Robert Lowes

About five years ago, two cardiology practices shopping for an EHR surveyed the same field of vendors and made two different picks that illustrate what matters to specialists when they go digital.

The 16-physician, Fla.-based, Jacksonville Heart Center chose a system from NextGen Healthcare, a major vendor which sells to every specialty under the sun. The Jacksonville cardiologists didn't want to select a minor-league vendor that might fold three years later, or lack the resources to invest in research and development, says Mark Masters, the group's chief administrative officer.

"NextGen was a monster company with plenty of capital," says Masters. "They looked like a strong player going forward." In addition, he added, NextGen did a good job catering to their specialty's needs, setting up the Florida cardiologists with electronic forms, or templates, for echocardiograms, EKGs, and other matters of the heart.

However, NextGen wasn't good enough for the 8-physician, N.J.-based, Westwood Cardiology Associates, which chose an EHR from a niche vendor that the Jacksonville group had passed on - GEMMS, which makes EHRs only for cardiologists.

"We really wanted a cardiology-specific program," says cardiologist Elliott Lichtstein. He notes the competitors of GEMMS, such as NextGen, were more geared toward primary care. "It's hard to be good at everything."

Five years later, specialists of all stripes still ask the same questions about EHRs. Will this vendor be around tomorrow? And will it supply specialty-specific features? Pediatricians, for example, look for automated growth charts and a tool for calculating medication dosages based on a child's weight. Surgeons want separate templates for presurgical and postsurgical workups. And specialists performing consults want a system that will generate an impressive consult letter.

The good news in 2010 is that while some small niche vendors - often launched by a visionary specialist with a knack for computers - have indeed fallen by the wayside, others such as GEMMS have endured. At the same time, mainstream vendors once considered weak in building specialty-specific products are now earning gold stars.

"These companies are far, far ahead of where they were five years ago," says Rosemarie Nelson, a healthcare IT consultant in Jamesville, N.Y., with the Medical Group Management Association.

However, the issue of vendor robustness and survivability isn't going away, especially in light of last year's economic stimulus legislation that awards cash bonuses to physicians who demonstrate "meaningful use" of EHRs beginning in 2011, but promises to penalize nonadopters beginning in 2015. High-income specialists such as neurosurgeons might not bother chasing after the bonus - $44,000 over five years under Medicare, almost $64,000 over six years under Medicaid - like family physicians might, but nobody wants to lose money on account of their meaningful use status.

Now physicians are asking if a particular EHR will give them the necessary features to meet meaningful use requirements, including the ability to exchange data with other EHR systems. In addition, does the vendor have what it takes to get its EHR certified, another prerequisite for meaningful use money?

Alas, buying an EHR isn't as easy as buying a toaster, particularly if you're a specialist. But don't leave the store. We've gathered buying advice from a wide range of physicians, executives of medical software companies, and consultants.

For primary-care physicians, some experts would argue the task of selecting an EHR has been made easier by the work of the Certification Commission for Health Information Technology (CCHIT). Since 2006, this private, nonprofit group has been vetting EHRs that meet hundreds of performance standards, such as the ability to display a problem list, transmit an electronic prescription, or create an audit trail identifying everyone who's looked at a patient's record.

These standards expand from year to year, motivating EHR vendors to have their products certified under the latest set. Plus, certification initially was time-limited - three years for products in 2006 and 2007, two years for those in 2008. So vendors that want the CCHIT sticker on their system have had to reapply for it - an expensive proposition in terms of the $37,000 application fee and the hundreds of thousands of dollars sometimes spent on software programming. So it takes a well-heeled company to keep its EHR certified.

At the beginning, CCHIT standards for ambulatory care EHRs largely reflected how family physicians and general internists practiced medicine, which was fine for them, but not so fine for, say, allergists or OB/GYNs. Consequently, CCHIT began creating additional stamps of approvals for ambulatory care EHRs geared toward individual specialties. The first two were for cardiovascular medicine and children's health in 2008. This year the group began certifying systems for dermatology and behavioral health, and next year, it plans to roll out certification programs in women's health and oncology.

"We started with a one-size-fits-all approach and then specialists said 'That doesn't work for us,'" says CCHIT executive director Alisa Ray. "We're responding to them."

The roll call of products qualifying for certification in cardiovascular medicine and children's health is instructive. Most of the systems are from "generalist" medical software companies like NextGen, Allscripts, GE Healthcare, and eClinicalWorks, many of which are publicly traded. But scattered in the lists are products from privately owned vendors that make just one kind of EHR - GEMMS, in the case of cardiovascular medicine, for example, and Connexin Software, which sells Office Practicum to pediatricians. By earning - and re-earning - expensive CCHIT certification for their systems, niche EHR vendors arguably demonstrate that they're "players" who can keep up with the Allscripts and GE Healthcares of the world.

