Business of Private Practice, The

Perspectives in Psychiatric Care, Apr-Jun 2005 by Barry, Pat

At is a pleasure to write this column for those of you who are already engaged in private practice and those of you who may be contemplating starting a private practice. My intention in these early columns is to give you ideas to guide you in reviewing or creating the structure of your practice, so that you can work with less stress and more efficiency. When a good business plan is in place, your energy, creativity, and productivity will be available to you to do what you love to do-working with your clients-and having time for a nice personal life!

In the next columns I'll be addressing issues that can help you look at the pros and cons of various types of office space and then we'll move on to answering questions that you send to me that you would like to have answered. I welcome any and all questions. No question is insignificant. How many times were you in class and someone asked a question apologetically, assuming that everyone else knew the answer-and the whole class was relieved to hear the question because they didn't know the answer either!

In my original column that appeared in the last issue, I recommended consulting with your peers about how they have established their practices and what they believe is important for you to know. Your peers will be very helpful in looking at all aspects of your practice that pertain to clinical procedures, clinical decision-making in private practice, working with the insurance companies in your area, fee structures, and so on. When it comes to the business structure of your practice, I urge you to consult with professionals who can guide you to creating the soundest foundation for your practice. When a solid foundation is in place you will sleep better! When your basic business structure is set up well, you will thank yourself many times over for having the wisdom and vision to talk with professionals who can teach you what you need to know.

How to Set Up Your Billing Procedures

One of your important practice decisions is about how you will track your clients' appointment charges and their payments. I suggest that you talk with three of your colleagues who have many years' experience in their private practices and who have professional views that you respect. Tell them about the types of clients that you intend to treat. Find out how your colleagues manage this side of their practices. Ask how they do their billing and what the advantages and disadvantages of their approach are? Listen to their opinions carefully because billing is a critical piece of your practice's future viability. I recommend talking with three practitioners because you will hear many different views about how billing is approached. Avoid choosing the approach that sounds easiest. There may be pitfalls with the easiest approach. You will hear that there are three general approaches: (1) doing your own billing; (2) hiring an on-site bookkeeper/billing person; and (3) hiring an off-site billing company.

Managing Your Own Billing

The first option is to manage the billing and tracking of receivables yourself. If you will not be participating with HMO insurance companies, this can be a relatively simple process. If you plan to participate with one or more HMO companies you may find that the other two options described below are more preferable.

If, after talking with colleagues, you decide to manage your own billing, you can either use a handwritten billing process or purchase software to track your billing. Some practitioners use a super bill. This is a billing form printed in a triplicate form. Obtain a copy of a colleague's super bill form so that your own form can be prepared with the proper information. It should contain all required information for insurance submission, including diagnostic and procedural codes. You keep the original for your own records. One copy is given to your client. The third is for submission to insurance companies if you are an HMO participant. I emphasize that I don't suggest the use of super bills if you are an HMO participant unless you have colleagues in your area who report that this method is effective for HMO insurance submissions. It is an acceptable form if your clients have out-of-network insurance and will be submitting their own claims and tracking their own reimbursements.

There is a company that creates a hand-billing process known as the one-write system. You can purchase the necessary forms and account books for this system for around $50 by contacting a local business supply organization. This system gives you a form for recording charges that can also be used as a billing form, creates duplicates of charges, and payments that you receive.

A second option if you are managing your own billing is to track your clients' charges and payments by using a computer program to assist you in preparing your statements. There is also a one-write software system available for purchase online that you can locate by doing an Internet search. This billing software costs less than $100 and performs the basic recording tasks that are essential to creating billing forms and ensuring that you are paid for your work in a reasonable period of time.