American Academy of Ophthalmic Executives®
The Profitable Retina Practice: Unlock Strategic Growth and
Profitability SPE 20 - Oct. 11, 2019 South, Room 211 | 1:30 to 4:30
p.m.
Moscone Center | San Francisco, CA
AMERICAN ACADEMY
OF OPHTHALMOLOGY®
Presented by:
Co-instructors Richard J. Connelly, CEO
Sean D. Goodale, CPA, MBA
AAOE Program I Friday, Oct. 11, 2019 I San Francisco, CA
Moscone Convention Center I 1:30 - 4:30 p.m. I South, Room
211
Protecting Sight. Empowering Lives."'
AAOE 2019 | Master Class Presenters Joy Woodke, COE, OCS, OCSR
Practice Administrator — Oregon Eye Consultants LLC
Joy's 30+ years of experience in ophthalmology includes all aspects
of practice management, accounting, coding and billing. Joy is the
author of The Profitable Retina Practice series, a contributing
author of the Academy coding product line, and recipient of the
Academy's Secretariat and Achievement Awards.
Richard J. Donnelly Chief Operating Officer — The Retina Group of
Washington
Rich is a senior healthcare executive with a broad background and
proven track record of success in all aspects of financial
management, provider network development and management,
information technology, human resources and administration, mergers
and acquisitions, legal, business development and capital
formation. Rich is currently the Chief Executive Officer of The
Retina Group of Washington (RGW) and he is in the eighth year of
his tenure there. Rich’s career has spanned almost four decades
where prior to RGW, he was promoted to a series of increasingly
responsible positions over a 10-year period at UnitedHealthcare
(UHC). After Rich left Ernst & Young in 1983, he held various
executive financial positions with a venture capital firm
specializing in telecommunications and technology for over 15
years, then onto the position of Chief Financial Officer at a
Dental HMO prior to joining UnitedHealthcare.
1
Sean Goodale, CPA, MBA
CEO — Retina Associates, P.A.
Sean is the CEO of Retina Associates in Kansas City and has over 29
years’ experience in health care administration and financial
management. He is the chief executive officer of Retina Associates,
P.A., the largest retina-only practice in the greater Kansas City
area, with eight retina surgeons and 13 locations. He has also
worked as the CFO and CIO of a large multi-specialty physician
practice management organization. In addition, he serves or has
served on national and regional advisory committees in health care
and business, including local and national committees of the MGMA
and HFMA.
2
The Profitable Retina Practice: Unlock Strategic Growth and
Profitability Presented by: Joy Woodke, COE, OCS, OCSR Sean D
Goodale, CPA, MBA Richard J Donnelly, MS
3
4
Financial Disclosure • Richard Donnelly, MS
• I have no financial interests or relationships to disclose
relative to this topic.
5
Agenda
Relative Value Units (RVUs)
6
Acknowledgement
The Retina Group of Washington Dr. Michael Lai, Board Member John
DiNardo, CAO Candice Richardson, Controller
Bob Fleshner, Former CEO of UnitedHealthcare
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Why does a drug float need to be managed?
How to manage a drug float?
The RGW experience?
9
What Is a Drug Float Significant portion of a retinal
specialist’s
clinical activity involves use of expensive injectable drugs.
Utilization of expensive injectable drugs creates both revenue and
expense.
The timing in collection of drug revenue and payment of drug
expense can create an imbalance between the two. This imbalance
results in a “Drug Float.”
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Payment Cycle of an Injectable Drug
1 vial of drug A is used on a patient with X insurance Drug A was
ordered prior to injection at cost of $1,900 Bill for drug A
submitted to insurance X for reimbursement of
$2,000
Timing of the drug reimbursement relative to its payment results in
one of 3 possible scenarios: If both occur simultaneously, the
account balance would be
$100 If the reimbursement occurs before payment for the drug
was made, the account balance would be $2,000 If payment was made
prior to receiving reimbursement, the
account balance would be -$1,900
11
So What’s the Problem?
