Lessons learned from leading a hospital owned physician business office
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Lessons Learned from Leading a Hospital-Owned Physician Business Office. Catherine Zito, FHFMA, CPA, CPC-A Joette Derricks, CMPE, CPC, CHC, CSSBG August 2, 2012. Disclaimer. Our focus is the Business Office

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Lessons Learned from Leading a Hospital-Owned Physician Business Office

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Lessons Learned from Leading a Hospital-Owned Physician Business Office

Catherine Zito, FHFMA, CPA, CPC-A

Joette Derricks, CMPE, CPC, CHC, CSSBG

August 2, 2012


  • Our focus is the Business Office

    • We will not be addressing many other important and interesting aspects of running a hospital-owned business enterprise.

    • For example, would you consider physician recruitment as a Business Office initiative?

    • What about quality initiatives?

    • Physician compensation?

Lesson #1Collaboration, Coordination & Control

  • Everything is related and integrated with the Business Office functions

    • The Business Office must know what services the new physician will be providing and build the charge schedule, practice management user tables, train coders/billings ideally all before the first patient is seen.

    • Many quality initiatives from PMH to Physician Quarterly Reporting System to Meaningful Use are integrated with the practice management software.

    • What gets captured, billed and paid will impact physician compensation.

Lesson#1Collaboration, Coordination & Control

  • Hospital leadership, physician partnership, practice operations, managed care contract, finance and accounting, information tech, etc.

    • Responsibility (role definition)

    • Accountability (performance expectations)

Lesson # 1Collaboration, Coordination & Control

  • Two basic models

    1) Borrow or add on responsibilities to current hospital executives

    • On-the-job training to learn the differences between hospital and medical practice enterprise

    • Frustrating unless clear definitions of roles and responsibilities

      2) Hire a proven group practice administrator

    • Transition from one to many sites—a single to group vision

    • Understanding hospital bureaucracy and operating cultures

Lesson #1Collaboration, Coordination & Control

  • What we learned:

    • Established a management “leadership” team to set priorities and establish responsibilities and accountabilities to obtain common goals

      • Business Office Director, HIM Director, Practice Administrators, Compliance, Credentialing, HR Representative, and IT Director

    • Established a physician council with monthly meetings to listen to concerns and respond

      • Business Office Director attends and participates

Lesson #2Physician Revenue Cycle Tools and Expertise

  • If you want to be successful you need to learn the rules of the physician revenue cycle

  • Patient data gathering and verification (front-desk)

    • A physician registration associate is responsible for answering the phone, scheduling the patients, checking them in, pulling their charts, updating data, cleaning up the reception area after the sick kid, collecting co-pays, balance dues, printing fee tickets, scanning forms, etc.

Lesson #2Physician Revenue Cycle Tools and Expertise

  • Documentation of services

    • Capturing all revenue in all settings by all providers, e.g. physicians, nurses, ancillary techs

      • EMRs and paper forms

      • Auto coding or coding experts

  • Claim processing

    • Entry edits, clearinghouse edits, working outstanding claims, patient statements, denial management, claims resubmission and appeals

      • 5010 format

      • ICD-10 is still in play

Lesson #2Physician Revenue Cycle Tools and Expertise

  • Practice Management System

    • Your hospital vendor may notbe the best vendor for your physician enterprise

    • Select one and only one practice management (PM) system that supports the revenue cycle management process

    • Move all physicians/practices to a common standardized platform

    • A robust EMR is also critical; however, it doesn’t have to be a product of either your hospital EMR or your PM vendor

Lesson #2Physician Revenue Cycle Tools and Expertise

  • What we learned:

    • There are no shortcuts to the selection, configuration and properly implemented IT system

    • Dedicated IT associates

    • Don’t skimp on training for IT, physicians, practice and Business Office associates

    • The PM and EMR systems impact clinical quality, service, productivity, operational and financial viability of the Business Office and the entire physician enterprise

Lesson #2Physician Revenue Cycle Tools and Expertise

  • What we learned:

    • Develop in-house when possible, or supplement with outside (outsourcing or consulting), coding and physician revenue cycle expertise

      • Certified coders

      • Physician trainers

      • Regulatory and compliance specialists

      • Managed care contracts

      • Billing/denial management/appeals

Lesson #3Hospital/Physician Challenges Impact on the Business Office

  • Physician recruitment lead time and due diligence

    • The earlier in the process you know what is coming into the Business Office the better

  • Standardize compensation formula

    • Often information needs to be added to the PM system to capture data for the formula

    • Modeling the formula and refining it works better before the physician signed on the dotted line

  • Financial, accounting and managed care contracting considerations

    • One tax ID number or separate tax ID numbers

    • One group or multiple groups

Lesson # 3Hospital/Physician Challenges Impact on the Business Office

  • Inheriting physician staff and integrating them into the Business Office

    • New or different policies and procedures

    • Spouses, long-term employees requiring training

    • “That’s the way we have always done it”

Lesson #3Hospital/Physician Challenges Impact on the Business Office

  • What we learned:

    • Planning is a key to doing it right

      • Lack of adequate planning, controls resulted in many downstream problems and issues which we are still working through

      • Difficulty with always playing catch up and “issue of the day”

    • Communication is key to priorities and lead time

    • Don’t be afraid to let people go when they cannot adapt to a new organizational structure

Lesson #4What you Measure Counts!

  • Accurate management of data and reporting

    • Make sure the PM and EMR have a robust report writing capability

    • Determine what standard reports the physician/practice will see and when

    • Ensure you understand the data

      • Is the compensation based on work RVUs entered or billed or paid

Lesson # 4What you Measure Counts!

  • What we learned:

    • We didn’t have the right management tools

    • We suffered from a data deficiency dilemma

    • Physicians were use to having all the information they wanted at their finger tips

    • Physicians micro-managed information especially information that might impact their compensation

    • We downloaded data into external report writing software

    • We worked with our vendor to fix the deficiencies

Lesson # 5Learning is Ongoing!

  • The Business Office focus is on the revenue side of the equation

    • Improve charge capture techniques for out of office sites, e.g. nursing homes, assisted living

    • Train, train and train physician’s on documentation, coding and billing

    • Train, train and train your associates on documentation, coding and billing

    • Refine the receivables management system to improve bottom line

    • Build a management team around good leaders with the ability to implement best practices

Lesson # 5Learning is Ongoing!

  • Use outside resources (outsource/consultants) as needed

  • Stay on top of regulatory changes

    • The Medicare Physician Fee Schedule and new CMS changes are released in October/November for the following year

    • Diagnosis coding changes are effective October 1

    • CPT/HCPCS changes are effective January 1

    • Impact of Hospital/Outpatient changes on your physicians

      • 3-Day Rule for Wholly Owned or Wholly Controlled Practices

Lesson # 5Learning is Ongoing!

  • Accept that while you had the hospital revenue cycle under control – the physician revenue cycle learning curve can be tough so don’t be too hard on yourself!

  • Relax and embrace the challenges!


Thank you!

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