Can Your Medical Practice Afford To Drop An Insurance Carrier?

I worked with a practice that was in a similar situation. The partners wanted to drop an insurance plan, but they had questions they wanted to answer before pulling the trigger, so to speak.

For example, one of the questions was how many patients would they potentially lose and how significant would be the financial impact if they dropped the insurance plan?

Screen Shot 2016-01-05 at 11.09.13 AMI received a letter from the University of Chicago Medical Center explaining that effective Jan 2016; they will no longer accept BCBS.

The announcement took me by surprise. Not because the hospital was dropping an insurance plan- but because they were dropping a major plan, BCBS.

BCBS has a significant market share in Chicago; which translates to a lot of patients having BCBS as their insurance carrier.

I can only imagine why the hospital decided to drop BCBS, but I think I can say with a fair amount of certainty that the decision must have been difficult for stakeholders of the hospital. Undoubtedly dropping such a large plan would affect a lot of patients, but also, shake up the hospital’s income.

CAN A PRACTICE AFFORD TO DROP A PLAN?

I worked with a practice that was in a similar situation. The partners wanted to drop an insurance plan, but they had questions they wanted to answer before pulling the trigger, so to speak.

For example, one of the questions was how many patients would they potentially lose and how significant would be the financial impact if they dropped the insurance plan?

INSURANCE DISTRIBUTION

To help them answer their questions, I worked with the practice manager to create a simple spreadsheet that I call an insurance distribution sheet. Below is a version of the spreadsheet already completed.

Screen Shot 2016-01-03 at 6.28.38 PM

To build the spreadsheet, we needed 3-data sets from the practice’s practice management system. Those three data sets were:

  1. Number of Patient Seen by Insurance Plan
  2. Gross Charges by Insurance Plan
  3. Net Receivables by Insurance Plan

The practice management system we were working with did not provide these data sets in one clean report. We had to run individual reports and enter the values into the spreadsheet.

Once the data was aggregated, we added a simple formula to translate the results into percentages. And the results is what the example above shows.


For those that are unfamiliar with Excel, click HERE to see a brief overview of how to calculate the percent of the total.


WHAT DO THE COLUMNS MEAN?

The first column is the insurance company patients had at the time of service. Percent of patients represents the ratio between all the patients seen, versus the patients seen with the corresponding insurance company. For example, let’s say the practice saw 1000 patients and of those, 300 had BCBS.

300 / 1000 = .3*

(*) BCBS represented 30% of the patients seen

Like percent of patients, percent of charges is the ratio of the practices gross charges divided by the gross charges corresponding to each insurance company. Example. Let’s say the practice billed $1,000,000. Of that million, BCBS represented $250,000.

250,000 / 1,000,000 = .25*

(*) Percent of charges for BCBS is 25%

The percent of receivables column follows the same math as percent of patient as well as percent of charges. And the cents/$ column calculates how many cents on the dollar the practice is collecting from the payor.

INTERPRETING THE GRAPH

Let’s look at BCBS and read across from left to right.

We see BCBS has 40% in the percent of patient column. Meaning, of all the patients seen, 40% had BCBS as their primary insurance. The next column is percent of charges. We see the BCBS represented 45%. This indicates that 45% of gross charges for the practice was billed to BCBS.

Percent of receivables is the next column over. It indicates that the revenue from BCBS accounted for 50% of the practice’s total income. And the revenue averaged 73 cents on the dollar. Another way to read it is, for every $1 billed to BCBS, the practice received 73 cents.

In contrast, let’s look at UHC. Only 8% of all the patients the practice saw for the period were UHC patients. UHC represented 9% of the practice’s revenue, and they averaged 60 cents on the dollar.

WHAT CAN WE GLEAN?

With an analysis like this, the practice can begin to find concrete answers to their pressing questions. For example, if UHC was the plan they were planning to drop, the sheet is able to show them what the impact would be from both a patient standpoint and financial standpoint.

UHC represents 10% of their patient panel. Which would have to leave the practice if they drop the plan, taking with them 9% of the practice’s revenue.

If the plan in question is BCBS, the numbers tell a different story. Fifty percent of the practice’s revenue would walk away with 40% of their patient panel.

