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Monthly practice financial reports--what reports do you get each month

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  • Monthly practice financial reports--what reports do you get each month

    What sort of financial reports do you get for your practice each month?
    I have about another half year before becoming full shareholder partner in my current practice, but I'm concerned on the current lack of financial reporting.

    The group recently switched to a new practice management firm; the prior accounting firm provided a nice detailed monthly report that included: a balance sheet, a page listing what benefits had been paid out to each partner so far that year, a check register, and a payroll summary. When I was asked about switching I said it was fine, but we needed to make sure reports were provided. The prior reports were circulated to the other partners monthly last year, but it seems no one was actually looking at them. Within a short time of looking at last year;s reports, several big misses were apparent to me--the hospital had not billed us for an employee we pay for in over a year and several docs had not taken over 50 y/o employee 401k deductions for the year (probably because they were not reminded before the end of the year, but it was easily apparent looking at the payroll summary). A few of the prior partners who retired in recent years previously likely kept an eye on the reports and things in check.

    The current practice management group holds a Zoom meeting each month or so where they go over a balance sheet and budget but no monthly report is distributed and I just end up taking screen shots on my computer. After asking our group's treasurer the status of the monthly financial reports, I was just informed that the Zoom meetings were them. The current full partners have apparently not requested any sort of detailed monthly report--it's apparent now that they weren't looking at them for the past year with any sort of diligence. Am I over-reacting to expect a practice management group to provide a detailed monthly report similar to that bolded above? I think it's imperative to understand the workings of the practice--someone who works in the practice day to day will notice things that an accountant who doesn't work in the group may not. Do your groups get similar reports more or less frequently? I could just wait 6 months until I'm a full partner, but maybe the time to get it sorted is now.

  • #2
    monthly charges, adjustments, and payments, along with all prior months’ numbers YTD, and comparison numbers for prior year

    balance of accounts receivable, YTD average collections per procedure, YTD average collection percentage

    each employees production for the month (rvus), YTD, and prior year YTD

    breakdown of charges by modality, and location (radiology)


    cloud accounting software so I can review an up to date P&L, cash on hand summary, whatever reports, any time. I’ve set several reports to be auto emailed to me weekly

    i dont find a balance sheet all that useful because it’s not as easy for me to understand and doesn’t provide the same useful data. I need to learn more about understanding the balance sheet

    we also do payroll in house so I see all payroll data.

    I maintain a google sheet where I can import the ledger P&L and create an up to date Comp spreadsheet - showing each owner-employees share of overhead, individual expenses, YTD Comp and other benefits, and basically each owners share of the un-distributed Corp income

    i have an interest in this stuff and don’t like “not knowing”. It also helps to have multiple pairs of eyes on things. I had to make quite a few changes to get to the point that we’re at now in terms of data.

    you may need to do the same. But I’m not sure I would push it until I were partner. You’ll have to gauge that.

    If you can help your partners understand the value, you’ll have better luck. You sound like a much bigger operation than us.

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    • #3
      I don't know if you are over reacting or not, but you should be able to have access to most of these reports at some point before you are made partner. You really can't make that decision without knowing all the details.
      In my practice, each provider is given their profit and loss statement on the 5th of the month and on the 15th we are given details about our performance in the last month with regards to how much we billed, the types of patients we saw, comparisons to prior months or years, and anything else we track. I never get any information about other partners or their performance. About yearly we go over the practice's budget.
      I think there are plenty of partners in my practice that don't know the overall health of their practice. However, I don't think that impacts my ability to keep track of my personal practice.

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      • #4
        If you have already found even one major error you are not over-reacting.

