Charting the Course for Success!Dental Operations in the FQHC

Bob Russell, DDS, MPHBob Russell, DDS, MPHIowa Department of Public HealthIowa Department of Public Health

We don’t work in a vacuum…

Environmental/financial challengesEnvironmental/financial challenges• Federal/state regulationsFederal/state regulations

Auxiliary supervision and scope of serviceAuxiliary supervision and scope of service Reimbursement scenariosReimbursement scenarios

• Payer mixPayer mix• Competition for patientsCompetition for patients• Competition for staffCompetition for staff

Challenge of a changing health system and cultureChallenge of a changing health system and culture

• A Population-based focus; individual patient treatment planning and surveillance of the total population must be part of an efficient public health care dental program

• Data Driven!!!

Monitoring quality of care –basic outcome measuresPeer Review protocolsPatient satisfaction surveysCommunity needs assessmentEfficiencies in treatment applications

Financial ManagementCost control and supply utilizationRevenue and service cost trackingProvider productivity tracking

Service and treatment option priorities that impact productivity must be based on:

availability of resources, space and design of clinic,service prioritization, size of the target population, dental disease prevalence and types, demand of the population, all providers calibrated on a

reasonable concept and path towards creating dental health verses highest cost = ideal restoration.

• When scheduling assure that the patient knows they are responsible for notifying the office 24 hours before breaking an appointment OR confirming an appointment.

• No call or notification, the booked block is cancelled and reassigned to another patient.

• 3 No-shows, patient loses booking privileges and assigned to walk –in status

• Measure variances in no-show ratios to schedule appointments using predictability in overbooking situations

• Differing Medicaid payment structures• CBR, PPS, FFS

• Balancing revenues and expenses• Increases the Safety Net clinic’s value

in the public health system• Increases competitiveness for public

dollars

• Electronic health records produce traceable data that reveal trends in care

• Medicaid is now monitoring for “churning” or minimizing treatment per encounter

• National outcomes measures are being implemented

• Risk Management required• Health centers have received large

dollars for expansion• The nation’s eyes are on FQHCs!!!

“The refinements of productivity measurements willrequire more intensive, real-time data collection,

but will yield significant payoff in improvedunderstanding of dental practice and its

contributions to oral health.”

Conrad, Douglas A. Shuk-Yin Lee, Rosanna. Milgrom, Peter. Huebner, Colleen E. “Estimating Determinants of Dentist Productivity: New Evidence.” Journal of

Public Health Dentistry, Vol. 70, No. 4; Fall 2010, pg. 267

• Clinical Advantages• Needs and Risk Assessment Protocols• Patient satisfaction • Pre and Post treatment outcomes monitoring

• Electronic record reviews• Adverse outcomes tracking• Monitoring treatment ratios: Phase one levels of care (75%)

• Section 330 of Public Health Service Act requires every Health Center to have ongoing QI/QA program.

• Federal Tort Claim Act (FTCA) deeming application process requires submission of Health Center QI/QA plan and QI/QA committee minutes

• Provides accountability to Board of Directors, community members, and funding entities

• Risk Assessment is the identification, assessment, and prioritization of risks (the effect of uncertainty).

• Risk Management is the application of resources to minimize, monitor, and control the probability or impact of adverse events.

• It specifies information needed by providers, leaders, and staff to minimize risks for their oral health programs, and next steps if an error occurs.

• Regulatory Requirements (examples)• Health Insurance Portability and Accountability Act (HIPAA), American Disabilities Act (ADA), Culturally and Linguistically Appropriate Services (CLAS), Federal Tort Claim Act (FTCA), Occupational Safety and Health Administration (OSHA), The National Institute for Occupational Safety and Health (NIOSH) …most are applied health center wide, but may have dental specific applications

• Clinical (examples)• CDC Infection Control Guidelines• State Licensing Regulatory Standards of Care• ADA Principles of Ethical Standard and Conduct• The Joint Commission (TJC formerly JCAHO) or The Joint Commission (TJC formerly JCAHO) or

other ambulatory certification authorityother ambulatory certification authority

• Use environmental data from your health center’s fiscal, historical mission, population needs, and outcome expectations to set goals

• Make determinants for measurement in easy descriptive terms, i.e. cost per encounter

• Use national recognized benchmarks based on best practices as a foundation

• Allow you to individualize for your patient populations and their needs

• Allow you to collect data to show delivery of proven health care interventions

• Enable you to show improved health care outcomes

Productivity

Many factors are involved with productivity, and no single measure will provide an accurate view.

Sites should be reviewing productivity from many perspectives.

