n c a li m n ag me nta n a t h sso f i cia r e ti a o c n ... · get acquainted with region 5… by...
TRANSCRIPT
www.schfma.org Fall 2013
Palmetto State Newssouth carolina chapter Serving healthcare financial
management professionals statewide since 1953
annaaMlaiccinncaannnaiinFFieerreaarccahhc tth llt a e
ith cos
sssAAstt Aennntmeenmeeemggeaag
H CSSC
noonittia
Table of ContentsOfficers, Board & Committee Chairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2013-2014 Sponsors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
A Message from the Chapter President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Get Acquainted with Region 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
What I learned at SC HFMA Annual Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Pictures from SC HFMA Annual Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-11
Medical Necessity: Minimizing exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Kudzu Vine – SCHFMA Member and Sponsor News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Upcoming SCHFMA Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Hospital-Physician Alignment: Is it different this time? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-18
Update from SCHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19-20
Pictures from ANI Presidents Dinner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Looking for a webinar? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
HFMA, South Carolina Chapter
Our Vision: The South Carolina Chapter of the Healthcare Financial ManagementAssociation will continue to be the leading professional resource for individuals seekingexcellence in the area of financial management of integrated health systems and otherhealthcare organizations.
Advertising Prices!
1/4 page 3 7/8 x 5 3/8 $250 per issue
Half page 7 1/2 x 5 $450 per issue
Whole 7 1/2 x 10 $800 per issue
Include links to company websites ande-mail addresses
Palmetto State NewsEditor: Jasper Powell
1325 Spring Street • Greenwood, SC 29646 • 864-725-5231Email: [email protected]
Please contact Estelle with any updates to data contained within this publication.
Palmetto State News is the official publication of the South Carolina Chapter of theHealthcare Financial Management Association.
Opinions expressed here are those of the author and do not reflect the views of theHFMA or the South Carolina chapter.
© 2013-2014 South Carolina Chapter, Healthcare Financial Management Association.All rights reserved.
For a copy of the publications policy and guidelines, send a letter or email to the Editorat the address above.
2
3
Officers, Board & Committee Chairs 2013-2014President
Jude CrowellWashington and [email protected]
SecretaryWoody TurnerLexington Medical [email protected]
President-ElectGreg TaylorDixon Hughes, [email protected]
TreasurerEstelle [email protected]
Immediate Past PresidentDiane StoryRoper St. [email protected]
David SudduthBon Secours St. FrancisHealth [email protected]
Michael JebailyPrice Waterhouse [email protected]
Julianne DreonAnMed [email protected]
Ray HighVerisma [email protected]
Barney OsborneSC Hospital [email protected]
Jeff WhiteBeaufort [email protected]
Christy PowersCB&[email protected]
Jackie YoungClarendon Memorial
Candi PowersBeaufort Memorial [email protected]
Tommy CockrellSC Hospital [email protected]
Chapter Board of Directors
Committee Chairs
Advisory CommitteeDiane Story, ChairBudget/Finance
Barney Osborne, ChairCommunications
Estelle Welte, Co-ChairJasper Powell, Co-ChairCorporate Sponsorship
Julianne Dreon, ChairCRCA
Tara Gibson, Chair
Dixie 2015Greg Taylor, Chair
Education/ProgramsChristy Powers, Co-ChairCandi Powers, Co-Chair
Founders ContactWoody Turner, ChairInformation SystemsMichael Bowe, Chair
MembershipAdriana Day, Chair
NominatingRonnie Hyatt, Chair
Professional Excellence/CertificationSteve Lutfy, ChairSpecial Awards
Michael Jebaily, ChairStrategic PlanningRonnie Hyatt, Chair
4
2013/2014 Corporate Sponsors
The 2013-2014 South Carolina HFMA Corporate SponsorshipApplications are now open!
The chapter truly appreciates the generous support from all of ourcorporate sponsors.