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        • #5
          Originally posted by HandFellow View Post
          I don't know if you are over reacting or not, but you should be able to have access to most of these reports at some point before you are made partner. You really can't make that decision without knowing all the details.
          In my practice, each provider is given their profit and loss statement on the 5th of the month and on the 15th we are given details about our performance in the last month with regards to how much we billed, the types of patients we saw, comparisons to prior months or years, and anything else we track. I never get any information about other partners or their performance. About yearly we go over the practice's budget.
          I think there are plenty of partners in my practice that don't know the overall health of their practice. However, I don't think that impacts my ability to keep track of my personal practice.
          My concern with this approach is that you can't have oversight to assess equitable distribution of patients if you don't have access to other provider's data. Would it be fair if you were seeing 20% Medicaid any others were seeing 5%? Of course not. So while your ability to track your personal practice isn't affected by this lack of knowledge your overall practice could certainly be affected.

          Comment


          • #6
            To answer the OP's original question I agree with MPMD - you are not overreacting based on what you've described, and you should have access to whatever you want. I don't know how it's considered reasonable to not disclose financial/costing data to would-be partners. They are presumably asking you to pay in a hefty sum of money to the practice (or you are taking a hit right now where they pay you a salary and siphon off the excess) so why this shouldn't be fully transparent is beyond me.

            Transparency creates the ability of oversight for those interested in doing so. If the other partners don't care then that's their problem. But don't make their lack of caring and attention YOUR problem.

            Comment


            • #7
              jacoavlu
              You are on the correct path and a pretty good summary was provided.
              The system itself has standard reports and formats. What you are faced with is “access”, online and to what level of detail. There is probably zero benefit to huge “monthly book”. Management review is the critical point you are bringing up. Everything should be available for online access, but you don’t need a hard copy. You should have the ability to print a hard copy if you choose.
              P&L - monthly/ YTD, comparative to prior year for both
              P&L - Monthly/YTD , budget to actual with variance
              P&L - monthly trend and YTD total
              P&L - monthly contribution to Total
              P&L - YTD contribution to Total
              Contribution is each physician/partner
              Above, you have five column formats Then you have to choose Summary or Detail. You don’t need ten hard copy reports (a mountain of paper the overwhelms and not used). Maybe you consider a detail P&L for each physician only and a consolidated P&L for the practice manager.
              Your monthly meeting should focus on the consolidated and discuss “unusual items” month to month, current year to prior, current year to budget. The goal is to understand the business and direction as well as communicate status.
              Balance sheets summary on a monthly should suffice. Monthly trend and comparative to prior year. Consider an accounts receivable aging monthly. Quarterly, a detail may be helpful. What you should find is things like prepaid insurance insurance and accrued liabilities or major fixed asset purchases drive the significant balance changes. Someone is reviewing the bank account reconciliations? There is no need to provide a detail list of the sub ledgers of the open items. That takes manual effort. But it is sufficient to understand that large transactions occurred and what they were for.
              The monthly and quarterly report formats available should be reviewed and hardcopies keep to a limited predefined package.
              Online access should be basically unlimited. Drill down to allow an understanding of any questions.
              My concern is who is reviewing and approving cash in and cash out. Someone needs to have that responsibility. That is a partnership governance question.
              As you pointed out.
              I am aware of “charitable contributions” being made on behalf of a medical partnership that no other partners were aware they made. Ruffled feathers to the tune of $300k. Should have been caught. Each partner needs to participate in checks and balances to an extent. The volume of paper is much less important than the effective design of the package. If the partners sit back and insist on hardcopy, they will be buried in paper.
              How you replace the retired partners is a political issue. Definitely you should design your own. If they wish to use it, it’s to their benefit.

              Comment


              • #8
                Speaking from hard experience, at least one of the partners must critically review the financial details at least quarterly, independent of the practice administration. All of thepractice financial history must be immediately available to all of the partners on a shared secure website. This ensures that no changes can be made after the fact. Any changes by administration must be documented.

                Administration should provide copies of the financials 1 week prior to the meeting to allow the partners to review the numbers before hand. It is simply too difficult to critically evaluate the financials during the meeting itself. Also, It is much easier to find answers to questions while the administration, accountants and partners are all present.

                In a 15 partner private practice single specialty group, we had one full-time accountant within the practice, along with an outside accounting firm reviewing the financials before submitting them quarterly to the partners.