• REQUIRED • Pediatric Dental Screenings • Preventive Dental Care & Diagnosis• Emergency Services

• EXPECTED• Treatment of Dental Disease \ Early Intervention Services • Basic Restorations Services • Services for Special Needs Patients • Additional primary oral health care services identified in a

needs assessment of the population & the availability of resources to meet those needs.

• Comprehensive primary oral health care as an integral component of primary health care services

• RECOMENDED• Rehabilitative Services

• Output to be measured in terms of contributions to oral health, not visits

• Use of dental auxiliaries and their skill level be measured, not just their availability

• Utilization of dental technology and space utilization be measured more precisely

• Patient mix (demographics and oral health) be included in production models

• Risk management protocols in place

• Four interrelated economic determinants that a public health clinical program should focus on: • productivity rate or units produced per time period

• revenue generated per production unit

• cost for service per unit generated• Quality outcome impact on client’s health

• There are several outcomes that have to drive the program’s expectations:

• improved oral health status of the patient population served

•a financially viable delivery system •physical size of clinic, staffing efficiencies in skill sets and abilities, and equipped for maximum productivity

• Outcomes are a measure of the dental program’s success in improving the health of its patients and the communities it serves

• Phase I treatment completion focuses on the diagnosis, prevention and elimination of dental disease, non-surgical periodontal care and elimination of hopeless teeth

• Goal to complete Phase I treatment on 50-75% of patients within 12 months of dental exam and formulation of treatment plan

Set Realistic Financial and Productivity Goals

Service costs provided (average) should be less than actual rate per patient/encounter.Comprehensive mix of services should emphasize basic therapeutically acceptable care options. More “bang for the buck.”Productivity goals based on practice objectives: services vs. time (encounters).

• Self Pay• Sliding Fee Scale (From100% to 200% Federal Poverty Guidelines)• Private Dental Insurance (new ACA Benefit Exchange

combinations med-dent, dental only)• Medicaid:Medicaid:

• Managed Care Organizations• Fee For Services• PPS (Perspective Payment System = Encounter Rate)• CBR (Cost Based Reimbursement = end of year cost settlement)

• CHIP (Children’s Health Insurance program)Various grants, endowments, subsidies, etc….

• Pay for Performance – Quality Outcome Indicators Enforced!

• Accountable Care Organizations • Multiple Practice Conglomerations• Single billing core entity for efficiencies• Multi-discipline and multiple locations• Many FQHCs will merge into existing or

new ACOs

Creation of a high-quality, affordable, oral health program that documents the improvement of the oral health status of the patients we treat while being financially responsible.

“Community health dental programs provide high-quality clinical care to our nation’s most vulnerable residents. However, without a balance between mission focused-care and robust business practices, community health dental programs may jeopardize their own sustainability”

Mark Doherty, DDSDentaQuest Institute/Safety Net Solutions

• 2500-3200 encounters/year/FTE dentist• 1300-1600 encounters/year/FTE hygienist• 2700 encounters/year with 1100 patient base

(dentists) • 1.7 patients/hour or 13.6 patients per day per

dentist• 1.2 patients/hour or 8-10 patients/day for

hygienist• Gross Charges = >$400K per dentist per year

Performance Indicators

• Relative Value Units (RVUs) per Hour – A minimum of 5 RVUs for a dentist, 3.5 RVUs for a dental hygienist.

• Encounters per Hour – A minimum of 1.6 encounters per hour or an average of 40 minutes per encounter for both dentists and dental hygienists.

• RVUs per Encounter – A minimum of 3 per dentist and 2 per hygienist. This equates to 30 minutes of actual work per encounter.

Sites should calculate the gross productivity utilizing full fee charges as one measure of productivity. Full Fee Schedule should be 85% or higher of local charges of UCR(average gross charges) presuming that the fees are market rate

• Use benchmarks (1.7 visits/hour for dentists, 1.25 visits/hour for dental hygienists, 1 visit/hour for externs and new residents)

• Benchmark x number of daily clinical time = total number of visits/day/provider (eg, 1.7 x 8 hours = 14 visits)

• Goal for procedures per visit: 2-5 (for basic dental program serving mix adults and children)

• Revenue goals need to be based on overall costs of running program

• Potential capacity is based on number of FTE providers, hours of operation, chairs and standard productivity benchmarks

• Benchmarks are different for dentists vs. hygienists

• Potential visit capacity is impacted by factors affecting provider productivity

• Remember, What happens in the visit determines your quality and your quantity. Mission and Margin

• Poor clinic design and less than optimal chair numbers per provider will lower productivity

• Lack of sufficient clinical space for traffic will lower productivity

• Less trained staff or less than optimal staff numbers and will lower productivity

• Higher ratios of patients with complete treatment plans and receiving comprehensive care will lower encounter productivity

• Meeting the mission objective of FQHCs to improve the population’s health lowers the productivity ceiling

• Higher proportions of patients with medical compromised status, advanced mental or physical disabilities, disruptive behavior, and very young with extensive treatment needs will lower productivity

• Productivity has a ceiling and cannot be exceeded without lowering quality and burning out staff

• This ceiling varies among clinics and is based on that site’s particular environment

Productivity A dentist should utilize three chairs and 1 dental assistant per chair to achieve good productivity aims.

