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CPAs4MDs Guide to Practice Management and Internal Control

Introduction

Segregation of Duties

Supervision

Internal Controls

Tracking Accounts Receivable

Eliminating Accounts Receivable

Monitoring Insurance Payments

Conclusion




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ding Conclusion

Many physicians have difficulty realizing that to run a large, successful enterprise they must be concerned with all operations of the business, as well as the medical aspects of the practice. Another acute problem is that as the practice grows, physicians often become unable to perform the routine duties which once gave their practices the control and strength required. This can place the entire practice in a hazardous position.

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To empower employees, the physician should establish a weekly or monthly meeting with the practice administrator and the staff to discuss problem situations, solutions to past problems, operational or employee issues, and allow an open forum for employees to make constructive recommendations about the operational scope of their functions.

The involved physician should periodically stop by employees' work stations to briefly oversee their functions and inquire as to how they are coming along. If the physician is visible, the perception will be created that the physician is involved in the operational aspects of the practice.

A physician must also recognize that there are certain functions which Internal Control will simply not do. For example:

ding Internal Control will not analyze or correct a situation. Its purpose is to bring attention to unusual situations. Therefore, it is up to the physician to recognize danger signals.

ding Internal Control must have employee acceptance. If controls are not established with the direct involvement of the employees, they will become passive resisters, instead of enthusiastic supporters.

ding The system must be economical! It's fine to have an airtight system utilizing all the controls we have defined, however it must be efficient and not increase your cost of doing business. The physician should balance the cost of controls with the risk of their absence.

The physician must also keep in mind that the elements of Internal Control are complementary. They are used and tailored to individual degrees to fit each situation. Their collective strength determines whether an adequate structure exists.

All practices with competent personnel and a concerned physician-owner will benefit from a strong system of Internal Control.

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