Term Paper on "Medical Office Financial Policy"

Term Paper 5 pages (1802 words) Sources: 5

[EXCERPT] . . . .

Medical Office Financial Policy

Over the last several years, rising health care costs are having a dramatic impact on private practicing physicians. What has been taking place; is many young doctors are no long willing to: become partners in or open a private practice. While, many existing practices are seeing their partners selling their shares or they are closing down completely. The reason why is has been occurring, is because rising costs have been making it more difficult for these kinds of business to operate. As, they have to wrestle with not only price increase from whole sellers, but a variety of insurance companies and government programs (such as Medicare / Medicaid) that are cutting back on their fee structure. This is problematic, because these kinds of concerns mean that more doctors are: leaving private practice and they are taking salaried positions at health care organizations. Evidence of this can be seen with figures that were compiled by the Medical Group Management Association. They found that between 2005 and 2010, there was a decline of over 50% in the number of doctors who are in private practice. ("More Doctors Giving Up Private Practice," 2010) This is significant, because it highlighting the challenges that all health care organizations are facing.

In the case of the medical office that we examining they need to focus on these issues. This is because, the practice has been around for several years and they are starting to feel the effects of rising costs in addition lower profits. To help the business adjust to these challenges requires creating a policy that will: address the financial / operational challenges and analyze how this will have a positive impact on the facility. Once this occurs, it will provide the greatest insights as to how private practices can adapt to the changes that are occurring inside the industry.

Part A: Financial and Operational Challenges

The most pressing issues facing many private practices are a lack of accountability. This is because many of these kinds of clinics are often inundated with paperwork, in trying to keep up the various regulations and laws (such as: HIPPA). This is problematic, because it means that efficiency is decreasing, which will causes associated costs to increase dramatically. To effectively deal with these issues, the policy defines what procedures the business will be using going forward. (Zuelke, 1989, pp. 35 -- 89)

Collection of copayments, deductibles, and past-due balances

The collection of copayments, deductibles and past due balances will be taken care of by a third party medical billing provider. The reason why this choice was selected is because they can do the same kind of work at lower costs. At the same time, they have experience in dealing with a host of billing related issues ranging from: Medicare / Medicaid to a wide variety of private insurance plans. This will help to increase the profit margins and productivity. (Zuelke, 1989, pp. 35 -- 89) (Quaddiami, 2002)

Arrangements for handling of unpaid balances

The handling of unpaid balances will be the responsibility of the third party billing provider. However, if after 60 days the bill is continuing to remain unpaid, it will be turned over to a collect agent. They will report the matter to the major credit bureaus and with different health care organizations. In the event that someone is seeking some kind of treatment and they have not paid their past due balance; they will be required to bring their bill current before receiving additional services. This will help to mitigate the possible losses that the clinic is experiencing from delinquent accounts. (Zuelke, 1989, pp. 35 -- 89) (Quaddiami, 2002)

Handling of payments for non-covered services

In the beginning of the process, the payment for non-covered services will be handled by the third party billing providers. They will work with individuals to create some kind of payment plan with them. The basic idea is to create an affordable way to pay for non-covered services without, hurting the long-term relationship with the patient. In the event that they begin to miss their payments or do not follow the agreement, the matter will be referred to the collection agency after 60 days. (Zuelke, 1989, pp. 35 -- 89) (Quaddiami, 2002)

Prepayment policies

The prepayment policy will offer patients large discounts for paying their fees upfront. In this case, we will offer a 20% discount on all services that are prepaid. This will be distributed to everyone in brochure that will be available at the receptionists' desk. There will also be a sign that will clearly state the benefits of the prepayment policy. (Zuelke, 1989, pp. 35 -- 89)

Policies for accepting cash, checks, money orders, and credit or debit cards

Cash, checks, money orders and all major credit / debit cards will be accepted. The policy for all checks is: they will be deposited within one business day of receiving them and they will not be credited to the bill until they have cleared the bank. This will reduce the chance of receiving fraudulent checks and those with insufficient funds. Money orders will be accepted; however they will be subject to similar policy as checks. The reason why is because of possible fraudulent money orders. (Zuelke, 1989, pp. 35 -- 89) The use of credit / debit cards will be outsourced to a third party vendor that will provide real time approval / disapproval data and equipment.

Arrangements for sliding scales and low income payments

On Saturday's the clinic will open to low income families for large discounts in the services that they are receiving. This will take place, by offering a reduction of 50% on all services including those supported by Medicaid. To keep costs low, the clinic could have interns and residents working with patients during these days. At the same time, they could partner with charities and other non-profits on these days. (Zuelke, 1989, pp. 35 -- 89)

Other pertinent policies you see fit to include based on your research

Other pertinent policies are that patients' will be able to receive special discounts (based on the number of services that they are using). Where, a card could be provided to everyone offering them a discount on every tenth visit. This will help to increase the demand for services and it will allow the clinic be able to stand out in the minds of consumers. Once this takes place, it means that the kinds of services they are receiving will increase. This is because, a unique approach is being taken in the policy that is not provided by other health care providers. (Zuelke, 1989, pp. 35 -- 89)

These different policies are significant, because they will increase accountability for the services that being received. While at the same time, this approach is concerned about reducing the underlying costs as much as possible. Over the course of time, this will have a positive impact on the health organization. When you put these elements together, this will help the clinic be able to increase productivity and focus on the quality care that is being provided.

Part B: How this will have a positive impact on the facility?

Why you believe your policy is best suited to your selected type of medical office setting.

The reason why this policy is best suited for this kind of medial office; is because it is directly going after two of the main reasons why so many private clinics are having trouble (inefficiency and high costs). These factors are problematic, because they can eat away at the underlying financial foundation of the facility. This policy would work effectively, because it is outsourcing the most bureaucratic elements of the practice to third parties. This will keep the clinic in compliance with the law and it will create a system, for accounting for all outstanding balances. The collection agent will ensure that the losses from unpaid bills are mitigated as much as possible. At the same time, this is taking an approach that will offer large discounts and flexible payment plans to patients. These elements are important, because they will provide customers with a wide variety of options for paying their medical expenses. This is the key in maximizing the profits and mitigating the effects from the losses on unpaid services. (Lohr, 2010)

At the same time, the policy will be able to address certain aspects that are common problems in: the community and within the industry. Most notably: rising costs and offering health care services to low income families. Our strategy will address these challenges by forming a partnership with the nonprofits, to offer a variety of services to these people on Saturdays. Where, a sharp discount of 50% will be provided and more staff will be available through residents / interns. This is significant, because this kind of approach could be utilized to provide services to various aspects of the community. Over the course of time, this would improve the image of the practice in the area and it will… READ MORE

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