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29 posts from January 2009

January 30, 2009

Upcoming free webinars by Frank Cohen

My good friend Frank Cohen (http://www.cpahealth.com/html/home.html) is putting on a series of free webinars – if you haven’t heard Frank speak, you’re missing out! Here is a description of each webinar, followed by each related presentation schedule.


For Physician Compensation using Work RVUs

Developing physician compensation programs can be an arduous task, particularly when considering the number of metrics involved.  Using work RVUs, or any volumetric, for that matter, can work very successfully as long as there is accountability on both sides. The biggest mistake people make with RVU-type programs is assuming they measure productivity; they don't.  An RVU is a proxy for consumption of a unit of resource, not a measurement of a unit of productivity. Using an objective statistical approach and three specific process steps, it is not that difficult turn work RVUs into a viable compensation model. In this free webinar, Frank Cohen, Six Sigma Black Belt, statistician and data analyst, will cover key analytical issues and metrics that can be used to create a working and efficient compensation model based on Work RVUs, including ways to spot gaming and gain buy-in from physicians on revenue accountability.  The webinar will include instructions on calculations as well as some samples and examples.


For Basics of RBRVS

Whether we like it or not, RBRVS has become a standard in the healthcare industry for benchmarking, financial analysis, fee scheduling, physician productivity and compensation and other medical practice management and analytical applications.  You don't have to be an expert to take advantage of the benefits or mitigate the risks involved in projects involving RBRVS.  Payers use it for fee scheduling, RACs use it to identify practices for audit and practices use it to get a handle on costs and provider performance.  If you don't understand what RBRVS is or how it is used, now is the time to learn. In this free webinar, Frank Cohen, data analyst, statistician and RBRVS expert will introduce you to the basics of RBRVS, show you how the RVU components are developed and maintained and how the RBRVS can benefit you, your physicians and your practice.  In only 45 minutes, you will be able to talk the RBRVS talk and walk the RBRVS walk.  This webinar will include a link to a file that contains samples, examples and a great template to help you calculate RVUs for every procedure you report.


For Introduction to Lean Six Sigma for the Medical Practice

Profit is a ratio of revenue to expense.  In order to be more profitable, traditional thinking says you need to reduce expenses and/or increase revenue, both increasingly difficult, if not impossible tasks, for many practices.  So, if you can't do either, what options are left?  Lean thinking says improve efficiency.  What if you could do more with your current resources?  What if you could see more patients or perform more procedures without adding to your fixed cost?  And at the same time improve quality and reduce compliance risk?  This is exactly what Lean Six Sigma (LSS) will do for your practice. During this free webinar, Frank Cohen, statistician, Six Sigma Black Belt and Lean instructor will introduce you to the concepts and ideas behind LSS and show you how it can be applied specifically to the medical practice.  When complete, you will know whether process improvement is the way for you to go and if so, how to obtain the resources and information necessary to embark upon your own LSS projects.


Webinar 1 – Physician Compensation using Work RVUs – Tuesday, February 3, 2009 from 11:00am until noon EST

More information and Registration link-



Webinar 2 – The Basics of RBRVS – Tuesday, February 10, 2009 from 11:00 am until noon EST

More information and registration link –



Webinar 3 – Introduction to Lean Six Sigma for the Medical Practice - Tuesday, February 24, 2009 from 11:00 am until noon EST

More information and registration link –


Make 2009 a year to pay down some of your personal debt.

Over time, people and businesses seemed to have forgotten that any money borrowed needs to be repaid.  Remember, leverage equals risk.  Make 2009 a year to pay down some of your personal debt (saving on personal interest costs is a higher return on investment that what you’re probably getting with any of your current personal investments).  Perhaps you can delay the purchase of a new car, scale down your awesome vacation, or settle for a 37 inch flat screen TV.

January 29, 2009

Remodel exam room first when redesigning your office

If you decide to remodel or expand your facility, pay special attention to the most important part of your office-the area in which patients are actually examined and treated. Plan this space to maximize both physician productivity and patient comfort and privacy concerns.

Then, look to other facility areas for improvement. While you can certainly study all this yourself, you may find it worthwhile to seek an outside consultant who can bring a fresh, objective point of view to the analysis.

Either way, don't skip evaluating your present office's flow system. It's a key step toward maximizing your productivity.

January 28, 2009

What if employee needs another W-2?

When issuing a duplicate W-2: Type “REISSUED STATEMENT” in the upper right-hand corner on all W-2 copies. It is acceptable to use a copy of the employer’s copy.