Due to the expense and volume of injectable drugs, a drug float can
grow very large very quickly
12
3 account balance scenarios from use of 1 drug vial
If both occur simultaneously, the account balance would be $100 (No
Drug Float)
If the reimbursement occurs before payment for the drug was made,
the account balance would be $2,000 (Positive Drug Float)
If payment was made prior to receiving reimbursement, the account
balance would be -$1,900 (Negative Drug Float)
13
Creation of Drug Float (1 Day) 3 account balance scenarios from use
of 10 drug vial:
If both occur simultaneously, the account balance would be $1,000
(No Drug Float)
If the reimbursement occurs before payment for the drug was made,
the account balance would be $20,000 (Positive Drug Float)
If payment was made prior to receiving reimbursement, the account
balance would be -$19,000 (Negative Drug Float)
14
3 account balance scenarios from use of 50 drug vial
If both occur simultaneously, the account balance would be $5,000
(No Drug Float)
If the reimbursement occurs before payment for the drug was made,
the account balance would be $100,000 (Positive Drug Float)
If payment was made prior to receiving reimbursement, the account
balance would be -$95,000 (Negative Drug Float)
15
3 account balance scenarios from use of 200 drug vials
If both occur simultaneously, the account balance would be $20,000
(No Drug Float)
If the reimbursement occurs before payment for the drug was made,
the account balance would be $400,000 (Positive Drug Float)
If payment was made prior to receiving reimbursement, the account
balance would be -$380,000 (Negative Drug Float)
16
Creation of Drug Float (1 Month) 3 account balance scenarios from
use of 200 drug
vials If both occur simultaneously, the account balance would
be
$20,000 (No Drug Float = True profit)
If the reimbursement occurs before payment for the drug was made,
the account balance would be $400,000 (Positive Drug Float = False
profit)
If payment was made prior to receiving reimbursement, the account
balance would be -$380,000 (Negative Drug Float = False loss)
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Impacts of false loss: Artificially deflate practice financial
performance Artificially decrease physician compensation Affect
calculations for physician buy-in & buy-out Negatively affect
cash flow
18
Drug float can distort practice financial performance
Drug float can alter physician compensation
Drug float can impact physician buy-in & buy- out
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Set pre-defined dollar target
Match drug accounts receivable (A/R) with accounts payable
(A/P)
Match drug A/R plus value of drug inventory with drug A/P
20
Methodologies for Managing Drug Float
Set Pre-Defined Dollar Target This is set by the individual
practice How much in Drug Expense is outstanding at any point in
time Example: At the end of December 2018, the practice had
$600,000 owed to the Pharma company or
distributor The practice decided that they would only have $400,000
owed to the Pharma company or
distributor at any point in time Therefore the practice would have
paid down their drug expense at the end of December
2018 by $200,000 to leave $400,000 outstanding
21
Methodologies for Managing Drug Float
Manage Timing of Drug Pay Off This method manages days outstanding
rather than dollars
outstanding at each month end Pharma company or distributor sets
payment terms that define
the payment due date in number of days; ie. 30, 60, 90 days
Practice paying with credit can further lengthen payment cycle
Individual practice can choose to make payments earlier to
lower
drug float, or later (with credit) to increase drug float
22
Methodologies for Managing Drug Float Manage Timing of Drug Pay Off
Example 1: lower the float The Pharma gives the practice 60 days to
pay for drug A The practice wants their Drug Expense to never be
more than 30 days outstanding At month end, the practice would pay
down their Drug Expense so that there were only
30 days outstanding Example 2: raise the float The Pharma gives the
practice 60 days to pay for drug A At month end, the practice would
pay their Drug Expense with credit card, extending
payoff by another 30 days Drug Expense is paid 90 days after drug
is ordered
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Match Drug Accounts Receivable (A/R) with Accounts Payable
(A/P)
A/R = amounts a company has a right to collect; assets A/P =
amounts a company owes; liabilities Drug A/R = reimbursements
expected from drug usage Drug A/P = drug expense, cost of drug
usage
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Methodologies for Managing Drug Float
Match Drug Accounts Receivable (A/R) with Accounts Payable (A/P)
The practice reconciles the difference between Drug A/R and Drug
A/P to
determine the amount of Drug Expense that needs to be paid Example
At the end of December 2018 the practice had Drug A/R of $400,000
At the same time the practice had Drug A/P of $500,000 The practice
would then pay down their Drug A/P by $100,000 which would then
make
their Drug A/P equal their Drug A/R
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Methodologies for Managing Drug Float
Match drug A/R plus value of drug inventory with drug A/P Balance
financial obligations of the drugs with the expected assets (both
drug A/R
and drug inventory) The practice compares the amount of Drug A/R
plus the Drug Inventory to their
Drug A/P to determine the amount of Drug Expense that needs to be
paid Example At the end of December 2018 the practice had Drug A/P
of $500,000 At the same time the practice had Drug A/R of $400,000
and Drug Inventory of $50,000 which
totals $450,000 The practice would then pay down their Drug A/P by
$50,000 which would then make their Drug
A/P equal to their Drug A/R plus Drug Inventory
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Tips for Improving Your Drug Cost
Be aggressive with the Drug Vendors -- Negotiate upfront discounts
or back end volume rebates
Use a credit card to purchase the drugs and negotiate a rebate on
the card. Forget about points negotiate cash back. You can’t pay
your employees with points.
