As things change, private practice remains the same

In “No matter pressure applied, independent physicians will survive” (First Take, April 25), that 80-year-old physician who stated private practice will survive is absolutely right.

The reason is today’s healthcare is fueled by greed: from hospital corporations, pharmacy benefit managers, insurance companies, and the government. And greed breeds more greed-it is inevitable. And then the goose that laid the golden egg gets killed and what is left standing is physicians like him and myself (42 years in practice).

I’ve seen it all before. The practice of medicine has been around since the ancient Greeks. There is nothing new as it’s all been done before and still the private practice remains essentially unchanged: one physician and one patient doing what has been done for thousands of years.

52 years in private practice and counting

Thank you for the editorial “No matter pressure applied, independent physicians will survive.” I have been in my private family practice for 52 years, practice full time, and like what I do. I am also a former chief of staff of Blount Memorial Hospital. It recently purchased a 50-member East Tennessee medical group, and to admit patients they must go through ED and, if admitted, on to the hospitalists.

Access to care is poor and many people are surprised when at times I actually answer my phone. Yes, I even find time to garden, play tennis, be on the local school board, and even recently published a book “A Family Doctor’s Journey and Diversions along the Way.”

Robert “Bob” Proffitt, MD
Maryville, Tenn.

Three ways Congress can empower patients, lower costs

Mr. Martin: I enjoy your [First Take] editorials a lot. My colleagues, our patients, and you need to remember all the problems we have are the fault of the Congress who know exactly what to do to empower patients and lower costs.
Simply:

1. allow insurance to be sold across state lines;
2. turn all mandated state insurance coverage into cafeteria plans so patients can get what they want, not what vested interest “vendors: and their lobbyists have mandated; and
3. increase HSAs to whatever patients desire.
The first change alone would probably solve the cost and empowerment issue. Personally, my conversion to a concierge practice has changed my life. Keep up the good work.

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Your voice: As things change, private practice remains the same 

The difference between a level 3 and level 4 office visit might not seem like much, but to payers, these visit types each tell a completely different story about the work that’s required to treat a patient.

When physicians report a level 4 evaluation and management (E/M) code, they’re telling payers they should be paid more because their patient requires medical management for an exacerbation of an existing chronic condition, a complication, or a new problem, says Raemarie Jimenez, CPC, vice president of membership and certification solutions at AAPC in Salt Lake City, Utah. Payers may deny level 4 E/M codes for patients who respond well to treatment and are generally well-managed, she adds.

When using an EHR, though, it’s easy for physicians to default to a level 4 E/M code that might not be justified, says Jimenez. That’s because the EHR pulls information forward that might not be clinically relevant or even pre-populates information that falsely inflates the actual work the physician performs. “The computer just picks up on keywords and boxes, but it’s not smart enough to realize that a visit might be over-documented,” she adds.

For example, pulling information forward, such as a comprehensive family history or a complete review of systems, can inadvertently drive a level 4 E/M code when the nature of the presenting problem (e.g., otitis media) in no way supports this level of service, explains Jimenez. Over time, it may appear to payers that a physician is upcoding as compared to peers.

To avoid payer scrutiny, Jimenez advises physicians always to ask themselves these three questions before assigning a level 4 E/M code:

1. Is this patient sicker than most of the patients I see?
2. What specifically elevates the level of effort that’s required to treat this patient? Have I documented this information in the record?
3. Have I reported the most specific ICD-10-CM diagnosis code to justify patient severity?

Physicians should also know whether their EHR might be putting them at risk for upcoding. Jimenez says to consider these three questions:

1. Does the EHR auto-populate information and require physicians to deselect what’s not pertinent to the visit?


For example, an EHR might auto-populate a complete review of systems and require physicians to deselect the systems they don’t review with the patient. This practice is extremely risky because physicians don’t often remember to review the information or they may simply forget to deselect it, says Jimenez. Best practice is for physicians to manually select what they want to bring forward. It shouldn’t happen automatically, she adds.

2. Do diagnosis-specific templates require physicians to perform certain tasks every time they see a patient?


All work must be clinically relevant, says Jimenez. “Physicians shouldn’t be forced to do something just because the EHR is telling them to do it. Everything they do should be based on their own clinical judgment.”