Sending W-2s to former employees.  Photocopy the envelope in a way that shows the recipient's address, and write on the duplicate copy the date you mailed it.

Handling returned W-2s. If you mail W-2s, keep a returned one in the envelope. If you hear from the employee, put this envelope in another envelope and mail it to the corrected address. If you don’t hear from the employee, keep it for at least 4 years as proof that it was mailed by the deadline.

Alternative: As we reported to our members in June, IRS final regs offer an easy new way to retain returned W-2s. You can meet regulatory requirements by scanning W-2 copies B and C, then shredding the originals.

Also scan the envelope in which the W-2 was mailed (because the postmark and address are proof that you mailed it and when). Scanning has a privacy benefit: W-2s with names, addresses and SSNs are not accessible simply by opening a drawer. Be sure your electronic storage is secure. [IRS Rev. Proc. 97-22, 1997-3 I.R.B. 9, Guidance on Electronic Records]

January 27, 2009

Set up your retirement savings

Most people find it easier to max out their retirement contributions by budgeting a set amount each month.  Instruct your employer to withhold $1,375 per month for your 401(k) or 403(b) plan to ensure that you hit the max of $16,500 in 2009.  Are you self-employed?  If so, you can sock away up to $49,000 in year 2009 into a SEP, Keogh or Solo 401(k), which equals $4,083 per month.  And if you'll be 50 or older by December 31st, the limit jumps to $22,000 for 401(k) and 403(b) salary deferrals, and $54,500 for Solo 401 (k)'s.

REMEMBER: Most people today are not PLANNNING for their retirement! Get busy.

January 26, 2009

Use RVUs to analyze your capitated revenue, improve collections in practices with mixed reimbursement

Relative value units (RVU) analysis is a terrific tool to establish and evaluate fee schedules, determine practice costs, examine reimbursement from payers, and assess staffing levels and salary and incentive programs. For providers with mixed reimbursement streams, RVUs facilitate apples-to-apples comparisons of capitation and discounted fee-for-service. Try these tips to ensure accuracy:

  1. Base reimbursement on current procedural terminology (CPT), not averages. The first step is to create a chart of all CPT codes, then look at the contract and know the year on which a payer's fee schedule is based as well as the renewal date.
  2. Ensure payers reimburse according to contract by measuring RVUs, receipts. With these data in hand, it's easy to determine how much the practice actually collects by payer and calculate an average contract rate for all services across all payers. It's important to look at the reasons why collections are falling short of this contract rate.
  3. Use RVUs to assess physician productivity. Results of these analyses can serve as starting points to examine each physician's salary, determine how many RVUs he or she must generate to support that salary, and consider whether and how to structure incentive payments in proportion to productivity levels.
  4. Obtain better contracts with RVU analysis. To identify specific savings opportunities, a practice should compare the number of clinical and support full-time equivalents (FTEs) and their costs as well as the administrative operations support FTEs and their costs. These analyses can reveal whether a practice is using more clinical or administrative support staff than its peers or is paying them at a higher rate. Additionally, analyze payment patterns for high-volume services that don't seem to be reimbursed according to contract.
  5. Apply the same methodology to capitation. If a capitation contract significantly underperforms those of all other payers, a practice could use its RVU analysis as the basis to renegotiate PMPM rates or even carve out certain high-volume services and pay them on an FFS basis to bring the contract to a sustainable level of reimbursement. Without using RVUs to assess a capitated contract's performance, practices can only look at the number of covered lives and the monthly cap rate to arrive at a flat per-member-per-month rate-a simplistic calculation that overlooks a great deal of valuable information.

January 24, 2009

Hospital Pays $36 Million to Settle Kickback Allegations After Its Voluntary Disclosure to Feds

Reprinted from REPORT ON MEDICARE COMPLIANCE, the nation's leading source of news and strategic information on false claims, overpayments, compliance programs, billing errors and other Medicare compliance issues.

By Nina Youngstrom, Managing Editor, (nyoungstrom@aispub.com)

Condell Medical Center's $36 million settlement is a powerful argument for contract audits and management systems because the hospital didn't learn it had a multitude of potential Stark and kickback violations until its due diligence for a pending sale, people involved in the case say. When the rocks were overturned, scores of dubious deals came to light. So in late May, Condell voluntarily disclosed its possible Stark and kickback issues to the U.S. Attorney's Office for the Northern District of Illinois, which announced a settlement Dec. 2. Meanwhile, Condell's sale to Advocate Health Care has been consummated

On the up side, Condell, the largest provider in Lake County, Ill., avoided a false claims lawsuit by coming forward when it found suspicious financial relationships (e.g., below-market leases, improper loans, payments to physicians for patient services without written agreements). Linda Wawzenski, the assistant U.S. attorney in Chicago who handled the case, says the Condell experience was a model for voluntary disclosure. "This was one of the fastest settlements from start to finish. To have a deal by Dec. 1 is like warp speed," Wawzenski tells RMC. "And it had to be approved at a pretty high level of the Department [of Justice]." Time was of the essence because of the pending deal with Advocate, which was essential to Condell's survival. The hospital "was extraordinarily cooperative," she says, and "gave us access to every piece of paper we could want. It's an example of how voluntary disclosure should work."

