Joseph S. Eastern

It goes without saying that, as a physician, it’s essential to keep your knowledge and skills current. But too many private practitioners overlook the similar needs of their employees.

Continuing education is as important for your staff as for you. Like you, staff members provide better care to patients when they know the latest findings and techniques. They also provide better information: When patients ask questions of your staff, either in the office or over the phone (which happens more often than you probably think), you certainly want their answers to be accurate and up to date.

There are lots of other good reasons to invest in ongoing staff training. It’s a win-win strategy for you, your staff, and for your practice.

The more your employees know, the more productive they will be. Not only will they complete everyday duties more efficiently, they will be stimulated to learn new tasks and accept more responsibility.

Staffers who have learned new skills are more willing to take on new challenges. And the better their skills and the greater their confidence, the less supervision they need from you and the more they become involved in their work.

They also will be happier in their jobs. Investing in your employees’ competence makes them feel valued and appreciated. This leads to reduced turnover, which is often enough to pay for the training.

You probably already do some ongoing education: You do your yearly OSHA training because the law requires it, you run HIPAA updates as necessary (more on those two next month), and you have everyone recertified periodically in basic or advanced CPR (or you should). I’m talking about going beyond the basic stuff, which may satisfy legal requirements but does not motivate your people to loftier goals.

An obvious example is sending your insurance people annually to coding and insurance processing courses – or at the very least, on-line refreshers – so they are always current on the latest third-party changes. The use of outdated or obsolete codes can cost you thousands of dollars every month. Other opportunities include keyboarding and computer courses for staff who work with your computers, and Excel and QuickBooks updates for your bookkeepers.

Continuing education does not have to be costly, and in some cases it can be free. For example, pharmaceutical representatives will be happy to run an in-service for your staff on a new medication or procedure or instrument, or to refresh their memories on an established one. Be sure to make clear to the rep that the presentation must be as objective and impartial as possible, given the obvious potential conflicts of interest involved.

Your office manager should join the Association of Dermatology Administrators & Managers (ADAM). It holds annual meetings at the same time and place as the American Academy of Dermatology winter meetings, with a good selection of refresher courses and lots of opportunities for networking with other managers, either personally or virtually.

Many other venues are available for employee education, either in the cloud and in conventional classrooms. Courses are offered in many relevant subjects – a quick Google search turns up an eclectic mix, including medical terminology, recordkeeping and accounting, laboratory skills, diagnostic tests and procedures, pharmacology and medication administration, patient relations, medical law and ethics, and many others.

By far the most common question I receive on this issue is this: "What if I pay for all that training and the employees leave?" My invariable answer is this: "What if you don’t, and they stay?"

Well-trained employees are vastly preferable to untrained ones, even with the small risk of the occasional staffer who accepts training and then moves on. But in 31 years, it has never happened in my office. In my experience, well-trained employees will stay. Education fosters loyalty. Employees who know that you care enough about them to advance their skills will sense that they have a stake in the practice, and thus will be less likely to want to leave. Furthermore, continuing education will always be cheaper than training new employees from scratch.

In any case, everyone will benefit from a well-trained staff: you, your employees, your practice, and – most importantly – your patients.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. 

It goes without saying that, as a physician, it’s essential to keep your knowledge and skills current. But too many private practitioners overlook the similar needs of their employees.

Continuing education is as important for your staff as for you. Like you, staff members provide better care to patients when they know the latest findings and techniques. They also provide better information: When patients ask questions of your staff, either in the office or over the phone (which happens more often than you probably think), you certainly want their answers to be accurate and up to date.

There are lots of other good reasons to invest in ongoing staff training. It’s a win-win strategy for you, your staff, and for your practice.

The more your employees know, the more productive they will be. Not only will they complete everyday duties more efficiently, they will be stimulated to learn new tasks and accept more responsibility.

Staffers who have learned new skills are more willing to take on new challenges. And the better their skills and the greater their confidence, the less supervision they need from you and the more they become involved in their work.

They also will be happier in their jobs. Investing in your employees’ competence makes them feel valued and appreciated. This leads to reduced turnover, which is often enough to pay for the training.

You probably already do some ongoing education: You do your yearly OSHA training because the law requires it, you run HIPAA updates as necessary (more on those two next month), and you have everyone recertified periodically in basic or advanced CPR (or you should). I’m talking about going beyond the basic stuff, which may satisfy legal requirements but does not motivate your people to loftier goals.

An obvious example is sending your insurance people annually to coding and insurance processing courses – or at the very least, on-line refreshers – so they are always current on the latest third-party changes. The use of outdated or obsolete codes can cost you thousands of dollars every month. Other opportunities include keyboarding and computer courses for staff who work with your computers, and Excel and QuickBooks updates for your bookkeepers.

Continuing education does not have to be costly, and in some cases it can be free. For example, pharmaceutical representatives will be happy to run an in-service for your staff on a new medication or procedure or instrument, or to refresh their memories on an established one. Be sure to make clear to the rep that the presentation must be as objective and impartial as possible, given the obvious potential conflicts of interest involved.

Your office manager should join the Association of Dermatology Administrators & Managers (ADAM). It holds annual meetings at the same time and place as the American Academy of Dermatology winter meetings, with a good selection of refresher courses and lots of opportunities for networking with other managers, either personally or virtually.

Many other venues are available for employee education, either in the cloud and in conventional classrooms. Courses are offered in many relevant subjects – a quick Google search turns up an eclectic mix, including medical terminology, recordkeeping and accounting, laboratory skills, diagnostic tests and procedures, pharmacology and medication administration, patient relations, medical law and ethics, and many others.

By far the most common question I receive on this issue is this: "What if I pay for all that training and the employees leave?" My invariable answer is this: "What if you don’t, and they stay?"

Well-trained employees are vastly preferable to untrained ones, even with the small risk of the occasional staffer who accepts training and then moves on. But in 31 years, it has never happened in my office. In my experience, well-trained employees will stay. Education fosters loyalty. Employees who know that you care enough about them to advance their skills will sense that they have a stake in the practice, and thus will be less likely to want to leave. Furthermore, continuing education will always be cheaper than training new employees from scratch.

In any case, everyone will benefit from a well-trained staff: you, your employees, your practice, and – most importantly – your patients.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. 

It goes without saying that, as a physician, it’s essential to keep your knowledge and skills current. But too many private practitioners overlook the similar needs of their employees.

Continuing education is as important for your staff as for you. Like you, staff members provide better care to patients when they know the latest findings and techniques. They also provide better information: When patients ask questions of your staff, either in the office or over the phone (which happens more often than you probably think), you certainly want their answers to be accurate and up to date.

There are lots of other good reasons to invest in ongoing staff training. It’s a win-win strategy for you, your staff, and for your practice.

The more your employees know, the more productive they will be. Not only will they complete everyday duties more efficiently, they will be stimulated to learn new tasks and accept more responsibility.

Staffers who have learned new skills are more willing to take on new challenges. And the better their skills and the greater their confidence, the less supervision they need from you and the more they become involved in their work.

They also will be happier in their jobs. Investing in your employees’ competence makes them feel valued and appreciated. This leads to reduced turnover, which is often enough to pay for the training.

You probably already do some ongoing education: You do your yearly OSHA training because the law requires it, you run HIPAA updates as necessary (more on those two next month), and you have everyone recertified periodically in basic or advanced CPR (or you should). I’m talking about going beyond the basic stuff, which may satisfy legal requirements but does not motivate your people to loftier goals.

An obvious example is sending your insurance people annually to coding and insurance processing courses – or at the very least, on-line refreshers – so they are always current on the latest third-party changes. The use of outdated or obsolete codes can cost you thousands of dollars every month. Other opportunities include keyboarding and computer courses for staff who work with your computers, and Excel and QuickBooks updates for your bookkeepers.

Continuing education does not have to be costly, and in some cases it can be free. For example, pharmaceutical representatives will be happy to run an in-service for your staff on a new medication or procedure or instrument, or to refresh their memories on an established one. Be sure to make clear to the rep that the presentation must be as objective and impartial as possible, given the obvious potential conflicts of interest involved.

Your office manager should join the Association of Dermatology Administrators & Managers (ADAM). It holds annual meetings at the same time and place as the American Academy of Dermatology winter meetings, with a good selection of refresher courses and lots of opportunities for networking with other managers, either personally or virtually.

Many other venues are available for employee education, either in the cloud and in conventional classrooms. Courses are offered in many relevant subjects – a quick Google search turns up an eclectic mix, including medical terminology, recordkeeping and accounting, laboratory skills, diagnostic tests and procedures, pharmacology and medication administration, patient relations, medical law and ethics, and many others.

By far the most common question I receive on this issue is this: "What if I pay for all that training and the employees leave?" My invariable answer is this: "What if you don’t, and they stay?"

Well-trained employees are vastly preferable to untrained ones, even with the small risk of the occasional staffer who accepts training and then moves on. But in 31 years, it has never happened in my office. In my experience, well-trained employees will stay. Education fosters loyalty. Employees who know that you care enough about them to advance their skills will sense that they have a stake in the practice, and thus will be less likely to want to leave. Furthermore, continuing education will always be cheaper than training new employees from scratch.

In any case, everyone will benefit from a well-trained staff: you, your employees, your practice, and – most importantly – your patients.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. 

My column on the potential impact of the 2010 health care legislation on private practitioners is now more than 6 months old; yet it continues to generate discussion.

Lately, many of the questions have become more fundamental in nature: What, exactly, is broken in our current system? And does the Affordable Care Act address any of the core problems?

There are no simple answers, of course, but in perusing the voluminous literature on this subject, there are a few basic truths on which most seem to agree. First, some kind of tort reform must be implemented. Second, the encroachment of third-party payers on the physician-patient relationship needs to be reined in. Yet neither of these basic issues was even on the table during the health care debate.

Most experts also agree that the present system of employer-financed health care is fundamentally flawed. Allowing employers to control health insurance has created thorny (and largely avoidable) problems. Think about it: What would happen, for example, if employers controlled food purchasing and employees could go to a grocery store, pay a $20 copay, and take as much food as they want? Clearly, food prices would increase enormously (and artificially) in a big hurry; but employees wouldn’t care, because they would never see the bill.

That is basically what has happened with health care: Costs have skyrocketed, but because most bills go from hospital or clinic to insurance company to employer, most patients are left completely out of the loop and have no idea of what their treatment costs.

The strange part is that nobody planned this nongovernmental, non–free market model. It was created through a series of historical accidents, beginning around World War II. During the war, a wage freeze was imposed to control inflation, but the war effort also created huge production demands and a worker shortage. Because businesses were unable to lure good employees with higher wages, they resorted to offering generous fringe benefits, especially health insurance. Before World War II, only 10% of American citizens had employer-based health insurance; by 1953, 60% did.

Ultimately, in response to lobbying by business and insurance interests, Congress enshrined this arbitrary system into the tax law. Tax incentives were created for employers to offer health insurance: For every dollar they contributed, employees would get about $1.30 in benefits. Businesses were given incentives to offer even more insurance than employees would normally buy for themselves. So most patients were – and are – overinsured, and health care is far more expensive than it needs to be.

Furthermore, insurers are competing for human resources departments rather than for the people they insure or for those who provide care. As a consequence, the plans they offer are generally good for employers, but bad for patients and doctors. Meanwhile, insurers continue to encroach on the practice of medicine through financial decisions that are driven by simplistic profit motives rather than by quality of care. Again, this situation is largely opaque to patients.

The fix seems pretty obvious, at least to me. A market-driven system in which individuals buy health insurance the way they buy anything else (cell phones, computers, cars, and yes, auto insurance) would eliminate most of the inefficiencies embedded in our current system. Yet Congress never considered this option during the reform debate.

