Category: Uncategorized

Small Independent Medical Practice Financial Analysis and Reporting

Medical Practice Financial Analysis and Reporting

How do you keep track of the financial health of your practice?

Providers in small private practices rely on a variety of information that makes them comfortable. Some providers will ask for all kinds of data ranging from total billing and charges per month, amount of money received every month or even weekly, total aging, collections by procedures and CPT codes, patient balances, etc.

On the other hand, there are providers that rely on their office managers and builders tremendously, and as long as money is coming into the bank they don’t question too much.

In the majority of the cases, providers missed the mark entirely.

This is an age where we have data and information overload. Everything is digital, everything gets stored as discrete data and therefore everything can be reported on. Does that mean everything is useful? What information should we look at and what should we ignore?

Bits of data in isolation are irrelevant. Total charges per month and a graph of it over the year are irrelevant if not compared to the productivity and the total number of hours that a doctor puts in per day.

Absolute numbers don’t matter as much as looking at a trend over time. Keeping the total number of patients seen over time constant and the total number of hours that you put in on a daily basis constant, if the trend indicates a downward slope on collections, that is what we should be worried about.

Similarly, ratios and percentages are more important than absolute numbers. Total revenue per patient, revenue per procedure, productivity per employee, and similar ratios are perhaps more important than absolute numbers.

I understand that providers do not have the time to look into this in detail themselves. Most office managers are not equipped to think like business accountants. That is why you should look into experts and consultants who can help you analyze this data. If you are outsourcing your billing, many of them can provide this insight.

ICD-10 Whitepaper and Information Overload

I just googled the term ‘ICD10 Whitepaper’. Google said, “About 134,000 results” found. Plus, there were so many paid adverts and placements. If you search for ‘ICD10 information’ you can multiply the search results by 4!

Why? There is a lot of fear and even misinformation surrounding ICD-10.

There are three kinds of sources publishing information related to ICD-10.

ICD-10 Whitepaper - Avetalive

I just googled the term ‘ICD10 Whitepaper’. Google said, “About 134,000 results” were found. Plus, there were so many paid adverts and placements. If you search for ‘ICD10 information’ you can multiply the search results by 4!

Why? There is a lot of fear and even misinformation surrounding ICD-10.

There are three kinds of sources publishing information related to ICD-10.

  1. CMS and government websites (eg www.cms.gov, www.medicaid.gov)
  2. Academies. Physician and provider academies have generally done a good job of publishing information and distributing it via websites as well as member newsletters and emails.
  3. Vendors. EMR, EHR, Practice Management, and medical billing vendors have also created and published lots of content. This is the biggest category of content publishers. Some of it is for their customers. Most of it is to entice more people to their website, their products, and services in the hope that providers sign up with them.

You will find written content in the form of “Whitepapers” that is supposed to be vendor-neutral information that anyone can use to educate themselves. They can take the shape of thought leadership articles or even blogs.

The other form is that of Webinars. Some vendors and consultants have offered Seminars in the form of ‘webinars’ (Live or Recorded) that focus on and address the main concerns that most providers have.

Finally, you can sign up for and attend live physical events related to ICD-10. Some Academies organize these during their regional or national meetings. I have also seen experts and consultants offer these seminars. Some offer free seminars, and some charge.

For Fee, seminars are usually more focused on your specialty and are much more detailed, and can also have hands-on step-by-step workshops helping providers and practices get ready for ICD-10.

What should you do?

1. Read some Articles or Whitepapers. Just don’t overload yourself. Focus on those that are published by:

  • CMS and Government. These articles generally try to address regulatory implications, which is important.
  • Your Vendor. They are and should be your first point of contact for anything to do with ICD-10. You are going to use their software to submit your claims and be compliant so that you can get paid. You should get not only general information but also specifics about using the software to create appropriate claims.
  • Your specialty Academy. Academy should be your source of information about mapping out ICD-9 to ICD-10, and what codes and modifiers you should use to maximize your reimbursement.

We are not too far from the deadline. It is time to take action. Your information-gathering and education phase should be over by now.

You are still not ready?

Nothing to panic though. My simple advice is to first talk to your vendor as soon as possible. Find out if:

  • Is your software ready and enabled?
  • Do they have anyone who can help you prepare and update your Superbill? They may charge you consultation fees and that is normal because as a vendor of software, help with your Superbill is generally not covered as a standard fee. Whoever you hire/engage, be prepared to spend time with them if you don’t have someone on your staff who is a billing/coding expert.

