Neurology Solo Practice: Piecing the Puzzle Together

January 18, 2011

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by Rosabel Young, MD, FAAN

Going into solo practice is a lot easier than most neurology residency graduates seem to believe. I know that when I graduated in 1991, I was afraid of joining any existing practice, despite many great opportunities out there, and starting my own private practice was out of the question. After working as an employee for an insurance company, I decided that I was ready.

Without realizing it, I implemented some of the business methods I had learned from my former employer to my start-up solo practice, and the same basic rules of business seemed to apply.

Here are a few business rules:

First, a contract is an agreement between two parties, that means that both parties contribute to the contract and agree to its terms. It does not mean that one party prepares and sends the contract to the other, and the other has to sign it. Therefore, if you receive a contract from an insurance company, HMO, or even your prospective landlord, read it and make changes that are in your favor.

For the first few contracts, you will have to hire an attorney, but after the first three or four you will easily recognize which clauses you want to remove, change, and add to your contracts. For example, do you really want to "indemnify, release, and hold harmless" the other party for their violations? Do you really want to accept 80% of Medicare rates as full payment?

The first time I sent back a contract with several items crossed out, changed, or added, I was certain that the insurance company would ignore me and deny me that contract. To my surprise, I received a call from them, with a very gracious representative calling to let me know that they would accept my terms, and in a few days I had my version of the contract signed and delivered back to me. You don't know unless you try! Don't be afraid of rejection. Neurologists are very scarce right now. Besides, if they reject you, it was probably a "walk away" contract in the first place, i.e. one that would not be good for you. Whenever negotiating anything, remember to use your "walk away" power for as long as possible.

Hospital emergency department work is rarely compensated fee-for-service in most cities these days. Although there are laws allowing physicians to collect on non-insured patients, the paperwork is a hassle and is rarely followed by real money.

Instead, most specialists are demanding and hospitals are providing stipends for specialty coverage. The rates vary, but typically it is about $500 per day for a neurologist to be available those 24 hours. That means that you must be within reasonable driving distance to see a patient in that hospital, and that you cannot refuse to see any patient that you are called about.

If you are not trained in or do not want to do t-PA administration, for example, or do not do EMG's, be sure that you exclude these from your contract before you sign up, or you will be held responsible! In those cases the hospital may still hire you but subcontract those services to another provider.

It is also important to clarify the distinction between neurology and neurosurgery when signing up as a "neurology hospitalist," and to be familiar with their neurosurgeon hospitalist, otherwise they will call you for every head trauma, CNS hemorrhage, shunt malfunction, etc.

Don't compete against fellow neurologists. This is a good principle even if the field were overcrowded. The most harmful kind of competition is to lower one's rates or sign up for capitated contracts.

In doing so, you are automatically lowering the value of the skills you worked so hard to acquire! If the neurologist down the street charges $X for an EMG, and you think you can get more business by charging $ (X - Y) = $Z, think again. The first thing that may happen is that people will automatically think you are worth less, about $Y less than the other doctor.

Despite the economy, the general rule is that people automatically perceive the higher priced service as being better in quality than the "cheap" one. Next, insurance companies and HMOs may send you more referrals, but will cut everyone down to your rate across the board. They will then entice another neurologist to lower his or her rates below yours, and you will be the one left out and feeling pressured to reduce your rates again. Don't do it!

Determine your own fee schedule and update it every year based on your overhead expenses, additional services provided or new skills you have acquired, etc. If payers reduce their reimbursement, or a colleague tells you that you are charging too much, don't let these isolated comments determine your rates for you. You should make changes based on your own overhead expenses, patient population, case complexity, etc.

Speaking of "fee schedule," you do need to sign up and frequently visit the Medicare website and review their CPT code updates and fee changes. Signing up for the websites of all insurance companies and other payers is very important, and will save considerable staff time that they would otherwise be spending (wasting) on the phone.

Through the websites, you can look up the status of unpaid claims even before the EOB (Explanation of benefits) reaches you through the mail, and some companies are already (not "even") moving to stop mailing EOBs, so you will have to access their web sites or inquire by "slow phone" mode sooner or later.

Another question is whether to do your own billing or use a "professional" billing service. Neurology is too specialized for a general medical biller, and you can't expect a billing service that covers dozens of doctors to pay attention to you and the one or two other neurologists in the area. Basically, they will pay attention to the majority (primary care) and to high-priced items (surgeons), and your unpaid claims will "age" away right through the cracks!

Hire an honest, experienced biller with good references, employ them part-time, and require that he or she work in your office. This keeps copying work to a minimum, allows the biller to access patient files if needed, improves cooperation with your front office staff, and also minimizes the risk of identity theft. We have already had cases in California of doctors being sued for identity theft allegedly committed by their billing services or employees.

This article was originally published in the Official Newsletter of the Women's Issues in Neurology Section, Fall 2007.