3. Does the EHR require physicians to bill a certain code?


The code that the system calculates may not be accurate, and physicians always need the ability to override it when necessary, says Jimenez. She provides the example of a physician who includes rule-out diagnoses for continuity-of-care purposes. If the physician isn’t actively managing these conditions, they shouldn’t be counted toward the visit’s E/M level. If the EHR gives credit for this information, physicians need to recognize that the E/M level may be inflated, and they should override the code manually, she says.

To payers, these visits tell a completely different story about the work that’s required to treat a patient.

Coding tips: Level 3 vs. 4 evaluation and management

Payers and the Office of Inspector General (OIG) are starting to crack down on improper payments for CCM. The message to practices is: Focus on accurate coding, or run the risk of recoupments, says Kim Garner Huey, CPC, owner of KGG Coding and Reimbursement Consulting in Birmingham, Ala. Here are some common CCM denials and how to avoid them:

 More than one provider bills CCM for the same patient during the same 30-day timeframe.

 Coordinate care with specialists to avoid duplication, says Huey. This coordination should occur at the physician-to-physician level. The primary care physician and specialist should collaborate and decide who will perform all or a majority of the care management activities, including addressing the patient’s psychosocial needs. This is the provider who should bill the CCM code, she adds.

The practice bills CCM with home healthcare supervision/hospice care supervision (HCPCS codes G0181 or G0182), certain end-stage renal disease services (CPT codes 90951-90970), or transitional care management (CPT codes 99495-99496) during the same 30-day period.

 Ask the software vendor to include an edit that prevents the practice from billing CCM with these other services, says Huey. Another option is to hold the claim until the last day of the month. Then manually review claims for all patients enrolled in CCM to ensure that the practice hasn’t already billed any of the services listed above.

 Document a comprehensive plan of care that addresses all of the patient’s medical needs-not only the two minimum qualifying chronic conditions, says Huey. Avoid using templated language that isn’t specific to the patient, she adds.

CCM services aren’t appropriate for the patient.

Explain why the chronic conditions put the patient at significant risk of death or decline, says Huey. For example, one patient may have well-controlled diabetes while another could be uncontrolled or have multiple complications. Always choose the most specific diagnosis code in the EHR, and avoid unspecified codes when possible, she adds.

Here are four common CCM denials and how to avoid them.

Coding tips: Chronic care management (CCM)

Transitional care management (TCM) is also a payer target for auditing, which means practices need to focus on following the rules when billing this service. Consider the following common TCM denials and how to avoid them:

 The practice doesn’t call the patient within two business days of discharge.

 Join a health information exchange to receive daily admission discharge transfer (ADT) feeds and discharge summaries, says Samantha Sizemore, chief operating officer at Holston Medical Group PC in Kingsport, Tenn. Then work with the EHR vendor to incorporate this information into the system so staff can view it easily. Consider hiring a patient navigator who can monitor these discharges and reach out to patients in a timely manner to schedule a post-discharge appointment. In small practices with few TCM billings, nurses, medical assistants, or even administrative staff can also perform this task, she adds.

“The idea is to get the patient engaged in the outpatient setting as quickly as possible,” says Shelton Hager, MD, CPC, a primary care physician at Holston who bills TCM approximately five times a month.

 The practice doesn’t document the initial call to the patient.

 Develop an EHR template for the follow-up telephone call to the patient, says Sizemore. This template should include the date of discharge, time, and date of the follow-up phone call, and a summary of the conversation. Work with the EHR vendor to automatically pull information from this template into the template for the transition of care (TOC) office note, she adds.

The TOC office note should also include checkboxes to remind physicians of the key components of the TCM code (e.g., review the discharge summary, establish or re-establish referrals to community services, and provide patient education). “These are the components that auditors will be looking for,” says Hager.

 The patient is not seen within seven or 14 days of discharge.

 Save one or more appointment slots per week for hospital follow-up appointments, says Sizemore. Another option is to double book or have the patient see a different provider in the practice, she adds.

The patient is readmitted or dies within 30 days of discharge.

One option is to hold the TCM claim for 30 days and manually review ADT data before billing to ensure the patient hasn’t died or been readmitted. Another option is to bill TCM at the time of service under the assumption that the patient won’t die or be readmitted. If the patient is readmitted or dies within 30 days of discharge, Medicare will automatically recoup the TCM payment; however, practices can refile the claim using an E/M code based on the documentation. “If you don’t refile it, then you forfeit the payment for the TCM service altogether,” says Sizemore.

Here are four common transitional care management denials and how to avoid them.