On the down side, the 238-bed hospital is paying the feds $33.12 million to settle claims involving Medicare and Medicaid and the state of Illinois $2.88 million to settle claims relating to Medicaid. The scope and nature of the alleged Stark and kickback violations — which Condell formally denies in the settlement — are striking. According to the settlement and to sources, over 100 physicians had arrangements with Condell that did not meet a Stark exception and/or may have violated the anti-kickback statute. In certain scenarios, the physicians allegedly agreed to refer patients only to the hospital.

"This case is a poster child for not paying attention to physician relationships," says Nashville, Tenn., attorney Patsy Powers, with the law firm of Waller Lansden Dortch & Davis (who was not involved in the case).

According to the settlement, some of Condell's arrangements with referring physicians for various professional services did not always comply with a Stark exception. Brian Annulis, a Chicago attorney who represented Condell during the voluntary disclosure and settlement process, tells RMC that while he can't comment on the specifics of the settlement, physician recruitment was a big part of the problem. Using various incentives, Condell allegedly recruited physicians who would refer patients to the hospital. But the hospital ran afoul of the Stark recruitment exception and anti-kickback statute, according to the settlement. The settlement also states that Condell never assessed whether there was a community need for the recruited physicians' services, the settlement states. Some of the recruited physicians were already practicing in the hospital's service area, it says.

Despite the fact that some of the physicians didn't need incentives to be lured to a place where they already worked and the lack of clarity about the need for their services, Condell "entered into agreements which benefited individual physicians or physician groups rather than the community, and entered into multiple such agreements with the same physician or physician groups," the settlement states. Many support agreements barred physicians from getting privileges at other hospitals. The recruited physicians received "certain financial support agreements and loans secured by promissory notes," the settlement states.

MDs Allowed to Work off Loans

"They were bringing in new doctors and giving them loans to set up new practices, and then they would allow them to work off the loans. Rather than pay them back in cash, they could pay them back in kind," Wawzenski says. "But then the [hospital] did nothing to figure out the appropriate hourly rate." The settlement states that the hourly rate was greater than fair-market value. Condell didn't use a valuation expert to determine whether the deals were fair-market value, Wawzenski says. Annulis concedes that some of the permitted work-off activities were "suspect."

There were other Stark and anti-kickback violations alleged. Physicians rented space in medical office buildings owned by Condell. The physicians' rent was below fair-market value, or Condell allowed rent abatement or deferred collection of rental payments, the settlement states.

According to the settlement, Condell paid physicians for performing services at the hospital without written agreements, as required by a Stark exception. One example: EKG interpretations. The physicians assigned their billing to the hospital, and the hospital paid the physicians pursuant to a predetermined fee-schedule amount. Annulis says all the professional services were provided as charged. "These were not payments for phantom services," he tells RMC. "We are confident that the services were actually rendered and paid for, but we had a technical Stark law problem because the hospital lacked a signed agreement."

It's unclear why Condell didn't know about its alleged sweetheart deals. But lawyers say it's not uncommon for hospitals to discover Stark violations only when there's a pending sale because the buyer must perform due diligence (which is a thorough legal and financial review of a target entity).

"These things can come up in due diligence for an acquisition," Powers says. "If questionable financial arrangements are discovered during due diligence, a new owner may insist on a clean bill of health. If a buyer plans to pay millions for a hospital, it wants some assurance that it won't be investigated for the compliance failures of its predecessor, and voluntary disclosure is the best assurance. Unfortunately, it can be very expensive. If this hospital had conducted routine contract audits and employed third party valuations, these alleged improper arrangements would not have continued. The hospital decision-makers would know the problem and implement the appropriate compliance measures before facing a disappointed suitor."

But the unwillingness to tackle Stark and kickback compliance pre-emptively is perilous. In addition to self-disclosures forced by acquisitions, there is always the potential for whistleblowers to file lawsuits — a growing threat given the success of Stark-based False Claims Act lawsuits and the financial appeal of potential whistleblower rewards in these difficult economic times, Powers notes.

