Physicians Practice eBooks by William Ellis

Alternative Payment Models Resource

examining alternate payment models Stay competitive by considering new ways to practice

B r o u g h t t o y o u b y:

Membership medicine

Onthe

Rise In Post-ACA Environment

Facing a number of regulatory challenges, physicians are finding that concierge and direct pay models are a viable way to provide personalized care. By Lisa A. Eramo

oday’s physicians face many challenges: The costly transition to ICD-10, the complex attestation process for meaningful use, the adoption of e-prescribing and portal technologies, the challenges of collecting from patients with high-deductible insurance plans, the barriers of costly overhead, and more.

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This is where the world of private pay or membership medicine, also referred to as concierge and direct primary care, has entered the picture. Concierge and direct-pay models continue to grow in popularity among physicians who are frustrated by today’s complicated regulatory-driven healthcare environment. According to the 2015 Great American Physician Survey, sponsored by Kareo, the number of physi-

cians participating in a concierge practice stayed relatively the same, at just over 4 percent, but the number in direct pay jumped more than 2 percent from 2014 to 2015. Overall interest in these models remained strong over the past two years with more than one-third of respondents saying they are considering a concierge or direct pay model. “Concierge medicine allows me to practice a model of medicine that is currently not Physicians Practice

widespread called P4 Medicine: Personalized, Predictive, Preventive, and Participatory,” said practicing physician and Medical Advisor at Kareo, Molly Maloof. “I wanted an old-fashioned doctor patient relationship with a futuristic technological orientation of care. P4 medicine allows me to do this and concierge medicine allows me to be paid for it.” With concierge medicine, insurers may pay for certain covered services, however, patients generally pay a monthly or annual fee/retainer in exchange for certain noncovered clinical services and improved access. In direct primary care, patients pay for services out of pocket and receive more personalized care and access. Patients often get benefits such as sameday access to the physician (including the ability to reach his or her cell phone as well as engage in text messaging), unlimited office visits with no copayment, online consultations, fast prescription refills, convenient appointment scheduling, and more. The idea is to establish a direct financial relationship with patients, thereby removing or reducing the time- and resource-intensive process of billing insurance companies. This is particularly true for direct primary care, where practices bypass insurance companies entirely when providing comprehensive preventive care. The appeal for physicians is that they’re often able to earn more money, while seeing fewer patients with whom they spend more quality time. “Concierge also allows me to add additional wellness programs to my practice offerings and maintain my independence,” added Maloof. Although joining an accountable care organization, merging one’s practice with others, or Physicians Practice

working in a hospital setting are options, concierge and direct-pay membership medicine models seem to be the best of all worlds, experts said. “I think that with declining reimbursements, primary-care providers are starting to realize that they have an opportunity to either join hospital groups or maintain autonomy by adding an extra

“Most doctors don’t want to just receive cash for their practice. They want to enable patients to get some value from their insurance.” Molly Maloof, MD

fee to their practice,” explains Maloof. “Most doctors don’t want to just receive cash for their practice. They want to enable patients to get some value from their insurance.” Interest appears stronger among younger providers who are looking at the long term. According to a 2014 survey conducted by the physician staffing firm Merritt Hawkins, 17 percent of physicians ages 45 or younger indicate they will transition to a direct-pay or concierge practice. The survey also supports an overall increase in the interest in these models with 13 percent of all physicians saying they plan to transition in whole or in part to this type

of practice. This is a substantial increase from the 2012 study where only seven percent were considering this as a future move. There are definite benefits for patients too. Say goodbye to long wait times in the office or having to wait for weeks or months to make an appointment. “Patients can expect longer visits with their doctor and usually better access to their physician when they need it,” Maloof says. “Patients can purchase high deductible plans and use their Health Savings Account to pay for the additional costs of joining a concierge practice.” Using HSAs does have some restrictions though, so it’s important to know the rules in your state and help patients understand what is and what is not covered with an HSA. States are slowly changing their rules to support these options for patients. The upward trend of these models will likely continue as physicians — and patients — search for alternatives in this complex and increasingly costly healthcare marketplace. n Lisa A. Eramo is a freelance writer/editor specializing in health information management, medical coding, and healthcare regulatory topics. She also works as a healthcare content specialist for Agency Ten22. She began her healthcare career as a referral specialist for a wellknown cancer center. Lisa went on to work for several years at a healthcare publishing company. She regularly contributes to healthcare publications, websites, and blogs, including the AHIMA Journal and AHIMA Advantage. Her focus areas are medical coding and ICD-10 in particular, clinical documentation improvement, and healthcare quality/efficiency.

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Patients Embrace

hybrid concierge medicine Itâ&#x20AC;&#x2122;s not just physicians who are turning to concierge medicine; over the past few months a growing number of patients have also begun to embrace the model. By Wayne Lipton

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Physicians Practice

t’s no surprise that more and more physicians are turning to concierge practice models, particularly hybrid models. But did you know that more patients are joining concierge programs than ever before? We work with largeand small-physician practices from coast to coast, and in the last few months, we can say definitively that the tide has turned — concierge medicine is booming. If you understand the reasons why patients, doctors, and even physician groups are joining, it can help you to decide if a concierge model could work in your practice.

Why are physicians interested in concierge care? • Enhanced compensation for the areas of patient care and service that are not properly valued in today’s reimbursement models. • Greater stability in an unpredictable future. It is not only about the changes that appear to be inevitable. It is the ability to adapt in time to stay afloat. • More control of the healthcare process. Concierge medicine gives doctors a greater say, a rebalancing of the control that has drifted toward insurers and payers. • Recognition of excellence as defined by the patient.

Why are physician groups interested in concierge care? • A growing market for the hybrid concierge model. With the emphasis on low-cost delivery of care, there is a growing segment of the patient market that is willing to turn to some form of self payment to get the type of care they want — high-level, personalized care Physicians Practice

delivered with convenience, all the original components of the medical home concept. • Hybrid concierge does not interfere with established revenue paths in standard, vertically integrated systems, like captured referrals and ancillary services. It is a great way for groups to deliver both a traditional medical model as well as a high-level service program that taps into direct payment revenue in a volitional manner. • There are many more regions of the country that can support a hybrid concierge model versus full concierge programs. • Practices with concierge programs are becoming more desirable in recent acquisition situations. Particularly with hybrid programs, their continuation in large groups has proved to be economically beneficial and consistent within the practice strategies. • Physicians have a greater ability to positively impact their income through a direct patient payment approach, especially while adequate future compensation by traditional insurers is in doubt.

Most importantly, why are patients interested in concierge care? What is motivating them to join? • Concierge programs have become common. The idea of paying for enhanced services is no longer shocking in many markets. • More than ever, patients feel an urgent need to lock in a relationship with their physician. The media coverage of changes in the healthcare landscape has patients fearful, and is very motivating. Patients want the peace of mind knowing that their trusted physician will be there for them.

• Successful hybrid concierge programs have started even in rural areas and locations that never before could have supported a fee-based membership program. No matter the market, many patients want to secure their physician. • Even traditional patients are joining hybrid concierge programs, even years after their physician’s initial program has launched. Our membership marketing programs have seen a 30 percent increase in the member conversion rate in the past six months alone. For all of these reasons, this year we have had the most successful number of hybrid starts in the history of our company. Concierge care medicine, particularly hybrid concierge care, is realizing its highest level of success and growth since it began over thirteen years ago. And we expect this trend to continue. With more than ten years in the market, our experience is that more patients than ever are joining concierge programs, that a much greater percentage of patients are interested in joining concierge programs, and that — for our physician clients — the level of success has grown for each practice that has opened in the last year. If you’ve ever considered a concierge model, the iron is hot — it’s time to strike. n Wayne Lipton

has more than 35 years of experience in healthcare and business, including the past seven years as founder and managing partner of Concierge Choice Physicians LLC. He has conducted hundreds of seminars on full-model and hybrid concierge practices. He can be contacted at whlipton@choice.md. Brought to you by

Transitioning to a Direct Primary-Care Medical Practice Why one physician opened a direct-pay primary-care practice and how he did it. By Janet Colwell

n 2013, family physician Bruce Jung found himself at a professional crossroads after leaving his position at a Corbin, Ky.-based community health center that he cofounded. He and his wife wanted to stay in the area to raise their six children but he was wary of navigating the complicated healthcare landscape as a solo practitioner. “My wife heard about direct primary care (DPC) and we became fascinated with the concept,” said Jung. “Being free from the hassles of working with insurers was very intriguing.”

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After doing some research and consulting with former colleagues, Jung embraced the DPC model and opened his solo practice, The Doc Shoppe, in January 2014. His patients have the option of paying a monthly membership fee in exchange for unlimited access to routine and preventive services, or enrolling on a fee-for-service basis. The practice does not work with any private or government insurers. Opening the practice was a risky move that called for a sizable upfront investment and convincing potentially skeptical patients to try a nontraditional approach to managing and paying for their healthcare. More than a year later, Jung has yet to see a

profit but remains convinced that he made the right move. “I’ve never enjoyed practicing medicine or developing relationships with patients more than I do now,” he said. “I feel like I am getting back to the heart of medicine with direct patient-to-physician interaction in terms of both healthcare and reimbursement.” HOW IT WORKS

Jung is a firm believer in price transparency, a concept that fits well with direct billing under the membership model. His website prominently displays the costs of various categories of membership as well as à la carte prices for office visits and lab services and a link to the complete price menu. Physicians Practice

We believe in

small practices

By simplifying small practice operations, Kareo gives doctors more time to connect with patients. Our simple interface is easy for anyone to use, and cloud availability means you can connect with your practice and patients anytime.

Visit Kareo.com to learn more! Physicians Practice

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“I remember a patient in my prior practice asking me how much her visit would cost,” he said. “I realized that I had no idea and even my CEO did not know how much this person would have to pay for [her] visit. It got me interested in looking at other models.”

What to Charge at a Direct Primary-Care Practice The Doc Shoppe, a direct primary-care practice in Corbin, Ky., offers three membership levels for individuals, families, and small businesses. While it also enrolls patients on a fee-for-service basis, the practice markets its membership plans as the most economical and comprehensive option for patients. The membership plans also give the practice a reliable income stream without the hassle of working with third-party insurers. Prices:

Individual plan • $50/month for patients under age 65

Under The Doc Shoppe’s membership plan, patients pay a onetime $50 registration fee and sign up for automated bank transfers to cover their monthly payments. As members, they have unlimited access to primary and preven-

"I've never enjoyed practicing medicine or developing relationships with patients more than I do now. I feel like I am getting back to the heart of medicine with direct patient-to-physician interaction in terms of both healthcare and reimbursement." Bruce Jung, MD

• $75/month for patients age 65 and older Family plan • $150/month Small business plan • $50/month for individuals; $100 for couples; $150 for families What’s inclu ded :

• Unlimited clinic and virtual visits • Same-day or next-day appointments • Access to providers 24/7 • Most routine labs and tests Other ru les and fees:

• One-time, $50 registration fee to open a new billing account. • $10 fee for payments over 30 days late; cancellation of account at 60 days overdue. • No long-term contracts. • Cancel for any reason after three months. • Members must sign up for automated monthly bank transfers to cover fees.

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tive care as well as routine lab services. Jung gives out his cell phone number and offers sameday and next-day appointments as well as virtual visits. To cover catastrophic events, Jung recommends that patients supplement their membership with a high-deductible, lowpremium insurance plan. Ideally, that plan would be attached to a federal Health Savings Account (HSA), which allows consumers to save pre-tax dollars to pay for qualifying medical expenses. However, under current IRS rules, joining a DPC practice

disqualifies a patient from having an HSA paired with a highdeductible health plan. That’s because it defines DPC plans as health insurance and HSA holders are prohibited from having a second health plan. That may change soon, according to the lobbying group Direct Primary Care Coalition, which reports that seven states have passed legislation making DPC distinct from insurance products and several members of Congress have requested that the IRS reconsider its definition. The Washington Health Benefit Exchange, for example, offers consumers in the Seattle area the option of joining a DPC medical home combined with a qualified health plan. With or without an HSA, Jung makes the case that combining a high-deductible insurance plan with membership is more cost-effective for patients than traditional insurance. Instead of putting off doctor visits to avoid paying out-of-pocket until their deductibles are met, members tend to take care of problems as they arise, potentially preventing more serious health problems down the road. Visit bit.ly/price-comparisonchart to see the Doc Shoppe’s health coverage comparisons. In addition, patients may get higher quality care and more time with their clinicians than in a traditional practice, said Jung, because DPC eliminates the time and costs associated with working with third-party payers. FINDING A MARKET NICHE

Jung’s research on direct primary care yielded plenty of useful information about the basic membership model, but little on how it might work in a low-income community like Corbin. While most membership models he found were located in affluent or suburban areas, the median household income in Corbin was $31,746 in 2013, more than $10,000 below Physicians Practice

the state average, and more than $20,000 below the national average, according to the most recent U.S. Census data. “The only other models in indigent communities that we looked at were Federally Qualified Health Centers and they depended on entitlement funds and grants that I didn’t have access to,” he said. “To make this model work here we knew we would have to alter the model a bit and keep costs down even more.” Jung wanted to help some of the same low-income and uninsured patients he had cared for in his previous position at Grace Community Health Center. He decided to target a niche in the market made up of patients who earned too much to qualify for insurance subsidies under the Affordable Care Act, but too little to afford private insurance premiums that covered most primary-care services. “These patients are looking for a plan they can afford that would still cover their needs,” he said. “It makes sense for them to combine a high-deductible plan with a membership with us.” FINANCIAL CHALLENGES

In order to make membership affordable for his target population, Jung keeps overhead costs down by renting a small office space and hiring only one other staff member — a highly qualified nurse practitioner. He also negotiates with lab facilities and other providers for volume discounts on services for his patients. “We wanted to offer the lowest possible membership rate while including as many services as we can,” he said. “For $50 per month they get unlimited access to our office as well as hundreds of lab tests at no additional cost because we’ve been able to negotiate wholesale prices down to the bare minimum.” In addition to labs, Jung has been able to lock down discount Physicians Practice

rates with providers of ancillary services, such as radiologists, for things like computerized tomography scans, magnetic resonance imaging, and colonoscopies. Recently when a patient needed a foot X-ray, for example, Jung called two local hospitals and a diagnostic outpatient center and was quoted rates ranging from $100 to $600, often not including the radiologist reading. Thinking he could do better, he called on an orthopedist colleague who had an X-ray technician on staff. “He said he would do this patient’s X-ray for $45 and the patient could bring the films back to me to read,” said Jung. “The patient ended up saving 12 to 15 times the cost of an X-ray at the hospital, which paid for a whole year’s membership.” Other cost-saving measures included working with a local bank, rather than big credit card companies, to handle automated transfers of membership fees from patient accounts to the practice.

The bank’s $10 monthly rate and 5 cent transaction fee are much lower than most credit card rates. Still, costs continue to outstrip revenue, said Jung. He has enrolled just over 240 members so far, out of 450 patients in total. His goal is to reach 600 patients to 700 patients per provider in order get out of the red. “I was told by more experienced physicians that this process would take two years and cost from $50,000 to $200,000,” he said. “It looks like we will be on the high end of that and definitely hit the $200,000 mark.” n Janet Colwell is a Brooklyn, N.Y.-based freelance writer specializing in healthcare. With more than 20 years experience as a journalist, she writes frequently about clinical and practice management issues for several national health industry publications. She can be reached at editor@physicianspractice.com.

Making the Grade as a Medical Home How Direct Primary-Care Differs from Concierge Medicine Direct primary care (DPC) and concierge medicine both fall under the general category of membership medicine, where patients pay monthly or annual fees directly to the practice in exchange for enhanced access to providers and/or coverage of primary-care services. However, the models have distinct philosophies and clienteles, according to the Direct Primary Care Journal, a trade publication that covers the DPC industry. In general, DPC practices offer lower monthly rates and appeal to lower-income patients compared with concierge practices. According to the Journal, 82 percent of DPC practices charge less than $99 per month for unlimited access to some or all primary-care services. Concierge practices may work with government or private insurers whereas DPC practices cut out insurance completely, saving on overhead

expenses associated with billing and claims processing. However, DPC patients are encouraged to have separate high-deductible insurance plans to cover catastrophic events. The DPC model is newer than concierge, but makes up a growing segment of the retainer medicine market, which is about 80 percent concierge practices and 20 percent DPC practices, according to the Journal. Currently, there are only an estimated 600 DPC physicians nationally, but the segment is growing at a rate of 5 percent to 10 percent annually. And there is evidence that DPC is a viable business model, according to the Journal’s 2015 Annual Report and Market Trends Analysis. The report notes that 90 percent of physician polling data indicates that DPC practices are doing better financially than one year ago, whereas only 10 percent are doing worse.

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If you're considering concierge medicine, do you become a DIY-er or do you look to experts? By Wayne Lipton

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Physicians Practice

any doctors and physician practices are exploring concierge medicine as a way of securing a new revenue source to make up for declining reimbursements and increasing overhead. But how does a practice get started? There are two options. The first choice is to align with a concierge company that brings experience to the table in exchange for a fee. The second choice is a do-it-yourself (DIY) approach, where you won’t have to pay out fees. Or will you? To develop your own concierge program, you’ll have to: 1. Assess the opportunity.