We are in a nickel and dime business. Worry about the nickels and
dimes and the dollars will follow.
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What Are RVUs?
Would you say your relationships with your commercial payors
(insurance companies) are generally:
Multiple Choice Questions
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Do you know the approximate % of your billables that each Payor
represents?
Do you know the average length of time it takes to receive payments
from each company?
Do you know the approximate reimbursement rates for each of your
major payors?
Do you know the % of claims per payor that is typically
disallowed?
How Much Do You Know About Your Insurance Contracts?
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Who handles your insurance company negotiations? Do they have good
people skills? Are they empowered to make decisions?
Do you understand your relative position in the market size wise
and geographically?
Do you understand the insurance company’s position?
More questions. . . .
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Money— Yes, it’s the root of all evil. Yes, it’s also the most
important component in the negotiation----
but not the only one
Relationship You think I’m kidding? Let me tell you a story or two.
. .
Ease of use—this goes, in part, to relationship Size and complexity
are the issues, not desire to screw the
practice
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Relationship
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Who are they going to negotiate with more, someone they like,
someone they don’t know or someone they dislike?
Relationship
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Money
Benchmarks What are the other payors paying. There needs to be
parity critical in the network. Payors
compare top four to top four, etc. May ask for “blinded rates”; the
Payor can pull COB data and call your bluff Trend (year over year
increases) and physician CPI on fee for service rates. ASCs would
be a mix between Physician CPI and Hospitals Length of
contract
Medicare How important are you to their network?
Negotiating Issues from the Insurance Company Side
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% of overall market you represent-disruption analysis
Ease of Use Problem claims Education of staff on filing claims
Provider Service Rep
Ongoing Relationship
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Don’t wait until contract term is over to contact – Be
Proactive!
Ongoing dialogue Fewer surprises Desire to treat you professionally
- Make them care about you as a person
Who are insurance companies? They are people! Treat them like
people Learn about them and their needs in the negotiation Search
for common ground
Hints
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This is our report card or scoreboard
It tells us how well, or not so well, we are doing.
42
Financial Statements – WHAT ARE THEY? • Financial statements will
consist of: Balance Sheet (Assets & Liabilities) Income
Statement (Profit & Losses) Statement of Cash Flows (Timing of
Cash Inflows and
Outflows)
The financial statements should include a comparison to an annual
operating budget. Also include Forecasts throughout the year as
well.
43
Doctors
over period and to your YTD operating budget.
Trend Analysis – This is a multi-period comparison (Years or
Running Quarters)
Metrics – Put together a Dashboard with these metrics. Make it easy
to review.
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Financial Statements Metrics--DASHBOARD
Create a Dashboard of important metrics that are the dynamics of
the Practice.
Involve the Doctors in what is included in the metrics.
These important ratios should give you the financial pulse of your
practice or office.
The result should be a One-Page End-of-Month Financial Report that
makes sense and is understandable.
47
Types of Fee Income (Clinical/Surgical, Drugs, Clinical Studies,
Consulting, Other)
Allowables – Can be RVUs or Dollars based on the CMS GPCI
Patient Encounters & New Patients
Days the Practice is open
Accounts Receivable (Days O/S, Collection %s, Comment on Inv.
Doctors & Payors, etc.)
