Developing a Business Plan to Increase Third Party Reimbursement

Developing a Business Plan to Increase Third Party Reimbursement

June 28, 2003

Presented by:Michael R. Taylor

Precision Resources, Inc.

2

Business Plan Purpose

• Estimate potential revenue from third party billing and collections

• Identify operational changes necessary to increase revenue from third party payers

• Document steps and resources needed to implement billing and collections functions

3

Program Profile:First Step to Plan Completion

• Developing a program profile is the first step to complete your business plan

• The program profile documents pertinent program operating characteristics that the financial model uses to calculate potential third party reimbursement

4

Sample Program Profile:Happy Center for Primary Care

• Grantee type: School-Based Health Center

• Services offered:– Primary care– EPSDT– Behavioral health services– STD/HIV screening– Family planning

• Annual patient volume = 1,000

5


• Annual billable visits = 2,500

• Patient income distribution:– <100% FPL = 40%– 100 – 125% FPL = 30%– 126 – 150% FPL = 10%– 151 – 175% FPL = 10%– 176 – 200% FPL = 10%

• Patient employment rate = 60%

6


• Patient age distribution:– 0 - 4 years old = 5%– 5 – 10 years old = 38%– 11 – 13 years old = 26%– 14 - 18 years old = 26%– >18 years old = 5%

• Patient gender distribution:– Male = 40%– Female = 60%

7


• Patient distribution by payer:– Medicaid FFS = 30% or 300 patients– Medicaid managed care = 15% or 150 patients– S-CHIP = 20% or 200 patients– Commercial FFS = 10% or 100 patients– Commercial managed care = 10% or 100 patients– Self pay = 15% or 150 patients

8


• Visit distribution by payer:– Medicaid FFS = 30% or 750 visits– Medicaid Managed Care = 15% or 375 visits– S-CHIP = 30% or 750 visits– Commercial FFS = 5% or 125 visits– Commercial Managed Care = 5% or 125 visits– Self pay = 15% or 375 visits

9


• Staffing levels (FTEs):– Billable providers– Other clinical staff

• Payer contact information & program service eligibility– Medicaid– Medicaid Managed Care: Majestic Care– S-CHIP: GLH– Commercial: Green Cross

10


CPT CODE MEDICAID RATES PRIVATE RATES

99203 $63.47 $83.04

99212 $21.20 $35.40

99213 $31.09 $49.72

99215 $82.82 $114.58

Managed Care (pmpm)

$12.00 $12.00

Third party payment rates by CPT code:

11


• Missed Revenue:– Clinical staff who are not regarded as billable

providers by health plans

• Additional costs:– Itemization of costs to implement billing and

collections functions

12

Now It’s Your Turn

• Develop a program profile for your program– Accuracy is not important - guess if you need to– The point is to familiarize you with the process and

the tool so that you can use it later– A blank profile template is included in your binders– Take 20 minutes to complete the template

13

Populate Financial Model:Second Step to Plan Completion

Use the information in your completed program profile to populate the designated fields in the

financial model

14

Review Populated Model:Third Step to Plan Completion

Populated financial model for Happy Center for Primary Care

15

Business Plan: Page 1 TYPE OF PROGRAM: School-Based Health Center

PATIENTS:

Total number of patients 1,000

Total billable visits 2,500

Age distribution (%): 0-4 years 5-10 years 11-13 years 14-18 years 18+ years5% 38% 26% 26% 5%

Gender distribution (%): Male: Female:40% 60%

Family income (%): 0-100% FPL 101-125% FPL 126-150% FPL 151-175% FPL 176-200 FPL 201-250% FPL 251-300% FPL 301% + FPL40% 30% 10% 10% 10%

Employed (%): 60%

Primary care provider (%) 100%

Medicaid FFS Medicaid MC S-CHIP Medicare FFS Medicare MC Comm'l 1 (FFS) Comm'l 2 (M/C) Self Pay TotalsPatient distribution by payer (%): 30% 15% 20% 0% 0% 10% 10% 15% 100%Patients by payer 300 150 200 - - 100 100 150 1,000

Visit distribution by payer(%): 30% 15% 30% 0% 0% 5% 5% 15% 100%Visits by payer: 750 375 750 - - 125 125 375 2,500

Billable visits per patient 2.50 2.50 3.75 0.00 0.00 1.25 1.25 2.50 2.50

PROGRAM SERVICES:Yes No

Primary care: xEPSDT (Preventive): xBehavioral health: xSTD/ HIV screening: xFamily planning: x

