Enhancing Services to New and Existing Physician Clients

1. Enhancing Services to New and Existing Physician Clients Suzanne Denzine, CPA, CHCC sdenzine@KolbCo.com

2. Your Presenter • Suzanne Denzine, CPA, CHCC • Shareholder and Health Care Consultant • Expertise in operations and personnel management, physician compensation arrangements, business analytics, HIPAA regulations, OSHA compliance, fee analysis, compliance programs physician/hospital relationships, third-party payor contracts and negotiations, and practice start-ups

3. In Addition to Physicians… • Expand your definition of Health Care owners/stakeholders • MD’s, DO’s, Behavioral Health Practitioners • Advanced Level Practitioners (NPs and PAs) • Dentists • Veterinarians

4. Why I Don’t See Value in My CPA • From the client perspective • Proactive planning ideas included with financial statements not just historical financial data • What are the numbers telling me? • Value of service not demonstrated

5. How to Enhance My Services to New or Existing Medical Clients? • Add value to existing services • Additional “Specialty Services” to consider for building on your health care niche

6. Current Services • Change Management • 2012 -2013 substantial changes occurring in health care • SGR - Potential Medicare reduction in reimbursement rates again for 2013 • How will practices be able to absorb? • Implementation of electronic medical records • How practices meet 1st stage meaningful use in 2012 • Health care consolidation choices

7. Current Services • Change Management • Requires in-depth knowledge • Of the organization • Of the health care industry • Of the medical practice model • Knowledge-base to work through changes in critical parts of a practice

8. Current Services • Look for other ways to add value • Do you review the financial reports with your clients in person? • Are your statements presented in a format specific to medical practices? • Is a production analysis report part of your business analysis? • Example: provide gross and net collection rates global and by provider

9. Polling Question

10. Management with SMART Ideas • S Systems • M Management Outsourcing • A Accounts Receivable • R Revenue Cycle • T Targeting the low hanging fruit

11. Management with SMART Ideas • S Systems • Recall systems • Collections fees • Desktop power station

12. Management with SMART Ideas • M Management Outsourcing • Be an adviser on what is right for a practice • Is there a right answer? • Examples: • Coding expert • Cost accounting • Transcription

13. Management with SMART Ideas • A Accounts Receivable • Basic Tenets of a Good Collection Strategy • Developed written financial policies • Verify patient’s insurance coverage • Set clear expectations • Collect at time of service • Make easy and convenient to pay • Offer flexible payment options • Create team responsibility and incentive to collect

14. Management with SMART Ideas • What are the benchmarks that count? • Net collection rate • 99% or better is a STAR • Days in A/R • Under 35 days in total is a STAR • Exhibit A

15. Management with SMART Ideas

16. Management with SMART Ideas • R Revenue Cycle • Is a practice leaving money on the table? • Managed care contract analysis • payor mix, service codes • Constantly changing payor requirements • Missing patient encounter information

17. Management with SMART Ideas • T Targeting the low hanging fruit • Staffing per FTE physician vs. provider • Co-payment collection rates • Surgery deposits prior to the encounter • Denial percentage

18. Industry Benchmarks • Available through the MGMA and other outside sources • RVUs • Production, Cost and Compensation data • Overhead (See Exhibit B) • Revenue Cycle

19. Industry Benchmarks Exhibit B

20. The Business of Medicine • Incorporate financial statement format aligned to the health care practice (see Exhibit C) • Income tax basis • Health care nuances • Owner/Doctor segregation

21. The Business of Medicine Exhibit C

22. Flaws in the Analysis • Bundling of owners’ benefits into operating cost • Comparative analysis missing from the financial statements

23. Overhead Analysis • Personal costs • Practice development costs • Malpractice practice insurance • Bank Charges • Staffing/Benefits • Rent • Computer service related expenses • Repair & maintenance expenses • Miscellaneous expenses • Other income

24. Developing New Specialty Services • Add value to services • Services independent of one another • Identify additional skill sets/tool box • Employee benefit costs • Forensic accounting analysis • Internal control analysis • Revenue cycle system analysis

25. Polling Question

26. Merging Medical Practices • Consolidation in the independent physician group practice to • Specialty groups merging (Ex., cardiologists, cardiac surgeons and electro physiologists or ortho with physiatry and podiatry) • Larger, multi- specialty groups • Hospital system purchase • Accountable care organizations

27. Merging Medical Practices • Reasons • Accountable care organizations benefits and organization • Lower payor reimbursements • payor contracting efficiencies • Payment methodologies • Fee for Service • Episodic payments