Contact Julianne Dreon at [email protected] for more informationon becoming a SC HFMA Corporate Sponsor
Presidents Club
GoldAvaility, LLC • www.availity.com PricewaterhouseCoopers, LLP • www.pwc.comDECO, LLC • www.decorm.com Sevenex • www.thesevenexgroup.comMED A/Rx • www.medarx.com
SilverAccessOne MedCard, Inc - www.accessonemedcard.com Passport Health • www.passporthealth.com
Bank of America Merrill Lynch • www.bankofamerica.com Resource Corp • www.resourceone-llc.comBottom Line Systems, Inc. • www.onlinebls.com ResourceOne Medical Billing, LLC • www.resourceone-llc.comCardon Outreach • www.cardonoutreach.com South Carolina Hospital Association • www.scha.orgEmdeon • www.emdeon.org
BronzeApp Rev • www.apprev.com Laddaga-Garrett, P.A. • www.sehealthlaw.comBenefit Recovery • www.benefitrecovery.com LetterLogic • www.letterlogic.comAvectus Healthcare Solutions, LLC • www.avectushealth.com Medical Data Systems (MDS) • www.meddatsys.comCAB Collection Agency • www.cabrmc.com Meridian Leasing Corporation • www.onlinemeridian.comCliftonLarsonAllen LLP • www.cliftonlarsonallen.com Parrish Shaw • www.parrishshaw.comDataTrac Receivables Recovery • www.dtrrezpay.com Receivables Management Corporation • www.rmccollect.comDixon Hughes Goodman LLP • www.dhgllp.com Receivable Solutions, Inc. • www.receivable-solutions.comFCS/MedMaxFinance • www.medmaxfinance.com The Outsource Group • www.theoutsourcegroup.comFinancial Credit Services • www.fcsservices.com UCB, Inc • www.uhsweb.comFirstsource Solutions USA LLC • www.firstsource.com/healthcare_overview.html The ROI Companies • www.theroi.comGetixhealth • www.getixhealth.com Verisma Systems, Incl. • www.verismasystems.comHIMformatics • www.himformatics.com West Corporation • www.westassetmanagement.com
It is the start of a new year for SC HFMA chapter and I am excited about what we have planned.But before I get into the goals for this year, let me take a minute to thank Diane Story for herleadership over the past year. I think that everyone would join me in saying that Diane not onlyembraced the Leadership Matters theme but she also lives it every day. Thank you, Diane!
So with the new year, we have a new National Chairman’s theme. Steve Ross has declared thisyear’s theme is “Whatever it takes”. With all of the challenges we face as healthcare financeprofessionals, we must take on the mindset to do whatever it takes to thrive and empowerourselves and our workplaces to make a profound differences. Steve says that something as simpleas stopping to pick up a piece of paper to keep the interior of your facility clean and inviting is one
small thing that each of us can do to contribute to a greater cause: helping patients improve their physical well-being.It’s not enough to apply a “whatever it takes” attitude to your own work, Rose says. To drive a culture of “whatever ittakes,” HFMA members should take the lead in demonstrating this attitude to all those they work with—in actions bigand small—so that others may be inspired by their example.
For our chapter, we have three goals that I would like to accomplish this year:
1. Education - Our plan for education, is to deliver more provider-to-provider education as well as state-specificeducation. If you attended the Annual Institute at Myrtle Beach or our recent Committee Meetings in Columbia,then you have already seen some great provider-to-provider education. Expect to see more of the same at our FallInstitute in Greenville.
2. Transparency - Our plan is to be more transparent regarding chapter surveys and the chapter finances. I feel thatgreater transparency in these items will help our chapter to achieve greater results in both items.
3. Involvement - I want us as HFMA members to do whatever it takes to be involved in this chapter. I want each ofus to ask ourselves, “What am I doing to be involved or to bring involvement to our meetings, our education, andour fellowship?” We need to bring in new members. We need innovation and new ideas in order to thrive.
We CAN do this. We CAN do whatever it takes.
I hope you are as excited as I am about the Fall Institute being in the upstate this year? Greenville is a beautiful city andlet me tell you that Danielle Gori and Connie McKelvey are planning an excellent institute for us. The dates of theinstitute are October 23rd to 25th at the Hyatt Regency. Expect more information to come out very soon.
Thank you for the privilege of serving as your 2013-2014 Chapter President. I plan to do whatever it takes to get you tobe involved. So I hope to see you in the Fall.
Jude X. Crowell
5
A Message from the Chapter President…..
Jude Crowell
6
Make your chapterwork by workingfor your chapter
Become aVolunteer!www.schfma.org
Have something tocontribute to the
Palmetto State News? An article, a story about
a fellow member, pictures?
Your submission is encouraged.Send your article to the
Palmetto State News Editor [email protected]
7
Get Acquainted with Region 5…by Cathy Dougherty, FHFMA, Regional Executive
Were you aware that the NationalHFMA has over 39,000 membersand 69 chapters? These 69chapters are grouped into 11regions. Georgia is in Region 5along with the chapters fromSouth Carolina, Florida,Tennessee, and Alabama. Region5 has over 4700 members!