CLINICAL FTEs:

Billable providers: Family Emergency Internal Pediatrics Mental health OB-Gyn Other Totals Physicians 0.1 0.1 Nurse practitioners 1.0 1.0 Physician assistants 0.0 Residents 0.0 Total billable providers 0.0 0.0 0.0 1.1 0.0 0.0 0.0 1.1 Avg visits per billable provider 2,273

Other clinical staff: Licensed psychologists 0.0 Certified social workers 0.5 0.5 School social workers 0.0 Health educator 0.0 Substance abuse counselors 0.0 Registered nurses 0.0 Medical assistant/LPN 1.0 1.0 2.0 Others (specify) 0.0 Total other clinical staff 0.0 0.0 0.0 1.5 0.0 1.0 0.0 2.5

TOTAL CLINICAL FTEs 0.0 0.0 0.0 2.6 0.0 1.0 0.0 3.6

Total other clinical staff per provider 0.0 0.0 0.0 2.4 0.0 0.0 0.0 3.3

Screening, Counseling, TraetmentPregenancy Testing, GYN exams, Birth control prescriptions, Counseling

DescriptionAcute, Co-management of chronic conditions, Sports injuriesPhysicals, Immunizations, Preventive health screenings, Health risk assessments, Sports physicals, Health guidanceMental health assessments, Individual and group counselin (e.g.,Substance abuse, Family, etc.)

16

Business Plan: Page 2

PLANS AND PROGRAM SERVICE ELIGIBILITY:

Plan Name AddressContact Person Phone Email Website Plan Type

Program Eligible

Billable Provider Types

Number Pot. Patient Members

Eligible Services (Y/N)

State of Anywhere Medicaid

1 Nowhere Lane, Nowheresville, AY Jane Adams 999-123-4567 [email protected] www.health.ay.us.edu Medicaid Yes

All except LPNs, PAs, and CSWs 300

Majestic Care100 Royal Circle, State Capital, AY R.U. There 999-234-5678 [email protected] www.majestic.com Medicaid Yes


GHL200 GHL Plaza, State Capital, AY John Brown 999-345-6789 [email protected] www.ghl.com S-CHIP Yes


Green Cross of Anywhere

2150 Green Cross Rd, State Capital, AY Ellen Carrol 999-456-7890 [email protected] www.greeen.com Commercial Yes


17

Business Plan: Page 3-1COVERED SERVICES AND PAYMENTS:

Medicaid S-CHIP Commercial Self Pay

FFS payments by CPT code:New Patient: 99201 - Office visit @ 10mins $20.84 $20.84 $39.44 $39.44 99202- Office visit @ 20mins $41.67 $41.67 $61.69 $61.69 99203 - Office visit @ 30mins $63.47 $63.47 $83.04 $83.04 99204 - Office visit @ 45mins $93.96 $93.96 $123.48 $123.48 99205 - Office visit @ 60mins $124.78 $124.78 $152.18 $152.18Established Patient: 99211 - Office visit @ 5mins $7.92 $7.92 $19.72 $19.72 99212 - Office visit @ 10mins $21.20 $21.20 $35.40 $35.40 99213 - Office visit @ 15mins $31.09 $31.09 $49.72 $49.72 99214 - Office visit @ 25mins $51.37 $51.37 $74.10 $74.10 99215 - Office visit @ 40mins $82.82 $82.82 $114.58 $114.58Preventive Medicine: 99382 - Initial evaluation - ages 1-4 $44.15 $44.15 $73.59 $73.59 99383 - Initial evaluation - ages 5-11 $44.39 $44.39 $73.98 $73.98 99384 - Initial evaluation - ages 12-17 $45.32 $45.32 $75.53 $75.53Health Behavior Assessment: 96150 - Initial visit, each 15 mins $23.89 $23.89 $50.58 $50.58 96151 - Reassessment $22.88 $22.88 $48.46 $48.46 96152 - Individual intervention, each 15 mins $21.88 $21.88 $46.33 $46.33 96153 - Group, each 15 mins $4.95 $4.95 $10.48 $10.48 96154 - Family, each 15 mins $21.56 $21.56 $45.65 $45.65 96155 - Family wo patient, each 15 mins $21.23 $21.23 $44.96 $44.96

