“Should I join?” “Should I stay?” “Should I go?” A Look Into Three Viewpoints of...
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“Should I join?” “Should I stay?” “Should I go?” A Look Into Three Viewpoints of Alignment Ramona Osborne, CMPE Surgical Practice Preconference October
Should I join? Should I stay? Should I go? A Look Into Three
Viewpoints of Alignment Ramona Osborne, CMPE Surgical Practice
Preconference October 6, 2013
Slide 2
Learning Objectives Understand key factors in the alignment
decision process Avoid common pitfalls when undertaking your
desired alignment strategy Identify practical steps that will
improve physician satisfaction during implementation of your chosen
strategy
Slide 3
Ohio Valley Surgical Specialists
Slide 4
Should I join? Practice Profile Ohio Valley Surgical
Specialists Eight surgeons and one physician assistant General,
thoracic, and vascular surgery In-house ICAVL accredited vascular
laboratory Governance: Board of Directors, Managing Partner,
Executive Director Compensation - 100% productivity Implemented
EPIC EMR in October 2011 MGMA Better Performing Practice for four
consecutive years The roots of the practice extend back to the
early 1920s
Slide 5
Should I join? Market Description 8 out of 9 general surgeons
in primary service area employed by Ohio Valley Surgical
Specialists One acute care hospital in primary service area
Slide 6
Should I join? Internal Assessment
Slide 7
Should I join? External Assessment Passage of the Affordable
Care Act Evolution of State Health Exchanges No long term SGR fix
Surgeon shortage Call burden Certificate of Need restrictions
Slide 8
Should I join? Preparation and Negotiation Decision support
Options for affiliation and best fit for group Strategy - This is a
marathon, not a sprint. Staff communication Timeline The vote
Pitfalls and frustrations Role of outside advisors (attorney,
accountant, etc.)
Slide 9
Should I join? Integration with the IDS Governance Compensation
model Role of the administrator Staff How will we measure success
going forward?
Slide 10
Lessons Learned What I wish I knew then Positive outcomes
Negative outcomes Impact on referrals Staff turnover Surgeon
satisfaction If I had to do it all over again...
Slide 11
Contact Information Ramona Osborne, CMPE Director of Managed
Care Owensboro Health 270-685-7590
[email protected] www.owenborohealth.org
Slide 12
Should I Join, Should I Stay, Should I Go? A Look into Three
Viewpoints of Alignment Strategies for Maintaining an Independent
Surgical Practice John P. Berlin, MBA, CMPE Chief Executive
Officer, North Florida Surgeons, P.A. Presented at: MGMA Annual
Conference, October 6, 2013, San Diego, CA
Slide 13
13 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Learning Objectives Understand the key factors in the alignment
decision process Avoid common pitfalls when undertaking your
desired alignment strategy Identify practical steps that will
improve physician satisfaction during implementation of your chosen
strategy
Slide 14
14 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
North Florida Surgeons - Background - Providers Founded in 1996 as
a physician-owned General Surgery practice Single specialty
1996-2008 Multi-specialty as of 2008 with over 40 surgical
providers in 2013 (General, plastics, hand, otolaryngology,
ophthalmologic) Revised Group Strategy/CEO Hired
Slide 15
15 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
North Florida Surgeons, P.A. Background Service Area North Florida
Surgeons Office Locations Service Area 1996 - 2008: (purple circle)
Service Area 2008 - 2013 : (green line )
Slide 16
16 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
North Florida Surgeons- Background Service Lines and Corporate
Structure Comparison Group model 1996 - 2008: General Surgeons only
Ad Hoc growth Shareholders responsible for all votes Compensation
is 100% productivity Shared expenses on a fixed/variable model.