Drug Float
48
All of this information should be compared to your Budget and prior
periods
Also look at these metrics over multiple periods to see
trends
This will help with your variance analysis
Financial Statements – Types of Metrics or Other Information
49
Clinical/Surgical Fee Income
Total Fee Income
Drug Fee Income
Total Fee Income
Clinical Studies Income
Total Fee Income
50
Allowables – Can be RVUs or Dollars based on the CMS GPCI
Depending on your PM system, you can either Reprice the encounter
data at the prominent Medicare GPCI Fee
Schedule and illustrate in dollars. Payor mix is not consistent
among the Doctors. Levels the playing field.
Use RVUs to measure the level of work.
Financial Statements – Allowables
51
Doctor Days = # of Days that the Doctor saw patients measured as AM
and PM
Number of days (per month) a doctor is in the office or
surgery
This helps account for the effects of vacation, adding a new
doctor, or partial retirement. Patient Encounters / Doctor Days New
Patients / Doctor Days
Financial Statements – Patient Encounters & New Patients
52
Clinical Staff Ratios (Encounters, Doctors & Fee Income)
Encounters / # of FTEs Encounters / Doctors Fee Income (Non-Drug) /
# of FTEs Fee Income (Non-Drug) / # Doctors Fee Income (Non-Drug) /
Encounters
Financial Statements - Clinical Staff Ratios
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Days the Practice is open is looking at how you are utilizing your
capacity and resources. Do this by Office and in total.
Total Encounters / Days Open Fee Income / Days Open
Financial Statements – Days the Practice is Open
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A/R Days Outstanding – Your PM system will calculate this for you
or use the traditional accounting formula. This can be done by
Doctor, Office and Payor.
Collection %s -- How much of what was collected this month relates
to days outstanding. 0-30 days = 70.2% 31-60 days = 17.1% 61 - 90
days = 5.2% 91 - 120 days = 2.9% 121-150 days = 2.8% 151 – 180 days
= 0.4% 181+ days = 1.4%
Highlight the problem Payors and comment on the >90 days by
Doctor.
Track your Denied Claims and know what is causing them; this adds
to you’re A/R Days.
Financial Statements – Accounts Receivable Metrics
55
What is Drug Float -- Defined as the amount of money that we owe to
the injectable drug vendors at any point in time for Lucentis,
Eylea, Avastin, Ozurdex, etc.
As we contacted peer practices, each one had their own respective
spin on this definition. Some defined this as the amount they owe
the drug vendors less the amount of receivables outstanding for
drug claims less the amount of inventory that they have on
hand.
Others defined this as the amount that they owe to the drug vendors
period. This is what we consider the range.
Financial Statements – Drug Float
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If you are on a Cash Basis accounting method, you are not required
to recognize expenses in the same period that services are rendered
and therefore have taken into income. This means that at year end
the Shareholders/Partners realize a “false profit” in the amount of
the outstanding Drug Debt. So effectively this is a loan paid out
to the Practice that needs to be paid back to the pharma
vendors.
Conceptually this is money that the Shareholders have received over
the years that needs to be returned so that it can be paid back to
the pharma vendors.
If a disruptive technology, for example, a long term implant that
is purchased by hospitals and placed by us surgically, came along
today, future receivables would not be collected and you would
still need to pay the expense within the Drug Float period.
Financial Statements – Drug Float
58
Operating Expenses
59
Collections (Non Drug)
Average is 65.7% (Range 43% to 96%)
Result is dependent on how often you adjust your Billed Charges and
at what multiple of Payor Reimbursement
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Collections (Non Drug)
Number of RVUs Worked
Typically $38 for Medicare $48 to $55 is typical for commercial
insurance
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Conclusion
Know what works for you.
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QUESTIONS
63
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A. New to our practice
B. An option we have been considering
C. A subject we need more resources for retina practices
D. Not interested at this time
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• The changing landscape o How is this impacting retina
practices?
• Why PE and the long-term outlook
• How would a PE buy-out impact our practice? o Our physicians? o
Our staff?