Another observation is that Medicaid accounted for 37% of patients seen; but the State’s insurance plan accounted for 24% of the practice’s revenue. Something worth pondering.

HOW MUCH IS THE SHORTFALL?

For the sake of argument, let’s say UHC is the plan the practice was considering dropping. Doing so they would lose 9% of their revenue. This is not insignificant. If practice revenue is 1-million dollars, 9% represents $90,000. If practice revenue is 5-million, 9% is near $500,000. It’s less money no matter how you look at it.

PREPARING FOR THE SHORTFALL

When the doctors I was working with realized how much they’d lose, they got cold feet.

Here is what I explained to them…. the practice doesn’t have to see the same amount of patients to recuperate the 9% revenue shortfall. In fact, the practice can see fewer patients and still make up the revenue shortfall. How so?

Because of the cents on the dollar.

BCBS pays .73cents for every dollar billed. That’s 13cents more than UHC. By filling the schedule with better paying plans, like BCBS, Aetna or HFN, the practice will recuperate the 9% revenue loss faster because they are making more per patient than they would treating a UHC customer.

NOT ALWAYS SO CLEAR

Admittedly this graph does not give you a comprehensive picture. There are potentially other variables that a practice may consider. However, in the case of the practice that I worked with, this analysis was all they needed to answer their questions and move forward.

One last thing before you move one… don’t focus on the numbers you see on the graph and use them to compare with your practice numbers. Focus instead on the method, the process and the math with your numbers. Deal?


EDITORIAL UPDATE
The practice reached out to the payer to negotiate better rates. Armed with the data, they felt empowered (not at the mercy of the payor) and firmly request payment increases. The payer agreed. And they signed a contract that was competitive.

 

Are You Following These 10-Steps Before Terminating A Physician- Patient Relationship?

This post was originally published on the Verden Group’s Blog. Written by Sumita Saxena, Senior Consultant, The Verden Group

It unfortunately can happen to anyone: You go above and beyond to provide your patients excellent care with uncompromising accessibility, and yet something somewhere goes wrong and the relationship quickly deteriorates.

Screen Shot 2015-08-29 at 12.13.02 PMAfter trying your best to mend the problem it becomes clear – the relationship has broken down beyond repair and for whatever reason you reach the tough decision to terminate the patient from the practice.

Before you act and send notice, please take a look at some helpful steps we have compiled for you to consider as you navigate this difficult subject.

Step One: Try to Work It Out With Your Patient.

Practically speaking, when faced with a difficult patient situation, the best course of action is to avoid a unilateral termination of the physician/patient relationship by addressing the problem quickly.

Communication is the key.

The patient should be advised of the situation and given a reasonable opportunity to correct the problem. You should make it clear that failure to correct the problem may result in the dismissal of the patient from the practice.

Step Two: Review the Applicable State Medical Licensing Rules.

State licensing boards govern the practice of medicine and the relationship between a physician licensed in that state and his or her patients. Accordingly, it is essential to review the medical board rules carefully before you terminate a patient from your practice.

Step Three: Consider AMA Guidance. 

The American Medical Association (the “AMA”) has provided guidance on terminating the physician/patient relationship. According to the AMA’s Code of Medical Ethics, physicians have the option of terminating the physician/patient relationship, but they must give sufficient notice of withdrawal to the patient, relatives, or responsible friends and guardians to allow another physician to be secured.

The AMA recognizes that there are times when a physician may no longer be able to provide care to a certain patient, including when the patient refuses to comply, is unreasonably demanding, threatens the physician or staff, or otherwise is contributing to a breakdown of the physician/patient relationship.

According to the AMA, terminating a physician/patient relationship is ethical as long as the proper procedures are followed.
The AMA has given the following advice for the termination process:

  • Giving the patient written notice, preferably by certified mail, return receipt requested;
    Providing the patient with a brief explanation for terminating the relationship (this should be a valid reason, for instance non-compliance, failure to keep appointments);
  • Agreeing to continue to provide treatment and access to services for a reasonable period of time, such as 30 days, to allow a patient to secure care from another person (a physician may want to extend the period for emergency services);
  • Providing resources and/or recommendations to help a patient locate another physician of like specialty; and
  • Offering to transfer records to a newly designated physician upon signed patient authorization to do so. American Medical Association (AMA), “Ending the Patient-Physician Relationship,” http://www.ama-assn.org/ama/pub/physician-resources/legal-topics/patient-physician-relationship-topics/ending-patient-physician-relationship.page

Step Four: Check Your Payer Contracts and Policies. 