The first step is to analyze the demographics of your patient base and determine their loyalty to your practice. This is necessary to develop proper program development and an implementation strategy. Do you know about data analysis? Has the lower-cost consultant you are considering developed and conducted patient surveys with response rates that provide real meaning? 2. Develop the program.

Developing pricing is new territory for many physicians, who largely deal with fixed reimbursements from insurance companies. But pricing is critical to economic and professional success — it can maximize member retention and new member acquisition. Also, there are legal issues you need to be familiar with. What can you really charge for, in a hybrid program? In a full-model program? Regulatory and marketing landmines can be avoided with experience. You may wish to consult with an attorney, but remember — concierge care is a niche market and even most attorneys have little or no experience. Physicians Practice

3. Market the program.

Physicians are experts in marketing good health. Yet, still, national studies show that only 50 percent of patients comply with their physician’s medical advice. Do you think you will have time to also market a concierge program? Maybe your staff can; but no matter how wonderful your office staff is, surveys tell us that generally, patients prefer to hear from their physicians. (On average, less than half of staff members receive excellent ratings by patients.) Perhaps you should hire an outside sales person to assist? Be prepared to train them.

Good concierge companies are paid on performance and know how to implement and market a concierge program that brings value to patients.

As you can see, developing a DIY concierge program is a lot like DIY household repairs — you may be very handy with a saw and measuring tape, but when it comes time for plumbing and electrical work — you need to ask yourself if you aren’t better off with a professional. By the time you pay an inexperienced consultant, lawyer, and sales help, you may have paid out more than you would have with a concierge care company, and you likely will have missed important opportunities. Good concierge companies are paid on performance and know how to implement and market a concierge program that brings value to patients. They know how to navigate regulatory and insurance issues before they become a problem for your practice. Over the past 14 years, there have been many physicians who have asked me to help them relaunch their existing DIY hybridor full-concierge practices because the programs did not meet their expectations or solve their problems. Sometimes we can help, but in many cases there is no way to go back and start again. There are some very successful concierge practices that have used the DIY approach. However, in general what we have seen is that only top physicians, who also understand marketing and who have time and a willingness to do a lot of work themselves, should consider it. n

4. Create value.

People pay for value. Remember that as important as it is to market your program initially, it’s also important to keep patients in the program year after year. Patients will remain with a program if there is value. Do you really know what your patients value? Hint: it’s not more testing or referrals. And most physicians believe that they already deliver value. How will you get patients to buy what you already think you give them?

Wayne Lipton

With the increased buzz around the direct primary-care model, hereâ&#x20AC;&#x2122;s what you need to know about the private healthcare transition. By James J. Eischen, Jr. and Michael Campbell

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Physicians Practice

irect Primary Care (DPC) triggers enthusiasm among healthcare service providers, primary-care physicians, and employers looking for better managed primary care. Basically, DPC typically involves patients paying a monthly fee to primary-care physician practices for basic primary care plus expanded physician/patient time and connection. Patients more easily visit their primary-care physician, and can often e-mail or call the practice 24/7. Health payers are actively evaluating DPC-style patient engagement, as they shift reimbursement from “fee-forservice” and toward outcomebased compensation. For a U.S. primary care practice to generate adequate plan revenue, they must visit face-to-face with too many patients each day. There is far too little time for each visit, and the practice has too large of a patient panel for the physician to develop strong patient recognition and interaction. Primarycare reimbursement has dropped as practice expenses have increased for many years. This is discouraging primarycare physicians financially, and in how they really want to practice medicine: They are “people” who want to connect and know the patients well enough to make solid front-line medical decisions. And for patients, plan-reimbursed primary care often means inconvenient office visits with long waits scheduled weeks in advance that are brief and trigger copays or deductibles. Patients tend to avoid the long waits and inconveniences, and the copays or deductibles, by avoiding the physician as long as possible. That leads to

Physicians Practice

deferring primary-care visits until there is really a problem, and then the opportunity to delay or defer more expensive medical intervention is gone. The financial aspects of plan-reimbursed primary care fail to induce desired behaviors from patients and physicians. Patients are passive investors in “all-in” health payers, expecting robust healthcare intervention when needed. Physicians are paid for quick numerous office visits, but receive no compensation after a very busy day of office visits

ior modification for financial and personal reasons. But this healthcare economic investment upside is opaque, not transparent. Patients lack clear-cut financial value propositions sufficient to promote wellness investment. Plan-dependent primary-care physicians are largely on the outside of the wellness economy. The U.S. system is amazingly effective at high-cost intervention, but invests little in creating wellness incentives to reduce or avoid costly plan interventions. We plainly need to shift reimbursement to trigger desired outcomes, and that means shifting to incentivize desired behaviors from key stakeholders. Payers really are shifting toward “value” and “outcome” reimbursement, but without clarity on: a) how to better compensate primary-care physicians to encourage direct early patient connection; and b) how to create direct patient engagement and investment in wellness. Private direct or DPC medicine tackles both issues. Direct patient subscription investment in primary care compensates physicians for direct patient connection. If a simple all-in monthly fee for care works, why have HMOs not solved the U.S. healthcare problems? While HMO models internally coordinate care for a monthly premium, they lack a tangible engaged direct patient investment in preventative wellness. They lack primary-care physician compensation for direct patient connection. We need both to turn the corner on U.S. healthcare outcomes.

ary m i r p U.S. For a tice to c a r p care uate q e d a e t genera ue, they n e v e r n pla e-tomust visit fac face with too many patients each day.

to further connect with patients. In sum, existing fee-for-service plan reimbursement misaligns financial incentive with desired outcomes, leading to excessive plan costs. ‘VALUE’ OF HEALTHCARE

With high-deductible U.S. health payers requiring more out-ofpocket payments, and with the obvious downside of developing chronic conditions that could have been avoided, the U.S. population should be willing to engage in healthier behav-

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Rather than trying to legislate small-business model outcomes (accountability, incentives, etc.), why not simply allow small businesses to deliver accountable and incentivized solutions? DPC models involve free market direct patient subscription investments paid to physician practices as direct compensation to connect and coordinate care. DPC models enable improved opportunities to engage in badly needed patient behavior modification that cannot be accomplished in annual six minute office visits. DPC physicians like any small business owner are accountable for patient satisfaction, connected to their delivery, and incentivized to deliver improved care. Is that not exactly what the U.S. healthcare reimbursement reforms want? NAVIGATING MEDICARE COMPLIANCE

The powerful simplicity of DPC models face the following legal compliance challenges: • Physician Medicare participation means private fees must be allocated to non-covered services to avoid violating Medicare assignment, and cannot be a private charge to “access” the practice; • Alternatively, DPC physicians electing to formally opt out of Medicare to simplify the subscription offering must comply with opt-out patient agreement requirements; • Private-payer contract compliance can be difficult, leading many DPC models to entirely avoid private plan integration; • State laws may impact whether DPC models can charge a flat monthly fee for unlimited primary-care services (triggering insurance or consumer law issues); • Data privacy regulations triggered by DPC models’ typically more robust electronic communication and education

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amenities require compliance with HIPAA and other similar state and federal laws; and • Affordable Care Act and IRS requirements affect employer funding of DPC models and whether patient contributions can be funded via Health Savings Accounts or Flexible Spending Accounts. Navigating Medicare compliance remains a central consideration. Medicare participatory practices must not establish subscription payments for amenities covered by Medicare. HHS’ Office of the Inspector General (OIG) published the results of three investigations into the overcharging of Medicare patients; each of which are generally helpful guides for DPC compliance. In 2003, a settlement of $53,400 was reached for fees levied by a physician to patients for services covered by Medicare. The same charges were made against a North Carolina physician in 2007, and resulted in a settlement of $106,600. Most recently, in 2013, a medical group in South Carolina agreed to a settlement of $170,260, again for mandating relatively small annual payments from Medicare beneficiaries for “administrative” services that were deemed covered services (constituting an “access” fee). Failure to develop a Medicare compliant model can lead to significant financial and legal ramifications. We want to avoid physicians opting of Medicare to avoid this exposure. Solid compliance work can avoid Medicare compliance exposure without necessitating opting out of Medicare. DPC shows terrific potential to invigorate an otherwise discouraged primary-care physician population to deliver better patientconnected and coordinated care, aligning financial incentives with desired behaviors of patients and

physicians. The U.S. technology economy can generate 1,000 new technology solutions for healthcare that we only read about and never see implemented unless and until both patients and physicians are integrated and incentivized to adopt and use them. When payers embrace and guide DPC implementation, they will promote: a) incentivized primary-care physicians to captain better management of patient populations with value and data tracking elements; and b) reduced plan utilization with improved chronic condition avoidance and management. And that will positively impact the fiscal condition of the U.S., health plans, and all Americans. n James J. Eischen

is a partner with Higgs Fletcher & Mack, LLP and advises in matters connected to reimbursement, contracts, interdisciplinary health professional employment and labor issues, HIPAA compliance, and the fast growing membership-based direct primary care (DPC) service approach targeting employers and individuals. Eischen is a frequent speaker and noted expert for the American Academy of Family Physicians. He can be reached at eischenj@higgslaw.com. Michael J. Campbell is an

associate with Higgs, Fletcher & Mack LLP in the litigation, healthcare, and private medicine practice groups. He is an experienced healthcare litigator who works with Eischen with private direct medicine business planning and compliance. Campbell can be reached at campbellm@higgslaw.com. Physicians Practice

Opening a Direct-Pay Membership Medical Home Alternatives to traditional fee-for-service practice come in all shapes and sizes. Here’s one physician’s unique approach. By Aubrey Westgate

ne common concern among physicians considering concierge medicine is that many patients may not be able to afford it, and therefore, they will need to receive care elsewhere. After all, concierge care, in which patients pay a fee for additional services, such as improved access to physicians and more personalized attention, can come with a hefty price tag. But internal medicine physician

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Michael Freedman may have found a way around that. In July, he began accepting patients at Evolve Medical Clinics in Annapolis, Md., which he describes as a “direct-pay membership medical home.” Just like any other Patient-Centered Medical Home, Freedman and his partners embrace a team approach to patient care. The main difference between his model and the traditional medical home model, however, is that Freedman’s practice does not accept insurance; patients pay his

practice directly for care. They can also opt to pay a monthly membership fee for perks such as virtual patient visits and access to providers via secure e-mail and text messages. Freeman’s intent was to reduce the cost of patient care, improve care quality, and boost customer service. “... I had the vision of what I wanted to do, what I wanted to provide,” said Freedman, who declined participation in a national concierge practice chain due to concerns about the small number of patients who Brought to you by

could afford to join such a practice. “... I started with a goal of, ‘How can I provide really excellent care to a much greater percentage of [patients]?’” Evolve, said Freedman, was the answer. Here’s more on how he opened the clinic, how it works, and how it’s affecting patient care. NEW MODEL, NEW PARTNERSHIPS

Freedman, who previously practiced in a large medical group in Annapolis, says planning for the opening of his new clinic took about one and a half years. Much of that included determining what to charge patients for care, securing financing and legal advice, and planning for the new facility, which features hardwood floors, high ceilings, artwork from local artists, and a coffee, tea, and water bar. The planning process also included recruiting three NPs who would serve as Freedman’s partners and practice co-owners. These NPs, says Freedman, will play a critical role in the practice’s future.”For complicated people, an internist is the right person to go to, but for the vast majority of primary care where you’ve got high blood pressure, high cholesterol, thyroid [problems], diabetes, even COPD, there’s just a lot of stuff where [NPs] do a great job and their clinical ratings are better and their patient satisfaction outcomes are better,” said Freedman. “... The folks I have working with me are extremely active in helping us to build the practice. We have a weekly meeting [and] everything is very transparent as far as all the dollars and cents, and they contribute as far as what decisions are made and what direction we go. I think it’s going to be a big part of our success: Treating nurse practitioners more like doctors have traditionally been treated, with the respect that they are due.”

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DOLLARS AND CENTS

Patients who choose to join the membership side of Freedman’s practice pay a monthly fee of $35 and $25 per visit. They also pay out of pocket for certain procedures, such as a skin biopsy or an EKG. Still, Freedman says, he tries to keep those costs down, typically charging about 80 percent less than the prices for services that are listed in the Healthcare Bluebook.

ule for Evolve members and nonmembers, visit bit.ly/evolve-fees. Though the practice does not accept insurance, it does refer patients to specialists through their insurance when necessary, says Freedman. PROMOTION AND GROWTH

Four months after opening, Freedman’s practice had accumulated about 150 members, and he is predicting large growth in the coming months. “It was definitely a little slow at first; July and August tend to be slow months [in general], but it took a little while to get word out,” said Freedman, acknowledging that his payment model can be difficult to explain to patients. Still Freedman said, “... Everyone who Michael Freedman, MD comes through the door is just blown away. It’s extremely rewarding. Normally people are frustrated with their doctor’s office, people come in here and they’re just thrilled. They’re thrilled with the facilOne of the biggest perks of mem- ity, they’re thrilled with the staff, they’re thrilled with the provider, bership is access to virtual care, and they’re thrilled with their exsays Freedman. Rather than having perience. A lot of people who come to travel to the practice when rouin just for urgent care needs end tine health problems arise, Evolve up signing up as soon as they hear members can access Freedman and about the program.” the NPs online through secure virWhile patients are responding tual visits (for which they pay $25 well to the practice, so are Freedper visit), e-mail, and text messages. man and his partners. “... It’s just “... With a fee-for-service model, like working in heaven, Nirvana,” physicians don’t want to get themsaid Freedman. “We come in to selves tied up answering e-mails, work and there are hardwood texts, etc., all day long because floors, and there’s artwork hangit’s all free care,” said Freedman. ing on the walls. It’s clean, it’s “But with a membership model, pleasant. We’ve got a hand-picked you just price it so that all of that A-list team [of providers] ... Evservice is part of what’s included eryone just loves coming in.” [in the membership].” Evolve also accepts patients on Aubrey Westgate is former senior a non-membership basis, charging editor for Physicians Practice. $105 per visit and slightly higher She can be reached at aubrey. fees for services. To view a fee sched- westgate@ubm.com.

“... I started with a goal of, ‘How can I provide really excellent care to a much greater percentage of [patients]?’”

Physicians Practice

s the Affordable Care Act (ACA) continues to swing into full gear, physicians and patients are looking at alternatives to the traditional model of care. Patients want more attention and time from physicians, yet many physicians are struggling to keep their doors open while maintaining a work-life balance. Private medicine options like direct primary care and concierge may be one solution. In these arrangements, physicians offer services to patients and bill them directly, or they may bill insurers for covered services while collecting a flat fee from patients for improved access. Physicians see fewer patients, but they’re able to spend more time getting to know the unique health needs of those patients. Michael D. Miscoe, founding partner of Miscoe Health Law, LLC, said more physicians are starting to consider these models in light of the ACA. “Physicians are seeing exchange plans with higher deductibles. Patients are being required to pay more out of pocket. Because some outpatient providers would never be able to justify expenses beyond the patient’s deductible, more are moving toward concierge models,” he said. Miscoe frequently assists physicians who want to make the transition from the fee-for-service model to a full-fledged concierge practice. He provides insight into the types of legal questions that concierge physicians must address as they make the move. Consider the following common questions that arise: Are these physicians ever required to bill the insurer? It depends. If the physician is an MD or DO,

he or she has the legal right to opt out of Medicare completely, in which case he or she can simply bill Medicare patients directly even when services are covered. No provider is required to bill non-covered services to Medicare. All provider types have the ability to choose not to participate with a commercial Physicians Practice

Alternate payment models like direct pay or concierge have some legalities that differ from traditional fee-for-service. Here are five considerations. By Lisa A. Eramo

insurance plan. Even when providers do participate, most contracts allow them to bill the patient directly for non-covered services. Miscoe says many physicians are moving toward non-covered models of care to avoid the post-payment risk associated with billing of covered services. “Docs are saying it’s not worth it. When you go through an audit, you go through what’s now a three-year appeal process,” he said, adding that he’s currently waiting for a decision on an Administrative Law Judge hearing that took place nine months ago. For physicians and other providers who can’t opt out (e.g., nurse practitioners, podiatrists, chiropractors, therapists, physical therapists, and others) or those who haven’t opted out, there is a legal obligation to bill for covered services, said Miscoe. This is where it gets complicated. An evaluation and management (E/M) service, for example, is covered under Medicare. However, if the E/M service isn’t medically necessary then it’s not a covered service. Consider Brought to you by

a physician who performs an E/M service for the purpose of preparing a patient for a cosmetic Botox injection. This is not a covered E/M service, thus the provider has no obligation to bill the service to Medicare with an appropriate Advanced Beneficiary Notice (ABN) and can bill the patient directly, explained Miscoe. Other examples of non-covered services include weekly maintenance care for physical therapy or chiropractic services, certain routine foot care, certain ongoing wellness and prevention services, and a whole slew of others. “The best way to avoid billing Medicare is to not provide a covered service,” said Miscoe. “If you go through all of the publications and LCDs, you can come up with a million ways as to why a service isn’t covered.” Chiropractors run into non-covered services all the time, he said. For example, manipulation is covered if considered and documented to be restorative care, but maintenance manipulation is not. “Additionally, chiropractors can treat patients with a wide variety of techniques that don’t constitute manipulation, depending on how it’s defined in a particular state,” he added. Medicare auditors often impose strict conformance with their interpretation of documentation content guidance as a proxy for determining whether services are necessary, said Miscoe. He recalls one instance in which a provider documented a mechanism of trauma, as instructed in the guidance. However, the auditor denied the care because the trauma was due to an everyday activity. “This is the kind of ridiculous audit results commonly seen that trigger an expensive and time-consuming appeal process. 100 percent error rates are not unusual for that reason,” he says. Miscoe continued by stating that where providers apply

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these same post-payment audit standards, it is easy for them to conclude that care isn’t covered. Must these physicians provide ABNs? There’s no requirement

to provide an ABN for noncovered services, said Miscoe, except for cases in which the basis for non-coverage is due to a lack of medical necessity. He advised providers to ask patients to sign a document stating that they understand that the services are non-covered and that they will not be billed to Medicare. When non-coverage is based on medical necessity, an ABN is technically required. Should these physicians assign CPT and ICD codes if they don’t bill insurers? Miscoe advised against

the assignment of these codes. “Using these codes suggests that you’re doing a particular service, and in some cases, it can imply that the service was necessary,” he said, adding that he has seen cases in which use of a particular code to record the encounter was scrutinized for its accuracy during a licensure board investigation, even though the code was not billed to any third party. Instead, he suggested that cash-only practices develop internal codes for tracking.

from that standard, the more you can justify why your service would be considered non-covered by Medicare or a commercial carrier.” Must these physicians abide by HIPAA? Those who transition to

a care model that doesn’t require submission of claims to Medicare and other carriers may not be subject to the privacy and security provisions of HIPAA, to the extent that they don’t meet the definition of a covered entity under the law. Essentially, they don’t engage in electronic transactions (e.g. electronic claims, benefit verifications, or receive electronic remittance advice), explained Miscoe. However, these physicians must continue to abide by state laws and common law restrictions pertaining to privacy and confidentiality.

