CHICAGO—Medical practice consultant Owen Dahl, MBA, LFACHE, CHBC, looked out at the rheumatology practice managers and physicians, sitting around tables with white tablecloths, and asked what seemed like a simple question: “How many of you have a strategic plan?” he asked.
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Explore This IssueApril 2019
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A single hand was raised.
“One? How do you know where to go tomorrow when you don’t have a plan?” continued Mr. Dahl, who has consulted for and managed medical practices for 43 years. “How do you know where you’re going to be in a year if you don’t have a plan?”
In a daylong course meant to get rheumatology practices to run more efficiently and practice managers to think more strategically and be more nimble when hurdles appear, Mr. Dahl discussed strategic planning and ways to prepare for new regulations and competition. The session, held in advance of the 2018 ACR/ARHP Annual Meeting, included tips on moving to alternative payment models (APMs), compliance with fraud and abuse rules, and handling credentialing in a smart way.
Strategic Plans a Must
The first part of a strategic plan—a kind of roadmap that helps a practice do the things today that will help them get where they want to be tomorrow in terms of their size and scope—typically includes vision and mission and statements. These can be followed up with more specific goals and more detailed information about the practice. You’ll likely want to include include a SWOT analysis in which you identify your practice’s strengths, weaknesses, opportunities, and threats.
A rheumatology practice’s strategic plan should also account for a variety of scenarios:
- In the consumed scenario, a practice is threatened by takeover because of such problems as changes in referral patterns and inconvenience to patients;
- In the collapse scenario, a practice is beset by a decrease in use of ancillary services, higher overhead, inefficiencies related to electronic medical records (EMRs) and other problems;
- In the thrive scenario, a practice is fueled by efficient use of extenders, solid leadership succession, successful marketing and other ingredients; and
- In the success situation, ancillary services are expanded via clear roles set forth for physicians and the increased use of advanced care providers; and data mining and information technology are used optimally.
For all of these situations—the good and the bad—practices should know how to respond, and a well-considered strategic plan gives a practice the tools to do just that.
“With each scenario, you want to think about your customers, your suppliers, your employees, your competition—what are they doing for you, or to you, or with you? What would trigger me to go this way vs. that way?” asked Mr. Dahl.
Because change—Mr. Dahl prefers practice managers use the word transition—is inevitable and vital for survival, the culture of a practice is crucial. He underscored the importance of a daily huddle to assess successes and hiccups as they occur; share positive stories; and listen to employees and understand their motivations.
Intent to break the law is not required for a [Stark law] violation, & the law pertains only to physician referrals under Medicare.
“Culture trumps strategy,” Mr. Dahl said. “If you don’t get together and agree, you’ll lose your strategy because your culture does not support it.”
Analyze Your Practice’s Habits & Financials
Real-time analytics—using data collected in an ongoing fashion to make improvements or changes—is an important tool to use when analyzing your practice’s habits and how they fit into your plan.
The analytics of your rheumatology practice are more than just financial numbers, Mr. Dahl said. Consider the time spent with patients, the percentage of cancellations recovered, your number of no-shows. These data are indispensable and will assist you in making smart business decisions.
“If you don’t measure it, you can’t change it,” Mr. Dahl said. “If you don’t value it, you won’t change it.”
An important metric is takt time—a way of measuring the maximum acceptable time to meet a customer’s needs. In a medical practice, it’s used to measure such factors as the amount of time in the day allotted for each patient, after all else is accounted for, including lunch and other breaks.
Cycle time is another important metric. It’s the total time a patient spends in the office—perhaps from door to door, perhaps from sign-in to check-out, but a practice has to measure it consistently in all clinics, Mr. Dahl stressed. Determining your cycle time could be as simple as tracking each patient at the top of each hour for a week—if you see patients for three hours in the morning and three in the afternoon, you’ve got data on 30 patients. That’s enough to start to evaluate what’s happening.
Tracking these kinds of data doesn’t require attending advanced courses or statistical expertise, Mr. Dahl said—just reviewing the information with an eye on trends and a certain amount of intuition.
A practice should also know how much it costs to provide a service.
“If you don’t know how much it costs you to provide a service how do you know that a managed care contract is [appropriate]?” Mr. Dahl asked. How do you know that you will be adequately compensated under a capitated, episodic or bundled agreement?
Practices can get a sense of changes that need to be made by defining cost categories, Mr. Dahl said. Determine your practice’s fixed costs, which are the same no matter your patient volume; variable costs, which change with volume; direct costs, which are specific to the patient care mission; and indirect costs, which support related activities.
