After working with physician practices, billers and coders for over 26 years, I have found these are the most frequently asked questions seeking a resolution.


How much vacation is a partner's spouse entitled to?

Should a witness be present when you fire an employee?

Bridging the pay gap between new hires and established workers.

Knowing how many employees to hire.

Do special employees deserve special wages?

How long can you expect employees to work for you?

Should your manager participate in physician recruiting?

Should you hire a Certified Professional Coder and Certified Medical Manager?

How are employees paid for time spent at seminars?

What criteria are used to measure job performance?

What belongs in your employee manual?

Should your answering service relay requests for appointments?

Should you prohibit dating among employees?

How should you handle violation of office policies?

What is the best way to eliminate the number of job candidates?

What are the advantages using an employment agency or headhunter to hire staff?

Is an office manager responsible for subordinates' duties in their absence?

How do you handle a patient's co-payment discrepancies?

How should we handle co-payment receipts?

How long should you keep physician records?

What are the turnover rates for physicians at academic medical centers?

What is a fair wage or salary for an office manager?

What are the four basic financial ratios?

How many collectors are needed to achieve industry standards?

Question: Is it fair for my partner's wife, who works in our billing department, to take the same amount of vacation as her husband -- even if it's unpaid? I suspect the staff resents this privilege and resents having to pick up her workload when she's away from the office.

Answer: Employee vacation time should be stated in the office policy manual for all employees unless exceptions are noted in the manual. The partner's wife, as an employee, is entitled to the amount of vacation time as outlined in the office policy manual. To make exceptions is not a good practice as it defeats the purpose of office policy and undermines staff morale.

Question: Is it true that I should have a witness present when dismissing someone? Does this afford added legal protection against a wrongful termination suit?

Answer: It is always advisable to have a witness present when terminating an employee. The witness should be the managing physician, or someone who is a peer of the office manager. The witness can corroborate the facts should an employee institute a wrongful termination suit or dispute an issue of the termination.

Question: New hires with greater skills are demanding higher salaries than some of our current employees. If we don't agree to their wage demands, we're afraid we'll lose good candidates. If we do agree, we're afraid we'll upset loyal employees. What do your consultants suggest?

Answer: In the real business world, employee skill levels and quality work are more important than employee loyalty. An employee with greater skills has a higher salary potential. Loyalty is a diminishing factor in comparison to employee skill levels.

Question: I'm taking over a rural physician's family practice. His staff of three -- an LPN, receptionist, and billing clerk -- is retiring with him. Should I hire the same number and type of employees? I expect 90 percent of his patients to stay with me.

Answer: The optimum staff would be 3 exceptionally good workers - an LPN or CMA, a front desk receptionist and an office manager who is responsible for accounts receivable (billing, insurance claims, collections) as well as accounts payable, and managing administrative operations and staff.

Question: When my partner and I opened our practice, a family friend served as our office manager, billing clerk, receptionist, and nurse. Back then, she worked for minimum wage. But over the years, we've increased her wages at a greater rate then our other employees to make up for the time she was underpaid. Our new office manager takes exception to this. Isn't it our prerogative to pay employees as we deem fair?

Answer:Employee wages should be based on skill levels and performance. An exceptionally good employee deserves higher wages. Length of service in a practice should not be the sole basis of giving an employee an increase in wages.

Question: What's the normal rate of front-office staff turnover for a three-doctor suburban primary-care practice? Are some positions more prone to turnover than others?

Answer: The rate of front-office staff turnover depends on how appropriately the staff are treated. Front office staff are either promoted internally for quality work or the work relationship is severed because of poor performance. Generally, front-office staff have a higher rate of turnover since they are the lowest paid. The pay scale is institutionalized and the institution sets the standards. One way to break the turnover trend is to "pay for performance".

Question: Our office manager would like to orchestrate the recruiting of our next physician. Contract negotiation and interviewing would reside with us, of course, but she would do the advertising and preliminary screening. We've always used headhunters before. Is there any reason why we shouldn't let our manager handle this task?

