Fam Pract Manag. 2006 Feb;13(2):78-79.

Allocate overhead fairly


My group of eight family physicians is considering changing our current approach to sharing overhead expenses to make the allocation fairer. Our system has been in place since the inception of the practice when there were only three physicians in our group.

Currently, each physician keeps track of his or her hours spent seeing patients, and we figure each physician's percentage of total hours for the practice. The physician's percentage of total patient hours determines the percentage of total overhead for which the physician is responsible. This allows us to account for both part-time physicians and those who take more time with patients.

We are considering modifying this system to one where partners would be grouped into brackets, such as “full time,” “part time” and perhaps “super part time.” Physicians would pay a fixed percentage of expenses based on the bracket in which they fit. Is this a fair way to accommodate part-time partners?


Allocating overhead is one of the stickiest issues facing a group practice. Unfortunately, there is no perfect answer. Using a designation of “part time” and “super part time” is on the right track. However, you may need to take a different approach for different types of expenses. There are three categories: fixed, variable and physician-specific expenses.

Fixed expenses don't change, no matter how many patients the physician sees. Occupancy costs are one example of a fixed expense.

Variable expenses are those that change when productivity changes (e.g., staff salaries and supplies). In your setting, using hours spent seeing patients to allocate variable expenses works adequately. You could also use relative value units or procedures billed if this information is readily available from your computer system.

The final type of expense needing allocation is specific to the individual physician (e.g., CME, cell phone, auto reimbursement, travel and entertainment). Others should not have to share in these expenses.

One of the more complicated decisions your group will have to make is how to allocate malpractice premium expenses. The fairest approach is often to allocate these expenses directly to each physician, especially when individual rates vary significantly, or, in a practice with full-time and part-time physicians, when the part-time physicians' rates are nearly as high as their full-time colleagues' rates.

Allocating expenses as I've described involves a fair amount of number crunching, but it is fairer than sharing expenses equally or allocating them on the basis of productivity alone.

Streamline the Rx refill process

To help your patients get the prescription drug refills they need without disrupting your practice and tying up your phone lines, follow this approach:

  1. Instruct patients to call the pharmacy directly when they need a prescription refill.

  2. Encourage pharmacies to contact you by fax with refill requests.

  3. Consider whether your nurse or medical assistant is capable of approving refills for certain types of drugs.

  4. Let the pharmacy inform the patient when the refill is ready.

  5. Document the patient's refill as soon as the decision is made. The longer you wait, the more likely you are to forget to update the patient's record.

Source: Ferrell CW, Aspy CB, Mold JW. Management of prescription refills in primary care: an Oklahoma Physicians Resource/Research Network (OKPRN) study. J Am Board Fam Med. January-February 2006:31-38.


Make better decisions by improving your meetings

Good decisions are often the result of rich and honest dialogue among members of a group. To improve the dialogue that takes place at your meetings, take the following steps:

  • State up front, and repeat as needed, the purpose of the meeting. This will keep everyone focused on the issue at hand and not on their own views and self-interests.

  • Draw out the opinions of each person attending the meeting so you can be sure you have viewed the issue from all sides.

  • Make sure the important players are present for the discussion.

  • If information is missing, postpone the meeting until everything has been gathered. You don't want relevant information to show up after the decision has been made.

  • Follow through by making sure everyone knows what they need to do as a result of the meeting, how they will do it and by when. Write it down if needed.

Source: Charan R. Conquering a culture of indecision. Harvard Business Review. January 2006:108-117.


Do your homework before offering online consults

More and more health plans are beginning to pay physicians for online consultations with their patients. Before you dive into the world of e-visits, you may want to square away a few things.

  • Make sure you know what online services are reimbursable. For example, some payers will not pay for an e-visit that does not include clinical advice, such as a prescription refill or scheduling an appointment.

  • Make sure you aren't losing revenue by swapping e-visits (which pay around $25) with office visits (which run around $75). You should number crunch how many office visits you'll lose to e-visits, if any.

  • Check with your malpractice insurance carrier before you begin offering online consults to see whether it will affect your coverage. The carrier may even be able to offer risk-management advice.

  • Don't forget about the Health Insurance Portability and Accountability Act. Use a secure Web-based system that encrypts all correspondence.

  • Keep records of all your online correspondence with patients.

Source: More payers reimburse online consults as they pick up steam. Private Payer News newsletter. December 2005:1-3.


Go to the right source for help with Medicare reimbursement questions

To find out if Medicare reimburses for a particular service, contact your local Medicare contractor's call center and request to speak to a Provider Relations Research Specialist. They are required to answer your question, in writing, within 10 to 45 business days.

This customer service program, which began Jan. 1, 2005, was mandated by the Medicare Modernization Act of 2003 to ensure that physicians receive accurate and timely responses to their Medicare questions.

Provider Relations Research Specialists are experienced in Medicare policies and work with certified coders to answer your questions.

To find the phone number of the call center in your area, view the online directory at

Source: Centers for Medicare & Medicaid Services;



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 less), 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


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 $50 if we publish it. We also welcome questions for our Q&A section. Send pearls, questions, and comments to, or add your comments below.


Copyright © 2006 by the American Academy of Family Physicians.
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