Physician Invoicing

Just Make it Work: Regulations Cause Change in Physician Invoicing

Summary
In large group practices where a physician is paid based on production (revenue – costs), invoices must be generated providing an overview of both revenue and expenses for each physician. In a large group, these costs are allocated in a number of diferent ways, depending on the nature of the cost. For example, cost of x-ray film might be allocated by utilization of each physician of the x-ray department and equipment. The cost of rent might be divided evenly by all physicians at that location.

Weston was approached by one large group that needed to allocate costs in order to comply with STARK regulations. It was imperative for this medical group to create an environment that established a legal relationship with individual PA's to the central organization. To accomplish this organizational structure, a cost allocation system needed to be developed to handle the complex allocations required. The current General Ledger system could not perform the complex allocations that would satisfy the needs of all involved.

Solution
The group needed a technology-based solution to minimize manual labor and reduce errors that occur in a manual system. Weston initially created an Access-based system, which was later migrated to a Web-based front end with an SQL Server back-end. The system receives an ASCII file containing a chart of accounts from the accounting system. This system also receives a file containing one or many debits or credits per account.

Cost allocation information (such as which doctors are charged for phone service at one location) is maintained in this database. As part of processing, costs are allocated to the appropriate physician. A physician's revenue, including that of PA's, RN's etc. is then compiled and a concise invoice with cost and revenue information is provided.

Benefit
While the product of this system is much less error prone and fiscally more accurate, the reason for development of this invoicing system was solely the result of a change in government regulation. This is an obvious and continuing trend in healthcare.

Combining GL information with revenue or other information from a group practice is a need in many group practices. Accomplishing this task utilizing technology generally provides cost savings over manual work and greatly improves efficiency.

Contact us to learn how we can assist your group practice with physician invoicing.