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DIABETES PRACTICE

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OPTIONS

Improving Patient Care Through Increased Practice Efficiency

SEPTEMBER 2011 EDITORIAL

CONTRIBUTORS

Is There Life After Clinical Practice? Options Abound! By Michael Bihari, MD, contributing editor

David Mandell, JD, MBA

R. Paul Wilson, CRPC

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any physicians, especially primary care physicians who care for adults, are dissatisfied with clinical practice. Low reimbursement, insurance company hassles, and increased demand from an aging population are some of the reasons for the frustration. In my community, 10 physicians have left or changed their practices. Some went to work for the local hospital. Some converted to a boutique practice or left the area for a warmer climate. Two left clinical practice altogether. One set up a consulting firm and the other went to work for a large health insurance company. Richard Donze, MD, a hospital administrator and practicing physician, tags his essay “Doctor by Default” in my college alumni magazine, “Some physicians can’t imagine doing anything else. I’m the other kind.” Donze defines several types of physicians, including the “can’t-not” physician and the “why-not” physician, both of whom may have an uneasy relaContinued on page 2

IN THIS ISSUE 3 | DIABETES STRATEGY Telephonic Counseling, Walking Improve Health, Outlook of Diabetes Patients With Depression

6 | BILLING Outsourcing Day-One and Day-60 Early-Out Programs for Health Care Accounts Receivable

8 | MEDICAL HOMES Early EHR Adoption Facilitates Practice’s Level 3 PCMH Certification

11 | CAPITAL IDEAS Page 3

How to Protect Your Wealth if Hospital Employment Is a Possibility

13 | COMPENSATION Survey Finds Continued Financial Losses for Medical Groups, Low Increase in Physician Compensation

14 | PRACTICE MANAGEMENT NEWS CMS Launches Tools to Assist Quality Improvement Organizations, Inform Patients


EDITORIAL EDITIORIAL BOARD

Continued from page 1

Neil Baum, MD Urologist New Orleans

Peter R. Kongstvedt, MD P.R. Kongstvedt, LLC McLean, Va.

Daniel Beckham President The Beckham Co. Bluffton, S.C. Physician and Hospital Consultants Whitefish Bay, Wis.

John W. McDaniel President and CEO Peak Performance Physicians, LLC New Orleans

Harold B. Kaiser, MD Allergy & Asthma Specialists, PA Minneapolis Nathan Kaufman President The Kaufman Group Division of Superior Consultant Co. Inc. Physician and Hospital Consultants San Diego

Lee Newcomer, MD, MHA Senior Vice President, Oncology UnitedHealthcare Minneapolis

tionship with the practice of medicine. The “can’t-not” doc may not be able to engage in clinical practice and may choose to stay close to medicine by stepping away from direct clinical service and becoming an administrator, Donze says; a “why-not” doc may add administration or research to a clinical career. The complete article is available online at www.upenn.edu/gazette /0711/voices.html. I decided that I fit into the “can’t-not” category. After several years of pediatric prac-

James M. Schibanoff, MD Editor in chief Milliman Care Guidelines Milliman USA San Diego Jacque Sokolov, MD Chairman Sokolov, Sokolov, Burgess Scottsdale, Ariz.

Michael Bihari, MD

STAFF Editor Rev DiCerto 845/398-5100 editor@premierhealthcare.com Art Director Meridith Feldman

Publisher Premier Healthcare Resource, Inc. 150 Washington St. Morristown, NJ 07960 973/682-9003; Fax: 973/682-9077 publisher@premierhealthcare.com

This newsletter is published by Premier Healthcare Resource, Inc., Morristown, N.J. © Copyright strictly reserved. This newsletter may not be reproduced in whole or in part without the written permission of Premier Healthcare Resource, Inc. The advice and opinions in this publication are not necessarily those of the editor, advisory board, publishing staff, or the views of Premier Healthcare Resource, Inc., but instead are exclusively the opinions of the authors. Readers are urged to seek individual counsel and advice for their unique experiences.

2 Practice Options/September 2011

tice, I moved steadily into writing, administration, consulting, and volunteer work. On a related note, the seminar NonClinical Careers for Physicians, which has been offered for several years, is a popular venue for physicians who are interested in leaving clinical practice. Pre-conference workshops include “How to Start,” “Build and Run a Physician Consulting Practice,” and “How to Find and Land High Paying Non-Clinical Jobs.” The company that sponsors this seminar also sponsors an annual workshop for physicians who are interested in non-clinical writing, both fiction and non-fiction. I attended one of these writing workshops several years ago and was fascinated by the large number of physicians (more than 250) who had gathered to learn the ins and outs of writing the “great American novel.” Those two physicians from my community who left clinical practice must have attended the seminar! ■ More information is available at www.DiabetesOptions.net


Management Research. “Many people with diabetes have depression at some point in their lifetime, so physicians need to help patients recognize depression and obtain effective treatment. While depression is important in its own right, it is also a major barrier that keeps people from being able to self manage their diabetes.”

Counseling and Exercise

DIABETES STRATEGY

Telephonic Counseling, Walking Improve Health, Outlook of Diabetes Patients With Depression

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epression is common in patients with a wide array of chronic medical conditions, including diabetes. Unfortunately, depression often goes untreated in patients with diabetes, due to the many competing demands physicians face when treating these complex patients.

