Whether it’s declining reimbursement or old-fashioned collections issues, the financial end of running a practice can trip up even the most highly skilled clinicians.
Spiraling overhead forced internist Sheila Bee and a partner, internist Anita Lane, into breaking away from a traditional multispecialty group in 2012 to form a direct-pay practice.
“We had central billing and contracting, a chief financial officer, and a chief executive officer, and then each site had its own overhead as well as the centralized services,” Bee says. “The more overhead you have the less you end up taking home, and it got to the point, with electronic health records and increasing costs from all the paperwork and collections, that our overhead was a very high percentage of gross revenues. As a working mom you start looking at how much you’re spending on childcare and wondering if it’s even worth it after you pay your sitter. I was having to see more and more patients every day and worrying that I was going to miss something [clinically]. It just became a situation where I didn’t feel like I was giving the care I wanted to give. It got to the point where I said, ‘I’m quitting or changing course.'”
Today the partners’ practice is a blend of a retainer and a fee-for-service model. It’s a direct-pay practice, but it produces appropriately coded forms for patients to submit to their insurance companies for possible reimbursement.
Eliminating the process of billing insurance carriers and instead requesting immediate payments from patients has enabled the partners to run their practice with just three staff members, down from the eight they had for themselves and another half-time physician when they were part of the larger group.
Saving that overhead means they can charge lower fees to patients, which they hope will help them retain their patient roster as healthcare reform matures.
“Our goal was to provide great care at a decent price for patients,” says Bee. “We now have time to really listen to our patients and address their problems.”
Choose smart alternatives
Immediate payment for service, as required at Bee’s practice, isn’t an option for many physicians who work under contract with insurers, but there are several things clinicians can do to keep the financial end of their practice running smoothly, experts say.
Outsourcing is an obvious answer, but isn’t always a panacea, says Grace Terrell, president and chief executive of Cornerstone Health Care, a North Carolina multi-specialty group that includes about 250 physicians.
She joined her in-laws’ practice in 1993, which merged two years later with several other practices to form the foundation of Cornerstone. One of the group’s first decisions was to outsource the billing function, which proved to be a mistake, she says.
“There were issues right away with accounts receivable. So we took that back in-house and were able to create processes that made sense for revenue cycle management from the very first time a patient interacted with our service,” says Terrell.
Most small practices can’t justify keeping all financial functions in-house, of course, so Terrell suggests putting all business decisions through a test.
“Are you going to buy it or build it? If you buy something, the question becomes, are you buying it at the right price? If you’re building it, what is the cost of that decision relative to your capabilities?”
And when it comes to purchasing new technology aimed at boosting efficiencies or generating new patient flow, she says, stay flexible.

By: Janet Kidd Stewart

– Source: http://www.physicianspractice.com/medical-billing-collections/small-ways-stay-top-medical-practice-finances#sthash.51QWjrrX.dpuf

Many physicians are familiar with the provisions of Stark Law and the Anti-Kickback Statute, and the requirement that physician contracts be at a price consistent with “fair market value.” This is aimed at preventing hidden kickbacks, in which the physician might be paid too much for services (or charged too little for things the physician must purchase, such as office space or equipment leases).
Less is understood about the requirement that contracts must also be “commercially reasonable.”
I asked Michael Heil, one of the founders of MD Ranger, about this. MD Ranger is a subscription service providing market benchmark data about hospital-physician agreements, Michael also leads the consulting firm HealthWorks, which provides valuation services to both physicians and hospitals for hospital-physician agreements.
Martin Merritt: How is “commercial reasonableness” defined?
Michael HeilMichael Heil: In CMS regulations an agreement is “considered commercially reasonable in the absence of referrals if the arrangement would make commercial sense if entered into by a reasonable entity of similar type and size and a reasonable physician (or family member or group practice) of similar scope and specialty, even if there were no potential DHS referrals.”
MM: That definition sounds quite subjective. Are there more objective standards?
MH: No, not really. The only additional sources are IRS guidelines that list a few factors for consideration (such as duties and responsibilities of the physician and economic conditions in the marketplace). Some additional clues can be found in a few court rulings where findings were made against hospitals when the issue was whether anything should be paid at all.
MM: Can you give an example of how commercial reasonableness is different from fair market value?
MH: A hospital considered paying for orthopedic spine surgery call at a rate that was well within fair market value. But it was already paying for restricted neurosurgery coverage. The neurosurgeons were fully credentialed for spine surgery. Based on commercial reasonableness requirements, the hospital shouldn’t contract with the orthopedic spine physicians at all: A reasonable entity would not pay for the same coverage twice in the absence of referrals.
MM: Are there any examples from case law?
MH: In Kaczmarzyyk v. SCCI Hospital Ventures, 2004, the court found an excessive number of medical directors in violation of the commercial reasonableness requirement. To help with assessments like this, MD Ranger provides data on the total number of medical directors for hospitals of various types and sizes.
MM: MD Ranger has developed a checklist to make the process more objective.
MH: We are happy to share it. As you said, the regulatory standard is quite subjective, but here are criteria that physicians and hospital administrators should consider that help make it more objective:

By: Martin Merritt

– Source: http://www.physicianspractice.com/blog/understanding-commercial-reasonableness?cid=related_teaser#sthash.S9hixaxP.dpuf

A few weeks ago, a billing staff member was subjected to a particularly difficult and demanding patient phone call. The patient took 40 minutes of her time insisting that billing was done incorrectly, which it was not, and was just really very rude. I decided subsequent calls would never last this long, and that I needed to provide the staff some autonomy and training from a call-center standpoint.
I started looking online for some suggestions for training. I found this website helpful.
The five of us spent a lunch hour going through the different situations and personality types, and then performed some role-playing exercises. We laughed a lot, and made it fun. By giving them this training, I enabled them to know when it’s OK to end a call with an angry customer, and how to troubleshoot those callers who really wanted help. They all walked away much more confident and happier from this training.
What has come from this has been a really amazing experience and transformation. The staff now feel more valued in their roles. They know they are not just the punching bags in the company, which is typically how billing staff feel; hence, the large turnover. Most often a patient will call and complain from something that happened at the clinic level, and really has nothing to do with the billing department or staff. They’ve historically always taken the brunt of patient dissatisfaction. Is this fair? Not in my eyes.
Since this training, calls are routed to the appropriate staff, or the patient’s frustrations are quelled, leaving a much happier interaction with everyone. We have even implemented a new system of patient callbacks with questions such as, “Were your benefits explained to you on your first visit?” and “Do you have any questions about your bill?”
You’ve read the Yelp reviews and seen, “Physician was great, front office staff was really helpful, billing was awful.” I never want to see that associated with our billing department. It’s been a challenge to really identify the “whys” of patient phone calls. But, once identified, you can take steps to stop those types of calls from even being made.
Remember that by empowering your staff, whether billing or front office, the results will make such a big difference in performance and job satisfaction. You can only benefit from providing this type of support. Your staff will thank you!

By: P.J. Cloud-Moulds

– Source: http://www.physicianspractice.com/medical-billing-collections/training-medical-practice-staff-deal-angry-patients#sthash.maLZnKEG.dpuf

I spent some time this week reviewing denials that came through on some of our EOBs (explanation of benefits). Although this is a very laborious process, what I have learned from this exercise is truly worth the time I invested.
I ran a report in our software system that showed all of the EOBs that came in electronically. By opening up each file, I made a tallied list of the denial codes supplied by the insurance company. After a month’s worth of data, I decided to drop everything into a spreadsheet and then sorted the data. It provided me a snapshot of where we are having billing issues and/or front-office issues.
Some of the problem areas that I found were:

• Claims were sent out with incomplete information
• Claims were sent out with incorrect or missing modifiers
• Charge codes were not covered under patients’ plans
• Multiple duplicate claims were submitted — the insurance company may see this as a red flag and start auditing all of your accounts
• Precertification or authorization status was not included with claims — does this mean it was not obtained or not entered into the system?
• Insurance was terminated before patient was seen
• Patient name, date of birth, or policy number does not match; Patient cannot be identified as insured
• Claims submitted with incorrect provider name
• Patient’s benefit maximum has been met
• Patient’s insurance plan changed midway through treatment
• Primary EOB was not included with claim to secondary insurance