Seven divisions/offices in three health systems ER call PM system
only (MEDIC/Athena) Group model 2008 on: Multi-specialty surgical
with PAs Managed growth Executive Committee as key leaders
Compensation is 100% productivity Shared expenses on a
fixed/variable model. 20 divisions/offices in five health systems
ER call, trauma call, surgicalists PM/EMR (Allscripts Enterprise)
Attested for Meaningful Use in 2011 Hospital and lab
interfaces
Slide 17
17 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Factors Driving Physician Mergers or Acquisitions Regulatory
Impacts: PPACA CMS fee reductions CMS compliance ACOs 4010/5010
conversion ICD-10 Payer Impact: Rate squeeze on smaller groups
PPACA clinical cost component Employer retrenchment
Slide 18
18 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Factors Driving Physician Mergers or Acquisitions (cont.) Physician
Specific Issues: Physician recruiting and doctor shortages
Work/life balance issues Physician strategic vision and business
savvy Desire to avoid the day to day business hassle Advice from
business advisors Market Conditions: Hospital attitude towards
physician acquisition/hospital finances Number of large groups in
the market, region or state Scale and Scope issues Referral
re-alignment: Health system acquisition of referral sources
ACOs
Slide 19
19 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Factors Driving the Independent Physician Model Surgeon Mindset:
Physician ownership and entrepreneurial Compensation is
productivity driven Lead Huskies RVU productivity and compensation
above average Merged/acquired practices are same mindset as base
group Hospital/physician relations: Collaboration vs. competition
Running successful programs (trauma, surgicalist, co-management)
Alignment of surgeons to health systems Surgeons holding key
hospital leadership roles
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20 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
The Physician Alignment Decision Making Process Be proactive:
Conduct research into your alignment options varies by region and
specialty Review your Vision, Mission and how those align with the
available options Develop your roadmap for the short, medium and
long term Look at back up options if the primary option is not
feasible Open up dialog with all potential partners
Slide 21
21 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
The Physician Alignment Decision Making Process (cont.) Determine
if you will be an acquirer or be acquired: Do you have the culture
to align? Determine your best fit potential partners or suitors Do
you have the resources for alignment, or will your partner provide
them? Is the best partner a physician group, insurance carrier or a
health system? You may not be a fit with anyone in the market
Slide 22
22 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Steps to a Successful Group Integration Clear governance policy:
Mergers of equals rarely work need a clear leadership team in
charge Consistent surgeon contracts and shareholder paths
Merged/acquired practices must have the same mindset/culture as the
core group Avoid pyramid schemes Understand mergers take time may
be measured in years! Manage the four key naysayers from the
acquired group: Accountants Lawyers Consultants/vendors Office
managers
Slide 23
23 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Steps to a Successful Group Integration (cont.) Clear value
equation: Why should they join YOUR group? Determine the mergers
impact on existing relations with hospitals, insurance carriers and
referral sources Can you show that the benefits (particularly
financial) outweigh the costs for both sides? Sounds great but
payer contracts may prohibit! Corporate indebtedness: Assign and
allocate existing debt of acquirer and acquired groups up front
Make sure existing tax liability or NOLs are allocated Put
everything in writing!
Slide 24
24 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Steps to a Successful Group Integration (cont.) Aligning benefits:
Is your benefit program provide more attractive cost costs and
coverage? Profit sharing and/or pension plan Long term disability
policy Compensation Models: Must be agreed upon in advance
Productivity alignment with a shared ancillary revenue approach
Clear expense allocations Review for Stark and regulatory
compliance
Slide 25
25 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Steps to a Successful Group Integration (cont.) Risk management:
Ensure corporate structure supports an asset protection scheme
Ensure Medical Malpractice risk is either confined or accepted Exit
Options: Policies are clear and consistent. Non-compete policy is
set by contract and agreed by all Termination, retirement and/or
buy out clauses strict or lax? Make sure tail policies are
defined
Slide 26
26 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Practice Merger Project Management Steps 1.Negotiations
2.Credentialing 3.Human Resources 4.Payroll 5.Banking and
Accounting 6.Practice Management System 7.Technical review
8.Electronic Health Records
Slide 27
27 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Tips for Maintaining Surgeon and Administrator Sanity Physician
Champions smooth the path: Both the acquired group and the acquirer
must have administrative and physician champions to make sure the
integration succeeds. Get buy in up front for the acquisition from
both practices and make sure physician champions continue to
express the value of the merger Show your integration checklist to
the physician champions and get their buy in. No surprises! Make
sure the new physician group champion has immediate feedback (as
diplomatically as possible) if the naysayers are slowing the
process Consider inviting the new surgeons to shareholder or other
group meetings, but keep the personalities and meeting agenda in
mind
Slide 28
28 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Tips for Maintaining Surgeon and Administrator Sanity (cont.)
