Private Practices

Taking on financial challenges in physician private practice

Len Strazewski , Contributing News Writer

Getting a new physician private practice off the ground is a reason for celebration—but after that, the work continues. Physicians and practice managers still face a steady stream of financial challenges such as prior authorization, payor audits and the burden of managing a revenue cycle.

Keep your practice running

The AMA is fighting to keep private practice a viable option for physicians. We're working to remove unnecessary burdens so physicians can reclaim the time they need to focus on patients. 

To meet these challenges in today’s fast-moving health system, it takes astute clinical judgment as well as a commitment to collaboration and solving challenging problems to succeed in independent settings that are often fluid, and the AMA offers the resources and support physicians need to both start and sustain success in private practice.

That includes a series of 10 episodes—“Private Practice: Attending to Business”—that are part of the “AMA STEPS Forward®Podcast.”

The episodes are co-hosted by Taylor Johnson, the AMA’s manager of physician practice development, and Meghan Kwiatkowski, program manager of private practice sustainability at the AMA. Together, they share information and resources to help physicians navigate medical practice business operations and efficiency solutions to create and support a thriving business.

Even after a new practice is off the ground, physicians and administrators still have work to do, as covered in the episodes “Private Practice Administrative Issues Part I” and “Private Practice Administrative Issues Part II.”

Typically, only a tiny portion of practice revenues come directly from patients. Most come from government payors, insurers and third-party administrators who automate most steps of their payment process to simplify their own operations.

Johnson and Kwiatkowski recommend taking advantage of payors’ investment in efficiency and enroll in all their online platforms, since a majority will allow you to submit prior authorization requests and check the status of prior authorizations right through their portal.

This can cut time spent on prior authorization to five–10 minutes per request using an online platform instead of what could be 30 minutes to an hour on the phone obtaining prior authorization.

Fixing prior authorization is a critical component of the AMA Recovery Plan for America’s Physicians.

Prior authorization is overused, and existing processes present significant administrative and clinical concerns. Find out how the AMA is tackling prior authorization with research, practice resources and reform resources.

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Expert tips help doctors navigate private practice challenges

Another financial challenge involves payor audits, which have become more and more common. While audits have become a regular occurrence for many practices, they do not mean that a practice has done something wrong. They do, however, test whether your practice is keeping thorough records and maintaining proper bookkeeping.

When you receive an audit, jump on it right away. It is important for your designated point of contact, which is normally the practice administrator, to respond expeditiously so that any inadvertent delays do not compound the audit, Johnson and Kwiatkowski say.

Get the information requested by the audit into the payor’s online platform as soon as possible. This helps you track information involved in the audit and how it is being used in the process.

The AMA also has developed a comprehensive private practice toolkit on payor contracting that covers these elements:

Practices also need to keep track of and manage the revenue cycle process—the way you get paid. Johnson and Kwiatkowski recommend you consider an automated practice-management system that tracks scheduling, filing claims, billing, collections, and more for each patient encounter.

The system will help the practice managers submit and collect claims payment using electronic fund transfer and simplify eligibility and coverage verification.

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Starting or growing a private practice? Don’t forget the playbook

Successful practices and their practice managers also take leadership to address the social determinants of health and take leadership in managing a practice’s social initiatives.

“Historically, the practice of medicine has focused on diagnosing and treating specific clinical conditions, but as medical knowledge has evolved, and the health care system shifts to more value-based and population focused medicine, practices are looking beyond their walls to understand how their patients' social and physical environments impact their health,” Johnson says in the podcast episode “Social Determinants of Health in Private Practice.

Physician private practices can assess social determinants of health at a patient level, link patients to resources, and define a plan for their practices.

“As we move toward value-based care, expanding our health care focus to include social determinants of health is increasingly necessary, I think, to achieve improved outcomes,” Kwiatkowski said.

Learn more about the AMA Private Practice Physicians Section, which seeks to preserve the freedom, independence and integrity of private practice.