Mar 2006 Table of Contents

PRACTICE PEARLS



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Fam Pract Manag. 2006 Mar;13(3):81-82.

Create a coding resource guide

Have you and your staff ever had a coding question and wondered, “Where do we go for help?” A coding resource guide can help you, your office staff and fellow physicians find answers to frequently asked coding questions.

To put together a coding resource guide, have one of your staff members hunt down crucial coding resources and store them in one location where they can be accessed easily. For example, you’ll probably want to include a copy of either the 1995 or 1997 Documentation Guidelines for Evaluation and Management Services, which you can download at http://cms.hhs.gov/Medlearn-Products/20_DocGuide.asp. You should also have up-to-date editions of the Current Procedural Technology (CPT) manual, the ICD-9 manual and the HCPCS manual. Other helpful resources might include a medical dictionary, Medicaid and Medicare Part-B provider manuals, and any coding templates or policies that your practice has developed.

Source: How to create a master resource guide to improve your coding results. Conomikes Reports. December 2005/January 2006:1–2.

 

Benchmark for success

How do you know whether your practice is succeeding? A good way to find out is to set benchmarks for your practice, measure your performance on a regular basis and track those measures over time. For example, you may set a goal of achieving a 95-percent satisfaction rate among your employees. With an annual employee survey, you can determine if your practice is meeting its goal.

You should also set goals related to patient satisfaction, revenues and patient retention. Don’t hesitate to adjust your goals if needed so they remain relevant to your practice, reasonable and achievable.

Source: Brand-new world: medical marketing the business way. MGMA Connexion. January 2006:40–43.

 

Allot salaries and distributions correctly

Q

My group practice of five family physicians formed as an S corporation in which all of the five physicians have equal shares. Our salaries are based on productivity, and our distributions are divided equally. Since we are taxed less on our distributions, would it be possible to pay ourselves smaller salaries and larger distributions? Also, what should we do if one of us decides to work part-time?

A

While shifting more of your income to distributions sounds appealing, it could get you in trouble with the Internal Revenue Service (IRS). As you alluded to, S corporations are not subject to federal corporate income tax, so they don’t need to show zero income at the end of the year to avoid paying corporate taxes. Instead, practice profits flow to the physician shareholders and are taxed on their personal returns. The physician shareholders pay income taxes and payroll taxes on their salaries, but they pay only income taxes – not payroll taxes – on the practice’s profits.

The opportunity to avoid payroll taxes using an S corporation can be significant, so shareholders learned early to pay a small salary and a large distribution. It didn’t take the IRS long to catch this trick, so the IRS now looks for what it calls “reasonable compensation.” The IRS wants to see a salary commensurate with duties. The best way to prove reasonable compensation is to look at the average compensation for family physicians, which is between $123,000 and $169,000, depending on what part of the country you live in, according to data from the AAFP (http://www.aafp.org/careers/hunting/salaries.html). You could subject yourself to penalties and interest if you report a salary less than the average and you show large amounts of distributions. The IRS has promised more aggressive auditing in this area.

Distributions to S corporation shareholders must be equal to their ownership stake, therefore it would make sense for a physician who moves to part-time to surrender some of his or her shares. For example, if the physician works 50-percent time, the corporation should repurchase 50 percent of the physician’s stock.

Source: Michael Arnow, CPA, CFP, Glendale, Wis.

 

Promote professionalism

Defining professionalism in your practice is an important step in preventing inappropriate conduct. Have your practice’s physicians and office staff work together to determine what behaviors they define as professional. Here are a few examples:

  • Give and accept feedback gracefully;

  • When someone does good work, acknowledge it;

  • Apologize when you make a mistake;

  • Give thoughtful suggestions that build on the ideas of others;

  • If you disagree with an idea, make sure your argument is well-reasoned.

Source: Promote group culture by creating a physician compact. Group Practice Solutions. December 2005:6.

 

Reduce your malpractice risk

When you see a patient with a particularly troubling problem or an unclear diagnosis (e.g., abdominal pain or an unexplained fever in a child), consider calling the patient later that day or the next day to follow up on the situation. Most patients will be surprised and pleased that you took the time to check on them. Not only will this strengthen the bond you have with your patients, but it also will alert you early on if the patient is not doing well or needs further work-up, thus reducing your risk of malpractice.

Source: Gretchen H. Johnson, MD, Simpsonville, S.C.

 

HELP US HELP YOU

Practice Pearls presents the best advice on effective, efficient practice operations and patient care drawn from the medical and business literature, along with tips developed from your experience. Send us your best pearl (250 words or fewer), and if we publish it, you’ll earn $25. We also welcome questions for our Q&A section. Send your pearls and your questions to us at fpmedit@aafp.org.

WE WANT TO HEAR FROM YOU

Practice Pearls presents readers' advice on practice operations and patient care, along with tips drawn from the literature. Send us your best pearl (250 words of less), and you'll earn $25 if we publish it. We also welcome questions for our Q&A section. Send pearls, questions, and comments to fpmedit@aafp.org, or add your comments below.


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