Private Practice

Playbook

from the AMA STEPS Forward® Playbook Series

About the AMA STEPS Forward® Playbook series
This Playbook is part of the AMA STEPS Forward® practice innovation program. Each Playbook synthesizes
the best content AMA STEPS Forward has to offer—toolkits, videos, podcasts and ready-to-use tools,
templates and resources—into practical, actionable strategies and tactics to help you create positive change
in your practice today.

For the optimal experience—GO DIGITAL!

Scan this QR code to fully engage with the Playbook and access
all relevant links on your computer or mobile device.

About the AMA STEPS Forward® practice innovation strategies

The AMA STEPS Forward program offers practice innovation strategies that allow physicians and their
teams to thrive in the evolving health care environment by working smarter, not harder. Physicians looking
to refocus their practice can turn to AMA STEPS Forward for proven, physician-developed strategies for
confronting common challenges in busy medical settings and devoting more time to caring for patients. This
collection offers more than 70 online toolkits and other resources that help physicians and medical teams
make transformative changes to their practices, in areas such as managing stress, preventing burnout, and
improving practice workflow.
The AMA STEPS Forward® Innovation Academy expands on the program to give participants the flexibility
to customize their practice transformation journey. The Innovation Academy offers a wide range of
opportunities to learn from peers and experts, including webinars, tele-mentoring, virtual panel discussions,
boot camps, and immersion programs.
Explore more content, stay in touch, and follow us on LinkedIn.

Private Practice Playbook authors: Taylor Johnson, MBA candidate; Marie Brown, MD, MACP; Kathleen Blake,
MD, MPH; Meghan Kwiatkowski, CPHQ, LSSGB
AMA STEPS Forward acknowledges the authors of the individual toolkits referenced in the Private Practice
Playbook for their contributions: Melinda Ashton, MD (Getting Rid of Stupid Stuff); James E. Bailey, MD, MPH
(Transitions of Care); Nancy M. Bennett, MD, MS (SDOH); Bonnie Binkley, MA (Transitions of Care); Bruce
Budmayr, CMPE, BS (Patient Pre-Registration); Douglas K. Diehl, MD (Patient Pre-Registration); Janet Duni,
RN, MPA (Medical Assistant Professional Development); Christine Dzoga, BS, CMA (MA Recruitment and
Retention); David W. Gilmore, MSQSM, LSSBB (Patient Pre-Registration); Theresa Green, PhD, MBA (SDOH);
Laura Lee Hall, PhD (SDOH, PDSA); Matt Handley, MD (Choosing Wisely®); Michael Hodgkins, MD, MPH (EHR
Selection and Purchase, EHR Implementation); James Jerzak, MD (MA Recruitment and Retention); Brandon
J. Lynch, MD, MPH (Patient Pre-Registration); Rishi Manchanda, MD, MPH (Racial and Health Equity: Concrete
STEPS for Smaller Practices); Heather McComas, PharmD (Revenue Cycle Management); Wendy K. Nickel,
MPH (Choosing Wisely); Ellie Rajcevich, MPA (Team-Based Care); Alexandra Ristow, MD (What to Look for
in Your First or Next Practice); Christine Sinsky, MD, MACP (Team-Based Care, Pre-Visit Planning, Expanded
Rooming and Discharge, Team Documentation, Lean Health Care); Eunice Yu, MD (Daily Team Huddles); and
Allison M. Winkler, MPH (SDOH).

From the AMA STEPS Forward® Playbook series: Private Practice Playbook, v. 3.0. Last updated 2022-08-19.
© 2022 American Medical Association. https://www.ama-assn.org/terms-use

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Table of Contents
Introduction 5
What Is Private Practice? 6
Who Is This Playbook for? 6

Part 1: Is Private Practice Right for You? 7

The AMA Path to Private Practice 9

Part 2: Attending to Business 11

Starting in Private Practice Checklist 12
STEP 1: Location 12
STEP 2: Licensing and Credentials to Practice and Prescribe 13
STEP 3: Professional Advisors and Peer Collaboration 14
STEP 4: Payer Contracting and Payment Models 15
STEP 5: Professional Insurance 16
STEP 6: Equipment and Supplies 17
STEP 7: Staffing 18
Relevant Regulatory and Legal Information 20
Fraud and Abuse Laws 20
Understanding HIPAA 21
Understanding Information Blocking 21
Physician Payment and Delivery Models 22
Prior Authorization 23
Claims Submission and Payment Avenues 23
Practice Revenue Streams 25
The Fee Schedule 26
Claim Submission Workflow and Checkpoints 26
Payer Audits 27
Collection Issues 27

Table of Contents 3
Part 3: Attending to Patients 28
Electronic Health Record (EHR) Choice 29
Increase Practice Efficiency 31
Scheduling Patients 31
Lean Health Care 31
Pre-Visit Planning 32
Advanced Rooming and Discharge 33
Patient Pre-Registration 34
Transition to Team-Based Care for Better Care Coordination 35
Racial and Health Equity: Concrete STEPS for Smaller Practices 36
Social Determinants of Health: Improve Health Outcomes Beyond the Clinic Walls 37

Part 4: Grow Your Practice 38

Marketing 39
Social Media 40
Professional Organizations 41
Community Organizations 42
Leverage Opportunities to Save Money 43

Resources and Further Information 44

Private Practice Business Considerations Guide 45
Private Practice Common Financial Terminology 47
Physician Payment Models Guide 51
Private Practice Staffing Guide 54
Example Patient Wait Time Process Flow 58
References 59
Further Information 60
Learn More About Practice Innovation 61

Table of Contents 4
Introduction
The goal of this Playbook is to introduce foundational terms and concepts that
apply to private practice. Physicians who understand these terms can engage in
more meaningful conversations with advisors, vendors, and other professionals.

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What Is Private Practice?
In this Playbook, we define private practice as a practice that is wholly owned by physicians.
Private practice is an attractive option for physicians seeking the freedom and independence to practice in
a setting that allows them to provide personalized medical care for their patients. It is inclusive of practice
owners, employed physicians, and independent contractors.
Many physicians train in a landscape dominated by large medical organizations and are unaware of
opportunities to enter private practice. And yet, about 50% of all physicians in the US are in private
practice.1 The shift away from private practice and toward health systems has not uniformly led to projected
improvements in care delivery or reductions in the cost of care. This observation, coupled with already
present concerns surrounding access to care, has led to questions about the long-term sustainability of
private practices. Efforts to support and sustain private practices are crucial to the availability and success of
this model of care, controlling health care costs, and ensuring work-life balance for physicians.2
Not all private practices are the same, and this Playbook will describe the characteristics, benefits, and
challenges of different models.

Who Is This
Playbook for?
Throughout the 20th century, small
independent physician-owned primary
care practices formed the bedrock of the
health care system in the United States. […]
• Physicians who are aspiring to open a
evidence shows that they deliver care that
private practice
is equal to or better than that of practices
owned by hospitals and health systems. • Physicians who are aspiring to enter an
established private practice
• Practice managers
• Operations leaders
Rittenhouse DR, et al.3

This Playbook contains opportunities to EXPLORE MORE! through 19 AMA STEPS Forward®
toolkits and other essential AMA resources.

For the optimal experience—GO DIGITAL!

Scan this QR code to fully engage with the Playbook and access
all relevant links on your computer or mobile device.

Introduction 6
Part 1: Is Private Practice
Right for You?
Knowing your priorities regarding how you want to practice is important. There are a
variety of private practice models, and they each have advantages and disadvantages.
The greatest advantage for most physicians who choose private practice is flexibility
and more autonomy to make decisions.

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Before starting, step back and think about your priorities. Rank your priorities or identify potential
deal-breakers to help you tailor your search. Answering the following questions can also help:
• How much autonomy or control do I want over my day?
• Am I interested in taking on financial and management responsibilities?
• How much financial risk am I (and the people who depend on me) comfortable with?
• How much time off do I want? Flexible or part-time schedule; call schedule; coverage?
• What is my practice’s mission or affiliation?
• How will I earn my salary? (Compensation, including loan repayment programs)
• How innovative and tech-savvy is the practice?
The great variety of private practice options—and their pros and cons—can be broken down in several
ways (Table 1). There is no wrong answer; you should base your private practice journey on your individual
priorities.

Table 1. Features of Different Practice Models

EMPLOYMENT MANAGEMENT FINANCIAL GOVERNANCE OTHER

AUTONOMY CALL COVERAGE
STATUS RESPONSIBILITIES RISK STRUCTURE CONSIDERATIONS

Some enjoy the

HIGH variety of taking on
Personally
Owner of
HIGH Potential for
responsible for
an entrepreneurial
bonus and/or role
solo practice You are the sole HIGH reduction in arranging with
Sole owner
decision-maker income depending other colleagues It can be difficult to
on performance disconnect or take
metrics time away

MEDIUM Review partnership

MEDIUM requirements and
Potential for Set call schedule
Partner in a You have a say, bonus and/or Opportunity for benefits carefully
group practice but you must MEDIUM reduction in
that is unique to
partnership varies as they vary
collaborate with income depending each practice
widely between
other partners on performance organizations
metrics

Very important
to understand
the culture of
LOW decision-making
but variable and physician
Set call schedule Physician
Employed support within the
physician
Your physician LOW LOW that is unique to partners make
organization.
employer sets each practice decisions
the rules and The contract
requirements should include
support staff, call,
and patient
volume/panel size

Part 1: Is Private Practice Right for You? 8

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The AMA Path to Private Practice
The AMA understands that the highest quality of patient
care and greatest physician satisfaction occurs when
physicians pursue practice arrangements that complement
their unique style of practicing medicine.
For enterprising physicians seeking greater autonomy in
their practice of medicine, a private practice can be an Payer Contracting
exceptionally fulfilling environment. The path to private
practice is not without challenges, but a strong foundation
and Payment Models
can help ensure that physicians can overcome any hurdle. Additional considerations for physicians going into
Start on the path with the AMA’s essential tools and private practice are identifying payers to contract
with and the desired payment models for the
resources that give physicians the head start they need
practice. This is a complex and detailed process,
to sustain success in an independent practice setting.
so working with an experienced health care attorney
Your journey begins here: to negotiate these arrangements can be beneficial.

Location
Where a physician chooses to put down their practice’s
roots is the crucial first step in making the dream a
Professional Advisors
3
reality. Take stock of the local market and assess the
needs of the population in that area. Determine whether
buying or leasing property is best. Once you settle on and Peer Collaboration
a geographic location and real estate plans, work with It is vital for physicians to have a basic
an experienced commercial realtor to select the ideal understanding of business operations.
space. Ensuring a location meets all high-priority needs Engage in meaningful conversations
will go a long way toward the practice’s success. with professional advisors during the
decision-making process as you establish
operations for your private practice.