A physician who is a participating provider (under contract) with the patient’s insurer (commercial or government payer) may be obligated to notify the payer and comply with additional requirements. You should review your provider contract(s) and policies in order to determine if the payer has a policy on patient termination.

For example, some insurance carriers require 60 or 90 days notice before dismissal (as compared to the 30 days notice required pursuant to certain state laws) and some require prior written notice to the carrier to enable the carrier to contact the patient.

There also may be specific requirements concerning pregnant or mental health patients. Medicare, Medicaid, and other government payers have strict policies on terminating a patient that should be reviewed before terminating a governmental plan beneficiary.

Step Five: Review Your Malpractice Carrier Requirements. 

Some medical malpractice insurance carriers have adopted rules or recommendations for terminating the physician/patient relationship. Accordingly, you should review your malpractice policy or contact the malpractice carrier when establishing the procedure for terminating the physician/patient relationship.

Step Six: Send Written Notification to Your Patient.

You should send written notification advising the patient that he or she is terminating the patient relationship. The notification should comply with the licensing board’s rules and the requirements of the applicable payer and the your malpractice carrier. Ideally the patient notification should be prepared or reviewed by experienced counsel before sending to the patient.

Step Seven: Provide Continuity of Care.

You should ensure that you provide the proper continuity of care when dismissing a patient from your practice, including any requirements under state licensing rules, their payer contracts and their malpractice policy. The AMA guidance recommends that the physician provide the patient with resources and referrals for other sources of care.
Step Eight: Do not Charge for Patient Records.

A physician who terminates his or her relationship with a patient should not charge the patient for copying the patient’s medical records.

Step Nine: Consider Risk Management.

Additionally, you should perform a risk management analysis before terminating the physician/patient relationship. You should consider the possibility (even if the patient’s position is without merit and you will ultimately be successful) of patient complaints, disciplinary investigations, litigation, or other action initiated by disgruntled patients.

Step Ten: Establish a Set Policy on Patient Terminations and Train Staff on the Policy.

In order to avoid any potential issues with former patients, the practice should have a set policy in place for the termination of the physician/patient relationship, including a sample termination letter. The policy should be applied to patients consistently and without discrimination. The staff should be trained on the policy and should document compliance with the policy.
By following the above steps you can be proactive and diligent in mitigating your risk if such a situation ever arises with a patient.

How to Deal with Unreasonable Patients in Your Medical Practice

Angry patients, customer service, medical practiceA while back, I was working the front desk when a dad of one of our patients came up to me and said he didn’t want to sign the credit card on file authorization. I politely insisted he needed to fill out the auth form. He cut me off with loud: “WHY? Who came up with this stupid idea?”

Awkwardly I uttered, “Ummm, me.”

Now, both of us felt awkward. Silence…

So the parent broke the silence and in a less aggressive manner he asked why we were doing this. He asked, “…don’t you get paid by my insurance company?”

I started explaining how insurance worked. I happened to have a collection report on my desk. I showed him the bottom sum. It displayed the number that we had written off due to bad debt for the previous months before the CC policy went into place.

His draw dropped. He said “I had no idea..” he then said, “…how can you run a business when you don’t get paid right away?

“Now you know why this policy is so important to our office,” I said.

He gladly gave me his card.

In my experience, very few people will have a problem with your practice policies, whether it is collecting a charge for forms or instituting a credit card on file program. The ones that have an issue, will have less or no issue once you explain to them why you are doing it.

Let’s call these two group the reasonable parents. 

There will still be a group – a very, very small percentage of those that will continue to have a problem despite your best effort to explain your reasons.

How about if we call that group unreasonable parents? 

For the reasonable ones, continue doing what you do best. In fact, bend over backwards for this group.

