Eyes Wide Shut - Texas Optometric Associationtexas.aoa.org/Documents/TX/2016 PCS/HANDOUT - Morning...

Eyes WIDE ShutThe Independent Practice In The World Of Health Care Reform

J. Rumpakis, OD, MBAPractice Resource Management, Inc. – [email protected]

www.JustAskJohn.info – www.CodeSAFEPLUS.comwww.PRMI.com – WhatsMyPracticeWorth.com

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Eyes Wide ShutTHE INDEPENDENT PRACTICE IN THE WORLD OF HEALTH CARE REFORM

JOHN RUMPAKIS, OD, MBA

© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA DUPLICATION PROHIBITED WITHOUT PERMISSION. ALL RIGHTS RESERVED.

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John Rumpakis, OD, MBA

Dr. Rumpakis is currently President & CEO of Practice Resource

Management, Inc., a firm that has been providing a full array of

consulting, appraisal, and management services for healthcare

professionals and industry partners for the past 32 years. He has

developed some of the leading Internet‐based software applications for

the medical/eye care field such as CodeSAFEPLUS.com®

(www.CodeSAFEPLUS.com), the industry leading cloud‐based CPT & ICD

Code Data and Information Service, and offers personal medical coding

consultation through JustAskJohn (www.JustAskJohn.info). He is also the

founder of Opt‐ED® Professional Continuing Education (www.Opt‐

ED.com) which creates and delivers top tier continuing education around

the country as well as Opt‐IN® which provides optometric marketing and

promotional services.

Named the Chief Medical Coding Editor for Review of Optometry

& Optometric Management, he has been extensively published on

the topics of third party coding & billing, strategy development

and execution, practice management, team building, maximizing

effectiveness and profitability, including the textbook “Business

Aspects of Optometry”. Dr. Rumpakis is a popular lecturer both

nationally and internationally. In addition to having had a

successful solo practice, Dr. Rumpakis developed the practice

management curriculum at Pacific University College of

Optometry and taught optometric & medical economics there for

over a decade and was recently named the University of Houston

College of Optometry’s Benedict Professor for 2016‐2017.

A 1984 graduate of Pacific University College of Optometry, he

served as a volunteer for the AOA for near 17 years and sits on

numerous advisory boards, and board of directors for companies

both in and out of the ophthalmic industry.

Chief Medical Clinical Coding Editor – Review Of Optometry & Optometric Management

Financial Disclosures – John Rumpakis, OD, MBA

• Alcon Laboratories• Carl Zeiss Meditec• Optos• Vistakon• CooperVision• Maculogix• EMRLogic• TearLab

• Allergan• Beaver‐Visitec• OfficeMate• Maximeyes• Luxottica• MacuRisk• Paragon• SynergEyes


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• Eye‐Tel Imaging• Bausch & Lomb• Essilor of America• Wal‐Mart• Macuscope• Topcon• CyclopsEMR• MacuHealth

• RevolutionEHR• VisionWeb• Opticare• United Health Care• Vision Source• Bio‐Tissue• ECRVault• Freedom‐Meditech

I Am A Project Based Consultant & Have Received Honoraria From:(Partial Listing)

JustAskJohn – Personalized Medical Coding Consultation (www.JustAskJohn.info) CodeSAFEPLUS (www.CodeSAFEPLUS.com)Founder – Opt‐ED, Professional Optometric Continuing EducationFounder – Opt‐IN, Optometric Marketing & PromotionsWhatsMyPracticeWorth.com ‐ Online Practice Appraisals

• ArcticDX• Modernizing Medicine• Annidis• Kowa Optimed• HeartSmart• Diopsys• Nicox• Crystal PM




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Three Essential Resources For You

[email protected]

www.CodeSAFEPLUS.com

www.JustAskJohn.info© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA

DUPLICATION PROHIBITED WITHOUT PERMISSION. ALL RIGHTS RESERVED.5

Today’s Feature Presentation

THIS PRESENTATION IS NOT FOR THE FAINT OF HEART OR FOR INDIVIDUALS WHO AVOID SITUATIONS THAT ARE

ACTUALLY HAPPENING RIGHT IN FRONT OF THEM AND ARE AFRAID TO DEAL WITH THEM. CURRENT MARKET

CONDITIONS AND GRAPHIC DEPICTIONS OF THE HEALTHCARE ENVIRONMENT ARE CONTAINED THROUGHOUT.

THE FOLLOWING PRESENTATION HAS BEEN APPROVED FOR

ALL AUDIENCESBY THE RUMPAKIS SCHOOL OF HEALTHCARE ECONOMIC THEORY

THIS PRESENTATION HAS BEEN RATED

FOR ASEVERE DOSE OF REALITY




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THE FOLLOWING PRESENTATION CONTAINS

FA FACTUAL ANALYSIS OF HEALTH CARE DELIVERY SYSTEMWITH CHALLENGES & OPPORTUNITIES

AP ACTION PLAN TO OVERCOME INCREASING DESPAIR

AND SENSE OF HOPELESSNESS

GE GRAPHIC SCENES OF ECONOMIC ANALYSIS

What Is Outcome Based Care?

© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBADUPLICATION PROHIBITED WITHOUT PERMISSION. ALL RIGHTS RESERVED.

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Headwinds & Challenges


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Sunny Skies Ahead?


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Sunny Skies Ahead?


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“Due To RecentBudget Cuts,

The Light At TheEnd Of The Tunnel

Has Been Turned Off”© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA

DUPLICATION PROHIBITED WITHOUT PERMISSION. ALL RIGHTS RESERVED.




