Finding Your Footing in Uncertain Times
Finding Your Footing in Uncertain Times | Medical Group Management Association, David Gans, MGMA-ACMPE, Best Business Practices, Profitability, Healthcare Revenue, SGR, Cost Efficiency

David N. Gans
How do you change your practice structure to compensate for the uncertainty swirling around healthcare in today’s politically-charged climate?

Performance & Practices of Successful Medical Groups

A New Report from MGMA-ACMPE

MGMA-ACMPE has recently published a report highlighting actions that set successful practices apart from the mainstream. The data was distilled from survey information collected from members across the nation. Below are a few highlights. For more details, go online to www.mgma.com.

  • Better-performing practices generate more revenue. These practices ranged from approximately $185,000 to $320,000 per FTE physician more in total medical revenue. Several factors contribute to higher revenue including, but not limited to, higher productivity, sound operational efficiency, and the types of services the practice provides.
  • Better-performing practices collect their receivables more quickly than their peers. Better performers had approximately 7-10 percent of their total accounts receivables in the category of 120 or more days. In contrast, groups that didn’t fare as well (“Others”) had between 19-35 percent of their total accounts receivable in the 120+ category.
  • Better-performing practices create operational efficiencies to ensure strong provider productivity. In some cases, the top practices performed nearly twice as many procedures as the “Others” group.
  • Missing opportunities to collect on past due accounts can make or break a practice. Consequently, better-performing practices carry less bad debt on the books. Better-performing groups had approximately $6,900 to $14,000 less in bad debt than the "Others" group.

Trick question, according to David N. Gans, MSHA, FACMPE, vice-president of Innovation & Research for MGMA-ACMPE … the answer is you don’t.

There is no doubt, Gans said, that healthcare providers are faced with a huge amount of uncertainty about health reform, reimbursements and the SGR (sustainable growth rate). “Practices feel they are in an unpredictable environment with their largest payer, which is Medicare,” he noted. In fact, he said, practices haven’t seen this type of uncertainty since … well … last year.

“Unfortunately, we may be in the same position in December 2012 where we are having the exact same conversation. We’ve got a flawed payment system,” he continued. “In order to remove the SGR, we need to add to the federal debt $325 billion, which is the cost of having deferred physician payment decreases for the past nine years. It’s potentially easier to kick the can down the road another year than to admit the federal debt has to be increased by this amount.”

While there might be some breathing room to abolish the SGR following the 2012 national elections, he continued, practices cannot afford to adopt a ‘wait and see’ attitude when it comes to examining their business operations and bottom line.

“The good news is managing in this very volatile and difficult climate is no different than practicing in a good environment,” Gans said. After all, he noted, best practices are just that … the very best practices that should be instituted to maximize productivity, cost efficiency and appropriate reimbursements no matter what the outside forces.

 

Increasing Productivity

Gans said every practice should look at throughput and determine whether or not the right people are doing the right jobs. “A practice needs to focus first on productivity … it’s not easy, but it has the greatest return for the practice,” he noted.

He urged practices to begin by assessing their appointment scheduling to determine if it allows physicians to be as efficient as possible. “If you have 20 appointment slots in a normal work day, and you work a five-day work week, that’s 100 appointment slots. How many patients did you see? Eighty? One hundred?” Practices need to evaluate their no-show policy and look at the manner in which they work additional people into the system when a slot opens up.

If Monday mornings are hectic and Friday afternoons slack, look at what types of routine appointments could be shifted to the slack time. The open access concept, which utilizes few fixed appointments daily, is another option for some practices to address a high no-show rate. “It doesn’t work well for every specialty, every practice; but where it does work, it can work very well. When you have same-day appointments, you typically don’t have no shows,” Gans said.

Additionally, practices should see if it’s possible to add one more patient a day. “The simplest thing you can do to increase productivity is to increase the number of people in the waiting room.” Gans noted that most practices have very high fixed costs. Serving one more person a day often accrues only the extra cost of a handful of disposable items like a tongue depressor or the paper lining the exam table. “There’s not a lot of incremental cost typically so that revenue goes to your bottom line.”

Although it’s critical not to compromise quality, a frank evaluation of workflow and throughput often uncovers ways to increase appointment scheduling. Unfortunately, it’s easier to simply maintain the status quo. “This is a great example of how the familiar becomes the normal,” Gans noted.

 

MGMA, ACMPE Merge

Taking a page out of their own book on efficiency and productivity, the sister organizations of the Medical Group Management Association and American College of Medical Practice Executives formally merged at the beginning of 2012 to better serve members. Approved by the respective memberships, the new association continues to use the established MGMA and ACMPE brands while investigating ways to align these brands for the future.

With 22,500 members, MGMA is the largest professional membership association for medical practice management leaders. The highly respected ACMPE certification has 6,750 members. Current members of both organizations were automatically transitioned to members of the new MGMA-ACMPE association and pay a single dues payment equal to current MGMA dues. Members of the new association who wish to pursue certification through ACMPE will no longer need to join a separate organization and pay separate dues annually.

 

Maximize Cost Efficiency

Closely linked to productivity, one of the biggest cost inefficiencies is having overqualified staff members performing tasks. It might be possible for a practice to add another appointment during the day if the physician quits doing tasks that could be handled by a nurse, and a nurse quits taking on tasks that could be performed by a tech.

Another area where many practices might be more cost efficient is in their supply contracts. Gans noted that it’s possible to lose sight of the forest for the trees. While malpractice insurance rates, which receive a good deal of attention, are unquestionably an issue, Gans pointed out that pediatricians actually spend 10-11 times more per doctor, per year on medications and immunizations than on malpractice insurance … “so manage your drugs.”

He suggested taking advantage of group purchasing organization’s (GPOs), which are available to individual practices and might also be available through hospitals where physicians have privileges. “Do the easy ones first,” he said of becoming more cost efficient. “If you can buy the same product for less money, the balance goes to your bottom line.”

The second ‘easy’ area is to look at ways to avoid waste. Regular inventory should help point out which medications are expiring before being used. Although looking at staffing issues is tougher, it can certainly reap big rewards in terms of efficiency and productivity. Finally, Gans said to consider the physical plant. “Are you using your facility to the best of your ability? Could you rent less space or sub out extra space?”

 

Get Paid for the Work You Do

This is an area where a lot of revenue simply walks out the door. Despite knowing the best practices attached to revenue collection, too often co-pays are not collected at the time of service, processing claims takes too long and bills are submitted with inaccuracies

“Most denied claims are denied because of incorrect patient information,” said Gans.

He added, of course, that incorrect coding is also a major issue … not just when it comes to denials but also as it pertains to the total reimbursement remitted. “In surgical specialties where there are multiple procedures performed at a single time, the sequence of procedures makes a difference,” he said. “Does the sequence on the EOB (explanation of benefits) match the sequence on the bill? If the sequence is changed, the payment might change.”

Gans continued, “Make sure any rejected claim is researched and rebilled quickly.” Even when payment is remitted, he said offices should evaluate the EOB to make sure the claim was paid correctly and according to contracted rates.

As Gans pointed out, this type of checking and rechecking should be a routine business process, but the basics are often overlooked in the bustle of a busy practice.

 

Bottom Line

Even if Congress provides physicians a short-term measure of certainty by kicking the reimbursement can down the road once again, Gans said it isn’t a pass on evaluating your practice in terms of productivity, efficiency and being paid appropriately for services rendered. “These are the fundamentals of good business practice,” Gans concluded. “If you are going to deliver good quality healthcare, you don’t want to worry about being able to keep the doors open … and this keeps the doors open.”