66
Profitable Retina Practice – Efficiency and Clinic flow Sean
Goodale, CPA, MBA CEO of Retina Associates, Kansas City
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• Revenue Cycle Management Considerations
69
Maximizing Efficiency and Physician Productivity • Patient Workflow
and Planning o Physical Layout of space Minimize patient
movement/steps
Pods vs. Pattern vs. Single site
Dual utilization Physician/Staff workspaces Challenge existing
utilization (i.e. chart room, procedure room, dual use)
70
Maximizing Physician Productivity • Patient Workflow and Planning
(continued) o Workflow and time/task analysis EMR and PM systems
task tracking Check-in/ preliminary information Patient in take/
Work-up Testing
71
Maximizing Physician Productivity • Patient Workflow and Planning
(continued)
o Workflow and time/task analysis EMR and PM systems task tracking
(continued)
Exam Lane
72
Maximizing Physician Productivity • Staffing Analysis
o Supporting Physician schedules and patient load Doctor specific
clinical staff vs a rotating pool
Dedicated Lead Scribes/Technicians-Volume/demand dictates #
73
Maximizing Physician Productivity • Staffing Analysis
o Supporting Physician schedules and patient load Excess? staffing
to improve patient and doctor experience Cost Benefit Analysis of
additional staff and additional encounters
Increasing staff leading to increasing access and higher patient
satisfaction
Improved quality of life for physician and staff=more patient
access
Providing staff a bigger role benefits both the patients and the
staff
74
Maximizing Physician Productivity o Decisions, Decisions,
Decisions….. Cost Benefit Analysis (continued) Staffing vs
Volume
- # of Encounters to cover staff costs - Quality vs Cost - Increase
in efficiency - Improve patient experience - Sometimes less is
more
75
Maximizing Physician Productivity • Patient Workflow and
Planning
o Workflow and time/task analysis EMR and PM systems task
tracking
Training opportunities
Maximizing Physician Productivity • Location office analysis
o Strategic geographic access Zip Code Analysis for new and
existing patient base Patient zip code and Referring Doctor zip
code
- Where do existing patients come from - What areas are lacking zip
code presence - What presence does a referring base have in the
area
Cost Benefit Analysis of the cost of a new location o Ease of
access for patient directions and transportation o Physician and
Staff travel considerations
77
Revenue Cycle Staffing Efficiency o Encounter documentation and
physician (part of process) billing
Same day or next day billing Physician requirement to complete
chart
Real time tracking of unfiled encounters/claims
Goal Setting for billing staff
Denial rates
Revenue Cycle Staffing Efficiency o Staffing strategies for
Accounts Receivable Management Productivity goals for Charge Entry/
Review Charge entry
- Lines per hour - Total Charges
Utilization Management - Prior Authorization, Drug lists, Step
Therapy, etc.
Claims resolution/ follow up
Revenue Cycle Staffing Efficiency o Staffing strategies for
Accounts Receivable Management (continued) Productivity goals for
Charge Entry/ Review
Dedicated staff for drug assistance programs
- Skilled experts in the various copay/assistance programs
- Dedicated resources for clinical staff to interface with
regarding treatment options • Insurance Coverage concerns/
requirements • Benefits investigation/ utilization management
- Investment in staffing that has had a solid return
80
o Staffing strategies for Accounts Receivable Management
(continued)
Charge Entry Process Certified Coders vs In House trained vs
Outsourced
Remote access Challenges Regulatory Concerns-OSHA, HIPAA, etc
Productivity tracking Company culture
81
Revenue Cycle Management Efficiency
o Patient Education on Medicare Advantage and Commercial Products
Helping patients understand their options Informing patients of
plans that you may not be participating
o Collection rates Compared to Medicare/Medicaid Compared to other
commercial Payors
o Payor contract review and negotiation
82
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1. Information is the efficient use of data
