Let’s Talk About What Happened In Vegas

My friends from the Pediatric Management Institute (PMI) put on another great practice management conference in Las Vegas last January.Screen Shot 2016-02-21 at 10.55.37 AM

The content was excellent, thanks to the fabulous faculty PMI brought in.

The topics varied from customer service principles to fundamental changes happening in the health insurance industry and how those changes are – or soon will be – affecting doctors’ financial bottom line.

Below are a few highlights and notable points that resonated with me.


Dr. Jeanne Marconi presented an account of how her practice diversifies income streams by incorporating ancillary services into her practice.

Admittedly Dr. Marconi’s comprehensive – almost overwhelming – plethora of services (they even offer in-house exercise training programs for children with high BMI) is probably too much for the standard practice to implement.

But for me, her talk wasn’t an invitation to follow her footsteps, but instead, provide insight into what is possible, what can be done and what is available to practices.

Dr. Marconi dished out several challenges to the physicians in the crowd. But the one that resonated with me the most was her call for pediatric practices to challenge the status quo, expand their minds, think creatively (or to use a cliche, think outside the box) and begin to think about ways to diversify practice’s revenue streams.


Susanne Madden arrived in Vegas with her extensive knowledge and expertise of the health insurance industry.

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Dr. Jeanne Marconi and Susanne Madden

She presented attendees the sobering reality of how health insurance companies are adjusting, changing – even experimenting in some cases – with their models to continue delivering value to “their” shareholders. And by value, she means lower cost and higher profits.

Susanne underscored the importance of implementing quality measures such as P4P, HEIDIS, PCMH into our medical practices. But not for the reasons you might think.

While many of these health insurance programs are currently in place as rewards (e.g., enhanced or incentive payments) for medical practices that achieve quality measures thresholds in patient care, Susanne highlighted that these programs will soon become a requirement for practices.

What does this mean exactly? Insurance companies will soon stop offering enhanced payments programs to practices for achieving PCMH level III certification (or other types of incentives). Instead, they will reduce payments to doctors don’t meet PCMH certification.

As if that wasn’t bad enough, she added that many payers are evaluating providers based on how much the provider costs the company in benefits payouts.

How is that different than what they do now?

The difference is that they are not looking at the practice as a whole, but rather evaluating each provider individually.

The implications are that if you have physicians in your practice that don’t adhere to designated quality standards, payors can potentially pay each doctor in the practice different amounts.


PMI’s very own Paul Vanchiere gave two of his hallmark presentations. The first one focused on customer service using the acronym KIDS (Kindness, Integrity, Dignity & Service).

His second talk was my favorite. Why? Because Paul took a complicated, MBA, executive consulting level exercise (determining how much can your practice afford to pay an employed provider) and distilled it into an easy to follow, step-by-step, process, which only requires one to understand a few financial concepts and enter value sets into a spreadsheet.


Dr. Rich Lander went over the fundamentals of proper coding. In addition to reviewing the differences between coding Level 2, 3, 4 & 5 for a sick visit, Dr. Lander stressed the importance of documenting “time” correctly in a patient’s chart.

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Joanne Blanchard and Dr. Richard Lander

Dr. Lander shared multiple clinical scenarios that we often encounter with patients. But some of the codes he suggested I wasn’t all too familiar with. I couldn’t recall if we used them.

So I wrote down a reminder to myself to check how well (or not) providers at Salud Pediatrics were using the full scope of codes available.


Dr. John Moore – a new PMI faculty member – brought us up to speed with some of the new social media trends (Are you familiar with SnapChat and how kids are using it?)

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Dr. John Moore and Paul Vanchiere

One of the points that Dr. Moore articulated that I appreciated the most was the importance for pediatricians to embrace social media.

He said something that I’ve been saying for a long time; which is, had pediatricians adopted social media at a faster clip, the pro-vaccine vs. anti-vaccine arguments would have been balanced. Moreover, there was the potential to stifle the anti-vax movement.


You can always count on Chip Hart to deliver great wisdom and insight. Chip also gave two talks.Screen Shot 2016-02-21 at 10.56.11 AM

I’ve heard Chip speak many times, but this time, I felt his talks were different. Chip’s talks had a subtle, tough-love tone to them.

While addressing the challenges practices are facing today, he stressed that pediatricians have faced similar challenges before. He mentioned that during all previous tectonic shifts (aka industry changes) naysayers shouted out the demise of private practices. Much like many are shouting today.

Chip eloquently argued that not only are the doomsayers wrong, but that pediatricians are actually in a better situation than most think.