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Pressure On The Independent ECP


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Independent ECP Office

ACA

Government Environment

MU?PQRS/QRURVBM ‐ MIPS

MVCP

Changes In Product MixNew

Consumer Channels

Contacts –Glasses ‐Services

Market Shifts

Vertical Integration

Alliances

These PressuresCreate Challenges


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So What?THIS STUFF DOESN’T AFFECT ME AT ALL





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WTF?WHAT ARE THE FACTS?


• Most OD’s get into practice to have some semblance of control over their professional lives

• Today, 95% of OD’s participate in MVCP• Today, 90% of OD’s participate in Medical plans• The current model of optometric practice is highly dependent on optical revenue (65% of average practice revenues)

• Optometry practices utilize high levels of technology and test to a higher degree than other medical professionals

• The model of health care delivery is in unprecedented territory• Fee for service model is under attack


Starting With Simple Truths


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Not everything that is faced can be changed, but nothing can be changed until it is faced...




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CHANGETHE MOST UNPOPULAR 6 LETTER WORD IN THE ENGLISH LANGUAGE


Having The RightFrame Of Mind Is CriticalAND HAVING THE FOUNDATION, RESOURCES, NETWORK AND CONFIDENCE TO SUCCEED


We have to CHANGE The Change Cycle!


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OPPORTUNITY

Direct It

Embrace It

Anticipate It

CHANGE




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Without ChangeWE RATIONALIZE


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Without ChangeWE BECOME COMPLACENT


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Without ChangeRATIONALIZATION AND COMPLACENCY LEADS TO NO CHANGE AND MORE IMPORTANTLY,NO DIFFERENCE IN OUTCOMES


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Survive Change THROUGH Change• Change Happens• Anticipate Change• Embrace Change• Direct Change• Prosper From What Change Brings


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What Do You ThinkIs Happening In Health Care?AND HOW IS IT AFFECTING THE INDEPENDENT EYE CARE PROFESSIONAL?





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The Big Five Are Now The Big Three


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AnthemCignaAetnaHumana

United Health Care

$50 Billion

$37 Billion

$????


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Regulatory Demands Add Angst & Confusion


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Singular Events Are Converging


Where Have All Of My Patients Gone?

My MIPS Score?

Diagnosis Related Groups

ICD‐10Narrow Networks (ACO’s)

Meaningful Use

PQRS/QRURMandatory

EMR

Affordable Care Act

Today 2019

In A Market That Is Less & Less Familiar


Devaluing Asset

Loss Of Control

Carriers, Now Competitors


Rapid Consolidation

Or Changing So Fast It’s Hard To Keep Up




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• Audits Are Increasing – Medical & Refractive Carriers• Intense Scrutiny On Medical Necessity For Testing• 92004/92014 Under Attack

oRoutine exams are going to be more prevalent = • Increased MVCP Competition For Covered Lives

oChanging product mix will lead to decreased reimbursementso Increased bundling of services – Asking us to do more – for less

•Dictums From Carriers On How To Practice•Automation Is A Driving Force & Will Continue To Challenge The Traditional Practice Model


Some Primers

Trends Affecting Practices•Downward pressure on refractive reimbursements•Increasing costs•Increasing demand for care (baby boomers)•Contracting supply of ophthalmologists•More patient pay (deductibles, diagnostics, treatments)•More savvy patients•EMR and other technology•Need for better‐trained staff•Practice consolidation•Continual changes in the healthcare delivery system

42© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA


Growing The Independent ECPMANAGING THE MIDDLE ONLY WORKS FOR SO LONG…LET ’S LEARN HOW TO PRICE FOR PROFIT






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Your Practice Is Like A Bucket


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Medical Eye Care Revenue

Internet & Contact Lens Drop Outs

Refractive & Contact Lens Revenue

Patients Going Elsewhere For Medical Eye Care

Audit Risk

What Is Managed Vision Care?

Managed Vision Care Managed Competition

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=

Where an unaffected third party controls your supply, your demand, and ultimately your

profitability, through mechanisms of controlled distribution and contractual limitations.


Knowing Your NumbersMANAGING REVENUES & COSTS ARE THE KEYTO KNOWING HOW TO ANSWER THE TOUGH QUESTIONS

© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA© 2008 ‐ 2016 MORRIS CONSULTING ASSOCIATES DUPLICATION PROHIBITED WITHOUT

PERMISSION. ALL RIGHTS RESERVED.46




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Managing The Revenues

© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA© 2008 ‐ 2016 MORRIS CONSULTING ASSOCIATES DUPLICATION PROHIBITED WITHOUT

PERMISSION. ALL RIGHTS RESERVED.47

• Revenue Side• What is the mix?

• Services vs Materials• Material Breakdown – MVCP vs Private Pay• Service Breakdown – MVCP vs Medical Coverage vs Private Pay

• All levels Of Service are critical for this analysis

What Do You Know About Your Practice?

© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA© 2008 ‐ 2016 MORRIS CONSULTING ASSOCIATES DUPLICATION PROHIBITED WITHOUT PERMISSION. ALL RIGHTS RESERVED.


Calculating Chair CostLET’S LOOK AT THE IMPACT OF OUR COST WITH RESPECT TO MANAGED VISION CARE PLAN






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Profit & Loss

52© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBADUPLICATION PROHIBITED WITHOUT PERMISSION. ALL RIGHTS RESERVED.