He suggested keeping a score card, with four categories to evaluate performance. The financial category includes such items as net profit, cost of goods and operating expenses. The customer category includes visits, new and return patients. Internal operations includes such items as productivity and cycle time. And the learning and growth category includes an employee satisfaction index, internal promotions and education level.
Make sure sample data are representative of the population. Mr. Dahl also said practices need to ask: “Are there any outliers in [the] data distribution? How do they affect the results? What assumptions are behind [the] analysis?”
Physician employment contracts, physician recruitment contracts, management service agreements, patient transfer agreements, technology licensing, executive compensation and employee benefit arrangements, joint ventures, purchased services, equipment sales and leasing, ancillary services, business associate agreements … The list of contract types a practice likely needs, and has, to meet the goals in its strategic plan could go on ad infinitum.
When negotiating contracts, the goal is to reach a win-win for both parties, Mr. Dahl said. He suggested listing your own goals, along with every potential way to achieve them and your approach in trying to achieve them—and then doing the same thing for the other party’s goals.
It’s crucial, he said, to be “willing to walk away.”
Preparation is the key: “Nothing is more important,” he said. This involves familiarizing yourself with the background and history of the situation, researching issues, anticipating your counterpart’s tactics and developing the rationale for your positions.
Mr. Dahl offered some advice:
- Stick to the facts;
- Come up with as many alternatives to reach your goals as possible;
- Identify the least you’re willing to accept;
- Negotiate with the right person;
- Give yourself room to maneuver, not giving away too much too soon;
- Be prepared to say no; and
- Make your word your bond.
Mr. Dahl cautioned against accepting a bad deal just to strike a deal.
APMs & Refining Your Practice
Karen Ferguson, practice administrator for Arthritis Northwest, Spokane, Wash., offered lessons from her experience in helping refine a seven-rheumatologist, 60-employee practice’s habits of documentation, patient communication and handling referrals. The idea has been to link rheumatologists, primary care physicians and patients throughout the care process, putting the foundation to succeed under new payment models—a key element of success in any practice’s strategic plan.
Arthritis Northwest was recognized with Patient-Centered Specialty Program Certification, and it recently marked a milestone when it entered into a value-based contract with Premera Blue Cross.
The practice developed a platform that provides a total care management system for patients, with real-time treatment decision support to help direct the course of care for the physician. It also handles necessary documentation and pre-authorization process support, which greatly simplifies the administrative burden for staff, said Ms. Ferguson. This arms the practice with the data it needs to show that it’s meeting the requirements of value-based agreements and federal programs.
To reduce the administrative burden of reporting under MIPS (the Merit-Based Incentive Payment System used by the Centers for Medicare and Medicaid Services, the practice uses its platform to submit MIPS quality measures directly to Medicare’s Quality Payment Program website.
Ms. Ferguson said alternative payment models (APMs) will likely become more prevalent under MIPS. Although still in their infancy, she said, APMs hold promise to show reduced costs with a higher quality of care.
Arthritis Northwest’s planned transition to an APM is based on three main principles:
First is to improve the patient experience—and that means embracing technology. “We’re going to need a technology platform to increase efficiency and information sharing so we can have a better experience for our patients,” including patient access to their records wherever they happen to be, Ms. Ferguson said.
The analytics of your rheumatology practice are more than just financial numbers, Owen Dahl said. Consider the time spent with patients, the percentage of cancellations recovered, your number of no-shows.
Second is to improve the quality of care by assessing patient performance on measurable health outcomes. “Is this patient,” for example, “doing better on this treatment, and do you have the documentation to support the decision to use this medication?” she asked.
Third is to move toward transparency on the total cost of healthcare. “Most of us talk about the total cost of care, but [most practices] don’t have that kind of transparency in our office,” she said. For example, practices don’t even receive the cost of medications from payers.
As it went about assessing what needed to be changed, the practice found that primary care providers were not adequately recognizing RA; they were making inappropriate referrals to rheumatologists; there was a lack of necessary records transferred after referral; there was no good system for e-referral; and there was poor communication between the primary care physician, the patient and the specialist to “close the referral loop,” Ms. Ferguson said.
Arthritis Northwest’s improvements involved measuring and eliminating the backlog of referrals by 76%, an increase of 43% in scheduled appointments involving inflammatory conditions and a decrease of 64 days—about an 80% change—in the number of days patients and providers have to wait before hearing from their office once a referral is received.