Chip wasn’t disregarding the challenges or downplaying the potential threats. We are indeed going through tough times. But these tough times were an opportunity to transform and reinvent our practices, he argued.

My takeaway was: If the plan is to defend the status quo and hedge the long-term success of your business on account that you have the initials MD after your name, thus somehow inoculated from change, the end is certainly near for you.


Attending a seminar like this to learn from the speakers is certainly worth the price and the time. But more often than not, the icing on the cake, at least for me, is the immeasurable, intangible value I glean from networking.

The people who attend these events are the smartest and brightest in my opinion (and I’m not talking about the faculty, although they are good too).

Whether attendees are veterans in managing practices or opened their first private practices last week and believe they have no clue what they are doing, the truth is, there is opportunity to learn from everybody.

The faculty makes the trip worthwhile. But I would say the attendees make the event special.

Next year I hope to see you there. Especially if you didn’t get a chance to attend this year.

Place: New Orleans
Dates: Jan 27-28th 2017


Insurance Contract Negotiations: 15 Tips From a Pro

Today’s guest blog post comes from David Horowitz MD. Dr. Horowitz responded to a question on SOAPM regarding how to go about negotiating with a payer. I thought his advice was practical, to the point and very useful, so I asked him if he had an issue with me posting his response. He graciously agreed to share his comments with readers of PediatricInc.
By the way, this is not an unusual response on SOAPM. Most comments are this good. Enjoy…

I have done the contract negotiations for my practice for 20+ years. In those dark ages, before Internet and AAP resources, there was no primer for doing this. One of my partners recently asked how she could get up to speed on this, looking to the point where I might retire – which is not anytime soon. So I started thinking about a few essential points to have in contracts. You may not be able to get all of them, but they are all worth fighting for.

  1. Do a payer analysis so you know ahead of time what % of your practice income comes from each payer and what each payer is paying you for the major E/M codes. This means learn spreadsheet 101 software. Sometimes you need to be prepared to tell a company their offer is not acceptable and walk away. You need to know ahead of time what this may cost you. You also need to know whether you are the only pediatrician for 30 miles or whether there are 3 other practices within 5 miles who would be happy to snap up your cast offs.
  2. Become familiar with RVU valuations. AAP book Coding for Pediatrics issued yearly is an excellent resource for this.
  3. Ask for fee schedules based on a percentage of a given years Medicare, rather than just “we will pay you $x for code y. If you are lucky enough to get them to agree to basing the fee schedule on the current year, be aware that Congress is still playing with something called the SGR, which, if not fixed, may cut payments from Medicare by 30%. Fee schedules based on prior years Medicare are fixed in stone at this point.
  4. Know your area. There are parts of the country where simply getting 100% of Medicare is considered good. There are other parts of the country with rates as high as double that.
  5. Try to get a concession that they will follow CPT coding guidelines. I have been unable to get this in any contracts. But by bringing it up, it opens the door to specific discussions of paying for –25 modifiers for well and sick care on the same day, and bringing up what services are or are not bundled into well care, such as vision, hearing and developmental evaluations and after hours care.
  6. If in office lab is a big part of what you do, insure that what you are paid doesn’t lose money. You can always threaten to send every kid who needs a specific test to the hospital if they don’t at least meet your cost.
  7. VACCINES: know you costs, know your overhead and make sure that you are paid appropriately. These are almost always carved out of every contract and can cost you tons of money. Inscos often try to pay less than your acquisition cost for vaccines. Try to get payment based on the CDC price list. http://www.cdc.gov/vaccines/programs/vfc/cdc-vac-price-list.htm. Also check out the AAP information on the Business Case for Vaccine pricing. This one piece of the contract can make or break you.
  8. Try to avoid forever renewing contracts. A good price today is going to look pretty poor in 5 years when it hasn’t changed. 2 years is a reasonable amount of time so you are not forever negotiating.
  9. It takes 6 months to negotiate a contract and they are almost always completed after the actual termination date. Stall is the name of the game for inscos.
  10. When you agree on a contract, make sure the contract they send you to sign is actually the one you agreed to. All the companies have boiler plate contracts. I have had a company agree to give me specific terms, but the contract sent to me was 3 or 4 drafts prior to what we agreed upon. I was told this was an “oversight”.
  11. Once you agree on the big things, like payment for E/M codes, don’t forget the little things. Will they pay for after hours care and in office labs are the main things here. If they don’t pay for a specific service, do they consider it “bundled” which means you can not charge the patient, or do they consider it “not covered” which means you can bill the patient.
  12. Not that I don’t trust people, but once you sign a contract, look at the EOBs that come in and make sure that they are really paying you what they said they would pay you. You’d be surprised how often the insco computers load the “wrong” fee schedule by “accident”.
  13. You may not win even if you think you won. A comeback offer from an insco may take the form, “We will give you 10% more on E/M codes, but pay you 5% less on vaccines.” You have to be able to know that this 2nd offer may actually pay you less than the first. It can only help you in negotiating when you come back to them with something to the effect of how disappointed you are that they think you are so naïve, so how about a real offer, not a trick offer. Know what they mean by “E/M codes”. In my experience, they mean only Office Visit and Preventive Care codes. And even though all the other common codes for hospital care, newborn care, in office counseling, etc. are in the E/M section of the CPT book, they usually are not included in the insco definition of E/M.
  14. Know a ballpark minimum offer that you simply can not go below. If you don’t get it, WALK AWAY. This is the hardest thing to do. But if you are losing money on a payment schedule, you can’t make that up by doing more volume.
  15. Start your 1st negotiation with a payer who is rather MINOR in your income. This way you can learn, get your feet wet, and mistakes (which I still make) are not so costly. Save the big payer negotiations for after you have gotten some experience.