For the others, the unreasonable ones, let those skeptics go free. Let them pout, yell, scream,  and complain. But don’t be afraid of them. And what ever you do, don’t let them dictate what you know is the right thing to do. Also, and equally important, don’t let those bad apples influence how you will continue treating the reasonable ones. You don’t need the unreasonable ones . Let them go.

Do Your Patients Expect Something for Nothing?

iStock_000000385270SmallI would say yes.

However, I would submit that the reason our patient’s expect something for nothing is our fault, not theirs.

The truth is, we’ve given away so much over the years. And now that we want to charge for things (that have always cost us) like forms, after hour phone calls, and other things, people think we are now wanting to collect for things that they were lead to believe had no value.

Not to mention they often think we are nickle-and-diming them now.

But some practices have been very careful about not falling into this trap of giving away their time and their resources.

Take Village Pediatrics for example. Dr. Gruen and Dr. Gorman charge parents between $150 and $325 (depending on how many children) for a plan they call the added benefits plan. Here is what their website says about the plan:

This modest per-child administrative fee includes services that may be non-covered or non-reimbursed by your insurance company and are typically billed for at other medical offices. Such services include: e-prescribing, unlimited school/camp forms, as well as 24/7/365 access to the doctors without the use of a phone triage service. This fee has allowed Village Pediatrics to offer prompt and personalized care without dramatically increasing our practice volume, dropping insurance plans, or significantly raising our cash fees.

Why would parents pay above and beyond their health insurance premium every year to visit Village Peds?

Because Village Peds from the beginning decided to take a stance and tell parents, what they do has immense value. The time they spend with patients/parents in and out of the examining room is of great value. And if patient/parents want access to Dr. Gruen’s and Dr. Gorman’s valuable time and expertise, parents are going to have to pay for it.

I say, Good for them!! I applaud Dr. Gruen and Dr. Gorman’s efforts in establishing a practice that focuses on providing value worth paying for.

And my guess is that nearly 100% of Village Peds families pay the fee. Because all the other families that didn’t see the value, don’t have their children seen at Village Peds.

Here is the hurdle for me.

When I first read  the things Village Peds  offers  as a part of their added benefits plan, I said to myself, we can’t start charging like they do.  Why? Because all the things on that list our practice already provides without getting anything  for it.

Who’s fault is that? The patients/parents?

No. This is our mistake.

For those of us in the private health care world, we need to get over the fact that people are going to complain about paying for something they used to get for free. Heck, I don’t like to pay for something I used to get for free either. So we can’t hang that over our parents.

Furthermore, I’d emphasize that it is our responsibility to educate our parents that there is HUGE value in everything we do (both inside and outside the examining room).

If we don’t educate them, parents will continue to expect what they’ve always gotten. Which is something for nothing.

This is something I’m gonna start thinking about more. Especially if the plan is to remain an independent private practice.

Keeping Credit Cards On File Is The Only Option

Image: Swiping a credit cardIf you’ve read this blog long enough, and you’ve heard me speak at conferences, you know I’m a huge proponent of practices implementing a credit card on file policy.

If you don’t know what I’m talking about, I’m referring to the practice of asking patients to leave a credit card on file (with the practice) to cover balances that the health insurance companies deem patient responsibility.

Much like a car rental company or a hotel requires a credit card on file for incidental.

Our practice has been doing this since 2009 and we’ve never looked back. It has been one of the best decisions we’ve ever made. Not only was it not as difficult to implement as we thought, but we’ve been able to improve our accounts receivables.

As it turns out, I found a practice that has been doing the credit card on file thing  longer than we have. I wanted to learn more about their experience so I asked Melanie, the manager of this practice, if she could answer a few questions about their experience in implementing this policy.

She agreed. Enjoy!

—–

 How long have you had the credit card policy in place? 

We have had this mandatory since 2008.

What do you use to store the cards and process the payments?

We’ve partnered with a vendor name Instamed that helps us with this process.

Do you give patients options or is the policy you have in your office rigid?

Our patients have the option of cc/hsa/debit card and also any copay amount they wish to leave in their credit account on the day of service or if they have coinsurance/deductible etc & don’t want the patient responsibility portion to go on their card.