2. Key elements of usable information: o Easy to obtain Quick and
accessible
o Effective for decisions Accurate, reliable and clear
o Critical vs. Non critical
3. What is “Big Data”, IRIS registry, CMS, etc.
4. The link between Information and Value-Bad Data costs $$$
Information vs. Data
• In-house or external support (Cost benefit analysis)
• Hardware/User Interface considerations
85
To Cloud or Not to Cloud • Definition of Cloud vs. in-house
(server- based)
o Physical Location
• Cloud-based systems o Pros Hardware Simplification and management
Software updates Near world wide accessibility
o Disadvantages Internet Based (Access) Cost
87
To Cloud or Not to Cloud (continued)
• Office (server) based systems o Pros On site access Physical
presence Potentially lower cost
o Disadvantages Security and Backup responsibility
Hardware/Software configuration and maintenance Remote office
access challenges
88
To Cloud or Not to Cloud (continued)
• Hybrid Part Cloud Part Office based systems o Pros On site access
and positive redundancy Potential best of breed solutions for
certain elements Potentially lower cost
o Disadvantages Potential lack of clarity on security and backup
responsibility Multiple vendors for configuration and maintenance
Upkeep of interfaces and interoperability components
89
• Expertise and training- superusers
o Leveraging technology-Extended life
• Immediate hardware redundancy for support
• “Guest” network management
• Laptops, Desktops and Phones…Oh my!
• Network Security Audit
• Malware, Ransomware and Intrusion protection-potential
costs
• Other portable media considerations
Examples • Hybrid systems:
o Cloud EMR/ Local PM o Inventory systems integrated with PM and
EMR o Accounting systems linked to PM systems
• Laptops and Portable Devices o Tablets, convertibles,
Hotspots
93
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Audience Poll - KPIs • Do you use KPIs in your practice to track
profitability or efficiency?
• YES!
• NO!
96
Audience & Panel Discussion • What do you feel are the most
useful KPIs for a retina practice?
• If you could only track on KPI, what would it be?
• How do you present KPIs to your physicians?
• When should you include or exclude drug income or expense from
KPIs?
97
BREAK
98
99
Audience Poll - Hot Topics • What is the biggest challenge your
practice is currently facing:
A. Tech shortage
B. Clinic flow
D. Medication management
Panel & Audience Discussion • Best Practice tips related to hot
topics?
• What are the best resources for practice administrators?
• What resources do we need?
• What other challenges are impacting retina practices?
101
Avoiding Common Errors Impacting Drug Profitability Presented by:
Joy Woodke, COE, OCS, OCSR
102
Financial Disclosure • Joy Woodke, COE, OCS, OCSR
• I have no financial interests or relationships to disclose
relative to this topic.
• Academy Codequest instructor, private consultant and contributing
author to Academy products
103
104
Drug Profitability • Key players -
o Drug Reimbursement o Drug Cost o Drug Margin o Overhead
105
Drug Profitability • Key players -
o Drug Reimbursement o Drug Cost o Drug Margin o Overhead
• Based on CMS Average Sales Pricing (ASP) o Updated quarterly o
Price per unit o Calculate 2% sequestration o Commercial and
Medicare
Advantage plans may based reimbursement on a percentage of ASP
pricing
106
Drug Profitability • Key players -
o Drug Reimbursement o Drug Cost o Drug Margin o Overhead
• Negotiated cost per vendor or pharmaceutical company
• Consider all rebates
107
Drug Profitability • Key players -
o Drug Reimbursement o Drug Cost o Drug Margin o Overhead
$ Reimbursement
Practice cost - 1750
Drug margin $ 140
Drug Profitability • Key players -
o Drug Reimbursement o Drug Cost o Drug Margin o Overhead
• Allocating expenses o Practice overhead o Direct expense related
to
management of drugs o Supplies
109
• Tracking profitability
111
Correct Coding • Potential errors
o Incorrect units billed o Wrong medication coded Billing Avastin,
when Lucentis was injected
o Bill sample, regular dose used o Diagnosis link error Dry
AMD
o Diagnosis not medical necessary per payer policy o Missing –LT or
–RT modifiers o NDC missing or incorrect o Neglecting to bill for
wastage
113
Are we proactively auditing?
114
o Focus on medication claims
• Troubleshoot and manage o Prompt claim submission o Clearinghouse
denial or scrub edits o Insurance claim not received o Resolve
denials, promptly o Prior authorization or step therapy
barriers
• Design targeted A/R reports
Source: The Profitable Retina Practice: Medication Inventory
Management
116
Total Drug Reimbursement • Assumed goal – prompt, full
reimbursement
• First step, what is the total expected allowable? How do I find?
