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MGMA 2020: Thriving through better claims and collections


How an independent practice grew through optimizations and consolidation

money wrapped in stethoscope

Current revenue cycle management (RCM) processes in some practices may be well established, but there is always room for improvement and optimizations.

At MGMA's virtual Medical Practice Excellence Conference, Lawrence Jones, MD, partner and physician of One Pediatrics; and Daniel Pope, senior vice president and general manager at R1 RCM, presented "Thriving Financially through Better Claims and Collections".

One Pediatrics, Dr. Jones' practice, started out as an independent practice founded in 2014. Now a total of seven integrated practices all operate independently across nine locations, comprised of over 40 providers. In 2019, the practice group recorded 179,000 visits, roughly 35% of which came from the Lousiville market.

During the time from establishment through the present day, Jones says that his practice was increasingly challenged by hospital groups that purchased smaller independent practices. He and his group wanted to remain fairly independent; however, he was learning that, as autonomous practices, they were not leveraging best practices for streamlined operations.

"As small practices, we were really competing against each other," Jones says.

Particular issues in their individual practices included inconsistent or outdated payer contracts, as well as missed opportunities for negotiation that resulted in lower reimbursement revenue. For example, Jones says that his contracts at the time of consolidation were were nearly 20% lower than that of the competing hospital system.

Then, the COVID-19 pandemic introduced a new onslaught of complications, including reduced patient volume, costs that weren't budgeted (e.g. PPE), and an inability or unwillingness to collect from patients between March and May of 2020.

To remain independent, but also remain competitive against the larger hospital system, One Pediatrics and other local independent practices merged and became the system that exists today.

Consolidation may not sound appealing to every independent physician, but Jones says that it was well worth it.

"It was painful when it started," he says, regarding the funding processes, which were funded by the physicians themselves. "For anybody who wants to do this, I'd highly recommend it, but you've got to be all in because it's going to hurt at the beginning. In the long run, it's wildly successful, I would never go back to doing what I was doing before."

These are the lessons they have learned for all independent practices to be able to thrive financially.

Optimize Payer Contracts

"As an individual practice, it's a little bit challenging, a little daunting to try to go to some of these large payers and try to negotiate on your own behalf," says Pope. "There's definitely strength in numbers when it comes to this area of negotiation."

It is equally important for independent practices, whether solo or in groups, to use data analytics to identify opportunities in their negotiations.

"A payer's contract group is trained. They are going to try to get you to settle for less than what they what they want to pay," Pope says.

If you have data behind you—regional, market, national, individual payers and collective groups, commercial groups, managed care groups, etc—Pope says you will come to the negotiations more sophisticated and with a greater strategic approach.

Knowing things like patient volume, contributions from HCPC, and CPT code patterns are very important. Also, practices should review capitation rates and annual bonus incentives by payer

Practices without a value-based care program should also establish one, as demand for these services will only continue to increase.

"You need to be able to understand where it is you can deliver value to your specific patient population, whether it be a pediatric project such as One Pediatrics, or whether you're a geriatric practice," says Pope.

Understanding your patient population, and subsequently your payer population, can help to renegotiate your practice's quality metrics and capitation programs. Pope says, for One Pediatrics, knowing their specific patient populations led to a renegotiation that led to an achievement of $110,000 for the growing practice.

Pope says they were also helped by the knowledge of CPT code distribution, which allowed them to tighten up negotiations around high-volume CPT codes at their practice.

Optimize Operations Across Enterprise

While the presentation considered the experience of a consolidation among independent practices, these are still areas that solo or even other group practices should consider optimizing.

The most important thing, Pope says, was taking monotonous processes out of providers' and staff's hands, thus allowing each to operate to their greatest ability in their respective disciplines.

  • HR & IT
    • Consider coordinating 401K and benefits
    • Outsource things like payroll processing, recruitment and new employee onboarding when necessary and where applicable
    • Outsource 24-hour IT support

  • Safety & PCMH
    • host monthly safety calls; monthly PCMH calls
    • provide OSHA guided policy templates
    • move OSHA/HIPAA training to online modules
    • review and revise care coordination policies

Together, these HR, IT, Safety and PCMH optimizations allowed One Pediatrics to achieve quality goals that they can take to insurance companies, Jones says.

One Pediatrics also optimized the following areas of their practice, areas that other practices should consider optimizing as well.

  • Coding Education
    • Bi-annual individualized coding audits not only ensure providers are coding accurately, but also that they are coding with the best optimization possible

  • Growth and Revenue Integrity
    • Use slot utilization analysis and data-visualization tools to track historic trends

  • Patient Communications
    • implement reminder and balance messaging, including overdue messaging
    • Establish online scheduling
    • Systematic patient satisfaction reporting can also help identify where you can make adjustments for your patients

  • Marketing
    • Consider web presence, print ad designs
    • Draft and publish monthly wellness articles
    • Engage in active online reputation management

  • Technology improvements
    • Use data-driven analytics and easily accessible reports for managers
    • Hold monthly review of denials by provider, payer, reason

Creating a structure to fuel your best decision-making process

To begin creating your best decision-making structure, practices should start with month managers' meetings.

The conversation should start by covering three pillars: quality, revenue integrity, and employee engagement. From there, review income statements, G&L reports, discuss expense management best practices, and suggest ways to reduce costs and labor.

Practices should also hold a monthly leadership call, especially if you are part of a group. This conversation will be a high-level review of what each practice is doing and cover topics like hiring decisions. In all, these conversations should help to keep independent practices aware of each others' challenges and initiatives.

One Pediatrics' Accomplishments

By optimizing in these areas, One Pediatrics reportedly experienced:

  • Charge/visit : 7% improvement
  • Collection vists improvement: 18%
  • Improved payer contracting: 13%
  • Improved payer contracting: 29% (united
  • Overall collections: 11%
  • Days in AR below national standard: 17% better (25 days) (national avg = 28-32 days)
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