Chapter 16
Practice
Management
Copyright © 2014 Wolters Kluwer Health | Lippincott Williams & Wilkins
Review Tip
Depending on the size of the practice, many management functions
may be delegated to other departments and positions. An example
is human resources. Questions involving these areas are
incorporated into the role of practice management. Do not be
confused if the manager where you work or completed your
externship performs more or less of the functions that are included
in this chapter. Also, do not be confused if the person in charge of
your medical office has a different title such as practice or office
administrator or executive or director.
For the purposes of the national exams, the terms practice
management and medical office management are used. If your
medical office manager is not aware that you are preparing to take
the national exam, this may be an opportunity to tell him or her
and ask for any encouragement or advice that he or she may have.
Copyright © 2014 Wolters Kluwer Health | Lippincott Williams & Wilkins
Overview
Today’s medical offices may be owned by a physician or corporation
where the physician is not an owner but a contracted employee. One
person is in charge of overseeing the day-to-day operations, the
medical office manager. Depending on the size of the practice, other
supervisory personnel may report to the practice manager. Each
supervisor would then have staff reporting directly to him or her.
Additional supervisory staff titles include clinical team leader or
supervisor or manager; administrative team leader or supervisor or
manager; and supervisors or managers of various departments such
as human resources, laboratory, billing, and so on. In multispecialty
organizations, clinical supervisors may be designated by specialty,
such as pediatrics, internal medicine, and cardiology.
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Organization
Every medical office has an organizational model that may or may not be
represented by a formal organizational chart. The chart shows the
supervisory structure and reporting relationships between different
functions and positions—who is responsible for whom and what.
In most states, the medical assistant is under the direct supervision of
the physician and/or midlevel providers, such as the physician
assistant or nurse practitioner, for direct patient care activities. The
practice manager is usually responsible for interviewing, hiring, firing,
evaluating, assuring training, and credentialing medical assistants,
which are all considered administrative functions and not direct
patient care functions.
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Organization, cont’d.
The organizational charts reflect the chain of command, which
demonstrates how each position is accountable to those directly
superior and how the authority passes from one link in the chain to the
next, or from the top to the bottom. Today’s businesses, including
medical offices, operate using a chain of command. It is important for
employees to understand the chain of command and stay within it.
Questions regarding the chain of command may be on the exam
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Organization, cont’d.
Figure 16-1. Organizational chart of physician-owned medical
practice.
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Organization, cont’d.
Figure 16-2. Organizational chart of corporate-owned medical
practice.
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Management Styles
Managers tend to direct or lead using a specific management or
leadership style. Many names are associated with the styles, but four
are most common. A manager usually gravitates to one style but may
use a combination of the styles depending on the situation and group
of employees:
Autocratic—the manager makes all the decisions (autocratic
directive); appropriate when rapid decisions must be made; an
autocratic manager may make decisions but allows staff some
autonomy in carrying out the work (autocratic permissive)
■ Democratic (participatory or teamwork)—staff takes part in the
decision making; democratic managers may monitor staff closely
(directive) or not (permissive); should not be used when there is
not enough time to get appropriate employee input; this style helps
employees grow and develop
■
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Management Styles, cont’d.
■ Bureaucratic—the manager “goes by the book”; follows
procedures exactly and generally does not like making complex
decisions; best for training situations and working with precise
tasks
■ Laissez-faire—the manager provides very little leadership and
gives employees lots of leeway; employees may feel insecure and
lack confidence in the manager; this style works best in creative
fields
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Communication
The practice management position requires excellent verbal and written
communication and interpersonal skills. Some of the routine individuals
and groups with whom the practice manager communicates on a regular
basis are:
■ Staff
■ Patients
■ Physicians
■ Hospitals
■ Insurers
■ Vendors
■ Employers
■ Contractors
■ Attorneys
■ Community organizations
■ Educational facilities
■ Bankers
■ Governmental agencies
■ Other regulatory and professional
agencies
The role of the manager is also to assure that all communication is
appropriate, respectful, timely, and Health Insurance Portability and
Accountability Act (HIPAA) compliant.
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Communication, cont’d.
