1. Enhancing Services to New and Existing Physician Clients Suzanne Denzine, CPA, CHCC sdenzine@KolbCo.com

2. www.KolbCo.com Your Presenter Suzanne Denzine, CPA, CHCC –Shareholder and Health Care Consultant –Expertise in operations and personnel management, physician compensation arrangements, business analytics, HIPAA regulations and assessments, OSHA compliance, fee analysis, compliance programs, physician/hospital relationships, third-party payer contracts and negotiations, and practice start-ups

3. www.KolbCo.com In Addition to Physicians… Expand your definition of Health Care owners/stakeholders –MDs, DOs, Behavioral Health Practitioners –Advanced Level Practitioners (NPs and PAs) –Dentists –Veterinarians

4. www.KolbCo.com Why I Don’t See Value in My CPA From the client perspective –Current on upcoming Health Care reform issues –Proactive planning ideas included with financial statements not just historical financial data –What are the numbers telling me? –Value of service not demonstrated

5. www.KolbCo.com How to Enhance My Services to New or Existing Medical Clients? Add value to existing services Understand their Revenue Cycle challenges; be proactive Additional “Specialty Services” to consider for building on your health care niche

6. www.KolbCo.com Current Services Change Management –2012-2013 substantial changes occurring in health care SGR - Potential Medicare reduction in reimbursement rates again for 2013 –How will practices be able to absorb a 30% reduction in Medicare reimbursement? –Commercial payers fee schedules at less than 100% of Medicare reimbursements Implementation of electronic medical records –How practices meet 1 st stage meaningful use in 2012 or 2013

7. www.KolbCo.com Current Services Change Management –Health care consolidation choices –Requires in-depth knowledge Of the organization Of the health care industry Of the medical practice model –Knowledge-base to work through changes in critical parts of a practice

8. www.KolbCo.com Current Services Look for other ways to add value –Do you review the financial reports with your clients in person? –Are your statements presented in a format specific to medical practices? –Is a production analysis report part of your business analysis? Example: provide gross and net collection rates global and by provider

9. Polling Question

10. www.KolbCo.com Management with SMART Ideas SSystems MManagement Outsourcing AAccounts Receivable RRevenue Cycle TTargeting the low hanging fruit

11. www.KolbCo.com Management with SMART Ideas SSystems –EMR systems –Recall systems –Collections fees –Desktop power station

12. www.KolbCo.com Management with SMART Ideas MManagement Outsourcing –Be an adviser on what is right for a practice –Is there a right answer? –Examples: Coding expert Business analytics consulting Cost accounting Transcription

13. www.KolbCo.com Management with SMART Ideas AAccounts Receivable –Basic Tenets of a Good Collection Strategy Developed written financial policies Verify patient’s insurance coverage Set clear expectations Collect at time of service Make easy and convenient to pay Offer flexible payment options Create team responsibility and incentive to collect

14. www.KolbCo.com Management with SMART Ideas –What are the benchmarks that count? Net collection rate –99% or better is a STAR Days in A/R –Under 35 days in total is a STAR Exhibit A

15. www.KolbCo.com Management with SMART Ideas

16. www.KolbCo.com Management with SMART Ideas RRevenue Cycle –Is a practice leaving money on the table? Managed care contract analysis Payer mix, service codes Constantly changing payer requirements Missing patient encounter information

17. www.KolbCo.com Management with SMART Ideas TTargeting the low hanging fruit –Staffing per FTE physician vs. provider –Co-payment collection rates –Surgery deposits prior to the encounter –Denial percentage Scrubbers/PPM prior to submitting to insurance Knowledgeable coding staff

18. www.KolbCo.com Industry Benchmarks Available through the MGMA and other outside sources –RVUs by specialty and geographic area –Production, Cost and Compensation data –Overhead (See Exhibit B) –Revenue Cycle

19. www.KolbCo.com Industry Benchmarks Exhibit B

20. www.KolbCo.com The Business of Medicine Incorporate financial statement format aligned to the health care practice (see Exhibit C) –Income tax basis –Health care nuances –Owner/Doctor segregation

21. www.KolbCo.com Exhibit C The Business of Medicine

22. www.KolbCo.com Flaws in the Analysis Bundling of owners’ benefits into operating cost Comparative analysis missing from the financial statements

23. www.KolbCo.com Overhead Analysis Personal costs Practice development costs Malpractice practice insurance Bank Charges Staffing/Benefits Rent Computer service related expenses Repair & maintenance expenses Miscellaneous expenses Other income

24. www.KolbCo.com Developing New Specialty Services Add value to services Services independent of one another Identify additional skill sets/tool box –Employee benefit costs –Forensic accounting analysis –Internal control analysis –Revenue cycle system analysis –HIPAA privacy & security assessments

25. Polling Question

26. www.KolbCo.com Merging Medical Practices Consolidation in the independent physician group practice to: –Specialty groups merging (Ex., cardiologists, cardiac surgeons and electro physiologists or ortho with physiatry and podiatry) –Larger, multi-specialty groups –Hospital system purchase –Accountable care organizations

27. www.KolbCo.com Merging Medical Practices Reasons –Accountable care organizations benefits and organization –Lower payer reimbursements –Payer contracting efficiencies Payment methodologies –Fee for Service –Episodic payments