Importance of Screening In an effort to improve outcomes for patients with both diabetes and depression, University of Michigan and Veterans Affairs (VA) health system researchers tested an intervention that combines telephonic counseling and physical activity and found that compared with patients receiving usual care, intervention patients exhibited larger decreases in systolic blood pressure—an important factor contributing to diabetes complications—as well as improvements in depression symptoms and quality of life. Marcia Valenstein, MD, an associate professor in the Department of Psychiatry at the University of Michigan and a research scientist with the Department of Veterans Affairs Health Services Research and Development Service, notes that it is

important for doctors to consider whether their diabetes patients have co-occurring depression. “Depression is a high-prevalence comorbidity in diabetes patients. About 18% to 20% of patients with diabetes will also have a depressive disorder,” notes Valenstein, a co-author of the study. “Prior research has shown depression to be associated with poor diabetes-related outcomes and poor adherence to diabetes medications. Furthermore, patients with depression often exhibit poor health behaviors that can interfere with control of diabetes. For instance, compared with patients without depression, depressed patients have been found to exercise less, have poorer nutritional intake, more frequently forget to take their medications, and are more likely to decide that their medications are not effective.” “Doctors should be aware that diabetes and depression often go hand in hand,” says John D. Piette, PhD, professor of internal medicine and director of the Program on Quality Improvement for Complex Chronic Conditions at the University of Michigan in Ann Arbor. Piette is also a Senior Research Career Scientist at the VA Center for Clinical

The University of Michigan/VA intervention was tested in 291 patients with type 2 diabetes and significant depressive symptoms. The intervention included telephonic cognitive behavioral therapy (CBT) provided by a trained nurse care manager weekly for 12 weeks and then monthly for nine months. Once patients’ depressive symptoms started to resolve, they were encouraged to begin a walking program using a pedometer. “We included the walking program because physical activity can have a positive impact on both diabetes and depressive symptoms,” notes Piette. The intervention integrated depression management with discussions about diabetes self-care, so patients could see how their depression affects their diabetes. “The therapy sessions helped patients develop a set of skills that they can use to identify the inaccurate negative assumptions they make about their lives,” Piette says. “The program helped patients consider their diabetes and their control over their lives in a new, much more positive way.” CBT is a useful approach for this patient population. “CBT effectively addresses depression and has elements that can also address other patient behaviors such as increasing physical activity and ensuring medication adherence,” explains Valenstein. “CBT seeks to challenge automatic negative thoughts, such as ‘I can’t walk’ or ‘I can’t remember to take my medication.’ Those types of thoughts are amenable to being examined and reevaluated. Another tool used in CBT is an activity log, which patients use to schedule Continued on page 4 Practice Options/September 2011 3


DIABETES STRATEGY Continued from page 3

activities and then record their mastery patients in the intervention group had makes CBT more accessible.” and the pleasure they experience as a Another unique aspect of the inter- resolved depression symptoms comresult. Behavioral activation prompts vention is the stepped approach of pared with patients receiving usual patients to exercise, thereby increasing focusing first on the patient’s depres- care. “More patients in the intervention the feeling of self-efficacy and patients’ sion and then on the increase in physi- group were below the threshold for perceived ability to approach their cal activity. “Increasing activity has clinical depression,” notes Piette. problems actively.” The intervention did not have a positive effects both on mood and on Nurses and patients used a specially diabetes-related outcomes,” explains meaningful impact on patients’ blood developed manual to help guide their Valenstein. “If people do not have ener- glucose levels, perhaps because subjects sessions; interested adopters can contact gy or have self-defeating thought pat- had fairly well controlled HbA1c at Piette (jpiette@umich.edu) to request a terns—such as ‘I'm never going to get baseline, the researchers speculate. copy. “The manual is based on However, patients in the CBT principles but is specifiintervention group realized “Psychotherapy is an important treat- a four-point improvement cally targeted for patients with diabetes and depression,” he ment modality that physicians should in their systolic blood pressays. “It includes educational sure, an important risk facconsider recommending to their information about depression, tor for cardiovascular disdiabetes patients with depression.” diabetes, and physical activity ease in diabetes patients. as well as logs for tracking “The big improvement on —Marcia Valenstein, MD, Department of Veterans Affairs unhelpful thoughts, new goals, the physical health side was Health Services Research and Development Service and pedometer steps, which in subjects’ blood pressure,” can help patients to see their says Valenstein. “Managing achievements objectively.” blood pressure is critical for Valenstein notes that the intervention better’ or ‘I don't like to exercise’— helping patients avoid the adverse is unique because it is delivered by tele- addressing their depression first helps long-term consequences of diabetes.” phone, which reduces the burden on them increase their energy level and In addition, patients in the intervenpatients. “Many diabetes patients have tion group were more physically active, develop more positive beliefs regarding significant health problems that can their ability to actively address their as measured by pedometer steps. “On hinder their ability to visit health medical problems.” average, intervention patients walked providers,” she notes. “Furthermore, 1,000 steps per week more than Health Benefits psychotherapy is a fairly time-intensive patients in the control group, which translates to about a half a mile more intervention, particularly if it is com- The researchers found that even after per day,” Piette states. bined with travel. Telephone delivery 12 months, a larger percentage of

PHYSICIANS TREATING DIABETES PATIENTS SHOULD NOT AVOID THE TOPIC OF DEPRESSION ome physicians are uncomfortable broaching the subject of depression with their diabetic patients. However, Marcia Valenstein, MD, a research scientist with the Department of Veterans Affairs Health Services Research and Development Service, believes that the discomfort primary care physicians feel toward treating depression has probably lessened over the past decade or two. “Now most depression is treated by primary care physicians,” she says. “With the advent of newer medications such as selective serotonin reuptake inhibitors, antidepressants are much easier to use and to dose. More physicians are feeling comfortable with prescribing medication therapy, although comfort and readiness to refer patients for psychotherapy still varies.” “The main problem is that physicians are overburdened, and may not have support from clinicians such as diabetes educators,

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social workers, nurse care managers, and others who can explore mental health issues with patients,” notes John D. Piette, PhD, a senior research career scientist at the VA Center for Clinical Management Research. “As a result, physicians may not act as aggressively as they could to identify depression and then follow up with treatment.” Still, depression diagnosis and management should be an important component of diabetes patient care, since research has confirmed the negative impact of depression on diabetes outcomes. “Studies consistently show that diabetes patients with depression have more difficulty performing self care; in particular, they are less physically active and less compliant with mediations than diabetes patients without depression,” Piette notes. —DJN


Finally, intervention patients reported greater improvements in quality of life, as measured by the Short Form-12 (SF-12). Improvements were seen in several SF-12 dimensions, including physical functioning, mental functioning, emotional role limitations, vitality, and general health. “Not only did intervention patients’ depression symptoms get better, but they felt that they were able to function in the world more effectively,” Piette says. “In some sense, that is one of the most important outcomes we could have. We can not make a statement about causality, however. Did they report improvements in physical functioning because they were walking more, or were they walking more because they felt more physically functional? Were they more physically functional because their mental health improved? Or did their mental health get better because they were walking more and felt better? In a practical sense, the causality underlying the interrelationship of factors really does not matter. Rather, these positive outcomes all fit together, reflecting a person who is healthier, more active, and has a better quality of life.”

