Tuesday, September 18, 2012



If you treat Medicare beneficiaries, you will in all likelihood eventually meet one of Medicare’s Recovery Audit Contractors, otherwise known as RACs. Recovery audit contractors are Medicare third-party contractors engaged for the sole purpose of identifying services provided by doctors that do not meet the many documentation requirements now required by Medicare for reimbursement.

What happens if you are found to be in noncompliance with CMS requirements? If found to be in noncompliance with Medicare’s clinical payment criteria, documentation and billing requirements, CMS can impose civil fines of up to $11,000 per error, impose treble damages, exclude your practice from Medicare/Medicaid and even impose criminal penalties that include fines and imprisonment!

CMS is paying the permanent RACs approximately 10% of every dollar identified and recouped in perceived overpayments. They are looking for errors made by your medical billing and coding staff - often due to incorrect CPT/ICD9 codes given to the staff by a provider or because of lack of documentation in the chart notes created by the provider. These RAC medical collection agencies appear to be here to stay. It has been written that RAC auditors will be building an automated IT infrastructure that allows for ongoing overpayment determinations and denials for individual healthcare providers on a perpetual basis. Most importantly, RAC audits are not one time or intermittent reviews – they are a systematic and concurrent operating process for insuring compliance with Medicare coverage criteria as well as medical billing and coding guidelines.

Managed Care Alternatives, Inc.’s team of certified coders has significant experience with pre-RAC audit chart review that will identify coding and documentation errors that could potentially cost a practice thousands of dollars. As part of this service, we provide a detailed report showing what percentage of claims were under-coded or over-coded by your medical billing and coding staff according to the documentation in the chart notes. We also identify appropriate alternative coding where applicable to assist you as well as your medical billing and coding staff to increase the bottom line income of your practice.

Additionally, - based on the number of charts we review – we show the dollar value lost as a result of under-coding, as well as overpayments paid to the practice as a result of up-coding (which is where the tremendous liability lies for every provider in the event of a RAC audit).  Finally, we make recommendations for documentation enhancements where appropriate to assist you and your medical billing and coding staff in increasing the bottom-line revenue of your business by achieving the highest possible reimbursements.

We are able to offer this service at an extremely competitive rate.  We can also offer both per-chart and package rates.  When you consider what you could lose as far as time, money and the stress you would undoubtedly experience once a RAC auditor comes calling – not to mention the financial gain you could realize from our coding and documentation suggestions - I think you will find this to be a very economical expenditure.

Please call us at (602) 246-0756 for further information.

Thursday, August 16, 2012

A Critical Assessment of the Affordable Care Act


By James Doulgeris | August 9, 2012
Just a spoonful of sugar helps the medicine go down…” — Mary Poppins
Much like Poppins’ lyrics, a mixture of fact and fiction has swirled around the Affordable Care Act (ACA). Cheerleaders for the ACA highlight the sugar and the detractors highlight strong medicine, leaving most struggling for the truth. In 2,700 pages of law and tens of thousands more in new regulations, there is plenty of grist for everyone’s mill.

As the primary stakeholders assess the impact on their sectors and react, one rarely asked and fundamental question becomes paramount: Is the ACA actually workable? An unbiased review of what we now know leaves plenty of reason for concern:

• Patient protections, which virtually everyone agrees should be implemented, shifts costs onto insurers, both public and private, as a mostly unfunded mandate. Shifting costs is not saving costs:
     • Removal of lifetime limits on coverage
     • Removal of pre-existing condition restrictions
     • Removal of co-pays for certain visits
     • Premium limitations to homogenize costs

• Material reductions in the number of uninsured may be very hard to achieve as a result of the Supreme Court upholding state’s rights, state and large employer exemptions and waivers, and assumptions of provider participation that are already on shaky ground:

     • Over 96 percent of small business, or 5.8 million of 6 million total firms, have less than 50 employees, making them exempt and not obligated to pay into the program.

     • The “tax” penalty is insufficient to discourage employers with over 50 employees to provide coverage or from broadly expanding their part-time workforce to avoid providing insurance. It will simply be less expensive to pay the fines throwing yet more people under the individual mandate.

     • So many large employers and states have been given waivers that millions of people who would otherwise be covered under the law will, instead, be subject to the individual mandate and find that it is far less expensive to pay the penalty instead of premiums.

     • An estimated 12 million non-citizens are exempt from tax penalties and are not covered by any program.

