Why Your CPA Firm Should Be An Expert in Serving Physician Practices

Date November 17, 2023
Article Authors

When it comes to finances, your practice faces more complex and nuanced challenges than most. Growing your practice and maximizing your bottom line while maintaining regulatory compliance requires the support of a CPA firm that specializes in serving physician practices, from small specialty-specific practices to large multi-specialty and multi-location organizations. Before you engage a CPA firm, be sure they have the capabilities and expertise to support you in the areas most important to your sustainability and profitability.

Addressing the key financial issues. Your CPA firm should be able to provide expert support and service in financial areas key to your practice, such as revenue cycle management, including billing, collections, and cash flow management; internal compensation and payments modeling, including for employed physicians and mid-levels; and the impact of any merger and acquisition transactions, including those involving private equity or managed service organization (MSO) models.

Reimbursement. A physician practice-savvy CPA firm will know how reimbursement works, and help your internal staff optimize the various revenue cycle components to ensure quick and comprehensive reimbursement. They will be able to advise you on the practices and procedures that allow you to comply and achieve Merit-Based Incentive Payment System (MIPS) scores that ensure bonuses and avoid penalties. An experienced firm will have the industry knowledge and relationships to help your practice recognize and capitalize on additional revenue opportunities.

Revenue cycle management. Physician practices require the support of a CPA firm with a deep and long history serving healthcare businesses. A practice-savvy CPA firm will thoroughly understand the practice revenue cycle, how practices code services rendered, bill, and collect. Only through long and varied experience can a CPA firm build an understanding of the key issues that drive physician practice profitability.

Compensation modeling. Your CPA firm should be adept at compensation modeling. It should know how to divide and distribute compensation inside a private practice and whether compensation is based on equal distribution, productivity, or each practitioner’s patient base.

Transactional advisory. Your CPA firm should have extensive experience helping physician groups acquire or merge with other practices. That involves analyzing the return on the group’s investment in an acquisition, whether it is equipment and technology driven, or provider driven, by physicians and mid-levels. The firm should include valuation and corporate finance experts in their transaction advisory practice. An industry-savvy CPA firm can advise you if you are considering acquisition by a hospital system, large group practice, or private equity, or help you if you are leaving a system to return to private practice.

Internal controls. Your CPA firm should have the collective expertise to institute quality controls to prevent fraud and increase administrative efficiency. They should be practiced at working with your administrative staff to ensure proper cash management processes. They should be familiar with proper coding, including conducting coding audits and resolving denials from insurers.

Operations. An industry-savvy CPA firm will be able to help you in the full realm of operational activities, including credentialing, connecting you with local and regional pharmacy providers, advising on office software and medical records systems, and helping you protect your investment with appropriately priced industry-specific insurance policies. An industry-focused CPA firm will remain current on government programs, such as HHS relief programs as well as on the federal, state, and local regulations that govern healthcare operations.

Operational efficiencies: data analytics. Your CPA firm should be practiced at spotting opportunities to improve operational efficiency, providing appropriate direction, and implementing effective solutions. That includes data analytics: ensuring the practice is reading and interpreting, then employing the massive amounts of critical and sensitive data it amasses internally to maximize profitability.

Growing and managing wealth. A multi-disciplinary CPA firm will have in-house experts who craft employee benefit programs that meet the needs of practice partners as well as staff. They will have financial advisors who can help practice partners protect and grow their personal wealth.

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