Besides giving physicians some assurance they're buying a robust EHR, CCHIT certification has been a prerequisite for participating in important digital ventures, whether it's a state health information exchange in Vermont or an EHR demonstration project by Medicare. Now that physicians are eligible for five-figure bonuses for meaningful use of EHRs under the American Reinvestment and Recovery Act, certification has taken a new and confusing twist. Yes, you must use a certified EHR to cash in, but CCHIT isn't the only game in town. Late this summer, the Department of Health and Human Services assigned the job of vetting EHRs for meaningful use purposes to not only CCHIT, but also two other firms - the Drummond Group of Austin, Texas, and InfoGard Laboratories of San Luis Obispo, Calif.

Here's another twist - HHS standards for determining whether an EHR can perform key tasks such as e-prescribing and information sharing are different than those that CCHIT has been using. Consequently, EHRs already certified by CCHIT must earn their meaningful use certification all over again this fall from one of the three companies chosen by HHS. However, CCHIT spokesperson Sue Reber says software programs that have met her group's exacting requirements will have an easy time passing muster with the HHS standards which are far less demanding.

How many niche EHR vendors will apply for - and receive - certification for meaningful use remains to be seen, but healthcare IT consultant Mark Anderson in Montgomery, Texas, predicts a good number will make the cut.

"The requirements are so watered down that anybody can pass them, including the mom-and-pop companies," says Anderson.

Aside from certification, picking the right EHR for your specialty is largely about picking the product with the best templates to chart patient visits and order treatments. Each specialty has its own peculiar set of diagnoses, medications, and lab orders, not to mention its own choreography for where patients go in the office (procedure room, X-ray room, orthopedic cast room, refraction room, audiology screening room, etc.) and what clinician sees them there. Good templates reflect all this.

Ideally, you'd like to find an EHR vendor that has specialty templates already built and ready to go. At the same time, there's no escaping the need to tweak even the best of templates to match a physician's exact practice of medicine, whether it's the first clinical question posed to a patient with eczema, or preferred medications for treating depression.

"You need to put in a few nights tuning them up," says pediatrician Andrew Baumel of Mass.-based Framingham Pediatrics, who uses an EHR program from eClinicalWorks. Adds consultant Rosemarie Nelson, "None of these applications are plug-and-play."

Sometimes the tune-ups are super-quick. Urologist John Lin in Gilbert, Ariz., was in a lecture hall when he heard the presenter mention a prescription cream that could treat a rare penile disorder called balantis xerotica obliterans. With his laptop, Lin logged into his Allscripts EHR program remotely and added the drug to the medication list in his assessment and plan template. "It took me about 60 seconds," says Lin. The moral of the story? Ease of use is paramount.

If you're in a small group, you're probably wise to avoid building your own specialty-specific templates from scratch, given how that's been the downfall of many initial EHR enthusiasts. Even when the software lets you create templates, "only one out of 20 doctors takes the time to do it," says Chip Hart, director of pediatric solutions at PCC, which makes EHRs exclusively for pediatricians. However, you can hire a computer whiz to build what you need, notes Bruce Kleaveland, an MGMA healthcare IT consultant in Seattle, "and for a 40-physician group, that's not an unreasonable proposition."

Another option is resorting to any number of consultants and EHR resellers that design specialty templates that you can bolt onto the platform of a mainstream EHR program. A NextGen reseller called EPracticeWorks, for example, offers urologists 100 specialty-specific templates for office procedures like bladder irrigation, procedures done in ambulatory surgery centers such as vasectomies, and history-of-present-illness forms for disorders such as bladder cancer and infertility.

eClinicalWorks tries to take the hassle out of template creation by automating the task with a tool called eCliniSense. When you enter a diagnosis for a patient, the program will display what medications, tests, and referrals you've ordered and what instructions you've given to previous patients with the same problem. You can choose from this menu to treat the patient in front of you, as well as click an onscreen button and turn the menu into a template for future use.

The basic dos and don'ts of selecting an EHR apply to primary-care physicians and specialists alike, but as in the case of templates, specialists have special concerns.

Clinical content. The clinical decision support function of your EHR ought to reflect the prevailing clinical guidelines for your specialty, particularly those recommended by your specialty society. Some EHRs sold to pediatricians, for example, incorporate protocols from the "Bright Futures" initiative for health promotion and disease prevention developed by the American Academy of Pediatrics and other groups.

Diagnostic imaging. Specialists ranging from orthopedists to cardiologists have diagnostic imaging equipment in their offices, along with PACS (picture archiving and communication systems) for storing and viewing the images. So how do X-rays and echocardiograms fit into an EHR? Most EHR vendors don't engineer their systems to make them double as PACS, but instead allow you to interface your existing PACS (via software) with your EHR.

"You can view the PACS image inside your EHR program," says Michael Lovett, NextGen vice president of sales solutions.