Hope for Patients “Our findings are a reminder to physicians to be aware of the possible presence of depression in their diabetes patients,” says Valenstein. “Physicians

should proactively ask about depression and then treat it in order to improve patients’ adherence to medications and overall quality of life.” They should specifically consider psychotherapy that addresses beliefs and behaviors that reinforce depressive thoughts and symptoms and inactivity. Piette believes that the intervention is within the reach of many primary care practices. “Because therapy was provided over the telephone, it is efficient for the provider and easy for patients,” he says. “While clinicians do have to be trained in delivering CBT, this is a set of skills that is within the reach of a diabetes educator or other clinicians,” he states, adding that nurses in the study came from a variety of backgrounds. “Psychotherapy is an important treatment modality that physicians should consider recommending to their diabetes patients with depression,” says Valenstein, adding that many physicians and health plans may not have access to telephone-based CBT. “For physicians and patients who do not have access to this kind of therapy, some of the basic core elements of our intervention can still be applied. These elements include referring patients to a therapist or considering Internet-delivered CBT programs, which may be a good option for patients with limited time and financial resources. In addi-

tion, physicians and mental health professionals who treat patients with comorbid conditions should emphasize the value of physical activity for patients with both diabetes and depression.” “Pedometers are a really useful, inexpensive tool to help people increase their physical activity, and patients like using them,” Piette adds. Valenstein notes that diabetes medications and antidepressants can be used concurrently. “However, some antidepressants are associated with weight gain, which may make it more difficult to control blood sugar levels,” she says. “In addition, some medications used to augment antidepressant effectiveness carry the risk of weight gain. If these medications are necessary, physicians need to monitor their patients for weight gain and further metabolic issues.” Physicians should also convey to their patients that depression is a treatable condition. “Physicians should emphasize to their patients that they should take heart,” Piette emphasizes. “There are very effective pharmacologic and non-pharmacologic treatments that patients and primary care physicians can explore. Depression causes a lot of suffering, but it is not a personal failing. It is a condition that can and should be treated, just like diabetes.” ■ —Reported and written by Deborah J. Neveleff, in North Potomac, Md.

DIABETES PATIENTS’ DEPRESSION IS FREQUENTLY OVERLOOKED, RESEARCHERS SAY epression often goes undiagnosed and untreated in diabetes patients. “Depression is undertreated in the general public: only about 50% of people with active depression will report getting treatment in the last year,” observes Marcia Valenstein, MD, an associate professor in the Department of Psychiatry at the University of Michigan and a research scientist with the Department of Veterans Affairs Health Services Research and Development Service. “So it is not surprising that this pattern also holds true in the diabetes patient population.” Additional factors may make it even more likely that depression will be untreated in diabetes patients. “For example, during the primary

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care visit, much of the visit time may be spent addressing the patient’s diabetes or other medical issues, reducing the time available for a doctor to screen for or address depressive symptoms.” “Many people with diabetes do not recognize the symptoms of depression, which are often confused with feelings of frustration or life stress,” says John D. Piette, PhD, director of the Program on Quality Improvement for Complex Chronic Conditions at the University of Michigan in Ann Arbor. “People might feel like they should be more emotionally resilient and be able to handle their condition without the need for medication or therapy.” —DJN

Practice Options/September 2011 5


BILLING

Outsourcing Day-One and Day-60 Early-Out Programs for Health Care Accounts Receivable By Scott G. Koenig, president, KeyBridge Medical Revenue Management

In over a decade with KeyBridge Medical Revenue Management (www.keybridgemed.com), Scott Koenig has implemented a proven formula focusing on technology, management systems, and communication skills development. He is a past president and current board member of the Ohio Receivables Management Association and a past president and current board member of the Medical Dental Hospital Business Associates, a national trade association for firms specializing in health care accounts receivable management.

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arsh economic conditions have hurt health care accounts receivable (A/R). Volume has been reduced, patients’ ability to pay has been pinched, and thanks to increasing deductibles and co-pays required by employer-provided insurance plans, health care providers’ patient-pay receivables have mushroomed. The practice of outsourcing patient-liability A/R to outside vendors for recovery has existed for some time. These vendors reach out to patients on 6 Practice Options/September 2011

behalf of the provider to recover patient-pay balances. This outsourcing process typically takes place after an acceptable statement cycle has completed, usually 60 days from when the patient balance was identified. Many health care providers are now outsourcing accounts the day the first statement to the patient is generated. This practice adds incoming customer service calls and statement generation to the processes already being performed by the vendor, reducing the provider’s workload.

Early-Out Processes The job of processing accounts associated with patient-pay balances is shared between the health care provider and the vendor when a day-60 early-out process is implemented. Typically the provider handles tasks during the statement cycle, and the vendor handles outgoing communication efforts after the initial statement cycle is complete. In a day-one process, the first statement to the patient is either sent by the provider or the vendor, with the vendor taking over from there. The biggest change is that all incoming customer service calls during the initial statement cycle are handled by the vendor.

Impact The major difference providers experience between day-one and day-60 programs is in the staffing required to handle the volume of incoming customer service calls. A study conducted by KeyBridge Medical Revenue Management of Lima, Oh., revealed that incoming call volume during the initial statement cycle requires a minimum of 0.35 full-time equivalents (FTE) for every 1,000 accounts entering the process each month. This ratio

equates to an additional two FTEs for a typical 200-bed community hospital to handle the calls during the first 60 days of the statement cycle. Since many providers are currently struggling to turn a profit, it makes sense to outsource these functions to lower costs and avoid hiring internal staff. A more compelling reason to outsource is the core competencies required to do it well. Most providers are skilled at processing accounts from a coding or billing perspective, and then following up to ensure that the bulk of payments are received in a timely fashion. But assembling a staff that has communication skills in the areas of negotiation, closing, and rapport building can be daunting. These skills are not required to perform the bulk of duties in the provider’s business office and often are seen as less important. Hiring a top-quality vendor to provide this expertise can fill an important void and substantially increase cash flow, patient satisfaction, and staff morale. An advantage of day-one programs is the vendor’s ability to be flexible with a provider’s internal work standards and processes while utilizing the efficiencies of scale that many vendors possess. An example would be the ability to begin to communicate with and collect from patients before day 60. The primary advantage of day-60 programs comes from segregating the statement phase from the outbound contact phase. The former requires more of a customer-service mentality, while the latter is driven by payment negotiation and closing skills. The common denominator with both programs is that coordination between the provider and vendor is crucial. Depending on the account turnover operations of the provider, accounts can frequently deviate from