28. Merging Medical Practices • Reasons cont. • Overhead cost reductions • Eliminate duplication of services and site costs • Gain multiple service discounts (malpractice insurance etc.) • Issues • Site(s) maintain or eliminate • Governance • Personnel reduction • Production and profit distribution formulas

29. ACO/MSO/IPA Formation/Utilization • Accountable Care Organizations • New type of organization • Members can be health care organizations and/or employed physicians, independent providers • Addresses accountability for new HC reimbursement type(s) • Episodic care reimbursement (global payment inclusive of all care provided) • Quality initiative components

30. ACO/MSO/IPA Formation/Utilization • Accountable Care Organizations cont. • IPAs (Independent Physician Associations) • Many merging to ACO structure • Primary purpose of IPAs are: • payor contracting • Service arrangement cost reductions • Provider system support • PM system • EMR system

31. ACO/MSO/IPA Formation/Utilization • MSO (Managed Service Organizations) • Specialty specific • Payor contracting • Not as viable in the current insurance environment

32. Adding a Physician or Other Ancillary Staff • Basis for • Volume expansion • New sites • Payor or service areas • Expansion into another service • Ex. Ortho- foot & ankle • Next generation • Owners are five or less years to retirement

33. Changing the Physician Compensation Formula • Reasons for • Fairness • Current formula is not working • Stark provisions • Other client service issues

34. Changing the Physician Compensation Formula • Factors in change • Base formula factors; shared vs. direct compensation and expenses • Managing physician director • % change in baseline factors • 90/10 to 70/30 equalization • Meeting Stark provisions for ancillary services • Volume considerations • Maximum OH allocations

35. Changing the Physician Compensation Formula • Factors in change cont. • Initiating more factors on compensation on quality indicators, patient satisfaction and achieving certain disease quality indicators • Adding Quality metrics • RVU compensation models

36. Polling Question

37. Office Sharing with Another Practice • Assist a small practice to establish an office with a shared overhead arrangement • Assist the client with analysis of the shared overhead arrangement • Establish the shared space

38. Implementation of EMR • EMR implementation activity increasing due to government incentives • Practices need assistance with planning and project management

39. Make Stakeholders out of the Employees • Driven by management • Promote TEAM environment • Merit bonus plans vs. COL increases • Mission statement driven • Patient quality and service areas • Patient surveys can facilitate the review • Hotline for patient complaints

40. Help Build New Revenue Opportunities • Practice areas • Use of EMR • Meet Meaningful Use attestation for incentive bonus • Adding physician extenders • Review specialty specific competitors • Ob/Gyn; weight loss clinic • Acupuncture; healing center (cancer treatment etc.) • Ortho; add OT/PT, podiatry etc

41. Review and Implementation of Practice Internal Controls • Separation of Duties • Controls in systems • Dual access and management • Limitations on access • Time off requirements; require staff to take vacations • Workflow analysis and access • Determine weak areas in controls • Work with CPA to monitor and provide business physical

42. Look for Signs of Financial Problems • Declining revenue current and over time • Payor mix analysis • No show rates • Patient seen rates per day/provider • A/R days outstanding increasing or higher than specialty specific benchmarks • Prior authorization issue; UHC/Humana

43. Are You Taking Care of the Physician’s Personal Finances? • Risk management; insurance review • Retirement plan options • Wealth management • Tax planning

44. Examples of Specialized Service • Physician compensation structure • Billing revenue cycle audit • Practice start-ups • Practice on-going management • Compliance plan development or update • Strategic planning • Shareholder code of conduct • HR services; recruitment

45. Examples of Specialized Service • Technology deployment • Employment agreements • Buy/sell agreements • Structuring buy-in/buy-out • Merger and acquisition analysis and facilitation • Practice valuations

46. Practice Management Reports • CPA prepared • A/R analysis • Provider analysis • Service line analysis • PM: dashboards • Daily A/R reports • Denial rates • Referral base tracking reports

47. Clinical Encounters • Documentation and compliance • Utilizing extenders • Continuity of care

48. Provider Work RVUs • Portion of Medicare and other payor reimbursement formula • Used in physician compensation formula • Provider production analysis

49. Referring Doctor Trends • How do new patients get referred to the practice? Do you know? • Is reporting available? • Why are referral patterns important?

50. Organizations to Join • HCAA (National CPA Health Care Advisors Association) • PVN (Physician’s Viewpoint Network) • MGMA (Medical Group Management Association) • State MGMA associations • HIMSS (Health Information and Management Systems Society)