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Delivering Physician Services: the Good, the Bad and the Ugly!
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  1. Delivering Physician Services: the Good, the Bad and the Ugly! Source: October 2007 to September 2008 data, updated 01/08/2009 ALL OB Services excluded

  2. Trend in Hospital Physician Employment • 2009 first year in which more graduating physicians entered practice as an employed vs. independent. • Studies show large decrease in independent and two-physician practices from 1996 to 2007. • Nearly 70% of rural hospitals surveyed were currently recruiting physicians for employment. Nearly 40% suggested that the only way to bring a physician to the local market was to employ.

  3. Our experience from the 90’s • Hospital employment drivers in the 90’s: • Rural rationale- Initial push to utlize cost-based reimbursed rural health clinics transferring risk of physician employment to federal government. • Urban rationale- Attempt by hospital systems to control and expand their market share. Vertical and horizontal integration in response to “managed care” threat. • Typical losses in excess of $100k per year per physician due to large salaries and bonuses not supported by productivity.

  4. Why this time is different • Physician Drivers • Reimbursement- Decreasing for commercial payers; stagnant with governmental with prospects for large decreases. • Curbing ancillary revenue/expansion of Stark Law limitations. • Rising practice expenses- Practice costs up 4-5% per year while reimbursement increasing only .5% per year. • Higher expectations for EMR without financial or personnel resources to implement.

  5. Why this time is different (con’t) • Hospital Drivers • Keep up with demand. No shortage of patients, just shortage of reimbursement. • Desire to have physicians with invested interest in financial performance of hospital. • Need for more specialists in local markets. • Desire to improve ability to control quality/cost control. • Average loss per physician has dropped from approximately $100k per year to roughly $30k per year.

  6. Best Practices: Insurance and Risk Management HTH Survey Results: Hospitals employing physicians • How many are employing physicians? • 88% currently employ physicians. Of those hospitals… 88% employ 1-5 physicians, 12% employ 11 or more • 78% plan to hire new physicians in the next 18 months 57% in primary care, 42% both primary care & specialists Information provided by Potter Holden & Company

  7. The Decision Source: October 2007 to September 2008 data, updated 01/08/2009 ALL OB Services excluded

  8. Bad Practices: • Hiring as knee jerk reaction or to bail out. • Hiring when not justified by outmigration. • Hiring when only bad payer mix subject to shift. • Hiring based on gut feelings (without proforma). • Hiring with financial guarantee without mechanism to promote proper set up and maximization of volume and reimbursement. • Hiring under hospital TIN. • Hiring physician with “issues.”

  9. Best Practices:Do Your Homework! • Review market share analyses: • HERMES data • Outmigration by payer by specialty • Lost cases with financial impact • Develop proforma • Use market share • Identify specialized equipment, office space, staffing needs • Project both hospital and physician impact • Review licensure and determine any “issues.” • Behavioral issues (drugs, alcohol, etc) • Malpractice history

  10. Best Practices:Legal Set-Up • Determine correct legal structure • Separate physician group TIN (make TIN decision and stick with it – avoid changes!) • All physicians under one (non-hospital) TIN • Determine operational and financial structure: Practice or RHC?

  11. Benefits of a Practice • Easy to establish. • Concept easily understood by public and patients. • Does require enrollment and contracting with health plans. • No requirement to staff with NP, PA.

  12. Benefits of an RHC • Possible Increased Reimbursement • Medicare visits are reimbursed based on allowable costs • Medicaid visits are reimbursed under the cost-based method • Insulations against Medicare and Medicaid rate cuts. Since reimbursed based upon costs the RHC is unaffected by the proposed Medicare or Medicaid rate cuts. • Potential Cost Savings on Utilization • RHCs may see improved patient flow through the utilization of NPs, PAs and CNMs, as well as more efficient clinic operations. The clinic must be staffed at least 50% of the time with a midlevel practitioner.

  13. Be Clear… • It is a very lengthy process – up to 12 months or more! • An action plan is necessary for successful establishment or conversion. • Any changes to application will either delay the approval process or cause the application process to be restarted (i.e change of address, name change, etc) • RHC designation does not improve Commercial reimbursement. • CMO contracting must be included in the process to ensure appropriate amendments are obtained. • Billing processes must coordinate with conversion activities. • It will be a frustrating process! (but often worthwhile in $$s)

  14. The Preparation

  15. Bad Practices: • Insufficient lead time for enrollment and office set up. • Failure to assist in practice set up. • Provider enrollment • Office start-up • Billing • Training • Establishing too much like hospital operationally. • Attempting to incorporate into hospital business office. • Adjusting corporate structure in middle of process (changing TINs, adding addresses).

  16. Best Practices:Provider Enrollment • Start early (very early)! • Determine participation strategy. • Identify staff member responsible. • Set up physician credentialing file. • Establish appropriate NPI numbers. • Establish CAQH. • Enroll electronically in Medicare and Medicaid. • Enroll in EDI/EFT. • Keep copies of everything (applications and approval letters, etc) • Follow up, follow up, follow up

  17. Best Practices:Contracting • Apply contracting strategy to your physician entities. • Contract as HEALTH SYSTEM! • Obtain PHO or Group contracts whenever possible. • Negotiate language and reimbursement. • Watch for operational implications. • Only Hospital CEO or CFO signs group contracts. • Train physician and office staff NOT to sign anything; send to you.

  18. Provider Credentialing: A Technology Solution Providing IT Solutions for the Healthcare Community Steve Cherry CPHIMS President (615) 424 2489

  19. Provider Credentialing Technology Ion IT Group’s PrivilegePortal application is designed to help providers of all sizes meet their Credentialing requirements. PrivilegePortal is a comprehensive Provider Credentialing solution that provides immediate access to credentialing data from a single, user friendly source. PrivilegePortal is a single solution for credentialing of physicians, allied health and other staff/providers.

  20. Provider Credentialing Technology • Advantages of utilizing technology for credentialing process: • Filing cabinet becomes electronic • Automatic backup of data • Expiration reminders • File can be shared by multiple users at once • Reduce lost documentation • Automatic completion of verification letters, forms • Consistent data for all providers • Ease of reporting

  21. Provider Credentialing Technology • PrivilegePortal allows on line entry of necessary data: • Demographics • Insurance • Offices • License • Expiration Dates • CME Tracking • National DB Links • Document Scanning/Storage • Application/Reappointment Information • Education • References

  22. Provider Credentialing Technology • PrivilegePortal features include: • On line application process • Expiration worklist • Automated reappointment alerts • Verification letters populated with entered data • Import and storage of scanned/email/fax documents • Email reminders of expiring data • Auto population of CMS-855 • Provider and Procedure view only search

  23. Provider Credentialing Technology • PrivilegePortal is easy to maintain: • Client defined master files • Starter set of master files included • Add to master files ‘on the fly’ • Dropdown boxes utilized • Screen edits for required information • Web based application hosted by Ion IT Group • All updates loaded by Ion IT Group staff • Software, hosting, support and upgrades for one fee • Integration with Microsoft Office applications

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  30. Mike Scribner Strategic Healthcare Partners Helen Williams, CPC Precision Practice Management Steve Cherry Ion IT Group