Administrators Dont forget your existing practice: Make sure you
hire coders, claims analysts, payment posters, bookkeepers, and
other business office staff with plenty of lead time to train and
shake out they may fail in their probationary period Keep a close
watch on the revenue cycle Watch out for signs of stress on current
staff many have never worked on a merger When integrating business
office staff from the acquired group, be ready for culture clash
and shake outs When successful, make sure your physicians
understand the value of your team: Develop a bonus pool for the
acquisition Awards and recognition events
Slide 29
29 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Tips for Maintaining Surgeon and Administrator Sanity (cont.)
Administrators Have a plan for the integration: Have the existing
shareholders ensure the administrator role is extremely clear Set
expectations for your timeline and meet or exceed them If you have
documents that need to be reviewed and sign, have those ready as
soon as possible If you think you can go live with PM and EMR at
the same time, think again Do not get into battles with an acquired
groups administrative staff use your physician champions This is
your real job interview with the new doctors set expectations up
front and be a rock star!
Slide 30
30 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Summary Understand the key factors in the alignment decision
process Avoid common pitfalls when undertaking your desired
alignment strategy Identify practical steps that will improve
physician satisfaction during implementation of your chosen
strategy
Slide 31
31 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Contact Information John Berlin, MBA, CMPE Chief Executive Officer
North Florida Surgeons, PA Telephone: 904-396-1725 E-mail:
[email protected]
Slide 32
32 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Practice Merger Tips Handouts 1.Negotiations: a)Conduct due
diligence on acquired group b)Search on medical licenses, DEA, OIG,
etc. c)Have sample contract ready on day one. Explain that no
deviations are possible d)Allocate 60 days to years (!) for this
process 2.Credentialing: a)Get credentialing information before
contract signed and documents ready before contract signatures are
dry. Consider acquiring automated software to handle large volumes
of applications b)Validate malpractice policies c)Include website
policies and prepare website bios and photos d)Allocate 90-120 days
3.Human Resources: a)Provide employee handbook and brief on
benefits b)Significant paperwork required to bring on new offices
including health, dental, vision, disability, life and other
insurances, property and casualty policy, voluntary benefits,
pension or profit sharing plan, employee handbook receipt,
arbitration policies, etc. c)Allocate 30-60 days
Slide 33
33 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Practice Merger Tips Handouts (cont.) 4.Payroll: a)In concert with
HR on-boarding, complete W-4s, I-9s, background searches, drug
screening (if a drug free workplace) b)Determine policy in advance
for PTO accruals and grandfathering of hire dates c)Allocate 30-60
days for this process 5.Banking and Accounting: a)Notify bank and
lockbox for payments b)Set up on credit card and check processors.
Acquire card readers/machines c)Walk physicians and office managers
through financial policies including accounts payable policies,
refunds and write offs d)Make sure office managers are aware of
cash and insurance policies, including posting e)Allocate 30-60
days 6.Practice Management System: a)Add physicians and departments
and set up provider schedules b)Add/validate most used carriers
c)Demographic conversion with vendor (if required) d)Set up
training time and system process e)Allocate 60-120 days
Slide 34
34 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con
Practice Merger Tips Handouts (cont.) 7.Technical review: a)In
concert with all other steps, determine acquired group network
compatibility with all systems b)Order equipment as needed c)Set up
on e-mail, secure text, remote users, firewall configuration,
insurance carrier sites, and hospital CDR access for claims
representatives, etc. d)Allocate 30-60 days for this process
8.Electronic Health Records: a)Set up walkthroughs and demo for
physicians and staff. Show existing forms in the system and compare
with acquired group notes and forms b)Determine what will be
converted from existing EMR c)Add providers to eRx, CMS, PQRS, MU
reporting, hospital and lab interfaces d)Interview physicians and
set up note templates e)Set up transcription or Dragon f)Set up
patient portal g)Set up training sessions for physicians and staff
h)Allocate 120+ days
Slide 35
Should I Join, Should I Stay, Should I Go A Look Into 3 Points
of Alignment John P. Sano Practice Administrator / Director of
Finance The Vascular Group 518-262-4339 [email protected]
www.albanyvascular.com
Slide 36
THE VASCULAR GROUP the whole is greater than the sum of its
parts 19 BOARD CERTIFIED VASCULAR SURGEONS Located in Upstate New
York 13 HOSPITALS 10 ANGIO SUITES 1 Outpatient Angio Facility owned
by Group 1 64 slice CT Scanner owned by Group 10 VASCULAR LABS
(including Mobile Labs) Independent Research/Education Foundation
131 Employees
Slide 37
Slide 38
How We Function Team approach Pairs/Multiple surgeons in the OR
cases done expeditiously and safely keep the surgeons fresh
everybody asks for help Shared responsibility Minimizes stress
Objective assessment of results Continuous self assessment
Slide 39
HISTORY 1990- 1990- Albany Medical Center Albany Medical Center
Clinical Departments Clinical Departments AnesthesiaOphthalmology
AnesthesiaOphthalmology OB/GYNEmergency Medicine OB/GYNEmergency
Medicine NeurologyPediatrics NeurologyPediatrics MedicinePsychiatry
MedicinePsychiatry Family PracticePM&R Family PracticePM&R
Surgery Surgery General, Trauma, Urology, Vascular, etc. General,
Trauma, Urology, Vascular, etc.