However, the high cost of interface software deterred both the Jacksonville Heart Center and Westwood Cardiology Associates from taking that approach. Instead, they operate their PACS and EHR systems separately, and scan written imaging reports from the former into the latter.

Medical devices. Testing devices such as otoscopes, spirometers, EKG machines, and Holter monitors are designed these days to download their results into EHRs, so buy these types of equipment - as well as your EHR - with connectivity in mind.

Multispecialty groups. By virtue of their diversity, multispecialty groups need a mainstream EHR that can be customized specialty by specialty with off-the-shelf templates. Such groups, therefore, should assemble an EHR selection committee that represents each of its medical fields, says consultant Bruce Kleaveland.

Training and service. Vendors aren't created equal when it comes to teaching physicians and staffers how to use a drop-down list, remove software glitches, or return a phone call pronto about a crashed system. Niche EHR vendors may lack the staff or budget to pay attention to you, or they may treat you like family - it just depends on the company. The giant EHR vendor may have more bodies at the help desk, but you may feel as lost as a shopper in a big-box store. Again, it depends on the company.

"With PCC, I'm a big fish in a small pond," says pediatrician Joe Hagan Jr. in Burlington, Vt. "With Allscripts, I'm not even a minnow."

Big picture, hard choices. Specialists may have their personal wish list for what boxes and buttons belong where on the screen, but as evidenced by last year's stimulus legislation, the federal government also has a strong opinion on what an EHR should look like (that's what certification is all about). One big federal priority is interoperability, which allows a physician to connect electronically to labs, pharmacies, and hospitals, and share patient records digitally with doctors and their EHRs across town - all admittedly good things. So specialists may have to sacrifice some of their own personal concerns for the sake of using an EHR that plugs into the national health information network the feds are trying to create.

Whichever product you favor, it's wise to consider the financial strength of the vendor along with the strength of its product. Like or it not, you are essentially placing a bet on the future. Which companies will be around in five years? Which will be goners?

"Any vendor can fold, big or little," says consultant Rosemarie Nelson.

Fortunately, experts agree that using an EHR can benefit both your practice and your patients. Do your research, take your time, and don't sweat the small stuff.

In the final stages of EHR shopping, physicians need to find out if a system works as well as the sales brochure says it does.

One moment of truth is the product demo. Salespeople will want to trot through their standard simulations of, say, documenting a physical examination or prescribing a drug. However, EHR shoppers must insist on seeing simulations of patient encounters and clinical tasks that are unique to their practice, experts say. That's especially important advice for specialists, whose needs go beyond documenting the average office visit in primary care.

Put vendors to the test when they glibly answer "Yes, it can" when you ask "Can your software do this?" Oftentimes, "Yes, it can" means the software has never performed a certain task before, but the vendor can build in that function tomorrow, says consultant Mark Anderson. And tomorrow never comes.

The other must-do part of due diligence is visiting a practice like yours that bought the EHR you're eyeing.

"If you're a 30-doctor orthopedic practice, find an orthopedic practice about that size for a reference," says Anderson. "If you visit a two-doctor orthopedic practice, the way they work will be different."

Cardiologists, orthopedic surgeons, OB/GYNs, neurologists, and other specialists will feel hamstrung using an EHR designed for primary-care physicians. Fortunately, they'll find what they need from niche EHR vendors as well as mainstream companies that customize their systems for a given medical field. Here's the lay of the land.

• Mainstream EHR vendors have improved their specialty-specific offerings.

• Some niche vendors have survived the ongoing shakeout in the EHR industry.

• CCHIT is creating stamps of approval for specialty EHRs.

• Even the best specialty templates may need tweaking on your part.

• You can buy specialty templates for your EHR from third-party sources.

• Choose an EHR that can download data from medical devices.

• Some groups get by without interfacing PACS and EHR software.

 is an award-winning journalist based in St. Louis who has covered the healthcare industry for 21 years. He can be reached via editor@physicianspractice.com. 

This article originally appeared in the November 2010 issue of 

Articles

Mainstream EHR vendors have gotten better at catering to  physicians in specialties outside of primary care, but don't count out niche EHR vendors. We help you examine your purchasing options.

EHRs Especially for Specialists


Have you started to switch from a brand-name hypertension drug to a generic version? The rep for the brand-name drug can spot that and tout studies knocking the generic drug the next time he delivers pizza. 

About 80,000 pharmaceutical representatives - a.k.a. drug reps or detailers - know the individual prescribing habits of roughly 800,000 practicing physicians on a monthly basis. 

Reps can customize their sales spiels, because drug companies buy your prescribing data from data-mining companies that bought it from pharmacies. True, the data has been stripped of anything that would identify patients. But your name hasn’t been stripped out. 

Plenty of physicians know all this and don’t care. But some who discover that Big Pharma has been acting like Big Brother react with shock, says family physician Gary Sobelson in Concord, N.H., who supported legislation in his state to restrict the use of prescription data for marketing purposes. 

