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April 28, 2015

Prepared for GMGMA

Practice Management 101

GMGMA

Annual Conference

April 2015

April 28, 2015

Prepared for GMGMA

Agenda

• A/R Management

• Financial Controls

• Staffing

April 28, 2015

Prepared for GMGMA

“If you don’t know where

you’re going, you might end up

somewhere else.” Yogi Berra

April 28, 2015

Prepared for GMGMA

A/R Management

April 28, 2015

Prepared for GMGMA

Managed Care Trends To Watch

• Fewer payers (mergers)

• Medicare is the allowable standard

• Pay for performance

• Price transparency

• Providers dropping Medicare/Medicaid

• Concierge

• Affordable Care Act

April 28, 2015

Prepared for GMGMA

Impact On Your Practice

• Confusion reigns

• Higher copays/deductibles (better or worse

cash flow?)

• Decrease in pre-certs, streamline referrals

• Decrease in utilization?

• Patients shopping prices and compatibility

April 28, 2015

Prepared for GMGMA

Why Is It Important To

Manage Your A/R?

• Cash Flow

• Monitoring managed care contracts

• Patient perception of practice

April 28, 2015

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Why Is It Important To

Manage Your A/R?

If you plan, you act on your environment. If

you don’t, your environment acts on you!

April 28, 2015

Prepared for GMGMA

A/R Myths

• “Bill it and it will come.”

• “We have a contract so they will pay our

contracted amount.”

• “Co-payments are small potatoes.”

• “Sally is great at the front desk. Let’s

promote her to A/R clerk.”

• “Refile. Refile. Refile.”

April 28, 2015

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Set Expectations

• New patient first call

• Patient information

• Signs

• Brochure

• Financial policy

April 28, 2015

Prepared for GMGMA

Maximize Time of

Service Collections

• Collect copayments before the visit

• Accept all forms of payment

• Convert checks to debit

• Initiate payment plans – get deposit

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Maximize Time of

Service Collections

• Your copayment today is $_________.”

• Silence - option to refuse or ask for

concession is on patient.

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Page 13

Maximize Time of

Service Collections

$ 20.00 Copayment

Total Visits/Month

Insured

Visits/ Monthly Quarterly Annual

% Insured

(30 pts/day x 22

days) Month Copay $ Copay $ Copay $

5% 660 33 $660 $1,980 $7,920

10% 660 66 $1,320 $3,960 $15,840

15% 660 99 $1,980 $5,940 $23,760

20% 660 132 $2,640 $7,920 $31,680

25% 660 165 $3,300 $9,900 $39,600

30% 660 198 $3,960 $11,880 $47,520

35% 660 231 $4,620 $13,860 $55,440

40% 660 264 $5,280 $15,840 $63,360

45% 660 297 $5,940 $17,820 $71,280

50% 660 330 $6,600 $19,800 $79,200

April 28, 2015

Prepared for GMGMA

“Right From The Start”

Front Desk Role

• Accurate data entry - patient demographics,

insurance information

• Insurance verification - prior to each

appointment

• Referrals - if requested

• Pre-certifications - as required

• Contractual requirements for ancillary services

April 28, 2015

Prepared for GMGMA

Clinical Staff Role

• Ensure all procedures and diagnoses are

captured on encounter form

• Checks patient insurance type prior to lab,

diagnostic requisitions, or hospital admission

• Obtains pre-certifications

• Obtains non-covered services waivers

– Advanced Beneficiary Notice

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Physician’s Role

• Document, Document, Document!! – ICD-10

• Note all procedures on charge capture form (including hospital work!)

• Note any special circumstances

• Refer all billing/financial questions to billing staff

April 28, 2015

Prepared for GMGMA

Top 5 Reasons Physicians Should

Learn About Coding

• Increase reimbursement

• Decrease time spent on documentation

• Experience fewer claims denials

• Improve understanding of bottom line

• Avoid fines, penalties, jail time

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Prepared for GMGMA

Beware…. ICD-10-PCS is on its way

• 7 digits, not 5

• Each can be either alpha (not case sensitive) or numeric

• Numbers 0 – 9 are used

• Letters O and I are not used to avoid confusion with numbers 0 and 1

Examples

• 0680ZZ Division, inferior vena cava, open

• 0DQ107Z Repair, esophagus, upper, open with autograft

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A/R Management Procedures

• In writing

• Timely

• Adhered to

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Manage A/R Process

• Establish (& follow!) aggressive patient

collection protocols

April 28, 2015

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Patient Collections

Statement cycle

• Point-Of-Service/

On demand

• 30 days

• 60 days

Telephone Intervention

• 5-8 p.m.

