At Private Practice Initiatives, we provide many services and options to best suit your business’ needs. Please take a look below:
Revenue Cycle Management (RCM)
Is an “umbrella” term that has become popular in the HealthCare industry as a way to think, collectively, about managing all of the various tasks that go into how much money your practice ultimately makes. In the context of a medical office it includes traditional billing and collection issues but also includes other related issues such as proper credentialing, analysis and setting of fees, strategic evaluation of what procedures and services to offer within a practice, negotiating contracts with various networks and institutions, reviewing the procedure coding for insurance claims, data entry for patient registration and charge entry, submitting and tracking insurance claims, auditing payment accuracy, appealing underpaid claims, evaluating and optimizing work flow in the office, monitoring overhead, cash flow and productivity metrics. You can also elect to outsource individual tasks such as:
New Office Start-Up
If you need financing to start a new practice or to add new equipment or office facilities for an established practice.
One of your biggest expense items is usually your office space. Let us help you make sure your office is designed to incorporate the newest concepts in work flow. We can also show you how to leverage technology to reduce rent requirements. For example, as you transition from the old fashioned paper charts to an Electronic Medical Record, you no longer have to allocate space for a file room or buy shelves to store these charts. If you are already in an office, we can show you how you can convert these spaces to revenue generation. For example, an existing file room can become a new exam room or procedure room. This allows you to generate more revenue without increasing your rent expense. Outsourcing your business office tasks helps you reduce the number of employees you need at your office and allows you to save the space they would have needed. We help you use your space most efficiently and select the best equipment at the best prices.
We track current market conditions to insure that you get the best rates and terms.
Fee Schedule Analysis
Our experience working with a variety of physicians all over Texas provides us with a wealth of market information on current fee and reimbursement levels allowing us to monitor the changes in reimbursement rates offered through the various networks and plans by specialty and geographic location to insure that you are signed up with the best plans and then make sure you submit each claim through the network that offers the best reimbursement.
Establishing Network Affiliations
PPI goes beyond the role of the traditional billing service in a number of ways but some of the most valuable are our continuing education programs for the physicians and their staff members. We provide these to insure that our clients are kept up to date on the ever evolving rules and regulations that impact our industry. We look at the “best practices” for practice organization and operations. We also focus on helpful hints for how to improve your office work-flow to optimize performance and minimize cost. We share this information in a variety of ways:
- White Papers
- News Flashes
- Help Desk for answering questions as you encounter them
- Internet Chat-Room and Blog
We start with the basic principles of medical economics in today’s healthcare industry. Consider the following concepts:
Revenue Cycle Management (RCM)
Is an “umbrella” term that has become popular in the HealthCare industry as a way to think, collectively, about managing all of the various tasks that go into how much money your practice ultimately makes. It includes traditional billing and collection issues but also includes other related issues such as proper credentialing, analysis and setting of fees, strategic evaluation of what procedures and services to offer within a practice, negotiating contracts with various networks and institutions, auditing payment accuracy, appealing underpaid claims, evaluating and optimizing work flow in the office, monitoring overhead, cash flow and productivity metrics.
A very important advantage of working with PPI is access to dramatically better practice management metrics for monitoring your practice performance. We have developed our own reports that we provide to all of our clients each month so they can follow their progress. We also incorporate data from national benchmarks developed by organizations such as the Medical Group Management Association (MGMA) to measure our performance against other Texas practices as well as practices across the country. This even allows us to compare a practice to others of the same specialty and size. Our clients consistently outperform the national and state averages.
One of the problems we see with many offices is that they just don’t understand how to keep score. Sometimes they use the correct terminology but they don’t use the correct formulas. They tend to get unrealistically rosy interpretations of their productivity statistics because they don’t understand how to analyze the numbers. For example, we see doctors and office managers boasting of very high collection percentage rates but they are not tracking and factoring in the improperly discounted and denied fees. They are allowing significant revenue to slip through the cracks and they usually don’t even know it.
Increase Gross Collections
Our approach has allowed many of our clients to enjoy a dramatic increase in their monthly bank deposits within the first ninety days. We have seen our clients increase their monthly collections by 50%, 60% and even as high as 100%. Even more impressive, these improvements are not just the one-time windfall collections you sometimes see when you go back to clean up old outstanding claims. These improvements are sustained, month after month.
Reduce Practice Operating Expenses
We attack every expense item, one by one, to look for ways to improve efficiency, productivity and the quality of patient care while also saving money. Here are the main categories of expenses:
- Staff – your staff is usually your single biggest expense. Moreover, the cost of employees tends to go up every year. Outsourcing various tasks within your office to PPI can help you reduce your payroll and your overall operating expenses. Or sometimes you can reassign staff members who have been freed from their current clerical duties to work on providing services that generate additional income. For example, if you and your nurse or P.A. have less clerical work to do, you might have time to work in a few more patients each day. Reducing staff on your payroll means your staff health insurance, HR and management costs are lower too. A smaller staff is also often easier to work into a retirement plan program such as a Simplified Employee Pension (SEP) Plan or 401K plan.
