What is Practice Management?
Definition:
Medical Practice management is the process of coordination and administration of tasks that are an integral part of managing the finance and administration of a doctor's office or an office of a medical professional. It comprises of :
- Financial management
- Patient Management
- Human Resource Management
- Information technology and medical practice management systems
- Compliance, quality control and risk management
- Business Operations Management
Change occurs in every industry, and healthcare is no exception. New technologies, trends, regulations, and research continually shape the industry. The implementation more than a decade ago of the Affordable Care Act and the move from fee-for-service to value-based care have impacted patient care and the way physician practices operate.
Although doctors have administrative tasks in addition to their focus on patient care, it’s almost impossible for them to manage their practice without assistance. That’s where practice management comes in.
According to the American Academy of Professional Coders (AAPC), the role of a practice manager is to manage all aspects of a medical practice, including financials, human resources, information technology, compliance, marketing, and operations. Their goal is to enhance patient care, ensure day-to-day operations of the practice run smoothly, and alleviate administrative burden on the physician(s).
1. Role of a Practice Manager in Financial Management of a Practice?
The key component to running a successful physician practice is proficient financial management. Even if a clinician provides excellent care to his or her patients, the practice isn’t going to be sustainable without the necessary revenue.
Myriad facets are necessary to achieve and maintain streamlined financial operations, and many of them fall into the category of revenue cycle management (RCM).
RCM is defined as all administrative, financial, and clinical functions that contribute to the capture, billing, collection, and management of patient service revenue.” Some of these functions include:
- Monitoring key financial and performance indicators (KPIs)
- Enhancing front-office processes (patient eligibility, authorization, and check-in)
- Analyzing medical billing and collections
- Overseeing practice reimbursement initiatives
- Planning and budgeting to improve revenue and reduce costs
- Conducting coding, accounts receivable (A/R) closeout and other end-of-month functions
- Managing denials
- Producing and analyzing various financial reports
- Benchmarking to evaluate practice performance and comparing it to competitors
- Monitoring industry trends, expenses and productivity
- Negotiating resource allocation
- Handling payer contract management and negotiation
- Keeping provider credentials updated with payers
- Keeping up-to-date on government payment regulations
- Designing and monitoring systems of checks and balances and internal controls to safeguard practice assets
- Conducting regular coding audits
- Performing billing audits at a pre-determined frequency
One metric many practice managers utilize to accomplish these functions is relative value units (RVUs). Through a cost analysis based on RVUs, physician practices are able to establish productivity-based compensation, evaluate and renegotiate payer contracts, evaluate procedures and services, and set practice fees.
Two key functions that should be included in financial management of a practice are medical billing and coding audits. By auditing and analyzing past results of your practice, you achieve an in-depth review of your practice’s performance and identify what improvements might be needed for optimal efficiency.
References on Financial Resource Management
- Financial management toolkit from The American College of Physicians (ACP) to help you monitor key financial indicators within your practice
- A series of online education modules is provided by the American Academy of Family Physicians (AAFP) to assist you in understanding the key metrics for financial success in your practice
- Top tangible and intangible benefits of Implementing a practice management system that can be achieved by practices of all sizes
2. Role of a Practice Manager in Patient Management
Focusing on patient care should be the goal of every physician. As noted by MGMA, patient-centered care refers to the ability to create an environment and develop processes that support the best possible patient encounters. A practice manager can assist in that endeavor by performing care coordination, striving to ensure patient safety, and optimizing office workflow to promote patient satisfaction.
Patient satisfaction can be increased through patient engagement because those who are fully engaged in their care are more likely to maintain treatment plans, track their health and ask their providers questions. Technologies such as patient portals, automated appointment reminder systems, check-in applications, telehealth, digital payment options, and data analytics have been found to have profound impacts on both patient engagement and practice workflow.
Another role of a practice manager in patient management is supporting and overseeing quality initiatives and measurement activities. There are three types of quality measures in healthcare: structural, process, and outcome. One such measure is the Institute for Healthcare Improvement (IHI) Triple Aim of healthcare, which is designed to improve the patient experience of care and the health of populations and reduce the per capita cost of healthcare.
References on Patient Management
- Learn the basics of patient safety and its effect on the quality of healthcare
- Patient engagement and strategies to enhance patient engagement
- Patient Cycle Tool to measure office visit cycle time
3. Role of a Practice Manager in Human Resource Management
