.  Put differently, I will fix my irrigation system myself but I won't do electrical wiring.  Somehow, this applies to office management for doctors. 

You should call Daniel Horowitz "the Dr. Advocate" and his physician law team if your PPM or HR situation is “a mess”. If you have been sued, cheated or have lost control of your practice, we can help.