     • Many states are likely to opt out of the Medicaid expansion program and state insurance exchanges not because of politics, but because the huge cost of processing and validating millions of new claims and meeting federal regulatory requirements falls on state taxpayers.

     • Affordability provisions may not be affordable for taxpayers; the non-partisan Congressional Budget Office has already doubled the estimated cost to about $2 trillion over the first ten years.

     • The ACA shifts many of the costs over to an already stressed provider system that cannot absorb it:

     •  It initially drives physicians to hospital, ACO, and large clinic employment. It later threatens their collective fiscal viability with a surge of underinsured people who are saddled with thousands in out-of-pocket payments and an explosion of publicly insured people at reimbursement levels that are well below the cost of providing services.
     • Primary-care providers will be required to lead teams of specialists to help their patients to achieve improved outcomes without clear definition of what that means, and without appropriate compensation. The teams of specialists will likely be unable to, or will refuse to, treat publicly insured patients because reimbursements are below the cost of providing services.
     • In 2015, primary-care providers will be in the same financial bind as other specialists when the Medicaid reimbursement adjustment to Medicare rates expires, and reimbursements fall 40 percent.

     • There will be intense competition for privately insured patients that reimburse sufficiently to keep providers financially viable.

     • The first government response will likely be to propose accepting Medicaid as a condition to qualifying for Medicare. The likely provider response will be to drop Medicare in order to survive and competition for privately insured and self-paying patients will intensify further.
     • The Federal Government will have little alternative other than to: institute real reform; throw additional trillions of dollars at the program to prop it up; or start over. 

A hard look at the ACA and its trajectory paints a sobering picture. There is no choice but to reform the system.

The ACA is a first step, but it is looking more and more that this first step is onto a busy street. It doesn’t have to be that way. Our leaders need put their egos and invective rhetoric aside, and do this right.

Thursday, June 21, 2012

Six Steps to Boost Productivity by 30 Percent at Your Medical Practice


By Carol Stryker | April 29, 2012
What if your current staff could actually get all of their work done, you could see 30 percent more patients, or you could get home in time for dinner? How happy would patients be if wait time decreased?

The rule of thumb is that 30 percent of the activity in any type of office is wasted. My experience is that the percentage is even higher in a medical office. The more useless labor you can eliminate, the bigger the increase in productivity and the fewer mistakes. A careful review of some or all of the processes in a medical office can generally be expected to yield productivity gains of at least 30 percent in the areas addressed.

All work, productive and non-productive, is part of a process. Identifying and eliminating the wasted work in a particular process is a project with specific steps. Staff, even those not directly involved in the process, must be included in the project. Their knowledge of what is really happening is invaluable, and their buy-in promotes sustained change.

1. Choose a process you would like to streamline. You will be more motivated to attack a process that is causing major problems, but it might be helpful to practice technique on something simpler.

2. Answer this question: What should the process accomplish and why is that important? Take the time to clearly state the purpose and value of the process and write it down. This is the yardstick for future evaluations. This is the only aspect of the project that the physician(s) cannot delegate or outsource.

3. Write down the steps in the process, in order. Leave some space between the steps. Once you think you have all the steps, walk through them to be certain you have not left anything out. Add what you left out and walk through again. Repeat until all steps have been captured. An individual, with subsequent review and refinement by a knowledgeable group, can create the initial outline of the process.

4. For each step, ask the group:
• What does this have to do with the goal? If nothing, eliminate it. If not much, eliminate it or combine it with another step.
• Is another step performing the same function? If so, which one produces the best outcome? Eliminate the less effective step.
• Is there a better way? Do you have a tool, not available when the process was first developed, that gets the job done more effectively and/or efficiently?
• Could a step be added that would have a positive impact on a subsequent step? Would it help to sort a previously unsorted list? Would a paper report be easier to work than one on a screen?

5. For the amended process, ask:
• Are any additional steps necessary? If something will be printed now that was not printed before, what will be done with the paper?
• Are the steps in the most logical order? Examine alternative sequencing as a possible improvement to the process.
• Is the process intuitive? Will it be easy for the person doing the work to remember?
• Are any steps error-prone? What can be done to minimize or eliminate the propensity to error? If it cannot be eliminated, what can be done to validate the step was done properly?

Repeat from Step 5 until satisfied with the proposed process.

6. Once the improved process is implemented, choose another process and repeat the analysis. Continue until satisfied (even delighted) with the way the office works.

The only difficulty is finding the time and discipline to perform an analysis of a process and implement improvements.