2015 2014 2013 2012

Revenue

Income 1,007,878$ 1,005,159$ 958,961$ 978,310$

Less Patient Refunds & Adjustments 2,817$ 3,435$ 5,519$ 7,291$

Total Revenues 1,005,061$ 1,001,724$ 953,442$ 971,019$

Annualization 1.00 1.00 1.00 1.00

Total Annualized Revenues 1,005,061$ 1,001,724$ 953,442$ 971,019$

Average Annualized Revenues 982,812$

Operating Expenses

Cost of Goods Sold 223,747$ 249,661$ 256,061$ 248,897$

Wages 339,153$ 306,441$ 292,681$ 257,740$

Retirement (Pension) 7,370$ 7,322$ 7,539$ 6,016$

Professional Services 16,778$ 10,341$ 9,581$ 9,703$

Advertising/Franchise Fees 7,409$ 6,696$ 12,000$ 21,796$

Donations/Contributions 115$ 215$ 79$ 465$

Dues & Subscriptions 506$ 521$ 484$ 467$

Continuing Education 3,376$ 5,753$ 3,766$ 4,965$

Depreciation 25,461$ 50,588$ 42,783$ 41,749$

Bank Service Charges 14,145$ 12,501$ 11,775$ 11,154$

Amortization 313$ 311$ 630$ 1,853$

Health Insurance 33,846$ 26,834$ 30,177$ 25,077$

Interest 16,392$ 13,358$ 19,198$ 13,847$

Taxes ‐$ ‐$ ‐$ ‐$

License and Fees 2,935$ 1,778$ 1,474$ 1,728$

Lease Expense ‐$ ‐$ ‐$ ‐$

Office Expense 20,483$ 19,949$ 20,186$ 21,111$

Instruments ‐$ ‐$ ‐$ ‐$

Rent 67,687$ 68,370$ 58,300$ 63,600$

Payroll Taxes 21,964$ 21,402$ 21,320$ 18,853$

Computer Software Support 14,875$ 10,463$ 7,653$ 9,706$

Supplies ‐$ ‐$ ‐$ ‐$

Medical Supplies 6,059$ 3,051$ 4,150$ 5,925$

Insurance 13,153$ 16,046$ 26,924$ 21,090$

Training ‐$ ‐$ ‐$

Travel 1,687$ 2,458$ 1,929$ 3,003$

Auto Expense 2,293$ 3,634$ 20$ 20$

Repairs & Maintenance 2,316$ 4,798$ 7,696$ 21,234$

Meals and Entertainment 1,373$ 1,420$ 1,110$ 922$

Utilities 4,710$ 5,127$ 6,001$ 6,128$

Telephone 4,254$ 10,014$ 12,738$ 11,793$

Miscellaneous Expense 139$ 303$ 473$ 316$

Total Operating Expenses 852,541$ 859,356$ 856,727$ 829,156$

Total Annualized Operating Expenses 852,541$ 859,356$ 856,727$ 829,156$

Net Income (Loss) 152,520$ 142,368$ 96,715$ 141,863$

Annualized Net Income (Loss) 152,520$ 142,368$ 96,715$ 141,863$

Getting Stuff DoneJohn Rumpakis, OD, MBA

Expense analysis

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Getting Stuff Done

2015 2014 2013 2012

Total Annualized Operating Expenses 852,541$ 859,356$ 856,727$ 829,156$

Cost of Goods Sold 223,747$ 249,661$ 256,061$ 248,897$

Wages 320,697$ 316,800.29$ 247,119.17$ 271,984.78$

Depreciation 25,461$ 50,588$ 42,783$ 41,749$

Amortization 313$ 311$ 630$ 1,853$

Health Insurance 10,154$ 8,050$ 9,053$ 7,523$

Rent 20,306$ 20,511$ 17,490$ 19,080$

Payroll Taxes 6,589$ 6,421$ 6,396$ 5,656$

Total Expenses Not Related To Chair Cost 607,269$ 652,341$ 579,532$ 596,742$

Total Expenses RELATED To Chair Cost 245,273$ 207,015$ 277,196$ 232,414$

Number of FTE Doctors 0

Total Number of Doctor Production Hours Per Year 0 0 0 0

Chair Cost Per Year #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Running 4 Year Average Chair Cost #DIV/0!

Running 4 Year Average Chair Cost Per Dr. Minute #DIV/0!

Expenses Not Applicable To Chair Cost


Service Revenue Analysis

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Service Revenue Analysis Calculator Input Column ResultsTotal Gross Revenues (Collections) $983,515.81Total Gross Revenues From Material Sales 0% $0.00Total Gross Revenues From Services $983,515.81Service Revenue Breakdown (enter percent as decimal)Percent of Patients With Private Pay Vision (PPVS) 0%Average Fee For PPVS Exam & Refraction -$ Percent of Patients With Covered Vision (CVS) 0%Average Reimbursement For CVS Exam & Refraction -$

0%Percent of Patients With Private Pay Medical (PPMS) 0%Average Fee For PPMS Examination Services -$ Percent of Patients With Covered Medical (CMS) 0%Average Reimbursement For CMS Examination Services -$

0%Percent of Revenues From Vision Related Services 0%Percent of Revenues From Medically Related Services 0%Total Patient Services Composition (Must Equal 100%) 0%

Analysis Section OneTotal Income From PPVS $0.00Total Income From CVS $0.00Total Income From PPMS $0.00Total Income From CMS $0.00 Result From Above

Validity Check $0.00 $983,515.81Total Number of Annual Patient Encounters Per Office -

Resultant Patient Mix Total Of PPVS Encounters #DIV/0! - Resultant Patient Mix Total Of CVS Encounters #DIV/0! -

Resultant Patient Mix Total Of PPMS Encounters #DIV/0! - Resultant Patient Mix Total Of CMS Encounters #DIV/0! -

Validity Check #DIV/0! 0Total Number of Physicians Providing Care 0Total Number of Physician Care Hours 0Practice Chair Cost Per Hour #DIV/0!Average Patient Encounters Per Physician Hour #DIV/0!Average Total Service Revenue Per Physician Hour #DIV/0!© 2003-2016 Practice Resource Management, Inc. All Rights Reserved. Duplication Prohibited Without Permission

Service Revenue Analysis Calculator

Total Patient Vision Services Composition (Must Equal 100%)

Total Patient Medical Services Composition (Must Equal 100%)





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Vision PlanAnalysis

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Input AreaDesired Total Pre-Tax Net Income From Services $0Current Pre-Tax Net Income From Services $0Total Number of physician production hours - Current Practice Chair Cost #DIV/0!Current Pre-Tax Gross Revenue/Hour From Services #DIV/0!Current Pre-Tax Net Revenue/Hour From Services #DIV/0!Desired Total Pre-Tax Net Income/Hour From Services #DIV/0!Projected Total Gross Income of Entire Practice #DIV/0!

