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Fix My Practice - Blog

Fix My Practice – Understanding Business Structure Basics

The Physicians Practice S.O.S. Group® www.ppsosgroup.com

Ready to start your practice? Have you asked yourself what type of business entity you should be? There are several types of business entities to choose from when starting a business. It is important to consider tax treatment and benefits, sale of interest in the business and limiting your personal liability.

  1. Partnerships expose you to greater liability than sole proprietorships. In a general partnership, you are also responsible for certain actions of your partner(s). Partnerships must also file yearly returns with the IRS to report losses, profits and deductions. Before conducting business, partners should draft an agreement outlining how profits, expenses and workload will be divided. Disputes between partners can become costly to resolve and damaging to your business. Setting terms early on will help minimize the risk of a dispute.
  2. Corporations are independent entities formed and owned by one or more shareholders. Corporations may raise capital by selling stock or rely upon capital contributions of its shareholders. Shareholders’ personal assets are protected from legal liability, including business debts and lawsuits. The corporation pays taxes, conducts business and distributes profits to shareholders. Starting and maintaining a corporation requires a great deal of time and paperwork. It is important to keep thorough corporate records and ensure your corporation is fully compliant. In some instances, corporations may be taxed both on profits and on dividends paid out to shareholders. It is vital to consult an accountant or tax attorney regarding your corporate taxes.
  3. Limited Liability Companies (LLC) offer protection to their members similar to that of a corporation. As the member of an LLC, your personal assets are protected from the LLC’s liabilities. The liability protection is limited and does not protect members from illegal or wrongful acts, even if that act was committed by an employee. LLCs require less record keeping than corporations. It is up to the members of the LLC to determine how profits are distributed. There are fewer restrictions on the distribution of profits than with a corporation.

Practicing quality medicine while maintaining and managing the bottom line is a balancing act that provider’s face daily. The Physicians Practice S.O.S. Group is committed to and has helped healthcare providers across the country with new practice startups, IRO needs, and providing practice management and compliance solutions. Call our office to discuss any needs you might have.

Regina Mixon Bates, CEO | The Physicians Practice S.O.S. Group | www.ppsosgroup.com

 

Streamlining Your RVU Calculations

Relative Value Units (RVU) are part of the reimbursement formula, designed to measure the value of services provided by physicians. In hospitals, health systems or large group practices, a physician’s salary is often calculated on the number of RVUs provided. But independent physicians should pay careful attention to RVUs too – because RVU data can help you to set competitive prices, negotiate payer contracts, accurately predict payments, grow your practice, and evaluate mergers and acquisition opportunities.

Historically, Medicare paid physicians based on “usual, customary and reasonable” pricing. This meant that doctors nearly charged whatever they liked, and Medicare paid a percentage. Many argued that the result was procedures tending to be overpriced, while consulting, preventative and management services tended to be underpriced.

For example, a doctor making a complicated diagnosis might have been paid $40, while another doing a routine colonoscopy was paid $600. Procedural costs remained high even as technology reduced actual work times by 75% or more in many cases. As a result, insurance companies lobbied for changes and that is how RVU’s came about.

Three components make up what is known as the Total RVU, each adjusted by the Centers for Medicare & Medicaid Services (CMS) according to your geographic location.

Physician Work RVU evaluates the time and clinical skill necessary to treat a patient during a specific encounter. It usually runs about 52% of the total RVU.

Practice Expense RVU calculates the costs of labor, building space, equipment and office supplies. It typically comprises 44% of the total.

Professional Liability Insurance Expense RVU documents the cost of malpractice insurance premiums. It represents about 4% of the total.

Total RVU is simply the sum of these three component RVUs value which are added together. This number is multiplied by the Geographic Pricing Index (GPCI) to account for location. That result is then multiplied by a conversion factor (CF) that changes every year and is published by CMS to get a final dollar amount.

Calculating payments using RVUs can seem like a daunting task, but it’s not difficult if you’re prepared. Look up the current RVUs for the procedure in question as well as the year’s exchange rate and use the prescribed formulas. There are also calculators that can help, and all calculations can be validated on the CMS site.

Calculating RVUs is easier with the proper formula and values to put into it.