“Doctors are outraged on a privacy level,” says Sobelson, a former president of the New Hampshire Medical Society. “It’s like talking to a car salesman who knows what’s in your bank account. Doctors feel the prescription information belongs to them and shouldn’t be sold.” 

If you’re outraged, or just annoyed, by Big Pharma’s intelligence operation, there are a few steps you can take to limit its access to your prescribing data. You also can elect the nuclear option: Stop seeing reps. 

Don’t look to HIPAA to keep your prescribing habits off the pharmaceutical industry’s radar. The federal privacy law doesn’t apply to health information that has been stripped of identifying patient information, says Deven McGraw, a health privacy expert with the nonprofit Center for Democracy & Technology. The prescriber’s identity doesn’t enter the picture, although during last year’s healthcare reform debate, some Senate Democrats proposed banning the use of prescription data for marketing when it identifies either prescriber or patient. 

If you practice in New Hampshire, however, you enjoy this kind of Rx privacy, thanks to a 2006 law. It shields prescriber-specific data, but it doesn’t prevent drug companies from buying data broken down by geographic region or specialty. So drug reps still have something to work with, and they’re still free to knock on anyone’s door. 

Vermont has a similar law that bars the sale of prescriber-specific Rx data for marketing purposes unless prescribers sign a consent form. As of December, 14 percent of the state’s licensed MDs had waived their privacy, according to the Vermont Department of Health. Maine passed a law that reverses the process - prescribers must complete a form to 

 their data from marketing-minded third parties. 

Variations of these measures have been proposed in other state legislatures, according to the National Legislative Association on Prescription Drug Prices. So enacting a law where you live is one way to limit what Big Pharma and data miners can do. 

But can you make the law stick? The New Hampshire legislation weathered an unsuccessful court challenge from IMS Health and Verispan, two data-mining companies that buy prescription information from pharmacies and sell it to drug companies. A federal judge overturned the Maine law in a victory for data miners, although the state is appealing the decision. Data miners have taken their legal battle against the Vermont law to the federal appellate level. 

The data mining companies criticize these laws as violating their constitutional right to free speech and potentially jeopardizing patient safety by preventing the use of physician-identified prescription data for clinical activities, including research. They also argue, as they did in one court pleading, that their work helps “ensure that the right doctors receive the right information about the right drugs so that the doctors can make the right choices for their patients.” 

The American Medical Association gives physicians - members and nonmembers alike - a means of keeping their Rx life private, although it’s a partial degree of privacy. Through its Physician Data Restriction Program, you can withhold your prescribing information from drug reps and their immediate supervisors. To sign up, visit the AMA Web site and search for PDRP. As with similar state laws, opting out through this program doesn’t ban detailers from your practice. 


The AMA doesn’t buy or sell Rx data, but it does sell its database of physician demographic information to data mining companies. The AMA states that such companies must honor a physician’s desire to curtail the use of prescribing information based on their licensing contracts with the association. As of December, some 25,000 physicians had enrolled in the PDRP, according to the AMA. 

However, the PDRP has loopholes. Drug companies still can find out the particular drugs you order; they just aren’t allowed to share that information with a drug rep or his manager - on their honor. And drug reps are permitted to know your percentile ranking in the therapeutic classes of drugs you prescribe, notes general practitioner Adriane Fugh-Berman, who helps operate PharmedOut (

), a group seeking to reduce Big Pharma’s influence. 

“A rep can see that you’re in the top 10 percent of prescribers for antidepressants, for example, but not whether you prescribe Paxil or Zoloft,” says Fugh-Berman, an associate professor of physiology at Georgetown University School of Medicine. 

Fugh-Berman says that instead of relying on the PDRP or state laws to shield your Rx data, all you have to do is refuse to see drug reps. 

This decision, of course, hinges on what you think of drug reps. Roughly 80 percent of physicians welcome them, says Fugh-Berman. And many physicians say they’re thankful for the product information, samples, and free meals. 

However, Fugh-Berman and other physicians contend that drug reps represent a biased, unreliable source of information about medications. Furthermore, the argument goes, drug reps drive up the cost of healthcare since they push new, expensive drugs through their spiels and samples even when less expensive drugs - particularly generics - can get the job done. 

From the perspective of Big Pharma critics, the question is whether you want to share prescribing information with a drug rep who will use it to craft a sales pitch. And sales is the name of the game, as evidenced by this e-mail message, obtained by the 

, from a drug-company district sales manager to field reps six years ago: 

“Our goal is 50 or more scripts per week for each territory. If you are not achieving this goal, ask yourself if those doctors that you have such great relationships with are being fair to you. Hold them accountable for all of the time, samples, lunches, dinners, programs, and past preceptorships that you have provided or paid for and get the business!” 

