Optimize Your Practice

Philip Clark, MBA, CMPE

Business Manager, Duke Metabolic and Weight Loss Surgery

Billing and Coding, the Role of Fellows and Physician

Extenders, Band Adjustments and Diversifying

Strategies to Increase Revenue

Managing the Revenue Cycle

Billing and Coding: Revenue Cycle

New Patient Visit

Evaluation

Surgery

Payment

Accounts Receivable

Referral

Pre-

Authorization

Pre-

Determination

Pre-Verification

Op. Notes

Coding

Appeals

Patient Balance

Physician Involvement

=

= +

Pre-Operative Revenue Cycle

If you waited until you received the denial notification to deal with the insurance company, you left it to late!

Front End Management is Key to Successful Revenue Cycle – Optimize all processes prior to the bill being sent

Determine Bariatric Benefits (prior to delivering any services)

[Optimize – Convert to Self Pay]

Match Medical Evaluation Phase to Fit the Insurance Benefits

[Optimize – Personalize the evaluation process to the patients insurance benefit]

Get the right surgical authorization

[Optimize – add all potential procedures to the authorization]

Documentation in Pre-Evaluation Phase and in the OR

[Optimize – make sure that medical decision making and assessments match the actions of the encounters, template where appropriate]

Accounts Receivable

Denial Reason Write Off Billing Correction /

Documentation (Billing)

Appeal

(Physician)

Authorization required X

Services not Covered X

Coverage Terminated X

Medical Records X

More Documentation / Info X X

Medical Necessity X X

Missing / Invalid CPT X X

Coordination of Benefits X

Untimely Filing X

Negotiating Self Pay Package

Negotiate with Hospital

Negotiate with Ancillary Providers

Create Self Pay Contract

• Hospital Prices based-on cost,

including overhead and risk

• Negotiate with other

Professional Providers

• Collect Cash up Front

• Hospital will want new contract

for every patient (particularly for

low volume procedures)

• Remember market value

Physician Based vs Hospital Based

Billing and Coding

ASMBS Sleeve Gastrectomy Coverage Map

ASMBS Sleeve Gastrectomy Coverage Map

http://asmbs.org/2013/03/sleeve-gastrectomy-coverage-map/

Why E&M Coding Matters

Recovery Audit Program [RAC]

CMS: Medicare Fee-for-Service Recovery Audit Program Myths – December 17, 2012

http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Recovery-Audit-Program/Downloads/RAC-Program-Myths-12-18-12.pdf

E&M Coding

Estimate E&M Coding: 14% - 20% of Total Surgeon

Income

Documentation should include:

Reason for encounter and relevant history, physical

exam findings and prior diagnostic tests

Assessment, clinical impression and diagnosis

Medical plan of care

Date and legible identity of observer

If you do not understand E&M Coding, get educated.

Pre Surgical Evaluations

Pre-Operative Visits

E&M visits conducted for pre-operative clearance

are part of the global period of the surgery, even if

they occur 2 – 7 days before the surgery.

E&M visits prior to the surgery are only payable if

directly for the decision for surgery

Global Period

1 Day or Greater Before the Surgery

Pre-evaluation visits for surgical clearance are part of the global period

SURGERY

90 days after the surgery

Part of the global period, unless unrelated to the surgery

91 Days after the surgery

Out of global, part of medical long term follow up

Assistant Surgeons Modifier Title Use Qualifications % Fee

Schedule

80 Assistant Surgeon Assistant Surgeon must assist

through the entire procedure

Assistant Surgeon must work

under direct supervision of

Primary Surgeon and be

involved in procedure

Primary and Assistant must

use same CPT Code, with

Assist appending Modifier 80

M.D., D.O.,

D.M.D, D.D.S.,

D.P.M.

16%

81 Minimal Assistant

Surgeon

Assistant surgeon has limited

or minimal involvement in the

case

Physician assistance during

only part of the procedure

A clinical situation requiring

more than one physician

assistant

M.D., D.O.,

D.M.D, D.D.S.,

D.P.M

13%

82 Assistant Surgeon [No

Qualified Resident]

In a teaching facility, may be

used when a qualified resident

surgeon is not available to

assist

M.D., D.O.,

D.M.D, D.D.S.,

D.P.M

16%

AS Assistant at Surgery Used for non-physician

surgical assistants – primarily

APN / PA

Must have training in the

surgical procedures being

performed

Must be present for the entire

procedure and perform

operational assistance under

the direct supervision of the

Primary Surgeon

C.N.S, N.P.,

A.P.R.N.,

A.P.N.,

R.N.F.A.

