A bunch of trouble

Garry ChapmanPress, Uncategorized


A bunch of trouble

As forming group practices becomes increasingly popular among independent practitioners, Gary Nials reflects on the billing issues which can lead to administrative chaos if not properly understood and effectively managed

We have seen a large rise in the number of consultants forming groups during the last few years.
This growth covers many specialties and it makes a lot of sense because consultants can benefit from economies of scale by sharing the overheads, including secretaries.
It can also assist the quality of service provided to the patient by having several consultants working together within the same specialty but with each doctor having expertise within a subspecialty.
This can provide many benefits for everyone involved. But unless a close eye is kept on the administration side of the practice, it can very quickly escalate out of control.
We have dealt with group practices for many years and have more than 20 groups as part of our client base.
During that time, we have seen many of the same problems occurring in groups. I highlight the main ones to watch out for below

From our experience, coping with the volume of activity within the group is the single biggest issue that they have to deal with and the more successful the group, the bigger the issues can become.
Most underestimate the level of administrative activity they can expect from consultants working together.
This covers all aspects, particularly the volume of phone calls from patients, private medical insurers, clinics and hospitals.
We have been inside an office of one group practice where they were receiving so many phone calls that it occupied two full-time secretaries all day.
The level of activity typically results in the billing being delayed as the patient takes priority. This delay in the billing being sent out then results in greater debt, as not only does the billing go out late, but the practice runs out of time to chase outstanding invoices.
This situation can then escalate very quickly, as the busier the group practice becomes, the less time is spent on the billing, resulting in a backlog of work which has either not been billed or not collected
In many cases, this can actually result in consultants earning less money than they did before they formed or joined a group practice.
To give this some context, it is not unusual for a group practice to join us with a backlog of unpaid bills that is in six figures. Indeed, we have had one group practice joining us that had been established for less than a year with a backlog of outstanding invoices amounting to over £250,000.

Another administrative problem groups can experience is dealing with the multiple price structures that can exist with consultants charging different insurance companies for both consultations and codes set by the Clinical Coding and Schedule Development (CCSD) group (see page 38).
When this happens, to gain recognition with the two major insurers, consultants have to sign an agreement agreeing to adhere to the schedule of fees for both consultations and the CCSD codes for Bupa and AXA
On top of this, each established consultant can have their own fee schedule, which can be set to match insurers’ guidelines or they can set their own fee tariff.
All of the above can result in the group practice having to maintain a separate price structure for each consultant for each insurer, resulting in additional administration overheads to ensure that the billing is done accurately to reflect all of the complexities.
On top of this, someone has to spend the time to keep up to date with the ongoing changes that occur within each insurer’s schedule and the changes in the CCSD schedule to ensure the practice bills correctly for each consultant.

Dealing with all the various payments from companies such as the insurers, foreign embassies and other commercial organisations is another major issue.
With the insurers, if the group practice has its own provider code and everything is billed under that practice code, then the process should be relatively easy.
However, quite often, the consultants who work within the group also practise outside of the group. The administrative problem you can get in this scenario is where the insurance companies pay the wrong invoice to the wrong provider code or they end up paying the consultant and not the practice, or vice versa.
In this scenario, you will then need to get the amount recouped by the insurer and then paid to the correct provider code.
Over the past few years, it has also become very difficult to obtain a provider code for a group practice from the insurers, so it has become quite common for groups to have to bill for each consultant under their individual provider code.
If the practice then has consultants working outside the group, this becomes extremely onerous on both the group and the individual consultants. This is because the remittance advice will only go to one designated location and one designated bank account, which results in extra communication between the two parties to identify what belongs where.

Bank accounts
Someone within the group has to ensure that, taking into account all the issues highlighted above, the financial process is extremely robust and conforms with the financial agreement that has been put in place for each consultant within the group.
This ensures that all the money received ends up in the right bank account in a timely manner and can be audited, if necessary, which is particularly important from a tax perspective.
A complication is caused by the way that most insurers will only pay into one nominated bank account and some will not pay into a third-party account.
So, whether a consultant works only inside a group or has his or her own practice outside the group, there are likely to be multiple bank accounts involved.
This can then become a problem for both the group and the consultant’s individual practice in trying to identify where the payment has gone and what particular invoices that payment relates to so that the correct amount can be transferred to the correct account.

Self-pay patients
This is complicated further by dealing with the payments of the self-pay element of the practice.
As taking payment by credit card or debit card becomes increasingly common, trying to identify the reconciliation of individual invoices against the payments is onerous enough.
But, as these payments taken will be posted into one bank account, making sure that the correct amount gets transferred to the correct consultant/bank account is vital when dealing with the financial statements.
An example of the problems that can occur is epitomised in a group practice we took on.
As part of our service, we took on the reconciliation of the group accounts and, during this process, we identified there was a payment missing from a major insurer.
After investigation, we found the insurer was paying into the consultant’s old bank account, as it had never been changed when the consultant joined the group. This had been going on for 18 months, so the group was naturally delighted to get its missing money.


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