Slide 40
HISTORY 1998 1998 Albany Medical Center Albany Medical Center
Faculty Practice Plan (FPP) Faculty Practice Plan (FPP)
AnesthesiaOphthalmology AnesthesiaOphthalmology OB/GYNEmergency
Medicine OB/GYNEmergency Medicine NeurologyPediatrics
NeurologyPediatrics MedicineVascular MedicineVascular Family
Practice Family Practice Surgery Surgery General, Trauma, Urology,
etc. General, Trauma, Urology, etc. Establishment of The Institute
for Vascular Health and Disease Establishment of The Institute for
Vascular Health and Disease
Slide 41
Role of Administrator Financial and Operational Director of the
Department Financial and Operational Director of the Department
Worked under the Governance of the Faculty Practice Plan Worked
under the Governance of the Faculty Practice Plan Reported to Dept
Chair and DOO of FPP Reported to Dept Chair and DOO of FPP
Facilitated needs and issues of MDs and Department through the
Hospital channels Facilitated needs and issues of MDs and
Department through the Hospital channels Oversight of multiple
departments Oversight of multiple departments
Slide 42
COMPENSATION MDs contracted under Medical College MDs
contracted under Medical College Reported to Dept. Chair and Dean
of Medical School Reported to Dept. Chair and Dean of Medical
School Received Faculty Appointments Received Faculty Appointments
Salaried by Faculty rack Salaried by Faculty rack Bonuses
negotiated by Dept Chair with head of FPP and Dean Bonuses
negotiated by Dept Chair with head of FPP and Dean Based on
individual productivity and overall performance of both the
Department and Faculty Practice as a whole Based on individual
productivity and overall performance of both the Department and
Faculty Practice as a whole
Slide 43
How Does One Decide? Benefits under Hospital Benefits under
Hospital Fiscal security Fiscal security Share technical revenue
Share technical revenue Less Administrative Pain Less
Administrative Pain More Insulated Life More Insulated Life
Benefits of Independence Fiscally Independent More Leverage Outside
Venture Options Separate Pay Scales More Control of Staff Potential
Improved Collection Better 401K Plans No Restriction of
Practice
Slide 44
Independence vs Security
Slide 45
How Does One Decide? What Are Your Needs? What Are Your Needs?
