• 09 Nov 2015

    SpesNews Volume 124

    Outsourcing Practice Administration

    Factors to be consider when a practice service company offers you something which sounds too good to be true ……. because usually it will be too good to be true!

    SpesNet has had regular interaction with our member practices about a Cape based company who offers Practice Management services and advice that could compromise the practitioner’s compliance with the ethics and laws governing medical practice. We have asked our Specialist members to get these services claims and advice in writing but to date none of the practices have been able to secure such a document.

    When you place the administration of your income and professional reputation in the hands of a third party administrator, you must make sure that their business practices are aligned with the relevant laws and ethics governing medical practice. It is absolutely critical to do a due diligence on their business structure and practice as it is your reputation and finances in their hands.

    At the end of the day, it is your name on the top of the letterhead or claim, and numerous doctors have been found guilty because he/she or somebody acting on the practice’s behalf have made themselves guilty of inappropriate or incorrect billing.

    The following due diligence guidelines should be considered to give the practitioner comfort that the company will optimise their practice income with NO financial or professional risk:

    What is the reputation of the organisation within the marketplace and how long have they been successfully providing a Practice Management administration service to Specialist practices?

    1. What skill sets/people have they employed to ensure that all levels of practice administration complexity are optimally managed? (Qualification and Experience)

    2. Who will manage my practice on a daily basis? (Qualification and Experience)

    3. Do they have an in-house on-going training program with the appropriate experience and material to upskill staff?

    4. Do they have any support or call centre services for any clinical, coding or account queries and are their call centre agents clinically trained?

    5. What healthcare tools do they employ to guarantee accurate and consistent application of all the variables associated with a medical claim? (Valid ICD-10, Procedure codes and code-combinations, Practice tariff vs Patient ensured tariff, Plan Specific Benefits etc.)

    6. Do they utilise an advanced IT system, and is this designed to automatically apply the correct coding rules?

    7. In the case of a practice being investigated in a forensic review based on their billing patterns, do they provide an extensive healthcare, legal and coding team to support you during the forensic investigation?

    8. Will unethical up-coding or code-farming be applied or encouraged to increase your claim value?


      It is reported that doctors are being given the following advice:


    1. Resign from all Designated Service Providing (DSP) contracts

    2. All claims will be handled as PMB’s i.e. at 300% Reference Price List (RPL)

    3. The shortfall on the medical scheme payments will be made patient liable and if no payment is received, the patient will be handed over at 60 days


    Risks associated to above mentioned advice:

    1. What will the financial risk to your practice be when resigning from all DSP’s? Please refer to the SpesNet information brochure guiding practices around DSP decision making.

    2. It is clinically inappropriate to code all conditions as PMB’s. Short or no payments will be a regular occurrence.

    3. Evidence dictates that in certain socio-economic areas both patient and referral base (GP’s) will dwindle due to perceived value.

      There is a great case study where a blue chip company offered Doctors upfront payment for invoiced services at a % of monthly turnover. This immediately stimulated some doctors to charge a handsome private rate. The conclusion is well known, in that the company eventually terminated the services due to the immense financial risk associated with this model.

      Factors to consider include:

    • Be careful of becoming part of price-fixing behaviour which may raise the eyebrows of the Competition Commissioner and/or Medical Schemes.

    • The healthcare market is actively looking for individuals and companies who exploit the current legislation; don’t become one of them.

    • The fact remains that there are several areas in South Africa where patients cannot co-pay on any account higher than their insured rates. It is part of our medical ethos to assist patients who truly struggle financially.

    • The turnover of your book might appear wonderful at first, but you will soon see:

    • Dwindling referral numbers

    • Investigations from Medical Schemes on your Billing Policies

    • Investigations from the HPSCA on codes and rules applied– You would need to make sure your Outsourced Practice Administration applied the correct rules and modifiers

    • Complaints from patients who “have been harassed aggressively” for outstanding monies

    • A deterioration of doctor-patient relationship


    1. Are you going to pay your VAT, Assistance fees and Income Tax on the new higher turnover of your practice whilst the battles still rage out there to collect your monies?

    2. A point to remember, is that the average return by professional debt collecting companies is 40%. Your risk on those short payments is therefore very high.

    3. You remain ethically and legally responsible for your patient treatment and the billing thereof, even if you use an outsource solution


      IMPORTANT: Do the necessary homework before you outsource your practice administration. A site visit is essential to view and qualify the claims companies make.


      In summary, it is your practice, your name, your patients, your income and your decision on what is best for all.

    Point of Sales (POS) Land Line Issue

    It has come to light that POS machines will no longer be installed using landline connectivity. Radio-pad communication will be used for all future installations. Migration of current machines on landline connectivity to radio-pad communication might also occur. Should this be the case, the migration would be the sole responsibility of the individual bank. Please refer to the SpesNet home page (http://www.spesnet.co.za/) for the updated rental cost.



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DUXAH, The DUX Academy of Healthcare, evolved from within SpesNet, a company established by medical specialists to assist medical specialists and recently qualified registrars to negotiate the fraught business of private practice.

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ProfNet provides business management tools and practice support to maximise the income and efficiencies of private practice in the South African Allied Healthcare environment.

Evolve Medical is a leading provider of customised integrated software solutions.

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