AAOS Bulletin - April, 2006

Is your office ready for a disaster?

Having a disaster recovery plan is key to resuming operations

By Steven E. Fisher, MBA

This is the second in a series on disaster planning for orthopaedic offices. The first article focused on the specific things you can do to avoid a disaster (October 2005 Bulletin and the AAOS online Practice Management Center). This article focuses on the logistics of developing and implementing your recovery plan

Disasters can be regional—such as hurricanes, floods, tornados, power outages and earthquakes—or focused events affecting just your office—such as a building fire, water infiltration, explosion, electrical storm, chemical spill, bomb threat or hostage situation. For many practices, the death or injury of a key staff person may also qualify as a disaster.

Every office should create a task force to develop and implement a disaster recovery plan. The task force must identify the various perils facing the practice and determine which of these requires a recovery plan. For each peril, the task force needs to go through “if-then” scenarios in the following areas:

• Office, furniture and fixtures, and diagnostic equipment

• Medical and office supplies

• Operational functions and personnel

• Office equipment and associated software

• Paper and electronic records

• Internal and external communications

Some disasters may affect the delivery of patient care. Severe disasters may halt back office operations (including billing and collections), particularly if people have been evacuated from the area. If resuming operations is not possible, your short-term focus should be to refer current patients to other providers, safeguard your medical and other key records so that you will be able to resume operations, and provide your “stakeholders” (physicians, staff, patients, referring doctors and hospitals) with necessary information.

Office, furniture, equipment

You can’t provide medical care if your office has been destroyed or seriously damaged by fire, water or wind. You may not be able to quickly relocate, even with advance planning.

Your disaster recovery plan should identify minimum physical facility requirements, such as square footage for the reception area, exam rooms, radiology and back office functions. It should also document any special requirements for the physical plan, including the weight load that floors must bear, access in excess of Americans with Disabilities Act standards, the degree of wall shielding needed and hand-rails along corridor walls.

At least annually, an office representative should identify relocation options. Talk to hospitals, commercial real estate brokers and even other (non-competing) physicians with nearby offices. The alternatives may not be ideal, and some may have implications under Stark regulations. But knowing which alternative is best enables you to act quickly to secure space while your competition is still scrambling.

If a nearby facility can’t be found, you will need to evaluate the pros and cons of relocating. Assess whether your patients will follow you and whether your staff will consent to commute to the new site, and purchase business interruption insurance based on this analysis.

Although you may be able to rent furniture for your substitute office, diagnostic equipment—including radiology machinery—may not be available. So you should have specifications for all such equipment. On an annual basis, contact the manufacturers to build an ongoing relationship with them.

Property, casualty and other insurance to cover the repair and/or replacement of your office, furniture, fixtures and diagnostic equipment is critical. Insufficient coverage may mean you will not have enough capital to start your practice anew. Review your insurance coverage and its associated costs at least annually. Purchase coverage only from reputable companies; see the A.M. Best insurance rating Web site for information on companies: www.ambest.com.

Medical and office supplies

Medical and office supplies are as crucial to your practice as an office. Just as each peril will have a specific facility solution, each facility solution needs a delivery plan for medical/surgical and office supplies. This will require you to work with all your medical/surgical and office supply vendors.

This presents an excellent opportunity for you to rethink the way you purchase medical/surgical, office and X-ray supplies. Do you deal with multiple vendors for different kinds of products? Do vendor representatives personally visit your office on a weekly basis? Do you place orders in person, over the phone or via fax? A “yes” to any or all of these questions means the delay in restocking your office is likely to be greater than if you participate in a group purchasing program, particularly one with Internet order capability. AAOS is currently assessing how it can best serve members in this regard. Alternatively, you may be able to work through your hospital or physician-hospital organization.

Operations and personnel

Every orthopaedic practice performs the same functions, although in different ways. The front-office, for example, makes appointments, collects and documents patient demographic information, patient care and corresponding documentation.

Back-office functions include insurance verification, claim submission, patient billing, payment accounting, insurance follow-up and collection activities, inventory control and federal and state documentation requirements such as the Health Insurance Portability and Accountability Act.