Values

  • PW: Physician Work
  • GPCI: Geographic Pricing Index
  • PE: Practice Expenses
  • PLI: Practice Liability Insurance
  • CF: Conversion Factor
  • PP: Physician Payment

 Formulas

  • For in-facility procedures: (PW x PW GPCI + PE x PE GPCI + PLI x PLI GPCI) x CF = PP
  • To calculate out-of-facility amounts: (PW x PW GPCI + Transitioned Non-Facility PE x PE GPCI + PLI x PLI GPCI) x CF = Out-of-Facility P

Doing a similar exercise for Code 99214 would result in a Total RVU of 5.10930. Note that this is quite a bit larger than the Total RVU for Code 99213, which makes sense. A moderate level of medical decision making (30-39 minutes) service should be valued higher than a low level of decision making (20-29 minutes).

There are other things to consider when you calculate RVUs:

  • Remember that the fee you come up with may not be the exact amount of money a physician earns. Bilateral or multiple procedure payment rules could change the final payment.
  • RVUs, conversion factors, and other parts of the process change from year to year. Stay up to date to get the most accurate numbers.
  • Using a tool to calculate RVUs for you can make the process easier.

It’s important to develop a standard process for billing and paying staff. RVUs are only one method of doing this but provide many advantages over their alternatives.

We recommend that administrator and physicians focus on calculating RVUs for their 10 most frequently used codes. Total RVUs can then be used to approximate your practice’s performance and compare it against other benchmarks nationally.

Practicing quality medicine while maintaining and managing the bottom line is a balancing act that provider’s face daily. The Physicians Practice S.O.S. Group is committed to and has helped healthcare providers across the country with new practice startups, IRO needs, and providing practice management and compliance solutions. Call our office to discuss any needs you might have.

Regina Mixon Bates, CEO | The Physicians Practice S.O.S. Group | www.ppsosgroup.com

Fix My Practice – 10 Key Points of a Well-Managed Practice

The Physicians Practice S.O.S. Group® www.ppsosgroup.com

I often get asked by physicians what are some of the key things for me to know to determine if my practice is being well-managed? There are many, but here are 10 basics which are not in order of priority.

  1. The practice has foundation documents appropriate to the corporate structure and written agreements describing how income and expenses are shared by physicians and/or other providers and how partners enter and exit the practice. The owners of the practice and management meet monthly.
  2. The practice has documents that set the guidelines for operations such as a compliance plan, disaster plan, personnel handbook, job descriptions and requirements for annual evaluations, raises, bonuses and progressive discipline. Management and staff meet monthly.
  3. The net collection percentage is 90% or more. This means that of the expected collectible dollars, 90% is collected.
  4. The practice has a budget and variances are addressed.
  5. The unfilled appointment percentage is 5% or less. This is in retrospect, so it includes no-shows. The practice has a marketing budget and a written marketing plan.
  6. The practice has a line of credit or other means to draw upon in the case of unexpected cash flow drop.
  7. A single commercial payer comprises no more than 50% of the practice business.
  8. Employee turnover rate is 10% or less. New employees are brought onboard with training, coaching and competency testing.
  9. The practice has the ability to produce management reports to track and trend production, payments, adjustments, and denials. Process Improvement is used to address negative trends.
  10. Patient satisfaction is prioritized and measured, and improvement is valued.

How well did you rank with these?  If you didn’t meet them all what processes will you be putting in place moving forward?

Practicing quality medicine while maintaining and managing the bottom line is a balancing act that provider’s face daily. The Physicians Practice S.O.S. Group is committed to and has helped healthcare providers across the country with new practice startups, IRO needs, and providing practice management and compliance solutions. Call our office to discuss any needs you might have.

Regina Mixon Bates, CEO | The Physicians Practice S.O.S. Group | www.ppsosgroup.com

#FixMyPractice #practicemanagementconsulting #practicemanagement #physicianconsulting #medicalconsulting

Fix My Practice – Hiring the right person”ality” for your practice.

The Physicians Practice S.O.S. Group® www.ppsosgroup.com

As a practice manager or physicians hiring new employees is never an easy process. One of our top complaints from practice manager and/or physicians is how do we get the right person in for the job. Managers can receive hundreds of applications for a single position, and weeding out the majority of those applications can be daunting, and tiresome.

If you’re in a larger organization then typically, human resources staff will make it a little easier on themselves by eliminating certain candidates based on their lack of experience. The applicants with the most relevant work experience will likely be called for an interview, while those with the least will probably not move to the next round. Other factors considered in the first round of application review typically include an applicant’s educational background and skill set.

Personality and interpersonal skills are not typically evaluated until the interview stage, if they’re taken into consideration at all. By then, the applicants whose personalities are the best fits for the position may already have been weeded out.