Region 5 leadership consists ofthe Presidents and President-Elects of the five chapters, inaddition to a Regional Executive and a Regional ExecutiveElect. As the current Regional Executive (RE), my role is to:
• Serve as the primary volunteer and policy linkbetween the chapters and the Association
• Assist chapter leaders in serving members • Promote and lead change efforts to drive HFMA’s
strategies • Foster dialogue and communication at all levels of
HFMA• Represent the needs and interests of chapter leaders to
the HFMA Board and staff• Work to create a seamless system of service for
HFMA’s members• Encourage chapters to collaborate and help other
chapters
In short, the RE position serves as link between thechapters and the national office of HFMA. An RE takesconcerns, comments, and ideas, from the regional boardmeetings, and conveys them to National. Thesecomments, concerns and recommendations are sharedwith the National HFMA Board. So, what this means is“chapters actually have a voice on how HFMA operates atall levels.”
In addition we have a Regional Executive Elect – or a “REin waiting.” Kim Shrewsbury from the Alabama Chapteris serving as this year’s Regional Executive Elect (REE).She will step into the RE role in June of 2014.
Region 5 is an outstanding region with extremelysuccessful chapters. This past year Region 5 won twoYerger awards – one for “Outstanding Performance inEducation” related to the Dixie Institute hosted by theFlorida Chapter, and one for “Outstanding Performance inCollaboration” related to the regional webinars that ourchapters hosted.Each year the Region 5 leaders collaborate on variousprojects to support the chapters’ members. This year theRegion 5 leaders are focused on increasing healthcareprovider participation in educational events and aschapter volunteers. Watch for more information about“Triple P – the Provider Participation Project”. Becausethe regional webinars were so successful, we will continuedelivering free webinars throughout the year. Watch youremail to register for these webinars. We are also heavyinto building member value via the Region 5 website.Visit at www.hfmaregion5.org.
As a HFMA member, if you know of other projects orinitiatives that would make sense for our region, please contactme by email at [email protected]. Lookfor additional regional updates throughout the year in thechapters’ newsletter.
8
What I learned at…SC HFMA Annual Institute
Jacklyn Carter, Roper St. Francis
This was my second year attending the SC HFMA AnnualInstitute and it is one of many conferences I always lookforward to attending. It is held in beautiful Myrtle Beach,South Carolina. Candi Powers and her team did a greatjob allowing time for fellowship and networking. Theeducation sessions were relevant topics presented by thebest in the industry. The tag line for this year’s Annual Institute was “TheShifting Sands of Healthcare Revenue”. What a truedescription of our industry. John Supra, CIO of TheDepartment of Health and Human Services, spoke on theImpact of Healthcare Exchanges. He shared a lot of keyinformation and how hospitals can expect to get patientssigned up in the exchange. He did stress there was still alot of uncertainty. Christine Fontaine from OptumInsight, shared with us the future of denials as a result ofICD-10. According to CMS, denial rates will rise by 100-200 percent. Her presentation provided a few key areas tolook at in our own hospitals/practices to help in denialprevention. Karen O’Donald, from Emory Healthcare,illustrated how she used clinical informatics to take her
hospitals financial condition and commitment to qualityfrom average to one of the best. The healthcare industryis truly in the midst of change and being a part of HFMAhelps keep me up-to-date. It was our closing speaker, David McNair, who trulyinspired me and had me thinking of ways I could not onlybe a better leader but how I could be a better follower.He shared with us an experience he had while travelingand has since shared this story with many clients. He wastraveling really late to meet with a client and when hearrived to his hotel he was taken by surprise when thefront office clerk asked if he would like a pet goldfish forthe night. Yes, a goldfish! Most customers checking intothis hotel were traveling for work and the pet fishprovided company, unconditional love and a valuablesounding board, if needed. This hotel went above andbeyond to give the customer an unforgettable experience.Leadership did something right and the followers werehaving fun. Presentations from the Annual Institute are available onthe SC HFMA website at www.schfma.org/resources.htm
9
SC HFMA Annual Institute
10
SC HFMA Annual Institute
11
SC HFMA Annual Institute
12
Medical Necessity: Minimizing exposure tofinancial, compliance, audit risks
Feature articleBy Mary Guarino, VP, Regulatory, Craneware InSight
Medical necessity is one of the leading reasons payorsdeny claims, but these denials can often be prevented byimproving training and communication betweenphysicians and the revenue cycle team.Ensuring services are medically necessary is not simple.National coverage determinations (NCDs) and localcoverage determinations (LCDs) change frequently, whichmakes matching related CPT/HCPCS codes and ICD-9codes especially challenging. In fact, the overwhelmingmajority of medical necessity denials are caused by ICD-9codes that don’t match procedural CPT codes. With CMSand payors converting to ICD-10, this process willbecome even more complicated. Healthcare organizationsshould be prepared to handle additional medical necessitydenials and address ICD-10 requirements to support priorauthorization.
