Letter from the President

We finally have made it to the last month of 2020!  Every year, I feel as though reaching the end of November is met with excitement signifying the beginning of the Holiday season. Whether you celebrate Christmas, Hanukkah, Kwanzaa, Festivus (“for the rest of us”) or another holiday, December is a month of celebration leading up to New Year’s Eve and New Year’s Day. Celebrating the New Year has always been one of my favorite holidays.  I have many fond memories of New Year’s past.  I typically spend New Year’s Eve with close friends (who are family) drinking champagne; who could ask for any better way to spend an evening? This year may mean virtually spending the time together, in order to maintain our social distancing and help to flatten the curve.  But even celebrating virtually, the New Year allows us to reflect on the year that has passed and dream or anticipate what will face us in the year ahead. To me it is the celebration of what is possible—new opportunities, new goals, going in a new direction, or even continuing your current path but to new heights. I contend that even as we are eager to celebrate turning the calendar to 2021, we must ponder what we have experienced in 2020, both the good and the bad.   

They say that we must remember and learn from history so that we are not doomed to repeat it.  I think most everyone can agree that the LAST thing that any of us wants to do is to repeat 2020!  But, as we begin to navigate 2021 and look forward to putting the year 2020 behind us, I hope we can retain the lessons learned, keep the positives, and move forward with an eye to a more resilient future. We all know that without the rain, we would not appreciate the sunshine.  I challenge myself to make a list of the “sunny days” that have happened this past year, particularly those positives coming as a result of a “rainy day” (or deluge).  Change can feel devastating. Finding the strength to focus on the positive result is a way to navigate the devastation.  I have seen friends and colleagues make figurative lemonade out of lemons. I would go so far as to say that I imagine almost everyone has experienced something positive as a result of our circumstances in 2020. Prior to the pandemic, most of us were unaware of Zoom, Microsoft® Teams, or any of the various virtual platforms. Although I prefer meeting in person, these new technological tools have helped me to work more efficiently.  I eliminate travel time driving to different locations for meetings.  Yes, I miss the connection with colleagues and the “meeting before the meeting” (or after the meeting) opportunities, but you have to admit that your work can be accomplished more efficiently.  Without the catalyst of the pandemic, do you think we would be meeting virtually to the extent we are now?  Telehealth visits—how many of us would have considered these as an alternative?  It is amazing what we can do and achieve when our hand is forced. Operation Warp Speed is a perfect example of what we can do when we must.  With all entities working together toward one goal we are on the threshold of not just one but two vaccines to treat Covid-19 before the end of the year!  Ten months ago, who among us would have thought that possible?   How is that for a positive?     

As we wave goodbye to 2020 and look forward to 2021, let’s not forget the lessons learned, but use those experiences to forge ahead with promise to a new and improved 2021. Let 2020 be the “rain” we have experienced in order to enjoy the “sunshine” we expect in 2021—and don’t forget to look for rainbows. Whether you celebrate, Christmas, Hanukkah or Fesitvus (we all have many grievances to air), I wish you a happier, healthier and resilient 2021!

Traci Evans, FACMPE
Pennsylvania MGMA, President

Protecting Your Practice From Employment-Related Claims: The Importance of Training

By: George Hlavac, Esq.

We all know that it’s coming, and there is nothing that we can do to stop it.  January 1. New Year’s Day. A time to reflect. A time to turn our attention to making “changes” that we know we need to make. New Year’s resolutions: Eat better, exercise more, and unplug from the Matrix! Easy to say, but often difficult to do.  Like Jerry Seinfeld once said, “You know how to take the reservation, but you don’t know how to hold the reservation. And that really is the most important part of the reservation!”

The same is true for medical practices across the country. You know that there are things that you can and should do to limit your potential liability for employment-related claims. You often commit to doing these things, but either don’t follow through or find some excuse for not doing them. Here is one New Year’s resolution that is a MUST for all practices in 2021.

Train your employees. I don’t mean train them with respect to how to do their jobs. I mean train them in the critical areas of employment law. When is the last time that you conducted harassment training for your employees?  In light of the #MeToo movement, harassment training is necessary to protect yourself from potential liability. The only way to establish the affirmative defense to harassment liability is to show that you did two things: (1) took reasonable steps to prevent harassment in the workplace; and (2) took prompt and appropriate corrective action once you had knowledge of the harassment complaint.

In order to establish that you took reasonable steps to prevent harassment, you must be able to show that you “regularly train your employees with respect to harassment.”  Regular training is not once every two or three years.  In order to show that your practice is committed to preventing harassment at work, you will need to show that you conduct at least annual harassment training.

Sticking your employees in front of a computer for online harassment training, however, will not satisfy this requirement. In the EEOC’s “Guidance on Harassment,” it has clearly warned employers that online harassment training is not effective. According to the EEOC, and some states that have adopted mandatory training statutes, in order to be effective, harassment training must be “interactive” and conducted by a live instructor who can answer questions from attendees and involve them in hypothetical situations or role-playing exercises. This type of “live” training forces attendees to be involved in the training, to think about the issues, and to answer questions. They cannot simply turn off the volume and click their way to a certificate of completion.