being a true patient liability balance. earned in the statement cycle. This The outsourced vendor must possess For example, accounts on hold for issue can easily be abated by under- excellent communication, rapportfinancial assistance processing, con- standing that the main difference in building, and negotiation skills, or the tractual allowance adjustment, or services provided between day-one and provider will benefit only from cost employee discounts can cause prob- day-60 programs is when statement reductions due to economies of scale. lems when inadvertently released into a generation and incoming customer The right vendor can provide an day-one or day-60 program. service functions are outsourced. The increase in patient relations and most The biggest coordination problems costs incurred per account processed importantly, revenue. usually occur in day-60 programs, actually increase with the additional The same goes for technological and since accounts can be in any of a num- work performed with a day-one operations capabilities. A vendor’s ber of dispositions at the time the ven- approach. Whether the fees are earned technological and operations systems dor takes over, including active A/R; during the statement cycle or not, the should be designed for the purposes early-out A/R with other venthey are contracted for, and dors; loan programs; bad should use proven methods It makes sense to outsource debt; and charity care. that produce results that outweigh the provider’s Coordinating such accounts [collections] functions to lower costs capabilities. These include: necessitates sufficient training and avoid hiring internal staff. • Real-time payment accepof provider staff and vendor tance coordination of operations. reimbursement of costs incurred per • Online payment portals Recovery account to the vendor has to occur at a • Automated payment plan follow-up One of the most important advantages logical level. The provider and vendor • Proactive charity care follow-up to consider when implementing an must find the price point that makes • Analytical tools for process improveearly-out program is lower cost of sense for both parties. ment. recovery. These cost benefits become Both day-one and day-60 early-out clearly evident in a day-60 program, Selecting a Vendor programs have advantages in reducing where patient contact procedures are Of course, neither a day-one nor a day- recovery costs and increasing a health enacted that can cause a noticeable lift 60 program will work without a quality care provider’s cash flow, but day-one in the provider’s cash flow. These pro- vendor to outsource to. The most programs offer a cleaner transition to grams typically reduce internal costs by important thing a provider should con- the outsourced vendor along with minutilizing efficiencies built into vendor sider is that the expertise of the vendor’s imizing account coordination issues. operations. Day-one programs go a step staff should trump the expertise of the Day-one programs also allow for an further toward cutting expenses by provider’s staff. Key among that exper- increase in expertise through the taleliminating internal statement costs tise is the ability to effectively commu- ents of the vendor’s staff. As with any and reducing labor and overhead nicate with patients during the billing outsourcing, the correct choice involved in customer service functions. process. Effective communication can between day-one and day-60 depends Occasionally providers take issue easily eliminate the majority of issues on the needs and capabilities of the with day-one programs, since the ven- that block providers from collecting health care provider along with the dor is compensated with commissions what is owed in a timely fashion. quality of the vendor. ■

MEDICAL PROVIDERS SHOULD BEWARE OF ALIENATING PATIENTS WHEN USING EARLY-OUT PROGRAMS he most substantial effect a medical provider’s outsourcing of a day-one or day-60 early-out collection and accounts receivable program to a vendor has on the patient is a lack of continuity resulting from multiple points of contact with both the provider’s and the vendor’s staff. This situation is mostly seen in day-60 programs where there is a different telephone contact between the statement cycle and the early-out phase. The change in telephone contacts can lead to confusion or skepticism on the

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patient’s part. Most providers prefer that the handoff to the vendor be as seamless as possible, with no indications to the patient that the business has been outsourced. Day-60 programs also can accentuate situations where a patient has an account in both the statement cycle and the earlyout phase. Unless procedures are implemented that allow combining both accounts on a single payment schedule, the patient may view the program as less than optimal. —SGK

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MEDICAL HOMES

Early EHR Adoption Facilitates Practice’s Level 3 PCMH Certification

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s the various changes and “We’ve been using an EHR for seven requirements associated with years now, and doing electronic prethe Affordable Care Act have scribing,” says Almquist. “We were very been implemented, health care profes- early adopters locally. For electronic sionals have increasingly focused on prescribing, I had to educate the local two new practice models that derive pharmacies about turning on their fax from the new legislation: the account- machines so they could receive preable care organization and the patient- scriptions. We’ve been able to collect a centered medical home (PCMH). The lot of clinical data using our EMR PCMH model depends on the idea of because we’ve been using it so long.” each patient having a medical home where he is known to a primary care EHR Evolution physician and a team of specialists who Prior to upgrading to the Intergy syswill proactively use technology to track tem, starting in 2003, White Rose used Whitney Almquist the patient’s health status and to inter- Medical Manager, a simpler practice act. This model is readily adaptable to management system provided by the smaller practices with a limited num- Tampa, Fla.-based Sage. In 2004 the ber of providers. practice began the process of scanning Windows-based [Intergy] system, While it is possible for a practice to its paper records into the new system. which was a much more up-to-date receive National Committee for “We probably scanned in about 14,000 and complete EHR that offered us Quality Assurance (NCQA) certifica- charts by the time all was said and more advantages,” says Almquist. tion as a PCMH with a minimal done, because we scanned in all of our “We’ve been using an EHR for so long amount of health information technol- inactive patients, also. We had a space now—much longer than most other ogy (HIT), such certification practices in our area— is limited to the lowest level, that none of us would “We’ve been using an EHR for seven Level 1. For a practice to want to go back to using receive Level 3 certification, it years now, and doing electronic prescrib- paper records.” must demonstrate a high By the time of White ing. We were very early adopters locally. degree of implementation of Rose’s PCMH certificaFor electronic prescribing, I had to eduHIT, including a working tion, the practice had electronic health record been using the entire cate the local pharmacies about turning (EHR) system and electronic suite of software that the on their fax machines so they could prescribing. In July of 2010, Intergy system comprises for three years. That White Rose Family Practice receive prescriptions.” suite consists of the in York, Pa., received Level 3 —Whitney Almquist, White Rose Family Practice, York, Pa. practice management PCMH certification from the system, which handles NCQA. According to busiand storage issue and we wanted to dissuch things as billing and scheduling; ness manager Whitney Almquist, the the clinical part of the EHR that is used fact that the seven-provider practice pose of all our charts. It was probably a with approximately 10,000 active four- to five-year process,” says by the physicians themselves; and patients, founded in 1994, has been Almquist. “We felt that scanning the Intergy’s reporting module, which can entire chart provided an advantage for be used to generate reports containing using an EHR since 2003, and upgradthe physician, because then you had the any type of data collected within the ed to the Sage Intergy EHR system in entire chart there, and they could EHR, Almquist says. “We’ve collected 2007, made the certification process for access the images if they needed to. clinical data—meaning patients’ disease this important new designation much “Then in 2007 we moved to the states, their blood pressures, what probmore manageable.