• Documented

• 30-45 days

• Collection agency

• Release from practice

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Manage A/R Process

• File claims electronically & daily

• Review transmittal report for claims problems

• Re-file corrected claims

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Manage A/R Process

• Re-file selectively

• Don’t forget secondaries!

• Touch claims between 30-60 days

– 45 day report

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Manage A/R Process

• Utilize demand & cycle billing

• Utilize electronic statements

• Track denials/rejected claims

• Work denials

April 28, 2015

Prepared for GMGMA

18% of All Claims Are Denied Due To

[Practice Controlled] Billing Errors

• Incorrect or missing

subscriber number or

group number

• Provider’s signature

(or facsimile) missing

• Diagnosis is missing,

incomplete, or non-

existent

• Procedure codes are incorrect or missing

• There is no correlation between procedure codes and diagnoses

• Modifiers were used for procedural codes but were not explained in narrative

April 28, 2015

Prepared for GMGMA

2. Manage A/R Process Odds of collecting after date of service

97%94%

84%

74%

58%

43%

27%

0%

20%

40%

60%

80%

100%

< 30

days

30 60 90 180 270 365

April 28, 2015

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Page 27

What Are Your Timely Filing Limits?

Medicare 15 months (10% penalty

after 12 months)

Medicaid

BCBS

United Healthcare

April 28, 2015

Prepared for GMGMA

Reimbursement-

Are You Getting Paid

Appropriately?

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Manage Your Contracts

• Find & read contracts

• Negotiate untenable points

• Negotiate fixed fees/fixed RBRVS

April 28, 2015

Prepared for GMGMA

Manage Your Contracts

• Share contract terms with staff

• Utilize computer system technologies

• Watch carve outs, bundling, etc.

• No fees allowed at 100%

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Multiple Fee Schedules

HMO PPO POS What was paid

99213 $47.35 $70 -- $43.85,$32,$37.50, $37

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Solution

• Load each contract fee schedule

• Poster reviews each payment for accuracy

• Re-file for corrected payment (passive)

• Contact provider rep (aggressive)

April 28, 2015

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Delayed Payments - Solution

• Contact provider rep

• Letter to Plan President

• Open complaint with State Insurance

Commissioner

http://www.inscomm.state.ga.us

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Is Payer Paying/Allowing 100% of

Your Submitted Charge?

• Fee below UCR

• Leaving money on the table

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Tools To Evaluate A/R

• Billing Policies & Procedures

• Financial Benchmarks

• Management Reports

April 28, 2015

Prepared for GMGMA

Billing System Reports

• Aged A/R by Payer (Summary & Detail)

• Detail Self-pay Aged A/R

• Claims Pending

• Monthly Charges/Payments/Adjustments

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Prepared for GMGMA

Calculating and Applying

Financial Indicators

April 28, 2015

Prepared for GMGMA

A/R Indicators

• Gross collection rate

• Adjusted collection rate

• A/R ratio (months charges in A/R)

• Percentage A/R aging

April 28, 2015

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Benchmark 1: Gross Collection Rate

What percentage is the practice collecting of

what it charges?

FFS Collections

FFS Charges = %

April 28, 2015

Prepared for GMGMA

Gross Collection Rates

55.3%

33.7%

36.5%

42.8%

66.4%

42.9%

49.8%

Family Medicine

General Surgery

Orthopedic Surgery

Cardiology

Pediatrics

OB/GYN

Internal Medicine

Source: MGMA Cost and Revenue Survey: 2014 Report Based on 2013 Data, Sincle Specialty Practices, All Ownership, Median Values

April 28, 2015

Prepared for GMGMA

Benchmark 2: Adjusted Collection Rate

What percentage is the practice collecting of what it is allowed to collect?

FFS Collections

FFS Adjusted Charges* = %

*charges minus mandated adjustments

April 28, 2015

Prepared for GMGMA

Page 42

Example:

• Office visit = $100

• BC/BS Write off = $15

• Collected $80

Gross Collection Rate =

$80

$100 or 80%

Adjusted Collection Rate =

$80

($100 - $15) or 94%

April 28, 2015

Prepared for GMGMA

Adjusted Collection Rates

97.0%

92.2%

94.9%

94.8%

98.0%

96.5%

97.5%

Family Medicine

General Surgery

Orthopedic Surgery

Cardiology

Pediatrics

OB/GYN

Internal Medicine


April 28, 2015

Prepared for GMGMA

Benchmark 3: A/R Ratio

How many months worth of charges (work) are in your

Accounts Receivable?