Payers

18



FFS visit distribution by CPT code:New Patient: 99201 - Office visit @ 10mins 5.0% 5.0% 5.0% 5.0% 99202- Office visit @ 20mins 5.0% 5.0% 5.0% 5.0% 99203 - Office visit @ 30mins 5.0% 5.0% 5.0% 5.0% 99204 - Office visit @ 45mins 10.0% 10.0% 10.0% 10.0% 99205 - Office visit @ 60mins 10.0% 10.0% 10.0% 10.0%Established Patient: 99211 - Office visit @ 5mins 5.0% 5.0% 5.0% 5.0% 99212 - Office visit @ 10mins 5.0% 5.0% 5.0% 5.0% 99213 - Office visit @ 15mins 5.0% 5.0% 5.0% 5.0% 99214 - Office visit @ 25mins 5.0% 5.0% 5.0% 5.0% 99215 - Office visit @ 40mins 9.0% 9.0% 9.0% 9.0%Preventive Medicine: 99382 - Initial evaluation - ages 1-4 2.0% 2.0% 2.0% 2.0% 99383 - Initial evaluation - ages 5-11 2.0% 2.0% 2.0% 2.0% 99384 - Initial evaluation - ages 12-17 2.0% 2.0% 2.0% 2.0%Health Behavior Assessment: 96150 - Initial visit, each 15 mins 5.0% 5.0% 5.0% 5.0% 96151 - Reassessment 5.0% 5.0% 5.0% 5.0% 96152 - Individual intervention, each 15 mins 5.0% 5.0% 5.0% 5.0% 96153 - Group, each 15 mins 5.0% 5.0% 5.0% 5.0% 96154 - Family, each 15 mins 5.0% 5.0% 5.0% 5.0% 96155 - Family wo patient, each 15 mins 5.0% 5.0% 5.0% 5.0% Totals 100.0% 100.0% 100.0% 100.0%

Payers

19



FFS visit frequency by CPT code:New Patient: 99201 - Office visit @ 10mins 38 38 13 19 99202- Office visit @ 20mins 38 38 13 19 99203 - Office visit @ 30mins 38 38 13 19 99204 - Office visit @ 45mins 75 75 25 38 99205 - Office visit @ 60mins 75 75 25 38 Established Patient: 99211 - Office visit @ 5mins 38 38 13 19 99212 - Office visit @ 10mins 38 38 13 19 99213 - Office visit @ 15mins 38 38 13 19 99214 - Office visit @ 25mins 38 38 13 19 99215 - Office visit @ 40mins 68 68 23 34 Preventive Medicine: 99382 - Initial evaluation - ages 1-4 15 15 5 8 99383 - Initial evaluation - ages 5-11 15 15 5 8 99384 - Initial evaluation - ages 12-17 15 15 5 8 Health Behavior Assessment: 96150 - Initial visit, each 15 mins 38 38 13 19 96151 - Reassessment 38 38 13 19 96152 - Individual intervention, each 15 mins 38 38 13 19 96153 - Group, each 15 mins 38 38 13 19 96154 - Family, each 15 mins 38 38 13 19 96155 - Family wo patient, each 15 mins 38 38 13 19 Totals 750 750 250 375

Average Capitation Payments $12 $12

Average FFS Payments $42 $42 $65 $65

Payers

20


MISSED REVENUE DUE TO UNBILLABLE PROVIDERS - ANNUAL:

Payers Non-billable Providers

% of Total Visits per Provider

Total Visits per Provider % this Payer

Non-billable Visits by

Payer Payment per VisitEstimated Missed

RevenueMedicaid FFS 1 - Nurse Practitioner 15% 375 30% 113 $42 $4,687

0 30% 0 $42 $0Medicaid MC 1 - Nurse Practitioner 15% 375 15% N/A N/A N/A

0 15% N/A N/A N/A S-CHIP 1 - Nurse Practitioner 15% 375 20% 75 $42 $3,125

0 20% 0 $42 $0Commercial 1 (FFS) 1 - Nurse Practitioner 15% 375 10% 38 $65 $2,437

0 10% 0 $65 $0

Total Revenue Lost Due to Unbillable Providers $10,249

21

Business Plan: Page 5ADDITIONAL COSTS - ANNUAL:

STAFF

Itemize Staff % FTEAnnual Salary &

Overhead Annual costCertified coding specialist 10% $30,000 $3,000Billing clerk 50% $24,000 $12,000