It has also begun offering expedited referrals through an e-referral system, which includes a screening questionnaire, and has developed protocols and tools for handling non-rheumatic disease diagnoses.
“Now, we’re seeing a lot more of the right patients at our practice,” Ms. Ferguson said.
Documentation has also been dramatically revamped, she said. Everything doctors decide is documented and aligned with guidelines. The clinical and financial picture is analyzed to give a total cost of care for the patient.
“This is really eye-opening for both the payer and our practice,” she said, and it allows them to try to reduce the cost of care together.
She offered these seven steps for defensive documentation:
- Tracking and monitoring the health status of specific patient groups;
- Documenting adherence to ACR guidelines;
- Documenting and reconciling medications;
- Documenting appropriate prevention screenings;
- Doing regular function and disease activity assessments;
- Documenting medical necessity; and
- Coding to the highest level of specificity.
Complying with Fraud & Abuse Laws
Jesse Overbay, JD, senior management consultant and general counsel at Doctors Management LLC, said practice managers and physicians should take seriously concerns about compliance with abuse and fraud regulations—particularly the Stark law and the anti-kickback statute.
The Stark law prohibits physicians from referring Medicare patients for certain health services to an entity with which they, or an immediate family member, has a financial relationship, unless an exception applies.
Intent to break the law is not required for a violation, and the law pertains only to physician referrals under Medicare. Penalties are civil and can include monetary penalties and liability under the False Claims Act.
The anti-kickback statute is criminal in nature and prohibits anyone from offering, paying, soliciting or receiving anything of value to induce or reward referrals or general federal healthcare program business. Under this statute, intent must be proved. Penalties include fines of up to $25,000 per violation and up to five years in prison per violation.
“If you google ‘false claims act’ [or] ‘anti-kickback,’ you’ll see headlines from the last few weeks, and definitely from the last few months, of providers—in some cases, practice managers [and] billers—going to jail for these types of violations,” said Mr. Overbay. “It’s something to definitely be aware of.”
The False Claims Act is violated when an individual or corporation—but not the federal government or a state agency—“presents or causes to be presented, a false or fraudulent claim.”
Mr. Overbay said there has been an uptick in whistleblower cases in recent years.
“People feel like they’re not being heard in their organization,” he said. “It goes back to compliance.”
Every practice, Mr. Overbay stressed, needs a compliance program. If a practice has to undergo a federal audit and doesn’t have one, it will often be put under a “corporate integrity agreement (CIA)” led by federal overseers.
“It’s like a compliance program on steroids,” Mr. Overbay said. “They’re running it. They monitor it. … You do not want to be under a corporate integrity agreement.”
He outlined seven elements of a successful compliance program:
- Implement written policies, procedures and standards of conduct;
- Designate a compliance officer and a compliance committee;
- Practice due diligence in delegating authority. This, he said, should involve performing thorough background checks on employees and checking the Office of the Inspector General (OIG) exclusion list, which is required monthly;
- Educate employees and develop effective lines of communication. A monthly newsletter reminding employees what is expected of them and of billing changes is a good way to stay engaged with the staff, he said;
- Conduct internal monitoring and auditing. He suggested an audit of 20 charts as a baseline audit and then auditing five to 10 charts per physician each quarter to see how their billing compares with norms. “If you’re not taking those steps to actually develop baseline risk assessments for your coding and your documentation in your practice, then you don’t know if you’re going to be subject to an audit,” he said;
- Enforce standards through well-publicized disciplinary guidelines.
“If the rule is in place, there has to be a consequence if you don’t follow it,” Mr. Overbay said;
- Respond promptly to detected offenses and undertake corrective action.
“If vulnerabilities, non-compliance, or potential or actual violations are identified, there must be a plan for corrective action,” he said, including education, repayment or disciplinary action.
Practices should work to build a culture that makes compliance the norm. This involves an awareness of the ethical and legal issues, a perception of fair treatment among employees, a willingness to report legal violations, a knowledge of where to go with ethics and compliance questions, a perception that leadership cares about ethical conduct and a “perception that ethical behavior is rewarded and unethical behavior is punished at all levels,” Mr. Overbay said.
Self-Reporting, Oversight & Audits
Rheumatology practices have to be aware that “rheumatology is a very high-audit, high-risk specialty,” Mr. Overbay said.
When it comes to questions about Stark law violations, there is a long list of exceptions. When a question arises about whether or not your situation fits into an exception category, it is probably time to get professional advice.
“That’s where you would want to get some outside counsel and ask a healthcare attorney—somebody who’s very experienced in the Stark law—about the exceptions and if any of them apply to you,” he said.