In fact, many of the reform law’s provisions will only worsen the current situation. Small businesses will be given more tax-credit incentives to insure their workers. And the Small Business Health Options Program (SHOP) Exchange, which allows small businesses to pool their resources to buy health insurance, will only compound the problems of employer-based financing. On top of that, employers who do not offer coverage will face fines and other penalties.

So if employer-based insurance is a big part of the problem, why is Congress encouraging it rather than eliminating it? Obviously, there are big players (insurers, in particular) who have a lot more lobbying money than do either doctors or patients and who have a major interest in maintaining the status quo.

Basic economics and common sense tell us that staying the course will result only in a continuing exponential rise in costs; but until Congress understands that, there is little chance of any real reform.

Dr. Joseph S. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. 

My column on the potential impact of the 2010 health care legislation on private practitioners is now more than 6 months old; yet it continues to generate discussion.

Lately, many of the questions have become more fundamental in nature: What, exactly, is broken in our current system? And does the Affordable Care Act address any of the core problems?

There are no simple answers, of course, but in perusing the voluminous literature on this subject, there are a few basic truths on which most seem to agree. First, some kind of tort reform must be implemented. Second, the encroachment of third-party payers on the physician-patient relationship needs to be reined in. Yet neither of these basic issues was even on the table during the health care debate.

Most experts also agree that the present system of employer-financed health care is fundamentally flawed. Allowing employers to control health insurance has created thorny (and largely avoidable) problems. Think about it: What would happen, for example, if employers controlled food purchasing and employees could go to a grocery store, pay a $20 copay, and take as much food as they want? Clearly, food prices would increase enormously (and artificially) in a big hurry; but employees wouldn’t care, because they would never see the bill.

That is basically what has happened with health care: Costs have skyrocketed, but because most bills go from hospital or clinic to insurance company to employer, most patients are left completely out of the loop and have no idea of what their treatment costs.

The strange part is that nobody planned this nongovernmental, non–free market model. It was created through a series of historical accidents, beginning around World War II. During the war, a wage freeze was imposed to control inflation, but the war effort also created huge production demands and a worker shortage. Because businesses were unable to lure good employees with higher wages, they resorted to offering generous fringe benefits, especially health insurance. Before World War II, only 10% of American citizens had employer-based health insurance; by 1953, 60% did.

Ultimately, in response to lobbying by business and insurance interests, Congress enshrined this arbitrary system into the tax law. Tax incentives were created for employers to offer health insurance: For every dollar they contributed, employees would get about $1.30 in benefits. Businesses were given incentives to offer even more insurance than employees would normally buy for themselves. So most patients were – and are – overinsured, and health care is far more expensive than it needs to be.

Furthermore, insurers are competing for human resources departments rather than for the people they insure or for those who provide care. As a consequence, the plans they offer are generally good for employers, but bad for patients and doctors. Meanwhile, insurers continue to encroach on the practice of medicine through financial decisions that are driven by simplistic profit motives rather than by quality of care. Again, this situation is largely opaque to patients.

The fix seems pretty obvious, at least to me. A market-driven system in which individuals buy health insurance the way they buy anything else (cell phones, computers, cars, and yes, auto insurance) would eliminate most of the inefficiencies embedded in our current system. Yet Congress never considered this option during the reform debate.

In fact, many of the reform law’s provisions will only worsen the current situation. Small businesses will be given more tax-credit incentives to insure their workers. And the Small Business Health Options Program (SHOP) Exchange, which allows small businesses to pool their resources to buy health insurance, will only compound the problems of employer-based financing. On top of that, employers who do not offer coverage will face fines and other penalties.

So if employer-based insurance is a big part of the problem, why is Congress encouraging it rather than eliminating it? Obviously, there are big players (insurers, in particular) who have a lot more lobbying money than do either doctors or patients and who have a major interest in maintaining the status quo.

Basic economics and common sense tell us that staying the course will result only in a continuing exponential rise in costs; but until Congress understands that, there is little chance of any real reform.

Dr. Joseph S. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. 

My column on the potential impact of the 2010 health care legislation on private practitioners is now more than 6 months old; yet it continues to generate discussion.

Lately, many of the questions have become more fundamental in nature: What, exactly, is broken in our current system? And does the Affordable Care Act address any of the core problems?

There are no simple answers, of course, but in perusing the voluminous literature on this subject, there are a few basic truths on which most seem to agree. First, some kind of tort reform must be implemented. Second, the encroachment of third-party payers on the physician-patient relationship needs to be reined in. Yet neither of these basic issues was even on the table during the health care debate.

Most experts also agree that the present system of employer-financed health care is fundamentally flawed. Allowing employers to control health insurance has created thorny (and largely avoidable) problems. Think about it: What would happen, for example, if employers controlled food purchasing and employees could go to a grocery store, pay a $20 copay, and take as much food as they want? Clearly, food prices would increase enormously (and artificially) in a big hurry; but employees wouldn’t care, because they would never see the bill.

That is basically what has happened with health care: Costs have skyrocketed, but because most bills go from hospital or clinic to insurance company to employer, most patients are left completely out of the loop and have no idea of what their treatment costs.

The strange part is that nobody planned this nongovernmental, non–free market model. It was created through a series of historical accidents, beginning around World War II. During the war, a wage freeze was imposed to control inflation, but the war effort also created huge production demands and a worker shortage. Because businesses were unable to lure good employees with higher wages, they resorted to offering generous fringe benefits, especially health insurance. Before World War II, only 10% of American citizens had employer-based health insurance; by 1953, 60% did.

Ultimately, in response to lobbying by business and insurance interests, Congress enshrined this arbitrary system into the tax law. Tax incentives were created for employers to offer health insurance: For every dollar they contributed, employees would get about $1.30 in benefits. Businesses were given incentives to offer even more insurance than employees would normally buy for themselves. So most patients were – and are – overinsured, and health care is far more expensive than it needs to be.

Furthermore, insurers are competing for human resources departments rather than for the people they insure or for those who provide care. As a consequence, the plans they offer are generally good for employers, but bad for patients and doctors. Meanwhile, insurers continue to encroach on the practice of medicine through financial decisions that are driven by simplistic profit motives rather than by quality of care. Again, this situation is largely opaque to patients.

The fix seems pretty obvious, at least to me. A market-driven system in which individuals buy health insurance the way they buy anything else (cell phones, computers, cars, and yes, auto insurance) would eliminate most of the inefficiencies embedded in our current system. Yet Congress never considered this option during the reform debate.

In fact, many of the reform law’s provisions will only worsen the current situation. Small businesses will be given more tax-credit incentives to insure their workers. And the Small Business Health Options Program (SHOP) Exchange, which allows small businesses to pool their resources to buy health insurance, will only compound the problems of employer-based financing. On top of that, employers who do not offer coverage will face fines and other penalties.

So if employer-based insurance is a big part of the problem, why is Congress encouraging it rather than eliminating it? Obviously, there are big players (insurers, in particular) who have a lot more lobbying money than do either doctors or patients and who have a major interest in maintaining the status quo.

Basic economics and common sense tell us that staying the course will result only in a continuing exponential rise in costs; but until Congress understands that, there is little chance of any real reform.

Dr. Joseph S. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. 

[email protected]

Amid considerable discussion of the potential impact of Congress's 2010 health care legislation on hospitals, insurers, pharmaceutical companies, and patients, very little has been written about its effect on physicians. Partly, that may be because the effect has been barely perceptible so far, but mostly it's because, as usual, we are at the bottom of everyone's priority list.

While it is true that most physicians will see few changes in the near term, that paucity of change is part of the problem, since both of the essential changes sought by physicians – tort reform and revision of the ill-conceived Medicare compensation rules that threaten to cut payments by 25% every few months – were never addressed.

That said, many of the early provisions of the law do favor physicians in the short term. Beginning this year, insurers can no longer cancel policies already issued, nor can they exclude children with preexisting conditions. Adults who were previously uninsurable because of chronic ailments will have access to insurance as well. Lifetime coverage limits are prohibited, and dependents may remain on their parents' policies until they are 26 years old. Early retirees will not have to risk going uninsured until they qualify for Medicare, and Medicare's infamous “doughnut hole” will gradually close. Small businesses will receive tax-credit incentives to insure their workers.

All of this adds up to more paying patients, with better insurance.

However, as additional provisions come online starting in 2012, the long-range potential impact on private practitioners becomes more uncertain, and more ominous.

“Physician payment reforms” will begin to appear. Although no one yet knows exactly what that means, the law mandates the formation of accountable care organizations to “improve quality and efficiency of care.” The buzzword will be outcomes – the better your measurable results, the higher your reimbursements. This is supposed to reward quality of care over volume of procedures, but the result could be exactly the opposite if less-motivated providers cherry pick the quick, easy, least-risky cases and refer anything time consuming or complex to tertiary centers.

In 2013, Medicare will introduce a national program of payment bundling. A single hospital admission, for example, will be paid with a single bundled payment that will have to be divided among the hospital and treating physicians. The idea, ostensibly, is to encourage physicians and hospitals to work together to “better coordinate patient care,” but arguments over how to divide the pie could, once again, have the opposite effect.

It won't take long for hospitals to figure out that they can keep the whole pie if the partnering physicians are their employees. Look for hospitals to absorb more private offices.

By 2014, states will have to set up “SHOP Exchanges” (Small Business Health Options Program), allowing small businesses (defined as 100 employees or less) to pool their resources to buy health insurance. Most people will, by then, be required to have health insurance coverage or pay a fine if they don't. Employers not offering coverage will face fines and other penalties, and health insurance companies will begin paying a fee based on their market share, which will no doubt be passed along to those they insure, nullifying some of the savings garnered by the SHOP Exchanges, which are already predicted to be marginal.

The big Medicaid expansion will be in place by 2014 as well, but few physicians are likely to accept more Medicaid patients unless Medicaid compensation increases. That is unlikely to happen without substantial reductions in the states' woeful budget deficits – and probably not even then, since state governments already complain about their Medicaid budgets. Hospitals, with their deeper pockets, will get most of the new Medicaid patients and will hire even more physicians away from private practice to treat them.

If this sounds like a large potential problem for private practice as we know it, it is. Then again, it's too early for reliable predictions: There is a lot of potential leeway in the new law's future specifications, and a lot can happen between now and full implementation, from modifications and amendments to outright repeal. Only time will tell.

[email protected]

Amid considerable discussion of the potential impact of Congress's 2010 health care legislation on hospitals, insurers, pharmaceutical companies, and patients, very little has been written about its effect on physicians. Partly, that may be because the effect has been barely perceptible so far, but mostly it's because, as usual, we are at the bottom of everyone's priority list.

While it is true that most physicians will see few changes in the near term, that paucity of change is part of the problem, since both of the essential changes sought by physicians – tort reform and revision of the ill-conceived Medicare compensation rules that threaten to cut payments by 25% every few months – were never addressed.

That said, many of the early provisions of the law do favor physicians in the short term. Beginning this year, insurers can no longer cancel policies already issued, nor can they exclude children with preexisting conditions. Adults who were previously uninsurable because of chronic ailments will have access to insurance as well. Lifetime coverage limits are prohibited, and dependents may remain on their parents' policies until they are 26 years old. Early retirees will not have to risk going uninsured until they qualify for Medicare, and Medicare's infamous “doughnut hole” will gradually close. Small businesses will receive tax-credit incentives to insure their workers.

All of this adds up to more paying patients, with better insurance.

However, as additional provisions come online starting in 2012, the long-range potential impact on private practitioners becomes more uncertain, and more ominous.