13.6%

Deploying Fellows and Physician

Extenders

Physician Extenders and Fellows

B = Billable : X = Non-Billable

PA / NP Income by source

Strategies for Deployment

Pros Cons

Clinical Fellow Can provide most support to the surgeons.

Actively take call, see patients under

supervision, assist in surgery

Least costly, usually come with at least partial

grant funding

Most flexible, can work longer hours

Can act independently to provide general

surgery services

Can only bill in absence of qualified resident

as Assistant Surgeon [81]

Can be a hindrance more than a help, need

training and require closer supervision

Service inconsistent – new fellows every

year

Want to be in the OR more than the Clinic

Physician Assistant Can provide technical support across all

environments, much like a fellow, but less

qualified

Generally less costly than an equivalent NP

Can act independently and bill in clinic and act

as Surgeon Assistant

Hard to find well trained surgical PA

Nurse Practitioner Provide great support for long term follow up

care for patients

Can bill for work in the clinical setting

Great for patient education

Some can perform procedures and can be in

the OR, but surgical NP is extremely hard to

find

Tend to be the most expensive

NOTE: RULES ON PHYSICAN ASSISTANT AND NURSE PRACTIONER BILLING

AND SCOPE OF PRACTICE VARY BY STATE – CHECK BEFORE PROCEEDING

Recommendation on Extender Type

Depends on program and needs:

Academic program > Hire a fellow

Non-Academic Program - Technical Assistance in the OR

> Hire a PA

Clinic support> Hire an NP

OR and Clinic Support> Hire an PA

Incentive Plans for Fellows and Physician

Extenders

Fellow and extenders are assisting in the care of the

patients that you have recruited, and should be

incentivized.

Flat Rate Incentive based on individualized targets

($3,000 - $5,000)

Percent of Net Collections (5%) with a cap

When to Recruit a Physician Extender:

Financial Modeling Considerations

The recruitment decision is a decision based around

opportunity cost:

Opportunity cost is the cost of any activity measured in terms of the value of the next

best alternative forgone (that is not chosen). It is the sacrifice related to the second best

choice available to someone, or group, who has picked among several mutually exclusive

choices

Choice A: Physician Performs the Services and Collects the Income

Choice B: Recruit an Extender to Perform the Services and Collect the Revenue, while

Physician Does some Other Activity

Physician Extender Hiring Decision

Scenario: Based on Real Data at Duke. Physician A perform 175 Roux-en-Y Gastric Bypass and 75 Gastric Bands

Per Year

The new evaluation conversion rate is 70% - so 100 new valuations have to

be performed for every 70 patients

Each patient receives 3 follow up visits in the first year

Each band patient receives 3 adjustments in the first year

Assumptions

5 surgical cases may require 2 OR Days

7 New Evaluations may require 1 Clinic Day

20 Established Patients / Band Adjustments would require 1 Clinic Day

Surgeon Financial Modeling The surgeon passes long term follow up to NP, giving up 750 Established Visits, and 250 band

adjustments – or 1 Clinic Day per week. Replaces with 1 day OR per week, he could reasonable

complete 3 additional OR cases.

NP Financial Modeling

Note: NP Reimbursement for Office Visits = 85% of Physician Provider (estimated at $63 per visit)

PA Financial Modeling

Diversifying Strategies to

Increase Revenue

Diagnostic EGDs: Refer or Manage

Refer:

Can create goodwill with GI (although not a critical referrer of patients).

Endo Suite scheduling not always convenient

Need credentialing to perform Endo in the suite, high risk patients may need to be completed in the OR

Manage:

Additional source for professional fee income, if performed in the hospital setting

$400 - $600 per patient for about 20-45 minutes time

Can be billed in the pre-operative phase if diagnosis supports (commonly GERD)

Ancillary Services in the Provider Setting

Vitamin and Supplement Sales

Pros: Can provide good nutritional support to patients, especially for those on malabsorptive diet.

Income for practice, usually 50% mark up, or potential $15 – 20 per patient per month. $100 patient = $2,000.