Your harassment training also must be tailored to the appropriate audience. Supervisors and non-supervisors should not receive the same training.  Although many of the issues will be the same, supervisors require special training that teaches them about their obligations to protect employees from harassment and to take prompt and appropriate corrective action in response to complaints. They must understand that failure to satisfy these responsibilities could lead to potential personal liability.

Finally, in order to be effective, the training must devote the necessary time to actually cover the subject matter. Thirty minutes is not enough.  This is not a tanning session or a nail appointment.  It is not a pizza delivery guarantee.  At a minimum, your non-supervisor training must be at least one hour and your supervisor training needs to be two hours. Anything less is nothing more than window dressing, and the EEOC will view it as such.
Beyond harassment training, have you trained your supervisors with respect to how to be a good supervisor?  Have you provided your supervisors with any training in these critical areas:  interviewing; handling employee complaints; investigations; performance evaluations; ADA and FMLA issues; disciplining and terminating employees; and the importance of proper documentation?  When you hired someone as a supervisor or promoted someone from a non-supervisory position, did you simply assume that they had all of the skills necessary to effectively manage other employees?  I am sure that I don’t need to remind you what happens when you assume things.

Most new supervisors have no idea how to interview potential employees, how to conduct a proper workplace investigation, or how to prepare a performance evaluation. They also don’t understand how asking the wrong question in an interview, botching an investigation, or creating an inadequate performance evaluation can result in significant potential liability for the practice.
Supervisors everywhere are busy. It is a universal truth. Because of this, they often fail to document critical employment-related issues: performance counseling, behavioral problems, disciplinary steps, employee meetings, and many others. Unfortunately, when faced with an employment-related claim, this documentation is absolutely critical to protecting the employer from liability.  

The only way to ensure that your supervisors have these critical skills and understand the importance of these critical issues is to train them. Yes, the training will certainly have a cost.  Yes, it is easy to convince yourself that you don’t need it. Yes, you’ve gotten this far without training and its never been a problem.  In this regard, however, I have a saying that I frequently share with employers:  “It’s not a problem until it is.  And when it is, it will undoubtedly be a BIG problem.”

Happy New Year! Time to go. I’m meeting a friend for lunch (salads) and then I have to hit the gym.  Time to eat better and exercise more!

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About the Author

George Hlavac, Esq.

George received his law degree with honors in 1994 from George Washington University’s National Law Center, where he was a member of the University Law Review. He is also a Phi Beta Kappa, Magna Cum Laude graduate of Franklin & Marshall College, where he achieved All-American honors as a member of the football team.

George practices exclusively in the areas of labor and employment law, handling traditional labor law matters and employment-related litigation, as well as counseling with regard to workplace issues.

Culture of Cybersecurity

By: Bruce Nelson

Increasing profitability through the integration of people, process and technology has been our focus for more the 20 years.  It’s on our website and every piece of literature we’ve produced and distributed in the last two decades.  So how is this relevant to your organization or cybersecurity?  

The key component of the statement is the order of priority: people, process, and technology.  This mindset and approach have driven how we work with clients to solve problems and is particularly important when addressing today’s cybersecurity threats.  

So where do I start?  The first step in the journey is understanding and maybe creating a Culture of Cybersecurity.  Culture of Cybersecurity refers to the knowledge, beliefs, perceptions, attitudes, assumptions norms and values of people regarding cybersecurity and how they manifest in people’s behaviors with information technology.  Understanding this culture from the executive level to the intern is critical in defining your approach to cybersecurity.

People represents the human resources and security issues that surround them.  As illustrated by this infographic, people are the weak link and have become the target for most attacks.  Internally, how are you handling hiring?  It might be time to revisit background checks, clearly defined roles and responsibilities.  Are you providing security awareness training and testing?  How about on termination - do you have a detailed offboarding checklist to terminate access to facilities and systems?  These and several other considerations are critical to not only maintaining a secure environment but reinforcing a Culture of Cybersecurity.

Process is really the mechanisms to get things done.  It encompasses the way your company will identify, measure, manage and control risk, ensure availability, integrity and confidentiality (CIA) of data and resources; and ensure accountability.  Policies that are well defined and documented should be utilized to create processes that ensure user education and accountability.  These are critical to an organizations ability to measure the effectiveness of the cybersecurity posture.

Technology includes all the tools, software and infrastructure to make processes work.  In many organizations this is the only element of the three pillars of cybersecurity that is considered.  While certainly a key element in solving risk for an organization, it must be implemented within the framework of the people and processes.  Do users think it slows them down?  Does the extra step for multi-factor authentication seem unreasonable or inconvenient?  This type of culture and the ability to sidestep security measures can make your tools and solutions ineffective, thereby increasing your risk.

