Biggest Mistakes I Have Made Managing My Private Practice
Sometimes it is best to learn from others mistakes. Well, today let’s see if you can learn from some of my mistakes in my private practice. This blog is a raw account of what it takes to run a practice. Today I will open up about the biggest mistakes I have made so far while managing my practice. For those hoping to get some accounts on medical mistakes, you will be disappointed by this post. This post will focus on managing a practice mistakes.
Billing. So Many Billing Problems.
When I first started my practice, I hired a collection company. They took 6.5% of ANY money collected from a patient visit.
While hiring an external biller was not a mistake, the biggest mistake here was not constantly looking at billing myself.
My biller was submitting claims to insurance companies. If we received a rejection or denial, they would resubmit those claims. However, if it was a “difficult” claim, they ended up just writing it off without telling me. Or even worse. They just put it in a “pending” category for eternity and never told me. This made my accounts receivable eventually look terrible.
Once I hired a new biller, we resubmitted claims for things like venipuncture codes and other rejected claims that were not billed correctly. Within the first month we easily brought in another $20,000 from these claims she was just not dealing with.
Always Ask How Many Clients They Have Per Biller
I thought it was great that this biller had 2 employees and had something like 25 clients. Now, I know that is way too many doctors for only 3 billers in total. No wonder she was leaving money on the table. She was submitting claims, collecting easy money, and moving on. Unfortunately, billing mistakes in private practice start to affect many other things.
Cash Also Counts
About 6 months into my first biller, I finally audited her myself. I was really irritated that she was taking a 6.5% fee off of even my cash pay patients!
She did nothing for these patients. We swiped their credit card, posted it to our billing portion of our medical record, but she wanted her cut of this money.
Not only was I paying a 2.5% credit card fee, but I had to pay her 6.5% as well for my cash pay patients. Be careful when signing these types of contracts. Many times, they will have your contract written in a way that means that they will also even take their fee for cash pay patients.
Discounts Always Backfire
I was super eager to get to see patients when I started. That first week, I had 5 people total on my schedule.
Talk about anxiety, I was flooded with it. Did I make the wrong choice by going into private practice?
There was this very nice patient who had a $30 copay. She gave me a sad story about how she could not afford to pay it as a single mother, and I told her I would waive the copay this once.
Fast forward, and after the first year she ended up not paying me $240 worth of copays. Since I was waving her coapy, she took advantage. She was booking for all kinds of easy visits eating up a lot of my time with her “health anxiety.”
In the end, I had to terminate her as a patient after she threatened to leave me a 1 star review if we charge her for any of her copays. Since I made the mistake of telling her I would waive one of them, we just wrote it off and moved on. Lesson learned I thought.
Nope. I Did It Again
I did it again. A college student came in as an urgent same day add on. I was about 9 months into practice and clearly she was having a bipolar manic episode. Another sob story for financials. She was living out of her car and only had a little bit of money. I told her I would only charge her half my usual fee to help her and get her into a psych facility. I spent hours calling facilities and helping her get into a really good place.
Our billing system at the end of that day automatically sent her a statement for the other 50% due. A month later, she was mentally in a better place and called in to check on this error of a bill sent to her. She called in, we corrected it while she was on the phone with my biller and emailed her proof about how her balance is paid in full.
At the end of the phone call, she told my biller that “[our practice] sucks and did nothing for her.” Less than 30 minutes later left us a 1 star review about how we “are a horrible clinic who made her wear a mask in our office.”
Always Collect Deductible or Copay Money Upfront
Once the patient walks out the door, the likelihood of collecting any money owed goes dramatically down. In the beginning we allowed people with high deductibles to pay later if they gave any verbal pushback.
Many of these patients never paid, and never paid when we sent them to collections. This is a mistake that many private practices make.
There is a new law going into effect in 2023, any money less than $500 for medical bills will not go against someone’s credit.
Even if it is a “guess,” collect something. We have our staff collect level 4 visits on all high deductible plans. If we owe the patient money, then we send them a check.
DO NOT Put Your Home Address Or Cell Phone Number On Credentialing For Your Practice
When I started I didn’t for sure know my office address or have an office phone number. I went onto provider enrollment for Medicare and put in my home address and my cell phone. Once I had my real number about a month later, I updated it on PECOS.
It took almost 3 years for the phone calls and mailings to stop.
Big insurances query PECOS for your contact information. That information got “stuck” in their databases about my contact info. For 3 years I would get faxes as phone calls, or calls directly from pharmacies to my cell phone thinking they were calling the main office.
What a huge headache. DO NOT make this same mistake.
Not Terminating An Employee Quicker
When it is clear that things are not going as you want, you need to tell your employee how they need to improve or terminate them.
I made a big mistake where I keep a different biller than above around too long. She almost bankrupted my private practice.
We also had a physician who continued to get less than stellar reviews. This physician ended up costing me over $100,000. I should have parted ways earlier and let things go on way too long.
If it is not working out, terminate and move on. I was terrified of what would happen to my unemployment costs. Turns out, they hardly budge for terminating a single employee.
Big Mistake: Caring Too Much About Bad Reviews
Everyone gets them. Your practice has them or will have them. No way around it. The big mistake in private practice is caring way too much about them.
I cared way too much about bad reviews. I mean to the point where I would feel the churn in my stomach and would lose sleep over it. My wife would even tell me, oh gosh you got a negative review, that means we can’t talk to you today because she knew I would be way too much “in my head.”
Many times, these reviews were false or a patient who was taking their anger out on us.
Reply to each negative review but move on. Drown them out with positive reviews. Don’t lose any sleep over the bad reviews.
Once The Boundaries Are Broken, It Is Time To Move On
There is no going back once a boundry has been broken.
