Case Study: Struggling Practice Finds Success Through an Innovative Consortium

1. Case Study: Struggling Practice Finds Success Through an Innovative Consortium Presented by Kyle Matthews CardioVascular Associates of Mesa, P.C.

2. Objectives • Explore a unique perspective on physician and practice cooperation to maintain independence • Identify a new way of doing business beyond integration or an accountable care organization model • Evaluate whether your organization can succeed using an innovative business model

3. About Your Speaker • Kentucky Native • Early Volunteer • Western Kentucky University • Freed-Hardeman University • Accounting • Finance • AmSurg Corporation • CardioVascular Associates of Mesa

4. About Your Speaker • Arizona MGMA President • National MGMA Committees • National/State Task Force • Annual Conference Abstract Review • MGMA 4Corners Conference Co-Chair

5. Disclaimer This presentation is a case study based on actual events as experienced by a practice administrator. Before beginning any work on any form of cooperative entity, please seek legal, accounting and other professional advice. Your presenter is not a legal nor accounting expert and is not making any recommendations on how to form new entities since all practices are unique.

6. Interact @KMattCHD KMatt35@gmail.com

7. Do It Yourself • Recognize the Problem • Find the Solution

8. Practice Background • Located in Mesa, Arizona • Phoenix Suburb • 38th Largest City • 8 Physicians • 5 NPs/PAs • 2 Offices • 15,000 Unique Patients Per Year

9. Service Area • Intense Competition • “Guys Next Door” • Influx of New Physicians • Hospitals/Systems • Lack of Integration • Snowbirds • Housing Market

10. Same Story, Different Place • Billing Problems • Low Morale • Sacred Cows • Unfavorable Contracts • Operational/Financial Inefficiencies • Mounting Debt • Embedded Consultant

11. Change Begins • New Management Team • New Compensation Model • New Team Focus • Financial-Based Decisions • Revamped Committee Structure • Restructuring of Existing Contracts

12. New Challenges Arise • Reimbursement • Economy • Competition • Hospitals • PCP Consolidation Traditional Solutions Were Not Enough

13. Our Future Partners • Different Philosophies • Different Culture • Number 1 vs. Number 2 • Heart Hospital • Partner Transfer • Virtually No Interaction

14. Small Problem -> Huge Opportunity • Banner System • “Rural” Hospital • No CV Services • No Cardiology Presence • 30 Minutes Each Way • Projected Consults < 5 Per Week

15. It Begins • One Phone Call • Cheesecake Factory • Similar Strategies • Similar Issues • Common “Foes”

16. Intent • Competitors • Maintain Independence • Exclude Revenue • Save Money • Exchange Ideas • Expand Strategy

17. The Basics • Structure • Separate Entity • Low Overhead • Physician Leadership • Legal • Operating Agreement • Purchasing Agreement • Master Agreements

18. Priorities • Medical Supplies • Nuclear Supplies • IT

19. Medical/Nuclear • RFP • Presentations • Required Participation • Existing Contracts • On-boarding • Tiered Savings • Partnerships

20. Medical/Nuclear Benefits • Protection against Supply Issues • Generics • Suggested Uniformity • Exchange Ideas • $$$

21. IT • Optional • RFP • Local • National • Presentations • On-boarding • Group Governance

22. IT Benefits • Reliability • HIPAA/Regulations Compliance • Shared Resources • Techs • Network Administration • CIO • Shared Purchasing • $$$

23. Data Center • I/O • Agility • Reliability • Sustainability • Security • Ideal for Medical Practices • Unaffordable as Individuals

24. Data Center Benefits • Financial • Shared Physical Space • Shared Data Storage • Shared Connections • Common Maintenance • Physical • Electric • A/C • Water Damage • Lightning

25. Data Center Benefits • Operational • Uptime • Speed • Equipment Health • Security • Sleep Better • Mitigated Additional Costs

30. Twitter Challenge @KMattCHD

31. Health Insurance • Optional • Partially Self-Funded • TPA • Stop-Loss • Reserves • Individual Plan Documents • Individual Loss Ratios • Centrally Administered

32. Health Insurance Benefits • Wellness Plan • Narrow Networks • Plan Design • ACA Protection • Premium Protection • Group Governance • Group Strategy • Shared Consulting • $$$

34. Other Projects • Office Supplies • Statements • Shredding • Echo Reading • Answering Service • Collections • Phone Maintenance • Venous Ablation Packs • ICD-10

35. How It Works • Physician Led • Physician Owned • Practice Administrator Executive • Physician Meetings • Administrator Meetings • Health Plan • Wellness • IT • Vendor-Partners • Superior Communication

36. Operating Parameters • Management Fees • Low Overhead • Reimbursements for Services • Budget • Approval Levels • Check Signatures • Buy-In • K-1

37. Challenges • Legal Restrictions • Individual Practice Buy-In • “What Have You Done For Me Lately” • Varying Needs • All Groups; All Sizes • Vendor Compliance

38. What Is Next • HR • Credentialing • Compliance • Shared Personnel • Nuc/Echo Maintenance • Billing

39. Possible Destinations • One Tax ID – Financial Integration • Clinical Integration • Internal Consolidation • Maintain Current Structure

40. Lessons Learned • Share the Work • Talk, Talk, Talk • Establish A Team • Administrator Relationships • Ideas • Problem-Solving • Best Practices • Sanity

41. Why It Works • Cost-Savings • Options • Independence • Harmony • Intelligent Decisions • Survival

42. Practice Today • Line of Credit Repaid/No Short-Term Debt • Strong Financial Health • Competitive Staff Compensation • Morale High; Turnover Low • Excellent Patient Satisfaction • Firm Partnerships • Enhanced Operational Efficiencies

43. Questions

44. Kyle Matthews @KMattCHD KMatt35@gmail.com