o CMS ASP Pricing – Medicare o Commercial, Medicare Advantage,
Medicaid, Secondary Start with your contract
• Contracts o Section: Injectables, pharmaceuticals Reference
Medicare Part B ASP Reimburse a percentage of Medicare, U & C,
or a carve-out assigned allowable Clause drug not listed on ASP,
percentage of Wholesale Acquisition Cost (WAC)
117
Total Drug Reimbursement • What to monitor
o Underpayment from insurance carrier based on contract – appeal
Run targeted reports
o Delayed payment from PAP, or not requested o Patient unable to
pay deductible, coinsurance o Coding error impacting total
reimbursement o Skilled Nursing Facility (SNF) – delayed payment,
not billed, or recoup from Medicare o Denials not appealed
118
o Poor inventory system Best practice: comprehensive spreadsheet or
computerized system
o Inventory counts - too high or too low o Expired or damaged drug
– not managing o Not rotating expiration dates Bill due for a vial
before using/billing
o Lack of routine inventory counts o Lost vials o Inventory used
and not logged Missed billing injection
119
Accounts Payable • Pitfalls to avoid
o Not monitoring A/P invoice totals o Cash flow challenges o Late
payments, losing discounts o Lack of negotiation with vendor –
cost, terms and rebates o Mismanagement of credit cards,
rewards
120
o Medication Inventory Management o Strategically Grow Your Retina
Practice
• Coding Audit Success Toolkit
• Audits – aao.org/audits
Rapid Fire Retina Panel Discussion – Prior Authorization (PA) &
Step Therapy
124
Audience Poll • In the last year, have your denials related to PAs
or Step Therapy:
A. Increased
B. Decreased
A. Technicians
126
Prior Authorization & Step Therapy • What are some of the
challenges we are facing related to PAs and Step
Therapy?
• What resources have been most helpful?
• Have any of the new policies impacted clinic flow or patient
care?
• What type of internal tracking system do you use for PAs?
127
128
Audience Poll • In the last year our practice has experienced
a
A. TPE audit
B. RA audit
• aao.org/audits
130
• How can a practice prepare for the inevitable audit?
• What is your internal process when receiving an audit
request?
• What other best practice tips can you share?
132
We love RETINA!
133
Ever ask “is our physician productivity on par with similar
practices”?
The Academy’s AcadeMetrics™ benchmarking and salary tools help you
find the right answers.
Good news: It’s FREE to members! .
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Learn more at
[email protected] or visit aao.org/academetrics
for more information.
ANTHONY P. JOHNSON, MD, FACS Jervey Eye Group PA AAOE Board Member
and Benchmarking Pro
134
Handouts & Resources Friday, October 11, 2019 | SPE20 1:00 to
4:30 p.m.
The Profitable Practice: Unlock Strategic Growth and Profitability
Senior Instructor: Joy Woodke, COE, OCS, OCSR Co-Instructors:
Richard J. Donnelly, CEO; Sean D. Goodale, CPA, MBA
Access your handouts to this course at:
https://www.aao.org/practice-management/annual-meeting-
courses/master-classes
1:30 to 4:30 p.m.
Growth and Profitability
Senior Instructor: Joy Woodke, COE, OCS, OCSR
Co-Instructors: Richard J. Donnelly, CEO and Sean D. Goodale, CPA,
MBA
Protecting Sight. Empowering Lives."' 137
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Visit reconciliation/ outstanding visit reports-Confirms all visits
captured
Drug reconciliation
Days in Accounts Receivable
Breakout by Doctor
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% of Accounts receivable under 30 days;70—75% or better
% of Drug Accounts receivable under 30 days 85-90%
Beware of Drug Accounts Receivable masking other categories
Accounts Receivable by CPT
Accounts Receivable by Payor
Accounts Receivable by Location
o Other Accounts Receivable Indicators to watch
Payor mix and trends from year to year, quarter to quarter
Growth of commercial plans
Trend reports of Charges, Payments and Encounters by month
Breakout of Drug vs Non Drug (Charges, receipts, adjustments)
New Patients by Doctor
New Patients by location
Review Eye codes vs E&M codes reimbursements
Payor Reimbursement Review
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Patient interaction tools at check in
Kiosks/Tablets
Paper
- Hospital Coverage-Emergent Care
Accuracy and Integrity
Estimates vs Definitive amounts
Simple Layout
Visits per Day
New patients per day