Coding tips: Transitional care management 

It may be easier to bill an E/M code based on time alone because physicians don’t need to count bullet points in the E/M guidelines to level a service. However, doing so can also put a practice’s revenue at risk if physicians report time-based E/M codes frequently, says Michael Strong, CPC, bill review technical specialist at SFM Mutual Insurance Company in Bloomington, Minn. These codes should be the exception rather than the rule, and physicians shouldn’t use time-based E/M codes to circumvent proper documentation or medical necessity, he adds. Strong provides these tips to avoid denials:

1. Use time as the controlling factor only when a physician spends more than 50 percent of the visit counseling the patient or coordinating care.

Counseling and coordinating care include the face-to-face time with the patient and/or family member spent obtaining a history, performing an exam, or counseling the patient. They do not include the following services:

Administrative tasks for which payers do not reimburse (e.g., documenting in the EHR, dictating, refilling prescriptions, or completing workers’ compensation applications)

Communicating with other professionals or the patient via written reports and telephone

Reviewing records and tests before or after the face-to-face visit

Physicians should clearly document how much time they spent performing the counseling and coordination of care and what they did specifically, says Strong. “If you don’t describe it, the payer doesn’t know whether you met the criteria,” he adds.

2. Choose the code that most accurately describes the services rendered.

For example, one of the following CPT codes might be more applicable than billing a time-based E/M code, says Strong:

99401-99404 (individual preventive medicine counseling and/or risk factor reduction intervention)

99406-99407 (smoking and tobacco use cessation counseling)

99408-99409 (alcohol and/or substance [other than tobacco] abuse counseling)

99411-99412 (group preventive medicine counseling and/or risk factor reduction intervention)

3. Bill psychotherapy separately from the E/M service.

When physicians perform psychotherapy in addition to an E/M service, they should report the E/M service as well as an add-on code for the psychotherapy (i.e., 90833, 9036, or 90838), rather than using time as the controlling factor for the E/M code and forgoing the psychotherapy code, says Strong. Physicians also can’t use time-based billing for the E/M service when they report it with a psychotherapy add-on code. Instead, select the E/M code based on the history, exam, and medical-decision making, he adds.

Follow these three tips to avoid denials when reporting time-based E/M codes. 

Coding tips: Time-based E/M billing

When used appropriately, modifiers help physicians collect revenue to which they’re entitled because they convey to payers that the claim should bypass billing edits that are designed to prevent improper payments. However, when practices use these modifiers to bypass edits inappropriately, they could be at risk for recoupments resulting from post-payment audits, says Angie Clements, CPC, physician coding auditor at MedKoder LLC in Mandeville, La.

It all comes down to documentation, says Clements. “Documentation has to support everything you do. Payers are looking at the documentation to support everything they pay,” she says.

Here are some do’s and don’ts when applying these three common modifiers:

 apply it when the E/M service goes above and beyond the usual pre- and post-operative work associated with a procedure that has a global fee period. Documentation must clearly explain why the additional E/M service was necessary and why it went above and beyond what’s typically required for the procedure, says Clements.

For example, a patient falls and has a laceration to the forehead that’s deep enough to require sutures. In addition to the laceration repair, the physician performs an exam and neurological assessment to rule out a concussion and orders additional testing. The E/M code for the office visit may be separately reportable using modifier -25 provided all documentation requirements are met, says Clements.

 apply it automatically just because a non-physician provider performs part of the treatment. As always, documentation must justify why the E/M service is separately reportable, says Clements.

 apply it when a patient presents for a scheduled procedure. For example, a physician performs an E/M service and asks the patient to come back in a few days for an injection if symptoms worsen. If the patient returns, the physician should only bill the CPT code for the injection-not an additional E/M code with modifier -25, says Clements.

 apply it when a physician performs the professional component only. For example, CPT code 71045 denotes a single-view chest X-ray. If a physician performs the professional component only, they should report this code with modifier -26.

 apply it when there is a more specific code. For example, CPT code 93000 denotes a routine electrocardiogram (ECG) with at least 12 leads, including the tracing, interpretation, and report. If a physician performs only the interpretation and report (without the tracing), they should report CPT code 93010-not 93000 with modifier -26.

apply it when another physician already interpreted the test. Physicians can count their own interpretation toward their medical decision-making but not bill separately for the professional component of the test, says Clements.