It’s your call whether your prescribing habits are any of 

is an award-winning journalist based in St. Louis who has covered the healthcare industry for 21 years. He can be reached via 

This article originally appeared in the March 2010 issue of Physicians Practice.

Should you keep your Rx data away from drug companies? Is that even possible? Here’s what you can and can’t do to protect your prescribing privacy.

What Your Drug Rep Knows


In harsh economic times that test doctors’ souls, Buffalo family physician Raul Vazquez performs a lot of tests. 

Spirometry. Nerve conduction studies. EKGs. Stress tests. Ultrasound imaging to detect peripheral arterial disease. 

 are in fact essential to the financial well-being of his practice. With payment from private health insurers for evaluation and management services continuing to shrink - as evidenced by our 2009 Physician Fee Schedule Survey - physicians like Vazquez can’t get by with old-fashioned primary-care medicine. Merely sitting down with a patient, diagnosing his illness, and writing a prescription won’t cut it anymore. “If you just see patients, you might as well close up,” says Vazquez. 

Faced with enrollment declines and dismal investment returns, insurance companies in 2009 accelerated their now-customary pay cuts, according to our latest fee schedule survey. For bread-and-butter office visits for new patients, established patients, and consults, reimbursement declined an average 7.3 percent, our data reveal, and the bellwether 99213 - the most frequently billed code - fell 8.6 percent to $65.49. (Our analysis assumes that physicians reported private-pay allowables - the rate physicians contract for, which typically includes money collected from the patient - as opposed to dollar amounts on the insurance checks they receive.) 

Private health plans have been tight-fisted for years, but the 

 only tightened their grip in 2009. When employers lay off workers, enrollment drops in company-sponsored health plans, which means lower premium revenue. And a moribund stock market in 2008 meant that insurers also earned less on their investments. So they try to preserve their profit margins by paying doctors less, says Susanne Madden, president of The Verden Group, a consulting group focused on managed care. 

“Payers are cost-shifting to physicians,” says Madden. “By putting downward pressure on 

, they don’t have to bump up their premiums as much to maintain their profitability.” 

But who’s worrying about physician profitability? Well, you are. And so are we. The skies are gloomy and the rain is falling for private-office physicians; our 2009 Fee Schedule Survey is not exactly forecasting picnic weather. Still, there are some things you can do to get some cover. 


Our data reveal a pattern of private-payer reimbursement that’s declining steeply enough to make Medicare’s relatively low-but-stable pay rates look pretty good by comparison. 

In 2009, the federal program bumped up its rates for office visits 99213, 99214, and 99215 by 2.5 percent, 2.7 percent, and 2.7 percent, respectively. Reimbursement remained essentially flat for 99212 while falling 5.3 percent for the so-called nursing code of 99211. 

All in all, the feds are trying to bolster primary-care doctors who depend heavily on these E&M codes, says Max Reiboldt, CEO of The Coker Group, an Atlanta-based consulting firm. 

While private payers have pushed their rates down, Medicare has pushed its rates up. The result? The federal program that used to be a reimbursement floor that everyone built on - “We’ll pay you 120 percent of the Medicare fee schedule” - is becoming the ceiling. In 2008, private plans outpaid Medicare for all levels of established-patient office visits except 99215. In 2009, private payers fell below Medicare on 99214 as well, and the gap between Medicare and private payers on the other codes shrank. In 2008, the average allowable from private payers for 99213 was 120 percent of Medicare. In 2009, it slipped to 107 percent. If this trend keeps up, you’ll be lucky if payers say, “We’ll pay you as


This trend is becoming a talking point for doctors who favor a 

. “Medicare for all is not a bad concept,” says Vazquez. Adds Madden, “Reimbursement rates explain why so many physicians support a public option. In adult primary care, Medicare is often the better payer.” 

And the Medicare edge isn’t just about dollars. Physicians experience fewer hassles dealing with Medicare since its payment rules are clearer and applied more consistently, says Madden. Plus, the agency doesn’t rewrite the rules as frequently and capriciously as do some private payers. 

The average charge for office visits for new patients, established patients, and consults decreased by almost 8 percent. Physicians primarily cut their prices for new-patient and consult visits. 

It might seem academic, since the amount you charge isn’t the same as the amount you’re paid - and you’re only in direct control of the former - but reducing charges is a bad move, Madden says. 

Charges should be based on your costs, including physician compensation, she argues. “At the very least, you need to increase your charges each year to reflect inflation.” 

It’s not clear why charges dropped in 2009. One possible explanation is physician sympathy for patients who must foot the entire bill, either because they have a high-deductible insurance plan or else lack coverage altogether. That’s no way to run a business, says Madden. 

“If patients are struggling to pay what they owe, physicians can always write off part of the bill, as long as they document that it’s a hardship case,” says Madden. “But they shouldn’t move their charges downward across the board to help patients.” Payers might reasonably assume in such cases that the lower charge is your “usual and customary fee,” and seek discounts against that number. 