Staff Communication
The following are communication modalities often used with staff:
Staff meetings
• Agenda—the list of meeting topics and the order in which they
will be addressed
• Minutes—the meeting record, including the date and time,
who was present and absent, what was discussed, and who
was responsible for any actions
■ In-service—facilitating and communicating education and training
conducted in the facility
■ E-mail—a large number of offices have e-mail for each employee
or group of employees
■
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Communication, cont’d.
■ Newsletters—provide information on what is going on in the
practice, new policies and procedures or requirements,
accomplishments and awards, and internal and community
events; also often highlight staff members or departments
■ Bulletin boards—usually located in the staff lounge; should not
contain any confidential or sensitive information because
janitorial staff and others outside of the practice may have access
■ Communication books—becoming replaced with electronic
communication; a notebook or binder with information the
manager wants to inform the staff about is kept in a central
location; employees may be required to initial each entry to
assure it was read
■ Open door policy—a practice giving staff the freedom to come
talk with the manager any time that the office door is opened
■ Suggestion box—staff submit ideas in a box with a name or
anonymously
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Communication, cont’d.
Figure 16-3. Staff meeting agenda.
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Legal Business Functions
Another role of the practice manger is to assure compliancy with legal
requirements and the standard for medical and business practices.
This responsibility involves many systems and processes. Some of
the more common ones are assuring that:
Policy and procedure manuals are developed, maintained,
reviewed, and updated (usually annually)
■ Physicians and midlevel providers are properly licensed
■ Physician and midlevel provider Drug Enforcement Administration
(DEA) forms are up-to-date
■ Medical assistants, phlebotomists, coders, and other personnel are
properly trained and certified or credentialed according to federal,
state, and professional standards
■
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Legal Business Functions, cont’d.
■ Required licenses to operate the facility, such as local business
licenses, are up-to-date
■ Centers for Medicare and Medicaid Services (CMS) and
accrediting approvals are in place and up-to-date
■ Insurance requirements such as malpractice and liability contracts
are up-to-date and reflect current values
■ Contracts with health insurance companies, laboratories,
attorneys, and other services necessary to conduct business are
in place
■ Required reporting to authorities, such as communicable diseases,
is in compliance
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Legal Business Functions, cont’d.
Budget and Overall Finances
A budget is created annually and reviewed at least monthly. The budget
is the predicted expenses and revenues to operate over a given
period of time.
■ First,
the manager must know the total expenses, which include
such items as salaries with potential raises, rent, utilities, supplies,
equipment rental and purchase, technology costs, insurance and
business fees, taxes, contracted services such as janitorial
support, and others.
■ The manager reviews the commercial health care insurance and
governmental agency patient care contracts and other sources of
income such as sports physicals.
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Legal Business Functions, cont’d.
■
He or she estimates the number of patients from each entity and
then calculates the anticipated reimbursement or payments. This
is the projected revenue.
Sometimes the manager must renegotiate the contract if costs have
risen. If revenues are lower than expected and the expenses are
higher, the manager makes the decisions on what to cut back on,
such as supplies and salaries, to balance the budget.
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Legal Business Functions, cont’d.
Scheduling and Travel
Ensuring that adequate staff are on duty at all times for the business to
function properly is an additional aspect of the practice manager’s role.
Scheduling is a job that may be relegated to a supervisor or other
person depending on the size of the practice but is monitored by the
manager. Often physicians and other staff, such as medical assistants,
travel for educational purposes with expenses covered by the practice.
Planning for staffing the office when personnel are gone may be
necessary. In addition to staffing, the following are some travel-related
responsibilities:
■ Travel
and lodging accommodations; may be done through a travel
agent; online websites are common; food may be paid for on a per
diem basis, which means a certain money amount is designated
either daily or per meal
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Legal Business Functions, cont’d.
■ Itinerary preparation, which is the schedule of travel and events,
with arrival and departure times and other specifics such as
contact numbers
■ Speaker accommodations for physicians or other staff presenting
at conferences or other events, which may include arranging for
media, creating biographies and presentation material such as
PowerPoint presentations, and copying and shipping handout
materials
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Legal Business Functions, cont’d.