Validating medical necessity at the exact time services arerequested is the best defense for reducing medicalnecessity denials and ensuring compliance with AdvanceBeneficiary Notice (ABN) requirements for Medicare aswell as requirements for Commercial Notices of Non-coverage (NONCs).Medical necessity software allows healthcare organizationsto determine, in real time, whether diagnoses support themedical necessity of the procedures ordered, or if theyrequire prior authorization. Flagging services with medicalnecessity issues before the services are rendered ensuresaccuracy of coding and compliance with ABN guidelines.Medical necessity software also helps structurecommunication and supports the education of physicians,clinical staff and the revenue cycle team on medicalnecessity rules and payor requirements.
To evaluate the effectiveness of medical necessity software,consider the following:• Are LCD/Medical Necessity requirements maintained
for every contractor, including all MedicareAdministrative Contractors (MACs), fiscalintermediaries (FIs) and commercial payors?
• Do the LCDs contain not only CPT to ICD-9verification, but also check for frequency, gender andage criteria as well as primary and secondary diagnosiscoding?
• Is coding available for LCDs that have a probability forfuture RAC medical necessity audits?
• Are qualified individuals reading and interpretingdifficult LCDs to ensure accurate results?
• Are prior authorization warnings available for allpayors?
• Are proprietary edits available?• Is medical necessity for Medicaid provided?• Are CMS and MAC/FI/Carrier websites monitored
weekly to keep every policy updated?• Is direct access provided to current policies to validate
services?• Are ABNs or NONCs issued before providing services
that do not meet “medical necessity” guidelines?• Is there a review of payor medical necessity denials to
create front-end warnings?• What preparations are being made for ICD-10 codes?
Up-front monitoring of all medical necessity and prior-authorization policies issued by CMS, Medicarecontractors and commercial payors is fundamental toensuring total earnings are not at risk and that healthcareorganizations are not exposed to post-payment audits andpotential compliance issues with ABNs. The propermedical necessity tools and processes can help healthcareorganizations establish and sustain revenue integrity,including mitigating compliance risks, improving staffefficiency and optimizing reimbursement.
Mary Guarino, Vice President of Regulatory at CranewareInSight, has more than 28 years of professional healthcareexperience. Her expertise includes revenue cyclemanagement, managed care contracting, physician practicemanagement, uncompensated care reimbursement, Medicareregulations and extensive chargemaster knowledge. Herachievements at several hospitals include reducingoutpatient denials by 40% and increasing net revenue bymillions of dollars for services previously not identified.Mary holds a B.A. from UMass and has completed businesscourses towards an MBA at Northeastern University. Maryis an active member of bothHFMA and MAPAM.
13
Chris Snyder, Regional Vice President of Avadyne Health, and his wife, Lindsey, proudly introduceAniston Grace who was born on May 16, 2013. Congratulations on your new addition!
MUSC was awarded a Hospital Prevention Excellence Award by NC Prevention Partners on June 5th.Congratulations!
Oconee Medical Center won the first ever Cooking Well Invitational on July 26th. Palmetto Healthplaced second and Georgetown Hospital System placed third.
We would like to welcome the following new members to SC HFMA: • Christina Banks, Spartanburg Regional Medical Center• Jean Bryll, MedAssets• Koshina Campbell, Lexington Medical Center Physician Network• Janine Ciranni, PNC Bank NA• Rita Goldberg, KeyMark Inc• Brian Hayes, Providence Hospital• James Layton, Cymetrix• Patrick Lynch, HTMA-SC• Jonathan Rafferty, Greenville Health Systems• Scott Richardson, Kemberton Healthcare Services• Catherine Spotts, Lexington Medical Center• Regine Villain, MPH, Medical University of South Carolina• Tim Wren, Abbeville Area Medical Center
14
UPCOMING SCHFMA EVENTSUPCOMING SCHFMA EVENTS
Fall Institute on October 23-25 in Greenville, SC
Revenue Cycle Boot Camp - November 15 - TBA
Chapter Awards and CRCA Graduation - January 10 - Columbia, SC
Region 5 Dixie Institute - February 25-28 - Mobile, AL
www.schfma.org/events.htm
15
PricewaterhouseCoopers’ on shore Virtual Business Office, located in Columbia, SC manages third party accounts receivable and provides detailed analysis and recommendations to enhance cash recovery.