What is the Political Environment Competition, Leverage, Community
Needs What is the Political Environment Competition, Leverage,
Community Needs What is Important (Independence vs Stability) What
is Important (Independence vs Stability) Cohesive Group or
Individual Practices Cohesive Group or Individual Practices What
are the Hospitals Needs What are the Hospitals Needs
Slide 46
Challenges With Independence Must Be Economically Viable Must
Be Economically Viable Must Have Secure Infrastructure Must Have
Secure Infrastructure Must Be Willing To Accept Risk Must Be
Willing To Accept Risk Monitor Fee schedules and Rates Monitor Fee
schedules and Rates Must Have Vision for Impending Change Must Have
Vision for Impending Change Must Establish Alternative (non
clinical) Revenue Must Establish Alternative (non clinical)
Revenue
Slide 47
Why We Left Independence / Growth Independence / Growth Too
many restrictions under the governance of the Medical Center Too
many restrictions under the governance of the Medical Center
Ability to decide where to practice Ability to decide where to
practice Add other Hospital Systems to geographic footprint Add
other Hospital Systems to geographic footprint To become
accountable for Personal income To become accountable for Personal
income High Performance / Low Yield High Performance / Low Yield
Deans Tax based on Net Revenue Deans Tax based on Net Revenue Our
Departmental profits spread over FPP Our Departmental profits
spread over FPP Viewed as undesirable on paper Viewed as
undesirable on paper
Slide 48
Why We Left (cont). Ancillary Revenues Ancillary Revenues
Ability to bill Globally for Vascular Ultrasound Studies Ability to
bill Globally for Vascular Ultrasound Studies Improved Efficiencies
Improved Efficiencies
Slide 49
The Transition Negotiations with Hospital began 2 yrs. prior to
separation Negotiations with Hospital began 2 yrs. prior to
separation PLLC Established PLLC Established Opportunity to
establish our own governance, Operating Agreement, and Compensation
plan Opportunity to establish our own governance, Operating
Agreement, and Compensation plan MD Credentialing MD Credentialing
Hospital Affiliation Negotiated Hospital Affiliation Negotiated MDs
remained on Faculty MDs remained on Faculty PLLC remained on
Hospital Campus via rented space PLLC remained on Hospital Campus
via rented space Source of income to Hospital Source of income to
Hospital Seamless transition for our patients Seamless transition
for our patients Partnership Approach Partnership Approach Non
Partner Employment Contracts Non Partner Employment Contracts
Slide 50
NEGOTIATIONS WITH HOSPITAL Explain How You Can Help The
Hospital System Explain How You Can Help The Hospital System Be The
Best Solution Be The Best Solution Remember Metrics: Data, Cost,
Outcomes, Remember Metrics: Data, Cost, Outcomes, Negotiate
Honestly, Understand The Needs and Biases of With Whom You Are
Negotiating Negotiate Honestly, Understand The Needs and Biases of
With Whom You Are Negotiating Fair Market Value Is Defined By
Defined Tasks Fair Market Value Is Defined By Defined Tasks not by
Volume (Quality Not Just Quantity) not by Volume (Quality Not Just
Quantity)
Slide 51
NEGOTIATIONS WITH HOSPITAL You Will Have to Negotiate One Way
or Another You Will Have to Negotiate One Way or Another Negotiate
from a Position of Power Negotiate from a Position of Power The
Bigger the Group The More Leverage (and the more problems) The
Bigger the Group The More Leverage (and the more problems)
Negotiate with Singular Voice Negotiate with Singular Voice You
Need To Sell a Package You Need To Sell a Package Be Positive and
Constructive (Have a Plan) Be Positive and Constructive (Have a
Plan)
Slide 52
Slide 53
Vendor Search Attorneys Attorneys Accountants Accountants IT IT
Payroll Payroll Insurance Insurance Malpractice401K Malpractice401K
Gen. LiabilityPractice Mgmt System Gen. LiabilityPractice Mgmt
System EE BenefitsBanking Relationships EE BenefitsBanking
Relationships
Slide 54
Role Of Administrator (aka Chief Cook and Bottle Washer) Set Up
Set Up Corporate Infrastructure Corporate Infrastructure Accounting
and Financial Reporting System Accounting and Financial Reporting
System HR System HR System Pay Practices Pay Practices Benefits
Benefits Policy and Procedure Manual Policy and Procedure Manual
Practice Management System Practice Management System Payor
Contracts Payor Contracts
Slide 55
THE VASCULAR GROUP - 2004 D.M. SHAH, MD R.C. DARLING, MD B.B.
CHANG, MD P.S.K. PATY, MD S.P. RODDY, MD K.J. OZSVATH, MD M. MEHTA,
MD P.B. KREIENBERG, MD
How We Keep It Together? Everybody Has To Be Heard Everybody
Has To Be Heard Everybody Has To Work Equitably Everybody Has To
Work Equitably We Are All Responsible For Success We Are All
Responsible For Success Address Conflicts As They Arise Address
Conflicts As They Arise Salary Is A Reflection Of Group
Productivity Salary Is A Reflection Of Group Productivity Nobody Is
Allowed To Leverage Group Nobody Is Allowed To Leverage Group
Slide 59
Philosophy of Our Practice Patient Care Patient Care Group
Orientation Group Orientation All for one and one for all All for
one and one for all Brand the Group not the Individual Brand the
Group not the Individual Hire the best fit Hire the best fit Fiscal
Responsibility to Group and Employees Fiscal Responsibility to
Group and Employees Academic and Research Development Academic and
Research Development Reasonable Lifestyle Reasonable Lifestyle