8 Practice Options/September 2011


lems they were having and what was to being paperless are the ease of access continues. “You’re able to provide betdone to address them—with our EHR to the patient record and the consistent ter patient care because the chart you’re for seven years now,” she says. It is this organization in the EHR, which allow using is accessible all the time. The wealth of collected data and the ease the clinical staff to see a very complete whole chart is available to everyone with which it can be broken down using picture all at the same time. Also there’s when they need it. We have been able the EHR’s reporting module that the historical perspective that the EHR to reduce several support staff, filing Almquist credits for clerks that would come in and the ease with which work day and night filing “Having the ability to pull out accurate White Rose achieved charts. Our doctors don’t take its PCMH certification. charts out anymore. clinical data puts us far ahead of “When a patient comes in, many practices in terms of being able Advantages our nurses first pull up his to demonstrate our capabilities for The elimination of or her health status in the paper charts improved EHR and see what needs to these initiatives,” Almquist says. the practice’s efficiency, be done,” she says. “They can Almquist says. then prepare for the doctor, “Everybody here could tell you stories provides. You can look back and see all collecting whatever information the of patients’ charts that were filled with of a patient’s blood pressure readings doctor will need or administering loose papers and sticky notes, and the for seven years, whereas looking at a whatever care is necessary before the difficulty of finding the chart when you paper chart, you’re stuck flipping doctor even enters the room.” needed it. One person needs it, the through pages to find that type of doctor needs it,” she says. “The amount information. Evidence-Based Care of time spent taking down charts had “But the advantages of using an EHR The EHR has made it possible for grown ridiculous. Two big advantages are in more than just time,” Almquist White Rose to closely follow evidenceContinued on page 10

EVOLVING PCMH STANDARDS HELP PRACTICES FOCUS ON PATIENT-CENTERED CARE hen the White Rose Family Practice in York, Pa., achieved National Committee for Quality Assurance (NCQA) certification as a patient-centered medical home (PCMH) in July of 2010, certification was based on nine standards. “The NCQA created the PCMH medical home survey,” says White Rose’s business manager, Whitney Almquist. “This is an attempt by the NCQA to take a measure of practices. You have to prove to the NCQA whether you fulfilled each of the standards by submitting reports, screen shots, or whatever type of documentation they need to prove you were doing what was required of you. Insurance companies are looking closely at that. We’ve been told by several of the majors that they are looking seriously at paying practices that have the certification more for their services, because they think it proves the practices have a more whole-person approach, which can lead to reduced insurance costs. That’s the bottom line for insurance carriers: patients will have better care, practices will have healthier patients, and that will decrease their insurance costs.” The original nine standards for PCMH certification required practices to prove that they could provide expanded patient access and communication; efficient patient tracking and registry functions; care management; support for patients’ self-manage-

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ment; electronic prescribing; tracking of test data; tracking and coordination of referrals; performance reporting and improvement; and advanced electronic communication. While they do not explicitly demand that a practice incorporate an electronic health record system, these standards make it very difficult for a practice to achieve any but the lowest level of certification without one. The nine standards have recently been updated in a system referred to as PCMH 2011. Under PCMH 2011, the list has been shortened to six standards designed to increase the extent to which the PCMH model provides patient-centered care. The six crucial standards practices must meet under PCMH 2011 are: • Enhance access to and continuity of care • Identify and manage patient populations • Plan and manage care • Provide patients with self-care support and community resources • Track and coordinate patients’ care • Measure and improve practice performance The standards, along with detailed explanations and a worksheet practices can use to evaluate the extent to which they are currently achieving each standard, is available as a free download from the NCQA Web site (www.ncqa.org). —RD

Practice Options/September 2011 9


MEDICAL HOMES Continued from page 9

based care guidelines, Almquist says. Initiative, several major insurance car- costs and improve patients’ overall Being able to provide documentation riers in Pennsylvania pay medical prac- health,” Almquist continues. “The that such guidelines are being rigorous- tices to implement a chronic care PCMH model follows that same ly followed facilitated the practice’s cer- model. thought. The government’s meaningful tification, she says. “You have to have “High Mark Blue Shield of use requirement encourages practices the processes in place,” she says. “But Pennsylvania [a participant in the to prove that they are meaningfully having the system certainly helps you Chronic Care Initiative] has a pay-for- using their EHRs to produce better to document that you’re providing the performance program,” says Almquist. patient care and reduce costs. All of necessary care for certificathese philosophies tie tion. Technology is a huge together. Having a robust part of the PCMH model.” EHR system in place that “[With the EHR,] you can look back The documentation faciliwe’ve been using for a and see all of a patient’s blood pressure tated by the EHR enabled period of time and having White Rose to receive paygood practices in place, readings for seven years, whereas ments through the and having the ability to looking at a paper chart, you’re stuck Pennsylvania Governor’s pull out accurate clinical flipping through pages,” says Almquist. Chronic Care Initiative, data, puts us far ahead of Almquist says. “We began many practices in terms reaching out to our diabetics of being able to demonwith a diabetic report card,” she says. “Because of our EHR, two years in a strate our capabilities for these initia“When they come in for their follow- row we have scored 115 points, which tives.” up visit, we go over their numbers and is 100%, with them. We are the only While she views the use of a robust any medication changes. One of our practice in Pennsylvania that has done EHR system as a means of improving a staff is now calling them within a week that. They have a list of the criteria for medical practice’s efficiency and facilito make sure they got their prescrip- preventative care. When High Mark’s tating the provision of evidence-based tions filled and to see if they have any medical director came out to visit care, Almquist says she feels that the questions. At first some of them are a us, he said it was clear that we are using main group who should benefit from little amazed that you’re calling. We’re an EHR because of the fact that such a device is the patients. “If the end holding them more accountable in one we’re consistently scoring 100% under result is not better patient care, the respect. But you need a reporting mod- those criteria. whole point of having an EHR is wastule to be able to do things like that; you “The chronic care model says that ed,” she says. ■ have to be able to generate these types care givers better manage patients with —Reported and written by Editor Rev DiCerto. of reports.” Through the Chronic Care chronic illness to reduce health care