Each successful project frees up resources and makes it easier to address another process. Morale improves because office operations are improving. Stress decreases because there is actually time to do what needs to be done. Staff turnover goes down and profits go up. Give it a try.

Tuesday, June 12, 2012

Medical Practice Purchases: Health Reform Creates Déjà Vu


By David Mokotoff, MD | June 9, 2012
On the west central coast of Florida, where I practice cardiology, an interesting phenomenon sprung up in the early 1990s. The role of HMOs was steamrolling across the country and private medical group practices were feeling anxious about their ability to contract successfully with this new healthcare delivery model by themselves. In order to skirt self-referral and anti-kickback rules within "Stark I" laws, medical service organizations (MSOs) sprung up across the medical landscape.

Stark I was part of the Omnibus Budget Reconciliation Act of 1989 (OBRA 1989). Physicians could not meet and decide on pricing of their services without running afoul of the law. Private enterprise took note of this, and soon a host of companies, like Caremark, PhyCor, and MedPartners, went out and bought group practices at exorbitant prices. These Physician Practice Management (PPM) companies saw the future and it looked like corporatizing medicine was the pot of gold at the end of the rainbow.

Trading on the public stock exchanges, shareholders started to demand greater profits that never materialized. As any physician in private practice will tell you, the best way to make a doctor less productive is to give him a bunch of money and then place him on a salary. MedPartners announced that they would suffer a net loss of $841 million for the 4th quarter of 1997, and not surprisingly MedPartners exited the PPM business by 2000, selling doctors back their practices.

Also consider the history of PhyCor. When it bought physician practice assets, it had doctors sign a 40-year deal for the company to manage the practices. But the company itself died at the tender age of 13. In a 2001 Securities and Exchange Commission filing, PhyCor reported that it had sold the last of its multispecialty clinics. It later sold its IPA businesses as well. The company used the money to pay debt. It missed a $4.4 million bond interest payment in February 2001, and ultimately filed for bankruptcy in July 2002.
"Them seeking protection would not come as a surprise to anybody," said Todd Richter, (in 2001), an analyst at Banc of America Securities who had followed PhyCor. "They are the last company in that space of their era that hasn't sought protection.

"They operated a flawed business model. It's difficult for a company to do well at the expense of its doctors," he added.

From 2005 to 2008, the number of physician-owned private medical practices has been dropping from around 66 percent to less than 50 percent, and researchers said the trend would continue downward.

My field of cardiology has been particularly hit hard. According to a 2009 survey by the American College of Cardiologists, more than 50 percent of cardiologists in the U.S. had joined forces with their local hospital. That percentage is even higher today. There are many factors driving this historic exodus from private practice. To mention just a few, consider these: the declining Medicare rates of reimbursements for cardiology procedures (versus rising reimbursements to hospitals for the same procedure) over the past decade, increasing legal and salary costs of maintaining a private practice as a small business, and increasing unfunded federal mandates such as the electronic medical record, OSHA, and EPA requirements.

About 20 years ago, I recall a medical consultant saying this about hospitals acquiring medical practice: “If you want a hospital administrator to run your medical practice, he will –– right into the ground.” If you think that may be an overstatement then consider how efficiently a hospital runs and bills for its services.

Now added to the alphabet soup of acronyms is the ACO (accountable care organization). As part of the Affordable Care Act, this lets a group of doctors, and other providers, take full risk of insuring a given population. Incentives will be given for adherence to evidence medicine, guidelines, etc. Sounds to me a lot like a full-risk HMO contract that claims to hold down medical costs by eschewing excessive tests and procedures. In theory, this is a laudable goal. In actuality I have seen it lead to rationing of care for the sake of profits.

So from my vantage point, what is happening now is as the saying goes, "déjà vu all over again." Doctors bit on the temptation once, 20 years ago for a buyout and are doing so again. The buying entities have changed from a practice management company to a hospital but I am betting the outcome will be the same — buyer’s remorse, unhappy doctors, and patients. Let’s hope that I am wrong.


Wednesday, May 23, 2012

Choosing a New Billing Partner for Your Medical Practice


By P.J. Cloud-Moulds | January 14, 2012

Last week, we touched on the steps you need to take prior to making a switch between a poor performing billing company and a potential new one. Here are some questions you can use to “interview” a new company, and the areas you should focus on during this process.