Private payers are consistent if nothing else. In 2009, they cut reimbursement for every level of the office-visit sets for new patients, established patients, and consults. In addition, reimbursements on average declined in every region of the country, with the steepest drop in the Mid-Atlantic states, where E&M rates are now the nation’s lowest. A 99213 there came to $58.30. The least-drastic cuts occurred in the Pacific region, which also boasted the highest rates - $73.10 for a 99213, for example. 

Experts don’t know exactly what accounts for these geographic disparities, but they have theories. “In states like New Jersey and New York, you have a higher density of physicians, and the competition keeps reimbursement at a lower level,” says Madden. A larger number of physicians in one location means payers there can more easily play physicians against each other. 


Census figures buttress Madden’s argument. Four of our Mid-Atlantic states - Maryland, New York, New Jersey, and Pennsylvania - rank among the nation’s 10 highest in physicians per capita. In contrast, California, Washington, and Oregon - the three largest states in the Pacific region, the others being Alaska and Hawaii - are in the second tier of 10. 

For his part, Reiboldt wonders if the difference in rates reflects a greater prevalence of large-group practices in the Pacific region, which gives these doctors more negotiating clout. Doctors in the Mid-Atlantic region, he says, are more independent-minded and less likely to join a white-coated herd. 

Dicing survey results by medical specialty reveals the usual lack of parity between primary-care physicians and their specialist colleagues. While all physicians took an E&M pay cut, the cuts weren’t as onerous for medical specialists (-4 percent) and surgical specialists (-3 percent) as they were for primary-care physicians (-9 percent). And overall, specialists received the highest rates. Since orthopedic surgeons, cardiologists, and the like are less plentiful than internists and family physicians, they may enjoy more bargaining power with insurers. 

Declining reimbursements result from a trickle-down economy, with Wall Street trickling down problems on health insurers, and health insurers trickling down problems on doctors. In 2008, the nation’s Blue Cross Blue Shield companies experienced a 41 percent drop in net income, due in part to lower return on investments, according to a study by the credit-rating firm A.M. Best. This Blues song included publicly traded Wellpoint, which operates BCBS companies in 14 states. Its net income fell 25.5 percent in 2008. 

These troubles persisted into 2009, with Wellpoint earnings tailing off by 76 percent in the second quarter and membership declining by 1 million from 12 months before, due mostly to higher unemployment. Among the ranks of other publicly traded health insurers, income also decreased for Aetna, Coventry Health Care, and HealthNet in the second quarter, but rose nicely for Humana, UnitedHealth Group and Cigna. 

Still, all of the publicly traded insurers managed to post profits through the first half of 2009, and one way to stay in the black was to whittle down physicians’ fees. In addition, payers in 2009 may have been reducing their costs in anticipation that healthcare reform legislation would erode future profits, said Reiboldt. “It’s a matter of positioning themselves.” 


The health plans have their strategy for tough times. What about you? It may seem too tempting to throw up your hands in frustration, but there remain strategies for mitigating the effect of the negative economic forces on your practice: 

 One essential skill is knowing what your health plan contracts actually say. Many practices don’t even recognize fee cuts when the plans enact them. “Some doctors are ignorant of what they’re paid,” says Denver-based practice-management consultant Todd Welter. 

It’s your business. You don’t have the luxury any longer of leaving the “money stuff” to other people. But while payer contracts may be dense with arcana, understanding what you’re getting paid is not like memorizing the phone book, says Welter. Just track reimbursement for the 20 to 30 CPT codes that represent 90 percent of your revenue. If you notice that a new contract shaves dollars off your key codes, voice your objections to the provider relations representative, who may give in, says Welter. “They’re watching for the doctors who aren’t watching the details.” 

Knowing your top codes cold is especially critical when health plans crow about new rates that are “on average” substantially higher than Medicare rates. Closer inspection of a private payer’s new fee schedule may reveal that the plan is lowering your 99213 to 105 percent of Medicare, but increasing some rarely used codes to 150 percent. Also beware of payers who freeze their rates by continuing to base them on 

 year’s Medicare fee schedule, instead of upgrading to

 that operate like virtual monopolies in many regions isn’t a cakewalk, but it’s worth trying. They’re more likely to give you a raise, or at least not give you a haircut, if you convince them that you’re more valuable to them than rival practices. Perhaps you’re the only one who offers extended office hours, or you hew more closely to clinical guidelines for a larger percentage of patients than most of your colleagues. If you’ve got it, flaunt it. 

 If you can’t stave off rate decreases, you may be able to protect your bottom line through 

. Maybe you can carve out another slot or two for office visits by tightly scheduling chats with pharmaceutical reps, or delegating more patient education to an RN or medical assistant. A consultant can help identify logjams in your patient flow, such as a shortage of exam rooms, which you might be able to correct by using your private office to handle patient visits. 


