Need a practice management system? Here's what to look for

Upgrading, replacing or adopting a practice management system can be difficult. Asking the right questions will ensure you get the right system.

By Emily Berry — Posted Nov. 2, 2009

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A good practice management system should be like an oracle for your office. You should be able to ask, "Which patient is coming in next?" or "Who hasn't paid their bill?" and get the right answer every time.

Driven by federal incentives to adopt electronic medical record systems, even physicians who are happy with their practice management systems are wondering if it's time to find new ones packaged with EMRs. The alternative is to pay thousands of dollars to have two vendors' systems work together -- an approach some practices may find worth the cost.

"The push from the government with the funding that's out there is driving a lot of energy in this space," said Jared Peterson, executive vice president for ambulatory research at KLAS Research, a firm based in Orem, Utah, that rates medical software, vendors and medical equipment.

Experts say there's no right answer on whether to buy an EMR bundled with a new practice management system or to pay to have the two systems interfaced. But there are key considerations.

"As physicians and practice administrators seek EMRs, they may also recognize their practice management system is not able to give them the reporting they need to truly manage their practice efficiently and effectively," said Cindy Dunn, RN, a senior consultant for the Medical Group Management Assn.

Peterson estimated that about half of physician practices buying EMRs intend to keep their practice management systems. About 75% of those end up changing their minds and opting for a package deal.

But a package deal isn't always best, said Chicago-based practice management consultant Karen Zupko. "One of the biggest mistakes I think people make is on this very subject. The practice management system may be superb, but the EMR that company has designed [has] a really strong primary care flavor, and if you're an orthopedic surgeon, that's going to drive you nuts."

Defining practice management system needs

Brandon Betancourt is practice manager for Salud Pediatrics in Algonquin, Ill., where his wife, Joanna Betancourt, MD, and another physician see 30 to 40 patients a day. Betancourt evaluates practice management systems on whether they can tell him what he needs without complicated queries or hassles. "I'm really into analysis and running numbers. In this system, what kind of pushed me was the reporting capabilities."

Experts say Betancourt was right to define what's needed and ask if the system can deliver. If multiple people use the system, each should write down what he or she wants, Dunn said. The final purchase should reflect those needs.

All systems should be able to schedule patient visits and submit claims. And robust, user-friendly reporting distinguishes a great practice management system from a so-so system. "You cannot make any decisions in a practice without data," Dunn said. "You have to have data, and it's difficult in many systems to get data out of it."

A good system should be able to run reports easily, meaning you shouldn't have to program in data or know complicated command language. This includes "lag reports" that will show the time between date of service, date a claim was submitted and date it was paid, and denial analyses that will help identify problems that lead to claims getting rejected. A good system also should allow patient preregistration, including eligibility checks on insurance coverage, Dunn said.

A basic practice management system should allow electronic claim submissions. But not every system does it the same way. Typically, those claims go through a clearinghouse; a vendor may require a certain one be used, or charge for claims submitted directly to payers. You need to know applicable restrictions and fees, Dunn said.

Some systems will help fix errors in claims to make sure what's submitted to insurers is "clean," expediting payment, Peterson said.

Developing seamless EMR communication

If you opt to keep your current practice management system, you should know if adopting a new EMR will require you or your staff to enter the same information twice.

Look for "bidirectional interface," Dunn advised, so if you change a patient's phone number in the practice management system, that change will show up automatically in the EMR, and vice versa. Beyond the time wasted, entering information twice doubles the risk of an error, Dunn said.

But vendors can charge $10,000 to $50,000 to make their EMR talk to your practice management system or vice versa, so you need to decide if that cost is worth it.

Peterson said it's that choice -- to enter data twice or pay to make the systems talk -- that pushes many physicians toward a single vendor. Larger practices are less likely to replace an old system if it's working well and customized to the group's needs, since training everyone on both an EMR and new practice management system may be as expensive as paying the interface fee.

If you keep your practice management system or buy one from a vendor different from the one that sold you your EMR, Dunn advised, "make sure the two vendors will talk to each other -- you don't want to be stuck in the middle."

Finding a good vendor

Dunn said there are several ways to evaluate a vendor, but you must take time to do the research.

First, do not assume having a "certified" system means that your vendor is a good choice. Certification doesn't "rate whether the vendor provides good support, or is financially viable, and those are things you're going to take care of and take responsibility for," Dunn said.

Find out if the company hosts an annual user group meeting, she said. If possible, attend that meeting to hear customers' gripes.

Dealing with only a company's sales staff does not tell you about vendor support, said Jennifer O'Brien, executive director for Arkansas Specialty Orthopaedics, a 22-doctor practice in Little Rock, Ark. She suggested judging by numbers -- finding out how many clients the support team handles gives you an idea of their responsiveness.

Betancourt chose his practice management vendor first based on how well it would work with the practice's EMR, then for its pediatric-specific customization. "I never bought it when [other vendors] told me, 'We can customize it,' " he said.

The system he ultimately chose offers tools that made sense for the group, something experts said can be helpful, but isn't a necessity for every specialty. And there are trade-offs. "The challenge is a lot of those specialty-specific vendors [are] not huge vendors, and there is risk going with a small vendor," Peterson said.

Budgeting time and money

Key to planning adoption of a new system is realizing that the outlay of time and money isn't going to stop after a few months.

Dunn said you still must replace computers every three years on average, and you may have to pay for new software user licenses if your practice grows. If you upgrade either your EMR or practice management system and they are from different vendors, you might have to pay the interface fee again.

Spending enough implementation time is key. "Bringing on either a practice management software system for the first time or a new practice management system probably requires at least twice as much preparation, planning, piloting and training than you think it does," O'Brien said.

She started working as a practice management consultant after seeing firsthand the problems a practice can have returning to a previous system. Be ready to troubleshoot nontechnical problems, such as how the system affects practice flow and morale, she said.

"The skills of the manager in managing people, developing them to their highest level of performance, is as important as knowing the system and what it can do for you," O'Brien said.

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Ask before you buy

Experts suggest some questions to consider before you upgrade or replace your practice management system:

  • Will it work with your EMR? How well? Will you have to pay extra for the two systems to interface? If you upgrade one or the other, will you have to pay again?
  • Is the vendor financially viable for the long haul?
  • How tailored is it to your specialty? Can you add customized reports or data fields without re-entering the query every time?
  • Who will be responsible for training you and practice staff on a new system?
  • If your vendor assigns a project manager or other "point person," how many other customers is that person assigned to?
  • How much is the system's subscription fee? This can equal 10% of the up-front cost annually.
  • Are you paying a fee for each user? How will that affect costs if your staff grows?
  • How much should you budget for system maintenance, technical support and regular upgrades for your hardware?
  • Have you set up and budgeted for a regular system backup? Do you test your backup system at least once a year?

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Need advice?

Resources to help you find the best practice management system for your practice.

American Medical Association: Physicians can get tip sheets on health information technology and electronic claims submission through the Association's Practice Management Center (link).

Some topics are available to AMA members only. Those that are available to everyone include:

  • "How to select a billing software vendor for the physician practice"
  • "Frequently asked questions regarding electronic funds transfer agreements"

KLAS Research: The Utah-based health care technology company conducts independent research about health information systems, including practice management systems and electronic medical records, based on user surveys. You can also rate your system through their Web site (link). The group's list of top-rated products can be viewed for free, but the company charges for access to detailed evaluations of individual systems.

Medical Group Management Assn.: The MGMA offers a list of leading practice management system vendors through its Web site (link).

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