- Office rent is often the second biggest expense item. As you outsource functions and reduce the number of employees, you no longer have to rent the space that they previously needed to work in. The same thing is true for the implementation of an EMR system. You can eliminate the rent for medical records storage. You then have the options of redesigning your office to use less space or of reallocating the space you free up for a revenue generating use. For example, you may be able to turn an old file room into a new procedure room so the space generates revenue instead of just being an expense.
- Malpractice Insurance is also often a big expense item
- Equipment Costs – diagnostic equipment & clerical equipment
- Supply Costs – postage, paper, ink, envelopes, folders, staples, paper clips, copier toner, pens, pencils, etc
Electronic Medical Records (EMR)
Implementing an efficient and cost effective Electronic Medical Records system can help reduce expenses in all of the categories just mentioned above. For example, you can reduce clerical staff needed to create the charts and transport them around the office, reduce rent for file storage, reduce equipment costs associated with copiers, fax machines, and reduce supply costs by eliminating all of the paper, ink cartridges and file folders associated with paper charts.
Maximize Net Income
This is the ubiquitous “bottom line” we talk about so often. You start with your Gross Collections and subtract your Practice Operating Expenses and what you have left is your Net Income. This is the most fundamental number you will focus on. This is your take home pay.
Are the sum of all the standard fees for all the procedures performed. However, measuring your collections as a percentage of your gross charges is misleading because there is a significant discrepancy between Gross Charges & Collections. The reason is that we are working in an industry where you don’t get paid the same amount for the same procedure each time you perform it. Your actual payment differs significantly based on:
- Which Health Insurance policy is the patient covered by?
- Which networks or preferred provider organizations (PPO’s) are the physician signed up with?
The U.S. Government sets the reimbursement schedule for government sponsored health plans like Medicare. The individual states set the reimbursement rates for Medicaid and other state sponsored health plans. The private insurance companies negotiate the reimbursement rates with the different plans and preferred provider organizations (PPO’s). The result of all this is that some pay higher rates than others.
In an effort to keep charges as high as possible and not leave any money on the table, most doctors set their Standard Charges at the highest reimbursement rate they think they will see even though only a small number of their patients have insurance that will actually pay this amount. The vast majority of their patients will only pay a fraction of the Standard Fee. Consequently, our gross charges tend to be arbitrary and poorly correlated to allowable or “collectable” charges. Traditionally, gross charge rates are intentionally set higher than the expected payments.
This is the amount for each procedure that you are allowed to collect. The “allowable” amount can and does vary from insurance company to insurance company, CPT Code to CPT Code, doctor to doctor, network to network and, of course, from year to year. Thus, it is usually the case that you will get paid a different amount, regardless of what your original fee schedule says.
You have two basic challenges:
- First, you need to make sure that you are signed up with the networks or plans that will garner you the highest allowables. This takes research and negotiation to secure the best rates. Moreover, this is an ever changing landscape such that one network may offer the best reimbursements this year but another may be best next year. Because we work with so many different practices all across the state, we are in a perfect position to stay up to date on the changes as they occur.
- Second, you need to monitor and audit the payments very carefully to insure that the insurance companies pay what the contract say they should pay. Insurance companies are notorious for making “mistakes” on their reimbursements and these “mistakes” are almost never in the physician’s favor. It is critical to have a system that carefully audits every payment for accuracy and then appeals the “mistakes” in a very timely manner.
The danger here is that you don’t want to write-off more that you have to.
How busy is the practice? We look at the:
- Total number of patient encounters per month
- Average RVU’s generated from each encounter
Payments per unit of work can be expressed as the Average payment dollars collected per RVU. Medicare and a large number of private insurance plans have adopted a payment scale indexed to the Relative Value Units (RVU) index. The Relative Value Unit or “RVU” system was developed as a way to compare the comparative value of all the various medical services and procedures described in the CPT Procedure Code tables. Each CPT Code is assigned an “RVU” point value based on several factors including difficulty, risk and malpractice insurance rates. These RVU values are revised annually because some procedures actually get easier or harder based on advances in technology or experience. A great example is the price reductions we have seen with laser eye surgery as the procedures were perfected and the physicians were able to perform the procedures much more quickly and reduce risk with much higher success rates and fewer complications. Most of the insurance payors now calculate their allowable rates by determining how much they will allow per RVU “point”. One company may pay $15.00 per RVU Point while another insurance plan may only pay $12.00 per RVU point. While the vast majority of CPT Codes stay the same from year to year, every year new options are added to reflect new medications, new surgeries, new diagnostic procedures, etc. The rates are generally adjusted once a year. Since different specialties naturally employ a different mix of procedures, and, even within a single specialty, different doctors tend to use a different mix, the RVU averages provide an excellent way to compare overall results.
Days in A/R
This is the measure of how quickly you are able to collect your money. We use a running average based on the charges you have generated over the past year to establish an Average Charge Day and then divide your Outstanding Accounts Receivable by this amount. We also apply this same test to your major payors to determine if there are certain insurance companies that have a pattern of paying more slowly.
The idea is to establish a feed-back loop with the quickest turn around possible. Historically, a practice would submit insurance claims and expect to wait several weeks to get any word back about how the claim would be paid. Using the very newest and best technology, we have been able to implement processes that allow us to monitor the claims, step by step, as they filter through the adjudication process. The value of this is that we can respond immediately when a claim appears to be falling into a delayed or denied payment status.