“Physician payment reforms” will begin to appear. Although no one yet knows exactly what that means, the law mandates the formation of accountable care organizations to “improve quality and efficiency of care.” The buzzword will be outcomes – the better your measurable results, the higher your reimbursements. This is supposed to reward quality of care over volume of procedures, but the result could be exactly the opposite if less-motivated providers cherry pick the quick, easy, least-risky cases and refer anything time consuming or complex to tertiary centers.

In 2013, Medicare will introduce a national program of payment bundling. A single hospital admission, for example, will be paid with a single bundled payment that will have to be divided among the hospital and treating physicians. The idea, ostensibly, is to encourage physicians and hospitals to work together to “better coordinate patient care,” but arguments over how to divide the pie could, once again, have the opposite effect.

It won't take long for hospitals to figure out that they can keep the whole pie if the partnering physicians are their employees. Look for hospitals to absorb more private offices.

By 2014, states will have to set up “SHOP Exchanges” (Small Business Health Options Program), allowing small businesses (defined as 100 employees or less) to pool their resources to buy health insurance. Most people will, by then, be required to have health insurance coverage or pay a fine if they don't. Employers not offering coverage will face fines and other penalties, and health insurance companies will begin paying a fee based on their market share, which will no doubt be passed along to those they insure, nullifying some of the savings garnered by the SHOP Exchanges, which are already predicted to be marginal.

The big Medicaid expansion will be in place by 2014 as well, but few physicians are likely to accept more Medicaid patients unless Medicaid compensation increases. That is unlikely to happen without substantial reductions in the states' woeful budget deficits – and probably not even then, since state governments already complain about their Medicaid budgets. Hospitals, with their deeper pockets, will get most of the new Medicaid patients and will hire even more physicians away from private practice to treat them.

If this sounds like a large potential problem for private practice as we know it, it is. Then again, it's too early for reliable predictions: There is a lot of potential leeway in the new law's future specifications, and a lot can happen between now and full implementation, from modifications and amendments to outright repeal. Only time will tell.

[email protected]

Amid considerable discussion of the potential impact of Congress's 2010 health care legislation on hospitals, insurers, pharmaceutical companies, and patients, very little has been written about its effect on physicians. Partly, that may be because the effect has been barely perceptible so far, but mostly it's because, as usual, we are at the bottom of everyone's priority list.

While it is true that most physicians will see few changes in the near term, that paucity of change is part of the problem, since both of the essential changes sought by physicians – tort reform and revision of the ill-conceived Medicare compensation rules that threaten to cut payments by 25% every few months – were never addressed.

That said, many of the early provisions of the law do favor physicians in the short term. Beginning this year, insurers can no longer cancel policies already issued, nor can they exclude children with preexisting conditions. Adults who were previously uninsurable because of chronic ailments will have access to insurance as well. Lifetime coverage limits are prohibited, and dependents may remain on their parents' policies until they are 26 years old. Early retirees will not have to risk going uninsured until they qualify for Medicare, and Medicare's infamous “doughnut hole” will gradually close. Small businesses will receive tax-credit incentives to insure their workers.

All of this adds up to more paying patients, with better insurance.

However, as additional provisions come online starting in 2012, the long-range potential impact on private practitioners becomes more uncertain, and more ominous.

“Physician payment reforms” will begin to appear. Although no one yet knows exactly what that means, the law mandates the formation of accountable care organizations to “improve quality and efficiency of care.” The buzzword will be outcomes – the better your measurable results, the higher your reimbursements. This is supposed to reward quality of care over volume of procedures, but the result could be exactly the opposite if less-motivated providers cherry pick the quick, easy, least-risky cases and refer anything time consuming or complex to tertiary centers.

In 2013, Medicare will introduce a national program of payment bundling. A single hospital admission, for example, will be paid with a single bundled payment that will have to be divided among the hospital and treating physicians. The idea, ostensibly, is to encourage physicians and hospitals to work together to “better coordinate patient care,” but arguments over how to divide the pie could, once again, have the opposite effect.

It won't take long for hospitals to figure out that they can keep the whole pie if the partnering physicians are their employees. Look for hospitals to absorb more private offices.

By 2014, states will have to set up “SHOP Exchanges” (Small Business Health Options Program), allowing small businesses (defined as 100 employees or less) to pool their resources to buy health insurance. Most people will, by then, be required to have health insurance coverage or pay a fine if they don't. Employers not offering coverage will face fines and other penalties, and health insurance companies will begin paying a fee based on their market share, which will no doubt be passed along to those they insure, nullifying some of the savings garnered by the SHOP Exchanges, which are already predicted to be marginal.

The big Medicaid expansion will be in place by 2014 as well, but few physicians are likely to accept more Medicaid patients unless Medicaid compensation increases. That is unlikely to happen without substantial reductions in the states' woeful budget deficits – and probably not even then, since state governments already complain about their Medicaid budgets. Hospitals, with their deeper pockets, will get most of the new Medicaid patients and will hire even more physicians away from private practice to treat them.

If this sounds like a large potential problem for private practice as we know it, it is. Then again, it's too early for reliable predictions: There is a lot of potential leeway in the new law's future specifications, and a lot can happen between now and full implementation, from modifications and amendments to outright repeal. Only time will tell.

Year's end is a good time to think about the various financial arrangements you've set up over the years, and consider whether they need updating.

Your estate plan, in particular, needs regular review. Even if nothing important has changed in your life or the lives of those close to you since you last revised your will, chances are the laws have changed, or other factors may have rendered your plan obsolete without your even realizing it.

I am assuming, of course, that you have in fact drafted a will. If not, do it now. Things happen; if you die without one (“intestate,” in lawyers' lingo), your heirs will be at the mercy of attorneys, bureaucrats, state and federal laws, and greed. Quarrels will ensue; decisions will be made that are almost certainly at variance with what you would have wanted; and a substantial chunk of your estate, which could have gone to loved ones or charity, will be lost to taxes and fees.

That said, let's consider some factors that may require modification of the estate plan you now (hopefully) have in place:

▸ Laws change continually. Trust laws, in particular, have changed a great deal in recent years, and new trust strategies have been devised as a result. New instruments like perpetual trusts, trust protectors, directed trusts, and total return trusts may or may not work to your advantage, but you won't know without asking. State laws affecting estate planning also change on a regular basis.

Once a year, my wife and I meet with a lawyer who has estate planning expertise to learn about any new legislation that may affect our plan. Last year, I learned that my irrevocable trust is no longer totally irrevocable; new laws now permit certain provisions to be modified.

Laws that don't directly regulate wills and trusts can have a significant impact on them as well. For instance, the ever-popular Health Insurance Portability and Accountability Act (HIPAA) affects your estate as well as your practice; under its provisions, your family cannot access your medical information or make treatment and life-support decisions without your specific permission. So if a Health Care Power of Attorney is not already part of your will, add it now. And be sure to modify it if your medical status (or your philosophy of life) changes, or if treatment for your medical condition evolves significantly.

▸ Financial markets change. It's not exactly a secret that asset values and interest rates have changed in big ways over the last few years. Those changes may have had a significant, unanticipated impact; large real estate or securities bequests could now be significantly smaller, and vice versa. Your accountant and estate lawyer should take a look at your assets periodically, and their apportionment in your will, to be sure all arrangements remain as you intend. And be sure to notify them whenever the composition of your assets changes, even if the value doesn't. For example, selling a business or property and reinvesting the proceeds in something completely different could change how you leave that asset to your heirs because a different set of tax laws may apply.

▸ Fiduciaries change. The executor of your estate and the trustee(s) of your trust(s) may need replacing as circumstances change. If your brother-in-law is your executor and your sister divorces him, you may want to find a new executor. Or your once-vigorous trustee could now be aging or in failing health. Trustees are often financial institutions; if one of your corporate trustees goes belly up, or the employee you were working with retires or changes firms, you'll need a replacement. Keep track of your fiduciaries, and be prepared to make changes as necessary.

▸ Personal circumstances change. Some changes – marriage, divorce, the death of an heir or the birth of a new one – obviously require modifications to wills and trusts. But any significant alteration of your personal or financial circumstances probably merits at least a phone call to your financial planners; the need for changes, and your options should changes be necessary, are not always obvious.

Year's end is a good time to think about the various financial arrangements you've set up over the years, and consider whether they need updating.

Your estate plan, in particular, needs regular review. Even if nothing important has changed in your life or the lives of those close to you since you last revised your will, chances are the laws have changed, or other factors may have rendered your plan obsolete without your even realizing it.

I am assuming, of course, that you have in fact drafted a will. If not, do it now. Things happen; if you die without one (“intestate,” in lawyers' lingo), your heirs will be at the mercy of attorneys, bureaucrats, state and federal laws, and greed. Quarrels will ensue; decisions will be made that are almost certainly at variance with what you would have wanted; and a substantial chunk of your estate, which could have gone to loved ones or charity, will be lost to taxes and fees.

That said, let's consider some factors that may require modification of the estate plan you now (hopefully) have in place:

▸ Laws change continually. Trust laws, in particular, have changed a great deal in recent years, and new trust strategies have been devised as a result. New instruments like perpetual trusts, trust protectors, directed trusts, and total return trusts may or may not work to your advantage, but you won't know without asking. State laws affecting estate planning also change on a regular basis.

Once a year, my wife and I meet with a lawyer who has estate planning expertise to learn about any new legislation that may affect our plan. Last year, I learned that my irrevocable trust is no longer totally irrevocable; new laws now permit certain provisions to be modified.

Laws that don't directly regulate wills and trusts can have a significant impact on them as well. For instance, the ever-popular Health Insurance Portability and Accountability Act (HIPAA) affects your estate as well as your practice; under its provisions, your family cannot access your medical information or make treatment and life-support decisions without your specific permission. So if a Health Care Power of Attorney is not already part of your will, add it now. And be sure to modify it if your medical status (or your philosophy of life) changes, or if treatment for your medical condition evolves significantly.

▸ Financial markets change. It's not exactly a secret that asset values and interest rates have changed in big ways over the last few years. Those changes may have had a significant, unanticipated impact; large real estate or securities bequests could now be significantly smaller, and vice versa. Your accountant and estate lawyer should take a look at your assets periodically, and their apportionment in your will, to be sure all arrangements remain as you intend. And be sure to notify them whenever the composition of your assets changes, even if the value doesn't. For example, selling a business or property and reinvesting the proceeds in something completely different could change how you leave that asset to your heirs because a different set of tax laws may apply.

▸ Fiduciaries change. The executor of your estate and the trustee(s) of your trust(s) may need replacing as circumstances change. If your brother-in-law is your executor and your sister divorces him, you may want to find a new executor. Or your once-vigorous trustee could now be aging or in failing health. Trustees are often financial institutions; if one of your corporate trustees goes belly up, or the employee you were working with retires or changes firms, you'll need a replacement. Keep track of your fiduciaries, and be prepared to make changes as necessary.

▸ Personal circumstances change. Some changes – marriage, divorce, the death of an heir or the birth of a new one – obviously require modifications to wills and trusts. But any significant alteration of your personal or financial circumstances probably merits at least a phone call to your financial planners; the need for changes, and your options should changes be necessary, are not always obvious.

Year's end is a good time to think about the various financial arrangements you've set up over the years, and consider whether they need updating.

Your estate plan, in particular, needs regular review. Even if nothing important has changed in your life or the lives of those close to you since you last revised your will, chances are the laws have changed, or other factors may have rendered your plan obsolete without your even realizing it.

