CMS requires new time limits for filing claims
The Centers for Medicare & Medicaid Services (CMS) recently issued instructions requiring providers to submit Medicare fee-for-service claims within one calendar year from the date of service. This requirement reduces the amount of time providers previously had to submit claims, and claims submitted more than one year after the date of service will be denied by Medicare. The requirement impacts all claims with dates of service on or after Jan. 1, 2010. Additionally, any claims for services furnished prior to Jan. 1, 2010, must be submitted to Medicare contractors by Dec. 31, 2010. The new, timely filing requirement is mandated in Sec. 6404 of the Patient Protection and Affordable Care Act.
July 29, 2010 in Medicare | Permalink | Comments (0) | TrackBack (0)
A strategic planning self-assessment for physician practices
The checklist below is an example of a strategic planning self-assessment you can use in your practice. The purpose of these self-assessments is to give you a concise checklist of best practices in a clinical practice. This checklist follows the Pareto Principle of focusing on the 20% of business practices that get you 80% of the results. Therefore, I don’t claim that it covers everything but it does cover a good percentage of the most important things.
Strategic Planning Checklist
r We do a strategic planning process at least annually.
r This process gathers input from key stakeholders and data about our practice and marketplace.
r We review our mission and vision for the practice.
r We assess the size and growth of the market for our services.
r We compare our own “penetration” to the size of the market.
r We assess trends in managed care and payments and analyze our contracts.
r We evaluate competitors’ strengths and weaknesses, and how we can gain an edge.
r We assess the strengths and weaknesses of our referral network.
r We evaluate the depth and breadth of our overall service offerings. We assess the strengths and weaknesses of our marketing.
r We assess our payers, including our payer mix.
r We evaluate our clinical utilization rates and quality or care outcomes.
r We evaluate our internal controls.
r We evaluate our cost structure and financial ratios.
r We review our technology.
r We take a hard look at the patient’s experience, and how to improve it.
r We assess the capabilities of our clinicians and staff and identify any gaps to fill.
r We review physician and staff compensation.
r We assess our risks, compliance, and malpractice insurance.
r We evaluate our relationship with local hospital(s).
r We analyze our financial strength, including capacity for debt, days receivables, trends in aging of receivables, collection ratios, and profitability by services.
r We assess our facility and location, including whether we are located in the optimal zip code/area to serve our desired patient base.
r We do an overall “Strength, Weaknesses, Opportunities, and Threats” or SWOT analysis about our practice.
r We determine which services and programs to expand, which to defend, and which to exit.
r We identify the top issues we need to address, and then identify key priorities to address these issues, achieve our vision, and be more competitive and profitable.
r We set annual performance/financial goals for our practice and develop a plan to achieve those goals.
r We assign specific accountability to achieve these initiatives, and a communication plan to follow up on them.
July 28, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)
Medicare utilization numbers for physicians
Looking for Medicare utilization statistics? You can go to the CMS website and download the files here:
http://www.cms.hhs.gov/MedicareFeeforSvcPartsAB/04_MedicareUtilizationforPartB.asp#TopOfPage
This is the link for the Medicare Part B physician file. There are also other files available by State. If you go to Medicare, Statistics and reports, the page has a number of options. On the lower right side of the screen check there are three separate areas to check. Medicare Health Plan Reports and Files, Medicare Fee for Service (Has both Part A and B) and Medicare Program Rates and Statistics. Many of the files are extremely large and cannot be opened in an Excel worksheet and have to be put into a database program such as Access. If you are looking for E&M code specifically, they are at the bottom of the page on the link.
July 26, 2010 in Medicare | Permalink | Comments (0) | TrackBack (0)
Is there a “Most Common” Deficiency among Today’s Physician Practices?
I am often asked what is the most common deficiency I find in medical practice operations when I conduct a full operational assessment. Managing a medical practice has to be one of the most challenging careers a person could ever have, and in today’s evolving health care industry, those challenges can come tenfold on a daily basis. It is no surprise, then, that in such an environment it is easy to identify areas where we, as an industry, have “needs”. It is somewhat harder to generalize, or to single out any one area of weakness as being consistently the most prevalent. That said, we do find both a number of common strengths and deficiencies in medical practice operations.
