Rebirth of Physician Practices in the Post-Pandemic Era

PRACTICE OPERATIONS

John W. McDaniel, MHA*

As we approach the aftermath of the COVID-19 pandemic, medical practices *Founder and Chairman, Peak Perfor- mance Physicians LLC, 909 Poydras will be facing myriad operational challenges necessary to continue practice op- Street, Suite 2600, New Orleans, LA 70112; phone: 800-764-2633; e-mail: erations while providing patient care in a multifaceted manner. The focus of the [email protected]. Copyright © 2020 by American medical practice will include increased use of telemedicine and remote patient Association for Physician Leadership®. monitoring capabilities for both patient and physician/provider convenience, and greater attention to the revenue cycle management activities of the practice to increase operating cash flow. We explore the action steps required as a part of the Medical Practice Continuity Plan to ensure the efficient provision of healthcare services to patients, regardless of specialty, while sustaining the financial viability of the practice. KEY WORDS: Coronavirus pandemic; medical practice profitability; telemedicine; revenue cycle management; operations improvement.

“When the ordinary retreat, the resilient reinvent.” Deloatch returned it for a touchdown! To this day, those in — Steve Gleason, New Orleans Saints (#37) attendance, including the announcers, said they have never heard a collective chorus of sheer joy any louder than on et me tell you a story about how resilience can help us that September night. overcome tragedy in the face of life during and after Although the Saints won the game, this was more than Lthe coronavirus pandemic. a football game. It signified the rebirth of a city. In fact, As you may recall, New Orleans was the epicenter of a statue entitled “Rebirth” near the southeast corner of destruction during and after Hurricane Katrina in 2005. the Mercedes Benz Superdome memorializes this iconic This epic storm devastated property and life as it had been play. Sadly, approximately five years after this game, Steve known, and it fractured personal and family relationships Gleason was diagnosed with amyotrophic lateral sclerosis as tens of thousands had to relocate to various cities since (Lou Gehrig’s disease). During his nine years of battling they had no homes, no jobs, and needed to enroll their chil- this devastating disease, Steve has become a champion in dren in new schools. Through sheer determination and the the fight for a cure and epitomizes the type of person we all will to return to their beloved city, however, the majority of aspire to be through his love of life and gifts of encourage- New Orleanians have returned and developed a stronger ment and hope. and more progressive city. The sentinel event that captured the spirit of New Or- When we are able to return to leans and the return to some sense of normalcy occurred on September 25, 2006, when the New Orleans Saints operating medical practices returned to the Mercedes Benz Superdome for the first toward the end of this pandemic, time in over a year on Monday Night Football to face their division nemesis, the Atlanta Falcons. The Saints have al- what will “normal” look like? ways represented the soul of New Orleans, and this setting could not have been more perfectly scripted. After the Analogous to the aftermath of Hurricane Katrina, when Falcons received the kickoff and went three and out, only we are able to return to operating medical practices toward 90 seconds into the game, Steve Gleason (#37), a special the end of this pandemic, what will “normal” look like? We teams stalwart, blocked the punt, and teammate Curtis must return to the fundamentals of operating practices