PRACTICE’S ELECTRONIC PRESCRIBING EXPERIENCE PROTECTS PATIENTS, FACILITATES PCMH CERTIFICATION ne of the requirements a practice must satisfy to achieve National Committee for Quality Assurance (NCQA) certification as a patient-centered medical home (PCMH) is that it be able to demonstrate that a certain percentage of its prescribing is being done electronically. White Rose Family Practice, which achieved Level 3 PCMH certification in July of 2010, began using electronic prescribing through Sage Medical Manager, a practice management system manufactured by Tampa, Fla.-based Sage Healthcare, in 2003, upgrading to the Sage Intergy electronic health record (EHR) system in 2007. The York, Pa.-based practice’s years of experience with electronic prescribing were part of the reason it was able to so easily achieve PCMH certification. “Electronic prescribing was the first thing we started using

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10 Practice Options/September 2011

with our EHRs,” says White Rose’s business manager Whitney Almquist. “At that point many of the pharmacies still didn’t have fax machines and didn’t accept prescriptions over the computer. That has changed dramatically. “The system gives you a more up-to-date and complete medication list,” Almquist continues. “You can clearly see a patient’s medication list, including what dosage of a medication they have been prescribed and what directions they were given. Now the safest product is connected for insurance purchases. What this is working toward is much more accountability with patients regarding what medications they’re taking, because not only can we accurately track what medications we’ve prescribed them, but we can also see what other doctors prescribe.” —RD


CAPITAL IDEAS

How to Protect Your Wealth if Hospital Employment Is a Possibility By David B. Mandell, JD, MBA, and R. Paul Wilson, CRPC

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common trend in the medical landscape today is the acquisition of medical practices by hospitals, so more specialists are becoming hospital employees every day. However, many hospitalemployed physicians are frustrated with the tax and retirement planning options they have, compared with their colleagues in private practice.

Pros and Cons One significant downside of being an employee of a hospital is that employees have virtually no control over the tax-saving retirement plans, benefit plans, fringe benefit plans, or other write-offs available to them. For a physician working in a practice he or she owns, all of these important financial options are available. Over a career, these tools can mean the difference between an early or later retirement and determine the quality of that retirement financially. The traditional practice acquisition model has positives and negatives for the doctor. The positives include reduced legal exposure for the doctor, reduced overhead expenses, and, in some circumstances, increased financial security for the practice.

TABLE 1.

David Mandell, JD, MBA, is an attorney, author, and principal of the financial consulting firm O’Dell Jarvis Mandell LLC (www.ojmgroup.com), where R. Paul Wilson, CRPC, works as a financial consultant. They can be reached at 877-656-4362. Significant negatives include loss of the physician’s autonomy and the loss of control of his or her financial package, including qualified plan and other benefit planning. The second negative can be costly to the doctor. Qualified plans include defined contribution (profit-sharing) plans and defined benefit plans. In a profit-sharing plan, a physician can defer up to $49,000 in 2011. This contribution limit typically increases each

OSCAR’S SCENARIO AS A HOSPITAL EMPLOYEE Gross annual amount

Income tax savings at 40% tax bracket

Deferred contribution into 403(b) plan $16,500 Deferred contribution into 457(b) plan $16,500 Total annual tax savings Source: O’Dell Jarvis Mandell LLC, Cincinnati, OH, 2011

$6,600 $6,600 $13,200

year to keep pace with inflation. The physician’s investment will accumulate on a tax-deferred basis as well, but every dollar withdrawn in retirement will be taxed as income. A defined benefit plan is also funded with tax-deferred dollars. The annual contributions are calculated each year based on conservative growth assumptions, and a specific amount to be attained at a specific age. These funds will also accumulate on a tax-deferred basis, and withdrawals during retirement will be taxed as income.

Case Study At 45 years old with a healthy practice, Oscar would likely have a profitsharing plan or a defined benefit plan, or both, to help him save for retirement and reduce his current taxable income. He maximizes his profitsharing contribution but does not presently take advantage of a defined benefit plan. In addition to his qualified retireContinued on page 12 Practice Options/September 2011 11


CAPITAL IDEAS Continued from page 11

ment plans, as a practice owner, Oscar can deduct business-related expenses such as a portion of his car lease; home office expenses such as computer and electronic equipment, software, office furniture, and office supplies; and travel expenses. If he pays $800 per month for his car lease and claims he uses his vehicle for business purposes 70% of the time, the business portion of his lease payment will be deductible to the extent allowed against his business income. Between his profit-sharing and his office expense deductions, Oscar’s total annual tax savings as a private practice owner are $21,200. However, as a hospital employee, Oscar can only take that deduction to the extent his employee business expenses along with other deductions exceed 2% of his adjusted gross income (AGI). When Oscar becomes a hospital W2 employee, he will lose the more taxbeneficial qualified plans. Oscar would likely have access to a 403(b), which allows him to defer only $16,500 in 2011. In a best-case scenario, Oscar would also have access to a 457(b) plan, which would allow him to defer another $16,500 in 2011. Oscar’s case is typical. A physician gives up most of the benefit of being a business owner when becoming a hospital employee. The ability to implement aggressive retirement plans, fringe benefit plans, and the tax savings that go along with them has a direct impact on a physician’s long-term wealth creation. Giving up that ability represents a significant sacrifice. Assuming Oscar’s AGI is $500,000, Table 1 illustrates the extent to which he could reduce his tax expenses as a hospital employee.