Above all, Mr. Overbay said, “you are supposed to be your own monitor of fraud, waste and abuse.”
He said physicians should consider self-disclosure, which can be done online.
With self-disclosure, the possibility of reduced penalties increases, with less per claim than otherwise—an important consideration because Stark violations carry a six-year lookback period. Self-disclosure also offers the chance to avoid exclusion from Medicare as part of the settlement, as well as potential protection from a whistleblower action.
Self-disclosure is also an option when someone thinks they may have violated the anti-kickback statute. The OIG offers guidance on how to investigate conduct, quantify damages and report the conduct
Under the False Claims Act, penalties can include payment suspension, civil monetary penalties, exclusion from Medicare from one year to a permanent exclusion and corporate integrity agreements. Violations can also be self-reported to the OIG.
Mr. Overbay said he is sometimes asked, “What if a provider comes to me and makes me as a biller or coder submit something I know is fraudulent?” As long as the biller can “make some plausible argument that they were under duress,” the government is unlikely to take action against them, he said.
It’s important to understand the difference between fraud, or intentionally deceiving the government for personal benefit, and abuse, which involves actions that result in unnecessary costs to the government.
“The primary difference between fraud and abuse is intent,” Mr. Overbay said.
The world of government healthcare auditing involves an alphabet soup of officers and programs that can almost rival that of medicine itself. The goal—to reduce financial waste and protect public money—is a good one, Mr. Overbay said.
UPICs, or unified program integrity contractors, are particularly active right now, Mr. Overbay said. Their goal is to detect, deter and prevent waste and abuse, and they receive bonuses for the money recovered. “It’s in their best interest to send out as many audits as they can and try to get back as much money as they can,” he said.
A RAC, or recovery audit contractor, reviews claims after payments have already gone out to detect and correct past payments that were improper.
CERT is comprehensive error rate testing—a way to assess if Medicare administrative contractors are paying claims properly. This generally involves relatively simple audits of coding and billing, and is not focused directly on providers, but is not something to ignore, Mr. Overbay said.
TPE, or targeted probe and educate, is a program meant to increase accuracy in billing in very specific areas. The goal, the CMS says, is to help the provider improve quickly.
Although the CMS has well-defined levels of appeal, that’s not the case with private payers. “Private payers can make their own rules, essentially,” Mr. Overbay said. Sometimes, their requests for documentation can have unreasonably tight deadlines.
The main issue private payers are concerned with is medical necessity, Mr. Overbay said. “That is the biggest keyword.”
There is no standard definition, but elements of medical necessity include: generally accepted standards of medical practice; clinically appropriate; not primarily for convenience; and not more costly than an alternative service that is at least as likely to produce the same result.
Eventually, Mr. Overbay said, you can expect to be audited. Have a compliance plan, and use it; provide adequate education, and conduct regular training; have an audit response plan; and perform spot and regular audits yourself.
When an audit request comes, it’s important to read the request thoroughly; to note and adhere to the timelines; to ask for extensions when necessary; to be thorough, clear and concise when responding; and to consider retaining an outside attorney to work with you on the audit.
Smart Credentialing Practices
Healthcare consultant Larry Kemp, managing partner of PRS Consulting, said effective credentialing of physicians is critical for a practice’s revenue stream. Without an accurate and well-documented credentialing process, payment delays and denials will follow, he said.
“Ignoring provider credentialing problems will result in lost income,” he said. “And the practice with effective processes can control many actions.”
It’s a time-consuming and labor-intensive process, he said, but unavoidable.
Applications for credentialing should be accurate and they need to be monitored until they’re approved. Also, he said, a practice should keep an electronic database of its providers. Re-credentialing also needs monitoring. Understanding the process will help a practice stay ahead of the game.
To oversee credentialing the right way, he said, all contracts and service providers have to be inventoried, including all payers, networks, products and locations. Provider names, dates of birth and National Provider Identifier (NPI) and Social Security numbers must be confirmed. The Center for Affordable Quality Healthcare database info must be up to date. Accurate supporting documents must be retained. Medicare revalidation issues must be handled while staying ahead of due dates. Know when credentials expire.
For new providers, credentialing should begin three months before their start
date, he said, with obtaining their NPI, controlled substance registrations, Medicare enrollment, malpractice insurance and
hospital privileges all on the to-do list.
For current providers, the front office of a practice is key to keeping information accurate and preventing payment delays.
Thomas R. Collins is a freelance writer living in South Florida.