Mar 2004 Table of Contents

ASK FPM

Fam Pract Manag. 2004 Mar;11(3):86-89.

Equipment leases

Q

I would like to sign an equipment lease that I could pay off early without penalties if I choose. However, I have heard that some leases claiming to have “no prepayment penalty” actually do penalize if you attempt to pay them off early. What should I do?

A

Equipment leases can be very complicated, and doctors often confuse them with loans since both are a form of financing. For example, if you enter into a 60-month lease for a piece of equipment with monthly payments of $500, your obligation would total $30,000. The tricky part about leases is that there is no clear breakdown between the principal and interest on the obligation. In a loan, you know how much principal you borrowed and how much interest you will be charged. In a lease, however, you’re obligated to pay the full amount, period. There is no discount given for completing the payments before the term ends, but there is no penalty assessed for paying it off earlier.

If you anticipate paying off a lease before the end of its term, try to negotiate a provision up front that would provide you with specified discounts at specified times during the lease term. Or, to avoid this dilemma, borrow the money on a loan where you can truly prepay without penalty.

Answering machine messages

Q

Does the Health Insurance Portability and Accountability Act (HIPAA) permit our office to call a patient about an appointment and, if the patient is not home, leave a brief message on the answering machine? Also, is it appropriate to leave messages concerning health-related information if someone other than the patient (e.g., a spouse or co-worker) may hear the message?

A

The Office of Civil Rights, which is responsible for enforcing the HIPAA regulations, confirms that it is permissible for physicians’ offices to call and leave messages for patients regarding their appointments. However, physicians must still be mindful of the sensitivity of the information.

A simple appointment reminder will not raise problems, but leaving messages containing health care information on answering machines is not a good idea. Even if a patient’s test results are normal, it is not advisable to leave such information on an unprotected voice mail system or answering machine. If you are certain the patient lives alone or that the risk of others hearing the message is not great, you could obtain the patient’s written consent (or verbal consent documented in the medical record) that he or she is comfortable with your office leaving messages in this way.

Setting up your charges

Q

I have signed a PPO contract with an insurance company, but I do not have a list that shows what they’ll reimburse me for each CPT code. Can I charge patients the difference between my charge and what their insurance company pays me or must I write off the difference?

A

You typically have to write off the difference as a condition of being listed as a preferred provider. To minimize your losses, you should focus on getting the insurance company’s full allowable for each CPT code. If the insurer won’t provide you this information, review your explanation of benefits (EOBs). If you are receiving the full amount you charge for your services, you may not be charging as much as the insurance company allows. If the allowable is $50 and you charge $40, they will only pay you $40. We set a fee schedule for our practice using our highest paying plan’s allowable as the standard and add a set percentage to it based on fees in our region. This allows us to provide a discount to well-defined populations without violating the Centers for Medicare & Medicaid Services rules and still maintain good reimbursement levels.

Waiting room entertainment

Q

I am looking for new approaches to make our waiting room more pleasant for our patients. What do you suggest?

A

The most important step is to think carefully about what might appeal to your patients based on your awareness of their interests and personalities. Once you do this, you’ll find several possibilities. First, there are many ways to use televisions in your waiting area. Health education videos are available on a variety of topics. These can focus on prevention, nutrition, exercise, smoking cessation or common conditions such as asthma, diabetes and hypertension. Some practices have a TV nook where educational videos are available for patients to choose to view. Nature programs, music and art videos may also be relaxing and interesting.

The major alternative to television is radio, but, as with television, it is difficult to choose a station that will please everyone. Commercial messages often are jarring and unpleasant. Some practices have a CD player and ask staff members to bring in their favorite discs. Consider placing the CD cover at the front desk, identifying the staff member who chose the music. This may give the patients something to talk about when they encounter the staff member who selected the music, and it gives the staff a sense of ownership of the office environment.

Magazines are another option for entertainment, but it is important to monitor their condition and dates. Make sure to offer a wide variety. Other options include jigsaw puzzles, crossword-puzzle books and coffee-table books with interesting topics. Finally, consider a small lending library with books on nutrition, exercise, poetry, self-help or other topics that apply to your patient population. Of course none of these ideas should overshadow the best solution, which is to try not to keep patients waiting at all.

Business associate agreements

Q

One of our local physician organizations says that to comply with the Health Insurance Portability and Accountability Act (HIPAA), we should ask drug reps to sign business associate agreements. I contend that since we do not transact business directly with drug reps and we do not release protected health information to them, it is not necessary. What do you think?

A

This will depend on the specifics of the situation. In a business associate relationship, the business associate performs a function on behalf of the covered entity that requires the use or disclosure of health information. Most interactions with drug reps don’t meet these standards since the reps are not usually performing a function on behalf of the physician. However, if the rep is talking with you about the use of a drug for a specific patient and the interchange involves patient health information, a business associate agreement could be necessary.

Adding radiology to your practice

Q

What economic factors should I consider before adding radiology services such as mammography or X-rays to my practice?

A

Radiology can be profitable if you meet volume requirements. As with any new service and capital outlay, you will first need to gather cost data and project revenues, which can be a difficult process that is easily miscalculated. Don’t count on outside referrals to support your practice’s radiology service. In fact, you should expect wide referral variations within your own group. Not all physicians will put forth the time and effort to make sure that patients who need the service get it from your practice.

The number of physicians needed to make the service cost-effective depends on a number of factors. In general, though, plain film studies should not be considered for economic benefit unless the practice has at least four full-time physicians and other health care providers. Mammography can be considered after the base of physicians and other providers exceeds 10.

You should also be prepared to implement several new processes when you set up radiology. Plain film studies will raise the operational complexities of the practice somewhat, while mammography will raise the complexities more significantly. There are four main areas you will need to concentrate on:

  • Reimbursement. Third-party reimbursement will need to be aggressively negotiated, as many standard payer rates are below the cost of providing the service. If you receive capitation reimbursement, you will need to negotiate a carve-out for your radiology services.

  • Radiologists. You will need to find and contract with a radiologist to read your studies.

  • Regulations. Mammography, in particular, requires compliance with the FDA and accreditation by the American College of Radiology. This involves strict implementation of quality standards as well as tracking, follow-up and recall protocols.

  • Staffing. Licensure of mammography technicians is required by federal law. The qualifications necessary for doing plain film studies depend on state law. In either case, managing technical staff is quite different than lay staff, and, in most areas, radiology technicians are in short supply. Salaries can be quite large, so realistic budgeting and efficient utilization are crucial.

Copyright © 2004 by the American Academy of Family Physicians.
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