CPT Analysis
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Average Collection rates
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Reimbursement review
- Specific to each drug
Reimbursement review
- By Location
- By Doctor
MIPS and Quality reporting
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24
Unrelated evaluation and management service (or eye codes) by the
same physician during a postoperative period
25 Significant, separately,
identifiable evaluation and management service (or eye
codes) by the same physician on the same day of the procedure
or
other services
related to the original surgery:
-New symptoms
evaluation
mean unrelated
(0 or 10 global period days)
Office visit same day, or within 3 days of a major surgery (90 day
global period)
OFFICE VISIT
PLANNED OR
the post-op period
period
70% ALLOWABLE
Billable same
Global
Commercial
Global*
66761 Yag PI 10 days -25 90 days -57
66821 Yag PCO 90 days -57 90 days -57
67105 Laser repair RD 10 days -25 90 days -57
67145 90 days -57 90 days -5767145 Laser repair
retinal tear, prophylaxis RD
67210 Focal laser 90 days -57 90 days -57
67220 Laser for choroid
67228 PRP laser 10 days -25 90 days -57
* Confirm global period per
insurance carrier based on
allowable and/or RVU 160
Check List for Injected Drugs. From Coding Audit Success
Toolkit
With the current TPE audits targeting Eylea, focusing now on an
internal review on this high-volume service is best practice. After
reviewing your MAC LCDs or commercial payer policies, review a
sample of chart records for appropriate documentation and the
insurance claim for the appropriate billing.
Confirm there has been 28 days since the last injection, same eye.
Surgical order including;
Medication name Dosage in mg and volume in ml (ie Avastin 1.25 mg @
0.05ml) Route of administration (intravitreal injection) Site of
injection, eye (s) treated Indication for treatment and confirm is
a covered benefit per payer policy Physician signature
Plan including the reason for using the specific medication or
continuing treatment. Copy of diagnostic testing and interpretation
and report supporting medical necessity for
treatment. Informed consent for first injection and when a change
in medication or eye (s) is treated. Consent for off-label use as
appropriate. Procedure note that documents;
Dosage of medication injected in mg and volume in ml Amount of drug
units wasted. If less than 1 unit, document residual medication
less
than one unit was discarded. Lot number Diagnosis
Maintain complete inventory and medication log records. Chart notes
are legible and include patient name and date of birth. Physician
signature
161
American Academy of Ophthalmology
American Academy of Ophthalmic Executives 655 Beach Street San
Francisco, CA 94109
The Profitable Retina Practice: Unlock Strategic Growth and
Profitability
AAOE 2019 | Master Class Presenters
AAOE 2019 | Master Class Presenters
PPT Title Page
Talk Objectives
Payment Cycle of an Injectable Drug
So What’s the Problem?
Creation of Drug Float (1 Vial)
Creation of Drug Float (1 Day)
Creation of Drug Float (1 Week)
Creation of Drug Float (1 Month)
Creation of Drug Float (1 Month) (continued)
Impacts of Drug Float
Tips for Improving Your Drug Cost
Relative Value Units (RVUs)
More questions. . . .
Relationship
Negotiating Issues from the Insurance Company Side
(continued)
Hints
Financial Statements - FREQUENCY
Financial Statements – ADDITIONAL REPORTING
Financial Statements – Types of Fee Income
Financial Statements – Allowables
Financial Statements - Clinical Staff Ratios
Financial Statements – Days the Practice is Open
Financial Statements – Accounts Receivable Metrics
Financial Statements – Drug Float
Financial Statements – Drug Float
Financial Statements – Practice Overhead %
Financial Statements – % of Billed Charges
Financial Statements – Collections per RVU
Conclusion
QUESTIONS
Sean Goodale, CPA, MBAFinancial Disclosure
Featured Topics
Revenue Cycle Staffing Efficiency, pps. 80-82
INFORMATION TECHNOLOGY STRATEGY AND DESIGN
Information vs. Data
Efficient Information Flow
In-house vs. External Support
Examples
Financial Disclosure
Final Thoughts
Ever ask “is our physician productivity on par with similar
practices”?
Link to Handouts
End of PPT
Revenue Cycle Management
Technology Use Examples
Technology and Reporting
Prior Authorization Resource
Diagnostic Services