Now that I have identified where the denials are coming from, I can work with the results to improve our billing processes and procedures. I can group these denial types into areas of responsibility. For example:
Front-office staff. Provider name incorrect, incorrect patient demographics, precertification/authorization not present — all of these are front-office or data-entry problems and can be addressed with those employees.
Physicians. Coding and modifiers are the physicians’ responsibility. Be sure they are fully trained or hold a modifiers and coding seminar to help educate them.
Office policy/manual. Patient benefit maximum met, insurance plan changed midway through treatment, patients plan terminated prior to visit. These are areas that need to be in your office policy stating that patients are fully responsible for the cost of their treatment.
Billing department. Claims sent out with incomplete information, duplicate claims, precertification/authorization not included with the claim; primary EOB not included with the claim to secondary insurance. These can all be addressed with your billing department. The only caveat would be that patients should also be responsible for coordinating their benefits.
Unless you ask the questions, you will never be able to fix the problems. Don’t be afraid of what you’ll find, instead understand that the results of your internal audit will help you solve multiple problems, and you can start getting paid faster and appropriately.

By: P.J. Cloud-Moulds

– Source: http://www.physicianspractice.com/medical-billing-collections/knowing-why-claims-are-being-denied-will-help-you-get-paid#sthash.vMkb5wkm.dpuf

Physicians and practice managers face pressure to increase performance and reduce costs in just about every area, and with the myriad of performance-based incentive programs, licensing and certification requirements, and reporting obligations, it’s no wonder many are overwhelmed and confused.
There is much to deliver on, and expectations are high. One of those deliverables is patient experience, which focuses on the patient’s perception of care received. Because of its impact on patient health outcomes and financial efficiencies, patient experience is now viewed as a marker of quality patient care and is being measured through CAHPS surveys.
Here are six ways focusing on improving the patient experience might benefit your practice:
1. Maximize PQRS incentive. Reporting of CAHPS surveys may be used to meet one of the nine mandatory measures, and one of the three mandatory National Quality Strategy domains, under the PQRS program. Financially speaking, that’s one-third of the way toward meeting your Medicare Part B Physician Fee Schedule incentive. This is an easy way to fulfil PQRS requirements and avoid the 2 percent decrease in payment for unsatisfactory reporting in 2016.
2. Maximize Physician Value-Based Payment Modifier (VBPM) dollars. Reporting of CAHPS surveys counts towards at least 16.7 percent of the VBPM dollars, providing physicians and practices with a good opportunity to improve performance, and reimbursements.
3. Maximize shared-savings dollars. CAHPS surveys are used to measure the patient and caregiver experience in Medicare’s pioneer and shared-savings program accountable care organizations (ACOs). This makes up 25 percent of the overall quality score used to determine an ACO’s share of cost-savings (or losses for those in the two-sided shared-savings model).
4. Meet the new Maintenance of Certification requirement. ABIM now requires all board certified physicians to participate in the completion of CAHPS surveys by the end of 2018, and every five years thereafter.
5. Gain Patient-Centered Medical Home certification. Measuring CAHPS domains will earn points towards Level 1, 2, or 3 of medical home certification under the National Committee for Quality Assurance.
6. Improve your reputation. Medicare’s Physician Compare website now includes quality of care ratings for group practices.
Many of the CAHPS survey questions require factual responses about the patient’s contact with the office, such as how quickly patients are able to schedule an appointment, or how long they wait. These questions require straightforward responses, and practices can improve performance by examining their current processes and making efficiency improvements.
Other survey responses inquire about the cognitive aspects of the physician-patient interaction, and identify how patients feel throughout the encounter.
For example:
• How often did this provider explain things in a way that was easy to understand?
• How often did this provider listen carefully to you?
• How often did this provider show respect for what you had to say?
• How would you rate this provider?
Most physicians believe they will perform well on these questions, however, research suggests that this is often not the case.
A 2011 study found that patients do not express their health concerns, expectations, or opinions in up to 75 percent of physician visits, principally because they are not asked. A report from leaders at Elmhurst Memorial Healthcare, Hackensack University Medical Center, Piedmont Healthcare, Griffin Hospital, and Sharp Healthcare noted that more than 50 percent of patients leave their appointment not understanding what they were told, how to take their medication, or in fact, why they need to take their medication at all.
Good interpersonal skills and the ability to create a good patient experience is not something that just “comes naturally” to all doctors. Just like any other evidence-based clinical competency, it requires teaching, practice, and evaluation.
In my next post, I will provide you with simple techniques to help ensure you are doing all you can to improve the patient experience at your practice.
Sue Larsen is president and director of education of Astute Doctor Education, Inc, a provider of online education and resources specializing in physician interpersonal skills. Larsen has over 10 years experience in medical education, and understands how to turn clinical evidence into practical, technique-based learning events. E-mail her here.