A/R Balance

Average Monthly Charges = Ratio

April 28, 2015

Prepared for GMGMA

A/R Ratio

0.94

1.16

1.35

1.05

0.82

1.15

0.93

Family Medicine

General Surgery

Orthopedic Surgery

Cardiology

Pediatrics

OB/GYN

Internal Medicine


April 28, 2015

Prepared for GMGMA

Benchmark 4: Calculating Overhead

Total Expenses

<Physician’s Salaries>

<Physician retirement>

Net Expenses ÷ Total Revenue

April 28, 2015

Prepared for GMGMA

Total Operating Cost

72.4%

87.2%

51.4%

59.6%

60.4%

80.8%

68.7%

Family Medicine

General Surgery

Orthopedic Surgery

Cardiology

Pediatrics

OB/GYN

Internal Medicine


April 28, 2015

Prepared for GMGMA

Calculating Employee Expense

Total Employee Salaries

Net Revenue

April 28, 2015

Prepared for GMGMA

Medical Practice

Financial Controls

(or Lack Thereof)

April 28, 2015

Prepared for GMGMA

What Are Internal Controls?

Methods and procedures used to…

• Prevent, detect errors

• Encourage adherence to policies

• Safeguard against misappropriation

April 28, 2015

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Fraud Risks

• Desperate people do desperate things

• Regulatory requirements

• Competition

• Rapid changes

• Need for capital

• Complex transactions or structure

• Absentee owners

April 28, 2015

Prepared for GMGMA

How Fraud Occurs

• Poor internal controls – 60%

• Management override – 35%

• High risk industry – 33%

• 3rd party collusion – 33%

• No ethics policy – 8%

• No director control – 5%

• Other – 2%

KPMG Study

April 28, 2015

Prepared for GMGMA

Red Flags

• Personal financial pressure

• Vices

• Extravagant lifestyle

• Real or imagined grievances

against the company or

management

• Increased personal stress

• Management pressure

• Short vacations,

unexplained hours

• Overly neat, territorial

• General lack of ethics

• Unusually close

vendor relationships

April 28, 2015

Prepared for GMGMA

110 10 Key Questions

April 28, 2015

Prepared for GMGMA

Question 1

Do you know the typical daily, weekly, and

monthly volume of your practice, and do you

promptly investigate any material deviations?

April 28, 2015

Prepared for GMGMA

Question 2

Are charge slips, cash receipt slips,

and checks pre-numbered, controlled

and accounted for, including voids?

Are blank documents stored safely and

is access limited?

Sally “loses” her friend’s charge ticket.

No charge = No write off = No money

April 28, 2015

Prepared for GMGMA

Question 3

Are cash-related duties appropriately segregated among your staff members?

Recordkeeping vs. custody vs. approval

– Who opens the mail?

– Who posts payments?

– Who does the bank reconciliation?

– Who reviews the payroll journal?

April 28, 2015

Prepared for GMGMA

Question 4

Are your accounting records, including

charge posting, payroll reports, and bank

reconciliations, kept up-to-date and balanced

daily and monthly?

– Monthly daysheet reconciliation

April 28, 2015

Prepared for GMGMA

Question 5

Do you restrict check signature authority to

physician owners only, insist on personal

signature instead of a signature stamp,

and inspect back-up invoices before

signing checks?

– All parts of the check are complete; original

invoice approved and canceled; packing slip

attached; expenditure is reasonable.

April 28, 2015

Prepared for GMGMA

Question 6

Are all checks stamped with the practice’s

“For Deposit Only” endorsement stamp

immediately upon receipt? Are un-deposited

checks stored in a safe place pending

deposit?

April 28, 2015

Prepared for GMGMA

Question 7

Are all employees required to take annual

vacations? Is there a backup person for all

positions?

– Big bus theory

– “her way” versus the right way

April 28, 2015

Prepared for GMGMA

Question 8

Are all contractual adjustments, patient

refunds and non-contractual write-offs

approved or monitored by an authorized

supervisor?

– Ignorance? Innocent mistake? Deliberate?

Sally’s friend incurs $3,500 in patient responsible

services. Sally’s choices:

- Put friend through normal collection procedures

- Write friend’s balance down to zero

April 28, 2015

Prepared for GMGMA

Question 9

Do you check the references of new hires

carefully and screen candidates and

current employees regularly for exclusion

from or sanctions by Medicare and other

federal programs?

Do you obtain a background check/credit

report?

http://exclusions.oig.hhs.gov

http://epls.arnet.gov

http://www.hhs.gov/oig

http://epls.arnet.gov/

April 28, 2015

Prepared for GMGMA

Question 10

Do you use the “sentinel” effect?