One – frequently hidden - deficiency that is both common as well as significant in its impact on the overall performance of the organization would have to be in regard to the training of staff. Almost without exception, I will find staff working on tasks where they have not been adequately trained. This includes not just technology areas but also “soft” areas such as the people skills needed for interacting and working effectively with patients. Make no mistake; to step away from the many daily crises and take time to invest in training your people requires tremendous discipline. And, making the omission even easier, the significance of not doing so can remain hidden for some time. Most of the medical management information systems, for example, are found to be utilized only to about 50% of their potential due to inadequate training of staff.
After a short introduction, very few practices participate in follow up training, cross training, or user groups where many innovations are shared among users. It is often not until someone undertakes a quantification of the resulting costs (from diverse areas such as stress-related turnover, error rates, increased liabilities, etc) that attention is allocated to the issue.
So for the moment, and in general, I would have to say that a blanket recommendation could be made to medical practices to implement, as part of their strategic plans, staff training by position and to implement an intensive and formal start up training program for new hires.
July 23, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)
Considerations when limiting or reducing Medicare patients in a physician practice
Many physician practices are beginning to reduce and limit the number of new Medicare patients they see in the office. Here are some pointers in case you are thinking about this kind of action:
a. Pay attention to the socio-economic characteristics of the patients being limited or reduced. Do not create the appearance or reality of “red-lining” or other prohibited discriminatory conduct. Defending the appearance of it, even if successful, will be costly and damaging to the practice’s reputation;
b. Pay attention to the applicable state laws related to “abandonment” and how patients can be excused from the practice. Most states require advance notice and some sort of courtesy list of potential qualified alternative providers. In addition, patients under active treatment for “live-threatening” or other significant medical problems may be further protected. The State Medical Society usually has the information readily available;
c. Remember that “Opting Out” of the Medicare program is a specific, formal process that is irrevocable for two years. A careful analysis and pro forma are strongly recommended, as well as interviews with a representative number of the practice’s current and/or prospective patients unless the Medicare percentage of the practice is de minimus;
d. Gradually scale back by limiting appointments (“no more than x or xx Medicare appointments per [day] [week]”), closing the practice to new Medicare patients (this is becoming very common), reducing by attrition (no new Medicare patients and no replacements), or limiting by disease/problem (no diabetics, only diabetics, etc.);
e. Keep records of the “before” results and the “during” and “after” results to verify that the desired effect(s) were achieved.
July 22, 2010 in Medicare | Permalink | Comments (0) | TrackBack (0)
HIPAA: Physicians treating family members
What safeguards should physicians who treat family members consider? Reasonably ensure the maintenance of relevant audit logs. Also, consider a regular review of patient charts for family members treated regularly. These measures are necessary to reasonably ensure that access to the medical record, whether paper or electronic, is related to treatment, payment, or healthcare operations only.
Securing the charts of family members in a locked receptacle or cabinet is a wise precaution. These charts may be provided to physicians for appointments with family members or when a chart review or consultation is necessary. The HIPAA Privacy Rule does not require these measures; they are merely additional steps to help protect the practice, family members, and physician if the physician is later accused of accessing family members’ files for reasons other than treatment.
Reproduced from HIPPA Weekly Advisor © 2008 HCPro, Inc., 200 Hoods Lane, Marblehead, MA 01945. 781/639-1872. www.hcpro.com. Used with permission.
July 21, 2010 in HIPAA | Permalink | Comments (0) | TrackBack (0)
Dear Doctor: It’s Not About Overhead Anymore
A colleague and I were discussing recently how we think physicians must have watched the cartoon series Southpark where school counselor Mr. Mackey tells the children about the evils of drugs by endlessly repeating the mantra: "Drugs are bad, OK." Physicians repeat this mantra as: "Overhead is bad, overhead is bad." Since overhead is "bad," it must be reduced. Guess what doctors; it’s not about overhead anymore.