2
Licensing and Credentials
Physicians must be both licensed and credentialed
in the state they wish to practice medicine. This
process often takes several months to complete,
so it is recommended to start as early as possible.

Part 1: Is Private Practice Right for You? 9

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Professional Insurance
You may want to consider insurance policies
commonly available to businesses and business
owners. Policies like business overhead
insurance and disability buyout insurance
can protect the practice and any partners.
7 Staffing
Use industry benchmarks to determine

5
how best to staff your practice. The
number of support team members you
need in your practice will depend on the

6 number of full-time physicians employed.

Consider your administrative staff needs—
receptionists, staff who complete billing,
coding, prior authorization, referrals, and
Equipment and Supplies credentialing, managers, human resources,
and others—which may vary by office.
Physicians need equipment and supplies to
care for their patients. While it may seem
obvious to include items such as bandages
and gauze in a procurement list, what may be
less obvious are furnishings, uniforms, and
durable medical equipment (DME). A vendor to
partner with on purchasing supplies can be a
worthwhile investment. It’s also a good idea to
compare prices at various supply companies.

Building on the Path to Private Practice, the What to Look for in Your First or Next Practice toolkit details
8 STEPS to evaluate practice opportunities that can benefit even seasoned physicians considering a shift to
a different practice type.

EXPLORE MORE! Download the complete

What to Look for in Your Path to Private Practice
First or Next Practice toolkit infographic poster (PDF)

Part 1: Is Private Practice Right for You? 10

Part 2:
Attending to Business

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Starting in Private Practice
Checklist
The health care landscape is changing rapidly, driven by the growth of payment models other than
Fee for Service, regulatory changes, technology, and consumer demands, among other factors. AMA
advocacy, resources, and research help make private practice a viable option for physicians. For physicians
contemplating a move to private practice, several important considerations outlined below contribute to the
success of this model of care.

STEP 1: Location
Where a physician chooses to put down their practice’s roots is the crucial first step in making the dream
a reality. Take stock of the local market and assess the needs of the population in that area. Determine
whether buying or leasing property is best. Once you settle on a geographic location and real estate plans,
work with an experienced commercial realtor to select the ideal space. Ensuring a location meets all high-
priority needs will go a long way toward the practice’s success (Figure 1).

Figure 1. Considerations When Choosing a Private Practice Location

Real Estate Real Estate Setting Structure Type Additional

Purchase Lease Considerations

• Higher up-front • Lower up- • Rural • Hospital- • Competition

cost, but fixed front cost, but • Suburban affiliated • Patient
monthly costs monthly costs • Stand-alone demographics
will help you are variable and • Urban
predict your could change • Private medical • Traffic patterns
future expenses. when lease office building • Signage
• Ability to expires. • Retail store • Parking
expand by • Several barriers front
• Proximity to
adding space in for future
hospital
the future. expansion.

Part 2: Attending to Business 12

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STEP 2: Licensing and Credentials to Practice and Prescribe

Physicians must be both licensed and credentialed in the state they wish to practice to care for patients. This
process often takes several months to complete, so it is recommended to start as early as possible (Figure 2).

Figure 2. Overview of the Process for Licensing and Credentialling

Licensing & Credentialing – Credentialing –

Certifications Phase 1 Phase 2
• State physician 1. Identity & access management These enrollments are less
(I&A account). First step in common but may be required
• State controlled substance
obtaining a National Provider based on your patient population
• United States Drug Enforcement Identifier (NPI) number for payer or physician organization.
Administration (DEA) enrollment.
• Railroad Medicare enrollment.
• Board certification (if applicable) 2. National Plan & Provider This is separate from traditional
• Medical liability insurance* Enumeration System (NPPES) Medicare and should be
enrollment. To obtain your NPI completed once group/clinic &
number. individual PTAN’s are received.
Additional resources:
3. Medicare group or clinic • Medicaid enrollment (PDF).
Navigating state medical licensure enrollment (PDF). To obtain To enroll with the Medicaid plans
Federation of State Medical Boards the Medicare PTAN (Provider in your state. Most physician
(FSMB): Federation credentials Transaction Access Number) for or hospital organizations will
verification service your practice. require active participation
with Medicaid to begin the
FREIDA™ physician credentialing 4. Medicare individual enrollment
credentialing process.
(PDF). To obtain the Medicare
AMA Advocacy: physicians call PTAN for individual physicians. • Council for Affordable Quality
for clarity on IMG credentialling, Link your individual enrollment Healthcare (CAQH) enrollment.
licensure to your practice PTAN for Self-reporting professional
payment purposes and practice information
portal between physicians and
*Not a license but required by Additional resources: health plans or other health
many hospitals. care organizations. This step is
National Provider Identifier optional, but many physicians
IMG=international medical Standard (NPI) have found it to be a timesaver.
graduate
Know your options: Medicare
Participation Guide (PDF) Additional resources:
Improving Health Plan Provider
Directories white paper (PDF)

NOTE: There are several options for contracting with commercial or private insurance payers outlined in the
resources provided in Part 2, STEP 4 of this Playbook.

EXPLORE MORE!
Navigating state medical licensure resource

Part 2: Attending to Business 13

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STEP 3: Professional Advisors and Peer Collaboration

It is vital for physicians to have a basic understanding of business operations. This knowledge can be
obtained by engaging in meaningful conversations with professional advisors during the decision-making
process as you establish operations for your private practice. These consultations provide invaluable
guidance and may help you develop a business plan for day-to-day and long-term operations. Many financial
institutions require a formal business plan to approve business or equipment loans. Personal guarantees
may also be required.

Figure 3. Advisors to Guide Physicians Entering Private Practice

Legal Finance Compliance Information Peer

Technology Collaboration

Consult for their expertise in:

Real estate Practice finances HIPAA regulations Phone system Shared call
and taxes
Payer contracts Paper shredding Internet Vendor referrals
Personal taxes
Practice business Sharps disposal Network Advisor referrals
structure Billing service
Other medical Connectivity
waste disposal
Computers

Phones

Tablets

EXPLORE MORE!
Private Practice Business Considerations Guide (also see p. 45)
Private Practice Common Financial Terminology (also see p. 47)

Part 2: Attending to Business 14

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STEP 4: Payer Contracting and Payment Models

Additional considerations for physicians going into private practice are identifying payers to contract with
and the desired payment models for their practice (Figure 4). This is a complex and detailed process, so
working with an experienced health care attorney to negotiate these arrangements can be beneficial.

Figure 4. Different Forms of Payer Contracting and Payment Models

Payer Contracting Payment Models

Payer types Core

Medicare Fee for service
Medicaid Capitation
Commercial Bundled payments
Contract types Supplemental
Direct Pay for Performance (P4P)
Physician organization Shared savings
Retainer based
Organizational
Medical home
Accountable Care Organization
(ACO)

EXPLORE MORE!
Physician Payment Models Guide (also see p. 51)
Private Practice Toolkit: Payor Contracting 101 (PDF)
Payor Contracting 101 & 201 webinar
Private Practice Checklist: Key Considerations in Forming, Operating or Joining a Clinically
Integrated Network (CIN) (PDF)

Part 2: Attending to Business 15

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STEP 5: Professional Insurance

Physicians may want to consider insurance policies commonly available to businesses and business owners
to protect the practice and any partners. Examples include business overhead insurance and disability
buyout insurance, though there are others to consider as well (Figure 5).

Figure 5. Professional Insurance Considerations for Private Practice

Directors and Business Employee

Life
Officers (D&O) interruption dishonesty

Cyber
Property Umbrella
security

Commercial Workers’ Medical

Disability
liability compensation liability

Technology Equipment

EXPLORE MORE!
Protecting professional practices

Part 2: Attending to Business 16

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STEP 6: Equipment and Supplies

Physicians need equipment and supplies to care for their patients. While it may seem obvious to include
items such as bandages and gauze in a procurement list, what may be less obvious are furnishings, uniforms,
and durable medical equipment (DME). A vendor to partner with on purchasing supplies can be a worthwhile
investment. It’s also a good idea to compare prices at various supply companies. Figure 6 lists some basics to
get you started equipping and supplying your practice.
Questions to ask yourself as you begin procurement:
• Will you purchase or rent items?
• Are you planning to purchase only new items, or can some items, such as office furniture, be used?
• Will you need financing, and if so, will this be through the vendor or a private bank?
• Do your professional organizations have group purchasing arrangements for discounted pricing?
• Do your medical supply vendors offer office supplies?

Figure 6. Equipment and Supplies For Starting a Private Practice

Medical Office Medical Office

Equipment Equipment Supplies Supplies

• Exam chairs • Desks and chairs • Non-surgical • Paper products

and tables • Computers, instruments • Pens, pencils, and
Other equipment tablets, and • Wound and markers
types: printers skincare kits • Binders
• Diagnostic • Internet security • Syringes • Packing supplies
• Surgical • Server • Needles • Workspace
• Durable medical • File and storage • Gloves organizers
equipment (DME) cabinets • Sterilization • Labels
• Storage • Supply shelving • Swabs • Stamps
• Transportation • Waiting room • Minor procedure • Employee badges
furniture supplies
• Acute care • Staplers and
• Televisions punches
• Procedural
• Décor • Carrying cases
• Safety and
security items

Part 2: Attending to Business 17

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STEP 7: Staffing
Staffing ratios can be highly variable, and there are numerous considerations for creating a high-functioning,
cohesive, and efficient team that delivers excellent care (Figure 7). The objective is to pinpoint a staffing ratio
and team makeup that provides optimal support for physicians in your practice setting. Your specialty or
subspecialty professional society may be helpful in providing data specific to your practice.
Calculating the number of support team members that a practice needs relies on determining the number
of physicians employed as full-time equivalent (FTE). This can be misleading, however, as calculating FTE
with the hours worked per week is frequently based on a standard 40-hour workweek. Research suggests
that for every hour of direct face time with patients, a physician spends an additional hour on non-patient-
facing desktop medicine (patient portal communication, responding to online requests, etc.).4 Taking this
into account, a physician with 28 patient scheduled hours likely works closer to 56 total hours per week. It is
important to be aware of this when calculating FTEs and establishing your ideal staffing ratio.
Physicians should also consider competitive benefits packages as recruitment for the practice team is
ongoing. Consider offering professional development for team members as another differentiator for your
practice. For example, enable medical assistants to contribute in a more meaningful way to the practice
team by increasing their skills and knowledge. The Medical Assistant Professional Development toolkit gives
suggestions for creating personalized MA training for your practice to help your team practice to their
highest potential and improve the quality of care the office can provide.
Note: While creating your own medical assistant professional development program will be invaluable to
your practice, it does not take the place of a certified medical assistant training program accredited by
organizations. Learn more about MA professional credentials, the different pathways to certification, and the
potential skill variation in MAs certified through different pathways in the Medical Assistant Recruitment
and Retention toolkit.

