NEBRASKA RURAL HEALTH

ASSOCIATIONSEPTEMBER 16TH, 2015

KEY FINANCIAL IMPACT ESSENTIALS FOR FOR RURAL HEALTH CLINICS

TARA WISDOMHEALTHCARE CONSULTING402.827.2076TWISDOM@LUTZ.US

PAUL BAUMERTHEALTHCARE CONSULTING402.827.2315PBAUMERT@LUTZ.US

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AGENDA

• CMS REGULATIONS– Compliance Issues

– Cost Report

• RHC PRODUCTIVITY STANDARDS– Hours Worked per Direct Care Hours

– Tips for Improved Physician Effectiveness

• CHARGE CAPTURE AND PRICING– Impact on Reimbursement

• PROVIDER PRODUCTIVITY MEASUREMENT– Physician involvement, compensation, metrics, referrals

• SCHEDULING MODELS & SUGGESTIONS

• CONCLUSION

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RHC CHALLENGES

• Many RHCs are struggling with increased overhead– Professional services– Staffing

• Reimbursements are in jeopardy– Third Party– Medicare and Medicare Advantage

• Independence RHCs – $80.44 (2015), $79.80 (2014), $79.17 (2013), $78.54 (2012)• Medicare Economic Index increase 0.8 percent from 2013 to 2015, 0.6 in 2012• Bad Debts

– Medicaid (RHC base rate plus MEI annually)• 1999 and 2000 Medicare cost reports or initial cost report

– Billing issues

• Strive to improve operational performance and safeguard reimbursement

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RHC - COMPLIANCE

• Clarifications and Revisions to RHC Policy Manual

– Issued November 2013

– RHC must be in a rural and underserved location

• If existing RHC grandfathered in applies only to new RHC’s

• If considering moving or expanding your RHC - contact CMS to

make sure you still qualify

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RHC - COMPLIANCE

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RHC - COMPLIANCE

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RHC - COMPLIANCE• Must post hours of operations at or near the entrance

– Hours– Days

• Non-physicians providers• Must have one employed on staff at each location• W- 2• May contract with non-physician providers

• Commingling of Space (Provider Based)– Non-RHC and RHC services can not share same space during same time

• Public Awareness (Provider Based)• Signage• Does the patient know they are entering a department of the Hospital

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RHC - COMPLIANCE

• RHC Conditions of Participation (CoP); 42 CFR §491.8– Staffing

• Employ a PA or NP; May also contract with a mid-level practitioner• NP, PA or CNM must be present at least 50% of the time the clinic is open• A physician, NP, PA, CNM, or CP must be available to furnish patient care

services at all times the clinic or center is open

– Physician Responsibilities• Provide medical direction for the clinic’s health care activities and staff• Participate in the development and implementation of policies• Periodically review the patient records and provide medical orders

– PA and NP Responsibilities• Participate in the development and implementation of policies• Participate in a review of patient records

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RHC – COST REPORT

• RHC Services– Visit/Encounter

• A medically necessary face-to-face visit between a Medicare approved RHC provider (i.e. physician, PA, NP, CNM, psychologist, or social worker) and a Medicare beneficiary. Please note that the encounter must be both medically necessary AND face-to-face.

– Incident To• Services that are provided incident-to a professional service of an

approved Medicare provider. These might include dressings, supplies and support staff assisting with the provision of a professional service.

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RHC – COST REPORT

• RHC Visits– Where can they be done?

• The RHC• Patient’s residence• An assisted-living facility• Nursing Home• A Medicare-covered Part A SNF• Swing-Bed

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RHC – COST REPORT

• Productivity Standards– Inconsistency and Misunderstood

• 4,200 visits per 1.0 FTE Physician– Approximately 2 visits per hour worked (productive)

• 2,100 visits per 1.0 FTE PA or NP– Approximately 1 visits per hour worked (productive)

– No standards• Visiting Nurse• Clinical Social Worker• Clinical Psychologist• Locum Tenens• Contracted physicians (exception)

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RHC – COST REPORT

• Productivity Standards (cont’d)• Contracted physicians – more

– Benefit Policy Manual - Chapter 13, Section §70.4– Physician services that are provided on a short term or irregular basis

under agreements are not subject to the productivity standards. Instead of the productivity limitation, purchased physician services are subject to a limitation on what Medicare would otherwise pay for the services (under the Physician Fee Schedule), in accordance with 42 CFR 405.2468(d)(2)(v). Practitioners working in a RHC or FQHC on a regular, ongoing basis are subject to the productivity standards, regardless of whether they are paid as an employee or independent contractor.