Answer: Your office manager is your best resource for recruiting physicians for your practice. She/he knows the culture and the needs of the practice better than any headhunter does. Your manager can handle the task provided she/he is capable of writing and placing recruiting advertisements and knows which associations to contact for your medical specialty. Strong interviewing skills should also be a requirement of your manager to perform preliminary screening and interviewing of prospective new physicians.

Question: Our office wants to hire a person with  "Certified Procedural Coder" and "Certified Medical Manager" credentials. Should we do so and what are the advantages?

Answer: Skilled professionals are always an asset to a practice as long as the owners appreciate their talents. CMM's and CPC's are aware of the latest changes in medical regulations and generally have excellent interpersonal skills, both important assets in today's medical environment. Professional managers and coders expect to be given the necessary management latitude and deserve to be well compensated.

Question: How do you compensate employees attending seminars?

Answer: Comp time can be offered to an employee who spends more than 40 hours in a week attending educational seminars. Time spent attending social events should not be included in the 40 hours.

Question: Can you suggest any objective measures for evaluating employees for salary increases based upon performance?

Answer: An employee Performance Evaluation Form (PEF) should be used for each employee. This should include employee name, position, DOH, job responsibilities, etc. Performance can be rated on a scale of 1 to 10 with 10 being exceptional and 1 being poor. Evaluations should measure employee professional performance, such as knowledge of office procedure, patient communication, ability to recognize and solve problems, organizational skills, quality of work, productivity, results, ability to plan and complete work, willingness to learn, verbal and telephone skills, written communication skills, ability to handle stress, ability to adapt to changes in the system. Furthermore, personal development and leadership skills should be measured, such as diplomacy, dependability, attitude, professional demeanor, appearance, motivation of other employees, acceptance of new ideas. PEF's should include sections for recommendations. There should be an employee self-appraisal rating which the employee completes and a manager/physician rating. Keep in mind, one of the most vital but most difficult and time consuming chore of any practice is performance evaluations. No one likes to pass judgment on a person on a face-to-face basis. However, doing it routinely and correctly is very rewarding to both employees and the practice. For more information on this topic contact: http://www.performancereview.com

Question: What can you suggest for updating our employee policy manual?

Answer: There are two ways to do it. Write it yourself with a software package or pay someone to do it for you. The National Association of Professional Employees (PEO) offers services to employers of 6 or more employees to write employee manuals. There are generic manuals which incorporate all legal risks and current regulations. They will provide the employee manuals and an 800 number to call with any questions for a minimal fee. Other organizations, such as Paychecks, do a great job of customizing an employee policy. Of course, Healthcare Resource Management, Inc. will also write policy manuals. Please note that there is a big difference between an employee policy manual and an office policy manual. The latter is written by the practice and outlines all policies and procedures, such as hours of operation, business operations, billing procedures, office policies, etc.

Question: Patients making routine appointments will periodically reach and answering service instead of the office. Should they be told to call back during regular office hours or should the service take a message?

Answer: Patients should never be told to call back. A message with the patient's name, phone number, date and time of the call and the reason for the call should always be taken by the answering service and relayed to the office. This policy ensures patients, established and new, are accommodated and not lost to another practice.

Question: Should our practice discourage romantic relationships between coworkers? If Yes, how should we structure a written policy?

Answer: Yes. This policy is very difficult to monitor. However, written policy should state "No blatant displays of affection in the workplace and no favoritism".

Question: One of our best employees constantly "forgets" to punch out when leaving for lunch, errands and breaks. She has been warned several times and it has been noted in her personnel file, but she still forgets. We are reluctant to terminate her because she generates considerable amount of income. What should we do?

Answer: No employee is above adhering to office policies since those actions can influence other employees to do the same. The offender should first be given a verbal warning followed by one or two written warnings (The written warnings must be signed by the offender acknowledging the consequences. Refusal to sign means immediate termination). Third, a suspension without pay for a specific period of time. Fourth, termination. Your office policy manual should clearly outline the steps for this procedure so everyone understands in advance.

Question: My partners and I are looking for a fourth physician to join our practice. We have narrowed it down to eight possible candidates. Should we first conduct phone interviews or just continue to screen the resumes?

