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Newsletter #1

Marketing Your New Practice –

The Graduating Resident and the Most Important Step to Immediate Future Success

            So you’ve just signed an attractive net income guarantee and you are expected to report to your newly outfitted office right after the July 4th holidays – roughly six months from today.  Your newly appointed hospital Physician Relations person has sent you an e-mail welcoming you, promising to line you up a first rate staff and attached scans of carpet and paint samples, for your new office space, for your approval.   She adds at the bottom of the note that she’ll be sending you a package of managed care plan applications and encourages you to fill them out at your first chance.  You fire off a reply e-mail with your choice of colors and with the most sincerely promise to fill out the paperwork as soon as it arrives.  Two weeks later, a box is on the table in the apartment when you get home from a 48 hour shift as Head Resident.  You sit down tired, relieved to be off your feet, and open it to find it crammed with forms, plan literature and still more forms.  It’s been a long week, so you re-pack the box and push it aside.  You promise yourself you’ll get to it this weekend.  Friday comes and you get an invitation to go to a friend’s lake cottage, upstate.  A welcome chance for escape!  You jump at the chance.  The box gets put in the car.  It is never touched until you get back to the apartment late Sunday night and unload the car.  Who would’ve thunk (sic)?  Monday 6AM, you’re back on the Medical floor for another 48.  Two weeks pass and the message light is blinking on your phone when you drag yourself home.  You press the button and go to the refrigerator.  “Dr. Johns?  Hi this is Donna. I was just following up with you on the package I sent you.  Please send it back as soon as you can.  Oh, by the way, I’m sending you copies of the ads we’ll be running in the newspaper about your new practice.  Beep. … Fred, this is Angie, I had fun at the lake.  Call me.  Beep.  … Fred!  Dude!  We need a fifth man tomorrow night for a pick-up game.  Jack twisted his ankle again.  Hey, mind if I go out with Angie?  Beep. …  Fred, Jack says you can’t play for him.  You cost too much money.  Did you really get that much on your guarantee?  You’re making us Internists look bad man. What are you Shaq or something?  Just kidding.  Call me.  Beep” … And so it goes.   The box makes two more trips to the lake.  It has a great time and eventually finds a comfortable spot in the back seat where it sits until your Residency is complete.

July 1st roles around, you pack your apartment into a truck and drive half way across the country, arriving in your new city on the 4th.  Exhausted again – but you’ve felt worse – you move in and have things arranged just in time to report to the hospital administrative department on the 6th.   The hospital administrator comes out to warmly shake your hand and promise to support you any way they can.  Your Physician Relations person turns up soon after and is eager to show you your new office.  Everything looks perfect.  Your new staff is at a computer orientation meeting – you’ll meet them later that day.  Before she leaves you ask her how many new patients the staff has scheduled.  This is when her smile fades…

This newly minted physician has just been slapped with his first exposure of the omnipresent reality of running a business.   To run a business, you must attract business.  To attract business, you must let customers know you exist.   So where are all the patients?  The hospital said they ran ads.   The fact of the matter is, your practice is not going to be a success for a while, a lot of it is up to you, and you are already behind.  There is a whole battery of things you must do to promote yourself and because you did not send in your managed care applications YET, you are way behind.

Managed care companies, your main future customers (they pay most of the claims after-all) typically need 2 – 3 months just to process your paperwork once you’ve sent it to them.  This delay is because the applications are put in stacks with all the other applications pending approval of the plan’s provider boards who may meet only once every 60 – 90 days.  Until they approve your application, the managed care company has no record of you outside of the paperwork sitting on someone’s desk.  Until approval, it may do nothing to let members know you exist.  And that’s just the start.  Once an application makes it through approval process there is often another lengthy delay before you get your name listed in their provider directory.

            In the mean time, you do have the option of seeing the patients – those who find you on their own - but you will not get paid for services rendered until your application is approved.  Some patients who do find you will not be willing to risk having to pay “out-of-network” co-pays and will choose to see another physician who is listed already.

            You may be forced to withhold sending in your claims to the managed care companies since they require a “provider number.”  You haven’t been approved so guess what?  You don’t have a provider number.   You might take the risk of filing the claims, but chances are they’ll be kicked back or “lost.”

To make matters worse.  Most managed care plans have a maximum number of days after which you may not file a claim and expect to be reimbursed.  So let’s say you’ve seen a patient in the first week of business and it takes 120 days for the plan to get you your provider number.  You haven’t filed your claims because you have been waiting on this number.  You file your claim as soon as the number arrives and problems pop up again?  What happened?  You’ve received notification back that your claim has exceeded the plan’s 90 day limit and it will not be reimbursed – ever.

You may think this is rare, but in my experience as a hospital network practice manager, and an acquaintance of many other practice managers, this happens more than I could ever have imagined.   This is not saying new doctors are irresponsible.  Hardly – remember you folks are pulling the Resident shifts and keeping the hospital going when the senior staff may be out on the links or sleeping in.  But focusing on a new business while doing another job is difficult for anyone.  So it is not surprising that these six to twelve page applications are often given a low priority among the many.  Some managed care applications are as hard to fill out as an income tax form and we all know how fast we jump at completing those every year.

As a Physician Relations person, I figured out later than I care to admit, that to minimize the likelihood of the late application problem, I had to complete the applications myself and just request signatures.  Nevertheless the problems persisted and I routinely caught heat from delinquent signers about their vacant waiting rooms.  The recruiting hospital, at income guarantee singing time had, after all, promised the recruit ample patient volume to support a practice.  Those docs without conscience would often blame us and verbalize that at least they’ve got the guarantee to fall back on, while those with a more honest sense of self recognized that the hospital was eating the income difference through this otherwise avoidable period.  It was a position no one really should have been in.

To summarize, it is easy to put off filling out managed care applications and all the other assorted new business paperwork when you are still completing your residency.  Completing the applications is like doing your taxes or applying to Medical Schools all over again.  But to put off the applications, you are setting your new practice up for initial failure.  Managed care companies (your paying business clients) will not know you exist and will not forward you new patients (income generating business) - the base you need to start your practice.  You will miss opportunities to seize initiative new physicians have that older physicians do not.  The early months of your new career are ones when you should take on all comers.  You’ll most likely be getting free hospital advertising and friendly first time referrals that later on you must earn. To turn them down or give them a reason to be less than favorably impressed could be a big mistake.

Managed care applications are one key to marketing your practice.  Don't let managed care application anxiety and the consequent repercussions happen to you.  Fill out your applications in a timely manner and start marketing your new practice now!

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