EXPLORE MORE!
Private Practice Staffing Guide (also see p. 54)
Medical Assistant Recruitment and Retention toolkit
Medical Assistant Professional Development toolkit
Success Story: Dermatology Practice Reaps Benefits of Empowered Medical Assistants and
Detailed Note Templates
Success Story: Teamlets Led by Physicians but Run by Medical Assistants Improve Efficiency
Private Practice Guide: Implementing a Work-From-Home Program (PDF)

Part 2: Attending to Business 18

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Figure 7. Evaluating Clinical Care Team and Administrative Staffing Needs

Support Staff Per Full-time Equivalent (FTE) Physician Ratio

The number of full-time administrative and clinical team members needed to effectively support 1 full-time physician.
The ratio of FTE support team members for every FTE physician will differ between practices, and there is no “right” ratio.

Calculating Staffing Needs

• Determine the total number of physicians in your practice expressed in FTEs. Each full-time physician counts as 1, while each
physician that works less than full time counts as fraction of an FTE calculated by dividing their average number of hours
worked per week by the full-time standard in your practice.
• Calculate your staffing needs by multiplying the total number of physician FTEs by the total number of FTE non-physician team
members needed to effectively support 1 full-time physician in your practice.

Factors That Can Inform Your Staffing Needs

Administrative
• Is billing done in-house, or do you have a vendor?
• Are prior authorizations done in-house or via a vendor?
• What administrative tasks have you outsourced, and what administrative staff do you need to hire (eg, receptionists, staff who
complete billing, coding, prior authorization, referrals, and credentialing, managers, human resources, and others)?
• Can you cross-train full-time team members to fill several part-time roles, such as an administrative member handling billing,
prior authorization, and referrals, or a practice manager taking on human resources tasks?

Clinical workflows
• How many procedures are done in the office?
• How many clinical and non-clinical tasks are the responsibility of supporting team members?
• Are you performing telehealth visits?
• How many exam rooms do you have?
• How does your practice layout affect your workflows? How much time does it take physicians, support team members, and
patients to move through your practice space to address their duties or visit needs?

Patient population
• What is your patient panel size?
• How many patients does each physician see per day?
• What are the needs of your patients? Do they require extra time for assessment and treatment plan review?
• Do your patients have social determinants of health (SDOH) or other needs that require a higher level of care?

Other
• Does your specialty society have staffing recommendations?

Additional Considerations

Staffing On-call schedule Training Benefit Remote

shortages (for staff absences) opportunities packages employment
options

Part 2: Attending to Business 19

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Relevant Regulatory and Legal
Information
No business owner, let alone a physician focused on patient care, anticipates running afoul of legal or
regulatory issues. Being aware, informed, and prepared in this arena cannot be emphasized enough.

EXPLORE MORE!
Debunking regulatory myths website

Fraud and Abuse Laws

Physicians and staff should have a thorough understanding of fraud and abuse laws and concepts that apply
specifically to medical practice (Table 2).

Table 2. Overview of Fraud And Abuse Laws Physicians Should Know5

LAW DESCRIPTION

Anti-kickback Prohibits the knowing and willful payment of “remuneration” to reward patient referrals or the generation of
Statute (AKS) business involving any item or service payable by federal health care programs.

Physician Commonly referred to as the Stark Law, it prohibits physicians from making Department of Human Services
Self-Referral Law (DHS) referrals payable by Medicare to an entity that they or their immediate family members have a financial
relationship with, like ownership, investment, or compensation.

Exclusion Statute The Office of the Inspector General (OIG) is legally required to exclude individuals and organizations from
participating in all Federal health programs if convicted of certain criminal offenses. If you are excluded, then
Federal health programs will not pay for your services.

Civil Monetary OIG may seek legal monetary penalties and sometimes exclusion from various programs for individuals and
Penalties Law (CMPL) organizations that have violated certain rules. Penalties can range from $10,000 to $50,000 per violation.

False Claims Act It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or
fraudulent.

EXPLORE MORE!
Patient Records Electronic Access Playbook (PDF)
HIPAA privacy & security resources
HIPAA administrative simplification
HIPAA audits
The Nuts and Bolts of Achieving HIPAA Security Rule Compliance through Effective Risk
Assessment (CME credit)

Part 2: Attending to Business 20

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Understanding HIPAA
HIPAA is the acronym for the Health Insurance Portability and Accountability Act. HIPAA covers privacy,
security, breach notification requirements, and administrative simplification requirements related to
electronic transactions and code set standards. It is important to note that HIPAA is a “floor,” meaning
that states may have requirements that go above and beyond what the federal government requires. This
Playbook focuses on federal mandates.

Understanding Information Blocking

Information blocking can occur in many forms.

Patients can experience information blocking when trying to access their medical records or
sending their records to another physician.

Physicians can experience information blocking when trying to access patient records from
other providers, connecting their electronic health record (EHR) systems to local health
information exchanges, migrating from one EHR to another, and linking their EHRs with a
clinical data registry. Physicians may also implicate the information-blocking rule if they
knowingly take actions that interfere with accessing, exchanging, or using electronic health
information (EHI), even if no harm materializes. In this way, physicians can benefit from and
are the subject of information blocking regulations.

EXPLORE MORE!
Part 1: What is information blocking? (PDF)
Part 2: How do I comply with info blocking and where do I start? (PDF)
Information Blocking Regulations: What to know and how to comply (CME credit)

Part 2: Attending to Business 21

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Physician Payment and Delivery
Models
The world of physician payment and delivery models has changed the health care industry as we knew it. The
federal government and private payers are changing how they pay physicians and other health professionals.
There is an ongoing movement towards models that are intended to improve quality and reduce costs
through tracking and paying performance-based bonuses based on process, outcome, and cost measures or
entering capitated risk arrangements. An AMA–RAND study investigated these models and their real-world
impact on physician practices and found that payment models affect both physicians and practices in a
variety of ways.

Figure 8. Physician Payment and Delivery Models

Core Payment Supplementary Organizational

Models Payment Models Models

Fee-for-service Pay for Performance Medical home

(P4P)
Capitation Accountable Care
Shared savings Organization (ACO)
Bundled or
episode-based Retainer-based
payments payment

Consider your cash flow and revenue cycle model once you’ve selected a payment and delivery model. The
STEPS Forward® Revenue Cycle Management toolkit breaks revenue cycle efficiency into 8 actionable STEPS,
many of which leverage electronic systems instead of paper—for example, electronically verifying patient
insurance and submitting claims, using electronic transactions to reduce prior authorization burdens, and
leveraging electronic claims submission.

EXPLORE MORE!
Revenue Cycle Management toolkit
Physician Payment Models Guide (also see p. 51)

Part 2: Attending to Business 22

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Prior Authorization
Prior authorization—sometimes called precertification or prior approval—is a health plan cost and quality
control process. Physicians and other health care providers must obtain advance approval from a health plan
before a specific service is delivered to the patient to qualify for payment coverage. When it is used, prior
authorization should follow a standardized, automated process to minimize the burden placed upon both
physicians and health plans.

EXPLORE MORE!
Tips to help physicians reduce the prior authorization burden on their practice (PDF)
Break Through the Prior Authorization Roadblock webinar slides (PDF)
AMA prior authorization initiatives and resources

Claims Submission and Payment

Avenues
Imagine that you experienced a computer problem that prevented your claims from being sent to your
clearinghouse. You didn’t notice the computer problem for a month until the slowing in the cash flow rate
and drop in practice revenue and bank balances became obvious. Now you are scrambling to resubmit claims
via your clearinghouse and panicking about your potential lack of cash flow for the next 1 to 3 months while
you await payment. In Table 3, you can find tips for simplifying claims submission and payment administrative
aspects and learn how to leverage electronic transaction standards to improve practice efficiency.

Part 2: Attending to Business 23

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Table 3. Description and Resources for Common Claims Submission Methods and Payment
Avenues

DESCRIPTION

Clearinghouse Acts as the middleman between your practice and the insurance payers. The clearinghouse will check electronic
medical claims for errors to ensure the claims are processed correctly by the payer.
Most EHR vendors have preferred clearinghouses that they work with and may offer discounted pricing for
practices.

Electronic Eligibility Provides your practice with a patient’s insurance eligibility and benefit information before or at the time
Verification of their visit. The practice can use this information to provide patients with an estimate of their financial
responsibility before an exam or procedure.

Electronic Claims Transmits a paperless patient claim form generated by computer software and electronically over a computer
connection to a health insurer or other third-party payer for processing and payment.

Electronic Funds Automates your claims management revenue cycle by transferring claims payments electronically to a bank
Transfer (EFT) account of your designation.

Electronic Payments: Delivers claim payments via payer-issued virtual credit cards (VCCs). When paying via VCCs, health plans send
Virtual Credit Cards credit card payment information and instructions to physicians, who process the payments using standard
credit card technology. Note that this payment method is associated with transaction fees that can reduce
practice revenue.

Electronic Remittance Gives details about the amount billed, the amount paid by the health plan, and the reasons for any differences
Advice (ERA) between the billed and paid amounts in an electronic version of a paper explanation of benefits (EOB).

EXPLORE MORE!
Electronic transaction toolkits
Electronic claims toolkit (PDF)
Electronic funds transfer toolkit (PDF)
Know your rights and make ACH EFT work for your practice (PDF)
CMS guidance on VCCs, EFT/ERA and business associates—what you need to know (PDF)
The effect of health plan virtual credit card payments on physician practices (PDF)
Getting started with electronic remittance advice (PDF)

Part 2: Attending to Business 24

2
Practice Revenue Streams
As you establish your private practice, it is easiest to think of your income coming from 3 different buckets:
insurance payments, patient payments, and workers’ compensation claims (Figure 9).

Figure 9. Three Forms of Physician Payment

Patient Payments Workers’ Compensation

Practices collect payment when the Practices may occasionally seek
patient is still in the office at the time payment from other entities, such
of service. This is the vital first step in as property and casualty (P&C)
any effective patient payment policy insurers for workers’ compensation
and will increase your practice’s cash claims. While there are many
flow, decrease accounts receivable similarities in workflows between
and bad debt, and reduce billing health insurance claims and P&C
and back-end collection costs. medical billing, practices need to
be aware of key differences.
Insurance Payments
Practices receive payment
from insurance companies
for services performed for
their member patients.