This is a starting place. I’m sure others on this listserve will be happy to offer more critical points that I have over looked. And some of these items can be rather daunting. It can take a while to get proficient at Excel. If you have a spreadsheet wiz in the office, it might be reasonable to delegate this part of the task. And getting the Medicare fee payments for the common codes that you do may be somewhat hard if you are not good at Excel. The AAP and Chip Hart on this listserve have good sources of information about common CPT codes and their valuation.

We Can’t Provide If We Are In Need

I’ve had an opportunity to give my 101 ways to transform your practice talk a couple of times and one of the points that gets the most interest from attendees, is our collection efforts. Specifically some of the techniques we use to get people to pay us. So I wanted to highlight for you today, some of those techniques we use.

Fundamentally, the collection efforts begins before you’ve provided the service. And the administrative task is to ensure we will get paid before anything else.

Now, there are circumstances where a child is ill and needs immediate attention. I’m not talking about those special circumstances. The well-being of children comes above all else.

Having said that, the well-being of children depends on our financial well-being. In other words…

…we can’t provide for the needs of others if we are in need as well.

Credit Card On File

For starters, many of you regular readers know that we have a no exception rule to our credit card policy. What this means is that everybody – and I mean everybody – has to leave a credit card on file if parents wish for us to see their children ( I guess there is an exception, Medicaid patients). The agreement states that if we are unable to collect for the patient balance after 90 days, we are able to process the credit card.


We collect all balances due before seeing a patient. If the patient’s balance is too high, and the parents can’t pay it in full, we set up a payment plan. But the payment plan has to be on a credit card and we process the card at a defined date. None of this, I’ll send you check every month nonsense.

It is OK for other merchants to allow customers to send in payment every month because those companies can reposes a car, turn off the electricity or turn of the cable TV service until customers pay up.

But a medical office? Well, we’ve already provided services; so at that point, we are at the parent’s mercy. After all, the kid is better; there is no real incentive to send in payment.

15 Day Rule

For those parents that are delinquent (delinquent is defined as 30 day past due), we reach out to them every 15 days via a letter, phone call or statement. Why? Because the sooner you consistently let parents know they have a balance, the more likely they are going to pay. So let’s say the parent received a statement and did not pay within the 30 days. We will pick up the phone 15 days after their second statement, give the parent a call, and ask them if they have any questions regarding their bill or if there was any other reason why they missed the payment deadline.

Envelope Collection Letters

With our collection letters, we use color coated envelops. Why? Because we want to draw attention to the letter. The majority of mail comes in white envelops. A pink or bright blue envelope will stand out.

We also handwrite the receivers address as well as use a regular stamp (versus a machine generated stamp). We do this so the envelope doesn’t appear to be a “collection letter.” People will be more likely to open it if they don’t identify the letter with a collection letter.

Kill’em With Kindness

Our collection letters (those that we send out when we don’t make phone calls) are also a bit different. We don’t mention “collections” or sound as if we were giving people an ultimatum. Our approach is, Kill’em with kidness.

For a sample of our letter, click on this “link

We Do Our Best

I wish I could say that all these methods are 100% guaranteed. But the reality is that some patient/parents do slip by. Although  much less thanks to my team’s effort.

Remember this, the collection process ought not to be a department per say, but rather an attitude. What I mean is that everybody (including the doctors) must work towards ensuring that the collection efforts are achieved. I’m not suggesting the docs get on the phone to make collection calls, but they too can play a part in ensuring that the collection efforts are not undermined.

What collection efforts have worked for you?