This is for optimum efficiency.

Use of additional operatories and expanded function dental assistants (EFDAs) significantly increase the marginal rate of return on investment as well as productivity.

• Do not set productivity levels so high resulting in a decrease in quality and ability of providers to meet the needs of patients.

• Attempt to standardize encounter time increments that allow sufficient time to provide reasonable service

• Document all conditions that force encounter time changes to less than scheduled – or prolongs encounter time beyond what is scheduled.

• Be prepared to address complaints of churning or producing lower than expected encounter numbers over a specific time (i.e. quarters, semi-annual, etc…)

• Number of visits • Gross charges• Total expenses (direct and

indirect) • Net revenue (including all

sources of revenue)• Expense/visit• Revenue/visit• Transactions (procedures

by ADA code)• Transactions /visit• Aging report past 90 days

• Payer and patient mix• No-show rate• Emergency rate• Number of unduplicated

patients• Number of new patients• Percentage of completed

treatments• Percentage of children

needing sealants who received sealants

• Number of FTE providers (dentists, hygienists, other providers with chargeable services)

36

How to evaluate your finances to determine effectiveness

Now (7,500 visits)35% Medicaid (avg.

revenue/visit = $100)55% Self-Pay/SFS (avg.

revenue/visit = $30)10% Commercial (avg.

revenue/visit = $120)2,625 visits x $100 = $262,5004,125 visits x $30 = $123,750750 visits x $120 = $90,000Total revenue = $476,250Total expenses = $500,000

Operating loss = ($23,750)

Better (7,500 visits)50% Medicaid (avg.

revenue/visit = $100)40% Self-Pay/SFS (avg.

revenue/visit = $30)10% Commercial (avg.

revenue/visit = $120)3,750 visits x 100 = $375,0003,000 visits x $30 = $90,000750 visits x $120 = $90,000Total revenue = $555,000Total expenses = $500,000

Operating surplus = $55,000

To compensate for rising costs! Assurance your program remains profitable Use standard local/regional Usual Customary

Rates (UCR) Stay within 85+ percentile of local fee scale Remember: you have a sliding scale to assist the

low-income clients in your clinic Use patient-population growth to adjust PPS

rates Watch for incremental changes (monthly) on

budget

REVENUE: Jan-12 Feb-12 Mar-12

GROSS CHARGES 451,392 404,048 626,948

INSURANCE ADJUSTMENTS (170,175) (152,326) (236,359)

GRANT REVENUE 22,917 22,917 22,916

CAPITATION PAYMENTS 5,366 5,186 5,224

INTEREST/OTHER INCOME - - -

TOTAL REVENUE 309,500 279,825 418,729

EXPENSES:SALARIES & BENEFITS 235,182 221,523 247,372 COMMISSIONS - - - RENT, BUILDING EXPENSE, OFFICE EQUIPMENT13,542 13,542 13,542 PRINTING & ADVERTISING 250 250 250 POSTAGE & SUPPLIES 35,808 35,808 35,808 TELEPHONE 1,715 1,708 1,708 OPERATIONAL EXPENSE 1,542 1,542 1,542 PROFESSIONAL SERVICES & CONSULTING18,417 18,417 18,417 INITIATIVES - - - COMPANY INSURANCE - - 2,900 TRAVEL 67 67 67 MISCELLANEOUS 993 993 3,193 DEPRECIATION 32,223 32,223 32,223

Total Expenses 339,738 326,071 357,021

NET INCOME (30,238) (46,247) 61,708

Example: Monthly Financial Statement

• Practice incurs $800,000 in direct and indirect expenses for the year

• To break-even (without grant support), practice must generate that much in net patient-generated revenue

• To achieve surplus, practice sets a goal of $900,000 in net patient-generated revenue

• $900,000 ÷ 230 days = $3913 in net patient revenue per day; $19,565 in net patient revenue per week = Practice Goals

• Practice collects 50% of what it charges; therefore, gross production goals need to be $7,826 per day and $39,130 per week