What if a patient is completely against leaving the card on file?

If they are completely against the card on account, the only other option is to leave deposit of full network allowable at time of service & wait for me to refund by check any difference from what their insurance pays.

Do you have any patients that take this option?

We have maybe 2 that actually do this.

Are there exception to this policy?

This policy is across the board, even medicaid patients. We check daily for eligibility so no one with active medicaid is charged anyway.

Do you bend the rules for some patients?

You need to be consistent with your policy.

Surely there have been a few bends here and there?

For first time patients we do not bend. They are made aware by phone or mail of this [policy] before coming in. It’s also on our website under forms to bring to first visit as well. Some but extremely few have decided not to continue with the visit.

How about established patients, do you bend the rules for them?

For established patients we gave them a pass if they “didn’t bring one” for one visit & sometimes two, but if it went a third, I would go talk with them.

What would you tell them?

I explained it’s not personal, but necessary to keep consistent for all patients.

 If they don’t agree with the policy, then what?

Unfortunately, they would have to find another provider if they didn’t want to follow the policy.

 Your policy sounds fool proof, is it?

Keep in mind even having the card on account doesn’t guarantee that it will actually work by the time the era/eob comes back, though for the most part it does.

Eligibility I understand, but I think checking for benefits is a hassle. Do you check eligibility and benefits beforehand?

We are also on top of making sure we do our best to know everyone’s coverage, so patients are not surprised by what they may owe (front desk has a spreadsheet of payer allowable as only 20 fit in our EMR). This includes immunizations and we always let them know the health department is an option for those with coinsurance/deductibles. We are a vfc provider so medicaid or no-insurance is not a barrier.

Let’s say a practice is thinking about instituting this policy. What would be your advice to them?

Everyone needs to be on board and stand behind it. For established patients maybe you want to give them a pass on one visit but have them sign updated policy & let them know it’s required by next visit.

Anything else?

Be consistent with your policy.

——

I wish more docs would get over their fear of asking patients for a credit card company. It is the only way to shift the risk and responsibility back to the patient.

Just like patients are getting more savvy about the cost of healthcare and looking for ways to save, doctors also need to look at ways to operate with the understanding that financing patient’s medical services is not a very good long term strategy.

Reasonable patients will understand why you are doing it. Those that don’t understand ought to find another sucker then…

If you’ve implemented this policy, let me know. I’d love to hear about it.

How to Decide on a Collection Company For Your Medical Practice

In our experience, collection companies do very little to help out with collection efforts. For starters, pediatricians’ medical offices balances are generally small when compared to hospital charges, ER charges or even surgery charges.

If you were in the collection business and got a commission for your efforts, would you try to collect on $10,000 or $100? In other words, our accounts are not high on the priority list.

I also think that by the time we turn over a bill to a collections company, more than 120 days have gone by. And we know that the longer an account is delinquent, the harder it is to collect on it.

The truth is, the best collection company for your medical practice is, your medical practice.

And your goal, as a manager of the practice, is to use your own billing company as little as possible. And in order to that, you have to put in place a protocol that minimizes the chances an account goes to collections.

Now, how do we ensure that?

Glad you asked.

Here is what has worked for us:

1 – Every single private patient MUST leave a credit card on file. No exceptions.

2 – We collect copayments at the time of service, ALWAYS. What about if the kid can’t breath and they don’t have their wallet? There are exceptions, of course, but those sort of things rarely happen. If they are dying, they shouldn’t be  in our office in the first place.

3- We collect balances at the gate (code word for front office). If the account is past due, you won’t be seen. Unless the kid is dying, can’t breath or has an unresolved issue.

4 – With large balances, we call the parent as as soon as we know about them. Not to collect but to make them aware. The sooner we do this, the better. The purpose of the call is to initiate dialogue and awareness.

5 – Every 15 days, after the first statement goes out, we contact the patient either by mail or phone. We usually alternate phone with letters.

6 – We make available an Easy Pay Program where we set up patients on a payment plan. We only set this up with a credit card or a debit card. We don’t send out coupons or allow parents to “remember” to send in payment.