A Potential Solution U.S. hospitals are beginning to adopt a type of benefit plan that can provide Oscar with a way to capture all his lost benefits, and more: the hybrid plan. The plan is authorized by a section of the Internal Revenue Code that has

12 Practice Options/September 2011

TABLE 2.

OSCAR IN BEST-CASE HOSPITAL SCENARIO Gross annual amount

Income tax savings at 40% tax bracket

Deferred contribution into 403(b) plan $16,500 Deferred contribution into 457(b) plan $16,500 Deduction based on $50,000 contribution into the hybrid plan $17,512 Total annual tax savings Source: O’Dell Jarvis Mandell LLC, Cincinnati, OH, 2011

existed for over 30 years. Nearly five years ago, a revenue procedure was issued creating safe harbor rules for calculating the economic benefits to be included as taxable compensation under the plan. The hospital can offer the hybrid plan in addition to their 403(b) or other qualified retirement plan. It can be offered to all employees, physicians only, or to some other classification tied to employment. It is asset protected at the highest level in many states and can be designed for solid asset protection in all states. If Oscar’s hospital adopts the hybrid plan and offers it to Oscar, in addition to the 403(b), he can contribute another $50,000 into the plan.

Increased Tax Savings The hybrid plan saves Oscar an additional $6,000 to $8,000 in taxes per year, for a total of $30,000 to $40,000 in savings over five years. The contributions into his plan may grow asset protected under his state’s law. If Oscar leaves hospital employment, he takes 100% of his funds in the hybrid plan with him. Presuming an 8% return in the market, Oscar would be able to take out $38,531 per year tax-free in retirement, ages 65 through 84. These numbers would be larger if he retires later. All of these

$6,600 $6,600

$7,004.80 $20,204.80

benefits are in addition to the hospital’s 403(b) or 457(b) plan that he also funds. Table 3 illustrates the savings Oscar is able to realize by utilizing the hybrid plan. With the hybrid plan, Oscar has been able to reduce his lost deductions by more than $17,000 per year, bringing him almost even with his deductions when he owned his practice. The plan contributions are flexible. Oscar could contribute up to $100,000 per year into the plan, in addition to the 403(b) and 457(b) plans, giving him another $17,000 or more of deductions. Not only would he then be better off deduction-wise than he was in private practice, but he would be funding a plan that was asset protected in his state and acts as a tax hedge against future income and capital gains tax increases. Physicians who are or may become hospital employees, and who care about increasing their deductions, taxbeneficial retirement income, and asset protection, should work with fellow physicians, the hospital board and the HR department to have a hybrid plan added to the hospital’s benefit package. This plan can be structured at no cost to the hospital, so it shouldn’t be hard to have it approved. Consult a financial adviser for advice on implementing such a plan.■


COMPENSATION

Survey Finds Continued Financial Losses for Medical Groups, Low Increase in Physician Compensation

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any health care provider organizations continue to operate at a significant loss, and although nearly 70% of specialties saw increases in provider compensation in 2010, the increases seen were marginal, findings in the Alexandria, Virginia-based American Medical Group Association’s (AMGA; www.amga.org) 2011 Medical Group Compensation and Financial Survey show. The survey results were released August 16.

ed. Our current volume-based reimbursement system is largely indifferent to the efforts of medical groups to elevate the standard of care in the United States. AMGA is working to address the inequities of the current payment model as part of overall health care reform and to develop a model that incorporates a substantial component reflecting achievement of quality results and value for patients and payers.”

ginally for most specialties,” said Fisher. “The modest increases seen this year reflect the negative impact of declining reimbursements, competition for specialists, the cost of new technology, and other factors affecting practice revenues in most parts of the country.”

Respondent Data

The report gives a complete financial picture of medical group operations and provides compensation, productivCompensation Increases ity, and financial operations data from The compensation portion of the survey approximately 49,700 health care Financial Challenges found that 69% of the specialties saw providers throughout the United States, The section of the survey examining increases in compensation in 2010, with including 124 specialties, 32 other financial operations found medical the overall average increase around health care provider positions, and 28 groups were still faced with significant 2.4%. In 2009, 76% of specialties experi- administrative positions. The data repfinancial challenges, and operating enced an average increase around 3.8%. resent responses from 239 medical margins are increasingly thin. In 2010, The primary care specialties saw about a groups, representing 51,700 providers. only medical organizations Of responding medical groups, located in the Western 55.6% report more than 100 The section… examining financial region were close to breakphysicians. ing even (losses of $27 per The survey data include startoperations found medical groups were physician). All other ing salaries by specialty; medians, still faced with significant financial means, and percentiles; compenregions were operating at a sation to productivity ratios; loss: the Eastern region challenges, and operating and comparative data from previaveraged a loss of $1,597 margins are increasingly thin. ous surveys, as well as providing per physician; the Southern region averaged a loss of analysis by group size and $1,870; and the Northern region experi- 2.6% increase in 2010, while other med- geographic region. In the financial enced increasing losses of $10,669 per ical specialties averaged an increase of section, profiles are provided per physiphysician in 2010, compared with loss- 2.4% and surgical specialties averaged cian full-time unit, facility square es of $9,943 per physician in 2009. around 3.8%. By comparison, the pri- footage, and work relative value units. I “In the face of the current economic mary care and surgical specialties saw n addition to staffing profiles, the climate, these medical groups continue about a 3.8% increase in 2009, while financial data include medians, to rise to the challenge of delivering the other medical specialties saw 2.4%. The capitation impact, accounts receivable highest quality, coordinated care to the survey reports that during 2010, the spe- analysis, and department level analysis. patients they serve,” commented cialties experiencing the largest increas- A section examines data specific to Donald W. Fisher, PhD, CAE, president es in compensation were allergy (6.38% the academic and faculty practice and chief executive officer of AMGA. increase), emergency medicine (6.37% environment. “Much of the losses we see in 2010 are increase), and hospitalist-internal mediThe survey was conducted by the supplemented by other non-clinical cine (6.29% increase). national accounting firm of McGladrey. revenue sources or funding from health “The survey indicates that compen- The complete survey can be purchased systems with which groups are associatsation continues to fluctuate only mar- through the MGMA’s Web site.■