$0$0$0$0

Total Staff Costs: $15,000

INFORMATION SYSTEMS TASKS:Acquire coding software and coding manuals $1,000Acquire practice management/scheduling software $7,500Computerization of billing $10,000

Total IS Costs: $18,500

ADMINISTRATIVE TASKS:Analyze job functions N/ARevise job descriptions N/ACross-train staff N/ASet your charges N/AGet payors rules and regulations N/AContact your State Medicaid program N/AContact the electronic claim submission vendor N/AComplete provider applications N/ASet up billing department $5,000Develop policies and procedures N/ATrain staff $3,000Conduct a simulation N/A

Total Administrative Tasks: $8,000

22

Business Plan: Page 6ANNUAL REVENUE SUMMARY:

FFS Revenue:Number of

Patients

Capitated Per Member

Per Month Payment

Avg. FFS Payment Per

VisitAvg. Visits

Per Year

Avg. Annual Revenue/

PatientEst. Total Revenue

Medicaid 300 N/A $42 2.5 $104 $31,247 S-CHIP 200 N/A $42 3.8 $156 $31,247 Commercial 1 100 N/A $65 1.3 $81 $8,125 Commercial 2 100 N/A $65 1.3 $81 $8,125 Self Pay 150 N/A $65 2.5 $162 $24,374 Total Estimated FFS Revenue $103,119

Capitation Revenue: Medicaid 150 $12 N/A 2.5 $144 $21,600 Commercial 2 100 $12 N/A 1.3 $144 $14,400 Total Estimated Capitation Revenue $36,000

Total FFS & Capitation Revenue $139,119

Minus (Costs): Additional staff costs $15,000 Information systems costs $18,500 Administrative tasks costs $8,000 Total Costs $41,500

Net Third Party Revenue $97,619

Total Missed Revenue Due to Unbillable Providers $10,249

23


IMPLEMENTATION TASKS:

Payers to be contacted:Plan name Address Contact Person Phone Email Website Plan TypeState of Anywhere Medicaid

1 Nowhere Lane, Nowheresville, AY Jane Adams 999-123-4567 [email protected] www.health.ay.us.edu Medicaid

Majestic Care100 Royal Circle, State Capital, AY R.U. There 999-234-5678 [email protected] www.majestic.com Medicaid

GHL 200 GHL Plaza, State Capital, AY John Brown 999-234-5678 [email protected] www.ghl.com S-CHIPGreen Cross of Anywhere

2150 Green Cross Rd, State Capital, AY Ellen Carrol 999-345-6789 [email protected] www.greeen.com Commercial

IS implementation tasks:Task name Responsible person Vendor, if any Start Date Completion DateDevelop computer resource Jose Sanchez 1-Jan 30-Sep

24

Business Plan: Page 8ACTION STEPS:

Planned ActualResponsible Start Completion Completion

Person Date Date DatePlanning:Establish steering committee to guide development and implementation of TPR program Frank Smith 1-Jan 30-SepDevelop a policies & procedures manual that details billing and collections functions Jose Sanchez 1-Jan 31-MarAscertain approval process for new policies and procedures Frank Smith 1-Jan 31-Mar

Program operations: Develop/revise billing procedures Frank Smith 1-Jan 31-Mar Create/revise patient registration procedure Jose Sanchez 1-Jan 31-Mar Create/revise medical records procedure Mary O'Malley 1-Jan 31-Mar Create/revise encounter data collection procedure Jose Sanchez 1-Jan 31-Mar Create/revise billing follow-up procedure Jose Sanchez 1-Jan 31-Mar

Staffing tasks: Determine provider staffing needs Frank Smith 1-Apr 15-May Determine other staffing needs Frank Smith 1-Apr 15-May Identify staff training required Frank Smith 1-Apr 15-May Idenfity consultant/technical assistance needs Frank Smith 1-Apr 15-May

Actions: Complete provider hiring/credentialling Frank Smith 16-May 30-Jun Revise human resources procedures Jose Sanchez 1-Mar 15-May Implement new procedures Frank Smith 1-Apr 30-Sep Contact payors Frank Smith 1-Jan 31-Jan Complete staff hiring/training/education Jose Sanchez 16-May 30-Sep Start data collection Mary O'Malley 30-Sep 30-Sep Conduct simulation Frank Smith 1-Sep 30-Sep Bill Mary O'Malley 30-Sep 30-Sep

Developing a Business Plan to Increase Third Party Reimbursement

Documents

Transcript of Developing a Business Plan to Increase Third Party Reimbursement