apply it as a last resort. Consider these other options first: -RT (right), -LT (left), or -50 (bilateral procedure). Payers may also accept modifiers -XE (separate encounter), -XS (separate organ or structure), -XU (unusual non-overlapping service), or -XP (separate practitioner). For example, a physician performs an injection in the right and left knees. Report CPT code 20610 with modifier -50 not -59.

 apply it when there’s a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury. For example, a physician trims a callus and trims a toenail on the same toe. The toenail, bed, and surrounding tissues are considered the same anatomical site, says Clements.

 apply it if National Correct Coding Initiative (NCCI) edits prohibit doing so. For example, physicians shouldn’t report a biopsy and excision of the same lesion using modifier -59. They should only report the removal, says Clements. An exception to this is when a physician biopsies the lesion, waits for the pathology results, and then excises the lesion during the same session. In this case, they can report both procedures using modifier -59. If there isn’t any documentation to support the decision to excise the lesion after pathology results were obtained, payers may recoup reimbursement during a post-payment audit, she adds.

Here are some do’s and don’ts when applying these three common modifiers.

Coding tips: Modifiers -25, -26, and -59

When it comes to appealing denials, knowing payer policies and regulatory requirements is critical. “Being smarter than your payers is the key to successful denial management,” says Michael Strong, CPC, bill review technical specialist at SFM Mutual Insurance Company in Bloomington, Minn. Consider these tips to ease the appeal process:


“Look at the remark codes, and address those specific edits,” says Strong. “Don’t hand them back the same medical record. They’re just going to deny it again.” For example, missing information is a common reason for claim denials. Payers often look for lab or operative reports and won’t pay the claim until they receive this documentation, he adds.


Payer policies aren’t set in stone, and payers may be willing to make exceptions for diagnostic procedures such as labs or x-rays when patients have an abnormal or uncommon presentation, says Tammy Tipton, owner of Appeal Solutions Inc. in Oklahoma City, Okla. For example, she says, many clinical guidelines are more applicable to adult patients and may not be relevant to pediatric patients.

3. Cite regulatory information in the appeal letter.


This includes Medicare Local Coverage Determinations and National Coverage Determinations as well as the Affordable Care Act (ACA), says Tipton.

The ACA, for example, expanded access to external reviews-something that payers don’t necessarily want providers to know, she says. This expansion allows providers who are authorized to appeal on a patient’s behalf to request an external review after they’ve exhausted all internal reviews with a payer. Providers can obtain this authorization by asking patients to sign an assignment of benefits and authorization release, including the ability to pursue appeals on the patient’s behalf.

“I feel strongly that you get a higher quality of review with an external appeal because it’s unbiased, and reviewers are accessing the latest clinical guidelines when making decisions,” she adds. “You also get more detail as to how and why the payer is making certain decisions.”

Also, be prepared to cite the Employee Retirement Income Security Act (ERISA). ERISA allows providers with authorization to appeal on a patient’s behalf to:

Ask for the specific internal criteria on which a payer is basing a denial. This information goes beyond the denial reason code and can help providers craft a compelling argument to fight the denial, says Tipton.

Ask the payer to provide the credentials of the reviewer. Demand peer review (i.e., that a physician in the same specialty with the same credentials review the appeal), says Tipton. “The more specialized the treatment, the more critical a peer review is to the review process,” she adds.

File appeals within 180 days. This may go beyond a payer contract allowing only 30 or 60 days, says Tipton.

“You have to understand all of these regulations, be willing to cite them in your appeal, and demand compliance,” she says

When appealing denials, keep these three tips in mind. 

Coding tips: Appealing denied claims

Coding can be out-of-this-world difficult.

Funny bone: Alien codes

Smartphones are ubiquitous. Beyond phone calls and texting, rarely does a moment go by without an urge to peek at the latest Facebook message or newest Instagram picture. While this may be fine at home, it can cause some problems in a medical practice setting if staff members use their smartphones to access social media.

Nitin S. Damle, MD, MS, MACP, board member and physician at South County Internal Medicine in Wakefield, R.I., says his staff are instructed to leave their phones in their lockers and turned off during work hours.

“There is no reason anyone should be getting onto any website other than one that is related to work during working hours,” he says.

Some practices allow use of staff smartphones during breaks, but within specific guidelines. For example, personal social media accounts must be clearly personal and not representative of the office, practice, or health system and no protected patient or other office-related data can appear anywhere on those personal accounts.