If a physician isn’t billing insurers, must he or she continue to maintain detailed documentation?

For more information on legal issues with concierge medicine, review “Concierge Medicine: Legal Issues, Ethical Dilemmas, and Policy Challenges,” originally published in the Journal of Health & Life Sciences Law. The AMA also provides guidelines regarding retainer practices. Any physicians interested in the concierge model should definitely consult with a healthcare attorney familiar with these issues throughout the transition process to ensure that all legal obligations are met. n

The only requirement for these physicians is to adhere to rules set forth by their licensure boards, said Miscoe. However, these rules are often vague and very loose. Miscoe said all providers should maintain detailed documentation regardless of whether it’s required by an insurer or other entity. “I worry about malpractice liability more than compliance with licensure board standards,” he said. “You need to be able to justify what you’re doing any way so if there’s an adverse effect, you have something to rely on. But you don’t need to adhere to a strict LCD documentation content standard. In fact, the more you deviate

Lisa A. Eramo is a freelance writer/editor specializing in health information management, medical coding, and healthcare regulatory topics. She began her healthcare career as a referral specialist for a well-known cancer center. Lisa went on to work for several years at a healthcare publishing company. She regularly contributes to healthcare publications, websites, and blogs, including the AHIMA Journal and AHIMA Advantage. Her focus areas are medical coding, and ICD-10 in particular, clinical documentation improvement, and healthcare quality/efficiency. Physicians Practice

software

tools

concierge practices

n e e d

In concierge medicine, technology plays an important role. Find out which four technology solutions you need to be successful. By Charles “Drew” Settles

ost people agree that the current U.S. healthcare system could be improved. Costs are ballooning, regulatory pressure is increasing, and reimbursements from payers seem to be shrinking. Primarycare physicians may have it the worst. Lower reimbursements are forcing many primary-care practices to focus on quantity of care over quality of care. It’s little surprise that primary-care physicians are experimenting with a payment model that allows them to provide a higher

Physicians Practice

quality of care to a fewer number patients: concierge medicine. Concierge medicine is akin to membership in a private club. For a monthly or annual fee, supplemented by small copays, concierge doctors provide unlimited care to their patients. Most (but not all) concierge doctors accept no forms of insurance, instead relying on subscription fees to provide a steady source of income. As a result, most concierge doctors aren’t concerned about Medicare/Medicaid reimbursement reductions, meaningful use incentives, or other health IT-related government mandates. They also don’t

have to worry about medical billing problems like ‘upcoding’ or ‘revenue leakage.’ Because of this, it’s sometimes thought that concierge doctors have little need for health IT— but this couldn’t be further from the truth. The vast majority of concierge physicians appear to be health IT evangelists. This is because using health IT systems — such as patient portals, EHRs, or practice management software — allows them to extend their abilities and capture additional revenue. Furthermore, as concierge medicine evolves and more groups emerge, being able to exchange patient information between different Brought to you by

providers’ systems will be key, just as it is with conventional medical payment models. With that being said, here are four software tools for concierge practices: EHR+PM

Concierge primary-care physicians require many of the same systems as conventional providers. A well-designed EHR platform

request prescription refills online. Patient portals can also reduce unnecessary visits. Secure patientprovider messaging allows new parents or heavy users of medical care to seek an electronic consultation without taking up space on the appointment schedule. For providers who rely on engaged, satisfied patients who are paying out of pocket, a patient portal can play an important role in reten-

Telemedicine

One of the fastest growing health IT segments is telemedicine. Savvy concierge doctors can use telemedicine apps as both a marketing tool and as a potential additional revenue stream. Patients like telemedicine apps because they provide immediate, low-cost access to medical advice. Physicians like telemedicine apps because they

For providers who rely on engaged, satisfied patients who are paying out of pocket, a patient portal can play an important role in retention. One study showed that 73 percent of patients are more loyal to provider who offers access to medical records through a portal.

and practice management system are essential to any modern medical practice. Concierge physicians still need to take notes, send lab orders, prescribe medication, and schedule appointments. While a medical billing system is still important — some concierge doctors do take insurance, after all — the ability to process payments for self-pay patients is absolutely critical. Patient Portal

Patient portals have value to patients. Younger patients particularly expect to be able to schedule appointments, pay bills, and

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tion. One study showed that 73 percent of patients are more loyal to provider who offers access to medical records through a portal. Marketing & Customer Service Software:

Though many physicians still consider direct marketing to be in poor taste, most concierge doctors realize that it’s a necessity. It’s typically easier to retain a patient than it is to acquire a new one, so customer relationship management software is essential for concierge practices. This is particularly true for those who aren’t affiliated with a group or some other way of getting referrals.

help capture new patients and lost revenue from phone or patient portal-driven consultations. Perhaps even more so than conventional physicians, the right technology is essential for concierge doctors. Building a complementary, well-integrated software ecosystem can help recruit and retain patients so the practice can maintain the patient base needed to sustain this model. n Charles “Drew” Settles is a prod-

uct analyst at TechnologyAdvice. He covers topics related to healthcare IT, business intelligence, and other emerging technology. Connect with him on LinkedIn. Physicians Practice

Connected patients

come back

Kareo’s DoctorBase solution uses communication tools like recare reminders, automated scheduling and secure messaging to help you consistently communicate with your patients. Beneﬁts to your practice? Fewer no-shows, increased patient visits and patients who feel reassured and connected.

Visit Kareo.com to learn more! Physicians Practice

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Occasionally, we meet physicians who are intrigued by the concept of concierge care, but they are fearful about taking that first step. Their fears typically boil down to the same concerns.

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Physicians Practice

Does my practice have enough people who would pay for this? Rarely can physicians analyze and make predictions regarding their own practice. They may see patients who have problems paying their copays and assume a membership program would be impossible. That is not always the case. In full models of concierge care, the number of people who join is critical. If you do not get enough, then there is a real risk of an economic disaster. However, in hybrid models, the question is, how many patients will join? And how much to charge? There is no risk of disaster when properly constructed. If a physician works with experienced people who can properly analyze and accurately predict membership, this concern is easily addressed.

2. What will I have to do for patients who join? Will I become a babysitter? Physicians worry that they will have to offer special services for member patients, services that they really don’t want to provide. While concierge programs are consumer-driven and patients expect to get value from their payment, there are ways to set levels of expectations so that the program supports membership, and balances the professional and personal needs of the physician. Physicians participating in the programs we develop report that because patients know they can reach them when needed, they rarely get afterhours or weekend calls unless it is a true emergency.

3. Will I be on call more often and have to give up my personal life? In traditional practices, being on call is commonly shared with a Physicians Practice

variety of doctors and practices. So, with fewer days on call, the possibility of talking to one of your patients after hours on any given day is small. But when you are scheduled to be on call, it can be overwhelming. Physicians worry that every day will feel like an on-call day. But being on call in a concierge model is different. It’s not about a “ball-and-chain”

6. Do I have to let my advanced practitioner go — a person who makes my life easier? If you develop a concierge program, there may be an even greater need for your advanced practitioner or the provider may no longer be necessary. It really depends on the design of your program. Your program needs

Covering for a small number of patients who respect your time generates very few calls. that you wear all the time. It is about a greater opportunity for member patients to reach you in an emergency. You will have far fewer member patients reaching out to you than your typical oncall period. Covering for a small number of patients who respect your time generates very few calls. You can also share call with other physicians, with proper modifications. And of course, when you are compensated for taking the call, it doesn’t feel so burdensome.

4. Is concierge medicine legal? Our company currently operates in 24 states, so yes, if done properly, it is legal. When done poorly, it can be a problem. Experience helps avoid problems.

5. What will my third-party payers say about this? Concierge programs vary. Third-party payers may have some concerns about programs that are not optional in nature. But optional programs like a hybrid concierge tend to present little problems with third-party payers. Once again, experience helps with managing this issue.

to address your goals, the analytics of your practice, and what is best for your patients. The important thing is to remember is that if you rely on experience, there is no need to be fearful. Be wary of those who claim that they know what they are doing, but have little experience. Check the competition. Examine their level of experience. The last thing you want is to be is the practice that calls in experts to help when it initially does not get the results that it was hoping for. Sometimes it is just too late at that point. Look for a source you trust and with a proven track record of success. n Wayne Lipton

CAPTURING CAPITAL: For Yourself and Your Practice

B R O U G H T T O Y O U B Y:

TIME IS MONEY

Greater efficiency can help physicians boost their bottom line. Here are four ways to manage practice productivity and organize staff. BY PAMELA LEWIS DOLAN

ime is the physician’s most important resource. Although healthcare is moving toward fee-for-outcome-based payment models, most physician income still depends largely on effective time use based on the number and intensity of services provided. Because reimbursements do not seem to be keeping pace with escalating costs, physicians need to focus on efficiency. Harnessing time by creating workflows and processes can boost physician and staff productivity, increase revenue and improve patient care. But physicians face regulatory and administrative 2

| PHYSICIANS PRACTICE

burdens on a daily basis that threaten their ability to use time most effectively. There are strategies doctors can embrace to improve productivity, and reduce these daily hassles. “This is about taking decision-making out of a doctor’s hands, and placing it in the hands of a protocol,” says Frederick Turton, medical director of general internal medicine at Emory University Hospital Midtown in Atlanta. MAPPING WORK FLOW

It’s often hard to identify tasks that could be performed capably by another employee or done in a BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

more efficient manner because activities just become part of the everyday work flow with no real rhyme or reason. This is why a work flow analysis is a crucial step to improving efficiencies and productivity. Performing a workflow analysis can be a lengthy process. It involves looking at every process and mapping out each step and who performs it. Because there are dozens, if not hundreds, of processes to choose from, practices should start with obvious pain points, says Jeff Hummel, medical director for healthcare informatics at Qualis Health, a Seattle-based nonprofit healthcare quality improvement and consulting organization. Physician practices looking to start mapping processes should focus on three key areas that can provide the most benefit, says Frank Cohen, a practice management consultant in Clearwater, Florida. The key areas to map include:

clueless as to how each of the processes work, which steps are involved and the data that surround those steps,” he says. “The process map details each step. It helps to identify steps that are not necessary, that don’t benefit the practice or the patient.” WORKING AT THE TOP OF YOUR LICENSE

Kenneth Hertz, CMPE, principal with the Medical Group Management Association (MGMA) Health Care Consulting Group, once worked with a physician who liked to give patients bro-

Many practices are turning to non-physician providers (NPPs) such as nurse practitioners and physician assistants to help improve practice productivity.

• the patient visit (from check-in to check-out); • the billing cycle (from patient check-out, through the reimbursement process, to payment posting); and • the clinical event. For each workflow mapping project, every employee who touches that process must be identified and involved, says Peggy Evans, consulting director with Qualis Health in Seattle. Employees then meet and, literally, draw a map using a large white board or paper easels that shows each step of a process. Writing out the process in incremental steps is vital, Cohen says. “Most practice managers and administrators are virtually BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

chures and handouts. He had an original copy of each one and every time he wanted to give one to a patient, he left the exam room to make a trip to the copier. It was a nice gesture, recalls Hertz, but there were plenty of people in that practice qualified to make copies besides the highestcredentialed member of the staff. Physicians are often the busiest people in a practice because they feel they can do everything better than anyone else, Turton says. And while that may be true, there’s no reason for physicians

to perform work that can be performed by a lower-salaried worker. Turton says it’s about “allowing the least trained—but still qualified—person do the work.” If physicians focused on the things only they were qualified to do while delegating the remaining tasks to others, they will gain more time in a day. When this concept trickles down to every member of the staff, no employee will be performing work they are overqualified to do and tasks will be assigned appropriately. But delegating must be a standardized process based on protocols, says Turton. The way to do this is to create protocols for various functions, from scheduling patients to conducting wellness exams. For example, Turton says practices should create a prescription refill protocol that allows refill inquiries to be routed to a certified staff member so that most refills can be authorized without the physician. The times when a refill needs to be brought to the physician’s attention should be outlined in the protocol. Many practices are turning to non-physician providers (NPPs) such as nurse practitioners and physician assistants to help improve practice productivity. While they aren’t able to provide all of the same services as a physician, NPPs can perform a large number of services such as routine well visits or diagnosing and treating minor acute problems. According to the MGMA, practices that employ NPPs perform better financially. PATIENT PORTALS

For family physician James Morrow, installing a patient portal presented an opportunity PHYSICIANS PRACTICE |

to improve communication with his patients without the use of other employees’ time. From anywhere, at any time, patients can send a message. Patients can also access their lab results, request prescription refills, or schedule an appointment without the time-draining routine of calling, leaving a message with the front desk staff, waiting for the message to be relayed to the appropriate person, then waiting for that person to respond. Because he is able to message the patient back directly whenever he has a free moment, the patient gets a much quicker and satisfactory response, says Morrow, chief executive officer of Morrow Family Medicine, a primary care practice in Cumming, Georgia. “It just makes everything about the communication better, in my opinion,” he says. Numerous studies have shown the potential for patient portals to lower costs and improve practice productivity. “Everyone is trying to do more with less and trying to save where they can, and [secure messaging] is a tremendous place where you can save. It’s remarkable the monetary savings that can come from that,” says Morrow. While no practice will ever have 100 percent participation in its portal, it’s possible to get close to 90 percent, Morrow says. The best way to do that is to tell patients that this is the way you are doing it now, instead of saying, “Well, if you’d like to, you can get online,” explains Morrow. By explaining the benefits to patients, most will be eager to sign up, even the older patients, he says. MOTIVATING EMPLOYEES

No initiative will be successful without buy-in from employees. Employees must be willing to accept that they might not be as efficient in their jobs as they could 4

| PHYSICIANS PRACTICE

be, and they must be open to change. How to get them in this mindset can sometimes be tricky. Building a motivated team starts with hiring, Hertz says. In the interview process, practice leaders need to share their vision and culture and determine whether that candidate shares the same commitments.

"This is about taking decision-making out of a doctor's hands, and placing it in the hands of a protocol," Frederick Turton, MD

But employees still like to be recognized for a job well done. While financial incentives may seem like the most effective form of motivation, it is possible to motivate employees without the promise of a hefty bonus at the end of the year, something that most physicians cannot afford to offer. The staffing and human resources consulting firm Adecco has a set of recommendations for rewarding and recognizing employees. Among them is to involve employees when developing a recognition program. The reward doesn’t have to cost a lot of money; it can simply be a token of appreciation. When employees help to decide what that token will be, it becomes more meaningful and motivating to them to work harder to obtain the reward.