ContractedAmount

Current Net Profit

Per Service Hour

Desired Net Income

Per Service Hour Keep The Plan

Contracted Reimbursement Per Exam (Vision Plan 1) 0 #DIV/0! #DIV/0! No Analysis PerformedContracted Reimbursement Per Exam (Vision Plan 2) 0 #DIV/0! #DIV/0! No Analysis PerformedContracted Reimbursement Per Exam (Vision Plan 3) 0 #DIV/0! #DIV/0! No Analysis PerformedContracted Reimbursement Per Exam (Vision Plan 4) 0 #DIV/0! #DIV/0! No Analysis PerformedContracted Reimbursement Per Exam (Vision Plan 5) 0 #DIV/0! #DIV/0! No Analysis Performed© 2003-2016 Practice Resource Management, Inc. All Rights Reserved. Duplication Prohibited Without Permission

Vision Plan Analysis Sheet


Primary CareProfit Analysis

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PhysicianTime Requirement






Service Performed Conjunctivitis Ocular Allergy Corneal Abrasion Dry Eye Corneal FB GlaucomaInitial Comprehensive Exam 0.00 0.00 0.00 0.00 0.00 0.33Initial Visit 0.17 0.00 0.17 0.50 0.25 0.2524 Hr Follow-Up 0.08 0.00 0.08 0.00 0.08 0.08One Week Follow-Up 0.00 0.08 0.00 0.00 0.08 0.08Two Week Follow-Up 0.00 0.00 0.00 0.25 0.00 0.25One Month Follow-Up 0.00 0.00 0.00 0.00 0.08 0.08Three Month Follow-Up 0.00 0.08 0.00 0.25 0.00 0.08

Total Time Requirement (in hours) 0.25 0.17 0.25 1 0.49 1.15

Profitability AnalysisProfessional fees 214.41 146.28 219.64 737.43 184.17 1034.27Income From Materials $0 $0 $0 $0 $0 $0Total Revenue Per Hour $858 $878 $879 $737 $373 $897Gross Profit Per Hour $858 $878 $879 $737 $373 $897

Net Profit Per Hour #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Primary CareProfitability Analysis


Cost Per Minute Calculation•It’s Easy To Calculate!•Calculate chair cost per hour•Divide chair cost per hour by 60•That equals your chair cost by minute

•Think I’m too detailed?oEvery minute you are in your practice is either a drainon cash flow or a builder of cash flow

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National Average = $1.65 per minute





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What Doe It Look Like?


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Chair Cost Analysis

Single Practitioner Scenario

Annual Gross Revenue (Total Receipts) $650,000.00 100%

Monthly Gross Revenue (Total Annual Receipts divided by 12) $54,166.67 100%

Cost Of Goods Sold (28% of Monthy Receipts) $15,166.67 28%

Gross Margin On Sales (72% of Monthly Receipts) $39,000.00 72%

Operating Costs (45% of Monthly Receipts) $24,375.00 45%

Pre‐Tax Net Income (27% of Monthly Receipts) $14,625.00 27%

Calculating A Meaningful Number


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Shared Costs Within Practice For Optical Reduction of Operating Costs

Prorated Share of Operating Expenses such as rent, labor, utilities for Optical (30%) $7,312.50

Net Operating Costs Due To Professional Services (Operating Costs ‐ Prorated Optical Costs) $17,062.50

Total Doctor Hours Per Month Allocated To Patient Care 172

(Assuming 8 hours per day, 5 days per week, 4.3 weeks per month)

True Chair Cost Per Hour (Professional Operating Costs/Doctor Production Hours Per Month) $99.20

Revenues At RiskWE HAVE MUCH TOLOSE IF WE DON’TPAY ATTENTION


Let's Take A Look




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Not A Big Deal? Let’s Look At The Income Risk..

Ocular Allergy Revenue $8,641,035

Contact Lens Drop Out Revenue $2,086,920

Dry Eye Revenue $8,385,178


Lifetime Earning Potential(Return On Investment)Baseline Lifetime Economic Earnings $6,030,000

Additional Lifetime Earnings From Preventing Contact Lens Drop Outs $2,086,920

Additional Lifetime Earnings From Treating Ocular Allergies $8,641,035

Additional Lifetime Earnings From Treating OSD $8,385,178

New Potential Annual Earnings $558,736.28

Total Potential Lifetime Earnings $25,143,133


So, I Guess It Will Be Worth It!

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Total Cost Of Education

Total Return On Investment

$435,000

5961%





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Avoiding The Race To Zero…


Reimbursement (Income)

Practice ProfitPatient Volume (Exams per hour)

Business Logic Doesn’t Always Apply


Speed

QualityPrice

When applied to other industries, you can generally deliver only two out of three

Changes in the healthcare system of the future will require that we deliver three out of three

AssemblingYour Team

•The only way to deliver care to a growing public demand is for adopting a team approach and enacting appropriate delegation of all activities.