7- At 90 days, after we’ve called and sent letters, and the patient still doesn’t respond, we process the card they have on file. This is spelled out in our policy, which they’ve agreed to.

8- With our collection letters, and phone calls, we never threat with sending the accounts to collections. Our letters and phone calls are designed to encourage people to call. Not to threaten them. When you threaten people, they generally do two things. They either push back or get angry. Sometimes both. Either of which gets you NO money. Thus, we choose to kill’em with kindness.

Even after all that, some people still fall through the cracks. But far less than the alternative.

If they do fall through the cracks, we send the accounts to collections. We also send them a dismissal letter and follow our dismissal protocol.

Emotionally, however, I’ve resigned. In my heart I know we did everything we could have done. Unlikely that the collection company could do better. If they do, great.

9 – Before we send the accounts to collections, we attach 40% to the balance (also written out clearly in our policy; which the parents have signed and dated) to cover the cost of the collection agency should the collection be successful at their attempts.

10. In my view of the world, the collection is on us. And the more we do upfront, the less you’ll need to use a collection agency.

Usually, when I go through our collection policy, I always get somebody that says, “Brandon!” “Why don’t you simply check eligibility?”

Our practice management system checks eligibility. But the system basically checks to see if that person has coverage under that insurance company. I find that the issue isn’t so much about determining if the person has insurance or not, but rather if the patient has bought enough insurance to cover our services.

Thus, determining benefits are more important. However, checking benefits is like chasing the wind. First, it consumes WAY too much time. Sure, you can check online these days. Knock yourself out if it works for you. Still a waste of time I think.

Second, there is absolutely no guarantee that the insurance will pay for services, even after getting a human on the line and asking them specifically if the services will be covered.

The insurance company will tell you point blank “…even though I’m confirming this patient is eligible and has covered benefits, we can’t promise it will get paid until we process the claim.” To which I murmur under my breath, why in the world did I just spend 20 minutes on the flipping phone call then if I’m not going to get a guarantee?”

I’ve resolved that issue by asking people to leave a credit card of file. Not only am I shifting the liability of payment to the parents, I’m saving time.

I’ve written about this issue a few times. If you would like to learn more about our collection efforts, and how we go about it, check out the links below.

Patient Collection Letters, what is your approach?

Does Your Medical Practice Have a Problem with Bad Debt? Here is a Solution

Medical Practice Collection Letters that Work – With Samples

 

If Only…

I’ve worked in various industries. I’ve worked in the grocery business with Nabisco, airline industry with Continental Airlines, I’ve consulted for companies in the travel industry, software, and finance industry.

One of the things that I’ve noticed working in all these different places, is that each company I’ve worked with, has a sentence that starts like this, if only….

The grocery business talks about margins. If only our margins were better, we could really start to do things. If only we could have a floor display next to Coke, we could really sell this SuperBowl weekend. The airline business is all about fuel cost. If only fuel cost didn’t rise, we’d be better off.

In healthcare, we have tons of if only… if only insurance companies would pay us enough, we could be happier. If only we could negotiate better rates, things would be different. If only we could make money on vaccines, I could practice medicine the way I want. If only we could do procedures like ortho pods, I wouldn’t have to see 35 patients a day.

Here is the thing, the grocery business will always have low margins. Airlines are going to have fuel cost issue no matter what. Insurance companies will continue to take advantage of primary care and try to pay as little as they can get away with. And the likelihood pediatricians will start to do procedures is also slim.

So what should we do? How should we go about? What is the alternative?

What if we embraced our if only… and use it as a starting point to develop a strategy? What if we stopped ( ’cause I’m a perpetrator of the if only too from time to time) using the “if only” as an excuse as to why we can’t succeed and instead use it as a catalyst to find a way around it despite the challenges.

For example, grocery businesses like Whole Foods and Trader Joe’s understand that margins are low in the grocery business. Thus they’ve embraced this reality and developed a concept that bring in higher margins.

Whole Foods brings their organic, market food feel while Trader Joes focuses on items we normally don’t see in the traditional stores. Another example is SouthWest Airlines. As a result of high fuel cost, the airline has developed an infamous fuel hedging program that has become part of their competitive advantage.