EXPLORE MORE!
Maximize Patient Collections After the Time of Service (PDF)
Managing Patient Payments: 7 STEPS to POC Pricing (PDF)
How to Calculate the Price of Treatment at the Point of Care (PDF)
Medical Billing for Workers’ Compensation and Other Property and Casualty Insurance
(PDF; AMA-member-access only)

Part 2: Attending to Business 25

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The Fee Schedule
One of the key steps in assuring your practice is compensated appropriately is establishing a fee schedule for
your services.6 Practices should have 1 set fee schedule for all services. Insurance payers will adjust charges
based on your contract, or physicians can manually offer discounts to self-pay patients. Federal law prohibits
calling other practices and asking their fees to establish your own fee schedule. If you need additional
guidance, the Centers for Medicare and Medicaid Services (CMS), the AMA, and other organizations have
resources to help you (refer to the Resources and Further Information section of this Playbook).

EXPLORE MORE!
Resource-Based Relative Value Scale (RBRVS) overview

Claim Submission Workflow and Checkpoints

It is vital for the cash flow of your practice to institute claim submission workflows and daily checkpoints
to ensure your claims were received by the clearinghouse, processed, and submitted to the insurer for
processing and payment. Delays in claims submission could result in delayed payment for several months.
Because it can take 1 to 3 months for a health plan to pay claims, anything that delays claim submission and
payments can have serious downstream effects (eg, cash flow, missed deadlines, the expense of reworking
claims, etc.).
Many payers also have timely filing deadlines for claim submission; you only have a certain number of days
from the date of service for the payer to receive your claims, process, and remit payment. Claims received
after the timely filing deadline will be rejected by the payer and will not be paid. The physician’s office is
responsible for confirming the claim was received by the payer.

PRO TIP:
All payers have different timely filing deadlines, so it is important to confirm timely filing
when signing your contract with new payers.

Part 2: Attending to Business 26

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Payer Audits
Several different types of audits could affect the timing of your payments. Often a payer will review your
billing and patient records for appropriateness. Sometimes, physicians are not paid until an audit is complete
and services were deemed medically necessary and correctly billed.

EXPLORE MORE!
Payer Audit Checklist (PDF)

Collection Issues
As many businesses can attest, collecting payment for services provided is a process that does not run on
its own. Establish measurable goals for employees, with accountability for their contribution to the process.
While you can hope that most of your practice’s payments are collected promptly, there are steps to take
when you don’t receive payments in a timely manner. Practices should consider collection policies for
insurance companies and patients separately.7

EXPLORE MORE!
Managing patient payments

Part 2: Attending to Business 27

Part 3:
Attending to Patients
Efficient Operations to Ensure More Time with Patients
Many physicians are drawn to private practice because of the potential for
long-lasting relationships with patients, the ability to have more control over
the patient–physician experience, and the knowledge that the care team and
administrative staffing are the physician’s responsibility. Succeeding in the
private practice setting takes astute clinical judgment, effective collaboration
with colleagues, and innovative problem-solving. One of those innovative
problem-solving opportunities may be selecting and adopting your EHR.

28
3
Electronic Health Record (EHR)
Choice
There is no one-size-fits-all approach to EHR selection and adoption. Each practice should consider its own
unique needs, high-priority features, and resources when deciding which EHR works for them.8 Keep in mind
that physicians spend almost half of their day on the EHR and desk work. Even during the patient visit, 37%
of the time in the exam room is spent on these tasks. Research cites the clerical burden resulting from EHR
adoption as a contributor to physician dissatisfaction in practice and subsequent burnout.9
The best time to minimize the burden is when implementing a new EHR system. This is a perfect time to
be sure default settings, triaged messages, etc., are optimized. It is always best to set defaults to the most
efficient team-based approach early on and adjust them, if needed, after using the system. Figures 10 and 11
detail considerations for selecting and implementing an EHR system; be aware that some features described
may be included in the initial EHR package, whereas others are add-ons for an additional cost.
STEPS Forward toolkits and resources share guidance at every phase of the process, from selecting an EHR
to implementing to improving how you work in your EHR with the Taming the EHR Playbook and techniques
from the Getting Rid of Stupid Stuff toolkit.

Figure 10. Core EHR Considerations

• Ability to transfer data to or from existing technology

Interface (ie, lab and imaging software)
• Billing and scheduling capabilities

Provider-to-Provider
• Transfer patient information between clinicians via EHR platform
Communication

Local Health Care • Improve interoperability between practices in system

Systems • Possible discounts available

Specialty • EHR designed for your specific specialty

• Software and upgrades • Support

Costs
• Training • Team time

Part 3: Attending to Patients 29

3
Figure 11. Additional EHR Considerations

Scheduling and billing

Patient Document Insurance
(Practice Management
portal scanning eligibility reports
System)

Clinical and Functionality to

Customization
administrative automate reminder
options
report console calls and messages

Prescription Clinical Orders and results

Charting
management tasking management

Decision Health record Marketing

support management support

Population health Health information Public health Quality measure

management exchange reporting reporting

Speech Mobile device

Telemedicine
recognition access

EXPLORE MORE!
Electronic Health Record (EHR) Software Selection and Purchase toolkit
EHR Implementation toolkit
Taming the EHR Playbook (PDF)
Getting Rid of Stupid Stuff (GROSS) toolkit

Part 3: Attending to Patients 30

3
Increase Practice Efficiency
Waste in health care causes physicians and the care team to spend time, energy, attention, and money on
activities that do not add value to patients. Attention to efficiency in every aspect of your practice will result
in greater satisfaction for you, your team, and your patients while increasing access and income. Think ahead
to what time-saving efforts you will implement in your private practice, who from the care team you will
involve, and how you will measure success. Time-saving efforts need to come from the top down: from the
level of practice leaders.

Scheduling Patients
Inefficient patient scheduling can dramatically impede the progress of your day. There are many effective
methods to choose from, and you can experiment with different appointment schedules to learn what works
best for the practice. Some different methods to explore are the typical method, the wave method, the need
method, and the open-access method.

Lean Health Care

Lean thinking in a practice setting leads to a shift in culture where all team members are empowered to
identify sources of inefficiency and innovative solutions to rectify problems. Lean works best with the buy in
and involvement of everyone on the team.

Figure 12. Overview of Lean Health Care

• A method to engage patients and the care team to improve population outcomes
What is Lean? • Applying Lean principles can help practices run more efficiently and effectively

• To minimize waste in every process, which adds value for the patient, physician,
Focus of Lean and entire care team

• Empower the care team to take initiative to find and fix the root cause of critical
Goal of Lean problems seen during daily practice

• Lengthy patient wait times

• Clinics with flow of care that is not streamlined
Examples
• Moving in and out of areas to find information
of waste • Duplicate testing when prior results cannot be found
• Provisions of care that are not indicated

EXPLORE MORE!
Lean Health Care toolkit
Choosing Wisely® toolkit
Plan-Do-Study-Act (PDSA) toolkit

Part 3: Attending to Patients 31

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In the spirit of maximizing efficiency in the practice, there are a few highlights from the Saving Time
Playbook to consider implementing as you start your practice, such as setting up pre-visit planning,
expanded rooming and discharge protocols, and team-based care. Standardizing and streamlining
these practice fundamentals, or core workflows, will save time during and between visits.

Pre-Visit Planning
Pre-visit planning allows the care team to schedule future appointments, preorder labs and other necessary
tests for the next visit, and arrange for tests to be completed prior to the next appointment (Figure 13).
Pre-visit planning often allows a clinic to run smoothly and have more capacity to handle unanticipated
issues as they arise.

Figure 13. Optimal Pre-Visit Planning Workflow

At the End of the Between the Current On the Morning of

Current Visit and the Next Visit the Next Visit

1 4 6
Use a Visit Planner Use a Checklist to Hold a Pre-Clinic
Checklist to Preorder Review Pre-Visit Tasks Team Huddle
Labs and Other
Needed Tests for 5 7
the Next Visit
Send Patient Use a Pre-Appointment
Appointment Questionnaire to
2 Reminders Gather Patient
Schedule the Updates
Next Follow-Up
Appointment 8
Perform a Handoff
3 of the Patient
Arrange for Tests to to the Physician
Be Completed Before
the Next Visit

EXPLORE MORE!
Pre-Visit Planning toolkit

Part 3: Attending to Patients 32

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Advanced Rooming and Discharge
Physicians cannot and should not be expected to do all the work needed for most office visits. Advanced
rooming and discharge protocols are standard work routines that enable other team members to take on
additional responsibilities. With advanced rooming and discharge protocols, the nurse, medical assistant
(MA), or other clinical support team members can use their skills to create a smooth visit for the patient and
a satisfying clinic session for the entire team.

Figure 14. Sample Advanced Rooming and Discharge Workflow

Patient check-in Patient rooming

Take vital signs, determine chief complaint, update past family
and/or social history, update immunizations, etc.

Areas where others Patient interview and examination

could assist in the team
During the physician’s discussion with the patient, the
documentation process documentation assistant records the history and exam as directed
while they are with the by the physician.
physician and patient
in the exam room
Plan of care and clinical documentation
While the physician and the patient discuss the plan of care and
next steps, the documentation assistant records the plan and fills
in the details for the after-visit summary.

Prescription, order, and referral processing

Throughout the visit, the documentation assistant can place
orders, ensuring that any orders are prepared for the physician’s
signature as appropriate.

Patient education and care coordination

Reinforce next steps of care as well as provide immunizations,
patient education and health coaching, order and schedule
laboratory tests, screenings, etc.

Patient check-out

EXPLORE MORE!
Advanced Rooming and Discharge toolkit

Part 3: Attending to Patients 33

3
Patient Pre-Registration
A streamlined pre-registration process saves time and reduces paperwork for both the patient and the team.
Patients save time they would otherwise spend trying to understand and accurately answer registration
questions presented to them in paper form. Physicians and other care team members can also spend more
time on the visit and less time on paperwork while being confident they have a complete medical history.
The Patient Pre-Registration toolkit outlines a process where a new patient coordinator (NPC) conducts
new patient pre-registration over the phone or in person before the initial visit to capture all the required
demographic and payment information in the registration record. The new patient coordinator can also
enter medical information, including the medication list, allergies, and medical history, directly into the
EHR to reduce the data entry work required during the patient’s initial visit. Eliminating paper and entering
information directly into your practice’s registration software and EHR prevents mistakes. An Example
Patient Wait Time Process Flow is included in the Resources and Further Information section of the Playbook.

