MEDICO-LEGAL WORKAdd a new stream to your earnings
As consultants seek alternative revenue streams, is it time to consider adding medico-legal to the services your practice provides? Simon Brignall from Medical Billing & Collection discusses the billing challenges you will face
THE CURRENT economic climate has highlighted why it is important that many businesses have diversified revenue streams.
This diversification can be accomplished in many ways and often may be as simple as adding a new practice location with a different patient demographic. For example, adding a central London location will likely increase your exposure to international self-pay and embassy patients.
Medical Billing and Collection data shows that the amount of private medical-insured invoicing we do for our clients has dropped from 66% to 55% over the past decade.
The 45% of the invoices we now raise that are not billed to insurance companies include self-pay (see my article last month) and a range of other sectors that have seen an increase in activity such as medico-legal, embassy and work for the NHS.
I have received many calls from consultants who are now either considering adding medico-legal work to their practice or they already have and find it challenging. So I will focus on this area and explain what you need to know from a billing perspective.
The first thing to understand is that the medico-legal sector is extremely fragmented, with thousands of solicitors working in this field either independently or as part of a group. Work also comes in via a range of medico-legal agencies.
Due to the multitude of potential clients available to private doctors, it is crucial that your practice is prepared correctly to manage a commercial relationship with them right from the very first contact.
In our 28-years of experience in this sector, many consultants begin medico-legal work without ensuring they have adequate terms and conditions in place or giving due consideration to their fee structure and payment terms.
And what often happens is that they then find out later – after the work has been completed – that the case they have been working on is on a ‘no win, no fee’ basis, which can mean that they end up waiting years for their money.
These difficulties around delayed or deferred payments obviously lead to a negative impact on the cash flow of the practice. The biggest and most common problem, often overlooked, is that once the invoice is raised, you have created a tax liability for yourself. Bad news! Until you collect the money owed, you are actually paying to do the medico-legal work.
For those who have a large medico-legal practice and have to charge VAT, the situation is even worse, because you would have had to pay VAT to the taxman every quarter. That increases your overall debt and exacerbates your cash flow predicament.
Of course, there are many factors to consider before taking on medico-legal cases, but I will focus on the billing and collection issues.
Ensure you have clear and precise terms and conditions, agreed by your client, when they engage you. These should cover the following areas:
How much do you want to charge for your standard medico-legal report? This should be based upon the length of time taken to review a standard amount of medical records and any interview or examination of the client, including all dictation and preparation of documents.
You should also quote an additional cost per hour to provide some flexibility for cases that take longer to review, particularly where there are a large amount of medical records to review or where the case is very complex.
For court cases where you are required to attend court, you should have a fee schedule per day. Due to the nature of court cases, your fee should be for a minimum charge and not related to the amount of time you have to appear.
This is due to the impact on your schedule and your availability to do other work. You should also charge for travelling expenses as well as any other expenses you incur.
Supplementary work should also be quoted using an hourly rate. This is to cover any further reviews and additional work relating to the case. This work can then be invoiced at your hourly rate and, typically, can be broken down into 15-minute increments.
You need to define your DNA rules. These cover cases where the patient does not attend without prior cancellation within a set time frame or where your court appearance is cancelled within a given notice period.
You need to decide what your charges will be in these instances and make sure they are clear. Some practices have time stipulations that may result in your fee being invoiced either in full or a percentage thereof depending on what notice was provided.
You will need to decide what your standard payment terms are going to be for your medico-legal reports.
These will need to be balanced according to the sector you are operating in and terms that you are prepared to enforce. These can include penalty clauses for late payment.
You should have different payment terms for any court appearance, and these should also be applicable to any charges you enforce when the court appearance is cancelled within your penalty period.
Once you have formulated your terms and conditions, the next key step is to ensure you have a robust system to reconcile and chase up outstanding invoices.
The most important step is to always make sure your fees and terms and conditions are accepted up front before taking on any case.
Once you have raised the invoice and sent it, you need to follow it up with a phone call to ensure it has been accepted and has been put on the solicitors’/agency system with the correct payment terms.Even when all the above is done, you will still need a system in place to chase outstanding invoices on a continual basis to ensure payment is made in a timely manner.
It is critical that you have visibility of your aged debt, because if you have issues collecting payment with a particular solicitor/agency, then you need to think long and hard about taking on other cases from the same company – or you could end up making the problem worse and paying to work for them.
As both your reputation and workload increase in this field, you can then choose to make decisions about how you prioritise your availability and whom you work with. This will be based on many factors including their speed of payment.
Chasing money owed on a continual basis is the hardest part of this whole administrative process, as most practices are not geared up for this specific aspect or they find the task intimidating. It is only through the routine application of a rigorous chase process that aged debt is kept to a minimum and cash flow not compromised.
In my experience in dealing with practices that engage in medicolegal work, this is often something they find time-consuming and requires a specific skill set.
I rarely find a practice with the time to chase these invoices on a continual basis. Even rarer are the in-house skills to do this, especially when medico-legal work is only one component of the numerous tasks managed by a busy practice.
Often the best option is to use a professional billing company with experience in this field. Ideally, this will be before you start doing medico-legal work.
But if you have been in the sector for some time and have experienced some of the problems I have covered here and feel you want to gain control over the situation, we would be happy to hear from you.
Simon Brignall is director of business development at Medical Billing and Collection
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