•Maintaining the traditional “optometric model” of delivering care will not be an effective strategy in the health care model of the future.


Don’t Believe Me?66




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AssemblingYour Team


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Team IsMore Important Than Ever

• It is absolutely vital that ECP’s accept the paradigm of change. It is inevitable.

• The average practitioner has a practice lifetime of approximately 42 years.

• Medicare, which celebrates it’s 50th

Anniversary in 2016, established the only payment system that virtually every generation of current practitioners have ever known.

• It is now changing…

Changing the way we think is absolutely critical to being able to survive in the healthcare system of the future.

Change means being able to learn new approaches to new challenges that present themselves

These opportunities can (will) transform your practice.


What Can We Change?•Know your state laws

o What can be delegated legally•Making sure that we know our cost per minute•Understanding how to process a patient properly

o Time Ito Change Ito Time It Again…

•Schedule yourself for successo Control your service mixo Plan for systemwide efficiencies

•Set patient expectations for efficiencyo Develop communications skills


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Bottom Line – Grow The TopMARGIN EXPANSION CAN ONLY HAPPEN BY GROWING REVENUES


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Effective CommunicationIs Essential TO EXTERNAL CUSTOMERSTO INTERNAL STAKEHOLDERS


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Patient Acceptance (Loyalty?)IS THE CONSUMER REALLY BECOMING MORE EDUCATEDWITH RESPECT TO THEIR HEALTH CARE DECISIONS?


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OR JUST MORE CONFUSED?




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Consumers Demand Convenience& Value

Our Primary Revenue Source Is Being Eroded

•Alternative Choices Abound:oBlinkoOpternativeoVSPoWalgreensoCVSo Jinso20/20 Now

Consumers Can’t Know ‐ What They Don’t Know


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Affordable Care ActTHE PATIENT PROTECTION AND AFFORDABLE CARE ACT WAS S IGNED INTO LAW BY PRESIDENT OBAMA IN MARCH 2010. ITS MAJOR PROVIS IONS GO INTO EFFECT IN JAN. 1 , 2014, ALTHOUGH SIGNIF ICANT CHANGES WENT INTO EFFECT BEFORE THAT DATE AND WILL CONTINUE IN YEARS TO COME.


The


What Are The Pillars Of The ACA?

Essential Health Benefits

Employers Must Offer Health Coverage

Individuals Must Obtain Coverage

Cost ShiftingReduce

UtilizationOutcome Based

Care




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Affordable Care ActTHE PATIENT PROTECTION AND AFFORDABLE CARE ACT WAS S IGNED INTO LAW BY PRESIDENT OBAMA IN MARCH 2010. ITS MAJOR PROVIS IONS GO INTO EFFECT IN JAN. 1 , 2014, ALTHOUGH SIGNIF ICANT CHANGES WENT INTO EFFECT BEFORE THAT DATE AND WILL CONTINUE IN YEARS TO COME.


The

• Minimum Essential Coverage – 10 Essential Health • Ambulatory patient services• Emergency services• Hospitalization• Maternity and newborn care• Mental health and substance use disorder services, including behavioral health treatment

• Prescription drugs• Rehabilitative and habilitative services and devices• Laboratory services• Preventive and wellness services and chronic disease management• Pediatric services, including oral and vision care.



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Control Supply & Demand The Employer Mandate / Employer Penalty• Originally set to begin in 2014, was delayed until 2015 / 2016. The “employer mandate” is a requirement that all businesses with 50 or more full‐time equivalent employees (FTE) provide health insurance to at least 95% of their full‐time employees and dependents up to age 26, or pay a fee.



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The Individual Mandate• The individual mandate requires that most Americans obtained health insurance by 2014 or pay a tax penalty. The individual mandate went into effect January 1st, 2014 and continues each year. The penalty for not having coverage will be paid on your Federal Income Tax Returns, based on yourModified Adjusted Gross Income (MAGI), for each full month you or a family member doesn’t have health insurance or an exemption.



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The Individual Mandate• The individual mandate tax forces households to purchase an expensive product or to pay a tax in lieu of that purchase. The law softens this blow for some households by providing subsidies, called “health insurance premium tax credits.” To be eligible for the subsidies, a household must meet two conditions:

1. Household income must be less than 400% of the Federal Poverty Level (FPL), which varies with family size. For a family of four in 2015, 400% FPL = $97,000.

2. The household’s portion of the employer‐sponsored health insurance premium must exceed 9.5% of household income.



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•Six million to pay penalties – WSJ, Jan 28, 2015•ACA creates trickier tax season – WSJ, Jan 1, 2015•IRS Budget Cuts Reduce Assistance – NYT, Jan 7, 2015


By The People, For The People…

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The trend is clear that we are shifting to a benefit structure that is borne by the recipient of the care, rather than a third party provider.

Resulting In

It’s Not Your Fault!

The Optometric Frame Of Mind

Guilt…


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There Are Different Levels of Guilt

•Catholic Guilt•Jewish Guilt•Optometric Guilt


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Reduce Utilization• By shifting costs to the consumer of the health care, utilization of services has shown a demonstrable decrease in the first year of the ACA.



Outcome Based Care• Three federal initiatives — the HITECH Act, the Health Data Initiative (HDI) and the Affordable Care Act (ACA) — are designed to improve clinical quality and the patient experience, and make health care more affordable. As a result of these changes, several trends are emerging, including movement toward outcome‐based payments, higher labor productivity, decreased demand for hospital‐based care and better, more efficient consumer markets.






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Where Are We At So Far?