What can we learn from Trader Joe’s and SouthWest Airline?

Pediatrics is also a high volume low margin business. That is why it is important to scrutinize every expense, and code for every dollar worked. Because margins are low, we have to make sure every doctor is coding appropriately. Because volume is high, we have to tirelessly find ways to become more effective and our staff has to become more efficient. Because patients have high deductible plans, we have to ask for credit cards to be placed on file so we don’t continue to increase our A/R every year.

Because insurance companies want to pay as little as possible, we have to make it part of our strategy to stay on top of these issues.

Now, I’m not suggesting to give up on fighting for better rates from the insurance company or conforming to the possibility that you will only have to see 40 patients a day to make ends meet. I’m not talking about giving up. I am talking about using some of these hurdles as ways to redefine our businesses like SouthWest and Whole Foods have.

A perfect example of this in our office was this notion of asking people to leave a credit card on file for accounts that are more than 90 days delinquent. This policy came as a result of higher deductible plans and the economic downturn in the US.

I could have used the higher deductible plans, thus higher A/R as an excuse. If only people didn’t have high deductible plans, we would be better off. Instead, I realized that the higher deductible plans and economic downturn is the way it is going to be. Thus, I needed to embrace this reality and use it in a way that will help me develop a strategy or policy that will help me overcome this issue.

Stop using the only if as an excuse and start using as an ingredient for success in your practice.

Small or Big: What is the future of small private practices?

Many experts and pundits are predicting that the downward pressure we are seeing in healthcare will claim small independent private physicians first. Those that are not affiliated or belong to a hospital or large healthcare network will not survive, say the pundits.

The argument is that these small practices will not be able to withstand the financial and administrative pressures of the new healthcare landscape.

Others very eloquently argue that if we don’t band together soon, and form larger groups, they will not have a seat at the table when the time comes, therefore forcing them to accept a deal that may not be in their best interest in the future.

It is like jumping on a large tanker to survive a huge storm or last longer at sea without returning to port. Which is a good strategy, I guess. If your goal is to cross the Atlantic back and forth, a small independent ship may not be the best strategy.

But to me, jumping on a larger vessels dismisses the fact that there are other destinations… destinations that can be reached far easier on a smaller boat.

Jumping on a big ship, you dismiss the opportunity to go up and down the coast, making lots of stops, go in and out of ports, explore new islands and have a say on where you want to go everyday. The large vessel, once it sets its course, it is set.

The big vessel does have many advantages, like protecting you better from a big storm. Nevertheless, that doesn’t mean that a smaller vessel can’t maneuver faster around the storm or find shelter in another port.

I do acknowledge that we are being squeezed in many ways, and I agree that many will eventually go out of business, fold or simply disappear; but I don’t believe there will be a massive small private independently own practice extinction.

If anything, I see this as a huge opportunity for those of us that are small, flexible and nimble to adapt to the new challenges of the healthcare industry.

Something to think about…

Amazon might have driven Borders out of business, but they haven’t put “writers” out of business. iTunes has changed how consumers buy music, thus crippleling the record labels’ business model, but iTunes hasn’t put artist out of business. If anything, they now have more distribution channels than ever.

The Internet is challenging the newspaper industry, but we don’t have a shortage of journalist.

McDonalds and Burger King mass produce hamburgers, but we all know of a place that sells the best burger in town.

Expedia and Travelocity might have driven travel agents out of business, but it has not bankrupt hotels, beach resorts, bed and breakfast and cruise lines.

There are going to be opportunities. It is just a matter of figuring out how the delivery of care will change.

Now, I’m not suggesting that becoming part of a larger entity is a bad strategy. But what I am suggesting is that it ought not to be the only strategy.

Personally, I believe that smaller practices will be positioned uniquely to transform the healthcare landscape. How we “deliver” medicine may change, but I believe that these larger groups cannot, and will not fulfill every single need.

And that is where some of us will jump in.

10 Practice Management Reports That you Haven’t Thought Of.

There is a very common phrase in the business world that says, you can’t improve what you don’t measure.