Answer: Phone interviews are an excellent means to qualify job candidates. However, before using this method be sure to outline specific questions for the candidates that will enable you to identify the most qualified and compatible ones.

Question: Other practices have used employment agencies to find clinical and administrative staff. What are the advantages?

Answer: If your office manager or administrator is not responsible for hiring, then a "headhunter" might be in order. Before such an agency is used you should check their reputation and employment fees. Have your attorney scrutinize the employment agency's contract since hiring a poor candidate can be very expensive in both time and money.

Question: Unlike our retired office manger, the new one refuses to fill in for absent employees. She will not answer the phone, stamp the mail, greet a patient, etc. What should we do?

Answer: Your manager should designate subordinates to fill in for absent subordinates. Actually, a clause to this effect should be part of the employee's job description.

Question: A patient we billed for co-insurance claims he paid cash for the visit. He does not have a receipt and we do not have a record of the payment. What should we do?

Answer: Co-payments must be collected from patients according to guidelines set forth in most payer contracts. You should query the staff to find out who collected the cash and why the patient was not given a paid receipt. However, a firm policy of issuing a receipt for every payment received should be implemented immediately and enforced. If this happens again, you may want to review employees activities to check for theft.

Question: Should my office issue receipts for co-payments? If a patient cannot pay at the time of service, should we send him home with a bill or mail the bill when we close the day's bookkeeping?

Answer: A receipt of payment should be issued for every payment, including co-pays by cash, check or credit card. Receipts are a paper trail for payments and for basic accounting to balance charges and payments. Every office should have a written financial policy requiring co-pays be paid before service are rendered. This eliminates any patient payment problems after the fact. It is not cost effective to bill patients for co-pays. However, it is less costly to give the patient a bill at the time of service rather than mail one.

Question: From a legal standpoint, how long are you obligated to keep medical records?

Answer: The answer depends upon where you do business. It is generally required to keep the records for 7 years for patients over 18 years of age. For patients under 18 years of age, records must be kept until they turn 18.

Question: Do you have any information on average turnover rates for physicians at academic medical centers?

Answer: Your best bet is to check with the Specialty Medical Societies or the AMA.

Question: I am having a dispute with one of my partners concerning what is the proper salary for an office manager. We are fortunate to have a very diligent, professional, hard working manager whom we pay $40,000 per year. I remember reading in one of those management magazines that the average wage is higher than this. Could you give us some direction on this matter?

Answer: You did not mention where your practice is located so the answer is difficult. Regardless, $40,000 is on the low side for a "bona fide" office manager. You also did not mention how many people the office manager supervises and the extent of responsibility. The higher that number, the higher the salary. To give you an idea: A 4 doctor orthopedic practice in central New Jersey (50 miles from New York City) with approximately 13 employees demands $75,000 to $85,000 per year plus a bonus. Keep in mind that this is for a real practice administrator who has been delegated complete hiring, firing and managing authority. In this case the doctors do what they have been trained for and leave the management to a professional. It would interest you to know what this practice grosses per year!

Question: What are the most important financial ratios and benchmarks?

Answer: A/R turnover rate; gross collections ratio; net collections ratio; days revenues outstanding; profit margin. Benchmarks for these ratios vary depending upon how heavily contracted you are.

Question: Our practice has a gross A/R of $8 million with 64% of the A/R greater than 90 days. How many collectors are needed to achieve industry standards?

Answer: It depends on the number of providers and non- physician providers, as well as the type of practice, for example, internal medicine versus surgical, and if the practice is highly contracted with payors, Medicare, etc. versus not participating with most payors. However, generally speaking, 2.5 to 3 "administrative" personnel per provider is considered standard which includes billers, coders, collection staff, as well as front desk personnel.

"Although I've been in the medical arena for 20+ years, there are times that I need a "go-to" person. Not only is Cathy extremely knowledgeable, but she truly epitomizes the AAPC motto of "upholding a higher standard"!"

Adrienne Rabinowitz, CPC, CMRS, COSC

Billing Manager