Overhead isn't the enemy
A good deal of disagreeable behavior exhibited within medical practices can be traced back to money - and overhead is an easy target because everyone understands it (and it's always "too high"). As such, instead of concentrating on increasing the practice’s top line (i.e. revenue), most physicians take the easy way out and cut overhead unnecessarily instead in order to prop up practice profits.
I as a consultant should not be able to come in to ANY medical practice and be able to make a recommendation to cut out significant amounts of overhead. By now, practice overhead should be at a manageable level. If I can find overhead reduction opportunities, then management needs to be fired on the spot in my opinion. In today’s declining reimbursement environment, sitting on excess overhead shows a total lack on effective office management. However, if a physician or physicians won’t make the hard decisions necessary to reduce overhead (i.e. the administrator’s ability to reduce overhead is compromised), then he, she, or they need to start whining about practice cash flow and their own compensation.
Recently I did an assessment of a medical group where the overhead was "allegedly too high" and found that a majority of the physicians were in fact producing below the 30th percentile compared to national surveys. Blaming it on the overhead is a typical way of distracting the discussion of production.
My experience is that medical practices with higher overhead generally report higher physician incomes. To paraphrase management guru Tom Peters: Your ability to cut costs is limited, but your ability to increase revenue is unlimited.
Almost any practice in financial trouble can trace it's problems back not to overhead, but rather to problems on the revenue side. Physicians need to focus on negotiating better contracts with payers; they should focus on improving collections; they should focus on learning to code better; they should focus on being more efficient with their time; they should focus on adding other revenue sources. In other words, quit fretting so much about the overhead.
I regularly ask physicians if they would invest in a new ancillary service that would produce a guaranteed $1 million in revenue with 80% overhead and always find several who say no -- the overhead is too high.
Many large, successful enterprises in this country provide a nice return to shareholders by seeking out a pretty modest profit margin. Physicians need to remember this concept. If a service is revenue-positive, it's revenue-positive. Twenty cents on the dollar is better than zero cents on the dollar.
Faux Indicators
Overhead percentage is the most overrated and overused tool for evaluating medical practices. Overhead percentage doesn't reflect overhead, it reflects the ratio of overhead to revenue. Without looking at both revenue and overhead you get a very much distorted view.
I'll never forget the surgeons and internists we were merging a few years ago. "We can't merge with you," the surgeons said, "your overhead is 60% and ours is only 40%. You're too inefficient." The surgeons got real quiet when I pointed out that, in terms of real dollars, the overhead of the two groups was virtually identical - it was the revenue that was different.
You would expect the procedural nature of a surgical practice to have higher revenue than internists. That's the distortion in looking only at overhead percent - when your revenue goes up, your overhead percent magically goes down even though the overhead didn't change.
An obvious solution
When you pay attention to profit instead of overhead you are looking at the glass half-full, instead of half-empty.
The bottom line for physicians who want to see a better bottom line is to work on the bottom line by negotiating better contracts, terminating poor contracts, exploring joint ventures, improve coding and collection rates, improve office processes, develop services that will generate additional revenue, and look at all other avenues for practice expansion.
In the words: CONCENTRATE ON YOUR TOP LINE - The overhead will take care of itself.
July 20, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)
Starting a new medical practice?
Thinking of starting a new medical practice and wondering where do I begin? Well the first step is to download the new practice start-up checklist from my website:
http://www.rtacpa.com/healthcare-resources/forms-and-checklists.html
The next step is to engage a healthcare consultant or a CPA who has significant healthcare experience to help guide you through the start-up process. You can try to go at it alone but I don’t recommend it. But did you know the IRS offers tax tips for new businesses? The IRS offers a number of tax tips for new physician business owners, including: (1) deciding what type of business entity to establish, since it will determine which tax form to file; (2) applying for an Employer Identification Number (EIN), which can be obtained online at www.irs.gov ; and (3) establishing a recordkeeping system "suited to your business that clearly shows your income and expenses." While the law generally does not require any special kind of records, the business you are in affects the type of records you need to keep for federal tax purposes.
Check out these resources to assist in getting your new practice off to a good start.