The disaster recovery task force should list each activity, specify who’s responsible and what qualifications he or she needs. For each task and person, the task force should develop a “Plan B” (see box below)

Office equipment and software

Damage to your premises will probably result in damage to office equipment such as phone systems, fax machines, computers, printers and other equipment. Computer software programs may also be compromised and unusable.

In addition to insurance coverage on this equipment, you also need a replacement plan so that you can start operating as quickly as possible after a disaster. Contact your various vendor(s) and ask “what if” questions for each possible disaster scenario. If you can, get each vendor to commit to replacing what you have within a specified time frame.

Office equipment and software that isn’t updated may be impossible to replace. The money you save by deferring the purchase of new systems may be more than offset by the money you lose as you attempt to retool after a disaster hits, regardless of how much insurance coverage you have.

Paper and electronic records

In addition to patient medical charts and radiographs, records include:

• Corporate records: articles of incorporation, by-laws, minutes of annual and business meetings, employment contracts and income distribution agreements

• Financial records: patient account data (billings, collections and accounts receivable); practice profit and loss and balance statements; inventories of furniture, fixtures and supplies

• Payer records: contracts with all payers and the associated fee schedules

• Operational records: facility and equipment leases, maintenance contracts, insurance policies (health, life, disability, “key man,” errors and omissions, property and casualty)

• Personnel records: position descriptions, performance evaluations, timesheets, payroll records and pension or profit sharing contributions

• Compliance records: documentation that the practice has complied with federal and state regulations

The task force should first determine how all of the information is stored (paper or electronic form), where it is stored (in the office or off-site) and whether the data are available in more than one location.

You must then develop a plan to ensure that key staff have access to information. (See “Operations and personnel.”) If the office will be closed for some time, key portions of patient records must be available to other providers to ensure continuity of care.

Finally, you’ll need a protocol to regularly—and almost simultaneously—update all data stored in more than one location. Back-up data that’s not current will not be useful. The AAOS information services department recommends backing up systems on a daily basis, and storing back-up materials off-site, preferably in a secure, fireproof facility.

Your disaster planning efforts may underscore the need to shift to an electronic medical records (EMR) system. Although implementing EMR may be challenging, electronic records will soon become the norm, replacing paper charts.

Additionally, your task force should regularly conduct disaster recovery drills to practice restoring the data. Document all procedures for backing up and restoring systems and store the documentation in the same secure, accessible area.

Communication

The final aspect of your disaster recovery plan relates to communications. Some communications are internal (between practice physicians and staff); others are external (between the office and its patients, vendors, area hospitals, local law enforcement agencies and emergency service providers).

The task force must identify each possible disaster and determine what protocols are needed to address the problems that result. For example, physicians, staff, patients and referring doctors must be notified if the office sustains water damage due to a leaky pipe.

The message to each group, however, may differ. You may need to tell staff to report to another facility, inform patients to call and reschedule appointments, and ask referring doctors not to refer until repairs are completed. Ideally, one primary person and at least one support person should be responsible for these communications, with a designated back-up team.

Increasingly, emergency notification protocols involve the Internet and cellular telephones. Larger practices with their own e-mail servers may want to consider contracting with a third party to bring in another server if the office’s server becomes non-functional.

Conclusion

A disaster recovery plan is useless if no one knows about it or follows the protocols. Give a copy to every physician and staff member to keep off-site; explain the plan to every new employee. Once a year, meet with everyone to review key aspects of the plan.

Steven Fisher is the AAOS manager of practice management affairs. He can be reached at (847) 384-4331 or sfisher@aaos.org.

Examples of “Plan B” thinking

An orthopaedic practice employs a physiatrist to screen patients and treat them non-operatively. If that person were seriously injured or killed, the practice knows that a locum tenens replacement could be hired.

The same practice uses two in-house transcriptionists. If a disaster damages office space, it has made arrangements for the transcriptionists to work at home.

Because the practice is a small group with just three surgeon-owners, the death of a partner would have a severe impact on operations. While the deceased’s accounts receivable would become the property of the heirs, the practice is the beneficiary of a life insurance policy on each associate to cover fixed expenses until a new partner is found.


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