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• The Affordable Care Act was supposed to make insurance, well, more affordable. But now hard results are starting to emerge: premium surges that often average 10% to 20% and spikes that sometimes run as high as 50% or 60% or more from coast to coast.

• In a study across 45 states, the research outfit Health Pocket reports that mid‐level Exclusive Provider Organization plans are 20% more expensive in 2016 on average. HMOs are 19% more expensive, and for all plan types the average is 14%.


Insurance For Everyone, But At A Cost!

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• President Obama dropped by Nashville last week to claim Tennessee as a state where “the law has worked better than we expected” and “actually ended up costing less than people expected,” so let’s test the reality of those claims. As a baseline, in 2015 premium increases for Tennessee plans ranged from 7.5% to 19.1%.

• For 2016 BlueCross BlueShield of Tennessee—one of the state’s two major insurers—is requesting a 36.3% increase. One product line from Community Health Alliance Mutual is rising 32.8%, while another from Time Insurance Co. hits 46.9%. Offerings from Cigna,Humana and UnitedHealthcare range from 11% to 18%.

• In a rational market, premiums wouldn’t be soaring in a single year by 49.1%‐65% (Blue Cross Blue Shield of New Mexico) or 40.6%‐58.4% (Geisinger Health Plans of Pennsylvania).


Comparing Apples To Apples

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• After the first two years of ObamaCare in 2014 and 2015, insurers have more experience with the demographics and expenses of the new enrollees. They seem to be older and have more chronic conditions like diabetes or congestive heart failure than predicted. There are also fewer than expected.

• Some 76% of eligible individuals at 100 – 150% above the poverty line are enrolled, report the consultants at AvalereHealth. But enrollment drops:• to 41% between 151% and 200% of poverty,• and then to 30% at 201%‐250%. • and 251%‐300%, the share is 20%,• and 16% for 301%‐400%.


Who’s Actually Getting Insurance?

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Electronic Medical RecordsEXECUTIVE ORDER IN 2004 STATING ALL PRACTICES SHALL MOVE TO ELECTRONIC HEALTH RECORDS WITHIN 10 YEARS


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1) Health Information Technology – US Department of Health & Human Services

2) Federal Mandate For Electronic Medical Records

3) EMR Mandate 2014 Deadline Penalty


From Executive Order To Law

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Physician Quality Reporting InitiativeIN 2007 , THE CENTERS FOR MEDICARE AND MEDICA ID SERV ICES (CMS ) ESTABL ISHED THE PHYS IC IAN QUAL ITY REPORT ING IN IT IAT IVE (PQR I ) AS REQUIRED BY THE 2006 TAX REL IEF AND HEALTH CARE ACT (TRHCA) . THE 2007 PQRI WAS A PAY ‐FOR‐REPORT ING PROGRAM THAT INCLUDED CLA IMS ‐BASED REPORT ING OF DATA ON 74 IND IV IDUAL QUAL ITY MEASURES .


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PQRS eRx

Year Successful Not Successful Successful Not Successful

2009 +2.0% ‐‐ +2.0% ‐‐2010 +2.0% ‐‐ +2.0% ‐‐2011 +1.0%* ‐‐ +1.0% ‐‐2012 +0.5%* ‐‐ +1.0% ‐1.0%2013 +0.5%* ‐‐ +0.5% ‐1.5%2014 +0.5%* ‐‐ ‐‐ ‐2.0%2015 ‐‐ ‐1.5% ‐‐ ‐2.0%

2016 & Beyond ‐‐ ‐2.0% ‐‐ ‐2.0%

It’s Always Been About The Money, Right?

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•QRUR Information on Quality

The Quality Composite Score in the QRUR is based in part on the PQRS quality measures you report. Additionally, CMS will also calculate your performance on three outcome measures. The outcomes measures include two composite measures of hospital admissions for ambulatory care‐sensitive conditions (one for acute conditions and one for chronic conditions) and one measure of all‐cause hospital readmissions. Your PQRS performance in addition to your performance on the outcomes measures will determine your quality score.

• How To Get Your QRUR?


Quality Resource and Use Report

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Meaningful UseMEANINGFUL USE I S US ING CERT IF IED ELECTRONIC HEALTH RECORD (EHR) TECHNOLOGY TO IMPROVE QUAL ITY, SAFETY, EFF IC IENCY, AND REDUCE HEALTH D ISPAR IT IES , ENGAGE PAT IENTS AND FAMILY, IMPROVE CARE COORDINAT ION, AND POPULAT ION AND PUBL IC HEALTH , AND MAINTA IN PR IVACY AND SECUR ITY OF PAT IENT HEALTH INFORMAT ION


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Stages Of Meaningful Use

2011 – 2012

Stage 1Data Capture& Sharing

2014

Stage 2Advance Clinical

Processes

2017

Stage 3Improved Clinical

Outcomes

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Meaningful Use “Adjustments”

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• The penalty increases by 1 percent per year until the adjustment reaches 97% in CY 2017.

• If the Secretary of HHS finds that fewer than 75% of eligible professionals are meaningful EHR users, the penalty will continue its annual 100 basis point climb until the adjustment reaches 95% of the PFS in 2019.


Meaningful Use “Adjustments”

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Another Approach To Compliance•Use a Registry•AOA has established one specifically to assist:

AOA MORE(Measures and Outcomes Registry for Eyecare)


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Narrow NetworksAN ACCOUNTABLE CARE ORGANIZAT ION (ACO) I S A HEALTHCARE ORGANIZAT ION CHARACTER IZED BY A PAYMENT AND CARE DEL IVERY MODEL THAT SEEKS TO T IE PROV IDER RE IMBURSEMENTS TO QUAL ITY METR ICS AND REDUCT IONS IN THE TOTAL COST OF CARE FOR AN ASS IGNED POPULAT ION OF PAT IENTS . A GROUP OF COORDINATED HEALTH CARE PROV IDERS FORMS AN ACO, WHICH THEN PROV IDES CARE TO A GROUP OF PAT IENTS .