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RHC – COST REPORT

• Productivity Standards– Commonly overstated on Cost Report

• Higher calculated productive hours• May result in lower reimbursement

– What time should not be included in FTE calculations• Vacation/PTO/Sick• Hospital administrative• Hospital patients• RHC administrative• Continuing Education

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RHC – TIME STUDY

• Example

July August SeptemberDr. SmithRHC HoursRHC/Hospital AdministrativePTOEducationHospital RoundsER during RHC hoursTotal

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RHC – COST REPORT

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RHC – COST REPORT

• PRODUCTIVITY STANDARD EXAMPLESFTEs

Actual Visits

Prod Std. Visits Total Costs

Actual CPV

Settled CPV

Example #1MD 1.00 4,300 4,200 PA 1.00 2,250 2,100

2.00 6,550 6,300 $1,000,000 $152.67 $152.67Both the MD and ML meet the PS - no CPV reduction

Example #2MD 1.00 3,800 4,200 PA 1.00 1,850 2,100

2.00 5,650 6,300 $1,000,000 $176.99 $158.73Neither the MD nor the ML meet the PS - CPV reduction is over $18/visit

Example #3MD 1.00 3,850 4,200 PA 1.00 2,500 2,100

2.00 6,350 6,300 $1,000,000 $157.48 $157.48ML meeting the PS compensated for the MD missing it - no CPV reduction

Example #4MD 0.85 3,800 3,570 PA 0.90 1,850 1,890

1.75 5,650 5,460 $1,000,000 $176.99 $176.99Despite not meeting the PS, neither the MD nor the ML worked a full FTEs in the RHC - no CPV reduction as they met the PS for the hours worked in the RHC

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RHC – COST REPORT

• Non-RHC costs– Non-RHC service cost must be offset on the cost report

• Hospital Administrative duties• Hospital Patients

– Skilled/SWB patients are allowable• Emergency Room Call

– Develop plan to capture cost– Cost for Call allowable in the Emergency Room

• Other non-RHC activity

• Use of time records versus per visit estimates highly recommend

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RHC – COST REPORT

• Emergency Room Call Pay– Address in providers contract otherwise very difficult to Identify– Importance of Identifying

• 80% reimbursement in RHC times Medicare utilization• 101% reimbursement in ER times Medicare utilization

• Pharmacy– Cost of Pharmacy is part of cost per visit– Revenue and Cost must be reported in RHC cost center– Should not be reported as non-RHC pharmacy cost

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RHC – COST REPORT

• Labs, EKG, Radiology– Separately billable (Provider Based RHC) – Revenue and Expenses are reported in hospital ancillary

departments– Tracking– Charge variances as compared to the Hospital?

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RHC – CHARGE CAPTURE

• BILL FOR SERVICES PROVIDED• JUST BECAUSE SOMETHING IS INCLUDED WITH THE

ENCOUNTER, DOES NOT MEAN WE DO NOT BILL FOR IT. – In order to accurately capture the true charges of the cost of seeing the

patient, all services need to be included on the router sheet.

• EXAMPLE OF MULTIPLE ITEMS ON AN ENCOUNTER– Patient was seen in the office (office visit 99212), charge $80.00– Patient received a rocephin injection, charge $110.00– On the claim form there would just be one line item:

• Revenue code 521 for $190.00 Patient co-insurance is 20%, $38.00

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RHC – CHARGE CAPTURE

• EXAMPLESExample #1 Example #2

CPT 99212 $80.00 $80.00Rocephin Injection $110.00

Total $190.00 $80.00Coinsurance $38.00 $16.00Subtotal $152.00 $64.00

CPV $150.00 $150.0020% of CPV $30.00 $30.00

ReimbursementMedicare $112.00 $120.00Beneficiary $38.00 $16.00Total $150.00 $136.00

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RHC – PRICING

• PRICING UPDATES– Are your charges market?– Have you compared to an outside third party?– When was the last time prices were updated?– Are certain services more price sensitive? Do you know which ones?

• Lab?

– Do you know the financial impact of pricing services below market/below cost per visit?• Coinsurance penalty

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IMPROVING PROVIDER CAPACITY

• KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• USING PERFORMANCE DRIVEN COMPENSATION METHODOLOGY

• TRACKING PHYSICIANS AGAINST PERFORMANCE METRICS

• PRACTICE DEDICATED RESOURCES• NOT ANTICIPATING PHYSICIANS AS REFERRAL

FEEDERS• SCHEDULING

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KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• FINANCIAL MANAGEMENT– Establishing and maintaining a budget and

revenue cycle; monitoring and analyzing medical billing success and financial performance; negotiating contracts with payers

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KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• BUSINESS OPERATIONS– Developing a business and marketing plan;

identifying required outside resources; managing the practice’s physical space; purchasing

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KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• HUMAN RESOURCES MANAGEMENT– Recruiting, hiring, training, and retaining providers

and staff

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KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• INFORMATION MANAGEMENT– Acquiring and upgrading telephone and computer

systems including software/services for clinical, billing, electronic health records and financial management; securing patient data; reporting on practice compliance