By: Sue Larsen

- Source: http://www.physicianspractice.com/physician-compensation/six-ways-patient-satisfaction-could-impact-your-practice-finances#sthash.IpZVW1mU.dpuf

Whether you are looking to sell to a hospital, grow your provider base, or partner with other practices to take advantage of strength in numbers, knowing the true value of your medical practice has become much more important. But knowing the value is one thing; boosting that value may be the more important piece.

Daniel M. Bernick”Value is an important thing to keep in mind, even if you don’t have an immediate desire to sell your practice,” said Daniel M. Bernick, a principal at Plymouth Meeting, Pa.-based The Health Care Group and Health Care Law Associates.

For example, noted Bernick, if a practice is looking to bring on a new associate physician, it’s likely in the future that he will want to buy into the practice. You’ll want to know the value of your practice as the valuation will affect compensation during the buy-in period. Another consideration, added Bernick, is simply that “life is unpredictable and you never know when it might be to your advantage” to sell, perhaps to a hospital or other large entity.

“Because the market is changing and larger entities enjoy an advantage in terms of negotiating with payers, it may make sense for you to sell your practice to a larger entity,” he said. “If that happens, you are going to want to know what the value of your practice is.”

Bernick noted there are six areas where you can start boosting the value of your practice, starting today:

1.  Keep working.

Bernick notes this pertains to an older physician, as any potential buyers will want to see the financials prior to a deal. “If those financials show a declining revenue stream in the past few years it is very discouraging,” he said. “So you want to keep working and keep your revenue up so your practice continues to show good profit and is attractive to potential buyers.”

2. Maintain your “curb appeal.”

Just as you would put a fresh coat of paint on your walls before selling your home, do the same at your practice to spruce things up prior to a possible sale. And it is not just aesthetic items, Bernick noted, it is your practice website — which shouldn’t look “unprofessional or clunky” — and your financial reports on everything from aging of receivables to CPT volume. “To the extent you have professional-looking financials that look as though you are on top of things and are tracking the important aspects of your practice, that plays very well with potential buyers,” he said.

3. Maintain relationships.

Bernick said it is important to keep up relationships with referring sources to show patient base consistency and growth, with training program directors to ensure you have good access to qualified physician candidates, and with others, including your local hospital. “The hospital is an important player in your marketplace and may be a potential buyer for your practice,” he noted.

4. Utilize non-compete clauses.

While unenforceable in some states, Bernick notes that most states will allow a “geographically reasonable, properly drafted” non-compete clause for an associate physician, PA, or even nurse practitioner. Without such a clause, you are raising a red flag for potential buyers in terms of your patient base. “If the associate is not subject to a non-compete, the buyer will worry that your associate may, at the time of sale, go into practice on their own or right across the street,” he said. “If that’s a possibility, that will really depress the value of your practice.”

5. Hold off on major tech investments.

If you are considering a sale in the short term, hold off on long-term tech purchases, such as a new practice management system or EHR, said Bernick. One, there’s a good chance you’ll lose productivity during the adoption and integration of new technology, resulting in “a pretty big hiccup in your revenue flow.” Two, it’s likely that the buyer of your practice will have their own systems to integrate, rendering your new purchase — and the time and training involved — virtually useless.

6. Add ancillary services.

If it makes sense for your practice and you have the ability, ancillary services can be a boost to your practice’s value. “Some [services] are more expensive and some are within reason, so if you can add it reasonably and make use of the ancillary service, that’s going to help your profitability and help your curb appeal,” Bernick said

By: Keith L. Martin

– Source: http://www.physicianspractice.com/physician-compensation/six-areas-boost-your-medical-practices-value#sthash.iMNnE96U.dpuf