Damle adds that the same rules that apply to use of social media at work apply to personal phone calls as well. “There are certainly exceptions in more acute circumstances-for example, when an employee has an ill family member-but an employee who has to be constantly accessible to an elderly parent, for example, taking multiple phone calls from the parent or caregivers during patient care hours wouldn’t bode well for work performance,” he says.

A more challenging issue is personal social media relationships between staff and patients. Sometimes office staff may refer friends or relatives to the practice, which can also be tricky where social media is concerned.

In situations like these, the staff member already has a relationship with the patient, so physicians should emphasize that they should not use social media to give medical advice, information, scheduling, test results, or any other practice-related communications via their personal account.

Instead, practice-related communications should flow through normal channels, such as the secure patient portal.

Although it is more difficult to control staff members’ social media behavior outside the office, ground rules can still be established.

“Clearly, staff members shouldn’t talk about patients, even if they de-identify them, or about co-employees, or employers,” he says. Patients also should not post photographs of the work site, patients, physicians, or medical personnel. 

He emphasizes that if this type of activity comes to his attention, “it is immediate grounds for dismissal.” However, if the staff member is a friend or relative of a patient, it is acceptable to post pictures that might include the patient in an out-of-office setting.

Photographs taken within the office might seem innocuous, but can also potentially compromise the privacy of other staff members. For example, perhaps one of the physicians has pictures of his family on his desk-or of patients, even after hours. These posted pictures can also give the misimpression that the photographer is speaking on behalf of the practice.

Damle concludes by stressing that patient care “is at the center of any medical practice” and anything that causes a distraction or interruption of that care, such as inappropriate use of social media, should be avoided.

Frequent use of social media is common, but it can cause some problems in a medical practice setting.

When to police staff social media use

Diagnosis codes convey the reason for the visit, and they also capture risk-something that many payers increasingly consider when calculating reimbursement. It’s important for physicians to ensure that the information they document is as specific and complete as possible, said Terri Thomas, RHIA, clinical documentation specialist in San Leandro, Calif., who spoke during a recent national coding conference.

Accurate and complete documentation ultimately reduces denials, said Thomas. Translation? Physicians 

Unspecified diagnosis codes often wreak havoc on cashflow because many payers simply deny them, said Thomas. “We need to be as specific and compliant as possible. That’s one of the reasons why we moved to ICD-10,” she said.

Thomas discussed these four diagnoses and provided checklists of what physicians should document to avoid denials:

Smoking status, including history of smoking, when applicable

Use of home oxygen, BIPAP, or CPAP, when applicable

With acute exacerbation, hypoxemia, bronchitis, asthma, emphysema, or upper respiratory infection, when applicable

History of myocardial infarction, coronary artery bypass graft, or smoking, when applicable

Medication noncompliance, when applicable

Presence of heart disease, bradycardia, heart block/type, arrhythmia, or diabetes, when applicable

Severity (i.e., acute, chronic, or acute on chronic)

Type (i.e., systolic, diastolic, left, right)

With hypertension or renal failure, when applicable

Manifestations and complications (e.g., nephropathy, retinopathy, osteomyelitis, and vascular disease), when applicable

Presence of secondary diabetes and cause (e.g., due to neoplasm, steroid-induced, or adverse effect of drugs), when applicable

Relationship between diabetes and cellulitis, when present

Exposure to environmental tobacco smoke, when applicable

History of myocardial infarction, coronary artery bypass graft, or any other cardiac condition, when applicable

Relationship with chronic kidney disease, congestive heart failure, or both, when applicable

Tobacco dependence, use, or history of tobacco use, when applicable

Type (i.e., emergency, urgency, or crisis)

Physicians must ensure that they document all conditions that coexist at the time of the encounter that require or affect treatment. Coders are obligated to query physicians when documentation is conflicting, ambiguous, or incomplete, said Thomas. Physicians can mitigate these queries and protect revenue by taking the time to learn the specificity that’s required for code assignment.

Accurate and complete documentation helps physicians avoid denials.

Focus on specificity when documenting these four diagnoses

Many physicians find they are working harder than ever, but end up with less money in their pockets at the end of the year.

Reimbursements have become more complicated as patients struggle with high deductibles and payers require more documentation and often pay less than in the past. Meanwhile, office and staff expenses continue to climb, leaving doctors struggling to increase revenue or cut costs.