If you have implemented technology and have been disappointed in the results, I would encourage you to take a step back and evaluate the decision-making process.  Were features, functions and technologies at the front of the decision-making process?  The answer to this question in many cases is yes and leads to failed implementation and frustration.  Include users and administrators in the evaluations at the beginning to help understand the challenges they face, risks they may unknowingly present and outcomes they expected.  This will reinforce a strong Culture of Cybersecurity and ultimately improve your organizations’ security profile.

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About the Author

Bruce Nelson
President, Vertical Solutions

Bruce has over 20 years of financial, accounting, consulting, and management experience in both public accounting and private industry. As a consultant and manager with Vertical Solutions, Bruce has been involved in the planning, implementation, and support of hundreds of technology related projects for small and midsized practices throughout the country.

Bruce holds both a BS in Accounting from Duquesne University and a M.S. in Information Technology from Carnegie Mellon University.

How to Retain Value in Your Medical Practice During a Global Pandemic?

By: Sherry Jordan

Business value is a term that can be used to measure and define the overall health and well-being of your practice. Much like you provide check-ups to your patients, your business value needs a check-up from time to time too. Especially during a global pandemic, which has impacted the medical profession in unprecedented ways, having a pulse on the value of your practice is more important than ever.

What information is considered in a business valuation?

This will likely come as no surprise to you, but the most important factor typically considered in a business valuation is whether or not the practice is generating cash flow. After the expenses of the practice are paid, after staff are paid, after the physician is paid, is the practice still generating cash? After assessing cash flow, valuators will consider the worth of the equipment owned by the practice. They will also compare the accounting metrics of your practice to other similarly-sized practices in the same field of medicine.

Further, a valuator will review the résumés and productivity of the physician and the supporting staff, as well as the ability of the business manager to facilitate overall practice productivity and all associated practice costs.

If you’re considering a business valuation – whether that be for merger/acquisition or retirement planning, it will be important that your bookkeeping records and tax filings are up to date and well organized.

Depending upon the field of medicine and associated practice costs, physicians are often unpleasantly surprised that the sale of their practice upon retirement does not produce a value consistent with the salary they have brought home for many years, nor the retirement nest egg they had been counting on. The importance of gaining a proper understanding of the value of your business at least five years in advance of retirement or a sale, and ideally, even ten years in advance of such a transaction, cannot be overstated.

How can you increase practice value?

If you operate in a field of medicine that utilizes fairly simple equipment – laptops, beds, office furniture, etc., the best way for you to generate value in your practice is to improve cash flow. There are only two ways to improve cash flow – increase your revenue (the cash generated from the provision of your services) or decrease your practice costs.

What cost management metrics should you consider to decrease your practice costs?

Smart cost management begins with a concept called activity-based costing. While this may sound like some scary accounting term out of an old textbook you skipped over as not applicable, it really is as simple as it sounds: identify the activities that are performed in your practice every day and calculate the cost to perform those activities. Examples of some practice metrics to consider include:

  • What care is being provided for each patient?
  • What type of clinician or staff is providing each type of care?
  • How much time does each service take?
  • What is the hourly rate for each clinician or staff providing service? [1]
  • What non-clinical functions are you doing in-house that might produce better economies of scale when outsourced?

Using this data, you can calculate the cost to provide each service. Identifying 5-10 metrics that apply to your practice, such as those listed above, and monitoring these metrics on a weekly basis, should enhance your utilization of staff, equipment, and office hours.  A common follow-up to the implementation of an activity-based costing system is that once you have identified key metrics, you then need to determine if the costs associated with these metrics make some tasks attractive as outsourced activities. Certain back-end business functions, such as revenue cycle management for example, may be better managed through outsourcing to a third-party expert.  Reducing your practices FTE (full-time equivalent) spending for back-end business functions frees up not only capital but also makes the non-clinical office space available for clinical services. In other words, this office space can be redeployed to support revenue generation, bringing you full circle back to the revenue side of the practice value equation.


The better you are at identifying activities and assigning costs – and most importantly, the better you are at tracking these activities – the better you will be at cost management. Well managed costs mean more cash flow and more cash flow means more value. Whether you’re building value for the ultimate sale or transition of your practice, or for greater personal income – you can’t go wrong with smart cost management.

Reach out to a business valuation expert, such as a Certified Valuation Analyst, to help you form appropriate expectations regarding the value of your practice and evaluate whether a third-party provider can support outsourcing of certain back-office functions, such as coding and billing. When you take these action steps, you will be well on your way to growing the value of your practice, even during a global pandemic.

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About the Author

Sherry Jordan
Jordan Financial Consulting & Coaching

Sherry Jordan is the CEO/Founder of Jordan Financial Consulting & Coaching, LLC, based in Hummelstown, PA. Ms. Jordan has been providing public accounting services for twenty-five years. In addition to holding her Certified Public Accountant license, Ms. Jordan is a Certified Valuation Analyst and is additionally Certified in Financial Forensics and Professional Mediation. 

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