EXPLORE MORE!
Patient Pre-Registration toolkit

Part 3: Attending to Patients 34

3
Transition to Team-Based Care for
Better Care Coordination
Team-based care is a collaborative approach wherein team members share responsibilities to achieve
high-quality and efficient patient care. Under the physician’s leadership, team members coordinate
pre-visit planning, advanced rooming and discharge activities, and team documentation (Figure 15).
With the help of other team members, physicians can better connect with patients and remain focused
on their primary patient care tasks. This model of care improves team member collaboration and pride in
their work, efficiency, and patient satisfaction.

Figure 15. Elements of Successful Team-Based Care

Daily Team Care

Team Huddles Documentation Coordination

Helps team members Team members Intentionally

prepare so they other than the organizing patient care
are better able to physician assist with activities between 2
anticipate any special documenting visit or more participants
situations or unique notes, orders, referrals, in a patient’s care
needs that may arise and prescriptions to facilitate the
during the day during a visit appropriate delivery of
health care services
Generally, occurs GOAL:
before the team starts Allow physicians Includes determining
seeing patients and to focus on and where to send your
lasts 10 to 20 minutes provide better care patient next, what
to the patient, information to provide
GOAL: reduce burnout, and to the rest of the
Communicate about improve efficiency patient’s care team,
patients and the and how accountability
flow of the clinic is distributed
reliably, effectively, among the team
and efficiently

EXPLORE MORE!
Team-Based Care toolkit
Daily Team Huddles toolkit
Team Documentation toolkit
Transitions of Care toolkit

Part 3: Attending to Patients 35

3
Racial and Health Equity: Concrete
STEPS for Smaller Practices
Since health equity and racial equity are outcomes and continuous and interrelated processes, it is vital to
adapt a framework that can help move practices forward to advance racial and health equity for coworkers,
for patients, and for the communities they serve. Recognizing that the path to equity is a dynamic, long-
term journey, focus on initial catalytic steps and associated resources to translate that commitment to
equity into action. Use practical questions during visits to support equitable patient care (Figure 16).

Figure 16. In the Exam Room: Questions for the First Visit

Questions for the first visit.

Goal: Make the implicit, explicit.
“I don’t want to assume anything about your identities. How do you identify racially, ethnically,
1 and culturally, and what are your pronouns?”
Many of my patients experience racism in their health care. Are there any experiences
2 you would like to share with me?”

3 “What have your experiences been within the health care system?”

4 “Have there been any experiences that caused you to lose trust in the health care system?

“It is my job to ‘get’ you. You shouldn’t have to work to ‘get’ me. If I miss something important or say
something that doesn’t feel right, please know that you can tell me immediately and I will thank you for it.”

Put up visual cues of a safe space, such as Black Lives Matter (BLM) signage or a rainbow flag in
6 support of LGBTQ movements.

7 Acknowledge and honor what patients are already doing—“Wow, you’re already doing so much.”

8 “What’s happened to you?” vs “What are you doing?”

Curiosity can feel like colonizing language. Not “Can you explain to me why…?”; instead,
9 “There is something I don’t know that I really need to understand.”

Courtesy of Southern Jamaica Plain Health Center, Boston, MA.

EXPLORE MORE!
Racial and Health Equity: Concrete STEPS for Smaller Practices toolkit

Part 3: Attending to Patients 36

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Social Determinants of Health:
Improve Health Outcomes Beyond
the Clinic Walls
Social determinants of health focus on the social and economic conditions impacting health at a community
level, while social needs focus on the individual level.10 Figure 17 describes the 5 common domains of SDOH. It
is most important for physicians to recognize that interactions among social determinants of health have a
greater impact on health than any 1 social determinant alone. For example, people living in poverty-stricken
areas experience more barriers and challenges regarding education, housing, unemployment, and stress.
This confluence of negative social determinants of health and its effect on health status is often reflected in
life expectancy disparities based on zip code.

Figure 17. The 5 Social Determinants of Health

Economic Education Health and Neighborhood Social and

Stability Health Care and Built Community
Environment Context

Poverty High School Access to Access to Foods Social Cohesion

Graduation Health Care that Support
Employment Healthy Eating Civic Participation
Enrollment in Access to Patterns
Food Insecurity Higher Education Primary Care Discrimination
Quality
Housing Language Health Literacy Incarceration
of Housing
Instability and Literacy
Crime and Violence
Early Childhood
Education and Environmental
Development Conditions

Adapted from Healthy People 2020. Social determinants of health: interventions & resources. Office of Disease Prevention and Health Promotion.
Accessed May 17, 2022. https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources

EXPLORE MORE!
Social Determinants of Health toolkit

Part 3: Attending to Patients 37

Part 4:
Grow Your Practice

38
4
Marketing
External tactics to attract new patients, such as creating a practice website and developing a social media
presence, are relatively straightforward. Internal strategies to retain the patient base and increase loyalty
rely on activities conducted within your existing patient base. To execute, you need a marketing budget and
a plan for your marketing activities (Figure 18). Even the smallest budget with a solid marketing plan can be
highly effective for individual physician practices. One practice was able to increase new patient volume by
7% due to a focused marketing effort that employed the talents of each team member.11

Figure 18. Key Features of a Marketing Budget and Plan

Marketing Budget Marketing Plan

Account for this in the A multi-faceted approach

practice’s operational budget may have a broader reach:
Important marketing budgeting Word of mouth
considerations include:
Marketing agency
Graphic design for online
Internet marketing strategy
and print material
Print media
Web design and hosting
Internet listings
Internet listings
Social media
Social media graphics
Direct mailings

Part 4: Grow Your Practice 39

4
Social Media
Social media is a new and valuable way to connect with your patients to share current medical information
and information about your practice. Social media pages are generally free to create and manage, although
practices should consider seeking professional guidance if they don’t have any experience on the platforms.
Practices can develop a presence on “the big 4” social media platforms—Facebook, Instagram, Twitter, and
LinkedIn—to maximize the return on time invested (Figure 19). Maintaining your practice’s social presence
requires effort, so you might focus your efforts on 1 or 2 platforms if you’re just getting started.

Figure 19. The “Big 4” Social Media Platforms

Facebook Instagram Twitter LinkedIn

Linked content Visual content Character limit Most professional

Values community Hashtag heavy Trends Thought-leadership
Professional groups No linked content Fast-paced Build your network
Education Convey an experience Hashtag heavy Links & hashtags

IMPORTANT: The practice owners should create all social media pages and restrict access to
designated team members and agencies as needed. This assures the practice owns the social
media accounts, and they do not belong to team members that could leave the practice at
any time and take the accounts with them.

EXPLORE MORE!
Professionalism in the Use of Social Media

Part 4: Grow Your Practice 40

4
Professional Organizations
Professional organization membership may contribute to growing your practice. Membership allows you
to meet physician colleagues within and outside of your specialty for collegiality and potential referrals,
collaboration, and sharing of best practices and resources, such as staffing, supplies, vendors, etc. Physicians
can join national associations such as the American Medical Association’s Private Practice Physicians
Section or the National Medical Association, among others (Figure 20). Membership in local chapters of
professional associations, national medical specialty societies, or state medical societies can often offer
opportunities to join affinity groups based on your interests.

Figure 20. Professional Organization Membership Opportunities

County State National Specialty Service

medical society medical society medical societies medical society societies

Payer Hospital Physician

committees committees organizations

Local chapter of
Cultural School Medical condition Local chamber
national medical
medical societies boards associations of commerce
associations

EXPLORE MORE!
AMA Federation Directory
About the Private Practice Physicians Section
AMA Membership

Part 4: Grow Your Practice 41

4
Community Organizations
Community organizations offer educational sessions to community members at no cost to the attendees
(Figure 21). A partnership with such organizations provides a health education benefit to the population to
combat disease and promote prevention. These engagements are also a way for patients to find physicians
to manage their health, which helps practices grow.

Figure 21. Local Organizations to Engage the Community

Neighborhood,
Religious
town, and city Hospitals Schools
organizations
community centers

Senior centers and Veterans of Foreign

Nonprofit entities
communities Wars (VFW) posts

Part 4: Grow Your Practice 42

4
Leverage Opportunities to Save
Money
The American Medical Association has expanded the Member Value Program to bring you more resources
and savings that fit you and your practice. Take advantage of the benefits that come with AMA membership
(Figure 22).

Figure 22. AMA Member Benefits*

Home & Lifestyle

Find and finance your future home with physician-tailored resources

Auto & Transportation

Use AMA-negotiated discounts to buy or lease new and used cars

Health & Wellness

AMA members receive discounted access to a variety of fitness, wellness and meditation benefits

Travel & Entertainment

Travel safely for less

Loans & Financial Services

Realize savings to help organize personal finances and manage debt

Educational & Student Discounts

Get discounts on test preparation courses and low rates for medical school loans

Practice Discounts
Discover special offers on technology, shipping, payment collection, and practice financing

*Benefits current as of May 2022. Check https://www.ama-assn.org/amaone/ama-member-benefits-plus for updates.

Part 4: Grow Your Practice 43

Resources and
Further Information

44
Private Practice Business
Considerations Guide
Business Plan
When a physician decides to open a new practice, there are various models and questions to consider. It is
best to view all the logistics based on your practice situation and consider questions such as:
• Do you wish to rent, lease, or own your practice building or office space?
– Each municipality has zoning ordinances that control what type of business can operate on each plot
of land. It is important to talk with your realtor or landlord to verify that you can operate a medical
office within the buildings you are considering for your business.
– You need to notify your “potential” landlord about your business intentions if you decide to lease.
– The first step is finding a realtor specializing in commercial real estate sales if you plan to own.
Whether you decide to own or lease, you will need to contact a bank for a commercial mortgage or financing
options. They will require a business plan that will include your business startup costs. The business plan’s
initial purpose is to act as a guide to starting a business, obtaining funding, and directing operations. As the
larger health care environment changes, the business plan must be focused on changes (ie, reimbursement,
regulatory agencies, and patients) to reflect the current shifts and anticipate future shifts in the internal and
external environment.
Critical components of a business plan include:
• Executive Summary. This will include the main details of your practice, such as the name, location, and
the services you will provide. It will also cover your mission statement: why do you want to open your
practice? What are your long-term goals?
• Description of products and services. Who are you treating? How large is your practice? What is your
vision for the future of your practice?
• Market analysis. The target market must be well defined; without one, your plan will demonstrate little
value. A SWOT (strength, weakness, opportunity, and threat) analysis is the best way to identify internal
and external influences on your practice.
• Financial viability. To generate sufficient income to meet operating expenses and debt commitments
while growing your practice.
– Physicians must understand the payment structure around their services when explaining their
business plan and return on investment (ROI). Most financial institutions do not understand the
current payment schedules in health care and will require additional explanation for capitation,
bundled payments, and pay-for-performance income.
• Team description. You will want job descriptions for each employee at your practice. It will be helpful
to match each physician to a team of health professionals who work closely together to meet the needs
of the patient (ie, nurses, medical assistants, pharmacists, etc.). You should also identify the support
staff needed for administrative work for all physicians in the practice (ie, billing, human resources, prior
authorization, scheduling, etc.).
• Marketing. A brand will help your practice differentiate and elevate to patients. Things to consider
when reviewing marketing include logo, website, print materials, social media pages, and search engine
profiles. Will you contract with a third-party vendor or keep marketing in-house? Will you use paid
advertising? How will you engage with current and potential patients on social media platforms?