“There are all sorts of overhead increases, and if we find a decrease, we jump up and celebrate,” says Jeffrey Kagan, MD, an internist in Newington, Conn., and a member of the Medical Economics editorial advisory board. He’s examined expenses for everything from waste removal to his answering service to the electricity provider for his two-doctor practice in an attempt to save money. “I’ve always tried to look for expenses to cut, but now, it’s even more important. If we have a gap in our patient schedule, I feel like we should go look for more,” he says.

While physicians may prefer to focus their attention on patient care, experts warn that in this economic environment, it’s imperative to carefully analyze expenses as Kagan does and calculate how every business decision can affect overall profitability.

“A medical practice is a business and has to be run like a business with principles and discipline,” says Ken Hertz, FACMPE, principal consultant for the Medical Group Management Association.

The allure of bringing in more revenue can often overshadow how much expense is added to obtain it. Getting more patients through the practice is one way to counter flat or decreasing reimbursements, but if a practice has to add staff to do so, that can eliminate any gains in revenue, says David Howard, MPH, MBA, a principal in Grant Thornton’s healthcare advisory practice.

“Increasing revenue is harder for the small practice because of limited resources,” says Ge Bai, Ph.D., CPA, assistant professor at Johns Hopkins Carey Business School. “Containing costs is usually the most feasible option. In an environment where payers are under pressure to reduce prices, small practices must think about how to control their costs.”

Personnel costs, in terms of salaries and benefits, tend to be the biggest expense for most practices, so experts say it’s a good place to start an analysis. But asking staff members about capacity may not provide an accurate picture.

“You’ll often hear the staff say they are overwhelmed and can’t do any more, so a doctor will throw more money at the problem and add more staff,” says Hertz. “But if you are not managing them well or organizing them well, you may have more people but not necessarily produce better results.”

Instead, look at the processes and workflow the current staff follows and examine what is being done and not being done, says Hertz. If the work not being done produces revenue, then it’s a lot easier to determine if a new person would generate enough money to pay his or her salary.

If the work isn’t easily quantifiable, compare staffing levels to practices with similar revenue levels (staffing data is usually available through professional organizations). If the staffing level is below that of similar offices, it might indicate additional help is justified. If the staffing level is higher, take a closer look at workflows and search for waste in the way the staff is working. For example, maybe the staff is incurring a lot of overtime pay because the practice has extended its hours and nurses, front desk staff, and X-ray technicians are all working until 7 p.m.

“The extended hours may be necessary for the practice, but plan on the extended hours and set up staggered shifts so you don’t run into overtime issues,” says Hertz. An employee might work 9 a.m. to 5 p.m. one day, then 11 a.m. to 7 p.m. on another.

In some cases, providers’ hours may have shifted, but staff hours have not. “Look at your provider schedule,” says Howard. “If two of your four providers are off on Fridays, why do you have a full staff those days?”

He advises thinking about who really needs to be doing the work in a practice. Do RNs handle work a medical assistant could do? Can routine work be outsourced? “There are companies that can do appointment verification-it doesn’t have to be done by the front desk,” says Howard. “They can do it more efficiently than what you could do with one or two staff members.”

When considering a new position, calculate the costs and benefits to determine whether it’s worth adding. For example, if a scribe costs $30,000 per year, but hiring one allows a doctor to see 10 additional patients per week and the doctor works 44 weeks per year, that’s 440 additional patients generating revenue. If the average revenue per patient visit is $150, that equates to $66,000 in new revenue, netting the practice $36,000 in profit, says Hertz.

Nurse practitioners and physician assistants should be evaluated the same way, says Howard. If a nurse practitioner bills at 85 percent of what the physician would be reimbursed but is paid half to a third of what a physician would earn, a practice has to consider that option if it is looking to expand or already has the space available. The additional revenue is worth the expense.

Expenses aren’t necessarily bad, but a practice should look at their return. “The issue is to take your expenses and maximize their ability to generate revenue,” says Hertz. A practice may spend more in overhead than a similar practice, but if the overhead generates more revenue, then it’s well worth it. “It’s not just pure dollars, but how you leverage it to create more money,” he adds.

Office space needs to be closely scrutinized, because it can be a large expense-usually between 8 percent and 15 percent of revenue, says Howard, who notes that exam rooms often are underutilized. “Think creatively on where you are spending your time,” he says. “If you have three extra exam rooms, maybe you don’t need another partner, but allow another physician to come in and use the space.”

Coding can represent both expense and revenue. It costs money to have it done right, but doing it wrong can result in missed revenue. Howard says it’s imperative that practices not only ensure their evaluation and management coding is accurate, but also in line with industry benchmarks.