Our Virtual Testing Center (VTC) assists Providers with Testing, during system conversions and ICD-10 transition. Both VBO and VTC will turn complex issues surrounding the revenue cycle into opportunities, specifically in the areas of:
•!Third Party Account Remediation •!Legacy A/R Sunset Services •!Testing •!Denials Management •!Insurance Verification and Eligibility •!Unbilled Claims Recovery
Contact Steve Lutfy, FHFMA Managing Director [email protected] (803) 753-5209
PwC’s Virtual Business Office
www.PwC.com/us/VBO
Rated #1 in KLAS’s 2013 Survey of Extended Business Office Services
VITAL SIGNS OF A HEALTHY BUSINESS
availity.com
© 2013 Availity, LLC
Revenue Cycle Management
Advanced Clearinghouse
Web Portal
Clinical Data Interchange
If your hospital needs new, margin-increasing savings and enhanced revenues, on a no-risk, contractually guaranteed basis, then you need our patented and proven ROI-7 Solutions.®
Tony Taylor740-405-0641
THESEVENEXGROUP.COM
16
MUSCLE + efficiency
CPAs and Advisors throughout the Southern U.S. 877.424.6324 | dhgllp.com/healthcare
1700+11
Top 201
PeopleStates Healthcare Management Consulting FirmGo-To Relationship Partner
Experience our relationship focused service model backed by
Dixon Hughes Goodman is proud to serve South Carolina hospitals, physician groups, senior housing, long term care,
17
Hospital-Physician Alignment:Is it Different this time?
By Michael Ehlen
Background: The current move towards Hospital-Physician alignment feels like something we’ve donebefore – networks, joint ventures, and practiceacquisitions. Provider integration has been a cyclicalstrategy for hospitals dating back to the early 1980’s. Asin the past, physicians are currently looking for deals, butwill falling physician reimbursement mean that hospitalsend up getting burned again?
Previous hospital-physician alignments were the result ofhospitals buying primary care physician practices toprotect market share and gain the upper hand withmanaged care contracting. Once employed by thehospital, physician productivity tended to nose dive andmany hospitals experienced large annual losses on theirpractice investment. To add insult to injury, hospitalsended up selling their practices back to the originalemployed physicians, at a discount, once the perceivedthreat from managed care went unfulfilled. What isdifferent this time is that the strategic implication from notaligning with physicians is a larger financial threat tohospitals than just market share. The shift from inpatientprocedures to outpatient procedures and the loss of thosepatient encounters is stressing many hospitals’ financialperformance.
Current Environment: Complicating matters today is thefact that market data on outpatient and physician officeservices although better than previous years is still lackingor limited. Without reliable data, many organizations seekadvice from outside consultants, who may not possess theunique financial physician skills to understand the risksand true value of a practice acquisition or joint venture.Not understanding values can be misconstrued asoverpaying in exchange for patient referrals as somehospitals have learned the hard way.
It is crucial for today’s financial manger to take a moreactive role in the due diligence process of any current orfuture hospital-physician integration. As the pressure tomigrate to a consumer driven model gains traction, manyphysicians do not have a clear understanding of theeconomics of their current practice and the businesspressures they are exposed to. This is where the financialmanager can address potential problems during duediligence and improve the hospital-physician negotiationprocess.
This article will look at four key physician practiceperformance areas to gain a proper financial perspectivebefore any alignment takes place:
1. Denial Management: The most common waypractices lose money is through inadequate orinaccurate ICD-9 and CPT coding. Unlike a hospitalcharge master, with thousands of procedures, thephysician fee schedule may contain less than 100procedures and is much easier to manage. Forexample, CPT coding denials can be reported to thespecific carrier levels for payment timeliness, cashflow turnaround, under payments, and claims editsources/frequencies. From these detailed reportingmetrics, a true measure of the practice’s coding riskcan be obtained and also be used as a source forcomparative analysis.
2. Electronic Medical Records (EMR): The pros ofEMR outweigh the cons; however there is onefinancial aspect that needs to be addressed. With anEMR system, there is a tendency for the physician tosimply check a series of boxes or clicks, on acomputer, to complete a patient chart. This can causephysician charting to deviate from “medicallynecessity” and building the chart documentation fromthe proper diagnostic codes. Before practice EMRsystems, it was common for a physician to under codetheir documentation below the actual level ofresources consumed. This is due to the overwhelmingtask of back-tracking the decision sequence for all thepatients seen at the end of the day by dictation orchart notes. If the practice is seeing a significantincrease in the number of medical necessity denials,(post EMR implementation), a whole new category ofcompliance reviews may need to be addressed as thechart documentation is not being supported by thediagnostic coding.