Although the interview is a great opportunity to evaluate personality, many employers also do not put much weight on this factor. In the end, experience and special skills often win out. However, an applicant’s personality can be a much better indicator of how well they’ll do in their job.

Here are 3 tips important reasons why personality should be given greater weight in the hiring process:

  1. Skills can be learned

An applicant’s skills and knowledge of the field are almost always considered more important than personality in a potential hire. However, the fact of the matter is this: skills can be learned, but people can’t change their personalities.

Once thrown in a job, most people can learn the required skills very quickly. According to LinkedIn, workers on average know all the ins and outs of a new position after about three months. However, personal qualities are rather ingrained and cannot be changed, at least not very easily or quickly. With this in mind, an applicant’s work ethic, honesty, willingness to learn, charisma, and compatibility with the rest of the team are often far more important.

  1. The right team can make all the difference

Few jobs are done totally alone. Even if your employees are fairly autonomous, they’ll still have to work together from time to time. Teamwork is often especially important for large and important projects.

With this in mind, you should do your best to hire a group of people that work well together. It can be difficult to decipher if a candidate will click with the rest of the department. However, personality is often a good first indicator.

When you interview a candidate, ask yourself how similar or different his or her personality is from the rest of your staff’s. That’s not to say that everyone working for you should have the same personality, but people with radically different personalities tend to clash more.

  1. Go for the positive

In my experience, the number-one personality trait to hire for is a positive attitude. If I’m looking to hire you, you don’t have to be overwhelmingly bubbly, but I also don’t want someone who’s going to be a complainer.

We’ve all worked in offices where the mood is absolutely dreadful because everyone is so negative all the time. It sucks the life out of the room and makes the days drag on an on. So go for the positive!

Practicing quality medicine while maintaining and managing the bottom line is a balancing act that provider’s face daily. The Physicians Practice S.O.S. Group is committed to and has helped healthcare providers across the country with new practice startups, IRO needs, and providing practice management and compliance solutions. Call our office to discuss any needs you might have.

Regina Mixon Bates, CEO | The Physicians Practice S.O.S. Group | www.ppsosgroup.com

Fix My Practice –Can Independent Physicians Survive in the Current State of Healthcare?

Fix My Practice –Can Independent Physicians Survive in the Current State of Healthcare?

The Physicians Practice S.O.S. Group® www.ppsosgroup.com

If you feel like you’re glued to your computer or tablet for much of the day, it’s not your imagination. Many independent physicians say mounting paperwork is keeping them from spending enough time with patients. According to the Practice Profitability Index, the percentage of physicians who spend more than one day per week on paperwork has increased. This trend is eroding physicians’ on-the-job happiness. The physicians I know truly enjoy spending time with patients and teaching, and anything that takes them away from that is a negative.

A Kaiser study a few years ago indicated physicians spend more than 868 million hours annually on prior authorization activities. Payers say prior authorizations hold down costs, improve treatment efficacy and ensure patient safety. To physicians, however, they are an obstacle to providing the best care for their patients.

It seems that payer interference is increasing and dictating healthcare. Physicians have to deal with a range of audits tied to meaningful use, and other programs. The federal government can audit Medicare patients’ charts, while individual states can audit the records of Medicaid patients (since they fund Medicaid), up to 10 years after a patient’s treatment. The audits are just one sign of a trend toward payers influencing—or some would say dictating— patient care that can erode job satisfaction for medical professionals.

Audits are not the only way payers insert themselves into the physician-patient relationship. Prior authorizations are another way payers attempt to take decision-making out of physicians’ hands. In addition, more payers are tightening their provider networks in an attempt to rein in costs. This move toward narrower networks results in more physician evaluations.

More and more physicians must decide whether to stay independent or join a hospital system.  For some, joining a large hospital system offers a haven from the rising administrative burdens of staying independent, and from competitive pressures that can drive a small practice into insolvency. But joining a hospital system is not a panacea for the challenges facing physicians.

Some physicians are returning to private practice because their compensation from hospitals were not as lucrative after their initial contract expired. During the initial “honeymoon period”, pay is typically based on the previous three years of tax returns. When physicians’ contracts ended however, hospitals would often switch to performance-based fee schedules, which are usually much lower.

Here are a few survival tips for Independent Practice and Employment Options:

INDEPENDENT PRACTICE                             

  • Join Forces:  Consider joining an IPA (Independent Physicians Association) to align with other physicians and create negotiating power.
  • Look for High Impact Saving:  Major expense items that practices can easily investigate are occupancy and personal cost. Look at your leases, overall expenses, and automatic deductions.
  • Revamp Billing Practices: Make sure someone on your staff is held accountable for checking that all services are billed and reimbursed, and that no claims go over 90 days.
  • Re-examine Fee Schedules:  This is much easier to do if you are part of an IPA.