I am assuming, of course, that you have in fact drafted a will. If not, do it now. Things happen; if you die without one (“intestate,” in lawyers' lingo), your heirs will be at the mercy of attorneys, bureaucrats, state and federal laws, and greed. Quarrels will ensue; decisions will be made that are almost certainly at variance with what you would have wanted; and a substantial chunk of your estate, which could have gone to loved ones or charity, will be lost to taxes and fees.

That said, let's consider some factors that may require modification of the estate plan you now (hopefully) have in place:

▸ Laws change continually. Trust laws, in particular, have changed a great deal in recent years, and new trust strategies have been devised as a result. New instruments like perpetual trusts, trust protectors, directed trusts, and total return trusts may or may not work to your advantage, but you won't know without asking. State laws affecting estate planning also change on a regular basis.

Once a year, my wife and I meet with a lawyer who has estate planning expertise to learn about any new legislation that may affect our plan. Last year, I learned that my irrevocable trust is no longer totally irrevocable; new laws now permit certain provisions to be modified.

Laws that don't directly regulate wills and trusts can have a significant impact on them as well. For instance, the ever-popular Health Insurance Portability and Accountability Act (HIPAA) affects your estate as well as your practice; under its provisions, your family cannot access your medical information or make treatment and life-support decisions without your specific permission. So if a Health Care Power of Attorney is not already part of your will, add it now. And be sure to modify it if your medical status (or your philosophy of life) changes, or if treatment for your medical condition evolves significantly.

▸ Financial markets change. It's not exactly a secret that asset values and interest rates have changed in big ways over the last few years. Those changes may have had a significant, unanticipated impact; large real estate or securities bequests could now be significantly smaller, and vice versa. Your accountant and estate lawyer should take a look at your assets periodically, and their apportionment in your will, to be sure all arrangements remain as you intend. And be sure to notify them whenever the composition of your assets changes, even if the value doesn't. For example, selling a business or property and reinvesting the proceeds in something completely different could change how you leave that asset to your heirs because a different set of tax laws may apply.

▸ Fiduciaries change. The executor of your estate and the trustee(s) of your trust(s) may need replacing as circumstances change. If your brother-in-law is your executor and your sister divorces him, you may want to find a new executor. Or your once-vigorous trustee could now be aging or in failing health. Trustees are often financial institutions; if one of your corporate trustees goes belly up, or the employee you were working with retires or changes firms, you'll need a replacement. Keep track of your fiduciaries, and be prepared to make changes as necessary.

▸ Personal circumstances change. Some changes – marriage, divorce, the death of an heir or the birth of a new one – obviously require modifications to wills and trusts. But any significant alteration of your personal or financial circumstances probably merits at least a phone call to your financial planners; the need for changes, and your options should changes be necessary, are not always obvious.

Pop quiz: How long have I been writing that private medical practices are businesses, whether we like it or not; and like any other business, they require consistent, sensible business management?

If you answered that I've been harping on that point from the very beginning, congratulations; you're a long-time reader. And yet, the most basic and important business tool – preparation of an annual budget – continues to be ignored by most private practitioners.

The usual excuse is lack of time – and besides, the practice seems to be doing fine without one. But like anything else, you can't fix problems you never look for.

You can't identify needless, wasteful, or redundant purchases, under- or overstaffing, or misappropriated funds if you don't track your practice's expenditure data.

There is no way to make intelligent decisions on such basic issues as fee adjustments, new equipment purchases, and marketing strategies without a firm grasp of your expenditures, and a reasonable idea of where those numbers may be going in the foreseeable future. Without a budget, you cannot know your costs of doing business, let alone whether they are too high or too low. Chances are excellent that you are overpaying your taxes, too.

Embezzlers typically continue their nefarious ways far longer than they should (and some are never caught at all) because all too often, nobody is watching the budget numbers. And if you are planning a refurbishment or expansion, no self-respecting bank will approve a loan in the post-TARP era without seeing a well-organized budget.

There is no need to wait to take action until, one day, your cash flow is too low to meet payroll, or a similar crisis convinces you that budgeting is important. Now, at the beginning of a new year, with last year's financial data accumulated and readily at hand – and before significant changes mandated by the recent health care reform legislation take effect – is an ideal time to get a budget in place.

If your practice is incorporated and your fiscal year does not begin on Jan. 1, don't use that as an excuse; draw up a limited, “partial” budget for the remainder of the fiscal year, then start a new one when your next fiscal period begins.

Creating a budget is not the formidable or expensive task you may be envisioning. Unless your practice situation is unusually complex, you can probably do it yourself – although, if this is your first time, you will probably want to enlist the help of your accountant. A good spreadsheet program such as Excel or iWork simplifies the process considerably, and financial software packages such as QuickBooks or NetSuite make it even easier. (As always, I have no financial interest in any company or product mentioned in this column.)

Start by creating a list of practice expense categories, or “chart of accounts” (COA) in financial lingo. Each component of a COA is called a “line item,” and in general, the more line items, the better. Commercial software products typically provide a standardized COA, but you will want to customize it to your individual needs. (Your accountant can help with that.)

This is a critical step, so take your time, and do it right. The more detailed you make your COA, the more flexible your budget will be, the easier it will be to identify deductible expenses at year's end, and the harder you will make it for an embezzler to operate unnoticed.

Then, using last year's records (or if possible, an average of several years'), assign a dollar amount to each line item. Right away, some rude surprises may be in store (“We spend how much on printer ink?”), but already you are gaining valuable information that can be acted on immediately.

If you are not sure whether you are over- or underspending on a specific line item, or the category is a new one and you don't know how much to allot, check with local colleagues or your accountant. Some practice management firms post lists of “benchmarks” averaged from surveys of their clients. Benchmark numbers can be deceptive, however, especially if the surveyed practices are in different parts of the country or have different socioeconomic populations.

Creating a budget is only the beginning; periodically, you must compare your actual expenditures with those you budgeted. (Most businesses do this quarterly; more frequent reviews can trigger needless worry over normal short-term fluctuations.)

Look for significant discrepancies and the reasons for them. Are your expenditures excessive, or was the budgeted amount unrealistic? Adjustments (of both expenditures and budget) will be frequent at first; but as time passes and your financial management skills improve, your practice will sail along on a progressively smoother financial course.

Pop quiz: How long have I been writing that private medical practices are businesses, whether we like it or not; and like any other business, they require consistent, sensible business management?

If you answered that I've been harping on that point from the very beginning, congratulations; you're a long-time reader. And yet, the most basic and important business tool – preparation of an annual budget – continues to be ignored by most private practitioners.

The usual excuse is lack of time – and besides, the practice seems to be doing fine without one. But like anything else, you can't fix problems you never look for.

You can't identify needless, wasteful, or redundant purchases, under- or overstaffing, or misappropriated funds if you don't track your practice's expenditure data.

There is no way to make intelligent decisions on such basic issues as fee adjustments, new equipment purchases, and marketing strategies without a firm grasp of your expenditures, and a reasonable idea of where those numbers may be going in the foreseeable future. Without a budget, you cannot know your costs of doing business, let alone whether they are too high or too low. Chances are excellent that you are overpaying your taxes, too.

Embezzlers typically continue their nefarious ways far longer than they should (and some are never caught at all) because all too often, nobody is watching the budget numbers. And if you are planning a refurbishment or expansion, no self-respecting bank will approve a loan in the post-TARP era without seeing a well-organized budget.

There is no need to wait to take action until, one day, your cash flow is too low to meet payroll, or a similar crisis convinces you that budgeting is important. Now, at the beginning of a new year, with last year's financial data accumulated and readily at hand – and before significant changes mandated by the recent health care reform legislation take effect – is an ideal time to get a budget in place.

If your practice is incorporated and your fiscal year does not begin on Jan. 1, don't use that as an excuse; draw up a limited, “partial” budget for the remainder of the fiscal year, then start a new one when your next fiscal period begins.

Creating a budget is not the formidable or expensive task you may be envisioning. Unless your practice situation is unusually complex, you can probably do it yourself – although, if this is your first time, you will probably want to enlist the help of your accountant. A good spreadsheet program such as Excel or iWork simplifies the process considerably, and financial software packages such as QuickBooks or NetSuite make it even easier. (As always, I have no financial interest in any company or product mentioned in this column.)

Start by creating a list of practice expense categories, or “chart of accounts” (COA) in financial lingo. Each component of a COA is called a “line item,” and in general, the more line items, the better. Commercial software products typically provide a standardized COA, but you will want to customize it to your individual needs. (Your accountant can help with that.)

This is a critical step, so take your time, and do it right. The more detailed you make your COA, the more flexible your budget will be, the easier it will be to identify deductible expenses at year's end, and the harder you will make it for an embezzler to operate unnoticed.

Then, using last year's records (or if possible, an average of several years'), assign a dollar amount to each line item. Right away, some rude surprises may be in store (“We spend how much on printer ink?”), but already you are gaining valuable information that can be acted on immediately.

If you are not sure whether you are over- or underspending on a specific line item, or the category is a new one and you don't know how much to allot, check with local colleagues or your accountant. Some practice management firms post lists of “benchmarks” averaged from surveys of their clients. Benchmark numbers can be deceptive, however, especially if the surveyed practices are in different parts of the country or have different socioeconomic populations.

Creating a budget is only the beginning; periodically, you must compare your actual expenditures with those you budgeted. (Most businesses do this quarterly; more frequent reviews can trigger needless worry over normal short-term fluctuations.)

Look for significant discrepancies and the reasons for them. Are your expenditures excessive, or was the budgeted amount unrealistic? Adjustments (of both expenditures and budget) will be frequent at first; but as time passes and your financial management skills improve, your practice will sail along on a progressively smoother financial course.

Pop quiz: How long have I been writing that private medical practices are businesses, whether we like it or not; and like any other business, they require consistent, sensible business management?

If you answered that I've been harping on that point from the very beginning, congratulations; you're a long-time reader. And yet, the most basic and important business tool – preparation of an annual budget – continues to be ignored by most private practitioners.

The usual excuse is lack of time – and besides, the practice seems to be doing fine without one. But like anything else, you can't fix problems you never look for.

You can't identify needless, wasteful, or redundant purchases, under- or overstaffing, or misappropriated funds if you don't track your practice's expenditure data.

There is no way to make intelligent decisions on such basic issues as fee adjustments, new equipment purchases, and marketing strategies without a firm grasp of your expenditures, and a reasonable idea of where those numbers may be going in the foreseeable future. Without a budget, you cannot know your costs of doing business, let alone whether they are too high or too low. Chances are excellent that you are overpaying your taxes, too.

Embezzlers typically continue their nefarious ways far longer than they should (and some are never caught at all) because all too often, nobody is watching the budget numbers. And if you are planning a refurbishment or expansion, no self-respecting bank will approve a loan in the post-TARP era without seeing a well-organized budget.

There is no need to wait to take action until, one day, your cash flow is too low to meet payroll, or a similar crisis convinces you that budgeting is important. Now, at the beginning of a new year, with last year's financial data accumulated and readily at hand – and before significant changes mandated by the recent health care reform legislation take effect – is an ideal time to get a budget in place.

If your practice is incorporated and your fiscal year does not begin on Jan. 1, don't use that as an excuse; draw up a limited, “partial” budget for the remainder of the fiscal year, then start a new one when your next fiscal period begins.

Creating a budget is not the formidable or expensive task you may be envisioning. Unless your practice situation is unusually complex, you can probably do it yourself – although, if this is your first time, you will probably want to enlist the help of your accountant. A good spreadsheet program such as Excel or iWork simplifies the process considerably, and financial software packages such as QuickBooks or NetSuite make it even easier. (As always, I have no financial interest in any company or product mentioned in this column.)