“What is sometimes lost on small practices is knowing where providers fall within their peers in their specialty,” says Howard. If a practice falls on the high end of the curve, there may be some compliance risk. If the provider falls on the lower end, it may be an indicator that visits are being coded too low and the practice is losing revenue.

He also recommends practices have a third-party service conduct some chart audits to ensure compliance and appropriate billing levels to assure the practice is maximizing its revenue.

Collection practices are worth reviewing, because patients are responsible for an ever-greater share of their healthcare payments and are notoriously less reliable than insurance companies when it comes to paying on time. “If you are only getting $100 a visit and $20 of that comes from the patient, you can’t ignore it,” says Howard. “Most practices are not as focused on this as they should be.”

Not only should physicians ensure their practices are collecting any money due at the time of visit, they also need to invest in ways of making it easier for patients to pay their bills, such as through an online portal, says Howard.

“There are good tools out there that can help automate tasks like insurance verification and automate payments and help with patient throughput,” he says. “If you are trying to make it in the tough world of small private practice, you have to embrace different models and efficient technology and services that are out there. You have to also be a doctor of technology.”

Practices need to benchmark their financial performance to survive, says Hertz. “But don’t benchmark to the industry average,” he says. “Do you get up in the morning and say, ‘Gee, I hope I can be an average doctor today?’ Push to see how good you can be.”

Internal benchmarking should include monthly revenue and expense levels so practice physicians can make year-to-year and month-to-month comparisons. “Look at the trends,” says Hertz. “Are they going up or down and why? Learn what the numbers are telling you.”
But physicians should also benchmark their practice externally so they know how they compare. “You may be doing better than you did last year, but if your numbers are way off what others are doing, you may have a serious problem,” he notes.

Howard says software tools are available for around $1,000 that can provide practices  all the financial analysis they need. Tools such as Qlik, Birst, and Tableau, tie into existing software databases to generate dashboard reports that can help doctors make better financial decisions.

“Look at this as a challenge and an opportunity to have fun with it instead of getting frustrated and agonizing about it,” he says.

While physicians may prefer to focus their attention on patient care, it’s imperative to carefully analyze expenses and calculate how every business decision can affect overall profitability.

The profit equation: Stop struggling to make money

Patients are taking more control over their healthcare costs. From seeking price transparency for procedures to going online to search for the least expensive prescription, they are firmly in the driver’s seat today.

However, like any driver, proper caution can avoid a major disaster. And right now, the healthcare highway is a dangerous place for many Americans … and it could get worse.

Eight years ago, when the Affordable Care Act became law, the nation’s physicians were introduced to marketplace (or insurance exchange) plans. The goal? To save consumers money by letting them shop for what they believe is the right level of coverage for their healthcare needs at a price they could afford. The power of the healthcare dollar put right in the hands of consumers.

For patients, a less expensive plan often meant higher deductibles, copays, and costs for needed prescriptions. For physicians, tracking plan eligibility was a nightmare, turning them into insurance salesmen, explaining coverage and altering treatment plans. Since then, enrollment has ebbed and flowed, premiums spiked, and costs rose for many seeking coverage.

Fast forward to today and the new “association health plans.” Seen by the Trump Administration as the answer to those Obamacare-induced high prices, the plans allow small businesses to join together to obtain coverage as a de facto single employer.

Many also see this as a way around the administration’s failed attempts to cut essential benefits from required health plans. The nation’s payer association-America’s Health Insurance Plans-warns that consumers may purchase association plans without knowing that they don’t offer these essential benefits.

The American College of Physicians is one of many physician groups that has voiced its concern that cheaper plans may offer fewer benefits.

What could possibly go wrong? I mean, besides destabilizing the insurance markets in some regions, causing premiums to skyrocket, and leaving individuals with large medical bills?

It’s 2018. Healthcare is politics as it was in 2010. That doesn’t mean making the same mistakes under a new name.

Patients-and physicians-deserve much better. All Americans must have better healthcare coverage that meets their financial means. The nation’s doctors need more avenues, not obstacles, to improve patient care. They shouldn’t have to navigate myriad cut-rate plans and find workarounds to much-needed treatment.

Washington, D.C., should be focused on providing better solutions to take care of its citizenry, not fighting over who had the better bad idea.

Patients-and physicians-deserve much better.

July 25, 2018 edition