Will This Be a Good Market for My Practice?

{3:42 minutes to read} One common concern that comes up at the start of any new office Will This Be a Good Market for My Practice? by Ian Lifshutzis the large amount of cost associated with setting up such an office in an untested market or demographic area where you are currently not providing services. In leasing new space for a new venture, a new location or expanding an existing practice in the medical field, a testing of the market might be in order.

One solution that many practitioners undertake is to find an office sublet from an existing medical practice and spend minimal time at that office (a few hours or a day a week) to see what the market and patient base are like. This can help a provider determine if they want to get into that neighborhood or demographic area.

Continue reading

The Option of Concierge or Private Medicine in the Current State of Healthcare Today

The Option of Concierge or Private Medicine in the Current State of Healthcare Today By Ian LifshutzIn the face of the Affordable Care Act (ACA), and in recent years, the overly aggressive nature of HMOs, insurance companies, and other third-party providers, the concept of dropping insurances has been revisited and is gaining increased popularity with physicians and physician groups. However, there are numerous issues that need to be analyzed and addressed if a physician is going to drop insurance carriers and opt for private pay directly with patients.

The most obvious benefit is that the insurance carrier no longer has their hand in the physician’s pocket and/or increased scrutiny over the physician’s practice. Also, the physician would avoid any unnecessary audits or attempts by the insurance company to call back money. However, there is a very real balance between not only the patient paying out of pocket for services, but the patient becoming more cautious about making appointments. Even routine appointments might seem more of a hassle to a patient if their carrier is not paying for it.

Continue reading

What Happens to Your Medical Business/Practice After You Retire?

What Happens to Your Medical Business/Practice After You Retire? By Ian R. LifshutzRetirement plans for physicians and other healthcare professionals often carry unusual issues that do not affect regular businesses. This is because medical practices, Article 28s or other healthcare-related businesses have special licensure requirements attached in order for an individual to operate that type of business. These types of healthcare delivery-related businesses carry a number of additional concerns because there are often either approvals required by an oversight body for the new owners (Department of Health) or the healthcare business must be transferred to a very specific licensed professional which does not always permit inter-family transfers to guide a provider’s decision.

Continue reading

Does Your Medical Practice Have Sale Value?

Does Your Medical Practice Have Sale Value?Traditionally, medical practices were valued much the same as other businesses, based upon the accounts receivable, their patient/customer base and their hard assets (equipment, fixtures, lease, staff value, any beneficial contracts). However, with the HMOs and Third Party payers, as well as now the possibility of ACOs (Accountable Care Organizations), changes in government receivables, and other new developments, practices must rely on less traditional means of valuation in order to obtain a higher value.

There is no traditional customer base in a sense, since the customers follow the HMO. As such, the traditional sense of accounts receivable needs to be looked at in a different way. The number and quality of provider contracts, remaining in good standing with third party payors and government payor programs (medicare/medicaid), and maintaining a good audit record affect the value of the practice in the same way a traditional accounts receivable valuation used to – they directly affect a practice’s ability to generate accounts receivable. In order to maximize the value of these factors, any sale, assignment or transfer, needs to be structured in a way that ensures the transfer of these assets. Certain compliance activities, structures, agreements and documentation can assist in maintaining good standing as well as increase billing efficiency, which adds to the value of the practice.

Continue reading

Does Your Management Agreement Comply with Federal and State Law?

Does Your Management Agreement Comply with Federal and State Law?Management service organizations can raise red flags with investigators as they are often used by non-professionals as a means to improperly operate and control a medical practice. A management company or administrative services company providing only administrative services to a medical practice is permissible. However, due to the State Farm Mut. Auto Ins. Co. v Mellela, 4 NY3d 313 [2005] decision and increasing scrutiny, many management company operators engaging in improper practices, have created a negative reputation for an otherwise legitimate service, which in different formats is used by hospitals.

A management company and medical practice run the risk of getting into trouble if the management company does not charge flat fees for services rendered at fair market value. Based upon professional responsibility, a medical professional could potentially be exposed to sanctions, penalties and loss of license if the arrangement is a disguised fee splitting  or kickback scheme. These allegations are often raised by an insurance company or government investigator if a management company and a medical practice have a set of contract fees which continually change.

Continue reading