Part A Support including Performance-based Incentives

1. Part A Supportincluding Performance-based Incentives • West, Midwest & Canada Regional APC/PDAS Meeting HBP Services 11 Research Drive , Suite 2 Woodbridge, CT 06525 203 397-8000 rtessier@hbpworld.com www.hbpworld.com October 21-24, 2014 Robert H. Tessier Senior Reimbursement Consultant

2. Performance Based Incentives Performance Based Part A – WHAT IT IS NOT/WHAT IT IS How To Proceed? Performance Based Checklist Part A Fact Book Page 3 Page 7 Page 9 Page 15 Implement performance based incentives to include in your Part A contract.

3. Performance Based Part A- What IT IS NOT The foundation for Part A support will continue to be the hours documented, paid at a “reasonable” hourly rate. HBP always uses the Medicare Reasonable compensation Equivalent (RCE) adjusted by 3% inflation +$5,000 CME and actual cost of Malpractice. IT IS NOT: • a replacement for the need to document Part A services and prepare Time Studies. • a solution for those Pathologists who don’t want to be judged on results. • a concept to be used for those who ASSUME the Hospital knows your value.

4. Performance Based Part A- What IT IS NOT IT IS NOT: • intended for those who do not take the time to provide a effective education to administration. • a series of simple calculations that eliminate the need for dialogue with the Hospital. • a good approach if the goals of the Hospital are not aligned with those of the Pathologists. • the right methodology when the Pathologists only perform required Part A functions. • a static formula that can be applied over a multi-year contract.

5. Performance Based Part A - What IT IS IT IS: • A new approach for those Pathologists with a great story to tell. • An opportunity to formally discuss results with Administration. • A reward for those who can demonstrate accomplishments. • Developing consistent goals and objectives for the Hospital and the Pathologists.

6. Performance Based Part A - What IT IS IT IS: • Formulas that reward specific benchmarks. • A methodology that evolves as circumstances change. • A system that assures an effective balance so that both the Hospital and the Pathologists will mutually benefit from improved results.

7. How To Proceed? Performance Incentives might be a new concept for both parties Present a variety of options in line with Hospital priorities. Select incentives that present an opportunity for an ongoing dialogue. Review the items being measured and modify goals each year. Assign a value to each component that is either a fixed amount or a % of savings/improvements. Define the baseline and criteria for change.

8. How To Proceed? • Present items that can be easily quantified and determine the source to be used: Finance Reports, Department LIS, Practice Billing Data for date of service • Include items that need to be accomplished as part of the Short/Long Term Goals of the Lab. • Establish a Department Development Fund as the beneficiary of some incentives “25% of savings to Practice and 25% to the Department Fund” (the other 50% retained by the hospital) • If the incentive is more difficult to achieve in a subsequent year, the payment should be increased. (assume the bar will continue to be raised)

9. Performance Based Checklist

10. Performance Based Checklist

11. Performance Based Checklist

12. Performance Based Checklist

13. Performance Based Checklist

14. Performance Based Checklist

15. Part A Fact Book • Part A & RCE Calculation (Medicare Reasonable Compensation Equivalent ) 2004 Metro < 1m = $219.5k Metro >1m = $215.7k Non-Metro = $208k This is the “average” compensation • History of Part A Payments • Time Study Summary • Average Part A Hours • RCE Calculation • $219.5 (2004) @ 3% Inflation = $295 (2014) + CME $5,000 + Malpractice $15,000 (Actual) = $315k / 2,080 hrs. = $151.60 • Medicare Published RCE Documents • Part A Calculation

16. Part A Fact Book • Time Study Documentation • Department Responsibilities • Committees • Detailed Time Study Worksheet • Minimum 4 weeks per year • Maximum 2 weeks per quarter • Customize the format • Matrix of Responsibilities (Pages 11-12) • Department Organizational Chart • Goals & Objectives • List of Committees by Pathologist • List of PA Committees (if paid by Practice)

17. Matrix of Responsibilities - Department

18. Matrix of Responsibilities - Department

19. Part A Fact Book • Part A Services • Current Contract • Annual Dept. Report • Comparative Data • Description of Part A Services (customized for your Hospital) • Agreement for Pathology Services Contract • Annual Laboratory Quality / Department Report • Press Ganey Scores • Average Weekly Part A Hours - Chief • Average Weekly Part A Hours – Associates • Current Part A as a Percentage of Calculated Part A • Medicare Cost Report Schedule A-8-2 FOI Request