Start by creating a list of practice expense categories, or “chart of accounts” (COA) in financial lingo. Each component of a COA is called a “line item,” and in general, the more line items, the better. Commercial software products typically provide a standardized COA, but you will want to customize it to your individual needs. (Your accountant can help with that.)

This is a critical step, so take your time, and do it right. The more detailed you make your COA, the more flexible your budget will be, the easier it will be to identify deductible expenses at year's end, and the harder you will make it for an embezzler to operate unnoticed.

Then, using last year's records (or if possible, an average of several years'), assign a dollar amount to each line item. Right away, some rude surprises may be in store (“We spend how much on printer ink?”), but already you are gaining valuable information that can be acted on immediately.

If you are not sure whether you are over- or underspending on a specific line item, or the category is a new one and you don't know how much to allot, check with local colleagues or your accountant. Some practice management firms post lists of “benchmarks” averaged from surveys of their clients. Benchmark numbers can be deceptive, however, especially if the surveyed practices are in different parts of the country or have different socioeconomic populations.

Creating a budget is only the beginning; periodically, you must compare your actual expenditures with those you budgeted. (Most businesses do this quarterly; more frequent reviews can trigger needless worry over normal short-term fluctuations.)

Look for significant discrepancies and the reasons for them. Are your expenditures excessive, or was the budgeted amount unrealistic? Adjustments (of both expenditures and budget) will be frequent at first; but as time passes and your financial management skills improve, your practice will sail along on a progressively smoother financial course.

It doesn't occur to most physicians that a supplier might be ripping them off; but if adequate purchase controls are not in place, then it's possible, and even likely. Be aware of the common scams, how to avoid them, and the options if you're victimized.

Con artists take advantage of unsuspecting employees (and physicians) and lax purchasing procedures. Typically, the scam begins with a phone call from a “representative” who asks questions about the office and the supplies commonly ordered in bulk, such as paper, disposable gloves, printer cartridges, gauze pads, and cleaning supplies. (The caller might claim to be conducting a survey.)

The scammer might pretend to be a regular supplier who is “overstocked” on printer ink or toner. (Toner scams are so common that perpetrators are nicknamed “toner phoners.”)

Here is how this scenario might play out: You receive a shipment of poor quality merchandise you didn't order. Later, you receive an invoice for 5-10 times the amount you would pay a legitimate supplier for better quality supplies.

You can't be sure you didn't place the order, because you have no system in place for checking such things; your employees may have already opened the boxes; and you're under the mistaken impression that you have to return unordered merchandise or pay for it if you've started using it. (More on this later.)

Sometimes the caller offers your receptionist or office manager a free “promotional item” with “no further obligation.” Your employee figures why not, and accepts the gift. You receive overpriced unordered merchandise, followed by an invoice with the employee's name prominently displayed. The crooks are betting you will blame the employee, who you assume placed the order to get the gift (despite his or her denials), and now you have to pay.

Regardless of the method, the goal is the same: to get an invoice into your hands. Once that is accomplished, the scammers get very aggressive; they will dun you with letters and phone calls, send you to real or fake collection agents, and even threaten legal action.

You're at a disadvantage because you're not positive, and certainly can't prove, that you didn't order the supplies. And, if you pay the bill, you think maybe they will get off your back; however, you will only be targeted for additional scams. The scammer may even sell your “account” to other con artists.

Prevention is a matter of good organization and training. Put one person in charge of ordering supplies, and instruct everyone (including physicians) to tell all solicitors, “I'm not authorized to order anything or answer surveys. You'll need to speak to our purchaser.”

Instruct your purchaser to be suspicious of all cold calls and unfamiliar salespeople, and to never yield to pressure to make an immediate decision. If an offer appears legitimate, ask to see a catalog or printed price list before ordering anything.

Standardize your ordering procedure. Acquire a supply of purchase orders – electronic or written – and make sure one is filled out for every order, and every order is assigned a number. The employee who pays bills, ideally someone different from the one who does the ordering, should receive a copy of every purchase order. Keep blank order forms locked up or password protected.

When shipments arrive, verify they match the shipper's invoice and the purchase order. If everything reconciles, send a copy of the shipping invoice to your accounts payable employee. Bills for services should be reconciled the same way.

If a scammer still gets through your defenses, you have rights, and you should exercise them. According to the Federal Trade Commission, you are not required to pay for supplies or services you didn't order, nor are you required to return them. You may treat unordered merchandise as a gift. But you have to be able to prove you didn't order it, which should be easy if you use purchase orders.

The FTC has a good template of instructions for avoiding scams.

It doesn't occur to most physicians that a supplier might be ripping them off; but if adequate purchase controls are not in place, then it's possible, and even likely. Be aware of the common scams, how to avoid them, and the options if you're victimized.

Con artists take advantage of unsuspecting employees (and physicians) and lax purchasing procedures. Typically, the scam begins with a phone call from a “representative” who asks questions about the office and the supplies commonly ordered in bulk, such as paper, disposable gloves, printer cartridges, gauze pads, and cleaning supplies. (The caller might claim to be conducting a survey.)

The scammer might pretend to be a regular supplier who is “overstocked” on printer ink or toner. (Toner scams are so common that perpetrators are nicknamed “toner phoners.”)

Here is how this scenario might play out: You receive a shipment of poor quality merchandise you didn't order. Later, you receive an invoice for 5-10 times the amount you would pay a legitimate supplier for better quality supplies.

You can't be sure you didn't place the order, because you have no system in place for checking such things; your employees may have already opened the boxes; and you're under the mistaken impression that you have to return unordered merchandise or pay for it if you've started using it. (More on this later.)

Sometimes the caller offers your receptionist or office manager a free “promotional item” with “no further obligation.” Your employee figures why not, and accepts the gift. You receive overpriced unordered merchandise, followed by an invoice with the employee's name prominently displayed. The crooks are betting you will blame the employee, who you assume placed the order to get the gift (despite his or her denials), and now you have to pay.

Regardless of the method, the goal is the same: to get an invoice into your hands. Once that is accomplished, the scammers get very aggressive; they will dun you with letters and phone calls, send you to real or fake collection agents, and even threaten legal action.

You're at a disadvantage because you're not positive, and certainly can't prove, that you didn't order the supplies. And, if you pay the bill, you think maybe they will get off your back; however, you will only be targeted for additional scams. The scammer may even sell your “account” to other con artists.

Prevention is a matter of good organization and training. Put one person in charge of ordering supplies, and instruct everyone (including physicians) to tell all solicitors, “I'm not authorized to order anything or answer surveys. You'll need to speak to our purchaser.”

Instruct your purchaser to be suspicious of all cold calls and unfamiliar salespeople, and to never yield to pressure to make an immediate decision. If an offer appears legitimate, ask to see a catalog or printed price list before ordering anything.

Standardize your ordering procedure. Acquire a supply of purchase orders – electronic or written – and make sure one is filled out for every order, and every order is assigned a number. The employee who pays bills, ideally someone different from the one who does the ordering, should receive a copy of every purchase order. Keep blank order forms locked up or password protected.

When shipments arrive, verify they match the shipper's invoice and the purchase order. If everything reconciles, send a copy of the shipping invoice to your accounts payable employee. Bills for services should be reconciled the same way.

If a scammer still gets through your defenses, you have rights, and you should exercise them. According to the Federal Trade Commission, you are not required to pay for supplies or services you didn't order, nor are you required to return them. You may treat unordered merchandise as a gift. But you have to be able to prove you didn't order it, which should be easy if you use purchase orders.

The FTC has a good template of instructions for avoiding scams.

It doesn't occur to most physicians that a supplier might be ripping them off; but if adequate purchase controls are not in place, then it's possible, and even likely. Be aware of the common scams, how to avoid them, and the options if you're victimized.

Con artists take advantage of unsuspecting employees (and physicians) and lax purchasing procedures. Typically, the scam begins with a phone call from a “representative” who asks questions about the office and the supplies commonly ordered in bulk, such as paper, disposable gloves, printer cartridges, gauze pads, and cleaning supplies. (The caller might claim to be conducting a survey.)

The scammer might pretend to be a regular supplier who is “overstocked” on printer ink or toner. (Toner scams are so common that perpetrators are nicknamed “toner phoners.”)

Here is how this scenario might play out: You receive a shipment of poor quality merchandise you didn't order. Later, you receive an invoice for 5-10 times the amount you would pay a legitimate supplier for better quality supplies.

You can't be sure you didn't place the order, because you have no system in place for checking such things; your employees may have already opened the boxes; and you're under the mistaken impression that you have to return unordered merchandise or pay for it if you've started using it. (More on this later.)

Sometimes the caller offers your receptionist or office manager a free “promotional item” with “no further obligation.” Your employee figures why not, and accepts the gift. You receive overpriced unordered merchandise, followed by an invoice with the employee's name prominently displayed. The crooks are betting you will blame the employee, who you assume placed the order to get the gift (despite his or her denials), and now you have to pay.

Regardless of the method, the goal is the same: to get an invoice into your hands. Once that is accomplished, the scammers get very aggressive; they will dun you with letters and phone calls, send you to real or fake collection agents, and even threaten legal action.

You're at a disadvantage because you're not positive, and certainly can't prove, that you didn't order the supplies. And, if you pay the bill, you think maybe they will get off your back; however, you will only be targeted for additional scams. The scammer may even sell your “account” to other con artists.

Prevention is a matter of good organization and training. Put one person in charge of ordering supplies, and instruct everyone (including physicians) to tell all solicitors, “I'm not authorized to order anything or answer surveys. You'll need to speak to our purchaser.”

Instruct your purchaser to be suspicious of all cold calls and unfamiliar salespeople, and to never yield to pressure to make an immediate decision. If an offer appears legitimate, ask to see a catalog or printed price list before ordering anything.

Standardize your ordering procedure. Acquire a supply of purchase orders – electronic or written – and make sure one is filled out for every order, and every order is assigned a number. The employee who pays bills, ideally someone different from the one who does the ordering, should receive a copy of every purchase order. Keep blank order forms locked up or password protected.

When shipments arrive, verify they match the shipper's invoice and the purchase order. If everything reconciles, send a copy of the shipping invoice to your accounts payable employee. Bills for services should be reconciled the same way.

If a scammer still gets through your defenses, you have rights, and you should exercise them. According to the Federal Trade Commission, you are not required to pay for supplies or services you didn't order, nor are you required to return them. You may treat unordered merchandise as a gift. But you have to be able to prove you didn't order it, which should be easy if you use purchase orders.

The FTC has a good template of instructions for avoiding scams.

Management of accounts receivable is a significant issue in all private offices, and I've addressed it from multiple angles in previous columns.

In most cases, the patient-owed portion can be kept out of the accounts receivable in the first place. Collect as much as possible at the time of service, even if you have to offer a discount for immediate payment. When immediate payment is impossible, or you must wait for the insurance explanation of benefits, ask for a credit card number that you can keep on file and charge as soon as you know the balance due.

Sending statements should be a last resort, but they should be sent promptly, and no more than three times before you refer the account for collection.

Most difficult or awkward collection problems can be categorized, and you should have a standardized strategy for dealing with each of them. Those strategies should be assembled as a formal written policy and applied consistently each time they arise. Such a policy begins by considering possible scenarios.

Standardize as many situations as possible; for example, make a list of any situation in which you always want the patient balance written off, or always want the balance sent to a collection agency without your direction, or always want to make a case-by-case decision.