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KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• PATIENT CARE SYSTEMS – Maximizing provider efficiency through effective

workflow; establishing systems to keep patients informed, engaged and satisfied; establishing practice performance standards

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KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• QUALITY MANAGEMENT – Establishing and maintaining quality standards;

monitoring clinical quality oversight; setting up processes and systems to enable participation in Pay-for-Performance (P4P) programs; ensuring that all licensing is current

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KEEPING PHYSICIANS INVOLVED IN PRACTICE MANAGEMENT

• RISK MANAGEMENT– Establishing procedures to ensure patient safety

and to address emergencies, disasters and legal challenges; ensuring governmental compliance

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USING RVUS TO MEASURE PHYSICIAN PERFORMANCE

• TWO-THIRDS OF PHYSICIANS ARE FINDING THEIR COMPENSATION TIED TO PRODUCTIVITY

• THE USE OF WORK RELATIVE VALUE UNITS (RVUS) IS DOMINATING THE METHODOLOGY

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USING RVUS TO MEASURE PHYSICIAN PERFORMANCE

• KEEP IT SIMPLE • ENSURE ADMINISTRATORS AND

PHYSICIANS HAVE A CLEAR UNDERSTANDING

• STAY INFORMED OF DEVELOPMENTS WITH THE RVUS METHOD

• INCLUDE QUALITY INCENTIVE• BE AWARE OF POLITICAL RISK

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TRACKING PHYSICIANS AGAINST PERFORMANCE METRICS

THE DOS AND DON’TS• DO ORGANIZE METRICS

– After you complete the process of narrowing down your performance metrics, use the dashboard as an opportunity to educate your physicians on the most important performance elements.

• DON’T JUST LIST OUTCOMES– Show your physicians how their outcomes compare to medical groups goals or to their

own past performance.

• DO DRAW ATTENTION TO LOW (OR HIGH) PERFORMANCE– Capture your physicians’ attention by highlighting areas that need improvement, and/or

acknowledge metrics where your physicians are meeting or beating expectations.

• DON’T GO GRAPHIC-CRAZY– Only include critical charts and graphs that highlight hot-button issues, since they can be

confusing and take up significant scorecard real estate.

CHARGES, PAYMENT & ADJ BY PAYOR

BENCHMARKING PATTERNS

BENCHMARKING PATTERNS

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SCORECARD EXAMPLE

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PRACTICE DEDICATED RESOURCES

• PRACTICE DEDICATED MANAGERS– Experience– Different management techniques

• BILLING– Practice dedicated staff• Not just added to hospital billers

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REFERRAL FEEDERS

• LEGAL RISKS• INTEGRATED DELIVERY SYSTEM

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EFFECTIVE APPOINTMENT SCHEDULING

• STRUCTURED APPOINTMENT SCHEDULING–Metric–New Patients–Consistency between doctors– Supervisor perspective–Vacation Scheduling–Reducing inbound calls

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EFFECTIVE APPOINTMENT SCHEDULING

• METRIC– Aligning technology and staff– # of Days wait to be seen– Doctors agreeing on how many hours works• Sticking to the hours• Avoid rescheduling

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EFFECTIVE APPOINTMENT SCHEDULING

• NO DOUBLE BOOKING FOR PATIENTS– New Patients– Difficult Patients– Complicated problems

• DO NOT BOOK THESE AT BEGINNING OF HOUR– Intersperse with others that are likely to take less time

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EFFECTIVE APPOINTMENT SCHEDULING

• TYPES OF PATIENTS– Each patient visit has different levels of complexity.

• Assign weight to the different visits and list them for reference by your schedulers.

– Manage uncomplicated issues outside the office visit by phone, email, and group visits.• While this may not be directly reimbursed, it can provide indirect

financial rewards by increasing the complexity of office visits. • The average reimbursement per visit should go up, offsetting the

loss of simple visits.

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EFFECTIVE APPOINTMENT SCHEDULING

• SUPERVISOR OVERVIEW– High level– Keep patient scheduling on the agenda for

monthly office meetings– A highly effective technique is when the provider

arrives and is ready to see patients, have a standup, one-minute huddle with the provider, the scheduler, and the medical assistant to look at the upcoming block of patients for a discussion about how to manage it.

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EFFECTIVE APPOINTMENT SCHEDULING

• VACATION SCHEDULING– Change schedule 2 weeks before and after vacation– Reduce number of follow-up appointments before and after a

vacation

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EFFECTIVE APPOINTMENT SCHEDULING

• REDUCE UNNECESSARY INBOUND CALLS– Schedule follow up visits at time of visit – Have a 3 month schedule template, even with open

access as people plan vacations, days off, transportation

– Ask physicians to stick to schedule to avoid rescheduling

– Automate appointment reminders – Let schedulers schedule without interrupting physician– Online Scheduling

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QUESTIONS?