                Despite this, I personally found major accounting mistakes totaling over $1.3 million+ in the past 7 years. One mistake in particular resulted in a large redistribution of income among the partners going back a year or more causing a great deal of resentment between partners in the practice. Some of these hard feelings persist today, again, not because of any fault of the partners themselves, but rather from glaring errors overlooked by 2 licensed accountants.

                I advise you not to blindly accept explanations provided by your practice administators or accountants for any discepancies found. They dont like to admit mistakes and may try to gloss over them to avoid controversy.

                Also, know that reviewing the financials may not be an enjoyable job. I felt that it was extremely important, but I found that many times it resulted in me becoming quite angry. To the point that once I reached FI, I have chosen to ignore the financials completely.

                I am quite certain that mistakes are still being made, but I have now chosen blissful ignorance and am happier for it.

                Comment


                • #9
                  Originally posted by ENT Doc View Post

                  My concern with this approach is that you can't have oversight to assess equitable distribution of patients if you don't have access to other provider's data. Would it be fair if you were seeing 20% Medicaid any others were seeing 5%? Of course not. So while your ability to track your personal practice isn't affected by this lack of knowledge your overall practice could certainly be affected.
                  I think we have a pretty good system. We have an "eat what you kill" model where every physician takes home based on his or her production in any given month. First month out goes to fixed and variable expenses. Any money left over from the expenses goes straight to the provider that earned it. So if a provider is seeing more lower paying patients, they collect less and earn less. I don't think it is necessarily unfair if my payor mix is different from my partners.

                  Thinking about, i do see one aspect of my partners' production. We can see the overall percentage that each provider collected in a given month and what percentage of the variable expenses they had to pay.

                  Comment


                  • #10
                    Originally posted by HandFellow View Post

                    I think we have a pretty good system. We have an "eat what you kill" model where every physician takes home based on his or her production in any given month. First month out goes to fixed and variable expenses. Any money left over from the expenses goes straight to the provider that earned it. So if a provider is seeing more lower paying patients, they collect less and earn less. I don't think it is necessarily unfair if my payor mix is different from my partners.

                    Thinking about, i do see one aspect of my partners' production. We can see the overall percentage that each provider collected in a given month and what percentage of the variable expenses they had to pay.
                    You think it’s fair to get paid more/less for doing the same work?

                    Comment


                    • #11
                      It is important as a business owner to oversee the business. I found numerous bank errors in my practice also. Keeping up with numbers is the first and best defense against embezzlement.

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                      • #12
                        Originally posted by ENT Doc View Post

                        You think it’s fair to get paid more/less for doing the same work?
                        Over time, the payor mixes should work themselves out. I take care of every patient that comes through my door: worker's comp, medicare, liability, medicaid, and people who can't pay. I receive phone calls from the ER and I never ask the insurance. I do the work and hope for the best. Is that fair? Every partner has the ability to modify how many people from each payor as they choose. How is it any more "fair" if my work affects the work of someone else?

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                        • #13
                          Hope is not a plan.

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                          • #14
                            Originally posted by HandFellow View Post

                            Over time, the payor mixes should work themselves out. I take care of every patient that comes through my door: worker's comp, medicare, liability, medicaid, and people who can't pay. I receive phone calls from the ER and I never ask the insurance. I do the work and hope for the best. Is that fair? Every partner has the ability to modify how many people from each payor as they choose. How is it any more "fair" if my work affects the work of someone else?
                            That system seems ripe for bad acting. You have to set up a system IMO that incentivizes good behavior. Unless everyone is a saint you’ll see some bad actors gravitate towards taking the patients from X insurer with the best rates, or the referring provider who gives the best referrals, etc. Sure, you could have an honor system model without allocation up front, but unless you have some oversight of all parties you likely have some bad actors out there.

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                            • #15
                              New patient flow was brought up before. Just a refresher.
                              https://www.whitecoatinvestor.com/fo...ew-patients-go

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