Be as specific as possible. What do you want done, for example, when a patient is deceased? Do you want to bill the family or estate, or write off the balance as a bad debt, or some combination of the two? My office has a “sliding scale” based on the size of the balance due, ranging from writing off the smallest balances to deciding the fate of the largest on a case-by-case basis. The occasional very large balance might merit referral to a specialized company for a probate search, or other identification of accessible funds.

What about a patient who claims to have been laid off from work and does not pay a balance or discontinues payments? Options include referring the account to your collection agency, writing off the balance, or negotiating payment of a reduced balance.

If a patient has no insurance and requests a discount at, or prior to, the time of service, decide if you want to give one, and if so, how much and under which circumstances. My basic no-insurance discount is 40% if payment is made at the time of the visit. Those who can't pay immediately are offered 25% off if they pay within 30 days of service, 10% if within 60 days. Cases of particular hardship are worked out on an individual basis. We have a similar policy for patients who have insurance that my office does not accept.

For inpatient services, when the hospital has discounted or written off the patient balance and the patient requests a discount, we match the discount granted by the hospital. For small balances that remain unpaid after reasonable efforts have been made to collect from the patient, we write off balances of less than $25.00 and refer the rest for collection.

Delinquent accounts, after collection efforts have been exhausted without success, are usually unsalvageable; but, occasionally, patients will attempt to negotiate a settlement, once they realize the damage done to their credit rating. I am less generous with discounts under such circumstances, of course, but I usually take 5% off if the balance is paid in full within 10 days, and 10% if paid by credit card immediately, by phone. We require them to complete a standard “hardship form” to apply for a larger discount.

Nobody collects every balance owed. This is the reality in any business, especially a medical one. The main objective is to do everything possible to minimize uncollected accounts. Develop a system that works, and be disciplined about implementing it.

Management of accounts receivable is a significant issue in all private offices, and I've addressed it from multiple angles in previous columns.

In most cases, the patient-owed portion can be kept out of the accounts receivable in the first place. Collect as much as possible at the time of service, even if you have to offer a discount for immediate payment. When immediate payment is impossible, or you must wait for the insurance explanation of benefits, ask for a credit card number that you can keep on file and charge as soon as you know the balance due.

Sending statements should be a last resort, but they should be sent promptly, and no more than three times before you refer the account for collection.

Most difficult or awkward collection problems can be categorized, and you should have a standardized strategy for dealing with each of them. Those strategies should be assembled as a formal written policy and applied consistently each time they arise. Such a policy begins by considering possible scenarios.

Standardize as many situations as possible; for example, make a list of any situation in which you always want the patient balance written off, or always want the balance sent to a collection agency without your direction, or always want to make a case-by-case decision.

Be as specific as possible. What do you want done, for example, when a patient is deceased? Do you want to bill the family or estate, or write off the balance as a bad debt, or some combination of the two? My office has a “sliding scale” based on the size of the balance due, ranging from writing off the smallest balances to deciding the fate of the largest on a case-by-case basis. The occasional very large balance might merit referral to a specialized company for a probate search, or other identification of accessible funds.

What about a patient who claims to have been laid off from work and does not pay a balance or discontinues payments? Options include referring the account to your collection agency, writing off the balance, or negotiating payment of a reduced balance.

If a patient has no insurance and requests a discount at, or prior to, the time of service, decide if you want to give one, and if so, how much and under which circumstances. My basic no-insurance discount is 40% if payment is made at the time of the visit. Those who can't pay immediately are offered 25% off if they pay within 30 days of service, 10% if within 60 days. Cases of particular hardship are worked out on an individual basis. We have a similar policy for patients who have insurance that my office does not accept.

For inpatient services, when the hospital has discounted or written off the patient balance and the patient requests a discount, we match the discount granted by the hospital. For small balances that remain unpaid after reasonable efforts have been made to collect from the patient, we write off balances of less than $25.00 and refer the rest for collection.

Delinquent accounts, after collection efforts have been exhausted without success, are usually unsalvageable; but, occasionally, patients will attempt to negotiate a settlement, once they realize the damage done to their credit rating. I am less generous with discounts under such circumstances, of course, but I usually take 5% off if the balance is paid in full within 10 days, and 10% if paid by credit card immediately, by phone. We require them to complete a standard “hardship form” to apply for a larger discount.

Nobody collects every balance owed. This is the reality in any business, especially a medical one. The main objective is to do everything possible to minimize uncollected accounts. Develop a system that works, and be disciplined about implementing it.

Management of accounts receivable is a significant issue in all private offices, and I've addressed it from multiple angles in previous columns.

In most cases, the patient-owed portion can be kept out of the accounts receivable in the first place. Collect as much as possible at the time of service, even if you have to offer a discount for immediate payment. When immediate payment is impossible, or you must wait for the insurance explanation of benefits, ask for a credit card number that you can keep on file and charge as soon as you know the balance due.

Sending statements should be a last resort, but they should be sent promptly, and no more than three times before you refer the account for collection.

Most difficult or awkward collection problems can be categorized, and you should have a standardized strategy for dealing with each of them. Those strategies should be assembled as a formal written policy and applied consistently each time they arise. Such a policy begins by considering possible scenarios.

Standardize as many situations as possible; for example, make a list of any situation in which you always want the patient balance written off, or always want the balance sent to a collection agency without your direction, or always want to make a case-by-case decision.

Be as specific as possible. What do you want done, for example, when a patient is deceased? Do you want to bill the family or estate, or write off the balance as a bad debt, or some combination of the two? My office has a “sliding scale” based on the size of the balance due, ranging from writing off the smallest balances to deciding the fate of the largest on a case-by-case basis. The occasional very large balance might merit referral to a specialized company for a probate search, or other identification of accessible funds.

What about a patient who claims to have been laid off from work and does not pay a balance or discontinues payments? Options include referring the account to your collection agency, writing off the balance, or negotiating payment of a reduced balance.

If a patient has no insurance and requests a discount at, or prior to, the time of service, decide if you want to give one, and if so, how much and under which circumstances. My basic no-insurance discount is 40% if payment is made at the time of the visit. Those who can't pay immediately are offered 25% off if they pay within 30 days of service, 10% if within 60 days. Cases of particular hardship are worked out on an individual basis. We have a similar policy for patients who have insurance that my office does not accept.

For inpatient services, when the hospital has discounted or written off the patient balance and the patient requests a discount, we match the discount granted by the hospital. For small balances that remain unpaid after reasonable efforts have been made to collect from the patient, we write off balances of less than $25.00 and refer the rest for collection.

Delinquent accounts, after collection efforts have been exhausted without success, are usually unsalvageable; but, occasionally, patients will attempt to negotiate a settlement, once they realize the damage done to their credit rating. I am less generous with discounts under such circumstances, of course, but I usually take 5% off if the balance is paid in full within 10 days, and 10% if paid by credit card immediately, by phone. We require them to complete a standard “hardship form” to apply for a larger discount.

Nobody collects every balance owed. This is the reality in any business, especially a medical one. The main objective is to do everything possible to minimize uncollected accounts. Develop a system that works, and be disciplined about implementing it.

As the “Great Recession” continues, there is much discussion on medical forums about how to increase cash flow, decrease administrative expenses, and deal with ever-increasing numbers of unemployed and uninsured patients.

Extending discounts to patients who pay at the time of service or pay out of pocket is one effective way of addressing all three of these issues. Exercise caution, because discounts can run afoul of federal and state laws. These include state antikickback statutes, the anti-inducement provision of the Health Insurance Portability and Accountability Act, the Medicare exclusion provision, and state insurance antidiscrimination provisions.

From a legal standpoint, any discount is a kickback of sorts—you are returning part of your fee to the patient—and many laws designed to thwart real kickbacks can apply in such situations.

Take the straightforward case of time-of-service discounts for cosmetic procedures and other services not covered by insurance. You would think such transactions are just between you and your patients, but you need to avoid the appearance of using these discounts as marketing incentives (inducements to attract patients).

Also, a shrewd third-party payer could try to pull a fast one on you. Many provider agreements contain what are often called “most favored nation” clauses, which require you to automatically give that provider the lowest price you offer to anyone else, regardless of what they would otherwise pay. In other words, they could demand that you give them the same discount.

My response in that situation would be that a time-of-service discount is exactly that: It is offered only when payment is made immediately. Third parties never pay at the time of service and are not entitled to it.

Things get complicated if you also want to extend discounts for covered services. Be sure that the discounted fee you charge the patient is also reflected on the claim submitted to the insurer. Billing the insurer more than you charged the patient invites a charge of fraud. Avoid discounting so regularly that the discounted fee becomes your new usual and customary rate.

Waiving coinsurance and deductibles can be trouble, too, particularly with Medicare and Medicaid. You might intend it as a good deed, but the Centers for Medicare and Medicaid Services may see it as an inducement or kickback, especially if you do it routinely. The CMS has no problem with an occasional waiver, especially “after determining in good faith that the individual is in financial need” (according to the Office of Inspector General), but thorough documentation is in order in such cases.

Waiving copays for privately insured patients can be equally problematic. Nearly all insurers impose a contractual duty on providers to make a reasonable effort to collect applicable copays and/or deductibles. They view the routine waiver of patient payments as a breach of contract, and there has been litigation against providers who flout this requirement. As with the CMS, accommodating patients with individually documented financial limitations is acceptable, but when there is a pattern of routine waivers and no documentation, you will have difficulty defending it.

In addition to antikickback laws, some states have antidiscrimination laws that forbid either lower charges to any subset of insurance payers or any noninsurance payer than to any insurance payer. Some states make specific exceptions for legitimate discounts—as in cases of financial hardship, or when you are just trying to pass along your lower billing and collections costs—but others do not. Check your state's laws and run everything past your attorney.

As for how much of a discount you can give, I cannot suggest an amount, but if it is completely out of proportion to the administrative costs of submitting paperwork and the hassles associated with waiting for your money, you could, once again, be accused of offering a discount that is a de facto increase to insurance carriers, and that could result in charges of fraud.

In cases of legitimate financial hardship, the most effective and least problematic strategy may be to offer a sliding scale. Many large clinics and community agencies and all hospitals have a written policy for this, often based on federal poverty guidelines. Do a little homework: Contact local social service agencies and welfare clinics, learn the community standard in your area, and formulate a written policy with guidelines for determining a patient's indigence. Once again, consistency of administration, objectivity in policies, and documentation of individual eligibility are essential.

As the “Great Recession” continues, there is much discussion on medical forums about how to increase cash flow, decrease administrative expenses, and deal with ever-increasing numbers of unemployed and uninsured patients.

Extending discounts to patients who pay at the time of service or pay out of pocket is one effective way of addressing all three of these issues. Exercise caution, because discounts can run afoul of federal and state laws. These include state antikickback statutes, the anti-inducement provision of the Health Insurance Portability and Accountability Act, the Medicare exclusion provision, and state insurance antidiscrimination provisions.

From a legal standpoint, any discount is a kickback of sorts—you are returning part of your fee to the patient—and many laws designed to thwart real kickbacks can apply in such situations.

Take the straightforward case of time-of-service discounts for cosmetic procedures and other services not covered by insurance. You would think such transactions are just between you and your patients, but you need to avoid the appearance of using these discounts as marketing incentives (inducements to attract patients).

Also, a shrewd third-party payer could try to pull a fast one on you. Many provider agreements contain what are often called “most favored nation” clauses, which require you to automatically give that provider the lowest price you offer to anyone else, regardless of what they would otherwise pay. In other words, they could demand that you give them the same discount.

My response in that situation would be that a time-of-service discount is exactly that: It is offered only when payment is made immediately. Third parties never pay at the time of service and are not entitled to it.