Adecco also recommends giving a reward to all who meet the set goals instead of holding contests. If the entire staff accomplished the task given to them but only one person receives recognition, there will likely be one person feeling appreciated and a handful of others who feel resentful. Many of Adecco’s recommendations come down to building an appreciative culture inside the practice: saying ‘thank you’ often, nurturing self-esteem and recognizing behaviors, not just outcomes. Little gestures also can go a long way. Hertz says a great example he once saw was a physician who sent a handwritten note to three employees each month, recognizing something special they did. Another possibility is to hold fundraisers for community causes and allow employees to take turns deciding which causes will be supported. Practice leaders who treat employees as respected members of their team instead of subordinates will find a higher level of motivation. Employees must feel respected and valued, says Hertz. “None of that costs any money,” he says. “Give them good direction and good training. Treat them like human beings with respect and let them know how they fit in.” Valuing the opinion of employees can do more than just make them feel good. It can also help empower them to drive positive changes in the practice. They know their jobs better than anyone else, so when the practices is looking for ways to improve efficiencies, those employees will likely have the best ideas. n Pamela Lewis Dolan is a freelance

writer based in Chicago, who has years of experience in healthcare and health IT. She can be contacted at medec@advanstar.com BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

YOU HAVE OPTIONS:

How toGet

theMost Out

of YOUR CAREER You can maximize the benefits of your current position or make the transition into one of many profitable, fulfilling opportunities in healthcare. BY VALERIE CRAMER AND ANNETTE HOGAN OF BANKERS HEALTHCARE GROUP

ithin the dynamic healthcare marketplace today, there are countless opportunities for physicians to find the work they love at the price they want. You can maximize the benefits of your current position or make the transition into one of many profitable, fulfilling opportunities in healthcare. According to Physicians Practice’s 2015 Great American Survey, sponsored by Kareo, physicians are finding career satisfaction and profitability in both private practice as well as in hospitals and other large health systems. Fifty-two percent of employed physicians agreed with the statement “I like being a physician” and on a scale of one to 10 (one being “depressed” and 10 being “extremely happy,”), the average score for this group was 7.4. Among private practice physicians, 55 percent said they enjoyed being a physician with an average happiness score of 7.3. So no matter where you practice medicine, it’s really up to you: What do you want most from your practice of medicine right now? PRACTICE OWNERSHIP

Whether looking to maintain ownership, merge with a larger group, or sell altogether, all private practice owners have the same crucial starting point, knowing the total value of their practice. Most physicians start their calculations by addBROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

ing up the price of property, equipment, and other tangible assets. Then, they evaluate the total balances on accounts receivable. Of course, these items contribute to total value, but if you stop there you may underestimate the practice’s overall worth. The majority of value is derived from intangible assets, such as staff, skills, patient base, reputation, and revenue potential. Being in good standing with a loyal patient base is an invaluable asset and will certainly have an impact on the total value of the practice. Other hidden assets may include internally developed systems and platforms, geographic location, and regional demographics. INCREASE VALUE

Once you understand how much your practice is worth, the next step is to discover areas where you can increase value. Embrace and enhance the advantages of private practice that give it a competitive edge over hospitals and health systems. Creating a personalized care experience for your patients is one of the easiest and most cost-effective ways to add value to your practice. Consider how a phone call, holiday greeting card, or personal reminder could make your patients feel both cared for and appreciated. Patients are consumers and they recognize the market value of quality service. Your small efforts will not go unnoticed, and they will undoubtedly help your practice grow and stand out from the competition. Compared to hospitals, private practices have more control over policies and procedures, as well PHYSICIANS PRACTICE |

as flexibility regarding how to change, develop, and grow over time. Some of the more obvious ways to diversify your portfolio of expertise and services is to hire more staff and invest in new equipment, technology, and software. Depending on your particular specialty, adding ancillary services may be one avenue. Many require an initial financial investment but are a great way to deliver added value for your patients. For example, working with a vendor to offer in-house drug dispensing will give your practice credibility with payers, plus it’s convenient for patients and may improve outcomes. Although the pre-packaged medication means you will not need to hire a pharmacist, you must consider inventory and software costs. Offering recovery physical therapy services, even with the initial expense of renovations, equipment, and staff, can boost revenue with high reimbursements. Integrating lab tests may not be worthwhile if you don’t think the volume at your practice would drive enough revenue to justify the hefty expense. On the other hand, return on investment for X-ray equipment and operating costs can be exceptionally profitable, as long as

| PHYSICIANS PRACTICE

there are sufficient imagery needs. Perhaps the greatest, most obvious advantage that private practices have over hospital systems is cost. Practice owners should constantly be seeking out ways to improve management systems, especially as it relates to managing your revenue cycle. Start by gathering correct patient data and frequently verifying its accuracy. Collect copayments before providing services, making sure that your patients are well aware of this policy. Send patient bills as soon as your office receives reimbursements, closely monitor due dates and use patient visits to address outstanding balances and review their options. To increase productivity, hire an employee (or group of employees) trained in ICD-10 whose sole responsibility is to manage insurance claims. Last but not least, implement a collections strategy. Working with a consultant may help you identify other inefficiencies that are draining your revenue besides collections and reimbursements. Keeping your revenue cycle healthy will not only ensure you’re getting paid for all that you do, but will also allow you to continue offering competitive prices for your services. Some physicians decide to hire an external billing service. Although this is a solution to consid-

er, remember that billing services only make a small percentage on your money, so even though your internal billing team might fight to get their $200, an outside billing service might not think it’s worth their energy when they’re only getting maybe $25 out of it. PARTNER, MERGE, OR SELL

Even with these steps, small practices generally find that it’s difficult getting reimbursements when payers are primarily focused on the big players in healthcare. Another option to increase your negotiating power is to join forces. There are a variety of partnership agreements that allow you to maintain ownership, while also gaining the benefits and strength that comes with greater numbers. These options provide a good balance between single-practice ownership and a merger or acquisition. If a partnership, merger, or acquisition is the direction you’re leaning toward, start by asking: What is the reason for buying-in, merging or selling? Perhaps the incentive is to cover more geographic area, add or diversify skills, or simply to boost income. Next, understand what role your practice will have within the organizational structure, as well as how it is expected to contribute to overall strategic goals. What will

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your new role look like? Will you gain or lose authority, responsibilities or compensation? If your position is changing to an employed physician, you’ll need to take a close look at your employment contract. EMPLOYED PHYSICIANS

If you choose a physician role as an employee, you are in high demand. Your colleagues need your help to take care of a growing population of patients within the private sector, hospitals need your expertise in patient-care teams as specialists and to provide round-the-clock care as hospitalists, and the healthcare sector needs physicians in a myriad of clinical, research, and business environments. Regardless of the work setting you choose, the employment contract is one of the most important elements to consider. Not only is it the basis for your future compensation, it also shapes your work experience by defining the length of employment and rules for addressing any issues that may arise, including termination and liability, as outlined by the American Academy of Family Physicians. You will take on great responsibilities in patient care, which should be adequately compensated and supported in the contract. By paying attention to these details and actively negotiating terms with your future employer, you can shape how this work will affect your life for years to come, including workload, call schedule, time off, salary, and other obligations. CLINICAL SETTINGS

So, how will your work with patients get evaluated for payment? Reimbursement models are changing, influenced by legislation that values population health and aims to reduce overall costs. At the same time, fee-for-service models are still in place. Depending on your level of experience, a guaranteed base salary should be in place for one year to five years. Determine that you are able to enroll in any necessary provider insurance contracts. If portions of your salary will be

dependent on quality standards, patient satisfaction, meaningful use incentives, productivity, or other criteria, these metrics must be clearly described in writing, with measurable benchmarks, as discussed by NEJM Career Center contributors, Thomas Crawford, PhD, MBA, and Bonnie Darves. As regulations and trends continue to change in healthcare, your contract should include flexibility that allows you and your employer to adapt to new payment models, without adversely affecting your total compensation. Moreover, per AMA guidelines for employed physicians, you should be included in negotiations with payers and informed of professional fee amounts paid. If your role as an employed physician includes additional hours spent on administrative duties, such as managing staff or organizing continuing education, your contract should specify how you will be paid for the time and added responsibilities. Because of the high demand for physician employees, signing bonuses have become almost standard and can be a powerful incentive to take the job. Forgiveness of student loans can also be an attractive bonus included in your contract. Your new employer should also pay for your malpractice insurance and may even offer payment for moving expenses. However, be certain that you understand any requirements you may have to repay these upfront monies, in case you or your employer, decide to terminate the agreement ahead of schedule. NON-CLINICAL SETTINGS

Today’s healthcare marketplace also offers a number of exciting opportunities for physicians to increase compensation with employment outside of traditional patient care. These include positions in hospital administration and managed-care organizations, and as consultants, board members, researchers, or entrepreneurs in medical device companies, pharmaceutical companies, biotech startups and digital health, as featured by Christina

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Farr at KQED. Other options include medical journalism, roles in continuing medical education, and government. LEADERSHIP

As a practicing physician, you are one of the most valuable and accomplished members of modern society. Your leadership is needed now more than ever. Physician burnout is a growing and serious problem, but as discussed in MedPage Today, research by the Mayo Clinic shows that effective leadership within healthcare work environments alleviates this burnout. Physicians are in a unique position to step into these important leadership roles and to influence positive changes throughout the healthcare industry. Through autonomy in medical decision making and active participation in solving the problems facing practice groups, hospital boards, and managed-care organizations, physician leaders can create a future in medicine and healthcare that addresses the concerns of industry stakeholders, patients and practitioners, as well as their professional and financial goals. n

bhg-inc.com

Valerie Cramer serves

as Public Relations Manager for Bankers Healthcare Group. In that role, she connects BHG to its audience of healthcare professionals through a variety of public relations initiatives in addition to writing for the company’s blog, BHG360°. She can be contacted at vcramer@bhg-inc.com. Annette Hogan is

content specialist and copywriter for BHG, bringing a keen interest in healthcare and medical research to her role at the company. She can be contacted at ahogan@bhg-inc.com. PHYSICIANS PRACTICE |

Business Insurance

Coverage

LIABILITY CAN ALSO ARISE FROM THE BUSINESS SIDE OF MEDICAL PRACTICE. HERE’S HOW TO PROTECT YOURSELF.

BY NICK BOGAN AND ROBERT C. SCROGGINS

n consultation with a reputable and knowledgeable general insurance agent, we encourage our clients to consider the following types of coverage:

| PHYSICIANS PRACTICE

EVERY PHYSICIAN SHOULD HAVE

NON-OWNER (HIRED) AUTO

Your practice may own automobiles used by the doctors, in which case it is natural to have a policy covering those vehicles. However, coverage for employees sometimes is overlooked when they are using their personal automobiles to conduct business for the practice. Staff members handling bank deposits, errands, and other activities away from your practice can give rise to liability in the event of an accident. Non-owner auto coverage protects you when your employee or a third party is injured while carrying out business duties for your practice. Standard coverage is typically $1 million and is coordinated with an umbrella policy. It is typical to identify specifically and limit the

staff members who are permitted to run errands for the practice. ERISA/FIDELITY BOND

This is coverage specific to your practice’s retirement plan. The Employee Retirement Income Security Act (ERISA) requires a plan sponsor to carry coverage for employee dishonesty with respect to the retirement plan’s assets. The amount of required coverage is the lesser of $500,000 or 10 percent of plan assets. The policy covers those responsible for managing the plan in a fiduciary capacity as well as those who handle investment assets in the plan. EMPLOYEE DISHONESTY

This is another type of fidelity bond coverage. BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

This coverage is analogous to human resource-related issues.) to continue paying overhead an ERISA bond, in that it provides expenses such as payroll, rent, and Basic coverage is for damages, protection in the event that a staff utilities. The elimination period but separate coverage can also member steals or embezzles money typically is fairly short, perhaps be secured for legal expenses or property from your practice. even 30 days, and the coverage involved with defending a claim. Often this coverage can be dedoes not usually go beyond a UMBRELLA signed to satisfy the ERISA bond couple of years. The policy pays This policy ties into the other types requirement via an endorsement. overhead expenses needed to keep of coverage to protect against In most medical practice setthe business running. claims that exceed the limits of the tings, the potential for theft is LIFE AND DISABILITY other individual policies. present with respect to both ac(“KEY MAN”) counts receivable and accounts These are policies covering payable. In general it is recomthe life and ability to work mended to have base coverage for those in key positions. of at least $100,000. If a physician is For a medical practice, In addition to insurance, it unable to work due to this would include the is very important to estabphysician(s) and any a disability or other issue, lish good internal cash other significant incontrols to reduce the [business overhead expense] come-producing possibility of an emproviders imporinsurance provides cash flow to ployee misappropritant to practice continue paying overhead expenses ating practice assets. revenue. such as payroll, rent, and utilities. Life and disEMPLOYEE THEFT OF SENSITIVE ability insurCUSTOMER DATA ance for those This coverage, in the in key positions case of a medical pracare secured for the tice, is typically and primarily purpose of providing cash flow designed to protect against the while the practice replaces the misappropriation of sensitive lost production. For practices patient information. with significant value, key man In most cases It would also life and disability coverage is cover the situation of a nonalso important to provide cash to employee hacker (sometimes repay the estate of the deceased or ferred to as a “cyber breach”) as acquire the ownership interest of An umbrella can extend coverwell as the accidental intercepa disabled physician. age to gaps under other polition of sensitive information, for If the practice must support cies, such as covering the cost of example, in the case of a failed a buyout payment without the network firewall. legal expenses to defend a claim. help of insurance coverage, it can Coverage, particularly in the Because this type of policy supplewind up in a position of double case of a cyber breach, typically ments other coverage, you will trouble since the lost production extends to the injured party to want enough to protect practice capacity hurts top-line revenue provide assistance to recover earnings, assets, and outstandand the required buyout obligafrom the incident such as restoring liabilities — enough, in other tion is above and beyond normal ing credit and other related words, to recover from an event identity theft repairs. overhead expense. n that might otherwise drain the assets of the practice. EMPLOYMENT PRACTICES Nick Bogan is vice president of This type of coverage addresses Senour-Flaherty Insurance in BUSINESS OVERHEAD EXPENSE human resource- related allegaCincinnati, Ohio. This type of disability insurance tions such as wrongful terminais particularly helpful in a smaller Robert C. Scroggins, JD, CPA, tion and employee misconduct practice setting and very important CHBC is a management consultant such as sexual harassment. in the case of a solo practice. and principal with ScrogginsGrear, Coverage protects the physiIf a physician is unable to work Inc., in Cincinnati, Ohio. Send cian owners as well as claims due to a disability or other issue, your practice management quesagainst staff (essentially covering those responsible for handling the insurance provides cash flow tions to medec@advanstar.com. BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

PHYSICIANS PRACTICE |

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BY HANNY FREIWAT

ne of the biggest changes in the healthcare system recently has been the growth of consumerdirected health plans (CDHP), a trend which has led to greater patient responsibility for the cost of their care. According to a June 2014 survey from the National Business Group on Health, a nonprofit association of large U.S. employers, 57 percent of employers are implementing or expanding CDHPs. The percentage of employers offering only CDHPs continues to grow as well. In 2015, 32 percent of employers surveyed plan to have CDHPs as their only offering, up from 22 percent in 2014. With this shift, practices have to anticipate that a substantial portion of their income is no longer coming from an insurer. Without processes in place to collect payment for services during a patient’s visit, some physician practices may find themselves struggling to collect from patients in full, or even at all. Cash flow can be especially low in the first and second quarters of the year, as patients have not yet met their deductible and many patients have 100 percent responsibility for their healthcare costs until they do. According to a September 2014 report from the Kaiser Family Foundation, the average general annual deductible for a single person enrolled in a high-deductible plan is more than $2,200 and $4,000 or more for families. No physician or practice manager is alone in this struggle. According to a healthcare patient payment trend report from JP Morgan, practice managers have been focused on clinical applications such as electronic health records and scheduling rather than revenue cycle management and payment processing solutions. While their attention has been diverted, their bad debt has skyrocketed.

Leveraging Your Practice’s

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FRONT OFFICE

Here are three simple strategies to increase your cash flow.

If you’re one of the independent practices — especially those with fewer than 10 staff members — dealing with this issue, here are three simple tips to implement in your practice today. DETAILED ELIGIBILITY VERIFICATION IS A MUST

While for some it is standard practice to verify a patient’s insurance status either at or prior to an appointment, due to increased workloads and complications with obtaining benefit information, some practices are skipping this important step. Not knowing if a patient is covered can be costly. And don’t stop at just confirming if the patient has coverage. Find out if the patient has a deductible and if it has been met. If you are able to ascertain the deductible balance, even better, because depending on your services, a patient may hit his or her deductible mid-visit. PHYSICIANS PRACTICE |

Your staff should also gather information on benefit details tied to the services you offer and confirm if you are in-network for the patient. The more information you have, the more you can prepare your patients for what their responsibility likely will be. COLLECT AT TIME OF SERVICE

Your front-desk staff is your most important resource for collecting payments up front for new patients and on any out-

paying drops considerably. According to a 2010 McKinsey report on healthcare payments, provider collection rates are 50 percent to 70 percent for smalldollar payments from insured patients. For self-pay patients, the rate is only 10 percent. Establish a process and expectation for your staff to provide estimates to patients and collect at check-in for previous bills and at check-out for that day’s

NOT KNOWING IF A PATIENT IS COVERED CAN BE COSTLY. AND DON’T STOP AT JUST CONFIRMING IF THE PATIENT HAS COVERAGE. standing bills for returning patients. Are your front desk staff members equipped to have these conversations with patients? If benefits and deductible information is understood before a patient walks in the door, your staff is already in a better position for the conversation. The goal is not to turn your staff into collection agents, but it’s also important to try and collect whatever the patient owes before he or she leaves. A 2009 McKinsey Quarterly consumer survey found that 52 percent of patients are willing to pay from $200 to $500 or more by credit or debit card at the time of a doctor visit, if they received an estimate at the point of care. The same study also found that 74 percent of insured consumers would be willing to pay out-of-pocket medical expenses of up to $1,000 per year. Without proper systems in place to help manage patients and collect this money, independent physicians will struggle with cash flow. That’s because after a patient walks out the door, the chances of that patient 12

| PHYSICIANS PRACTICE

visit. From there it is all about scripting and training to help staff members know what to say, how to ask for payment and how to answer questions. Doing this for every patient can help increase your chances of getting paid. Make it part of your practice’s routine and you will change your business. MAKE IT EASY FOR PATIENTS TO PAY

When McKinsey surveyed consumers to ask why they would not to pay a medical bill, respondents cited a lack of options for payment plans, poor timing of bills and difficulties coping with confusing statements or policies. Electronic statements, online bill pay and simplification are commonplace nowadays. Healthcare practices need to embrace these methods as well. The shift to a retail-centric approach in healthcare is well under way. Smartphones have one-touch payment capabilities and major retail chains are including healthcare among their services. Patients want both to know what they owe up front

and to have multiple options for paying, especially when their financial responsibility is growing. Make it easy for your patients to understand what they owe and pay it in whatever valid form they want to give you. Accept credit or debit cards, payments over the phone, online through a portal, via a monthly billing plan or by check. Think of your front desk as a-point-of-sale terminal and help your staff members shift their mindset to work with patients to collect those funds any way a patient will pay. Help your front-desk staff stay informed so they become a trusted resource for your patients. To encourage patients to pay on the spot, offer an incentive such as a prompt-pay discount. For larger bills, offer payment plans that include a down payment before the patient leaves. The few dollars a patient saves can create motivation and save your staff time, money, paperwork, and headaches chasing down the same payment months later. If your staff is trained to collect the necessary information immediately and to remind patients of their responsibility, you’re more than halfway there. Making it part of your practice’s expected process eliminates the wiggle room or the excuses your patients might offer. CONCLUSION

All of these ideas can be implemented without investing in much more than staff time. Your cash flow should increase and your bad debt decrease, which can help shorten your revenue cycle. Enrollment in CDHPs is only going to grow. Practices that put simple systems into place today will benefit now and long into the future. n Hanny Freiwat is the co-founder

and president of Wellero, developer of a mobile healthcare payment app based in Portland, Ore. BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

Is Physician Moonlighting RIGHT FOR YOU?