Some practices lower costs by hiring nurse practitioners and physician assistants, who can do 80 percent of what a primary-care physician can do, including diagnose illnesses and prescribe medications, for less than half of what a physician earns. In 2008, for example, physician assistants specializing in primary care pulled down $87,649 in compensation and brought in $246,001 in revenue, according to the Medical Group Management Association. In comparison, a family physician not delivering babies earned $179,672 and produced $370,011 in revenue. So one family physician’s compensation would pay for two PAs, whose combined revenue of $492,002 would top the doctor’s by 33 percent. 

 Offering ancillary services such as spirometry, EKGs, and X-ray is a traditional way to supplement waning reimbursement for E&M services. But before you buy a piece of equipment, ask yourself a question - is this service benefiting your patients, or merely your bank account? “The temptation is to do it for every patient, whether they need it or not,” notes Madden. “That promotes overutilization.” 

However, you’re on safer ethical ground if you currently refer patients to a local hospital for tests and procedures that you could bring in-house, says Todd Welter. “Somebody is making money off these services,” he says. “Why shouldn’t it be the doctor?” Just be sure to run the numbers for your new service ahead of time to determine whether it will actually turn a profit. How much will a test or service cost in terms of equipment, supplies, and personnel? What’s your likely volume of patients? Are you certain your payers will reimburse you for it? How much? Can you delegate the actual performance of the service to lower-paid staff, or will you have to perform it personally? How much of your time will it take - and are there more profitable ways you would (or could) be spending that time? Do the math. 


Sometimes doing the math on third-party reimbursements - more about subtraction than addition - drives physicians to consider other employment arrangements or practice models. One idea is to sell: Hospitals are in a buying mood again, and Reiboldt says more and more physicians are becoming employed, which promises a reasonably good livelihood - but no overnight fortunes like those in the 1990s, when health systems overpaid for practices. Hospitals, he adds, have developed into more physician-friendly employers since they first started assembling regiments of MDs and DOs. However, they’ve also turned to productivity-based compensation formulas that keep physicians hustling like self-employed entrepreneurs. 

Another drastic survival plan is cutting your ties to private health plans and Medicare, seeing patients on a cash-only basis. “We stopped contracting with them seven years ago due to declining reimbursement,” says internist Raymond Kordonowy, a member of the four-doctor Internal Medicine of Southwest Florida in Fort Myers. “Providers should bill what their practice requires to remain profitable.” 

Whatever you do to counter the squeeze play of private payers, act boldly. You can’t be the doctor you were yesterday, circling 99213 on a charge ticket and waiting for a check. Says Raul Vazquez, “You have to reinvent yourself.” 

*Curious to see how payer reimbursements are trending? Compare the 2009 survey stats to our 

is an award-winning journalist who has covered the health-care industry for 20 years. He also is a published poet with an MFA in creative writing. He can be reached via 

This article originally appeared in the January 2010 issue of

A lingering recession and declining reimbursement make for stormy weather for practices. Check out our suggestions for how to stay dry - and in the black.

2009 Fee Schedule Survey:  Survive the Perfect Storm

Internal medicine subspecialist Susannah Blue* in Chicago used to be impressed by the dedication of her former office manager, Maude Rizzi.* 

This employee once hobbled into the office on crutches when she should have been home recovering from knee surgery. But then, Rizzi always insisted on being there to open the practice’s mail. 

“I have no life,” she’d tell Blue. “Your office is my life.” 

But it turned out to be a double life. Shortly after Rizzi left in January for another job, Blue discovered that her dedicated office manager had stolen $80,000 from the practice. Rizzi now faces criminal charges and Blue feels ashamed and humiliated. “I thought I had good internal controls,” she says. “I thought I was watching the store.” 

She needn’t beat up on herself, however, says practice management consultant Keith Borglum in Santa Rosa, Calif. “Anybody can get embezzled,” says Borglum. “You can do things to discourage embezzlement, and to discover it early once it happens, but you’ll never totally prevent it.” 

While Blue committed some classic mistakes that made it easier for Rizzi to raid the till, she has since learned a few lessons about minimizing the risk of another inside job. 

Blue hired Rizzi as a receptionist when she launched a solo practice in 2004 and promoted her to office manager when she took on a second physician and enlarged the staff. The practice grew quickly, but despite a full waiting room, Blue struggled to cover her expenses and take home a consistent salary. The financial picture became so bleak she even considered quitting medicine. 

Meanwhile, Rizzi was stealing her money, mostly by skimming cash that patients paid at the front desk, about $55,000 in all. The cash was posted in Blue’s practice management system, but it never was deposited in the bank - and Rizzi made sure that she was the only one making deposits. She went through the charade of sitting down with Blue and comparing the bank deposit to a tally of the day’s collections. The numbers always matched, says Blue, because Rizzi cooked up her own collection numbers - always minus the cash - on a custom-made spreadsheet instead of printing out an accurate report from the practice management system. And she also falsified accounts receivable reports to further squelch suspicions. 

