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Practice Management System (PMS) is a category of healthcare software that deals with the day-to-day operations of a medical practice. Such software frequently allows users to capture patient demographics, schedule appointments, maintain lists of insurance payors, perform billing tasks, and generate reports.

In the United States, most PMS systems are designed for small to medium-sized medical offices. Some of the software is designed for or used by third-party medical billing companies. PMS is often divided among desktop-only software, client-server software, or Internet-based software.

The desktop-only variety is intended to be used only on one computer by one or a handful of users sharing access. Client-server software typically necessitates that the practice acquire or lease server equipment and operate the server software on that hardware, while individual users' workstations contain client software that accesses the server. Client-server software's advantage is in allowing multiple users to share the data and the workload; a major disadvantage is the cost of running the server. Internet-based software is a relatively newer breed of PMS. Such software decreases the need for the practice to run their own server and worry about security and reliability. However, such software removes patient data from the practice's premises, which can be seen as a security risk of its own.

Medical practice management, whether for a small office or a large one, requires the practice manager to deal with a tremendous variety of issues: administrative, legal, financial, technological and more. One minute, a practice manager can be interviewing a potential physician’s assistant (PA), and the next minute calling a plumber to fix a malfunctioning sink. There can be a multitude of responsibilities involved in medical practice management, including:

Financial Management - Establishing and maintaining a budget and revenue cycle; monitoring and analyzing medical billing success and financial performance; negotiating contracts with payers
Business Operations - Developing a business and marketing plan; identifying required outside resources; managing the practice’s physical space; purchasing
Human Resources Management - Recruiting, hiring, training, and retaining providers and staff
Information Management - Acquiring and upgrading telephone and computer systems including software/services for clinical, billing, electronic health record (EHR) and financial management; securing patient data; reporting on practice compliance
Organizational Governance - Establishing legal structure of practice; integrating a corporate mission; establishing pay structure; fostering staff and clinical leaders
Patient Care Systems - Maximizing provider efficiency through effective workflow; establishing systems to keep patients informed, engaged and satisfied; establishing practice performance standards
Quality Management - Establishing and maintaining quality standards; monitoring clinical quality oversight; setting up processes and systems to enable participation in Pay-for-Performance (P4P) programs; ensuring that all licensing is current
Risk Management - Establishing procedures to ensure patient safety and to address emergencies, disasters and legal challenges; ensuring governmental compliance Amid this potentially enormous scope of responsibility, one of the biggest and most important challenges in physician practice management is making sure the practice gets paid in a timely manner for the care its providers deliver. Efficient medical billing and payment entry are the backbone of the operation. The revenue must be there—regularly and dependably—in order to accomplish day-to-day operations, including paying that new PA and buying the new plumbing. Because of the importance of this process in medical practice management, with incoming revenue enabling just about any level of growth and improvement, this Knowledge Hub puts a significant emphasis on ways to ensure your practice gets paid what it should, when it should.

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