PHYSICIANS CAN EXPAND INCOME, EXPERIENCE BY TAKING ON SECONDARY EMPLOYMENT. BY BETH THOMAS HERTZ

amily physician Kristen Dillon, MD, spends about 75 percent of her time seeing patients at Columbia Gorge Family Medicine in Hood River, Oregon. However, she also has lots of other things on her plate — she is the medical director for a nearby nursing home, serves on an Independent Practice Association (IPA) board and is an investigator for a research project. Dillon says the variety suits her well. She enjoys taking on different tasks and mixing up her work. “A day in the clinic has its own pace and demands. Doing other things is a nice change from back-toback patient encounters and gives me flexibility,” she says. “It’s a good match for me. The income, of course, doesn’t hurt either.” She has had a varied professional life ever since she had kids 15 years ago, typically working at the practice about three-quarters of the time. She has BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

been the nursing home medical director for about two years. In addition to caring for patients at the facility, she works with the staff and management on systems and quality improvement initiatives. She estimates she spends about one half-day per week with the nursing home and about 20 hours per month on the IPA and research project together. Dillon is not alone among physicians in earning from a secondary income today. In Medical Economics’ 2013 annual survey, 36 percent of family medicine/general practitioners and 35 percent of internists reported earning income from sources other than their primary practice/employer in 2012. That number was about the same for cardiologists (38 percent), but was higher for hospitalists (40 percent). Pediatricians and gastroenterologists were lower, at 25 percent and 27 percent, respectively. Defying the notion that it is mostly young, debtridden residents who moonlight for extra income, PHYSICIANS PRACTICE |

the age group most likely to have a secondary income are 50 to 54, followed closely by 45 to 49, 55 to 59, and 60 to 64. Physicians take on additional roles for many reasons. Younger and mid-career physicians are often looking for ways to pay off medical school debt or increase their income without taking on more work at the practice. Some physicians are looking for variety in their career and new challenges. Others are looking for ways to give back to the profession by mentoring, teaching, or volunteering. In general, men were more likely than women to earn money outside their primary jobs, and physicians in rural areas did it more frequently than those in inner city, suburban, or urban locations. Physicians who owned their practice were slightly more likely to do so. Higher patient volumes were also reported for those physicians with secondary incomes. The highest positive responses were from doctors who see 150 to 174 patients a week and those who see 200 or more. The sources of these secondary incomes were primarily medical. About 43 percent of respondents said they earn extra pay through “other medical work,” while 24 percent said hospital work, 22 percent said consulting, 7 percent said clinical trials, 7 percent said locum tenens assignments, 4 percent said medical director, 3 percent said emergency department/urgent care, 3 percent said clinic work, and 1 to 2 percent each said hospice medical director, nursing home medical director, teaching, legal/medico-

legal-related, speaking, expert witness, or military. About half the physicians surveyed said the extra income was under $30,000. About a quarter said it was $30,000 to $70,000. Only about 5 percent said it was over $150,000.

companies for speaking or conducting clinical trials, but there is not as much anymore,” Bee says. She also was not surprised that physicians in rural areas are slightly more likely to earn secondary incomes. Some sparselypopulated areas do not have enough patients to fill a schedule or enough medical professionals to cover all the jobs that need to be done. For example, some might serve as a coroner or a prison medical director. Bee surmises that a physician who reports a secondary income of $150,000 or more may own a medical spa or do laser work such as hair or tattoo removal on the side. If they do this work in a separate location, they would be more likely to view it as secondary income, instead of just part of their main pay. That practice owners are more likely to report secondary incomes is probably due to their greater flexibility in setting their own work hours and not having a contract limiting their work. She reasons that men are more likely than women to have a second income because women are more apt to have heavier responsibilities at home that don’t leave them the time or energy to moonlight. Perry A. Pugno, MD, MPH, vice president for medical education at the American Academy of Family Physicians, says that doing extra work may well be driven by the modern economy, but notes that achieving diversity of professional experience is part of the motivation as well. Pugno has served as an expert witness in child abuse and rape cases. Few people want to do that type of work and since he

About half the physicians surveyed said the extra income was under $30,000. About a quarter said it was $30,000 to $70,000. Only about 5 percent said it was over $150,000.

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ANALYZING THE TRENDS

Judy Bee, a management consultant with Practice Performance Group in La Jolla, California and a Medical Economics editorial consultant, says she is not surprised by these findings. She sees many clients earning secondary income working for IPAs. One of her clients does so much of that type of work that he may sell his practice, she says. She also has a client who reviews disability request records. Bee says some physicians do it for the money, some for the diversity of work experiences, while others view it as future part-time work after retiring from practice. “There used to be a fair amount of money available from drug

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had the qualifications, he saw it at least in part as a public service. He estimates that he earned less than $10,000 a year doing so. RESIDENTS

their duty hours could impact the accreditation of their program. In addition, residents must make sure they have proper licensure to moonlight, because the one they have for their residency may only apply to the training location. They also need

Older physicians may be earning money through secondary incomes, but that doesn’t mean they are the only ones doing it. Residents, many with young children at home, large debt loads, and lower incomes, have always been interested in picking up extra work when possible. Pugno was a residency program director for more than 20 years, working in programs from California to Connecticut in public, private and university-sponsored settings. He has seen Perry A. Pugno, MD, MPH escalating student debt push more residents into picking up secondary positions. “It makes sense for them to seek additional resources to help offset their debt,” he says, noting that an extra $10,000 a year to be sure they have adequate can increase a resident’s annual liability coverage. The residency earnings by 25 percent. program probably provides covSome student loan payments erage for the work done there, are deferred until after residency, but not work done at an outside but not all. Also, residents know facility, he says. it is going to take time for their Some residents moonlight at income to grow after their trainthe same location where they ing is complete, and the initial are doing their residency. It is steps of setting up a practice can easier to track duty hours this be expensive, i.e. moving, getway, Pugno notes. They are on ting licensed, board certification the “honor system” in terms of exam fees, etc. “They may all hit tracking hours if they moonlight at the same time,” Pugno says. at another location. Some residents may take on Some residents try to sneak extra jobs for the opportunity to around prohibitions on moongain clinical experience with a diflighting, driving a substantial ferent patient population, he adds. distance to work elsewhere. Sites Pugno cautions that residents where they might do this include who are moonlighting must get small, remote emergency departpermission from their program directors, because any violation of ments, urgent care centers or

“Do just enough to pay your bills, but don’t neglect your family and friends. The importance of having a personal life cannot be overemphasized.”

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insurance companies that need help processing physical exams. Pugno admits he did this in his residency years. “I was married, I had three children, had some educational debt, and wasn’t getting paid very much,” he says. However, he cautions residents, and any physician considering working extra hours solely for the money not to overdo it. “Do just enough to pay your bills, but don’t neglect your family and friends. The importance of having a personal life cannot be overemphasized,” he says. VOLUNTEERING

Some physicians take on added duties for another reason altogether— public service. “I have the sense that the social consciences of various age groups has escalated,” Pugno says. He sees medical students, and some faculty, doing more volunteer work and helping in free clinics. “They see how many people have no access to healthcare and want to help,” he says. Some are driven by the desire to gain added clinical experience, he adds. Working abroad appeals to some physicians, but he notes that many have to pay their own way, on top of missing time in the office. “But as worldwide communications get better, we are more and more aware of the needs of populations and exactly where they are,” he says. n Beth Thomas Hertz is a freelance

writer based in Copley, Ohio. She has written for various newspapers and magazines, with a specialty in healthcare. She can be contacted at editor@physicianspractice.com. PHYSICIANS PRACTICE |

n a i c i s y Ph t n e m e r i Ret

BAS ICS

Wealth manager Scott Wisniewski offers physicians tips for saving for retirement.

BY MARTIN MERRITT

t’s never too early for physicians to think about retirement planning. To help, I asked wealth manager Scott Wisniewski to offer some tips. Martin Merritt: What types of retire-

ment savings plans are available? Scott Wisniewski: The type of plan

available to a physician will depend on his employment status. For those that are W-2 (taxes withheld by an employer), a 401(k) may be an option for saving for retirement. Physicians that are self-employed and receive 1099 income as an independent contractor have more options for contributing to retirement such as a SEP IRA, solo/individual 401(k), profit sharing plan, and cash balance plans. MM What are the advantages/drawbacks of each, especially concerning the amounts available to contribute each year? 16

| PHYSICIANS PRACTICE

SW Below are the IRS’ annual limits for contribution amounts in 2013 and 2014: W2 EMPL OYEES:

401(k)/403(b): $17,500 (or $23,000 if age 50 or over) 1099/ SEL F- EMPL OYED:

SEP-IRA: Lesser of 1) 25 percent of compensation, or 2) $51,000 (for 2013; $52,000 for 2014) Solo 401(k): Combination of 1) 100 percent of compensation up to $17,500 for 2012 and 2014; or $23,000 if age 50 or over and 2) employer contributions up to 25 percent of compensation as defined by the plan (for self-employed individuals, compensation is defined as net earnings from self-employment after deduction both one-half your self-employment tax, and contributions for yourself). Total contributions, not counting catch-up contributions, cannot exceed $51,000 for 2013 and $52,000 for 2014. BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

CASH BALANCE AGE PENSION PLAN 2013*

DEFINED CONTRIBUTION PENSION PLAN 2013*

TOTAL 2013*

45 $109,000

$51,000

$160,000

55 $179,300

$56,500

$235,800

65 $237,300

$56,500

$293,800

*Different amounts will result for each plan combination, depending on normal retirement age, interest rates and credits, employee group demographics, and benefit levels for non-highly compensated employees.

CA S H B ALANCE PL A N :

The chart on the next page contains illustrative 2013 plan year contribution limits for combination plans under near optimum conditions. A consideration: A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that the limits on elective deferrals are by person, not by plan. As you can see, the plan limits can vary. The advantage of all of the plans is that contributions are made tax-free, therefore the higher the contribution the lower taxable income will be. Also, the account grows taxfree. On the other hand, you can’t access the funds before age 59.5, except for some limited circumstances, without paying a 10 percent penalty (plus the taxes due). Also, depending on which plan you participate in, the calculations can be complex. Consulting with a tax adviser and financial adviser is recommended. The most complex of all is a cash balance plan. The average physician probably won’t benefit from one simply because they don’t make enough. BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

WHAT IS CERTAIN IS PHYSICIANS GET A LATE START TO THE RETIREMENT GAME. BECAUSE THEY TYPICALLY DO NOT START EARNING RELATIVELY HIGHER LEVELS OF INCOME UNTIL THEIR EARLY THIRTIES, THEIR RETIREMENT GOALS CALL FOR A HIGHER CONTRIBUTION RATE. For self-employed individuals establishing a plan, the investments held within the account must be self-selected or consultation with a financial adviser should occur. MM How much should a physician contribute? SW It will vary based on a number of factors such as age, income, debt, risk appetite, current standard of living, etc. What is certain is physicians get a late start to the retirement game. Because they typically

do not start earning relatively higher levels of income until their early thirties, their retirement goals call for a higher contribution rate. It is not rare for a physician to contribute more than 20 percent to 30 percent of her pre-tax income toward retirement. Attempt to build a portfolio that equates to 20 times your annual income pre-retirement. We find many physicians are unaware of the considerations that must be accounted for when making retirement projections. Most individuals aren’t armed with the information as to how much needs to be contributed and what end (portfolio) value specific assumptions will achieve (age, investment returns, volatility, contribution rate, etc.). A competent financial adviseradviser should be able to compute different outcomes that will assign a probability to each scenario. Be aware that the more that is contributed toward tax-deferred retirement accounts the lower taxable income will be. If a physician’s federal and state marginal income tax rate is 40 percent, and his annual income is $250K per year, contributing $50K toward a SEP-IRA could knock $20K off his tax bill. n Martin Merritt, JD, is a Dallas-

based health lawyer with the firm of Friedman & Feiger, and executive director of the Texas Health Lawyers Association. He represents physicians, practices, and others in cases involving Stark Law, state and federal regulations, Medicare fraud and abuse compliance, as well as healthcare litigation and contracts. He can be reached at mmerritt@fflawoffice.com. PHYSICIANS PRACTICE |

Tackling

MED SCHOOL DEBT HERE’S HOW TO FIGURE OUT WHICH PAYBACK PLAN WILL WORK FOR YOU.

BY JANET KIDD STEWART

mergency medicine physician Pierce Hibma’s talent on the basketball court earned him a scholarship for undergraduate school at Creighton University, where he scored more than 300 career points for the Bluejays. He also won several student-athlete awards for his academic success and is now a fourth-year medical student at Creighton. Grateful for the undergraduate scholarship, Hibma nevertheless will leave the university with a substantial med school tab. Counting his wife’s graduate school debt, the couple is faced with nearly $400,000 to repay. “In fleeting moments I’ve re-thought my career decision,” says Hibma, who has been applying for emergency medicine residencies. “It would be nice to just get a job with little or no debt. But I always come back to medicine in the end. I just tell myself it will all work out.” Rebounding from six-figure debt on a relatively modest resident salary is challenging for any young doctor, but new repayment programs are helping new docs repay their loans without starving during the process, experts say.

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REPAYMENT PROGRAMS

Income-based repayment plans aim to keep student loan payments to 15 percent of discretionary income, as defined by the difference between adjusted gross income and the poverty measurement for a similar-size household. Stafford, Plus, and other consolidation loans are eligible to be repaid under an income-based plan. Exceptions include loans already in default or Parent Plus loans. BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

In 2012, the Obama Administration issued an executive order that changed the calculation from 15 percent to 10 percent and cut the payback period from 25 years under income-based repayment to 20 years, after which the remainder is forgiven. Under the 15 percent formula, a family of three earning $100,000 with $200,000 in qualifying debt would have a monthly payment of about $905, according to the U.S. Department of Education, which offers an online calculator. Hibma says he is leaning toward this type of payback plan rather than deferring payments until after residency, known as forbearance. DEFERRING LOANS/ FORBEARANCE

Deferring your school loans entirely through residency is still an option, but the deferrals no longer freeze interest accruals, and that can get costly, notes Mark Kantrowitz, publisher of Finaid.org and author of “Secrets to Winning a Scholarship.” Despite easing of terms on income-based plans, Kantrowitz expects further tightening of aid programs as the government continues to look for ways to reduce the federal deficit. Even so, physician salaries are still expected to stay strong enough to handle large debt loads, says Julie Fresne, director of student financial services for the Association of American Medical Colleges. There are some more creative options, particularly for doctors willing to work in nonprofit facilities and underserved areas, says Fresne. “The National Health Service Corps can be a wonderful way to repay loans,” she says. “These programs are competitive, but can make a huge difference for those going into primary care.” BROUGHT TO YOU BY BANKERS HEALTHCARE GROUP

A doctor with $162,000 in federal loans who chose forbearance during residency and worked under the NHSC program for two years would see total payments drop to $241,000, the AAMC says.

“Evidence shows an overwhelming number of physicians are in fact paying off their debt in a timely manner, but it’s incredibly important to have a strategy.” Julie Fresne, debt management expert

EXAMINING OTHER OPTIONS

Another option is to combine public service with the incomebased repayment plan, Fresne says. Rather than a 20- or 25year repayment period, the time period is 10 years, after which the remainder is forgiven. The NHSC offers programs nationwide, typically with a two-year minimum service commitment. The Indian Health Service provides up to $20,000 a year in loan repayment. “Evidence shows an overwhelming number of physicians are in fact paying off their debt in a timely manner, but it’s incredibly important to have a strategy,” Fresne says.