Second – if your vendor does not have a billing/coding expert for your specialty on staff, that’s okay. You can then look for help from one of many experts in your specialty. Talk to your Academy – they should be able to help locate consultants.

Finally, make sure your Superbill is ready one month before the deadline.

What is Wrong with This Title – “AAFP and HealthFusion Partner to Deliver EHR Benefits…”

When you read this headline, what goes on in your mind? If you are a Family Physician and member of AAFP, wouldn’t you think – ‘my academy had whetted, evaluated, or done something where they tested hundreds of EMRs out there and picked the best one for me’?

Media twists it even more – read this.

Nothing can be further than the truth.

I am sure AAFP does not have the time to do any of that. Also, AAFP in general does not endorse any product. Furthermore, this headline gives the impression that AAFP picked Healthfusion exclusively and recommends it. If I want, I can read even more into it thinking there is perhaps an incentive for being an AAFP member, or that it is being subsidized.

This is misleading Advertising.

AAFP should be more strict about how their partners put out press releases.

How Do You Know it’s Time for a New EMR?

EMR (Electronic Medical Record)

I read this blog from Seth Godin (New Times Call for New Decisions) and it struck a chord.

Remember when you bought your first EMR? Perhaps you’re still on it, or you may have changed. Each has its reasons. Here is what Seth wrote:

“New times call for new decisions
Those critical choices you made then, they were based on what you knew about the world as it was.

But now, you know more and the world is different.

So why spend so much time defending those choices?

We don’t re-decide very often, which means that most of our time is spent doing, not choosing. And if the world isn’t changing (if you’re not changing) that doing makes a lot of sense.

The pain comes from falling in love with your status quo and living in fear of making another choice, a choice that might not work.

You might have been right then, but now isn’t then, it’s now.

If the world isn’t different, no need to make a new decision.

The question is, “is the world different now?””

— Seth Godin

Nothing has changed more than Healthcare and in particular, Healthcare IT, EMR, and EHR. We persist because Change is Fear!

In the world of EMR/EHR, implications are more than just fear. They have to do with real costs of change – the cost of moving data from one system to another.

Cost of Change

  • Cost of Training Everyone
  • Cost of productivity – (it takes an average of 3 months before a practice becomes productive on one EMR/EHR system)
  • Cost of Transition – moving data from one system to another

Cost of No Change (Status Quo)

How do you determine if you need to change your EMR/EHR? Here are things that determine if you need to change your system:

  • Seeing less patients per day than you did before EMR/EHR
  • Drop in Revenue (not because of overall healthcare changes)
  • Unhappy staff. Listen to everyone, even if you are happy with the system
  • Inefficient workflow

How do you determine the cost of the Status Quo?

This may require some detailed financial analysis. Compare the cost of change and the cost of no change. If this cost is just incremental, do not change. Think of the analysis you do when you think of re-financing a house. Money saved per month versus the cost of re-financing.

But most important, do not remain stagnant.

Wrong Reason Not to Choose Cloud EHR

A Doctor mentioned today he does not want to use cloud EMR.

Reason? A colleague ‘lost data on the cloud’.

I’m not really sure what that means, but I have a sneaky suspicion that the vendor of that particular cloud EMR system did not provide data when the doctor wanted it, or that the EMR vendor was holding data hostage for a large fee.

In fact, client/server systems are more prone to losing data in the traditional sense. The solution to that problem of not getting the data from a cloud EMR vendor is not to use client-server systems but to do a better job of negotiating upfront and incorporating associated data extraction fees into the contract.

I have seen too many cloud EMR vendors holding doctors’ data hostage and demanding a large sum of money if the doctor wants to switch their EMR system.

What should you do?

Don’t jump from the frying pan to the fire. If you think cloud systems are a problem with your data, client-server systems are even worse – unless you spend a lot of resources managing the infrastructure internally.

Apple and Healthcare IT – Fuzzy Scary Lines

Apple and Healthcare IT

“Apple Could Lead In Healthcare. Here’s Why It Won’t.”

— Dan Munro, Forbes

In his Forbes article, Dan is very clear – Apple will NOT lead in Healthcare.

The choice of words is important. He uses ‘healthcare’, not ‘health’ as in hundreds of health, fitness, and wellness apps such as Fitbit. Real healthcare is in the realm of health monitoring such as blood glucose.