I was desperate for patients when I started my practice. I would spend 1-2 hours with each new patient. Each patient would get a personal phone call where I would go over their labs on the phone and not charge for it. Sometimes even on the weekend. (I know, what the hell was I thinking.)
Those early patients, almost every single one of them, I had to terminate the patient- physician relationship.
They didn’t respect my time as I grew busy. They still expected me to spend 1-2 hours with them during visits, personally call them back for every little thing. I created a big problem by going way to far for “customer service” in the beginning.
It’s Me, Not Them
These patients are nice people, and it is in no way their fault for acting the way they did. I had no boundaries in the beginning and that was 100% my fault. Gosh, I remember one evening instead of spending time with my family I spent 40 minutes on the phone talking to a patient who just had a panic attack. I cringe thinking about how I had no personal life and it was 100% practice all the time that first year.
I am so glad that the patient I just mentioned above got better, but I really did so many things wrong with establishing boundaries with the patient-physician relationship that it just could not continue. One patient during their Medicare annual physical berated me for 10 minutes about how much my practice “sucked” since they cannot talk directly to me anymore or how her requests for 1-hour appointments are not honored anymore. I told her that I hear her concerns, but that the last 3 visits have been nothing productive about her health and have devolved into her telling me how much my practice now “sucks.”
I told her this was her last visit and I’m sorry that she feels that way.
Neglecting Family Time
Starting a practice is hard. It takes a lot of hours to start a medical practice.
To keep costs low, I was doing everything myself in the beginning. I was the practice manager, HR, doctor, accountant, medical assistant, IT support, website creator…you get the idea. I did it all.
Many days, I would stay up super late or wake up super early to get work done on admin tasks. While it sure did help allow my practice to be almost always be cash flow positive, my wife and I definitely sacrificed time together for the first 1-2 years.
Looking back, I went overboard. I should have worked smart, not hard.
Now that I have hired a virtual assistant for my private practice, this helps me avoid the mistake of doing everything myself. While we sleep, they work, and work for cheap.
There will be sacrifice, but I let the business OWN me in the beginning. I went overboard, don’t do that.
Starting A Medical Practice With Friends
Before I opened my doors, I teamed up with 2 other doctors who were good friends of mine. To spread our risks, we were going to open a practice with all 3 of us together.
My lawyer begged me not to do this. He told me that this was going to be a big mistake in my private practice.
I pushed forward because I was worried about the financial risks.
First the woman physician backed out. She looked at the financials and got too worried about a lack of steady income. She also wanted to go into functional medicine rather than primary care. A year after I opened, she covered for me while I was on my honeymoon, and she struggled with hour long visits with my patients. It clearly was not going to be a good fit.
The other friend, I should have known better. I love him dearly as a friend. However, I would best define him as a free spirit. Someone who likes to travel and not be tied down.
He backed out after he fell in love with someone after dating this women for 2 months and moved to another state.
In the end it worked out since I started my practice solo. However, if we had started together, I would of had to buy their shares.
Ask yourself, do you really NEED your friend to be in business with you?
Seeing Patients Before Contracting And Credentialing Is Complete
There are two steps to becoming in network with insurance companies. Contracting and credentialing. I didn’t realize this in the beginning.
I had a verbal effective date for one insurance company. One day, I received my credentialing with them. However, I did not yet have my contracted rates. They emailed me that document would be coming within a week. I asked them if I could see patients now since credentialing is done. They said something generic like “you can start seeing patients at your discretion.”
I submitted the claims only to learn the big mistake in private practice. They put my effective date one month in the future from the contracting agreement. I never got paid for any of these visits since they all processed as out of network.
Don’t start seeing patients until you have everything in writing.
Understand The Difference Between Mistakes In Private Practice And Cost Of Doing Business
I would define a mistake as something easily avoidable. The cost of doing business is just that, the cost it takes to run a business with the micro-errors that occur daily.
The cost of doing business would be for example, we gave a shingles vaccine to a Medicare patient. Medicare will not pay for that vaccine in the clinic setting. So, we lost about $200 on that one vaccine and had to train the physician assistant that vaccine should not be given due to lack of reimbursement.
There will always be a cost of doing business. Keep trying to improve, and know that it is possible to have a thriving private practice.
Hopefully this helps!
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I am thinking of posting less often going forward on my blog and focusing on my vlog instead. I would be interested to get any feedback on vlog vs blog format if anyone would like to share their ideas. The vlogs are actually much easier to produce for me compared to a blog post (and a bit more fun).
11 thoughts on “Biggest Mistakes I Have Made Managing My Private Practice”
thank you so much for sharing these lessons! all your mistakes are the same ones I have seen in my own practice. my practice is almost a year old and I am still on the fence about opening. Has it been worth it opening your own practice? Also, you should post something about the new EMR you are using. Vlogs are just as great as blogs.
It has absolutely been worth it opening my own practice. However, I will say that I didn’t feel 100% confident in that answer until maybe year 3. Before that, it was a lot of hard work to get things up and running the way I wanted them to.
I’ll work on a post about our EMR and why we chose it.
Can you post a bit about the 2021 changes to reimbursement? Did that help make your private practice more sustainable?
Sure, I will work on that for a future post.
Thank you for sharing. This is super helpful.
Blog-reader here! But of course you should use whichever format you enjoy best.. You produce wonderful, informative content, and I don’t want it to end because you lose interest or burn out from it!
I really appreciate the kind words, thanks for following along!
Love the blogs. You’re inspiring. I opened my practice almost 6 months ago and can definitely understand how it would be easy to make those mistakes. Keep it up!
I appreciate the kind words, thanks for following along!
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Thank you for sharing your knowledge and experience – this is precious.