Things get complicated if you also want to extend discounts for covered services. Be sure that the discounted fee you charge the patient is also reflected on the claim submitted to the insurer. Billing the insurer more than you charged the patient invites a charge of fraud. Avoid discounting so regularly that the discounted fee becomes your new usual and customary rate.

Waiving coinsurance and deductibles can be trouble, too, particularly with Medicare and Medicaid. You might intend it as a good deed, but the Centers for Medicare and Medicaid Services may see it as an inducement or kickback, especially if you do it routinely. The CMS has no problem with an occasional waiver, especially “after determining in good faith that the individual is in financial need” (according to the Office of Inspector General), but thorough documentation is in order in such cases.

Waiving copays for privately insured patients can be equally problematic. Nearly all insurers impose a contractual duty on providers to make a reasonable effort to collect applicable copays and/or deductibles. They view the routine waiver of patient payments as a breach of contract, and there has been litigation against providers who flout this requirement. As with the CMS, accommodating patients with individually documented financial limitations is acceptable, but when there is a pattern of routine waivers and no documentation, you will have difficulty defending it.

In addition to antikickback laws, some states have antidiscrimination laws that forbid either lower charges to any subset of insurance payers or any noninsurance payer than to any insurance payer. Some states make specific exceptions for legitimate discounts—as in cases of financial hardship, or when you are just trying to pass along your lower billing and collections costs—but others do not. Check your state's laws and run everything past your attorney.

As for how much of a discount you can give, I cannot suggest an amount, but if it is completely out of proportion to the administrative costs of submitting paperwork and the hassles associated with waiting for your money, you could, once again, be accused of offering a discount that is a de facto increase to insurance carriers, and that could result in charges of fraud.

In cases of legitimate financial hardship, the most effective and least problematic strategy may be to offer a sliding scale. Many large clinics and community agencies and all hospitals have a written policy for this, often based on federal poverty guidelines. Do a little homework: Contact local social service agencies and welfare clinics, learn the community standard in your area, and formulate a written policy with guidelines for determining a patient's indigence. Once again, consistency of administration, objectivity in policies, and documentation of individual eligibility are essential.

As the “Great Recession” continues, there is much discussion on medical forums about how to increase cash flow, decrease administrative expenses, and deal with ever-increasing numbers of unemployed and uninsured patients.

Extending discounts to patients who pay at the time of service or pay out of pocket is one effective way of addressing all three of these issues. Exercise caution, because discounts can run afoul of federal and state laws. These include state antikickback statutes, the anti-inducement provision of the Health Insurance Portability and Accountability Act, the Medicare exclusion provision, and state insurance antidiscrimination provisions.

From a legal standpoint, any discount is a kickback of sorts—you are returning part of your fee to the patient—and many laws designed to thwart real kickbacks can apply in such situations.

Take the straightforward case of time-of-service discounts for cosmetic procedures and other services not covered by insurance. You would think such transactions are just between you and your patients, but you need to avoid the appearance of using these discounts as marketing incentives (inducements to attract patients).

Also, a shrewd third-party payer could try to pull a fast one on you. Many provider agreements contain what are often called “most favored nation” clauses, which require you to automatically give that provider the lowest price you offer to anyone else, regardless of what they would otherwise pay. In other words, they could demand that you give them the same discount.

My response in that situation would be that a time-of-service discount is exactly that: It is offered only when payment is made immediately. Third parties never pay at the time of service and are not entitled to it.

Things get complicated if you also want to extend discounts for covered services. Be sure that the discounted fee you charge the patient is also reflected on the claim submitted to the insurer. Billing the insurer more than you charged the patient invites a charge of fraud. Avoid discounting so regularly that the discounted fee becomes your new usual and customary rate.

Waiving coinsurance and deductibles can be trouble, too, particularly with Medicare and Medicaid. You might intend it as a good deed, but the Centers for Medicare and Medicaid Services may see it as an inducement or kickback, especially if you do it routinely. The CMS has no problem with an occasional waiver, especially “after determining in good faith that the individual is in financial need” (according to the Office of Inspector General), but thorough documentation is in order in such cases.

Waiving copays for privately insured patients can be equally problematic. Nearly all insurers impose a contractual duty on providers to make a reasonable effort to collect applicable copays and/or deductibles. They view the routine waiver of patient payments as a breach of contract, and there has been litigation against providers who flout this requirement. As with the CMS, accommodating patients with individually documented financial limitations is acceptable, but when there is a pattern of routine waivers and no documentation, you will have difficulty defending it.

In addition to antikickback laws, some states have antidiscrimination laws that forbid either lower charges to any subset of insurance payers or any noninsurance payer than to any insurance payer. Some states make specific exceptions for legitimate discounts—as in cases of financial hardship, or when you are just trying to pass along your lower billing and collections costs—but others do not. Check your state's laws and run everything past your attorney.

As for how much of a discount you can give, I cannot suggest an amount, but if it is completely out of proportion to the administrative costs of submitting paperwork and the hassles associated with waiting for your money, you could, once again, be accused of offering a discount that is a de facto increase to insurance carriers, and that could result in charges of fraud.

In cases of legitimate financial hardship, the most effective and least problematic strategy may be to offer a sliding scale. Many large clinics and community agencies and all hospitals have a written policy for this, often based on federal poverty guidelines. Do a little homework: Contact local social service agencies and welfare clinics, learn the community standard in your area, and formulate a written policy with guidelines for determining a patient's indigence. Once again, consistency of administration, objectivity in policies, and documentation of individual eligibility are essential.

Since passage of the health care reform bill in March, there has been considerable discussion in medical periodicals, forums, and blogs about the dramatic changes that will be taking place.

At least one thing—prior authorizations—will not change, because the legislation did not address it.

Lawmakers have offered no public explanation for ignoring such a glaring problem. It should have been obvious, even to them, that requiring physicians to ask permission, over and over, for necessary tests and treatments is senseless and inefficient.

Common sense dictates fixing something so universally hated by doctors and patients alike. One can speculate that the third party in the physician-patient equation—insurers—had a lot to do with this oversight.

Insurers love prior authorization because it saves them money. In fact, it's one of the most effective cost-cutting tools in their box: rationing through inconvenience. So it's logical to speculate that they probably used their considerable input into the reform law's content, via their army of lobbyists, to discourage action.

So, prior authorization will remain a problem for the foreseeable future, and we need to deal with it as best we can.

First and foremost, minimize the wasted time prior authorizations cause you and your staff. My office took a major step toward this goal by banning all submissions by telephone.

A single prior-authorization phone call can easily take 30 minutes of staffers' time as they fight through the automated greetings and category selections, and wait on hold before finally speaking to somebody with a pulse. At that point, since the person is hardly ever authorized to give approval, they get another department's number or a faxed form. It's an inexcusable and outrageously expensive waste of time.

When a request for preauthorization comes in, we call the patient and ask that he or she make the call to the insurance company to request the form.

I have mixed feelings about passing along the automated phone-hoop hassle to patients, but it is their insurance, after all, and this is one area where I simply can't afford the luxury of providing a time-consuming service for free. Plus, it gives patients some understanding of the absurdity of the whole prior-authorization game.

When possible, we enlist the help of any other parties at our disposal. Some insurers will accept prior-authorization requests from pharmacies, which makes a lot of sense. They typically have a complete record of all medications tried and failed, as well as the necessary diagnosis codes.

Unfortunately, many insurers inexplicably insist that only the physician's office submit the request, but it's worth your time to ask if the company in question accepts pharmacy filings, rather than assuming it doesn't.

Also, don't forget that manufacturers of some medications (biologics, for example) will help with some, or all, of the prior-authorization burden. Sometimes they have an auxiliary company set up just for that purpose.

If not, a representative or district manager may be able to help or point you toward someone who can. It never hurts to ask.

Also, most pharmaceutical companies have a “compassion” program that provides medications free when the insurer will not pay and the patient can't afford it.

Other potential allies are the big-box chains that offer selected medications at $4 (or less) per prescription. Sometimes, the most efficient solution is to point the patient toward Walmart, Costco, Target, or another chain in your area, and forget the preauthorization altogether.

The key is to get the insurance company's form. Not only do you avoid the phone runaround, but the form tells exactly what that particular company wants, so your staff won't waste time finding and supplying information that is not needed.

What about patients who request prior authorization for medically unnecessary medications?

In my office, that's usually a retinoid prescription for wrinkles. I tell them it's against the law to say a treatment is necessary when it is not, and that there is zero chance their insurer will pay. (As a diplomatic friend of mine puts it, “Your insurance company barely cares if you are dying, let alone how you look!”) I tell them I will not be able to go to bat for older patients with recalcitrant acne who really need retinoids, if I try to slip cosmetic prescriptions past insurers. Most understand.

Since passage of the health care reform bill in March, there has been considerable discussion in medical periodicals, forums, and blogs about the dramatic changes that will be taking place.

At least one thing—prior authorizations—will not change, because the legislation did not address it.

Lawmakers have offered no public explanation for ignoring such a glaring problem. It should have been obvious, even to them, that requiring physicians to ask permission, over and over, for necessary tests and treatments is senseless and inefficient.

Common sense dictates fixing something so universally hated by doctors and patients alike. One can speculate that the third party in the physician-patient equation—insurers—had a lot to do with this oversight.

Insurers love prior authorization because it saves them money. In fact, it's one of the most effective cost-cutting tools in their box: rationing through inconvenience. So it's logical to speculate that they probably used their considerable input into the reform law's content, via their army of lobbyists, to discourage action.

So, prior authorization will remain a problem for the foreseeable future, and we need to deal with it as best we can.

First and foremost, minimize the wasted time prior authorizations cause you and your staff. My office took a major step toward this goal by banning all submissions by telephone.

A single prior-authorization phone call can easily take 30 minutes of staffers' time as they fight through the automated greetings and category selections, and wait on hold before finally speaking to somebody with a pulse. At that point, since the person is hardly ever authorized to give approval, they get another department's number or a faxed form. It's an inexcusable and outrageously expensive waste of time.

When a request for preauthorization comes in, we call the patient and ask that he or she make the call to the insurance company to request the form.

I have mixed feelings about passing along the automated phone-hoop hassle to patients, but it is their insurance, after all, and this is one area where I simply can't afford the luxury of providing a time-consuming service for free. Plus, it gives patients some understanding of the absurdity of the whole prior-authorization game.

When possible, we enlist the help of any other parties at our disposal. Some insurers will accept prior-authorization requests from pharmacies, which makes a lot of sense. They typically have a complete record of all medications tried and failed, as well as the necessary diagnosis codes.

Unfortunately, many insurers inexplicably insist that only the physician's office submit the request, but it's worth your time to ask if the company in question accepts pharmacy filings, rather than assuming it doesn't.

Also, don't forget that manufacturers of some medications (biologics, for example) will help with some, or all, of the prior-authorization burden. Sometimes they have an auxiliary company set up just for that purpose.

If not, a representative or district manager may be able to help or point you toward someone who can. It never hurts to ask.

Also, most pharmaceutical companies have a “compassion” program that provides medications free when the insurer will not pay and the patient can't afford it.

Other potential allies are the big-box chains that offer selected medications at $4 (or less) per prescription. Sometimes, the most efficient solution is to point the patient toward Walmart, Costco, Target, or another chain in your area, and forget the preauthorization altogether.

The key is to get the insurance company's form. Not only do you avoid the phone runaround, but the form tells exactly what that particular company wants, so your staff won't waste time finding and supplying information that is not needed.

What about patients who request prior authorization for medically unnecessary medications?