One way to be sure you’re choosing the right one is to look for (or ask financial aid counselors at your medical school) the downside in any given payment plan, experts say. For example, an income-based plan can be a lifeline to cashstrapped residents, but using one can also mean you’ll pay more in interest over time. So if you have the cash, a traditional payback period with higher monthly payments might make more sense. A public service commitment can save you money in the short run, but if it means you aren’t practicing in the type of environment you desire, the long-term implications can be dire on both your income and your career satisfaction level. But keep in mind that a public service job won’t necessarily mean heading for Alaska or another remote locale. Nonprofit, military, and tribal organizations can all qualify as public service organizations, experts say. Meanwhile, Hibma says he tries not to worry too much about the potential choices and whether his future salary will make it all worthwhile. “At one point I started breaking down the debt by the day,” he says. “Every day I wake up and go to class it costs me about $200, and I’ve never had a job in my life where I made that much.” n Janet Kidd Stewart is a freelance

writer based in Marshfield, Wis. She holds a bachelor’s degree and master’s degree from the Medill School of Journalism at Northwestern University. She can be reached at editor@physicianspractice.com. PHYSICIANS PRACTICE |

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ENSURING MEDICAL BILLING SUCCESS Your guide to collect more of what your practice is owed

B R O U G H T T O Y O U B Y:

CL AI M S TH E IM PR O VE ou may be thinking you’re doing everything possible to submit clean, accurate claims to payers—yet denials persist. And if it seems that every day insurers are sending back different types of denials, you’re probably right. “That’s the way it is,” says Elizabeth Woodcock, MBA, FACMPE, a healthcare consultant and author with Woodcock & Associates. “No matter how hard you try to make everything perfect, denials still happen. But you have to recognize that the insurance companies have an economic incentive to deny claims, so you’re never going to get it down to zero.”

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M AN AG EM EN T

PR OC ES S:

A physician’s roadmap to performance improvement must include best practices to reduce and reverse unpaid claims BY DEBRA BEAULIEU-VOLK

That’s the bad news. The good news, however, is that with a strong parallel strategy of denial prevention and follow-up, you can significantly reduce your denial rate and ensure that almost all denied claims get paid. FOLLOW UP PROMPTLY

To maximize reimbursements, review all denials within 72 hours and act on them within seven days, Woodcock says. Gone are the days billing staff can simply reprint a denied claim and send it back to the payer with a rubber stamp that says “appeal,”

she adds. “Insurance companies would laugh at you.” But by correcting claims, such as by adding requested information, and sending them back to payers quickly, Woodcock says that at least 80% of them eventually will get paid. OPEN YOUR TREASURE CHEST

The key to long-term revenuecycle improvement, however, is learning from and correcting recurrent mistakes. Your most valuable resource in this quest is the denial report, Woodcock says. It can be tempting simply to correct denied claims and send MEDICAL ECONOMICS

them back, but failing to analyze the reasons claims are rejected in the first place only perpetuates the problem. “Denials are your treasure chest for performance improvement,” Woodcock says. “This is your guide to really make a difference.” For example, by reviewing your explanations of benefits you might learn that you’ve been submitting procedure codes that are inconsistent with diagnosis codes, indicating that you need to work on coding. Or you may find a pattern of missing or inaccurate demographic information, indicating possible problems with your front-desk registration procedures. DIVIDE AND CONQUER

But to really put this information to work, you need to organize it. For Brett Waress, MHA, FACMPE, chief operating officer at Tenet Florida Physician Services, the first phase of that process is dividing denials into those the practice understands and those it does not. “There are denials for reasons that are specified by insurance companies that we can understand, such as maybe we didn’t get the middle initial or get the patient registration right. Those are denials we know how to handle,” he says. Denials in this group then go through another (but not the last) round of sorting so they are addressed by the correct department: front office; billing office; or clinical staff, including physicians, notes Waress. “But there’s a whole other category of denials for reasons that we may not understand or appreciate. It may be a denial for bundling of services in a surgical procedure that is payer-specific and not supported by Medicare rules,” he says. “Those types of denials we like to be able to build them back into our contracting efforts, but it’s exceedingly difficult to call those MEDICAL ECONOMICS

out and have them addressed specifically in our contract.” Another complicating factor in this process is lack of consistency in the terminology payers use to describe their reasons for denial. “So getting them translated, cross-referenced, and put into actionable information for those three sections is very difficult and manual,” he says.

“DON’T TRY TO FIX DEMOGRAPHICS, CODING, AND SO FORTH IN A MONTH. FOCUS ON YOUR BIGGEST IMPACT POINT FIRST.” Owen Dahl, MBA, FACHE, consultant

This process is cumbersome for large systems like Tenet and small practices alike, but is too important to overlook, says Woodcock. “Even though it’s frustrating, we’re in a battle, and this battle is fought every single day. If we give up, we’re going to give up money as well.” SET PRIORITIES

Addressing denials is far less daunting, however, if you prioritize well. “Don’t try to fix demographics, coding, and so forth in a month,” says Owen Dahl, MBA, FACHE, principal of Owen Dahl Consulting in The Woodlands, Texas. “Focus on your biggest impact point first.” Once the first item is resolved, move down to the next-biggest problem. “It’s hard to chase more than one rabbit at a time,” agrees Waress. Where to begin, he adds, is a matter of preference. “You either pick the high-dollar, high effort or the low-dollar, low effort.” Either way, he says

prioritization is extremely helpful for a practice of any size. RALLY (DON’T PUNISH) YOUR TEAM

Another common mistake is for a practice manager to attempt to come up with the solutions to identified problems alone, says Dahl. “Talk and brainstorm with your staff and identify what the real source of the problem is,” he says. This approach not only eases the burden on managers, it also enhances buy-in among employees to follow through with the solutions they helped create. Keep in mind, too, that firing an employee who may be responsible for a discovered mistake may not be a productive move. “Eighty-five percent of the time an employee is involved in an error, a system causes the error, not the employee,” Dahl says. And such systems aren’t necessarily IT-related, but may have to do with inadequate training, poor tools, or too many tasks being assigned to employees, which winds up compromising their performance. “Look at this as a teachable or fixable moment,” Dahl says. “Don’t make the mistake of perpetuating the problem by firing one person and hiring a new one.” OPTIMIZE TECHNOLOGY

In addition to leveraging your team’s insights and expertise, take advantage of claims-scrubbing systems that help you catch errors before you submit them. “The clearinghouse world has gotten much better and more sophisticated, so there are tools now available that practices may not be fully aware of or taking advantage of,” Dahl says. Some basic versions of these tools may be bundled into general practice management software that practices already use, he says, adding the caveat that practices might need to spend BROUGHT TO YOU BY

some time to understand the technology and how it works. “People need to look at both what’s in their practice management system package and what’s in their claims management package from the clearinghouse, and then the compatibility of the two,” he says. “Do I fix a claim in the scrubber or the PMS and how do I make sure that data is being recorded properly?” Furthermore, practices should determine whether their PMS allows them to build in their own edits on top of the basic preloaded rules, Woodcock says. “You might say it’s kind of a pain to put in all those edits, all those rules. But remember, if I can prevent five, six, 15, or 25 errors from happening by building the rule each and every time, it’s definitely going to be worth the 30 to 45 minutes I spend researching and inputting that rule.” FIND A SUPPORT SYSTEM

Despite the influx of technology into claims processing in recent years, interpersonal relationships with payers still matter, says Dahl. “Payers are getting more sophisticated and doing more things electronically just like we are, but there’s still no substitute for the fact that I’ve known Mary from insurance company X for all these years and she always tries her best to help me. How you communicate with Mary could change to email, instant messaging, or texting, but I still recommend you contact Mary verbally on occasion just to say ‘hi.’” Woodcock agrees, noting that such relationships may help give your practice a voice at the payer if you find that a claimsscrubbing rule built into the insurer’s system isn’t accurate. “So that relationship may recognize that they’re working for a company just like us, and sometimes humans make mistakes

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in what they input and we need humans to correct them,” she says. Unfortunately, when Waress experienced just such a problem with a payer incorrectly denying claims, he was unable to reach payer employees empowered to resolve the error. “Even if they agree with and are sympathetic to your problem, people can’t always affect systemic changes in insurance algorithms,” he says. As a result his practice ultimately had to undertake a formal dispute process involving the state medical society and department of insurance, which took 18 months to complete. Because the denials were found to violate the group’s contract as well as department of insurance

rules, Waress was successful in obtaining a settlement from the payer that included penalties and interest. “The department of insurance of the state I was in, particularly their health insurance division, was instrumental in helping us get the attention of payers and getting them to change the way they denied or paid claims,” he says. For situations that require less extreme efforts, professional organizations such as the Medical Group Management Association and state medical societies can often help practices get in touch with other offices tackling the same challenges, Waress says. “The important thing to remember is that you’re not alone.” n

COMMON REASONS FOR CLAIM DENIALS Duplicate claims A duplicate claim was submitted when a practice hasn’t received reimbursement. Typos Errors or typos were made while collecting pertinent information from the patient or during the data entry process for a claim. Deductible The service won’t be reimbursed because the patient hasn’t yet met their insurance plan’s deductible. Health plan benefits exceeded The patient has exceeded his or her health plan’s benefit for the provided service. Insufficient information The claim is deficient in certain information. It may be missing a prior authorization or the effective period of time within which the service must be provided for reimbursement to occur. Problem with modifiers The claim form is missing a modifier or modifiers, or the modifier(s) are invalid for the procedure code. Site of service problem An inconsistent site of service is marked on the claim form, such as

an inpatient procedure billed in an outpatient setting. Coding mix up There is a coding or data error with mismatched totals or codes that are mutually exclusive. Outdated codes The claim includes outdated current procedural terminology codes, or it lists deleted or truncated diagnosis codes. Service not covered A particular service isn’t covered under the health plan’s benefits. Lack of medical necessity The health plan could deny a claim if it appears that a service was not medically necessary, or if there is a mismatch between the actual diagnosis and the service performed. Out of network When the physician isn’t an innetwork provider for the patient, the payer may reimburse a lesser amount if the patient has out-ofnetwork benefits. Debra Beaulieu-Volk is a Massa-

chusetts-based freelance healthcare writer. She can be contacted at medec@advanstar.com.

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PAYER NEGOTIATING TIPS FOR SMALL PRACTICES

Negotiating with payers is one of the necessary evils that independent physician practices must endure. Here’s some advice to healthcare providers about negotiation. BY MELISSA LUCARELLI, MD

egotiating with payers is one of the necessary evils that independent physician practices must endure. Despite the useful information these sources offer, many doctors in solo and small practices continue to believe that they have no power when it comes to negotiating, and that they must accept whatever terms the payer offers. I disagree. Regardless of your practice size, you can get a fair—or at least livable—con-

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tract from even the largest payers, as long as you are prepared and go into the negotiation with the right attitude. I know, because I’ve done it. I’ve owned and directed a solo family practice in the rural town of Randolph, Wisconsin since 2001. With the assistance of two other providers—a nurse practitioner and physician assistant—my clinic cares for a panel of about 6,000 patients. Just over half of our patients are covered by commercial insurers, and their reimbursements account for approximately 80% of our net collections. Apart from medical seminars and journal ar-

ticles, I have no formal training in business or contracting. Nevertheless, our practice has managed to stay financially viable. Earlier this year I negotiated a new contract for my practice with one of the five largest national health insurance payers. It was the third time I’d negotiated with that payer, and this was by far the most successful. Our new contract reimburses us about 10% more than our previous one, largely because of a higher Medicare multiplier for preventive health services, which account for the highest volume of services we provide. In addition, this contract MEDICAL ECONOMICS

includes a feature that neither of my previous contracts with this payer had, an “accelerator”—an annual cost-of-living raise. What made this contract negotiation different? Like any other skill, negotiation gets better with practice, and I have learned some valuable lessons over time. Here are the basic strategies I use when approaching a payer negotiation: Do your homework

Before I notified the payer that I wanted to renegotiate, I gathered meaningful data, including how much they were paying us as a percentage of our charges and how that compared to our other commercial payers. Many of you probably have been told by a payer that the reimbursement increase you’ve requested is out of line, that “nobody gets that amount”— whatever it is. I looked at our charges and reimbursements and discovered that this payer was actually our lowest contracted payer, and I calculated by what percentage they were the lowest. Sharing this data with them gave me powerful ammunition, and the confidence to call their bluff. Tell them what makes your practice special

To a giant commercial insurer, your small practice is just one of many they contract with. They are not going to know what makes you special—and why they should pay you more—unless you show them. I told this payer about their sponsored quality initiatives in which we participate. I emphasized the specific recognitions we had received for quality care from their organization and the fact that we are the only family practice in a 15-mile radius that is an in-network provider for their product. MEDICAL ECONOMICS

In addition, I took what may have been perceived as negotiating weaknesses—our size and location—and tried to turn them into advantages. I pointed out that small, rural practices like mine are important to employers outside of major metropolitan

IN MY EXPERIENCE, MOST PHYSICIANS ARE WILLING JUST TO “GO WITH THE FLOW.” THEY WANT THEIR PROFESSIONAL RELATIONSHIPS TO BE SIMPLE AND NON-CONFRONTATIONAL. SO WHEN A PAYER PRESENTS THEM WITH A CONTRACT AND TELLS THEM NOTHING IN IT IS NEGOTIABLE, THEY SIGN. THIS IS A BIG MISTAKE. areas, and these employers often have strong loyalty to their community and local physician practices. Treating my clinic well creates a favorable impression among those employers and increases business for the payer.

I recall a talk from a contract lawyer during the practice management part of my residency. He said there’s no such thing as a non-negotiable contract. You can always do an addendum or rider. It never hurts to ask. The worst they can say is no. Incidentally, the same advice goes for any language that’s vague or that you don’t understand. A negotiating tactic many insurance network representatives use is to try to dazzle you with fancy terminology and legal-sounding language. Usually it’s just a lot of meaningless obfuscation. Ask the person you’re negotiating with to explain it and to give you specific examples of how that clause might be applied. If you are concerned that the language might be interpreted to your detriment or that it doesn’t really apply to you, ask them to take it out. Be open to trade-offs and know when it is good enough

A payer may not be able to negotiate some items due to corporate policy or regulatory restrictions, but they might be able to make a change in another part of the contract that will make up for it. A negotiated agreement is seldom going to end up exactly the way you want it to. The trick is to know when it’s good enough, and how much the time spent in additional negotiation is worth to you. Have a backup plan

Don’t be afraid to ask for what you need, or want

In my experience, most physicians are willing just to “go with the flow.” They want their professional relationships to be simple and non-confrontational. So when a payer presents them with a contract and tells them nothing in it is negotiable, they sign. This is a big mistake.

Negotiating major payer contracts can be very anxietyprovoking. At times, I have felt that if I lost a contract my entire practice could fail. But there is nearly always an alternative, and if you haven’t discovered what it is, then you shouldn’t be negotiating yet. When I bought my practice, a large regional HMO represented BROUGHT TO YOU BY

40% of my business. I quickly realized I had to diversify the practice because if I lost that contract, I wouldn’t have been able to keep the lights on. By contrast, when I renegotiated this year with the commercial payer I knew I could walk away if absolutely necessary. I was bargaining from a stronger position.

NEGOTIATION DOESN’T HAVE TO BE A BATTLE. THE IDEA IS TO FIGURE OUT WHAT YOU REALLY WANT AND HOW YOU CAN DEMONSTRATE THAT IT’S FAIR AND REASONABLE AND DATA-DRIVEN. Approach negotiations as a collaboration

A book I recommend highly is “Getting to Yes: Negotiating Agreement Without Giving In” by Roger Fisher and William Ury. It helped me a great deal with contract negotiations. The authors introduced me to the concept that negotiation doesn’t have to be a battle. The idea is to figure out what you really want and how you can demonstrate that it’s fair and reasonable and data-driven. The book also talks about having a BATNA—a best alternative to a negotiated agreement. Taking the BATNA doesn’t mean you’re cutting and running; it means this particular negotiation isn’t going to be successful. You have to think creatively and ask yourself, “What can I do to get what I need without this particular negotiation?” Sometimes dropping the contract will turn out to be the best business decision.

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Don’t make it personal; it’s just business (or should be)

I’m not friends with the provider network person I negotiated with, but our relationship was cordial and business-like. Negotiating shouldn’t be emotional, but removing emotion from the process takes practice. When I was in medical school, a professor told me that if a patient causes you to feel anger or anxiety, that patient is either manipulating you or is mentally ill. Similarly, if someone you’re negotiating with causes you to feel those sorts of emotions, you need to step back and ask yourself, “Why is this personal? This person is only trying to get their goals met and make money for their employer, so why am I upset about this?” As a corollary to this point, it’s a good idea to avoid burning your bridges by saying or doing something that’s personally offensive to the person you’re negotiating with. You never know when you may cross paths with that person again, either in a contract negotiation or in some other capacity. For example, a former commercial insurance representative is now my clinic’s contact at our Medicare regional extension center. It’s amazing how much more cordial our conversations are now. Keep a sense of humor

The ability to laugh or make a joke can be important in defusing a tense negotiating situation and maybe even help forge a bond with your negotiating counterpart. I know that if I’m not in the mood to laugh, I should probably reschedule the meeting. Having a sense of humor also helps you to maintain your perspective about negotiating a contract. As physicians, sometimes we are faced with life or death situations, and a contract isn’t

one of those times. It’s just business, and sometimes you have to remind yourself about that.