www.physicianleaders.org | 800-562-8088 7 8 Medical Practice Management | July/August 2020 and focus on improving and reinventing certain areas for B. Perform documentation chart audits to ensure operational improvement: appropriate documentation and medical neces- Reimbursement systems; sity vis-a-vis procedural coding. Billing and collection processes; C. Conduct and document educational sessions to Accounts receivable management; review the outcome of this assessment process Operations improvement; and to satisfy compliance requirements and estab- Practice growth. lish an action plan for improvement. 3. Conduct professional fee schedule review to de- Let’s examine how we can use these five levers for per- termine reimbursement by the top CPT-4 codes by formance improvement to increase practice profitability in frequency for the top 10 payers. the days ahead. A. Identify opportunities for fee schedule adjust- The process for implementing sustainable change in ments and/or negotiation with managed care medical practices in the post-pandemic future involves the companies following: 4. Conduct reimbursement validation analysis to I. Reimbursement systems determine contract compliance by insurers and 1. Implementation of telemedicine services document payment at contracted rates. A. The silver lining of the pandemic has been the 5. Consider outsourcing Medicare AWVs and CCM if rapid proliferation of telemedicine visits and practice lacks internal resources to provide these consults. Over a matter of weeks, we have seen a services. transformation in the future of healthcare deliv- 6. Perform charge/collection/adjustment analysis by ery, out of necessity in being sequestered from payer to determine gross collection rate (GCR) and human interaction, and the public has quickly net collection rate (NCR). accepted the benefits of telemedicine. Although A. Target payers for renegotiation. telemedicine is thought to be mostly used by B. Consider opting out of specific contracts de- primary care providers, specialists can provide pending on revenue value to practice. certain services via telemedicine, such as fol- 7. Focus on risk-stratified care management (val- low-up of various disorders (e.g., postoperative ue-based care) programs, such as accountable care or post-procedures), pre-visit consultations, and organizations (ACOs), managed security service so on. As medical practices’ use of telemedicine providers (Medicare Shared Savings Programs), and becomes more sophisticated, they may want to the Merit-Based Incentive Payment System. explore formalizing their telemedicine programs A. Cautiously approach these programs regarding (e.g., using video conferencing products, free qualifying criteria pertaining to the determination of incentive payments versus payback video chat apps, or electronic signature software requirements. for patient forms and consents). Physicians also II. Billing and collection processes must be mindful that there is competition in the 1. Monitor upfront collections regarding copayments, telemedicine arena among proprietary com- deductibles, outstanding balances, and noncovered panies (e.g., TeleDoc) as well as various local services. physicians and corporate medical practices. A. Set monthly targets. B. Medical practices have begun to realize the 2. Establish acceptable turnaround regarding sub- benefits of performing patient assessments mission of initial claims and rebilling of denied or (within limits) through telehealth visits, online rejected claims. digital visits, remote patient monitoring, and 3. Develop claim denial and rejection follow-up telephonic E/M services. In addition, practices processes. have begun providing other telemedicine ser- A. Monitor weekly; vices, including Medicare annual wellness visits B. Track reasons; (AWV) and chronic care management (CCM), C. Provide ongoing education to reduce frequency; for example. and 2. Development of coding compliance program D. Assess the impact of delayed cash flow. A. Conduct evaluation and management coding 4. Monitor credit balances to ensure prompt repay- utilization analysis (including telemedicine ment of Medicare and Medicaid overpayments codes) to determine compliance with CMS Au- within 60 days. dit Standards and determine areas of potential A. Failure to refund overpayments will result in under- or overcoding. false claim penalties.

www.physicianleaders.org | 800-562-8088 McDaniel | Post-Pandemic Era 9

5. Assess cost/benefit of in-house versus outsourcing A. Ensure availability of personal protective equip- of revenue cycle management activities. ment. A. Must examine both costs to provide services 3. Embrace digital healthcare solutions in every feasi- against effectiveness of performance metrics ble aspect of the practice to increase efficiency. 6. Develop a system for tracking compliance with pa- 4. Assess office space requirements and lease needs tient payment plans. as the practice increases its use of telemedicine and 7. Ensure consistent performance by responsible staff other offsite services (e.g., business office opera- members regarding insurance verification and pa- tions). tient eligibility and preauthorization processes. 5. Develop operating/cash flow budgets to reflect A. Maximize information system capabilities. changes in patient care delivery (e.g., telemedicine) 8. Formalize or standardize financial policies and and support services (e.g., offsite coding, business procedures. office operations, scheduling). III. Accounts receivable management 6. Assess cost/benefit of remote patient monitoring 1. Utilize the 80/20 analysis in managing the accounts via telehealth. receivable aged trial balance (A/R ATB) by payer. 7. Develop asset management plan: A. Approximately 20% of insurers will represent A. Repay Small Business Administration loans (if 80% of total A/R dollars. applicable); B. Focus on the A/R ATB for that 20% to gain the B. Consider bank line of credit; and greatest impact in the shortest amount of time. C. Establish capital reserve account 2. Adopt strategies for collection of patient balance 8. Consider joining a national group purchasing orga- accounts: nization through professional societies. A. Patient payment plans; 9. Review mix of personnel: full-time, part-time, con- B. Utilization of third parties (e.g., collection agen- tract labor, RN/LPN versus medical assistant, and cies, credit bureaus, small claims court); or so on. C. Early Out Program (where a provider contracts 10. Assess possibility of integrating telemedicine soft- with a third party, such as a collection agency, ware with current management information sys- and the third party bills and collects for all out- tem/EMR versus a standalone system. standing patient balances from Day 1) 11. Implement a formal Medical Practice Compliance i. Outsource all patient balance accounts. Program. 3. Develop monthly audit of A/R ATB regarding in- A. Increased federal/regulatory scrutiny regard- sured accounts at 60+ days. ing HIPAA privacy and security standards with A. Review notes for each claim and information telemedicine needed to complete claim or reason for nonpay- 12. Develop a “Disaster Recovery Plan”: ment if claim is complete. A. Notify patients when it is safe to return to prac- 4. Review charge/collection/adjustment ratios by tice and conditions under which patients will be payer to detect areas of low reimbursement or de- seen on site. layed payments. B. Notification process: 5. Institute quarterly monitoring of collection agency i. Social and print media; performance regarding patient balance accounts ii. Patients (e-mails); and determine acceptable performance metrics. iii. Referring physicians; 6. Explore feasibility of outsourcing 90+ insurance iv. Hospitals; accounts. v. Community agencies; and 7. Determine feasibility of outsourcing all patient bal- vi. Critical vendors. ance accounts through Early Out Program. 13. Consider adding extended hours for access to rou- IV. Operations improvement tine and urgent care via telemedicine. 1. Develop a business continuity plan to prepare for 14. Explore all options for outsourcing nonclinical recovery from losses in patient revenue, ongoing services. labor costs, and supply expense. 15. Assess feasibility of continuing current ancillary A. Continue to explore federal and state financial services versus developing new modalities. assistance programs. 16. Review physician/provider compensation program. 2. Manage supply inventory on hand to meet patient A. Adjustments will be necessary in base salary, demand. Monitor usage and assurance from ven- incentive compensation (quantitative v. qualita- dors about reasonable turnaround time for supplies tive), and so forth. and pharmaceuticals to avoid excessive inventory 17. Develop actionable monthly financial/operational and supply expense. reports.