Once we understand this distinction, the implication becomes apparent. Healthcare is highly regulated. Just ask traditional healthcare players how difficult is the environment when it comes to providing products and/or services.

I think Apple is getting heady by trying to control and ‘own’ an entire ecosystem rather than being a part of it and facilitating the system.

What Happened to My Family Doctor?

Bonefide Physician

I had an interesting conversation with a friend of mine. He is (was) a solo practitioner in New York. He is a Pulmonologist / Internist. 5 years ago he started his own practice, getting away from a group practice. I have to mention, that he’s my family doctor too. He was skeptical but entrepreneurial.

Suddenly he decided to go and work for a hospital. What happened?

He was very successful in his practice. Successful in the sense that patients loved him, he had no problem attracting patients and he was busy. So what was the problem?

He was plagued by problems with rising co-pays, co-insurance, and deductibles, he was not collecting enough money. His insurance payments were fine though. With rising patient responsibility, he saw declining revenues. Just at that point, a local hospital he was affiliated with called him and made an offer.
Should he accept this offer or continue to enjoy his freedom with a good practice where not only his revenues were declining but more importantly, his wife was going nuts trying to get patients to pay their outstanding balances?

He found out that the hospital had come to him bypassing other providers in his neighborhood because they knew he was a good doctor who had a great asset – happy patients who referred others to him.

He did his homework of course. He was part of the ‘second wave of recruits’ to the hospital. A few years ago, the hospital approached and hired some good doctors away from their practice. 80% of them were still working there. So, he felt the odds were good. Hospital administration (which he knew) can’t be that bad as goes popular wisdom. So his chances of success would be at least 80%.

Here’s the most important thing – the hospital made a very good competitive offer that was close to what he was netting at his practice.
So, he took the offer. I’m sure his wife had a role to play – she wanted peace and more time to themselves.

Is this the trend? Are we losing independent practitioners? Are we losing our family doctors to the ‘Walmarts’ of medicine?

EMR Differentiator / EMR Success – It is All About Implementation

EMR Differentiator/EMR Success

For those of you who are looking for an EMR software, the number one question you should ask the vendor is, ‘Why is your EMR software different’?

For those of you who have already chosen an EMR software, do you consider your implementation successful?

By various counts, anywhere from 50-70% of clinics are considering switching their EHR software. Some Electronic health record implementations are on schedule with all stakeholders of the practice fully involved in achieving their set goals. Others struggle at the onset and eventually stall; leading to partial or no success.

What is the reason for Failure?

Is it the people involved or the implementation process, or is something wrong with the product? My extensive experience working with providers and clinics for the last 18 years has taught me – it is not that simple.

People, Processes, and Tools

Processes are the binding agent. You need to have the right people, starting with leadership in the practice and having the best Tool (EMR software) for your clinic. Best EMR Software is one that works with your workflow, and technological comfort.

Where it fails most of the time, however, is Processes. I am not going to write in detail about how to do implementation here, but I am going to point out a very important aspect of the Implementation process.

Vendor Involvement.

Too many times, vendors allow practices to dictate the process, whereas practices look for guidance and best practices from the vendor. Vendors should be leading this. I was speaking with a company recently that had decided to take this head-on by putting money where its mouth is. They decided to refund part of the implementation fee if the practice works with the vendor to do proper implementation within an agreed-upon time frame. This simple assertion means that people and tools have to be excellent and someone is willing to take the bull by the horns to project-manage the entire process.  I like this proactive approach and will be eager to learn the outcomes.

How to Select the Perfect EMR / EHR Software?

When you want to select an EHR System or EMR system for your practice, don’t get tied up into small details of functionality, features, etc.

There is really only ONE thing you need to evaluate all systems against.

WILL THIS SYSTEM ALLOW ME TO GO HOME – HALF AN HOUR, 45 MINUTES, ONE HOUR  EARLY EVERY DAY?

Of course, it goes without saying that going home early does not mean taking work home.

There are 3 reasons why providers have to stay back.

1.       Finish Charts – paper or Electronic

2.       Financial worries – pending accounts receivables, accounts aging. … and third

3.       Staffing worries and stress.

Of course, we can’t do much about staffing issues, although, some vendors will be able to help you with that – which you should keep in mind.

So, benchmark all your EMR software systems with respect to this simple criteria – can I go home early?