A Bit More Scrutiny Is Well Deserved

•A healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients.

© 2008 ‐ 2016 PRACTICE RESOURCE MANAGEMENT, INC. – J. RUMPAKIS, OD, MBA DUPLICATION PROHIBITED WITHOUT PERMISSION. ALL RIGHTS RESERVED.111




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Accountable Care Organizations•The definition of “ACO” bears a striking resemblance to the definition and history of “HMO,” a term coined in 1970. As was the case with the HMO, the ACO has been promoted primarily for its alleged value as a cost‐cutting tool. Like the HMO concept, the ACO concept is vague and has multiple definitions which vary depending on who you ask. Like the HMO, the ACO is defined as an entity that will be “held accountable” for providing comprehensive health services to a defined population.


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Accountable Care Organizations•As was the case with the HMO, “accountability” for cost will allegedly be achieved by shifting some or all of the insurance risk now born by insurance companies and public programs like Medicare to providers, and “accountability” for quality will allegedly be achieved by subjecting providers to report cards.

•As was the case with the HMO, Kaiser Permanente is often held up as an example of what an ACO might look like. The HMO and ACO are both said to have “enrollees.”


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A ModelFor The Future


• Entering These Relationships On An Individual Basis Can Be A Slippery Slope

• Experience & Knowledge Of This Sophisticated Marketplace Is Critical

• Having Network Wide Representation Is Extremely Attractive To ACO’s

• Having Practices That Are Technologically Advanced Is Critical





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And Of Course, The ICD‐10…

So, What Is The ICD‐10Really About?A NEW STANDARD IN MEDICAL RECORD CREATION,BIG DATA ANALYSIS, AND MEDICAL ECONOMICS

AND ITS IMPACT WILL BE FELT AT THE PRACTICE LEVEL


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ICD‐10•The International Classification of Diseases (ICD) is the standard diagnostic tool for epidemiology, health management and clinical purposes. This includes the analysis of the general health situation of population groups. It is used to monitor the incidence and prevalence of diseases and other health problems, proving a picture of the general health situation of countries and populations.


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•Quality Measurement ‐ data captured by the code sets could be used in more meaningful ways to better understand complications, design clinically robust algorithms, and track care outcomes.

•Public Health•Research•Organizational Monitoring & Performance ‐ ICD‐10’s increased specificity offers payers and providers the potential for considerable cost savings through more accurate trend and cost analysis.


Why Now?

http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_036866.hcsp?dDocName=bok1_036866

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What Is Affected?• Quality measurement and medical error reduction (patient safety)

• Outcomes measurement• Clinical research• Clinical, financial, and administrative performance measurement

• Health policy planning• Operational and strategic planning and healthcare delivery systems design

• Payment systems design and claims processing

• Reporting on use and effects of new medical technology

• Provider profiling• Refinements to current reimbursement systems, such as severity‐adjusted DRG systems

• Pay‐for‐performance programs• Public health and bioterrorism monitoring

• Managing care and disease processes• Educating consumers on costs and outcomes of treatment options


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Diagnosis Related GroupsDIAGNOSIS RELATED GROUPS (DRG) ARE A PATIENT CLASSIFICATION SYSTEM ADOPTED ON THE BASIS OF DIAGNOSIS CONSISTING OF DISTINCT GROUPINGS.


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Diagnosis Related Groups•The DRG method assigns a numeric value to an acute care inpatient hospital episode of care, which serves as a relative weighting factor intended to represent the resource intensity of hospital care of the clinical group that is classified to that specific DRG. As a reimbursement system the DRG assignment determines the payment level the hospital will receive.


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Hierarchical Condition Categories (HCC)•The basis of CMS’s Risk Adjustment Model

oRisk adjustment is a predictive model introduced by the ACAoGauges the risk a healthcare plan member will incur medical expenses above or below an average, over a period of time

•Risk adjustment assists in financial modeling/forecasting of future medical needs

•More information ‐https://www.cms.gov/Medicare/Health‐Plans/MedicareAdvtgSpecRateStats/Risk‐Adjustors.html


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Capitation By Diagnosis

Don’t believe me? – it’s already beginning

Another Way ToThink About It


The Comparative Billing Report‐The Beginning Of The End For Independence?• Comparative Billing Reports (CBR’s) are but one of four current initiatives being conducted by the Centers for Medicare & Medicaid Services (CMS) under the Division of Compliance, Projects and Demonstrations.

• According to the CMS site, “A Comparative Billing Report (CBR) provides comparative billing data to an individual health care provider.

• CBR's contain actual data‐driven tables and graphs with an explanation of findings that compare provider's billing and payment patterns to those of their peers on both a national and state level.

• CBR study topic(s) are selected because they are prone to improper payments.

http://www.cbrinfo.net


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My MIPS Score?MU+PQRS+VBM=MIPS


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What Is The Value Based Modifier?• The Value Modifier provides for differential payment to a physician or group of physicians under the Medicare Physician Fee Schedule (PFS) based upon the quality of care furnished compared to the cost of care during a performance period.

• The Value Modifier is an adjustment made on a per claim basis to Medicare payments for items and services under the Medicare PFS. It is applied at the Taxpayer Identification Number (TIN) level to physicians (and beginning in 2018, to non‐physician EPs) billing under the TIN.