For Rizzi, cash was king. “She told the front desk that all new patients must pay in cash, even if they had a check or credit card,” says Blue. “She’d send new patients to the ATM machine.” 

Rizzi stole another $12,000 or so by plumping up her paycheck, at first by $20 or $50, small increments that didn’t attract much attention when Blue inspected individual wages. At the end, Rizzi was giving herself $500 raises, which went unnoticed because she was now showing Blue only the 

 for payroll. Plus, she misrepresented what other employees earned. 

The rest of the losses resulted from Rizzi using a practice credit card to buy paper products and office supplies for her personal use. She’d tell Blue, however, that they were purchased for the practice. 

Blue says that in addition to embezzling, Rizzi saddled her practice with more than $120,000 in losses. She wasn’t just a thief; she was a lousy manager. Insurance claims were submitted past the filing deadline, if at all. Patients weren’t billed. Worse yet, Blue would write checks to vendors, but Rizzi would either mail them in late or sit on them. That’s why Blue’s bank was charging her late fees and higher interest for tardy payments on a loan and a line of credit (a problem that Rizzi hid from her boss until close to the end by intercepting bank statements). 

While Blue has wondered if Rizzi was trying to destroy her practice, it was probably nothing personal, says Angela Morelock, an accountant and fraud specialist at the CPA and advisory firm of BKD, in Springfield, Mo. Embezzlers, she adds, routinely stiff vendors to mask the damage they do to an employer’s bank account. “By not paying bills, the embezzler makes the bank account look normal and avoids the problem of checks bouncing if the balance gets too low.” 

Blue could have given Rizzi less opportunity to disguise her theft by outsourcing her accounts payable to a part-time bookkeeper, notes Keith Borglum. “You’d only need to use one about four hours every two weeks.” 

Blue admits making one big mistake in the Rizzi affair - she didn’t run a criminal background check before hiring her. “I got a glowing reference from her previous employer,” says Blue. “I thought that was good enough.” If she had run the check, she would have learned that Rizzi had been charged with stealing from two previous employers. 

The trouble with trusting a reference, says Morelock, is that an embezzler’s most recent employer may have been embezzled himself without knowing it. “The theft is often found long after someone leaves,” she says. 

Another mistake was ignoring common warning signs of fraud. Morelock says that embezzlers often upgrade their lifestyle, and Rizzi fit the bill. “She became more interested in shopping for shoes, clothes, and purses,” says Blue. “She also leased a condo that was probably beyond her price range.” 

A second tip-off was Rizzi’s obsession about opening the practice’s mail. “Before she went on vacation, she said, ‘I’ll open the mail when I get back,’” says Blue. “And then she’d cut short her vacation to do that.” Adds Morelock: “If embezzlers lose control of the mail, they’re dead in the water.” 


More than anything, though, Blue created a larcenous opening for Rizzi by abdicating responsibility to her in key areas. Blue once tried to hire a practice management consultant to figure out why she was losing money, for example, but instead of scheduling the meeting herself, she delegated that job to Rizzi. The meeting never materialized. 

Susannah Blue is taking some overdue precautions to protect herself from the next Maude Rizzi. She now compares her bank deposit slips to the collections posted in her practice management system. She’s run background checks on every new employee, including Rizzi’s replacement. 

And Blue is opening every single piece of mail herself. That may be an unrealistic safeguard in light of a doctor’s limited time - and Blue’s time is very limited, given that she’s a married mother of three small children. Instead, Blue might consider rotating mail duty among several employees, and tackle the job herself on a spot basis, suggests Borglum. 

He touts this combination of delegation and spot-checking for other key financial functions as a way to make would-be embezzlers think twice. “No matter how much you trust somebody, you still have to check,” he says. “And if employees know that the doctor is routinely inspecting things, they’ll be less inclined to steal.” 

Morelock recommends a thorough spot check in the form of an extensive audit every one or two years by a management consultant or a CPA. Such an audit would examine everything from write-offs of patient charges to the use of company credit cards. “You may need to spend $5,000 or so, but it’s worth it,” she says. 

While Blue committed some management errors that set herself up for fraud, she did one big thing right - turning Rizzi over to the authorities. “Some business owners feel so guilty and ashamed about getting embezzled that they don’t prosecute,” says Morelock. 

Their silence allows the Maude Rizzis of the world to move on a new target, proclaiming, “Your office is my life.” 

*Names have been changed to protect anonymity. 


is an award-winning journalist based in St. Louis who has covered the healthcare industry for 21 years. He can be reached via

This article originally appeared in the July/August 2009 issue of

An internal medicine specialist was fleeced badly by the Mother of all Embezzlers. Don’t think it can’t happen to you until you read what happened to her.

Author | Robert Lowes

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