HAVING A SENSE OF HUMOR ALSO HELPS YOU TO MAINTAIN YOUR PERSPECTIVE ABOUT NEGOTIATING A CONTRACT. AS PHYSICIANS, SOMETIMES WE ARE FACED WITH LIFE OR DEATH SITUATIONS, AND A CONTRACT ISN’T ONE OF THOSE TIMES. IT’S JUST BUSINESS, AND SOMETIMES YOU HAVE TO REMIND YOURSELF ABOUT THAT. It’s also OK to celebrate and be a little proud of yourself when you are done negotiating and able to walk away with a new contract that you’re happy with. Any physician should be able to manage patient care, but you are also managing a business. That is part of our identity as independent physicians and one of the reasons that our services are still valuable and relevant. n Melissa Lucarelli, MD, is a family

physician, medical director and owner of Randolph Community Clinic, a rural primary care clinic in South Central Wisconsin. She is a member of the Medical Economics Editorial Advisory Board and can be contacted at medec@advanstar.com. MEDICAL ECONOMICS

Accounts Strategies forBetter

Management Maintaining healthy accounts receivable (AR) is essential to strong financial performance, but itâ&#x20AC;&#x2122;s easy for practices to feel overwhelmed or become complacent when it comes to keeping this piece of the revenue cycle on track. BY DEBRA BEAULIEU-VOLK

he aging of your AR is crucial to watch because the older bills get, the harder and more costly they become to collect, says Laurie Morgan, MBA, a senior consultant with Californiabased Capko & Morgan. “When your AR slips and you have a very large backlog or balance, it can seem like you’ll never be able to tackle it,” she says. What’s more, this challenge has been compounded in recent years by the rise in patient financial responsibility for medical care. While high-deductible plans have existed for some time, they’ve become even more widespread as more and more products available through new health insurance exchanges offer low premiums in exchange for high deductibles or coinsurance. The multitude of new plans available to patients can in itself result in complexity and confusion for practices. Throw in the fact that many affected patients are unfamiliar with how health insurance works in the first place, and AR can suffer dearly. ANALYZE YOUR AR IN DETAIL

The first step in improving your AR is to analyze your starting point. But just as the proportion of patient-paid AR has evolved, so too should the way you run reports. “It’s important to break down the patient AR from the insurance AR to be able to understand what’s driving each of them. You can’t just look at it as one massive AR,” says Morgan. So if you note that your patient AR is mounting quickly, for example, that could suggest deficiencies in your front-desk processes or the way employees communicate to patients about your financial policy. Declining performance on the insurance side could also indicate front-

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desk errors, or point to a larger issue related to a third-party or centralized billing function. PRIORITIZE INSURANCE VERIFICATION

A starting point for addressing many of these issues is your process for verifying patients’ insurance coverage and eligibility. “Making sure we’re checking insurance eligibility well in advance of that patient presenting to the clinic is a strong indicator of AR,” says Stephanie Davis, director of revenue cycle management for Halley Consulting Group in Ohio.

“MAKING SURE WE’RE CHECKING INSURANCE ELIGIBILITY WELL IN ADVANCE OF THAT PATIENT PRESENTING TO THE CLINIC IS A STRONG INDICATOR OF AR.” Stephanie Davis, consultant

Most systems that practices use to check eligibility—including payer websites, software built into practice management systems or third-party products—can now provide medical office employees with detailed information that can help with AR. This data includes, for example, not just whether the patient has coverage, but how much of the deductible has been used up and even if the policy is in danger of suspension due to nonpayment of premiums. Ideally, practice employees communicate (and potentially translate) this information to patients before they come to the office for an appointment. “If patient insurance eligibility is not being verified or we’re not

connecting with the patient prior to them presenting to the office, it creates a massive amount of work on the back end to try and resolve open AR or open claims,” Davis says. Tina Smith, CPC, CPC-H, administrator of Steamboat Medical Group in Colorado, adds that practices often make the mistake of not maintaining sufficient staff to adequately verify benefits and educate patients. “The value of that function gets minimized and physicians have a difficult time seeing the bigger picture,” she says. “But what you’re collecting as a result of doing that [upfront] work will more than pay for the additional staff member it takes to do that.” COLLABORATE WITH OUTSIDE BILLERS

Of course, the revenue cycle extends far beyond the front desk—even if a practice uses a third-party billing company. “Practice managers are often really busy and anxious to offload some things to not worry about,” Morgan says. “So the temptation is there to start thinking as though billing is someone else’s job.” But even when most of the billing legwork is outsourced, practice managers have to work in concert with billers to make sure all parties are getting the information they need and performance is meeting expectations. Success in this area depends on maintaining a strong relationship with your billing company, according to Smith. Because her office is in a rural area, she enjoys the benefit of using a local billing company whose employees pick up the practice’s charge slips and drop off reports in person. When face-to-face interaction with billers isn’t an option, it becomes even more important for an individual in the practice who understands billing rules to MEDICAL ECONOMICS

communicate with the company routinely. When possible, the same billing company employees should work with a given practice consistently, she adds, so the company becomes familiar with your office’s charges and contracts. FOCUS ON CODING

In almost any primary care practice, there is opportunity for physicians to improve documentation and coding. When physicians see patients in multiple settings, such as nursing homes or hospitals, it’s especially important for practices to have systems in place to capture all of the services physicians are providing across these settings, says Davis. “You would be amazed at the amount of billable services that are not captured by physician practices just because we don’t have processes implemented that will allow physicians to enter that charge capture,” she adds. Even if physicians are using a superbill, they need to make sure not only that they are capturing all charges, but also know which of them they can and can’t charge separately, Smith says. “It’s a challenge because it’s not physicians’ area of expertise. They want to be seeing patients, not learning all the coding rules and regulations. But at the end of the day it’s the physician who is responsible. If there’s evidence of fraudulent billing, it’s not going to come back to the billing company. It’s going to come back to the physician,” she says. Accurate coding also speeds up the billing cycle, which increases the likelihood of patients paying their balances, Morgan points out. Any delay in the time it takes a bill to get through the clearinghouse and then to the health plan for payment also stalls the practice’s bill to the patient. The more time that elapses between when the patient is seen and when he or she receives a bill, the greater the chances the MEDICAL ECONOMICS

patient will have forgotten about the bill, will consume staff time questioning the bill, or simply not pay it. “So you lose money not just on the operating expense of dealing with the problem, but you may not get paid at all,” Morgan says. “Even in the best case it creates a negative experience for the patient, which is a result you don’t want.” ENGAGE PATIENTS

Instead, it’s crucial to engage patients early in setting expectations so that a bill or request for pay-

IT’S CRUCIAL TO ENGAGE PATIENTS EARLY IN SETTING EXPECTATIONS SO THAT A BILL OR REQUEST FOR PAYMENT WILL NOT COME AS A SURPRISE. ment will not come as a surprise. This step doesn’t stop with providing patients with your payment policy or reminding them of their balances. It also means giving patients easy ways to connect with the practice and pay their bills, says Davis. “Patients are very technologically savvy, and the more you can give them access to communication tools, such as an online portal, and convenient methods of payment, it makes it easier for the patient to be engaged in that process,” Davis says. BEWARE OF CONSOLIDATION CAVEATS

Patient engagement and accessibility are particularly important when a practice is going through a transition such as a merger or hospital buyout, notes Morgan. Of particular concern, switching to a hospital billing system often results in billing delays, leading to the problems men-

tioned previously that can sour a patient’s relationship with the practice. “So anything you can do in the clinic to communicate what’s going on, such as changes happening, updates to infrastructure, potential billing delays, or a new person to talk to with questions can head off problems,” Morgan says. Also, while being owned by a hospital or health system can be a plus when it comes to negotiating contracts, adopting hospital-centric policies is not always advantageous from a billing perspective, according to Davis. “We recommend you try to get the best of both worlds, whereby you allow the practice to continue to do their charge capture and other revenue cycle functions that are going to drive that performance,” Davis says. FOLLOW THE GOLDEN RULE

Regardless of your practice structure, Davis recommends following a credo of, “Whoever enters the data owns the data.” An example of this philosophy at work would be when a claim comes back denied because of an incorrect subscriber ID. Rather than taking the seemingly quickest route of fixing the error at the back-office level and resubmitting, Davis suggests routing the claim back to the employee who made the mistake so he or she can see what happened and not perpetuate the cycle. “Our front-desk personnel are typically people who strive to do their best. And where we see the breakdown is when we don’t provide that feedback loop and we don’t allow them to understand the results of their actions,” Davis says. “Engaging employees in the solution is the ultimate training.” n Debra Beaulieu-Volk is a Massa-

chusetts-based freelance healthcare writer. She can be contacted at medec@advanstar.com. BROUGHT TO YOU BY

ost practices are aware of how medical billing services and revenue cycle management can reduce costs and increase collections with benefits such as electronic eligibility verification, included EHR and practice management (PM) software, financial reporting, and faster accounts receivable turnaround. But how else can medical billing services benefit a practice? Here are some unknown benefits you can expect to see. DECREASE PRACTICE OVERHEAD

Avoid hiring additional employees to handle your billing services. Fewer employees can streamline a practice’s operational and financial processes. Keep costs down and headaches minimal. “Typical support staff is 37.16% of total practice costs,” according to the Medical Group Management Association’s 2014 Cost Survey. The size of the billing staff is usually determined by the number of claims the practice submits and according to AMA board member, Barbara McAneny, MD, “physicians divert as much as 14% of their gross revenue to insure accurate and sure payments for their services.” Any savings in support staff and billing costs will go straight to the bottom line. INCREASE PRACTICE EFFICIENCY

Without the stress of managing your practice’s billing, your staff can focus on other areas and improve workflows. EHR solutions not only give you the power of faster note taking, but allows you to stay organized throughout the day while efficiently managing administrative and financial tasks. Utilizing the tools provided by the medical billing service

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company and your EHR can also drastically improve your internal communication because data can easily be shared. Staying organized and optimizing processes can even reduce test duplication and decrease errors. AVOID NEGOTIATING WITH PAYERS AND CREDENTIALING BODIES

If you are a new practice or adding a physician to your practice, you must go through a credentialing and enrollment process to connect with insurance companies. This process can be time-consuming and cause delays if you don’t enroll properly. Medical billing service companies usually offer solutions to take care of this process for you. They have the contacts with insurance companies and can make sure you are enrolled properly and have the correct credentials. The next step in this process is negotiating with payers to receive the best rates. For smaller practices, this can be a little overwhelming and feel like you’re going up against Goliath when trying to negotiate with large insurance companies. Let a medical billing service company do the negotiating for you. They have the experience and can get the best rates for your practice. This service is normally free of charge, so be sure to take advantage of payer negotiation. You don’t need the added headache. COMPLETE TRANSPARENCY

Having your software and billing service under one roof and also connected to each other is a key benefit that is often forgotten when evaluating medical billing services as a solution. Practices need to have complete transparency with their billing process in order to know where each charge is in the process and have the ability to track the charges all the way back to the practice. MEDICAL ECONOMICS

If there are any denials, practices need to know what they are and how to correct them. A transparent process makes it easier for billers to confirm that all claims are processed in a timely manner. From there, practices can be sure that the insurance companies are processing the claims as soon as they receive them and are being paid the correct amount. A medical billing service makes this transparency possible.

THIRTY-SIX PERCENT OF PROVIDERS SAID THAT THEY WILL HAVE TO REDUCE THEIR CAPITAL SPEND (ACCORDING TO A PEER60 REPORT) AND 79% OF CHIEF FINANCIAL OFFICERS ARE LOOKING TO CUT TIES WITH RCM VENDORS THAT ARE NOT PRODUCING A RETURN ON INVESTMENT IN 2016, ACCORDING TO BLACK BOOK REPORT. COLLABORATIVE ENGAGEMENT OF IT/TECHNOLOGY

Using a medical billing service company that also uses the same technology as the practice provides the added benefit of everyone being on the same page. Using a one-stop shop for both software and service makes setup and implementation a breeze by incorporating patient reminders, online bill pay, patient portals, and more. Medical billing service companies can provide all of these solutions and since they use them daily, they can help with any questions you may have along the way.

BEST PRACTICE TRAINING INCLUDED

One thing to remember about most medical billing service companies is that they have years of billing experience and know all the ins and outs of how make your practice as efficient as possible. They typically provide training for basic practice operations and best practices for using your PM software. They are a great resource for any tips and training. If additional in-depth training such as on-site visits is needed, most medical billing service companies have available options. Be sure to reach out to see what options they have and utilize them as much as possible. They are there to help you succeed and most practice are unaware of these additional services. ACHIEVE POSITIVE ROI

Return on investment (ROI) is a best practice in any business, but as billing costs continue to increase, keeping costs down and revenue up has never been more important. When deciding whether or not to keep a software solution, evaluating the ROI is one of the key variables at which to look. Thirty-six percent of providers said that they will have to reduce their capital spend (according to a peer60 report) and 79% of chief financial officers are looking to cut ties with RCM vendors that are not producing a return on investment in 2016, according to Black Book report. n Manik Chawla is a

healthcare professional at Medico, a healthcare management company providing revenue cycle management, medical coding, and compliance services to practices nationwide. Chawla has more than 11 years of healthcare experience at leadership positions in operations, transition and training, and business development. He can be contacted at manik@medicoinc.com. BROUGHT TO YOU BY

High Deductibles:

Why Physicians Must Adjust How They Practice BY SUSAN KREIMER

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MEDICAL ECONOMICS

ccelerated by the Affordable Care Act, high-deductible health plans have emerged as a major trend in healthcare. Placing more financial responsibility on patients for medical services has a direct impact on physician practices. Operating successfully within this framework requires greater awareness of differences among insurance policies and discussions of treatment options that are sensitive to patients’ out-of-pocket expenses. “Doctors need to understand the landscape has changed. A doctor’s primary concern used to be whether a patient had insurance. Now, it’s the type of insurance,” says Devon M. Herrick, PhD, a senior fellow at the National Center for Policy Analysis in Dallas, a nonprofit organization that promotes private alternatives to government regulation. “Patients are more cost-conscious now. That means patients will question their physicians about costs for procedures,” he adds. “Patients will also ask uncomfortable questions like: ‘Doctor, do I really need that MRI?’ ‘What’s that going to cost?’ ‘Can that test wait?’” The best way to approach billing issues in a physician office is to be proactive with patients by clearly detailing costs and options. “Otherwise, a disgruntled patient who believes they were treated unfairly—and gouged by a rich physician—may be less likely to pay their bill,” Herrick says. HOW COSTS AFFECT PATIENT CHOICES

Studies have shown that consumers exercise greater caution in spending when health plans require them to share more of the costs, according to The Rand Corporation, a research organization that has conducted the largest independent study of high-deductible health plans. MEDICAL ECONOMICS

High-deductible coverage “really does reduce people’s healthcare costs and use. About two-thirds of the reduction is in number of episodes of care, and about one-third of the reduction is in the cost per episode,” says Amelia M. Haviland, PhD, an adjunct senior statistician with Rand and an associate professor of statistics and health policy at Carnegie Mellon University in Pittsburgh.

HIGH-DEDUCTIBLE COVERAGE “REALLY DOES REDUCE PEOPLE’S HEALTHCARE COSTS AND USE. ABOUT TWO-THIRDS OF THE REDUCTION IS IN NUMBER OF EPISODES OF CARE, AND ABOUT ONE-THIRD OF THE REDUCTION IS IN THE COST PER EPISODE. DETRIMENTAL IMPACT ON PATIENTS’ HEALTH OVER TIME.” Amelia M. Haviland, PhD, healthcare economist

“There may be some good news in terms of bending the cost curve, but there are also some concerns—that it might have a detrimental impact on patients’ health over time,” Haviland adds, citing an already apparent decline in cancer screenings, child immunizations and recommended tests for diabetics. “The concern on a physician’s side is that patients will be less compliant, or in particular, that they will not come for appointments; they’ll reduce their interactions with their doctors.”