Occasionally sample postings, review the

general ledger, inspect reconciliations, check

the cash drawer and ask questions?

April 28, 2015

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Staffing Success:

Hiring, Retaining, &

Growing Good Employees

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Staffing Reality

• Good employees are hard to find

• Once found, they’re hard to keep!

– Average employee changes jobs every 2-3 years

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Staffing Reality

• Everyone is looking for the same thing –

– Good work ethic

– Job knowledge/skills

– Customer service

• SHORTAGE of these people!

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Staffing Reality

And good staff is hard to keep

– 1 in 4 workers has been with their present

company for less than one year

– Gen Y – average of 14 jobs before they turn 38

– Turnover is a reality

– As many as 44% skilled worker and 23% of

executive resumes contain at least some lies

April 28, 2015

Prepared for GMGMA

Pre-Hiring Process

• Job description

• Advertisement – language, venue

• Review/Rank resumes

April 28, 2015

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Hiring – Successful Interviews

• Telephone interviews

– LISTEN!!

– Share

– Inquire

– Inform

Brief interactions but POWERFUL!

April 28, 2015

Prepared for GMGMA


• First face to face interviews

– Observe – promptness, appearance, ability to

engage in conversation?

– Ask questions and listen to the answers!

oTell me about a time you….

Past performance is best predictor of future!

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Prepared for GMGMA


• Second interviews

– Practice tour

– Half day/day visit

– Utilize staff (but not a consensus decision)

– Overview of structure, may include general

explanation of benefits but not $$

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Due Diligence

• Reference checks

• Background checks

• OIG/EPLS websites

• Style assessments – DISC

– Insight as to how employee may respond in your

practice

– Provides additional interview questions/points of

follow-up

April 28, 2015

Prepared for GMGMA

Practice Integration

• Term sheet (not contract)

• Employee Handbook

• Employee training & orientation

Good integration can lead to better retention!

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New Employee DON’TS

DON’TS

• Don’t have new employee start on Monday!

• Don’t throw new employee to the wolves!

• Don’t rely on the “Sally trained Sara who

trained Sandy who trained Susan”

methodology!

April 28, 2015

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New Employee DOs

DOs

• Do have new employee start on a slower

week day.

• Do have a planned orientation and integration

schedule.

– Include a checklist and have employee sign that

orientation occurred for each topic.

• Do review job description (again!).

April 28, 2015

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New Employee DOs

DOs

• Do provide resources.

• Do give employee a tour and introduce them

to everyone again.

• Do explain benefits, pay structure, etc.

• Do share practice philosophy and tips for

success.

April 28, 2015

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New Employee Training

• Do allow hands on practice.

• Do differentiate between listening (passive)

and hearing (active).

• Do use “tell me” and “show me” as you train

to ensure grasp of concept.

April 28, 2015

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Page 79

Competitive Pay

/Benefits

Good Environment

Good Management

Retention

April 28, 2015

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Employee Debate: Should I Stay?

• Learning/growth opportunity

• Competitive salary/benefits

• Favorable environment

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Employee Debate: Should I Go?

• Stagnant wages/benefits

• Poor management

• Negative culture/work environment

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Why Employees Leave

1. Their boss

2. Not recognized or appreciated

3. No say in work or decisions

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Employees Really Want to Work

• For a company they can identify with

• Where they are enabled – have supervision,

authority, information and resources needed

to be successful

• Where they are rewarded for their successes

• Where they can develop productive

workplace relationships with coworkers

April 28, 2015

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Signs of Disengagement

• Sudden “9 to 5” time clock mentality

• Unwillingness to participate in social events

outside office

• Tendency to isolate self from peers

(especially if contrary to their personality)

• Sense that something is not right but you

can’t put your finger on it

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Good Management

• Address problems

• Make decisions

• Provide feedback

• Instill fun

• Catch them being good

• Rewards don’t have to monetary

• MBWA

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Your Role as Administrator

• Communicate

• Set expectations

• Coach

• Educate

• Foster Growth

• Lead by example

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Your Role as Administrator

• Leader

• Coach

• Financial Officer

• Human Resources

Manager

• Banker

• Marketer

• Police Officer

• Cheerleader

• Bill payer

• Babysitter

• Facilities designer

• Landlord

• Decorator

• IT Manager

• And the list goes on…

April 28, 2015

Prepared for GMGMA

Thank You!

Lori A. Foley, CMA, CMM, PHR Principal

[email protected]

Pershing Yoakley & Associates, P.C. www.pyapc.com 404-266-9876

mailto:[email protected]

http://www.pyapc.com/

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