Other Business Functions
The contemporary medical office relies on technology for communication,
appointment scheduling, coding, billing, diagnostic test ordering and
reporting, prescription refills, and the electronic health record. These
areas require highly specialized skills to install and maintain. The
office manager:
■ Evaluates
and purchases the systems that fit the needs and budget
of the practice
■ Facilitates the installation and staff training
■ Oversees the ongoing operations
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Legal Business Functions, cont’d.
Other managerial functions include assuring mailing and shipping
services, inventory and supply purchase, and appropriate market and
public relation strategies such as websites, brochures, and community
events.
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Legal Business Functions, cont’d.
Human Resources
Human resources (HR), personnel services, or people services refers to
how employees are managed by the business and deals with the
following:
■ Writing
job descriptions, which should contain:
• Name of organization
• Name of position
• Grade, if appropriate
• Summary of position
• Job responsibilities
• Requirements and qualifications
• Title of supervisor
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Legal Business Functions, cont’d.
■ Recruiting
staff
■ Verifying qualifications and credentials
■ Interviewing
■ Hiring
■ Terminating the employee following a process (unless the offense
is very serious, and then termination may be immediate):
• First offense: brings undesirable behavior to the attention of the
staff member
• Second offense: gives verbal or written warning
• Third offense: gives written warning if verbal warning was
previously given
• Fourth offense: terminates the employee
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Legal Business Functions, cont’d.
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Legal Business Functions, cont’d.
■ Performing
staff evaluations and an improvement process as
necessary:
• Discusses the need for improvement with employee
• Writes an improvement plan/contract with the employee
• Provides additional training as needed
• Follows progress at scheduled intervals
• Terminates employee if improvement plan/contract not met
■ Orienting new staff
■ Managing payroll and benefits including following workers’
compensation cases of office employees
■ Setting policies involving personnel issues such as an employee
grievance process
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Legal Business Functions, cont’d.
■ Maintaining
staff records such as performance evaluations,
trainings, and employee health
■ Assuring compliance with federal, state, and local income taxes
and other regulations related to personnel
■ Mediating appropriate issues between staff members
Once again, depending on the size of the organization, all of these
responsibilities may fall on the practice manager. Larger organizations
have a separate department with its own director, manager,
supervisor, or coordinator. This person generally reports to the
practice manager. Some offices contract out many HR services such
as payroll.
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Health and Safety
Regulations from the Occupational Safety and Health Act (OSHA) and
state and local authorities regarding a safe work environment must
be followed. The practice manager assures compliance by:
Developing policies and procedures (P&P), which are then
incorporated in a safety manual
■ Establishing systems to accommodate P&P, for example,
establishing a contract with a biohazardous waste company
that includes containers, a schedule, and removal
■
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Health and Safety, cont’d.
Educating and training staff in the P&Ps
■ Making supplies and equipment available such as personal
protective equipment
■ Monitoring observance of the P&P
■
Health and safety also incorporate emergency preparedness plans
with directions for office evacuation and posted information. Risk
management and quality improvement are also the role of the
practice manager and are discussed in Chapter 4, Law and Ethics.
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The Physical Facility
The physical facility or plant is the building or buildings, offices,
parking structures, furniture, and mechanical systems (elevators,
electrical, heating, cooling, plumbing, etc.) that make up the
medical practice. To promote an efficient workplace the practice
manager facilitates the following:
Utilization of space
■ Payment of mortgage or rental, utilities, etc.
■ Selection and purchase or lease of capital equipment such as
copy machines and telephone systems
■ Establishment of contracts and oversight of janitorial,
biohazardous waste disposal, and other services
■ Required maintenance of elevators and heating, air
conditioning, and other equipment; pavement of parking lot;
replacement of light bulbs
■
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The Physical Facility, cont’d.
Replacement of worn furniture, carpeting, etc.
■ Compliance with Americans with Disabilities Act (ADA)
requirements
■ Availability of adequate supplies and materials
■ Emergency repairs such as clogged drains
■ Security
■ Landscape maintenance
■ Plans for future needs
■
These elements interface with other legal, business, and health and
safety responsibilities. The practice manager must have the
capability of “wearing many hats,” which requires the ability to
prioritize and perform more than one task at a time. This referred
to as multitasking or being multifocal.
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