July 19, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)
Continuity planning for physicians
Planning can ensure that your family and medical practice (or any other healthcare entity) business are protected. The long term survival of any business like a medical practice—and the well-being of your family—are factors that you should consider if you haven’t already.
The main goals of creating an estate plan for your business are:
• To establish a business continuation plan that can help provide benefits for your practice and your heirs.
• To meet your objectives for asset distribution.
• To potentially reduce taxes for your heirs.
To make sure that an business estate plan is up-to-date and effective, these are some of the concerns that you should document on an annual basis:
q Is there a business continuation plan in place? Does the plan identify the owner’s successors? If so, are these successors trained and ready to take over when necessary?
q Is the insurance coverage adequate to keep the business going?
q Are financial arrangements up-to-date? For example, are new sources of capital to fund expansion, purchases, new product lines and buy-sell agreements identified?
q Is the practice properly valued?
q Are employees informed about the future plans for the business? Knowing that the business has a continuity plan can help keep good employees on staff.
Make sure that you have issued detailed instructions to an executor. It is important to document everything relating to your medical practice and personal assets (e.g., the locations of all safety deposit boxes and investment accounts), even if your heirs will not actively run the business. This document should discuss management plans, shareholder agreements, buy-sell agreements and other issues vital to the company’s future. By keeping this information up to date, you will make it much easier for someone to take over or liquidate.
Planning today could go a long way in helping alleviate asset distribution headaches for your heirs and partners. Creating a proper estate plan requires careful planning and input from trained legal, tax and financial professionals.
July 16, 2010 in Personal Finance | Permalink | Comments (0) | TrackBack (0)
Cash vs. accrual books for a physician practice
Oftentimes a medical practice wants to know whether or not it should keep its books on the cash basis of accounting or the accrual basis of accounting. The answer often depends on the intended use of the financial statements. There are two basic “financial statements”: A Balance Sheet, which displays the practice’s assets, liabilities, and equity, and the Statement of Income, which displays the practice’s revenues, expenses, and net income.
The accrual method of accounting records revenues when they are earned and expenses when they have been incurred. In other words, revenues are recorded on the books when billed to patients, insurance companies, and other third party payers and expenses are recorded when incurred and there is an obligation to pay. Banking institutions or other lending institutions in order to receive and maintain a loan usually requires accrual basis statements. The cash basis method of accounting records revenues when the cash is received and other transactions, such as expenses, when they are actually paid.
So which method should a practice utilize to keep its books and records? The industry standard is to use the cash method of accounting. This is because practices use their financial statements to manage and track their operations. For example, revenues and expenses are often compared to annual and monthly budgeted amounts. Even more important, published practice statistics are expressed on the cash basis of accounting. Surveys from reputable sources such as the Medical Group Management Association, American Medical Association, and Medical Economics publish their statistical figures on the cash basis of accounting. Practices, as a management tool, compare their own operational statistics to these surveys. Practices need to know whether their collections are in line and whether or not their overhead is within reasonable limits or not.
So how does a practice owner or owners manage a practice on a day to day basis? One way is to use what is commonly termed a Medical Practice Management Report. Medical practice performance can be tied directly to the numbers it produces. Poor statistics usually indicate poor performance somewhere in the practice. This is how the managers of a practice knows there are or could be existing problems in the medical practice. Good statistics indicate good performance; it is that simple. Remember this one axiom: “NUMBERS DON’T LIE!” If a medical practice (or any other health care provider for that matter) is not able to meet or achieve certain statistical benchmarks, then you can be rest assured there is some problem that warrants your investigation. This is why it is so important for a medical office to monitor financial statistics on an ongoing basis.
Keep the concept of benchmarking in mind. Benchmarking is basically goal setting, and all medical practices and other healthcare providers need it. Each medical practice needs to determine where the practice should be in terms of financial statistics and numbers and where it should stand financially day to day, at the end of the month and at the end of year. For example, should the practice’s overhead be 50 percent of collections? Should only 15 percent of practice receivables be over 90 days old? Should the net collection percentage always exceed 90 percent at any point in time? By constantly monitoring these benchmarks, a practice can ensure its ongoing financial success.
July 15, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)