There are so many reputable billing companies out there, and so many that are not. The most important thing to remember when going through this process is: “Will this be a good fit for my business?” By good fit, I mean: Does the company you are looking at manage businesses your size, well? You can be a single private practice, or have 30 locations throughout the country. If they are a small billing company, and you have many locations, chances are that's not the best fit. Once you have narrowed down your options, here are some other very important questions to ask yourself and your potential new billing company:

1. What is your rate? Although this is a very important question, and you must know this in order to move forward with the conversation, keep in mind that if a company is going to provide you with amazing service, that extra 1 percent might just get you to a much better place with your business, and well worth it. Keep an open mind.

2. If we collect the patient co-pays and co-insurance, or if a patient pays a cash rate, do you still collect your percent with those monies collected? The answer should be “No.” If you and your staff are taking the time and effort to collect this up front, that money should be 100 percent yours. There are no administrative costs incurred to the billing company (time, printing statements, mailing, etc.) so they should be not be adding that into your bill.

3. Do I have a designated representative that I can talk to and they work on my accounts, consistently? The answer should be “Yes.” With the insurance industry as volatile as it is, accounts get really messy and it’s important that you have the same people working on your accounts. If a patient calls in and asks to speak with your rep, they should be able to get them on the phone. Remember that this team is an extension of your business.

4. How do you handle payment denials and delays? This should be an easy one; the answer should be “quickly and efficiently.” They should be asking for items from your staff which might include: copy of health card, RX, DX, copy of initial evaluation, chart notes, etc., every week, if not more often. The quicker you can get these items to them, the quicker they can appeal. We know that some unsavory insurance companies will deny up front in order to delay payment. A good billing company knows who these insurance companies are and can help you get paid on those much quicker.

5. Who keeps track of my business statistics and analysis? This answer should be you. You are ultimately responsible for your bottom line. However, a good and reputable billing company will have this information available to you on a daily basis through a website or portal. It is very important to know how to access your daily A/R, and if this is not provided, I would certainly call this a red-flag. They should also have business analysis individuals who can help answer any questions you may have, and be happy to do so.

6. Can you help me integrate my EHR with your billing company? This should be yes, most definitely. However, some billing companies are scrambling to make sure their systems are “talking” with all of the new EHR systems coming out every day. Ask them up front which systems they are compatible with.

Ask around to your colleagues and see who they are using, if they are successful, and what they do and do not like about their billing company. But always be sure it is a good fit for you. If you do not feel they will get the job done the way you need it done, then move along.

Making the transition, you may be asking: What about my old A/R? Look forward to next week’s article on how this can go really smoothly, and how you can help make that happen.

Sunday, April 22, 2012

The Uncertain Future of American Medicine

By David Mokotoff, MD | February 25, 2012
“This is the beginning of the end of the private practice of medicine in America.”

If you guessed that someone famous in March 2010 made this statement, after President Barack Obama signed into law “The Patient Protection and Affordable Care Act,” you would be wrong. An everyday doctor, my father, said this to his family after President Lyndon B. Johnson signed Medicare into law in July 1965.

My father was not correct. Far from being the beginning of the end of the private practice of American medicine, this law ushered in what we old-timers now longingly refer to as the “Golden Age” of medicine. In the beginning, (of Medicare law) doctors could charge whatever they wanted for their services, no matter how absurdly high the price, and as often as they wanted. Not only were they often reimbursed at this level, but the more you charged, the more you would get the following year under an economically illogical system, known as “usual and customary.”

Decades later, as the costs to administer Medicare Part B escalated, the payment system morphed into a more fixed methodology and continues to evolve today. However, as with any monopoly, which Medicare certainly is, costs to consumers are dictated and non-negotiable. However, unlike other monopolies, like a cable company, Medicare pays the providers — doctors and hospitals — rather than the end user: the patient. Private insurers pay doctors and hospitals largely based upon what Medicare pays, no matter how arbitrary it might be. Cataract and open-heart surgery are reimbursed differently if you live in Miami, than if you live in Fargo, N.D.

No matter how many IOU’s Congress writes to cover the burgeoning cost of Medicare Part A, B, D, etc., we all assume that this program is never going to go away. It will be tweaked, like higher deductibles, co-pays for Medicare Advantage programs, raising the eligibility age, and so forth. But the essential facts are that the typical Medicare beneficiary will receive many times in benefits whatever he paid in during his working life. When Medicare was first passed into law, there were about six workers for every person over the age of 65. In 2012 that ratio is now down to 4:1 and falling. People are living longer and demanding ever more sophisticated and costly procedures. The current system is not financially sustainable.