Cons: Can be difficult to administer in a large system – make sure you get on consignment

Transnasal Endoscopy

Pros: Provides in office diagnostics for some bariatric complications, GERD, and Hernia [ disposable sheaths]

Income for the practice can be reasonable, estimated at $260 per case, need to perform about 100 cases for break even on equipment and supplies

Cons: Not well tolerated by patients, difficult to find suitable patients

Intra-Operative Services

Intra-Operative EGD billing

Usually considered part of the operative procedure, if

used to “check” anastomosis

Can be used for diagnostic if unrelated to primary

procedure, common diagnosis “esophagitis”

Medical Necessity must be documented

Liver Biopsy

Must document the reason for taking a liver biopsy

Can be used for “fatty liver”

Post Bariatric Concierge Services

Exercise Physiology

Usually will involve employing the services of a exercise trainer with some medical background to develop individualized training regimens

Nutritional Consulting

Requires nutritional counseling on an ongoing bases from a dietician

Focus Groups

Provide long term support groups for the well being of the patients

PROs: Great for long term patient satisfaction and can improve outcomes

CONS: Hard to sell in a down economy, difficult for surgeons to make money – need to pay the ancillary providers.

Hospital Revenue On Call Compensation

Hospital Requirement (Bariatric Service)

Per Call Day Rate

Reimbursement Per Case for Uninsured/Underinsured

Medical Director Stipend

Reimbursement for administrative duties related to managing the program and participating in hospital required functions. Usually reimbursable at fixed annual rate [$25,000 - $50,000]

Service Line Co-Management

Reimbursement for managing the entire service line (surgical and related specialties) and includes much more involvement in business decisions related to the program. Contracts can be flat rate, and/or incentivized for improvements in efficiency, quality and financial metrics.

Non Surgical Physician Providers Endocrinology Base Sal. $180,000 [Partner]

PROS: Congruence with surgical practice for diabetic patients, can attract more diabetics, and generate more patients

CONS: Thrive of inpatient hospital setting, may not be ideal in ASc, low income specialty, income primarily derived from long term treatment – remission of diabetes could be a conflict

Psychiatry Base Sal. $200,000 [Buy – Hospital]

PROS: Absolute requirement for clearance of patients, may be option to employ

CONs: Can cause throughput issues if they become overwhelmed with patients, visits take much longer. Not all insurers reimburse the evaluation (Medicaid)

Bariatrician Base Sal. $150,000 [Buy – Practice]

PROs: Can provide higher level of post op care than a non-physician provider (NP/PA). Can develop an ancillary medical weight loss business for low BMI patients, and assist recruiting higher BMI patients

CONs: Bariatrician could compete for same obese patient population

Financial Outlook for Bariatric

Surgery

Tiered-Hospital Networks

Movement by the insurance companies to sensitize employees to the real cost of health – use tiered networks to drive down cost and increase quality Tiered Networks for Hospital and Physician Health Care – EBRI Issue Brief #260

Blue Select is a new “tiered benefit” health plan that can save employers as much as 10 percent* compared to traditional PPO plans. BCBSNC used its provider relationships, claims data and expertise to organize in-network hospitals and selected specialists (general surgery, OB/GYN, cardiology, orthopedics and gastroenterology) into two tiers based on quality, cost efficiency and accessibility. This product includes the following benefit levels:

Tier 1 represents the hospitals and selected specialists that receive BCBSNC’s top rating for clinical quality outcomes, cost efficiency or accessibility. Consumers pay less out-of-pocket costs when visiting a tier 1 provider compared to a tier 2 provider.

Tier 2 represents the remaining network hospitals and specialists that reach BCBSNC’s high standards for clinical quality outcomes and/or cost efficiency. Customers pay more to visit these providers

New BCBSNC Products Offer Cost Savings for Individuals and Employers

http://mediacenter.bcbsnc.com/pr/bluecross/new-bcbsnc-products-offer-cost-241718.aspx

Narrow Networks

Limited coverage products that will likely match the

EHB and offer limited benefits to employees and

employer groups.

Insurance Industry is preparing to enter the Health

Insurance Exchange in 2014, and they bring 150

million Americans with them

2010 – Narrow, Tiered Products accounted for 16% Market

2011 – Narrow, Tiered Products accounted for 20% Market

Affordable Care Act Population

Health Care Reform: EHB

Each State is required to have a Essential Health Benefits

(EHB) Plan that will form the basis of insurance plans in the

Health Insurance Exchanges (HIE)

The EHB is a federal or state-mandated minimum scope of

coverage that all health insurers in that market must

include in their plans. States can choose Federal EHB or to

opt for a state EHB, which must be based on the coverage

offered plan’s currently offered by the 3 largest small group

plan’s in the state.

Uninsured patients will receive tax credits to buy affordable

insurance from the exchange

Outlook Summary

The outlook depends on whether Bariatric Surgery is

included in State EHB Plans as this will set the bench

mark for commercial insurance narrow tiered plans.

Yes = 50 million more Americans will qualify for

surgery

No = more insurance products on the private market

with narrow tiers, which will exclude bariatric surgery

and therefore there will be less patients