In my office, that's usually a retinoid prescription for wrinkles. I tell them it's against the law to say a treatment is necessary when it is not, and that there is zero chance their insurer will pay. (As a diplomatic friend of mine puts it, “Your insurance company barely cares if you are dying, let alone how you look!”) I tell them I will not be able to go to bat for older patients with recalcitrant acne who really need retinoids, if I try to slip cosmetic prescriptions past insurers. Most understand.

Since passage of the health care reform bill in March, there has been considerable discussion in medical periodicals, forums, and blogs about the dramatic changes that will be taking place.

At least one thing—prior authorizations—will not change, because the legislation did not address it.

Lawmakers have offered no public explanation for ignoring such a glaring problem. It should have been obvious, even to them, that requiring physicians to ask permission, over and over, for necessary tests and treatments is senseless and inefficient.

Common sense dictates fixing something so universally hated by doctors and patients alike. One can speculate that the third party in the physician-patient equation—insurers—had a lot to do with this oversight.

Insurers love prior authorization because it saves them money. In fact, it's one of the most effective cost-cutting tools in their box: rationing through inconvenience. So it's logical to speculate that they probably used their considerable input into the reform law's content, via their army of lobbyists, to discourage action.

So, prior authorization will remain a problem for the foreseeable future, and we need to deal with it as best we can.

First and foremost, minimize the wasted time prior authorizations cause you and your staff. My office took a major step toward this goal by banning all submissions by telephone.

A single prior-authorization phone call can easily take 30 minutes of staffers' time as they fight through the automated greetings and category selections, and wait on hold before finally speaking to somebody with a pulse. At that point, since the person is hardly ever authorized to give approval, they get another department's number or a faxed form. It's an inexcusable and outrageously expensive waste of time.

When a request for preauthorization comes in, we call the patient and ask that he or she make the call to the insurance company to request the form.

I have mixed feelings about passing along the automated phone-hoop hassle to patients, but it is their insurance, after all, and this is one area where I simply can't afford the luxury of providing a time-consuming service for free. Plus, it gives patients some understanding of the absurdity of the whole prior-authorization game.

When possible, we enlist the help of any other parties at our disposal. Some insurers will accept prior-authorization requests from pharmacies, which makes a lot of sense. They typically have a complete record of all medications tried and failed, as well as the necessary diagnosis codes.

Unfortunately, many insurers inexplicably insist that only the physician's office submit the request, but it's worth your time to ask if the company in question accepts pharmacy filings, rather than assuming it doesn't.

Also, don't forget that manufacturers of some medications (biologics, for example) will help with some, or all, of the prior-authorization burden. Sometimes they have an auxiliary company set up just for that purpose.

If not, a representative or district manager may be able to help or point you toward someone who can. It never hurts to ask.

Also, most pharmaceutical companies have a “compassion” program that provides medications free when the insurer will not pay and the patient can't afford it.

Other potential allies are the big-box chains that offer selected medications at $4 (or less) per prescription. Sometimes, the most efficient solution is to point the patient toward Walmart, Costco, Target, or another chain in your area, and forget the preauthorization altogether.

The key is to get the insurance company's form. Not only do you avoid the phone runaround, but the form tells exactly what that particular company wants, so your staff won't waste time finding and supplying information that is not needed.

What about patients who request prior authorization for medically unnecessary medications?

In my office, that's usually a retinoid prescription for wrinkles. I tell them it's against the law to say a treatment is necessary when it is not, and that there is zero chance their insurer will pay. (As a diplomatic friend of mine puts it, “Your insurance company barely cares if you are dying, let alone how you look!”) I tell them I will not be able to go to bat for older patients with recalcitrant acne who really need retinoids, if I try to slip cosmetic prescriptions past insurers. Most understand.

If you have plans to enlarge your office staff anytime soon, consider doing it sooner, rather than later.

In March, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act into law. Known popularly as the “Jobs Bill,” its intended purpose is to get the unemployed back to work by encouraging the hiring of employees now.

The new law exempts private-sector employers from their 6.2% share of the Social Security payroll tax for the remainder of 2010 on all new hires who had been unemployed for the previous 60 days or more.

This is a hiring incentive that, for once, works to your advantage, as well as that of your new employees. For one thing, the tax benefit is immediate; it helps your cash flow instantly, because there are no refunds—the tax is simply not collected in the first place. For another, if you keep your new employees on payroll for at least 52 weeks, you, as the employer, can take an additional tax credit of up to $1,000 for each new employee, on your own 2011 tax return.

(More precisely, the credit is the lesser of either $1,000 or 6.2% of the wages paid to the worker during the 52 consecutive-week period; that means it will be $1,000 for any employee paid more than about $16,130 over that period.)

There is no limit to the number of employees you can hire, no maximum or minimum salary you need to pay, and no cap on the total dollar amount of tax that may be forgiven; your office saves 6.2% whether your new employee is a $30,000 medical assistant, a $100,000 physician assistant, or a $250,000 physician.

Part-time employees also are eligible; there is no minimum number of hours that new employees must work. However, the salary you pay a part-time employee in the second 26 weeks of that first year must total at least 80% of his or her pay over the first 26 weeks.

The objective of the new law is to create new jobs, not to hire the unemployed at the expense of those who have jobs already. So if you are thinking about laying off your entire staff and hiring a completely new crew solely for the purpose of taking the payroll exemption, forget about it. A new hire who replaces another employee who performed the same job is not eligible for the benefit, unless the prior employee left voluntarily or was fired for cause.

Congress anticipated and proactively plugged some other obvious loopholes; you cannot get the exemption by firing employees for 60 days and then hiring them back, for example. And you cannot claim the new tax breaks by hiring family members or by employing domestic workers in your home.

The law also forbids double dipping: If you have employees who are eligible for the Work Opportunity Tax Credit (WOTC), you must select one benefit or the other for 2010, not both.

The law requires each eligible worker to certify by signed affidavit that he or she has not been employed for more than 40 hours during the preceding 60-day period, that no one was fired without cause to create the job being taken, and that the employer is not a relative or family member.

You should explain to these new hires that they will not be paying into Social Security in 2010, but their eventual Social Security benefits will not be decreased because of it.

Remember, the incentive only applies to wages paid to eligible new employees for the remainder of this year; the idea is to decrease unemployment now. So the sooner you hire, the longer your payroll tax holiday will last.

The IRS will be watching, so be sure to check with your lawyer and accountant, and get all your documentation straight.

If you have plans to enlarge your office staff anytime soon, consider doing it sooner, rather than later.

In March, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act into law. Known popularly as the “Jobs Bill,” its intended purpose is to get the unemployed back to work by encouraging the hiring of employees now.

The new law exempts private-sector employers from their 6.2% share of the Social Security payroll tax for the remainder of 2010 on all new hires who had been unemployed for the previous 60 days or more.

This is a hiring incentive that, for once, works to your advantage, as well as that of your new employees. For one thing, the tax benefit is immediate; it helps your cash flow instantly, because there are no refunds—the tax is simply not collected in the first place. For another, if you keep your new employees on payroll for at least 52 weeks, you, as the employer, can take an additional tax credit of up to $1,000 for each new employee, on your own 2011 tax return.

(More precisely, the credit is the lesser of either $1,000 or 6.2% of the wages paid to the worker during the 52 consecutive-week period; that means it will be $1,000 for any employee paid more than about $16,130 over that period.)

There is no limit to the number of employees you can hire, no maximum or minimum salary you need to pay, and no cap on the total dollar amount of tax that may be forgiven; your office saves 6.2% whether your new employee is a $30,000 medical assistant, a $100,000 physician assistant, or a $250,000 physician.

Part-time employees also are eligible; there is no minimum number of hours that new employees must work. However, the salary you pay a part-time employee in the second 26 weeks of that first year must total at least 80% of his or her pay over the first 26 weeks.

The objective of the new law is to create new jobs, not to hire the unemployed at the expense of those who have jobs already. So if you are thinking about laying off your entire staff and hiring a completely new crew solely for the purpose of taking the payroll exemption, forget about it. A new hire who replaces another employee who performed the same job is not eligible for the benefit, unless the prior employee left voluntarily or was fired for cause.

Congress anticipated and proactively plugged some other obvious loopholes; you cannot get the exemption by firing employees for 60 days and then hiring them back, for example. And you cannot claim the new tax breaks by hiring family members or by employing domestic workers in your home.

The law also forbids double dipping: If you have employees who are eligible for the Work Opportunity Tax Credit (WOTC), you must select one benefit or the other for 2010, not both.

The law requires each eligible worker to certify by signed affidavit that he or she has not been employed for more than 40 hours during the preceding 60-day period, that no one was fired without cause to create the job being taken, and that the employer is not a relative or family member.

You should explain to these new hires that they will not be paying into Social Security in 2010, but their eventual Social Security benefits will not be decreased because of it.

Remember, the incentive only applies to wages paid to eligible new employees for the remainder of this year; the idea is to decrease unemployment now. So the sooner you hire, the longer your payroll tax holiday will last.

The IRS will be watching, so be sure to check with your lawyer and accountant, and get all your documentation straight.

If you have plans to enlarge your office staff anytime soon, consider doing it sooner, rather than later.

In March, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act into law. Known popularly as the “Jobs Bill,” its intended purpose is to get the unemployed back to work by encouraging the hiring of employees now.

The new law exempts private-sector employers from their 6.2% share of the Social Security payroll tax for the remainder of 2010 on all new hires who had been unemployed for the previous 60 days or more.

This is a hiring incentive that, for once, works to your advantage, as well as that of your new employees. For one thing, the tax benefit is immediate; it helps your cash flow instantly, because there are no refunds—the tax is simply not collected in the first place. For another, if you keep your new employees on payroll for at least 52 weeks, you, as the employer, can take an additional tax credit of up to $1,000 for each new employee, on your own 2011 tax return.

(More precisely, the credit is the lesser of either $1,000 or 6.2% of the wages paid to the worker during the 52 consecutive-week period; that means it will be $1,000 for any employee paid more than about $16,130 over that period.)

There is no limit to the number of employees you can hire, no maximum or minimum salary you need to pay, and no cap on the total dollar amount of tax that may be forgiven; your office saves 6.2% whether your new employee is a $30,000 medical assistant, a $100,000 physician assistant, or a $250,000 physician.

Part-time employees also are eligible; there is no minimum number of hours that new employees must work. However, the salary you pay a part-time employee in the second 26 weeks of that first year must total at least 80% of his or her pay over the first 26 weeks.

The objective of the new law is to create new jobs, not to hire the unemployed at the expense of those who have jobs already. So if you are thinking about laying off your entire staff and hiring a completely new crew solely for the purpose of taking the payroll exemption, forget about it. A new hire who replaces another employee who performed the same job is not eligible for the benefit, unless the prior employee left voluntarily or was fired for cause.

Congress anticipated and proactively plugged some other obvious loopholes; you cannot get the exemption by firing employees for 60 days and then hiring them back, for example. And you cannot claim the new tax breaks by hiring family members or by employing domestic workers in your home.

The law also forbids double dipping: If you have employees who are eligible for the Work Opportunity Tax Credit (WOTC), you must select one benefit or the other for 2010, not both.

The law requires each eligible worker to certify by signed affidavit that he or she has not been employed for more than 40 hours during the preceding 60-day period, that no one was fired without cause to create the job being taken, and that the employer is not a relative or family member.

You should explain to these new hires that they will not be paying into Social Security in 2010, but their eventual Social Security benefits will not be decreased because of it.

Remember, the incentive only applies to wages paid to eligible new employees for the remainder of this year; the idea is to decrease unemployment now. So the sooner you hire, the longer your payroll tax holiday will last.

The IRS will be watching, so be sure to check with your lawyer and accountant, and get all your documentation straight.