And now entering the scene is The Affordable Care Act. Passed under presidential duress, this massive overhaul of the American healthcare system has yet to be fully functional. It is still unknown if the very linchpin of the law, the individual mandate, will survive a constitutional challenge before the U.S. Supreme Court this year. However, I will argue that this ruling may be irrelevant. Much like a poison or virus is injected into the blood stream, the long-term effects of “Obamacare” will continue to ripple through our society for years to come.

From the moment I heard President Obama say, “If you like your insurance and doctor, then you can keep it,” I knew his intent was opposite of this statement. The end game here is a single-payer system based upon a Canadian or British health system. Rules, regulations, and costs to private insurers will become prohibitively high to the point that they will simple stop their medical insurance business.

I plan to retire in two years, so this latest scheme to “reform” American healthcare, won’t directly affect me. However, I fear for the effects on patients and future doctors. I support true competition as the way to drive down health care costs, not less. For example, in 2000 when I had Lasik surgery, it cost $2,500 per eye. In 2005, when I had to have an idea redone, it was only $1,200. And that is because insurance did not cover it. The cost of the procedure was simply responding to the increasing supply of Lasik surgeons to the demand, which became level.

I do not profess to know if the next few years will birth the “beginning of the end” of medicine, as we know it. I am however, certain that the more centralized the payment and delivery of healthcare becomes, and the less competitive, the more the costs will be and the less access to it we will all have. I hope that I am wrong.

Wednesday, April 18, 2012

The Business Plan: What Doctors Must Understand to Survive

By Ike Devji, JD | March 13, 2012

There is heated discussion in many online forums about doctors, economics, and business skill right now. From right here at Physicians Practice to forums like LinkedIn, Twitter, and literally hundreds of practice management websites the comments and laments carry a common theme:

In our previous discussions we’ve provided specific guidance on some of these issues by providing a checklist of some essential business and legal planning issues that every doctor and practice manager must review. That list was merely and introductory checklist and must be supported by some other basic business skills and knowledge and while I have a clear understanding of the time constraints and workload many physicians operate under I’ll be clear on this issue: Taking control, even mentally, of the medical business you run or own is no longer a luxury and is required for your survival.

You must understand and have a basic business plan including cash flow and budgets.

I am regularly surprised by how many successful doctors we talk to that don’t have a business plan. In these cases I’d suggest they prospered in spite of not having that plan in place, based largely on old economic models that don’t exist anymore.

Even among professionals that regularly examine these issues for doctors, finding a credible business plan that meets generally acceptable business standards is rare. “We rarely see a real, functioning business plan outside two specific scenarios, when they want loans or start-up capital”, says Chris Amato, CEO of Triton Business Advisors in Phoenix, Ariz., a business planning group that works with medical professionals. “The business plan is a key first step when we work with a practice and must be based on performance and actual benchmarks established by the practice in the past, as opposed to vague ‘industry standards’. We really need to have good grip on what this practice has achieved, where the changes have occurred and what the opportunity costs of making the changes to stop that financial hemorrhaging are.”

When I bring a business plan up, especially with established, older doctors they often comment that they thought that was only something for a new business; that’s not correct. Given the changes in reimbursement and medical economics in general, a specific plan as to what your mission statement is, how your practice remains profitable, what patient volume it’s going to take to generate business to support that income level at current reimbursement rates, and how you are going to achieve those goals is important. You can’t just be a good at practicing medicine you have to be good at the business of practice medicine and this takes a specific treatment plan.

Some kind of cash flow crisis is at the core of most of the practice failures we have studied. Practices simply aren’t adjusting to new revenue models and changing to account for new reimbursement rates and increasing costs while they still have time to do something about it, now. If you wait until you are in a crisis situation to make adjustments to your business plan and overhead or personal cash flow it is usually too late.

Merely knowing how much you need or are short every month is only half the battle; your business, like your family, must live within its means. If you can’t support the office or staff you have in place right now comfortably it’s time to look at alternatives and options. If layoffs are going to be required, make sure that you have employment manuals and policies in place that protect the practice and start looking at ways to decrease your overhead that are both direct, like trying to downsize, sublet, or renegotiate your lease and passive and delegated to experts; such as energy studies, cost-segregation studies and property tax appeals. (If your building is worth less than it was five years ago why are you paying the same tax?).

A business plan is just that, a plan, but it does provide specific goals to work toward and can be a really simple way for doctors, even those with limited business knowledge, to take control of these issues and reduce them to manageable tasks and ideas. Whether you need a first plan or a new one that accounts for current realities, today is the day to act.

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