As with any business, there are many different things one can measure at our pediatric practices. So how does one know where to begin?

Some things are easy to identify. For example, we tend to measure accounts receivables, productivity by provider, expenses, maybe even accounts receivables by insurance company. I also like to document and measure patient seen by month, days worked by provider, gross billings, and net receivables. I also have graphs that compare all those numbers to our goals.

But are there other metrics we ought to look at that will help us improve our practice?

Chip Hart, practice management extraordinaire (I’m not saying that sarcastically) had some thoughts on this issue that I think should be shared. Not only will these suggestions helps us find ways to improve our practice’s bottom line, some of these actually helps us provider better healthcare by taking a proactive approach in the health of our little patients.

Here is what Chip had to say:

  • A/R by insurer and time-to-payment by insurer should be strongly correlated if you are making any helpful A/R calculations (i.e., a simple $$ figure for the former doesn’t do much). So, pick the easier one.
  • How about RVU-based measurements? I like RVU/visit/provider and RVU/visit/payor.
  • Look for tallies of “weak spot” coding efforts like burn treatment, nursemaid’s elbow, etc. Our friends have given us a starting list: http://coding.aap.org/content.aspx?aid=10834
  • Where is Revenue/Visit on your list?
  • How about Revenue / Visits by visit type?
  • Sick to well visit ratios
  • Percentage of kids up to date with vaccines?
  • Asthmatics with recent flu shots?
  • Kids overdue for physicals?
  •  Kids with BMI above X

Thanks Chip… that should keep us busy for a while.

Do you have any other benchmark that you’d like to share? If you do, don’t be shy. Leave a comment in the comment section below.

Chip Hart is the Director of PCC’s Pediatric Solutions consulting group. Chip blogs Confessions of a Pediatric Consultant

Medical Billing Behind the Scenes

I wrote the blog post below on the Survivor Pediatrics blog titled “What I wish parents Knew about Medical Billing”. I didn’t post it here on PediatricInc because placing it here would have been like preaching to the choir.

To my surprise, the post has gotten a lot of attention and I’ve received a lot of great feedback from people in the healthcare industry (those that actually live this day by day) as well as non-clinical or non-medical people.

So I decided to post a summary here on PediatricInc, not to tell you all what you already know, but rather to enlist you in sharing this message with your community, your audience and your parents.

Below is a summary, but you can check out the entire article by visiting the other pedia-tastic blog Survivor Pediatrics.

CODING — A LOT OF WHAT DOCTORS DO

At a restaurant, generally you’ll get an itemized check that shows all the things you’ve ordered. Doctors do the same thing, but they do it in the medical chart.

Virtually every doctor who accepts health insurance uses codes (called CPT codes) that are assigned to every task they and their staff performs. Everything from a simple blood draw, to immunizations, to the ear check, to specimen handling — all these things are “coded” separately.

BUT WE FEEL LIKE WE ARE BEING SQUEEZED FOR EVERY PENNY

Parents often think when they are looking at the bill that the doctor is nickel-and-diming parents, when in reality, it is the insurance company that requires the doc to show their work in this matter.

The health insurance company doesn’t accept the doctor telling them, “I did a well visit — pay me our agreed-upon fee.” They want to know all the things the doctor did during a patient’s visit so they can decide how much they ought to pay the doctor for his/her services.

Since most patients (or in the pediatrician’s case, parents) don’t pay the doctors directly, but rather the health insurance company, they want to know what took place during the visit so they know how much they ought to pay the doctor.

It is the same as going to the restaurant and getting billed for all the side and extra orders. Although the main meal is accompanied by other things, like french fries or a salad, refills, side orders, substitutions and additions to the order are billed as extra.

Health care services are a la carte as well.

MOREOVER…

As a practice, we consider that treating patients based on what the insurance covers and what it doesn’t, instead of treating by what the patient actually needs, is an unethical way to practice medicine.

I believe it is  time to start lifting the curtain, showing people what is under hood or giving people a behind the scene tour  on why things are the way they are.

Unless we start telling parents how things are and giving them this insight, they will continue to believe we are the reason the system is broken. We all know that is not true. And we all know who really is to blame.

For the full post, click here