EMPLOYMENT

  • Get It In Writing: No matter how minor it seems, delineate all responsibilities in writing.
  • Learn About Compensation Details:  It is to your advantage to be an expert on your compensation package and method. Knowing RVU’s and quality-based compensation are very important.
  • Find out Who to Call:  Going from a private practice to a large corporation is a big change in culture. One of the most helpful things to know is who to call when something goes wrong. Make a flow chart that shows who contact and how to do so depending on the problem.
  • Know Your Limitations: Sometimes other people really do know their stuff and can teach you quite a bit. When you find these people, listen to them.

Whatever your choice in practicing medicine make sure you do your leg work, read every contract in great detail, and hire the right consultant and/or attorney familiar with healthcare laws when needed.

Regina Mixon Bates, CEO | The Physicians Practice S.O.S. Group | www.ppsosgroup.com

#practicemanagementconsulting #practicemanagement #physicianconsulting #medicalconsulting

Ransomware Assault Threatens Hospitals

Cyber Security in Healthcare

Recently the FBI is warning there is a new threat of ransomware attacking the US Health Systems. The ransomware assault threatens hospitals and will most likely spread to the ambulatory practices. The FBI and two other federal agencies issued a joined alert stating that this malicious attack will lead to data theft and disruption of the healthcare system and services.
According to an article in www.dailymail.co.uk
The FBI is investigating the recent attacks, which include incidents in Oregon, California and New York made public just this week, according to three cybersecurity consultants familiar with the matter.
A doctor at one hospital told Reuters that the facility was functioning on paper after an attack and unable to transfer patients because the nearest alternative was an hour away. The doctor declined to be named because staff were not authorized to speak with reporters.
‘We can still watch vitals and getting imaging done, but all results are being communicated via paper only,’ the doctor said. Staff could see historic records but not update those files.
Experts said the likely group behind the attacks was known as Wizard Spider or UNC 1878. They warned that such attacks can disrupt hospital operations and lead to loss of life.
The attacks coincide with the U.S. presidential election, but do not appear to have any connection to it.
‘We are experiencing the most significant cyber security threat we´ve ever seen in the United States,’ Charles Carmakal, chief technical officer of the cybersecurity firm Mandiant, said in a statement.
He’s concerned that the group may deploy malware to hundreds of hospitals over the next few weeks.
Alex Holden, CEO of Hold Security, which has been closely tracking the ransomware in question for more than a year, agreed that the unfolding offensive is unprecedented in magnitude for the U.S. Administrative problems caused by ransomware, which scrambles data into gibberish that can only be unlocked with software keys provided once targets pay up, could further stress hospitals burdened by a nationwide spike in COVID-19 cases.
The Russian-speaking cybercriminals suspected of the attacks use a strain of ransomware known as Ryuk, which is seeded through a network of zombie computers called Trickbot that Microsoft began trying to counter earlier in October.
In the past, ransomware infections at hospitals have downed patient record-keeping databases, which critically store up-to-date medical information, affecting hospitals’ ability to provide healthcare.
While the company has had considerable success knocking Trickbot command-and-control servers offline through legal action, analysts say criminals have still been finding ways to spread Ryuk.
The US has seen a plague of ransomware over the past 18 months or so.
In September, a ransomware attack took down all 250 US facilities of the hospital chain Universal Health Services, forcing doctors and nurses to rely on paper and pencil for record-keeping and slowing lab work.
Employees described chaotic conditions impeding patient care. Also in September, the first known fatality related to ransomware occurred in Duesseldorf, Germany, when an IT system failure forced a critically ill patient to be routed to a hospital in another city.
Holden said he alerted federal law enforcement after monitoring infection attempts at a number of hospitals, some of which may have beaten back infections.

Practicing quality medicine while maintaining and managing the bottom line is a balancing act that providers face daily. The Physicians Practice S.O.S. Group is committed to helping healthcare providers across the country with new practice startups, IRO needs, and providing practice management and compliance solutions. Call our office to discuss any needs you might have.

Regina Mixon Bates, CEO | The Physicians Practice S.O.S. Group | www.ppsosgroup.com
#ReginaMixonBates #practicemanagementconsulting #practicemanagement #physicianconsulting #medicalconsulting #businesscoach #publicspeaker #motivationalspeaker

 
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