Oct 2003 Table of Contents

ASK FPM

Fam Pract Manag. 2003 Oct;10(9):72.

The questions and answers featured in this installment of Ask FPM address subjects we tend to get asked about again and again. Each item was previously published in FPM.

Considering ultrasound?

Q

What are the pros and cons of doing ultrasound in my office?

A

Any relatively easy diagnostic procedure that can be safely performed in the office, especially ultrasound, can have a positive financial effect on a practice. However, there are a few things to consider before deciding whether ultrasound will be a worthwhile addition to your practice.

How often will you be reimbursed for the procedure? If you contract with a lot of managed care plans, you’ll need to check each contract to determine whether you can even be reimbursed for this procedure. You can be reimbursed under Medicare and Medicaid for performing ultrasounds, but reimbursement is lower.

How many of your patients might need the service? Patients with diabetes, vascular disease, heart conditions and others can benefit from ultrasound. If you think you’ll use the equipment (and be reimbursed) at least 10 times per month, it’s probably worth your investment. Of course, you’ll also need to ensure that you’ll be performing ultrasounds frequently enough to maintain your skills.

How will your staffing be affected? A trained medical assistant can extend physician time by performing the procedure, leaving only the reading of the ultrasound to the physician. Keep in mind that if someone else reads the ultrasound, you won’t be reimbursed for the professional component of the procedure (usually about 35 percent to 40 percent of collections). There are courses available that can train you to read and perform ultrasounds.

How much will the equipment cost? Over the last 10 years, ultrasound prices have dropped dramatically, and quality, used, color-enhanced machines are now available for between $15,000 and $50,000. Don’t be afraid to finance the ultrasound over time, if necessary.

Problem patient

Q

We recently discharged a patient from our practice who had been abusing her medication and calling in her own prescriptions. Her new physician has now requested her medical records from us. Should I explain to the physician that the patient is a drug abuser, or does that put me into a legal situation?

A

It’s not advisable to call the other physician to warn him or her that the patient is a “drug abuser.” If the patient found out, it’s possible that a slander or libel claim could be filed, because the term could be construed as a subjective assessment with damaging personal consequences. It’s important for the physician and staff to document noncompliant patient behavior in the medical record without using subjective labels. Instead, place in quotations exactly what the patient said; for example: “7/11/99 – Patient stated ‘her dog chewed up the prescription and she needed another Rx for Vicodin.’ Informed patient that doctor denied an additional prescription. Patient advised of risks of overuse of pain medication.”

If you have documented previous behavior in the chart as described above, included factual evidence from the pharmacist that shows the patient tried to call in her own prescription, and if there’s a copy of the letter of withdrawal in the patient’s record that clearly states the reason for discharging her from your practice, the new physician should be able to easily discern the patient’s behavior. This physician can then decide whether to accept and treat the patient. Factual rather than subjective chart documentation is more defensible in the event of a liability claim.

Practice valuation

Q

One of our residents is considering buying into a practice. How do you determine the value of a practice?

A

When you buy a practice, you have to pay your share of the current value of the furniture and equipment, accounts receivable (adjusted according to the practice’s historical collection rate), goodwill and other assets. From these amounts, you then deduct your share of any loans and other liabilities to determine the value of the practice.

Goodwill (intangible asset value) is the hardest value to calculate, and fewer practices are charging for it these days. To determine whether you should pay for goodwill, look at the potential earnings in the practice. For example, if the average family physician earns $135,000 in the community and the average doctor in the practice earns only $125,000, you shouldn’t pay for goodwill. On the other hand, if the average doctor in the practice earns $145,000, you should be willing to pay extra for this higher earning potential. Generally, the value of goodwill should be three to four times the excess earnings. In this example, it would be $30,000 to $40,000 (i.e., [$145,000 – $135,000] x 3 or 4).

Once you’ve prepared an offer, meet with an accountant or lawyer with expertise in medical practice management to determine whether the offer is reasonable and fair. Practice valuation specialists can also determine an accurate practice value for you, but this service can cost from $3,000 to $5,000.


* Denotes member of FP Assist, the AAFP’s online clearinghouse for consultants and attorneys.

Copyright © 2003 by the American Academy of Family Physicians.
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