Expect Stark Oversight to Intensify

Meanwhile, Stark oversight will intensify in the near future for many hospitals because of the Disclosure of Financial Relationships Report (DFRR), contends Cynthia Wisner, assistant general counsel for Trinity Health in Novi, Mich. Until DFRR, CMS and OIG had no mechanism to routinely audit Stark compliance. But 500 hospitals will soon be required to complete the DFRR, a detailed form eliciting details about all physician agreements. Hospitals have to complete it and return it to CMS with copies of every contract.

"DFRR is a report that requires you to self-assess your status," Wisner says. The same way that filing tax returns forces organizations to know their taxable transactions, preparing the DFRR will push hospital compliance officers and executives toward intimacy with physician dealmaking. CMS has said that if it can find a way to reduce the burden, may require more hospitals to fill out the DFRR.

Speaking generally and not specifically about the Condell settlement, Annulis says many hospitals lack adequate policies and procedures for implementing and maintaining contracts with potential referral sources. "A hospital would be well-served to invest the time and resources necessary to ensure that its physician contracts and arrangements are compliant with the law," he says. Invest in the front end; put in the necessary time and resources to develop a contract implementation and management system, Annulis advises. "When someone comes knocking and asks questions, whether it's a government investigator or prospective buyer, you need to be able to produce and support the contract. You can't say, 'I called a couple brokers, and they thought reasonable and fair-market value for the lease was X dollars.' I know no one wants to spend the money, but in the long run, it's worth it. You can't cheat on this piece, especially with the new Stark rules," says Annulis, with the law firm of Katten Muchin Rosenman LLP.

CMS created an alternative path to fixing Stark noncompliance, penalty-free, in the final FY 2009 inpatient prospective payment system regulation published in the Aug. 19 Federal Register. Annulis notes that even before the settlement and proposed sale, Condell had hired new management, "which had begun to identify and address the problems in question."

Read the press release at www.usdoj.gov/usao/iln/pr/chicago/2008/index.html

January 23, 2009

Count on trusted colleagues for candidate referrals

Getting referrals from trusted colleagues can help you find motivated physician candidates who may not be interviewing with other practices. Referrals can come from current and past colleagues, former employers, and referring physicians.

Because these valuable resources know you, they should be able to identify candidates who are good professional and personality fits for your practice. This not only save times and money but also reduces the number of references you will need to check.

You also can get referrals from candidates you are currently considering. When speaking with candidates-especially those who don't seem interested in the job-politely ask, "Do you know anyone who may have an interest in the opportunity we discussed?" If so, ask the candidate whether it would be appropriate for you to call that person. If the candidate hesitates about sharing the associates contact information, inquire as whether he or she could pass along yours.

January 22, 2009

The Six Keys to Success in Physician Practice Management

1.    Leadership – The ship can’t be rudderless

2.    Technology – Invest in your future

3.    Marketing and Business Development – You have to constantly grow the practice

4.    A Great Place to Work – Happy staff translates in to a healthy bottom line

5.    Patient Service and Satisfaction – Isn’t this the real key to your success?

6.    Strategy Execution – People don’t plan to fail – they just fail to plan their future

Medicare E-Prescribing Incentive Program Update

Beginning January 1, 2009, eligible professionals can participate in the E-Prescribing Incentive Program by reporting on their adoption and use of an e-prescribing system by submitting information on one e-prescribing measure on their Medicare Part B claims. For the 2009 e-prescribing reporting year, to be a successful e-prescriber and to qualify to receive an incentive payment, an eligible professional must report one e-prescribing measure in at least 50 percent of the cases in which the measure is reportable by the eligible professional during 2009. There is no sign-up or pre-registration to participate in the E-Prescribing Incentive Program. For more information, visit http://www.cms.hhs.gov/PQRI and select “E-Prescribing Incentive Program” in the left column.

In October 2008, CMS and 34 partner organizations hosted a meeting about the mechanics of implementing an e-prescribing program in a practice. Audiotapes and slides are now archived online for continuing education credit. The Massachusetts Medical Society and the American Pharmacist Association are pleased to provide continuing medical education (a maximum of 22.5 AMA PRA Category 1 Credits™ (risk management study for Massachusetts physicians) and continuing education for pharmacists (up to 13.25 hours of continuing education credit (1.325 CEUs)). Go to www.massmed.org/cme/CMS_eprescribing to view the presentations and hear the audiotapes of the program. There are no registration or certificate fees.