For many patients, the decision to avoid appointments stems from not knowing that their deductible doesn’t apply to annual wellness visits, certain cancer screenings, and other preventive services. Physician offices may consider countering this misunderstanding by sending explanatory postcards, emails, or letters, Haviland says. High-deductible health plans “certainly are continuing to gain traction in the employersponsored insurance world and are the dominant plan type on the individual and small group markets on the exchanges. On the employer-sponsored market, they’ve overtaken HMOs,” she adds. “It’s more and more likely that doctors will have patients who are in these plans.” ‘A NEW SCENARIO’

In many cases, high-deductible health plans are paired with taxfree individual health savings accounts (HSAs) or employersponsored health reimbursement arrangements (HRAs). When a high-deductible plan accompanies one of these options or some other type of tax-free savings account, the result is described as a “consumer-directed health plan.” In 2014, 48% of companies offered a consumer-directed health plan, up from 39% in 2013, according to Mercer benefits consulting firm’s national survey of employers. Enrollment in these plans increased to 23% of covered employees in 2014 from 18% the previous year. Average in-network deductibles were $2,500 for an individual worker or $5,000 for a family plan. “It’s a new scenario for a lot of patients and physicians,” says Katherine Hempstead, PhD, director of health insurance coverage at The Robert Wood Johnson Foundation. The change has created “a little bit of a learning situation for everyone.” BROUGHT TO YOU BY

At first, many consumers didn’t fully grasp their financial responsibilities under the high-deductible plans they had selected. Consumers who tend to be lured to lower monthly premiums often are the ones who will encounter the most difficulties paying their deductibles, Hempstead says. Low-income enrollees in highdeductible plans were more likely to forgo emergency care due to unaffordable out-of-pocket expenses, according to a study of small employers in Massachusetts. Researchers reviewed emergency department visits and hospitalizations over two years among high-deductible plan members. Those of low socioeconomic status incurred 25% to 30% declines in high-severity visits over both years. Hospitalizations decreased by 23% in the first year but increased in the second year. “Initial reductions in highseverity ED visits might have increased the need for subsequent hospitalizations,” the authors wrote in the August 2013 issue of Health Affairs. “Policy makers and employers should consider proactive strategies to educate high-deductible plan members about their benefit structures or identify members at higher risk of avoiding needed care. They should also consider implementing means-based deductibles.” When insurance policies come up for renewal, it will be interesting to see if consumers who initially opted for high-deductible plans make different decisions for the future, Hempstead says. Meanwhile, providers will find it necessary to become more efficient in their practices and transparent about their pricing, as consumers demand more value for their healthcare dollars. ADVANCING PRICE TRANSPARENCY

In particular, the trend toward high deductibles “will certainly

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push price transparency for services or tests that physicians may order. “A patient may ask, ‘Where is the least expensive place to get an MRI?’” says Mark S. Williams, MD, MBA, president of the Southern Medical Association and chief physician executive for Tenet Healthcare and

“INITIAL REDUCTIONS IN HIGH-SEVERITY ED VISITS MIGHT HAVE INCREASED THE NEED FOR SUBSEQUENT HOSPITALIZATIONS. POLICY MAKERS AND EMPLOYERS SHOULD CONSIDER PROACTIVE STRATEGIES TO EDUCATE HIGH-DEDUCTIBLE PLAN MEMBERS ABOUT THEIR BENEFIT STRUCTURES OR IDENTIFY MEMBERS AT HIGHER RISK OF AVOIDING NEEDED CARE. THEY SHOULD ALSO CONSIDER IMPLEMENTING MEANSBASED DEDUCTIBLES.” Health Affairs, August 2013

Brookwood Medical Center in Birmingham, Alabama. Practices that have compared rates and quality among local imaging and laboratory facilities would be more prepared to answer such questions. Some physicians may experience a decline in the use of their services, while others gain a competitive advantage.

“Physician offices may be further challenged in collecting reimbursement for their services, as the patient will be paying more out of pocket,” Williams says. One way to continue serving patients while reducing their out-of-pocket costs would be to delegate less-complex visits to a nurse practitioner or a physician assistant. “Physicians who are best informed about these trends and changes will do very well,” says Williams. Conversely, “those physicians who may not take the time or make the effort to learn about these things are at risk. That high-deductible concept is not going to go away.” Among employer-sponsored health plans, deductibles for employees have edged steadily upward. In 2014, 80% of all covered employees had a general annual deductible averaging $1,217, according to the annual Kaiser Family Foundation/HRET survey of more than 2,000 small and large employers. The average deductible has increased 47% from $826 in 2009. Also in 2014, 41% of covered employees had a minimum annual deductible of $1,000, and 18% had deductibles of at least $2,000. Those at small companies (three to 199 employees) were even more likely to encounter large deductibles. Wanda D. Filer, MD, MBA, FAAFP, president-elect of the American Academy of Family Physicians (AAFP), says pricing information isn’t readily available in all healthcare markets, especially in competitive areas. She manages about 90% of patients’ health concerns in her primary care practice in York, Pennsylvania, without referrals to specialists. “My role is to offer them the best services that I can,” Filer says, while acknowledging that she tries “not to incur any more costs than I need to.” MEDICAL ECONOMICS

However, there are times when patients require procedures that fall outside the scope of her expertise. For example, she says, a male patient recently presented with problems that required consulting with a urologist but the patient couldn’t afford the out-of-pockets fees. While Filer’s clinic—Family First Health—is a federally-qualified health center, she also sees numerous patients with private insurance. “They’re a little more attuned to what time of year it is and where they are with their deductibles,” she observes. Many patients are unaware that preventive office visits and services would be covered regardless of whether they have met the annual deductible. There are also alternatives to traditional fee-for-service insurance billing. In a direct primary care (DPC) model, physicians typically charge patients a monthly, quarterly or annual fee that covers all or most primary care services, including laboratory tests, care coordination and comprehensive care management. This fee doesn’t cover some services, so practices often advise patients to acquire a highdeductible plan for emergencies, according to the AAFP. Direct primary care is not the same as concierge medicine. “I hear this confusion a lot,” Filer says. “DPC practices operate at a lower monthly fee in order to open more services and access to those who have previously been excluded financially.” SETTING THE RIGHT EXPECTATIONS

Physician practices walk a fine line between providing good clinical care that meets patients’ needs and limiting the burden associated with spiraling costs. It’s important for staff members to know what a plan covers MEDICAL ECONOMICS

as well as a patient’s financial limitations, says Laura Palmer, FACMPE, director of professional development at the Medical Group Management Association in Englewood, Colorado. At the outset, it helps to “set the right expectations with patients and staff.” Palmer recommends having open and honest conversations about costs well before a collections problem arises and the financial aspect compounds the stress for a patient undergoing treatment.

“THE AMA IS A STRONG ADVOCATE FOR BRINGING TRANSPARENCY, SIMPLICITY, AND CONSISTENCY TO THE MEDICAL CLAIMS SYSTEM. WE ARE URGING A STREAMLINED APPROACH THAT ALLOWS MEDICAL CLAIMS TO BE SUBMITTED AND SETTLED IN REAL TIME AT THE PATIENT’S POINT OF CARE.” Robert M. Wah, MD

A provider may ask, for example, if a patient on a highdeductible plan would encounter a financial hardship in paying for prescription medications. Sometimes a provider may be able to offer free samples and help a patient apply for a lowcost or subsidized prescription drug program, Palmer says. ‘CONSTANT EVALUATION’

Physician practices also can avoid losing revenue by learning how to collect payments from patients at the time of service, says Robert M. Wah, MD, president of the

American Medical Association (AMA) and a reproductive endocrinologist in McLean, Virginia. They can turn to the AMA’s website for point-of-care pricing resources that encourage increased electronic transactions and payment transparency. Webinars and toolkits explain how to use practice management software to provide point-of-care pricing, and how to measure a practice’s success at collecting payments at the time of service. There is also a sample template letter with contract language. “The AMA is a strong advocate for bringing transparency, simplicity, and consistency to the medical claims system. We are urging a streamlined approach that allows medical claims to be submitted and settled in real time at the patient’s point of care,” Wah says. “This will cut unnecessary administrative costs in the medical office, while helping patients to know their total out-of-pocket costs prior to treatment and help give them more control over their healthcare dollars.” It is not uncommon for physician practices to face shortfalls in cash flow at the beginning of the year unless the practice has established a methodical approach to collecting deductible payments at appointments, says James Smith, MBA, FACHE, a senior vice president in the New York office of The Camden Group, a healthcare consulting firm. “Given the rapid increase in share and the impacts on cash flow, practices must constantly be evaluating receivables and committing resources to their collection, as well as assuring adequate lines of credit and other financial instruments are available to help mitigate short-term cash shortfalls,” Smith says. n Susan Kreimer is an Illinois-

based freelance healthcare writer and editor. She can be contacted at medec@advanstar.com. BROUGHT TO YOU BY

GETTING

PAID

Strategies & Best Practices Doctors and their staff members often find themselves chasing patients and insurance companies to get paid, and frequently are forced to write off bills that could and should be paid BY COREN H. STERN, JD

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MEDICAL ECONOMICS

he Affordable Care Act has resulted in higher levels of patient responsibility, yet many patients remain under-insured or without insurance, leaving physician practices to manage those encounters to ensure proper payment. The following strategies can help physicians approach their workflow from the perspective of maximizing their reimbursements and ensuring they are able to collect all they’ve earned. MAXIMIZING YOUR ACCOUNTS RECEIVABLE

In general, doctors rely on billing personnel or outside billing services to issue statements and to follow up with patients and insurance companies. But billing services and personnel need direction from administrators or doctors as to the most efficient way to maximize the remuneration they receive for the care they provide. With this in mind, every physician should have intake forms that clearly assign medical benefits (though these aren’t always honored). These forms also should remind patients of their responsibility not only for unpaid portions of bills, but for any collection costs that might become necessary, including fees charged by collection agencies or attorneys. Without this provision, physicians often end up paying up to half of their fee to a collection agency or a lawyer, when including this clause in their intake forms would have cost them nothing. Providers also need standard billing practices that leave nothing to discretion. Doctors should send statements on a regular (perhaps monthly) basis, and have a strict policy as to how many statements are sent prior to referring an account for collection. (Three statements is a good number.) The reason for this is threefold. First, issuing quick and MEDICAL ECONOMICS

consistent billing statements reminds patients of their obligation to pay. Second, fresh debts have a much higher repayment rate than aged ones. Finally, statements must be sent consistently to preserve the right to sue. Most states provide that patients’ failure to object to statements in a timely manner is grounds for later legal action. WHEN TO USE A COLLECTION AGENCY

Collection agencies can provide pressure that billing personnel or services cannot. It is important, however, to ensure that medical practices use reputable collection agencies that comply with state and federal laws. Furthermore, billing arrangements must be taken into consideration when selecting a collection agency. Many agencies charge a percentage of monies recovered, with some rates as high as 50%. Other agencies, however, charge a flat fee, with rates as low as $10 per account. The advantage to the percentageof-fee basis is that it gives the collection agency a financial incentive to collect, and ensures that doctors won’t pay anything if the agency is unsuccessful. However, a percentage fee basis typically results in doctors paying much more when the collection agency is successful. Conversely, the flat fee arrangement generally costs less, but rewards an agency for bringing in accounts rather than actually working them. The downside to the flat fee arrangement is that physicians run the risk of paying for a service that does not guarantee, or in many cases, does not produce, results. Additionally, collection agencies have no ability to compel patients to pay. They can call and write letters, but have no legal means to extract payment from patients unwilling to settle their accounts.

WHEN TO USE AN ATTORNEY

Attorneys can do what collection agencies cannot: file lawsuits against debtors, get legal judgments, and in certain cases, levies on assets and wage garnishes. Rather than waiting until a collection agency fails to produce results, sometimes it makes more sense to refer an account directly to an attorney. In cases where patients deposit (and possibly spend) checks meant for their doctor, involving an attorney right away helps the doctor preserve his or her right to compel the patient to pay the money owed and reduces the risk that the patient will dissipate the funds. Doctors need to consider fee arrangements when dealing with attorneys. Attorneys paid on an hourly basis have no economic stake in the debt. Moreover, paying an attorney on an hourly basis risks paying legal fees on debts that ultimately are not collectible. However, while contingency fees may provide the attorney with an incentive to collect, and ensure that the doctor does not pay if no money is collected, physicians usually pay significantly more on accounts where money is recovered. DON’T JUST WRITE IT OFF

Doctors, like other professionals, have a right to be paid for their services. From internal billing personnel to collection agencies to attorneys, you have options, and if you manage your accounts properly, you can efficiently and (almost) painlessly bring in money that you thought would never materialize. n Coren H. Stern, JD,

is an attorney with Bressler, Amery & Ross, P. C., in Fort Lauderdale, Florida. He can be reached at medec@advanstar.com BROUGHT TO YOU BY

How Billing

Services Can Prepare Your Practice for the Future BY JEFF GAISFORD

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MEDICAL ECONOMICS

ith all the changes in healthcare, it can be difficult for your medical practice to keep up on regulations, mandates, and other initiatives that will affect your bottom line. These changes include the transition from ICD-9 to ICD-10 codes, a shift from traditional fee-for-service models to value-based models, and updates to the Affordable Care Act. Medical billing services can be your partner during the changes recently enacted and those ahead. Here’s how. EASIER AND SUCCESSFUL ICD-10 TRANSITION

After the move to ICD-10, “86 percent [of physicians] indicated ICD-10 having an impact on patient care,” according to a recent SERMO poll. By now you should have a good idea if your practice’s transition went smoothly or not. If you’re experiencing any issues or rejections, using a medical billing service can immediately solve some of your issues without the need to hire additional coders or make costly software upgrades. Even after the transition, 68% of providers said that ICD-10 conversion is an area that still needs to be addressed, according to peer60’s Healthcare Revenue Cycle Management: 2015 report. PREPARE FOR VALUE-BASED REIMBURSEMENTS

Get back to doing what you care about and focus on patients rather that dealing with billing. According to a press release by the U.S. Department of Health & Human Services, we are starting to shift away from traditional fee-for-service (FFS) models to value-based models with more emphasis on patient performance. Now is the time MEDICAL ECONOMICS

put the focus back on patients. Using tools and services that produce an integrated environment within your practice is shown to have greater patient engagement. One key patient experience benefit that comes from medical billing services is an easier bill paying process for the patient. Having systems in place to make paying a bill as painless as possible for the patient is a must when every dollar counts.

THE CONGRESSIONAL BUDGET OFFICE NOW PROJECTS MEDICARE ADVANTAGE ENROLLMENT WILL REACH 22 MILLION BENEFICIARIES BY 2020, MORE THAN DOUBLE THE NUMBER PROJECTED SHORTLY AFTER THE AFFORDABLE CARE ACT WAS ENACTED IN 2010, NOTES THE KAISER FAMILY FOUNDATION; CURRENTLY THAT ENROLLMENT IS AT MORE THAN 16 MILLION. REACTIONS TO THE AFFORDABLE CARE ACT

The Affordable Care Act added a lot of new rules and regulations to processing medical billing claims, and with that, came confusion for billers. If your practice has in-house billing, these changes have added even more headaches. Using a medical billing service company, who is already prepared for these changes, can alleviate any confusions and more importantly, errors. Another outcome of the Affordable Care Act has been a boom in

health insurance enrollment since it requires individuals to obtain coverage, as reported by Medical Billing Advocates of America. This will increase the total number of claims being processed, resulting in a higher demand for billing staff. A medical billing service can help alleviate these added costs and human resource needs. CONNECT REIMBURSEMENT TO QUALITY CARE

The move to value-based reimbursement that will occur over the next few years will cause issues in the beginning as practices start focusing on quality goals. As stated by HealthCatalyst, “the switch to value-based reimbursement has turned the traditional model of healthcare reimbursement on its head.” Small to medium-size practices are less prepared for these goals and need the expertise provided by medical billing service vendors and accountable care organizations (ACOs), which handle both payment and care requirements, Healthcare IT News. During this time, it is also important to make sure the quality care incentives are connected to the reimbursements and you are getting paid. Software and billing solutions are available from medical billing service companies to help with these incentives and as the importance of quality care continues to rise, these solutions will only become more necessary as time goes on. n Jeff Gaisford is

a sales leader at ChartLogic with more than 10 years selling and leading teams in complex technologies. Gaisford has educated and assisted medical professionals in the benefits of healthcare IT and billing services. He can be contacted jeffgaisford@chartlogic.com. BROUGHT TO YOU BY

Medical Billing Services Bring EMR, PM & Revenue Management All Under One Roof Practice Profile Name: Advanced Orthopaedics & Sports Medicine Location: Casa Grande, AZ Specialty: Orthopaedics/Sports Medicine Locations: 1 Physicians: 1 ChartLogic User Since 2011

Advanced Orthopaedics has been using ChartLogic Electronic Medical Record (EMR) for four years and ChartLogic Medical Billing Services for one year. Before ChartLogic, the practice was using another EMR and outsourcing their billing. Dr. Matanky and his staff like many features within ChartLogic such as customizable templates and Document Manager. “We like the specialty-specific templates. For example, we have a fracture template that we use, when patients call in we know exactly what questions to ask them” said Office Manager, Jennifer Gonzales. Dr. Matanky accesses ChartLogic remotely when he is not in the office, which is quite often since he in surgery three times a week. This is convenient for the doctor as well as his staff. If the staff needs a note done or needs the doctor to take a look at something, he can access ChartLogic on his laptop at home, on vacation or even at the hospital. A feature of ChartLogic Practice Management (PM) that the practice enjoys is the automatic eEligibility. “Before we would have to call the actual insurance company every time a patient would check in to see if the eligibility was up to date, and it was a pain and really slowed down front desk down, now it is a click of a button and takes two seconds.”

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The billing with ChartLogic is definitely different from our last solution which had a lot of issues trying to get our claims out, I felt like we were doing most of the work for them. We love our claims now, it is way easier! Jennifer Gonzales, Office Manager

Billing Ease with ChartLogic

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Advanced Orthopaedics & Sports Medicine

Using ChartLogic Billing is much easier than when the practice was outsourcing their billing because staff no longer has to double enter information in both programs. According to the office manager, “the billing with ChartLogic is definitely different from our last solution which had a lot of issues trying to get our claims out, I felt like we were doing most of the work for them.” Jennifer shares that things are a lot easier for the practice now that everything is under one roof with ChartLogic EMR, PM and Billing, “we love our claims now, it is way easier!” If patients have concerns or questions about their bill, they can contact ChartLogic Medical Billing Services directly instead of the practice. This prevents slowing down and distracting the front desk; they can spend more time with patients and answering phone calls. The practice utilizes advanced reporting within ChartLogic. “We report on claims and collections for patients that owe us money; we generate these every other week; we really like those reports.” These reports have increased collections from where they were before using ChartLogic. Overall, efficiency, scheduling, claims/collection, and time management has improved since Advanced Orthopaedics & Sports Medicine made the switch to ChartLogic Billing and began managing everything under one roof for complete transparency.

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