Resources and Further Information 45

 • Regulatory compliance and changes in the law. Establish a pragmatic regulatory change
management process that expects and encourages a high level of engagement and coordination
among designated team members—leading to an identifiable path to ensuring compliance.
• Conclusion. Medical expertise is vital, but the patient’s experience is critical: having what they want
when they want it.

Practice Corporate and Legal Structure

Physicians may practice medicine through professional corporations, nonprofit organizations (including
hospital services corporations and medical services corporations), limited liability companies, or
partnerships.

NOTE: Certain states don’t allow physicians to practice through traditional LLCs or regular
corporations; the medical practice must be a professional corporation. It is important to check
regulations within your state and consult with an attorney before selecting a legal structure
for your practice.

GENERAL SOLE
FEATURES C CORP S CORP LLC
PARTNERSHIP PROPRIETOR

Created by a state-level registration that

usually protects the company name X X X

Business duration can be perpetual X X X

Owners not required to be United States

citizens or residents X X X X

Allowed to be owned by another business X X

Owners can report business profit and loss

on personal tax returns X X X X

Owners can split profit and loss with the

business for a lower overall tax rate X

Limited liability for debts and obligations X

Unlimited number of owners X X X

Annual meetings or record meeting minutes

are not required X X X

Resources and Further Information 46

Private Practice Common Financial
Terminology
While many physicians would like to practice medicine without handling the financial aspects this entails,
a physician in private practice needs to understand at least the basics of financial management for the
viability of their business. A lack of attention to the details of the financial side of your practice could lead to
disaster and could prevent you from practicing in the way you would prefer.12

Common Accounting Acronyms13

TERM ACRONYM DEFINITION

Accounts receivable AR Funds owed to your practice for services invoiced

Accounts payable AP Funds owed to a vendor for services performed and invoiced

Current Asset CA A practice’s cash and its other assets that will be converted to cash within one year of
appearing in the practice’s balance sheet heading

Fixed Asset FA Long-term assets that a practice has purchased and is using for services

Balance Sheet BS A financial statement that reports a practice’s assets, liabilities, and shareholder equity

Cash flow CF The net amount of cash and cash equivalents being transferred into and out of a business

Cost of goods sold COGS The total amount your practice paid as a cost directly related to the sale of products

Credit CR A record of the money flowing out of an account

Debit DR A record of the money flowing into an account

Depreciation DEPR The amount of expense allocated during a specific period for certain types of assets that lose
their value over time - for example, building and equipment

Earnings before EBITDA Used when assessing the performance of a company; helpful to determine how much profit
interest, taxes, the business generates by providing services in a given period
depreciation, and
amortization

Equity EQ The amount of your practice’s total assets that you own outright (ie, not financed with debt)

Accrued Expenses AE An expense that is recognized on the books before it has been paid

Fixed Expenses FE An expense that does not change from period to period

Operating Expenses OPEX A cost that a company incurs to perform its operational activities

Variable Expenses VE A cost that can change over time depending on the usage of products or services

Equity and owners’ OE The amount of money that would be returned to owners if all assets were liquidated and all
equity debt paid off

Resources and Further Information 47

 TERM ACRONYM DEFINITION

General ledger GL The record-keeping system for a practice’s financial data, with debit and credit account records
validated by a trial balance

Current liabilities CL A practice’s debts or obligations that are due to be paid to creditors within 1 year

Long-term liabilities LTL A practice’s debts or obligations that are payable beyond 12 months

Marketable securities MS Stocks, bonds, and other investments with enough demand to be converted to cash or sold
quickly

Net income NI A practice’s gross profit minus all other expenses and costs as well as any other income and
revenue not included in gross income

Operating revenue OR Revenue generated from the day-to-day operations of the practice

Present value PV The concept that states an amount of money today is worth more than that same amount in
the future

Profit and loss P&L A financial statement that summarizes the revenues, costs, and expenses incurred during a
statement specific period

Return on investment ROI A widely used financial metric for measuring the profitability of gaining a return from an
investment

Total revenue TR Sum of operating and non-operating revenue

Uncollectibles UN An account that cannot be collected because the client or payer is not able or willing to pay

The Basics of Accounting and Budgeting

Two primary accounting methods are accrual basis and cash basis.
• Accrual accounting recognizes revenues and expenses when services are rendered, not when funds
have exchanged hands. This method is more accurate and harder to manipulate.
• Cash accounting recognizes revenues and expenses as they are added or subtracted from your bank
account. Small-to-medium-sized practices often use this method because it is simpler to administer.

Understanding Financial Statements

Every business should monitor 2 key financial reports: the balance sheet and the income statement.
The balance sheet summarizes all the practice assets, liabilities, and equity values. In a balance sheet,
the sum of the assets must always equal the sum of the liabilities plus the equity. Three key indicators of
practice health on a balance sheet:
1. If current liabilities exceed current assets, the practice may be in danger of defaulting on accounts
payable.
2. If liabilities unexpectedly grow, the practice is taking on more debt.
3. Shrinking equity without depreciation of assets and retained earnings.

Resources and Further Information 48

The income statement, also called a profit and loss statement, details your practice’s revenues and
expenses. This financial statement lists the collections in your practice and basic categories for practice
expenses for a specific period. Several ratios can be calculated from the income statement, giving insight
into where the practice is spending its income. One of the most important uses for the income statement is
comparing any current year’s financial results to previous years. Watching your expense levels and ratios year
after year or quarter by quarter will alert you to dangerous increases in expenses, reductions in collections,
and sometimes even theft from the practice.

Understanding the Chart of Accounts

The chart of accounts lists numbers that identify each expense category in your practice by the
department. Your accountant will help establish a chart of accounts that allocate expenditures for tax
purposes and cost accounting. Correctly distributing fees is essential to efficient practice operations.

Managing Accounts Payable

Here are some tips for managing accounts payable for your practice:
• Pay bills close to their due date rather than in advance. The accounts payment process works best if
bills are paid only once each month. Unless a substantial discount is offered for early payment, pay bills
closer to 30 days from purchase. By paying bills closer to the due date, you keep the money in the bank
working for you if possible and not in the vendor’s bank earning interest.
• Pay invoices, not vendor statements. If payment is made from a statement, an invoice may
mistakenly be paid twice.
• Establish a workable accounts payable system early on. Accurate tracking of supply costs reduces
overspending and panic buying. It also provides information needed for budgeting and forecasting and
gives the accountant the information necessary to prepare financial statements and tax returns.

Managing and Tracking Cash Flow

Imagine this:
You receive a large overpayment request from Medicare. Now you must decide
if you will pay the request in a lump sum to avoid interest or opt to enroll in a
high-interest repayment plan. By regularly managing and tracking your cash
flow, you will be able to make an informed financial decision if a situation like
this occurs.
It is crucial to have enough cash on hand to pay your bills and obligations
to ensure your practice operates smoothly. Highly profitable practices with
healthy cash flow may feel less pressure to project and manage cash flow. The
high profits enable the practice owners to work within the shifting flow of
collections and expenses. On the other hand, even healthy practices can have
a cash flow crisis if circumstances conspire to limit collections or dramatically
increase expenses.

Resources and Further Information 49

Budgeting
Budgets help instill fiscal discipline, so you are able to plan for major expenses and purchases rather than
incurring those costs on whims. However, it is essential to remember budgets are guidelines, not laws.
Budgets will fluctuate depending on the volume of patients seen in your practice, administrative workload,
and new or revised regulations.
Benefits of budgeting include:
• Aiding group practices in holding all partners accountable for expenses or purchases.
• Delegating responsibilities and accountability to managers and supervisors by incentivizing maximum
productivity of their departments.

Financial Ratios
Understanding your practice’s financial ratios gives a complete picture of your practice’s financial
performance. You can calculate these simple ratios on your own, or you can ask your accountant to calculate
them for you.

Key Financial Ratios

Profit Margin Debt Ratio

Net Total Total Total

Income Revenue Liabilities Assets

Days Cash on Hand

Cash
Provision for
Expenses Depreciation
Uncollectibles

Marketable
Securities 365

Resources and Further Information 50

Physician Payment Models Guide
Payment models can often be confusing, and the available models are frequently changing. The following
process flow can be helpful for physicians as they seek to understand the scope of the payment landscape.

1 2 3 4
Understand the Identify common Ask key questions Formulate strategies
terminology used in contractual provisions about model design for alternative
payment models and accountability payment model
engagement and
evaluation

While there are numerous options for physicians to review, the most common models fall into 3 main
categories: core payment models, supplementary payment models, and organizational models.

Core Payment Models

The core payment models, or underlying payment models, can exist alone without other payment types.

MODEL DESCRIPTION

Fee-for-service (FFS) Practices receive a flat fee per service unit for each visit, test, and procedure performed. In this model, practices
achieve higher revenue with more patients and procedures each day. However, whether these revenues cover
the physician’s cost of providing the services depends on many factors.
More information:
• Centers for Medicare & Medicaid Services (CMS): Overview of the Medicare Physician Fee Schedule Search
• CMS: Search the Physician Fee Schedule

Capitation Practices receive payment to manage a patient’s care and health conditions per patient per period, with the
period typically being 1 month. The health plan will apply attribution rules to decide which patients are included
in a given physician practice.
More information:
• Understanding Capitation
• Effects of Health Care Payment Models on Physician Practice in the United States—Follow-Up Study (PDF)
Basic definition: pp. 10–12; 32–33
Detailed overview: pp. 15–17; 37–39

Bundled or episode- Practices receive payment based on episodes of care as the payment base. Episodes are typically defined
based payments according to a set of diagnoses and services provided over a specified service time, especially for surgical
procedures. These models may bundle hospital, physician, and post-acute care services together. These models
allow practices to achieve higher revenue by avoiding complications, negotiating discounts, and choosing lower-
cost settings for post-acute care.
More information:
• Evaluating bundled or episode-based contracts (PDF)

Resources and Further Information 51

Supplementary Payment Models
The supplementary payment models can coexist with 1 or more core payment models but cannot exist on
their own.