3. Medicare Resource Based Relative Value Scale(RBRVS): There is a wealth of research on the use ofRBRVS as a means to both physician productivityand/or physician compensation. All physiciansestablish fee schedules based on the costs incurred bytheir practice and the value furnished in deliveringquality medical care. Policy adopted by the AmericanMedical Association (AMA) vigorously recommends
18
the use of RBRVS as a basis for setting physician feeschedules. The issue with using a RBRVS to set feesis that both age and sex have a great deal to do withutilization and the intensity of services provided to thepractice’s patients. The Medicare population is olderthan the general population and consists of a higherpercent of females. Unless the practice is 100%Medicare, the value of RBRVS is diminished to thedegree that the payor mix is other than Medicare. Inorder for financial managers to make sense of anypractice specific RBRVS data and perform a physicianproductivity analysis, an acuity factor, (AF) orintensity of service factor, must be applied to thepractice’s data. This is the only way to generatemeaningful results applicable to every physician,regardless of payer mix. A by-product of calculatingan AF and applying it to the physician’s RBRVSfrequency distribution, is the elimination of the “mypatients are sicker than others,” defense as thephysician’s true level of service can be quantifiedeither by provider to peer group or provider tonational average.
4. Point of Service Collections: With the sharp spike inpatient co-pays and deductibles, a shift to collecting asmuch of the guarantor balance at the time of servicehas become a necessity for physician practices. Toupstream the practice’s collections, many practicesoffer discounts of up to 20% to patients, who paytheir portion of the bill at the time of service. If thepractice offers discounts to all patients, withoutcategorizing them by work effort, loss of income willoccur as a large group of patients, who previouslypaid 100% of their balance from their first statementmailed, will now be paying less than they would have.This can be significant. For example, a family practicewith a typical 62-percent overhead and 38-percentprofit margin that loses an additional 5 percent ofcollections actually loses approximately 13 percent ofnet income, since the losses come directly from the"last-dollar" profits that remain after overhead hasbeen paid. That 13 percent represents approximately$20,000 for a practice with a profit of approximately$145,000, the median for a family practice withoutobstetrics
Summary: The above four physician practice performanceareas highlight a few of the opportunities where financialmanagers can make a difference. Physician practicevaluation is an increasingly critical component of thevarious transactions among health care entities andreferring providers. Although not touched on here,regulatory considerations also require that any findingsused to determine value are not based on “tainted” marketdata. The result of a bad valuation method can be aliability under Anti-Kickback Statues, False Claims Act, orAdministrative Sanctions such as exclusion from theMedicare Program.
Whether one is doing a current physician portfolio review,a potential joint venture or a physician practiceacquisition, and regardless of whether one is relying oninternal data or an external consultancy’s report, today’shealthcare financial manger must take an integral role inthe process to ensure that all findings are consistentlyapplied and the appropriate documentation is created tosupport any hospital-physician alignment going forward.
Michael Ehlen is the PFS Business Analyst with BeaufortMemorial Hospital located in the “Low Country” area of SouthCarolina. He is a current member of the South CarolinaHFMA chapter. If you have any questions regarding thisarticle, Michael can be reached at [email protected]
_______________________________________________1 www.ama.assn.org/pub/physician-resources/practice-management-center
2 Joint Statistics: Medical and Dental Income and ExpenseAverages, 2011 Report Based on 2010 Data. NationalAssociation of Healthcare Consultants, September, 2011
19
Updates for SCHA
All of us at SCHA recognized 2014 to be a key year for theimplementation of many ACA initiatives. Changesallowed by a Supreme Court decision pushed thosepotential outlooks far beyond our expectations.
Medicaid Expansion: Since the U.S. Supreme Court issuedits decision in the case challenging the Affordable Care Act(ACA) on June 28, 2012, Medicaid Expansion has beenour number one priority
From the first meeting of the Senate's special AffordableCare Act (ACA) subcommittee in January, to the finalSenate vote that ultimately killed Medicaid expansion inlate May, SCHA has worked tirelessly promoting MedicaidExpansion in South Carolina. So, what did we learn?
We learned that the politics engulfing "Obamacare" are farmore impenetrable than we expected, and unfortunatelythat rhetoric will remain hot this summer as more fundingis spent on ads to undermine the ACA. Therefore, weshouldn't expect the intense politics surrounding the ACAto subside before the 2014 legislative session.
We learned that human and moral arguments are notgoing to win the debate for Medicaid expansion in SouthCarolina. While roughly 300,000 of our most vulnerableSouth Carolinians stand to gain health coverage that willultimately improve health and life expectancy; thosearguments aren’t going to tug on the heartstrings ofconservative state legislators anytime soon. We mustcontinue to focus on the impact to businesses and thenegative economic impact it will have on our state as ourhospitals bear exorbitant federal cuts and South Carolinadollars subsidize Medicaid expansions across the country.