www.physicianleaders.org | 800-562-8088 10 Medical Practice Management | July/August 2020

18. Develop effective patient recall system, particularly 5. For specialty practices, conduct Physician Referral for patients not seen within the last 12 months. Analysis to determine number of referrals by physi- 19. Follow up with no-show patients to attempt to re- cian by total charges and payer mix. book appointments. 6. Conduct patient origin analysis to determine the 20. Explore ways to improve patient volume capacity geographic distribution of patients and potential through improved scheduling. areas for office expansion. 21. Establish benchmarks for physician/provider pro- 7. Develop e-business strategy for practice (e.g., ductivity and share through individual monthly telemedicine, increased use of IT resources, social reports. media). 22. Conduct provider compensation/productivity anal- 8. Develop practice strategic plan: yses to ensure fair market value compensation for A. Conduct SWOT analysis (strengths, weaknesses, hospital-affiliated physicians and providers opportunities and threats); 23. Track charges, collections, expenses and net profit/ B. Determine future areas of focus/development; loss by patient and by Work Relative Value Units. and 24. Review personnel policies and procedures to de- C. Determine what to stop doing/offering. termine areas of potential savings (e.g., employee 9. Assess benefits of participating with a management benefits such as paid time off). services organization. A. Address policies related to furloughs and defer- A. Cost/benefit of providing various services in- ral of compensation in times of emergency. house versus outsourcing 25. Assess cost/benefit of IT support. 10. Review payer contracting organizations to deter- 26. Review patient flow/patient process redesign op- mine the benefits of continuing certain arrange- tions to promote efficiency. ments. 27. Conduct internal training and education regarding 11. Assess benefits of participating with various phy- areas for regulatory compliance. sician networks (e.g., ACOs, clinical integration V. Practice growth networks). 1. Consider practice mergers regarding development 12. Explore opportunities for contracting with hospi- of larger single specialty or multispecialty group. tals to provide specific services, such as call pay, A. Assess economies of scale. medical directorships, and clinical comanagement B. Evaluate benefits of standardization/centraliza- arrangements. tion. 13. Consider feasibility of concierge model for primary 2. Explore sale of practice to hospitals, federally qual- care physicians and certain specialties that treat ified health centers, or private equity companies. patients with chronic disease (e.g., cardiology, en- 3. Address differences between primary care and spe- docrinology, pulmonology, nephrology). cialty care in terms of target markets. The practice of medicine in the aftermath of the corona- A. Marketing plan/budget; virus pandemic will allow practices to reinvent themselves. B. Use of social media; and Although most of us live in a comfort zone and are unwill- C. Website development/enhancement (e.g., use of ing to change, “necessity is the mother of invention,” and patient portal). true innovation takes place outside of our comfort zone. 4. Review frequency of CPT-4 and ICD-10 codes to In life, real growth usually results from difficult times. We determine types of patients currently being seen in should all learn the lessons from this tragedy and apply practice. them toward providing healthcare in a much smarter and A. How can the practice redesign benefit-targeted more convenient manner while improving the quality of life procedure and/or diagnosis codes (patients)? of both patients and those dedicated to healing them. ᨖ

SoundPractice Podcast is back! You may remember SoundPractice as one of the ﬁrst podcasts dedicated to the business of medicine. Re-launched in 2018 with Co-hosts, Mike Sacopolus and Cheryl Toth, go to www. soundpracticepodcast.com or listen to the episodes wherever you get your podcasts, such as iTunes or GooglePlay.