28. www.KolbCo.com Merging Medical Practices Reasons –Overhead cost reductions Eliminate duplication of services and site costs Gain multiple service discounts (malpractice insurance etc.) –Issues Site(s) maintain or eliminate Governance Personnel reduction Production and profit distribution formulas

29. www.KolbCo.com ACO/MSO/IPA Formation/Utilization Accountable Care Organizations –New type of organization Members can be health care organizations and/or employed physicians, independent providers –Addresses accountability for new HC reimbursement type(s) Episodic care reimbursement (global payment inclusive of all care provided) –Quality initiative components

30. www.KolbCo.com ACO/MSO/IPA Formation/Utilization Accountable Care Organizations cont. –IPAs (Independent Physician Associations) Many merging to ACO structure Primary purpose of IPAs are: –Payer contracting –Quality Initiatives w/ Medicare or other commercial payers –Service arrangement cost reductions –Provider system support »PM system »EMR system

31. www.KolbCo.com ACO/MSO/IPA Formation/Utilization MSO (Managed Service Organizations) –Specialty specific –Payer contracting –Not as viable in the current insurance environment

32. www.KolbCo.com Adding a Physician or Other Ancillary Staff Basis for –Volume expansion New sites Payer or service areas –Expansion into another service Ex. Ortho - foot & ankle –Next generation Owners are five or less years to retirement

33. www.KolbCo.com Changing the Physician Compensation Formula Reasons for change –Fairness –Current formula is not working –Stark provisions –Other client service issues

34. www.KolbCo.com Changing the Physician Compensation Formula Factors in change –Base formula factors; shared vs. direct compensation and expenses Managing physician director –% change in baseline factors 90/10 to 70/30 equalization Meeting Stark provisions for ancillary services Volume considerations –Maximum OH allocations

35. www.KolbCo.com Changing the Physician Compensation Formula Factors in change –Initiating more factors on compensation on quality indicators, patient satisfaction and achieving certain disease quality indicators –Adding Quality metrics RVU compensation models

36. Polling Question

37. www.KolbCo.com Office Sharing with Another Practice Assist a small practice to establish an office with a shared overhead arrangement Assist the client with analysis of the shared overhead arrangement Establish the shared space

38. www.KolbCo.com Implementation of EMR EMR implementation activity increasing due to government incentives Practices need assistance with planning and project management

39. www.KolbCo.com Make Stakeholders out of the Employees Driven by management –Promote TEAM environment Merit bonus plans vs. COL increases Mission statement driven Patient quality and service areas –Patient surveys can facilitate the review –Hotline for patient complaints

40. www.KolbCo.com Help Build New Revenue Opportunities Practice areas –Use of EMR Meet Meaningful Use attestation for incentive bonus –Adding physician extenders –Review specialty specific competitors Ob/Gyn; weight loss clinic Acupuncture; healing center (cancer treatment etc.) Ortho; add OT/PT, podiatry etc

41. www.KolbCo.com Review and Implementation of Practice Internal Controls Separation of Duties –Controls in systems Dual access and management Limitations on access Time off requirements; require staff to take vacations –Workflow analysis and access Determine weak areas in controls –Work with CPA to monitor and provide business physical

42. www.KolbCo.com Look for Signs of Financial Problems Declining revenue current and over time Payer mix analysis No show rates Patient seen rates per day/provider A/R days outstanding increasing or higher than specialty specific benchmarks Prior authorization issue; UHC/Humana

43. www.KolbCo.com Are You Taking Care of the Physician’s Personal Finances? Risk management; insurance review Retirement plan options Wealth management Tax planning –Huge for 2013 and going forward

44. www.KolbCo.com Examples of Specialized Service Physician compensation structure Billing revenue cycle audit Practice start-ups Practice on-going management Compliance plan development or update Strategic planning Shareholder code of conduct HR services; recruitment

45. www.KolbCo.com Examples of Specialized Service HIPAA Privacy and Security assessments Technology deployment Employment agreements Buy/sell agreements Structuring buy-in/buy-out Merger and acquisition analysis and facilitation Practice valuations

46. www.KolbCo.com Practice Management Reports CPA prepared –A/R analysis –Provider analysis –Service line revenue/cost analysis PM: dashboards –Daily A/R reports –Denial rates –Referral base tracking reports

47. www.KolbCo.com Clinical Encounters Documentation and compliance Utilizing extenders Continuity of care

48. www.KolbCo.com Provider Work RVUs Portion of Medicare and other payer reimbursement formula Used in physician compensation formula Provider production analysis

49. www.KolbCo.com Referring Doctor Trends How do new patients get referred to the practice? Do you know? Is reporting available? Why are referral patterns important?

50. www.KolbCo.com Organizations to Join HCAA (National CPA Health Care Advisors Association) PVN (Physician’s Viewpoint Network) MGMA (Medical Group Management Association) State MGMA associations HIMSS (Health Information and Management Systems Society)

51. www.KolbCo.com Keys to Success Look for ways to add value –Go beyond the numbers Look for opportunities that can be replicated in other practices –Compliance plan Make your health care niche known –LinkedIn, Twitter, Facebook page etc. –Form an advisory group of professionals for your area – quarterly meetings

52. www.KolbCo.com Questions and Answers Thank you! Sue Denzine –sdenzine@KolbCo.comsdenzine@KolbCo.com 800/461-8843 www.KolbCo.com