MODEL DESCRIPTION

Pay for Performance Physicians in the practice are compensated by the payer according to an evaluation of practice performance
(P4P) on defined metrics. These metrics could be based on the quality of care and/or measures of costs or
utilization of care. Practices may receive an increase or a reduction in their fee-for-service compensation.
ie, Medicare Merit-based
Incentive Payment System More information:
(MIPS) • Evaluating pay-for-performance contracts (PDF)

Shared Savings Program Practices receive fee-for-service payments throughout the contract year rather than capitation payments
before or during the year. At the end of the year, total costs of care for the attributed patient population are
compared to a cost target, which triggers a lump-sum bonus or penalty. This is often compared to a practice’s
historical performance, and such targets may be recalibrated after a set amount of time. The shared savings
bonus payments can only be distributed retroactively due to the calculation of actual costs.
More information:
• CMS: About the Shared Savings Program

Retainer-based payment Practices receive capitation payments from the patient to the practice directly. Retainer-based payment
models are commonly known as concierge or direct primary care. In this model, payments are typically
made per patient per year or month as a membership fee. The fee covers a defined range of services. The
membership can be supplemented by other payment arrangements, such as fee-for-service, typically billed
to the patient’s insurance (separate from the membership fee) for services, not within the range covered by
the membership fee.
More information:
• Direct Primary Care: An Alternative Practice Model to the Fee-For-Service Framework (PDF)

Organizational Models
Organizational models for physician practices combine payment models to create additional payment
models.

MODEL DESCRIPTION

Medical home Most practices following the medical home payment model receive fee-for-service payments as their primary
revenue source. Medical homes often receive additional payments in enhanced fee-for-service payment
rates, per-month patient care management fees, and pay-for-performance payments for high performance
on measures of quality, patient experience, or cost. Physicians may also be subject to payment reductions if
they miss cost and quality savings targets.
More information:
• Patient-Centered Medical Home (PCMH) Model

Accountable Care ACOs are large health systems or collections of physician practices that jointly enter an ACO contract with a
Organization (ACO) payer. Typically, ACO contracts pay via fee-for-service but can receive shared savings at the end of the year if
it performs well on quality and patient experience measures and holds the total costs for its population of
attributed patients below a defined target. The bonus is paid as a lump sum for the previous year, but other
payment bases are possible. Physicians participating in ACOs may also be liable for shared losses if spending
exceeds the benchmark.
More information:
• Accountable Care Organizations (PDF)

Resources and Further Information 52

Physician Payment and Risk
As health care moves from volume-based models to value-based models, there needs to be a focus on the
quality of care and potential risk-sharing between physicians and payers.

Risk in Payment Models

Before accepting risk-based contracts, physicians need a broader understanding and education of the risks,
rewards, and the underlying cost of doing business. A physician who makes such an agreement takes on the
risk and assumes responsibility for delivering or arranging health care services to patients when the total
payment for providing those services can be greater or less than the total cost for such services.
The AMA guide, Key Considerations in Forming, Operating or Joining a Clinically Integrated Network (PDF),
is invaluable when a practice is assessing readiness to join risk-based payment models.

TYPE OF RISK DEFINITION

Downside risk13 Downside risk occurs when a physician could potentially incur costs greater than payments received for services.

Insurance risk14 Insurance risk is related to the health status beyond the physician’s control, such as age, gender, and acuity differences.

Patient risk Patient risk adjustment uses a statistical process to calculate the health status of a patient into a number, called a risk
adjustment15 score, to assist in the prediction of health care costs.

Nominal risk16 Nominal risk is contained in the Medicare Access and CHIP Reauthorization Act (MACRA), Advanced Alternative
Payment Model (APM) states that participants must assume negligible risk or take the risk of an amount that is less
than optimal but substantial enough to drive performance.

Performance Performance risk is the potential for higher costs from delivering unnecessary services, inefficiently delivering care, or
risk14 committing errors in the diagnosis or treatment of a particular condition.

Full risk Full risk is a two-sided risk that can subject health care providers to responsibility for 100% of health care costs for a
population of patients but typically also provides an opportunity for higher shared savings gains.

Upside risk Upside risk gives physicians a chance for a financial upside but no downside risk. The risk comes from the uncertainty
that there will be a positive margin and its size.

Shared risk Shared risk is a method where the physician and payer agree to share responsibility when payment differs from the
cost of care.

Utilization risk Utilization risk relies on the physician to take steps to limit unnecessary care.

Risk in patient populations

As the payment model landscape shifts from payment for each service provided to payments that vary
according to costs and quality measures, physicians would benefit from a clear understanding of their
patient population and its health risks. This understanding directly correlates to the financial risks of your
practice.
Insurance companies and government payers use diagnosis coding to make comparisons of quality, cost,
and estimations of resource use. To accurately capture patients’ severity of illness, physicians will want to
be aware of specific diagnosis coding. ICD-10 diagnosis coding will help payers assign appropriate insurance
risk and position your practice for value-based payment by accurately reflecting individual patients’ health
or severity of illness. Higher risk assignment may also equate to higher pay for care management or under
a capitation model. Risk adjustment methods have some significant limitations, however. They generally
use historical information about patient diagnoses, so it may not lead to adequate compensation for the
services patients need when they need them.

Resources and Further Information 53

Further Reading
AMA–RAND Effects of Health Care Payment Models on Physician Practice in the United States
AMA–RAND Follow-Up Study (PDF)

Private Practice Staffing Guide

Hiring employees will be one of the toughest yet one of the most rewarding things you do as an employer.
Practices that consistently do well financially also tend to have the best employees, and those 2 factors
are inextricably linked. Good employees can make going to work a pleasure; difficult employees can try
the patience of even the most forgiving employer. The key to having good employees is to find the best
candidates and then provide good management to maintain high levels of motivation and dedication to the
practice.
Even as an employee, a physician is viewed as an authority figure in a medical practice. The medical
assistants, receptionists, billing staff, and supervisors expect physicians to understand and follow the
rules. Therefore, as an employer you should have a working knowledge of the laws and statutes regulating
the medical practice, and a thorough understanding of the internal personnel guidelines that pertain to
managing employees, and be knowledgeable about customary compensation and benefits.
For example, new guidelines allow multiple-contributor documentation directly into the chart, saving the
physician time. These documentation contributors can include certified or licensed team members(often
medical assistants) or non-licensed non-certified team members, and even the patient. This opens the
opportunity to hire pre-allied health students, transcriptionists, and others to assist with work. A shared
understanding of this regulation by the physician and the practice staff can increase practice efficiencies and
increase levels of professional satisfaction from all parties. The AMA Debunking Regulatory Myths website
and the STEPS Forward® Team Documentation toolkit can help you navigate ways that supporting team
members can assist the physician in patient care and documentation.

Staffing Your Practice

Staffing ratios can be highly variable, and there are numerous considerations for creating a high-functioning,
cohesive, and efficient team that delivers excellent care. The objective is to pinpoint a staffing ratio and team
makeup that provides optimal support for physicians in your practice setting. Your specialty or subspecialty
professional society may be helpful in providing data specific to your practice.
Calculating the number of support team members that a practice needs relies on determining the number
of physicians employed as full-time equivalent (FTE). This can be misleading, however, as calculating FTE
with the hours worked per week is frequently based on a standard 40-hour workweek. Research suggests
that for every hour of direct face time with patients, a physician spends an additional hour on non-patient-
facing desktop medicine (patient portal communication, responding to online requests, etc.).4 Taking this
into account, a physician with 28 patient scheduled hours likely works closer to 56 total hours per week. It is
important to be aware of this when calculating FTEs and establishing your ideal staffing ratio.

Resources and Further Information 54

Evaluating Clinical Care Team and Administrative Staffing Needs

Support Staff Per Full-time Equivalent (FTE) Physician Ratio

The number of full-time administrative and clinical team members needed to effectively support 1 full-time physician.
The ratio of FTE support team members for every FTE physician will differ between practices, and there is no “right” ratio.

Calculating Staffing Needs

• Determine the total number of physicians in your practice expressed in FTEs. Each full-time physician counts as 1, while each
physician that works less than full time counts as fraction of an FTE calculated by dividing their average number of hours
worked per week by the full-time standard in your practice.
• Calculate your staffing needs by multiplying the total number of physician FTEs by the total number of FTE non-physician team
members needed to effectively support 1 full-time physician in your practice.

Factors That Can Inform Your Staffing Needs

Administrative
• Is billing done in-house, or do you have a vendor?
• Are prior authorizations done in-house or via a vendor?
• What administrative tasks have you outsourced, and what administrative staff do you need to hire (eg, receptionists, staff who
complete billing, coding, prior authorization, referrals, and credentialing, managers, human resources, and others)?
• Can you cross-train full-time team members to fill several part-time roles, such as an administrative member handling billing,
prior authorization, and referrals, or a practice manager taking on human resources tasks?

Clinical workflows
• How many procedures are done in the office?
• How many clinical and non-clinical tasks are the responsibility of supporting team members?
• Are you performing telehealth visits?
• How many exam rooms do you have?
• How does your practice layout affect your workflows? How much time does it take physicians, support team members, and
patients to move through your practice space to address their duties or visit needs?

Patient population
• What is your patient panel size?
• How many patients does each physician see per day?
• What are the needs of your patients? Do they require extra time for assessment and treatment plan review?
• Do your patients have social determinants of health (SDOH) or other needs that require a higher level of care?

Other
• Does your specialty society have staffing recommendations?

Additional Considerations

Staffing On-call schedule Training Benefit Remote

shortages (for staff absences) opportunities packages employment
options

Resources and Further Information 55

Building Bridges Between Practicing Physicians and Administrators
Sometimes physicians overlook the capabilities of their administrative colleagues, and as a result take
on more responsibility than they should. Consider every member of your team may have more to offer
than their current job description shows. An investment in your team’s professional development and
responsibilities is an investment in your practice. A practice that recognizes the skill sets and training of its
team members—and puts those attributes into action—is a practice that thrives.
Building trust and transparency between practicing physicians and administrators has the potential to
improve practice culture and patient experience. This bridge can result in improved working relationships,
healthier workplaces, increased personal and organizational resilience, and improved patient–physician
experiences.

EXPLORE MORE!
Building Bridges Between Practicing Physicians and Administrators toolkit

Medical Assistant Professional Development

Medical assistants (MAs) are at the front line of patient care and play an integral role in achieving practice
goals such as increased patient satisfaction, improved quality of care, and enhanced team-based care.
You can enable medical assistants to contribute in a more meaningful way to the practice team through
professional development training.
Note: While creating your own medical assistant professional development program will be invaluable to
your practice, it does not take the place of a certified medical assistant training program accredited by
organizations.