And perhaps most importantly, we learned that we cannotdo this alone. SCHA and advocacy groups like the AcceptME SC coalition were the only groups advocating for thehundreds of thousands of South Carolinians who couldgain health coverage with the expansion of Medicaid. Wemust continue to work with our local business communityand groups like the South Carolina Chamber ofCommerce, the insurance industry and the healthcarecommunity to push for expanded health coverage.
While we did not achieve the outcome we hoped for thissession, SCHA is encouraged by the progress we made ineducating the General Assembly and the public on theimportance of Medicaid expansion. Our campaign toreclaim our federal healthcare dollars to provide healthcoverage to more South Carolinians is far from over. We
will continue to engage the Republican leadership onbipartisan solutions to leverage our federal tax dollars toexpand health coverage. Thank you for your efforts thissession to advocate for Medicaid expansion, and we willcount on your support again in 2014 as we fight to keepour healthcare dollars in South Carolina.
Proviso 33.34: As an alternative plan for expandingMedicaid under the Affordable Care Act, both bodiesadopted Proviso 33.34 offered by Chairman of HouseWays & Means Committee, Representative Brian White(R-Anderson). Proviso 33.34 for the first time providesfunds that may only be accessed if hospitals and clinicsserving the uninsured work together and adhere to healthimprovement initiatives outlined in the proviso. SCDHHSseparated this proviso into seven segments:
• Hospital & Clinic Innovations• Hospital Transparency• Disproportionate Share Hospital (DSH)
Accountability• Graduate Medical Education (GME) Payments• Telemedicine & OB/GYN • Optional State Supplement (OSS)• Reporting
The Hospital and Clinic Innovation component of theProviso has taken precedence in the department’sadherence to Proviso 33.34 to date. It contains directivesto provide additional funding for hospitals and primarycare safety net providers including Federally QualifiedHealth Centers (FQHCs), FQHC Look-A-Likes, RuralHealth Clinics, Free Clinics and Welvista for thedevelopment of a Healthy Outcomes Plan (HOP). SCHAhas been working very closely with SCDHHS and manyother parties throughout the state in the development ofthe program. Financial components of the plan include:
• A $35 million Medicaid rate increase tohospitals
• The “Disproportionate Share (DSH) cap” carriedforward from prior year’s budget cuts has beenlifted adding approximately $17 million to the2014 state DSH program
• $14 million will reimburse safety net providers toprovide primary care, behavioral health andpharmacy services to qualifying safety netproviders (Federally Qualified Health Centers,Rural Health Clinics, Free Clinics, Welvista)
• Hospitals will receive 90 percent of their totalDSH distributions as usual. 10 percent of DSHpayments however, is now directly linked to anapproved HOP
• Participation in HOP is at a minimum defined as
20
presenting an application with an approved HOPprogram and at least one signed Memorandum ofUnderstanding (MOU) from a primary care safetynet provider. There are very distinct requirementsfor the approval of a project.
• Earlier, Governor Haley granted $20 million forcertain rural hospitals' uncompensated carereallocated from the existing DSH program. Thismoved rural hospital payments up to 100% of thecost for caring for the uninsured. While thesedollars are unrelated to the Proviso, thesehospitals must now participate with a the HOP toobtain their expanded DSH.
Clinically, SCDHHS, with the assistance of variousproviders and provider representatives, has developedHealthy Outcomes Program guidelines which spell out indetail the expectations of a HOP. Each HOP will requirepreapproval by the Department and will be subject toroutine review throughout the remaining months of theprogram.
The remaining segments of the Proviso are still indevelopmental stages.
Disproportionate Share: CMS is also implementingsignificant changes to the Disproportionate Share (DSH)program overall. According to ACA provisions, 2014 willbegin significant changes to both Medicare DSH andMedicaid DSH programs. The May 13, 2013 CMS DSHProposed Rule preliminarily defines reductions in StateMedicaid DSH allotments from 2014 through 2020 toreflect the reduced need to reimburse hospitals foruncompensated care expected as a result of increasedcoverage in the ACA, and these reductions were extendedthrough 2022 by the American Taxpayer Relief Act of2012. According to the proposal, South Carolina willreceive a $13.7mm reduction in Medicaid DSH FederalMatch for 2014. This equates to a reduction of $19.6mmin combined state and federal funds.