• Use this resource to download a current fact sheet: https://www.cms.gov/Medicare/Medicare‐Fee‐for‐Service‐Payment/PhysicianFeedbackProgram/Downloads/CY2015ValueModifierPolicies.pdf


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What Is MIPS?

• The recently passed Medicare Access and CHIP Reauthorization Act (MACRA) mandates that three major Medicare programs for physicians‐the Physician Quality Reporting System (PQRS), the Electronic Health Record (EHR) Meaningful Use Program and the Value Based Modifier (VBM) Program be combined. Currently, these programs reward or penalize physicians based on measures of quality and the ability to demonstrate certain capacities within a practice. Starting in 2019, these three CMS programs will be consolidated into a single program called the Merit‐Based Incentive Payment System (MIPS).

The Merit‐Based Payment Incentive Program



News ReleaseU.S. Department of Health & Human ServicesNews Division

[email protected] www.hhs.gov/news

Twitter @HHSMediaFOR IMMEDIATE RELEASE

Monday, January 26, 2015

Better, Smarter, Healthier: In historic announcement, HHS setsclear goals and timeline for shifting Medicare reimbursements fromvolume to value

In a meeting with nearly two dozen leaders representing consumers, insurers, providers, and business leaders, Health and Human Services Secretary Sylvia M. Burwell today announced measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.

The Clock Is TickingHHS has set a goal of tying 30 percent of traditional, or fee‐for‐service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018.

This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value‐based payments.

And So It Begins…





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And So It Begins…


And So It Begins…


And So It Begins…





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And So It Begins…


April 11, 2016

There Are Many Challenges


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Independent ECP Office

ACA

Government Environment

MU?PQRS/QRURVBM ‐ MIPS

MVCP

Changes In Product MixNew

Consumer Channels

Contacts –Glasses ‐Services

Market Shifts


Alliances

These challenges will require action

today to get results tomorrow

But if ignored, the ECP will face

significant challenges & headwinds

Change Is Inevitable.Progress Is

Optional.

~Tony Robbins

•The only way to deliver care to a growing public demand is for us to realize that to fit into a new healthcare system, we must adapt ‐ the INDEPENDENT ECP MUST ADAPT. It is not a choice – It is a mandate.

•Maintaining the traditional “optometric model” of delivering care will not be an effective strategy for prosperity in the health care model of the future… but it can’t be done alone.





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Singular Events Are Converging


Where Have All Of My Patients Gone?

My MIPS Score?

Diagnosis Related Groups

ICD‐10Narrow Networks (ACO’s)

Meaningful Use

PQRS/QRURMandatory

EMRAffordable Care Act

The occurrence of these event will require action from you.No one else can do it for you!

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And No One Is Coming To Rescue YOU!


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Putting It All TogetherWELCOME TO THE WORLD OF “BIG DATA”





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The Comparative Billing Report‐The Beginning Of The End?• Comparative Billing Reports (CBR’s) are but one of four current initiatives being conducted by the Centers for Medicare & Medicaid Services (CMS) under the Division of Compliance, Projects and Demonstrations.

• According to the CMS site, “A Comparative Billing Report (CBR) provides comparative billing data to an individual health care provider.

• CBR's contain actual data‐driven tables and graphs with an explanation of findings that compare provider's billing and payment patterns to those of their peers on both a national and state level.

• CBR study topic(s) are selected because they are prone to improper payments.

http://www.cbrinfo.net


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Lets Take A Look…


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“Dr. Jones”


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• Does Not Use EMR Successfully – Attested – but…???• Has Not Participated In PQRS/ERx – No Outcomes• Doesn’t Believe That QRUR Would Qualify As A Scrabble Word• Does Not Fulfill MU Requirements – No Data• Does Not Understand & Use ICD‐10 Properly• What The Heck Is MIPS??? • Is Not Asked To Participate In ACO At All• Figures That Everything Will Be OK Because They Still Have The MVCP Participation & Sell Optical


Dr. Jones

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“Dr. Smith”


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• Understands & Uses ICD‐10 Properly• Uses EMR successfully – Certified for MU• Participates In PQRS/ERx – Good Outcomes• Tracks his QRUR religiously• Fulfills MU requirements – Unified Health Record• Understands the value of his MIPS score• Is Asked To Participate In ACO As Tier One Provider


Dr. Smith

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So What Can You Do NOW?• Collect data about your practice• PQRS, MU

• Analyze your practice data• Product/Service Mix, Chair Cost

• Define your practice• Form your goals• Prioritize your goals

•Execute Your PlanoKnow your numbero Learn the ICD‐10oKnow your outcomesoBe technology savvyoEngage with ACO’soDevelop your own DRG’s for your practice


Figure Out How Effective Training & Delegation Can Reduce Overhead Cost Per Patient & Continue To Drive Higher Quality Outcomes & A Better Patient Experience

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Influence & ActionWHEN CHOOSING A TEAM – DEPTH MEANS EVERYTHING


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The Action PlanHOW DO WE PRESERVE INDEPENDENT OPTOMETRY?...


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“Intent” vs. “Impact”


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We ALL have great intentions!There is often a clear difference that occurs between what you had intended to do and

what you actually did

Just Do It vs. Just Think About It

The Power Of I to the 4th Power


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Integrate Implement

Intent Impact

Some Say That You Can’t Teach An Old Dog New Tricks…I SAY YOU CAN, BUT…

ONLY IF THEY ARE WILLING TO CHANGE


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Eyes Wide ShutTHE INDEPENDENT PRACTICE IN THE WORLD OF HEALTH CARE REFORM

JOHN RUMPAKIS, OD, MBA


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Eyes Wide Shut - Texas Optometric Associationtexas.aoa.org/Documents/TX/2016 PCS/HANDOUT - Morning...

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