EXPLORE MORE!
Medical Assistant Recruitment and Retention toolkit
Medical Assistant Professional Development toolkit

Team Meetings: Strengthen Relationships and Increase Productivity

Team meetings bring all members of the practice, such as the physician, nurse, MA, and office team
members together to analyze the way work is currently being done and take steps to improve efficiency.
Because all team members should be involved, you may have to send calls to voicemail during this time.
In effective team meetings, each team member is encouraged to share ideas to improve the practice’s
workflow.

EXPLORE MORE!
Team Meetings toolkit
Appreciative Inquiry Principles toolkit

Resources and Further Information 56

Team-Based Care
Providing care in a collaborative system, one in which team members share responsibilities to achieve high-
quality and efficient patient care, improves team collaboration and pride in their work, workflow efficiency,
and patient satisfaction.4 With the help of other team members, physicians are better able to connect with
patients and remain focused on their primary task of patient care.

EXPLORE MORE!
Team-Based Care toolkit

Team Culture: Strengthen Team Cohesion and Engagement

Team culture in your practice is a set of underlying rules and beliefs that determine how your team interacts
with patients and each other. Culture is the way an organization “does business.” New team members may
gradually absorb the practice’s culture without being taught or even noticing, but that process is not ideal.
Having defined expectations and ways to achieve them can make all those in the medical practice feel part of
the team.
One way to foster collaboration is to select a small project as a team that would improve an aspect of your
practice. The Impact-Effort matrix below is an example of a way to prioritize ideas for a quick win.

Impact–Effort Matrix Example

HOT TOPIC!
Bullying in the Health Care Workplace: A Guide to Prevention and Mitigation (PDF)

Resources and Further Information 57

Example Patient Wait Time
Process Flow

Patient arrives Are additional diagnostics

at clinic required in the office? No

Patient services
representative After completing
(PSR) gives patient paperwork,
Patient leaves
paperwork for patient waits for Yes clinic
review & signature available PSR to
and takes patient’s complete check-in
insurance card & ID
Patient waits while
physician works with
medical assistants
& nurses to obtain
information
Patient receives
referrals, orders,
Patient waits while
PSR collects after-visit summary
physician works with
copay and returns Patient waits for and instructions,
medical assistants
cards to patient, medical assistant schedules follow-up
& nurses to place
completing check-in appointments as
and validate orders
necessary and
completes check-out

Medical assistant Yes No

takes patient back
on “first ready” Patient waits for
Diagnostic test
basis, takes vitals & physician to enter
is completed
updates history and & start visit
completes medication
reconciliation

Additional
documents Patient waits for Patient waits for
Patient has encounter
required? Diagnostic physician to return available PSR in
with physician
tests, labs, and/or with results check-out area
outside records?

Terminal Point Process Delay

Patient discusses plan of care with physician
Decision Improvement Opportunities

Resources and Further Information 58

References
1. Kane CK. Recent changes in physician practice arrangements: private practice dropped to less than 50
percent of physicians in 2020. American Medical Association. Accessed June 1, 2022. https://www.ama-
assn.org/system/files/2021-05/2020-prp-physician-practice-arrangements.pdf
2. Whaley CM, Zhao X, Richards M, Damberg CL. Higher Medicare spending on imaging and lab services
after primary care physician group vertical integration. Health Aff (Millwood). 2021;40(5):702-709.
doi:10.1377/hlthaff.2020.01006
3. Rittenhouse DR, Bazemore AW, Morgan ZJ, Peterson LE. One-third of family physicians remain in
independently owned practice, 2017-2019. J Am Board Fam Med. 2021;34(5):1033-1034. doi:10.3122/
jabfm.2021.05.210051
4. Tai-Seale M, Olson CW, Li J, et al. Electronic Health Record Logs Indicate That Physicians Split Time Evenly
Between Seeing Patients And Desktop Medicine. Health Aff (Millwood). 2017;36(4):655-662. doi:10.1377/
hlthaff.2016.0811
5. U.S. Department of Health and Human Services Office of the Inspector General. Fraud & abuse laws.
Accessed May 16, 2022. https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/
6. Payment for services. In: Parke DW II, Durfee DA, Zacks CM, Orloff PN, eds. The Profession of
Ophthalmology, Practice Management, Ethics, and Advocacy. 1st ed. American Academy of
Ophthalmology; 2005:69-70.
7. Payment for services. In: Parke DW II, Durfee DA, Zacks CM, Orloff PN, eds. The Profession of
Ophthalmology, Practice Management, Ethics, and Advocacy. 1st ed. American Academy of
Ophthalmology; 2005:83-87.
8. HealthIT.gov. How do I select a vendor? Last reviewed October 17, 2019. Accessed May 17, 2022. https://
www.healthit.gov/faq/how-do-i-select-vendor
9. Shanafelt TD, Dyrbye LN, Sinsky C, et al. Relationship between clerical burden and characteristics of
the electronic environment with physician burnout and professional satisfaction. Mayo Clin Proc.
2016;91(7):836-848. doi:10.1016/j.mayocp.2016.05.007
10. Glasheen S. Meeting social needs and addressing social determinants of health. United Healthcare
Community and State. October 21, 2019. Accessed May 17, 2022. https://www.uhccommunityandstate.
com/blog-post/sarah-glasheen-posts/meeting-social-needs-and-addressing-social-determinants-of-
health.html
11. Kelli Shifflett, F. Marketing strategies for a limited primary care budget: case study. 2015. Accessed May
17, 2022. https://www.mgma.com/MGMA/media/files/fellowship%20papers/Marketing-Strategies-for-a-
Limited-Primary-Care-Budget_.pdf?ext=.pdf
12. Financial management and business performance. In: Parke DW II, Durfee DA, Zacks CM, Orloff PN, eds.
The Profession of Ophthalmology, Practice Management, Ethics, and Advocacy. 1st ed. American Academy
of Ophthalmology; 2005:51-65.
13. Investopedia. Dictionary. Accessed May 19, 2022. https://www.investopedia.com/financial-term-
dictionary-4769738
14. American Academy of Actuaries. Risk pooling: how health insurance in the individual market works.
Accessed June 1, 2022. https://www.actuary.org/content/risk-pooling-how-health-insurance-individual-
market-works-0#:~:text=A%20health%20insurance%20risk%20pool,within%20a%20premium%20
rating%20category

Resources and Further Information 59

15. HealthCare.gov. Risk adjustment. Accessed June 1, 2022. https://www.healthcare.gov/glossary/risk-
adjustment/#:~:text=A%20statistical%20process%20that%20takes,outcomes%20or%20health%20
care%20costs
16. LaPointe J. Exploring two-sided financial risk in alternative payment models. RevCycle Intelligence. January
20, 2017. Accessed June 1, 2022. https://revcycleintelligence.com/features/exploring-two-sided-financial-
risk-in-alternative-payment-models

Further Information
Regulatory and Legal Considerations
• A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse
• Department of Health & Human Services Office for Civil Rights, Summary of the HIPAA Privacy Rule
(PDF)

The Fee Schedule

• AMA Medical Coding and Billing Resources, including the Physician Fee and Coding Guide (CPT 2022:
Professional Edition)
• RBRVS Data Manager online edition
• CMS Physician Fee Schedule (PFS) Relative Value Files
• Medicare Physician Fee Schedule Search

EHR Choice
• How to Select Your EHR Vendor

Scheduling Patients
• Matulis JC, McCoy R. Patient-centered appointment scheduling: a call for autonomy, continuity, and
creativity. J Gen Intern Med. 2021;36(2):511-514. doi:10.1007/s11606-020-06058-9

Transitions of Care
• Agency for Healthcare Research and Quality (AHRQ) Care Coordination Measures Atlas, Chapter 2: What
is Care Coordination?

Social Determinants of Health

• Center on Society and Health: Mapping Life Expectancy

Resources and Further Information 60

Learn More About
Practice Innovation
Take the next steps on the journey with the AMA STEPS Forward®
practice innovation resources and assets.
Use the 5-pronged approach (Act, Recognize, Measure, Convene,
Research) as your guide. Employ the evidence-based, field-tested,
and targeted solutions described below to optimize practice
efficiencies, reduce burnout, and improve professional well-being.

Act
• View the comprehensive portfolio of AMA STEPS Forward® resources at stepsforward.org, including
toolkits, playbooks, videos, webinars, podcasts and calculators.
• The AMA’s Mentoring for Impact program provides virtual meetings with a Professional Satisfaction
and Practice Sustainability Group physician who can help develop a customized approach to remove
obstacles that interfere with patient care. For more information, email [email protected]
(include “Mentoring for Impact” in the subject line).

Recognize
• Participate in the AMA STEPS Forward® Recognition of Participation certificate program and find new
ways to engage with your team
• Use the AMA Joy in Medicine™ Health System Recognition Program as a road map to support your
organization’s strategic efforts

Measure
• Take our practice assessment to identify and prioritize your workflow intervention efforts
• Encourage your organization to measure professional well-being on an annual basis

Convene
• Join us at the AMA STEPS Forward® Innovation Academy for timely and relevant webinars and more
• Attend the International Conference on Physician Health™ (ICPH), the American Conference on
Physician Health (ACPH), and other upcoming conferences, summits, and events as they are announced

Research
• Stay abreast of meaningful research to guide your professional well-being strategies and interventions

Watch the video to learn more about AMA Professional Satisfaction and Practice Sustainability efforts,
or visit stepsforward.org.

Resources and Further Information 61

About the AMA Professional Satisfaction and
Practice Sustainability Group
The AMA Professional Satisfaction and Practice Sustainability group is committed to making the patient–
physician relationship more valued than paperwork, technology an asset and not a burden, and physician
burnout a thing of the past. We are focused on improving—and setting a positive future path for—the
operational, financial, and technological aspects of a physician’s practice.
To learn more, visit https://www.ama-assn.org/practice-management/ama-steps-forward.

Disclaimer
AMA STEPS Forward® content is provided for informational purposes only, is believed to be current and
accurate at the time of posting, and is not intended as, and should not be construed to be, legal, financial,
medical, or consulting advice. Physicians and other users should seek competent legal, financial, medical, and
consulting advice. AMA STEPS Forward® content provides information on commercial products, processes,
and services for informational purposes only. The AMA does not endorse or recommend any commercial
products, processes, or services and mention of the same in AMA STEPS Forward® content is not an
endorsement or recommendation. The AMA hereby disclaims all express and implied warranties of any kind
related to any third-party content or offering. The AMA expressly disclaims all liability for damages of any
kind arising out of use, reference to, or reliance on AMA STEPS Forward® content.

© 2022 American Medical Association

https://www.ama-assn.org/terms-use

Fromthe AMA STEPS Forward® Playbook series: Private Practice Playbook, v. 3.0. Last updated 2022-08-19.

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