The ACA also requires CMS to implement significantchanges to the current Medicare DSH payment policies.These changes will reduce and redistribute DSH fundingbeginning in FFY 2014. By law, an “empirical payment”of 25% of current DSH funding (estimated at $3.084billion) will continue to be rate-based and paid to eachhospital under the traditional DSH formula based onindividual calculations. The remaining 75% ($9.2535billion) will be reduced and redistributed to hospitals asuncompensated care payments in fixed amounts based onrates predefined in the 2014 CMS IPPS Proposed Rule.Therefore, according to the Proposed Rule changes to a
hospital’s actual cost report data before cost reportsettlement will only impact the empirical paymentamount.
Presenting a potential impact of cash flow, the 25%empirical payment will be paid in the same manner ascurrent DSH payments on the remittance and will be CostReport Adjusted. The 75% uninsured portion however,will be paid throughout the year in lump sum payments.The Proposed Rule does not define the intended paymentregime. CMS is proposing not to settle the 75%uninsured component of DSH to actual data on the CostReport. The payment amounts received will be final.
Also worth noting, CMS chose not to factor states’decisions whether to expand their Medicaid programs intoits proposal for implementing the ACA’s DSH reductionsfor the first two years. The agency plans to issue futurerulemaking to implement the DSH reductions in FY 2016and beyond.
Transparency: The TIME magazine article “Bitter Pill”brought to light again many questions about hospitalprices. Soon afterwards, Medicare released MedicareProvider Charge Data which includes data includinginformation comparing the charges for the 100 mostcommon inpatient services and 30 common outpatientservices. A large number of other TV and Newspaperfollowed with local reports.
In an effort to promote transparency at the state level,SCHA has developed a special task force charged withconsidering options for improving the current hospitalcharge master system and evaluating the barriers thathospitals face in their efforts to modernize their chargemasters. The SCHA’s goal is to make the system moretransparent by providing information that is easier for thepublic to understand and use as they make health caredecisions for themselves. The task force will includeCEOs, CFOs, hospital communications officers, andgovernment relations staff, as well as hospital staffmembers with special expertise that may be needed.All of us at the Association recognize these as challengingtimes for hospitals and will continue to do our best torepresent and assist hospitals in any way possible. Wealways value comments from our members. Feel free tocontact any of us with questions, concerns andparticularly ideas for improvement.
Schipp Ames, Manager, Advocacy CommunicationsBarney Osborne, FHFMA, VP Finance and Reimbursement
21
The South Carolina HFMA Chapter has secured a limited number of rooms at therate of $129 00 per night The room block ends on October 1st 2013rate of $129.00 per night. The room block ends on October 1st, 2013.
When: Wednesday, October 23rd to Friday, October 25th, 2013
Where: Hyatt Regency Greenville220 North Main StreetGreenville, South Carolina 29601
To make your reservation:
Phone (864) 235 1234 or
Online: https://resweb.passkey.com/go/SCHFMA2013
Conference code HF13Conference code HF13
Cover Photo, “Greenville, SC” is copyright (c) 2011 Timothy J. Carroll and made available under a Attribution 2.0 Generic License
SAN ANTONION OV E M B E R 1 1 -1 3
CHICAGOD ECE M B E R 1 0 -1 2
take a deeper dive
Choose 1, 2, or 3-day options
Learn with peers
Earn up to 21 CPEs
Master what you need to know in healthcare finance —join HFMA’s Seminars. Explore key topics, engage with colleagues, strengthen individual skills, and improve organizational performance. From your trusted source on healthcare finance: HFMA. Register today at hfma.org/seminars
22
Annual National Institute Presidents Dinner
Courtesy RC Photographic Productions
Learn about timely healthcare finance topics and earn CPEs. Most live webinarsare free for HFMA members and $99 for non-members, unless otherwise noted.
All can be found at hfma.org/webinars
Aug 15 - Leveraging the Latest RFID Technology to Support Your Supply Chain,Manage Costs, and Improve Clinician Workflow
Aug 22 - Managing the Transition from Volume to Value
Aug 27 - Strategies to Increase and Accelerate Patient Payment At The Point Of Care
Aug 28 - Transform Budgeting, Capital Planning, And Performance Reporting ToSupport Strategic Business Decisions
Sep 10 - Leveraging Your Organization’s Enterprise Resource Planning (ERP) SystemInvestment
Sep 11 - Understanding the Impact of Consumable Costs That Exceed Their CapitalInvestments
Sep 12 -Predicting the Unpredictable: Using Analysis to Match Staffing-To-PatientDemand
Sept. 18 – South Carolina Chapter: Back to the ‘Not-so’ Basics: Tax Law – State/Fed
23
Looking fora webinar?