Practice Options/September 2011 13


PRACTICE MANAGEMENT NEWS

CMS Launches Tools to Assist Quality Improvement Organizations, Inform Patients

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he Centers for Medicare & Medicaid Services (CMS) on August 5 announced a new tool for patients and caregivers, and other enhanced initiatives to empower consumers to make informed choices about their health care. The steps announced include a Quality Care Finder (www.Medicare. gov/QualityCareFinder) to provide consumers with access to Medicare’s Compare tools and comparison information on hospitals, nursing homes, and plans; an updated Hospital Compare Web site (www.hospitalcom pare.hhs.gov) and an enhanced Quality

Improvement Organization (QIO) program under which QIOs provide technical assistance and resources to assist health care providers in changing how care is delivered. The QIOs will coordinate care across settings, improve community health by promoting preventive services, and make health care costs sustainable by supporting care that keeps patients safe from costly and dangerous complications. The work supports the National Quality Strategy and the Partnership for Patients, designed to build collaborative models to improve health care quality, reduce hospital-acquired con-

MGMA SURVEY: COMPENSATION STATIC edian compensation for practice management professionals in 2010 changed little from 2009, according to the MGMA Management Compensation Survey: 2011 Report Based on 2010 Data from the Englewood, Colo.-based Medical Group Management Association (MGMA). Administrators in practices with six or fewer full-time-equivalent (FTE) physicians earned a median of $86,459, a decrease from 2009. Administrators in practices with seven to 25 FTE physicians reported median compensation of $115,000, an increase of 0.28% from 2009. In groups with 26 or more FTE physicians, administrators reported median compensation of $150,756.

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FOR

ditions, and lower hospital readmissions. More information on the QIO Program can be found at http://tinyurl.com/3r6vjl2. CMS has also updated data for outcomes of inpatient hospital care on Hospital Compare. The site includes 10 measures that capture patient experience with hospital care, 25 process-ofcare measures, and three children’s asthma care measures. It also features information about the volume of certain hospital procedures performed and conditions treated for Medicare patients and what Medicare pays for those services.

MEDICAL PRACTICE MANAGERS

Some practice management professionals reported increases in compensation, likely due to expanded responsibilities. Business service director reported a 5.7% increase in median compensation to $88,540. Branch and satellite clinic managers saw an increase in median compensation to $57,510, up 2.57%. Marketing and communications specialists earned median compensation of $49,262, up 0.74%. The report includes data on 7,240 managers in 1,287 medical practices. The full report can be purchased at http://tinyurl.com/3lwb6v5.

AMA, OTHER GROUPS REQUEST CMS ENSURE PAYER DATA ARE RELIABLE FOR PATIENTS, PHYSICIANS nsuring public reports on Medicare and private payer data are valid, reliable, and actionable is critical, the American Medical Association (AMA) and 81 physician organizations told the Centers for Medicare and Medicaid Services (CMS) August 8 in comments submitted on the proposed rule on Medicare data for performance measurement. The organizations applauded the inclusion in the rule of safeguards to protect patients and physicians, but noted several issues must be resolved for physician measurement and public reporting to be effective.

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14 Practice Options/September 2011

The organizations called on CMS to ensure physicians can review their data for accuracy and appeal any errors before information is made public. AMA urged CMS to standardize the process for developing public reports and the information they will include, across Medicare and for private insurance. The comment letter provides detailed recommendations to CMS on additional safeguards and ways to standardize the data collection to assist in developing meaningful, actionable reports. It can be viewed at http://tinyurl.com/3whl3kd.


MGMA STUDY: MANY PRACTICES INTERESTED IN BECOMING PCMHS

Physician Group Practice Demonstration Improves Care Quality, Reduces Medicare Costs

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he Centers for Medicare and Medicaid Services (CMS; www.cms.gov) on August 8 announced results from the initial Physician Group Practice (PGP) Demonstration, a partnership with physician group practices seeking to better coordinate care across settings, leading to improved quality and cost savings. After five years, this demonstration has shown significant progress in quality improvement and savings in Medicare expenditures. The lessons learned from this demonstration helped shape the accountable care organization model put forth by the Affordable Care Act. Under the PGP Demonstration, physician groups earn incentive payments based on the quality of care they provide and the estimated savings they generate in Medicare expenditures for their patient populations. For each par-

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ticipating practice, CMS established benchmarks for 32 quality performance measures, which the group had to meet to receive incentive payments. In the demonstration’s fifth year, seven groups achieved benchmark performance on all 32 measures. The remaining three groups achieved benchmark performance on at least 30 reported measures. In the demonstration’s first year, only two groups achieved benchmark performance on all measures. The first performance year of the two-year PGP Transition Demonstration began on January 1, 2011. The Demonstration will provide CMS with additional performance data and insight into how the successes of this type of program can be sustained. For more information on the PGP Transition Demonstration, visit http://tinyurl.com/44jfjzu.

HHS AWARDS AFFORDABLE CARE ACT FUNDS TO COMMUNITY HEALTH CENTER PROGRAMS epartment of Health and Human Services (HHS) Secretary Kathleen Sebelius on August 9 announced awards of $28.8 million to 67 community health center programs across the country. These funds, made available by the Affordable Care Act, will help to establish new health service delivery sites to care for an additional 286,000 patients. Health centers are well positioned to be responsive to the health care needs of their communities. These grants will support new full-time service delivery sites that provide comprehensive primary and preventive health care services. By maximizing the availability, access, and continuity of primary care services to the

D

onducted in April 2011 by the Englewood, Colo.-based Medical Group Management Association (MGMA; www.mgma.com), the Patient Centered Medical Home Study: 2011 Report Based on 2011 Data, which surveyed 341 primary care and multispecialty practices nationwide, found that almost 70% of respondents were either in the process of transforming to or interested in becoming a patientcentered medical home (PCMH), while more than 20% were accredited or recognized as a PCMH by a national organization. The majority of practices interested in becoming a PCMH were family medicine (nearly 36%), followed by multispecialty practices with primary and specialty care (more than 30%) and pediatrics (more than 10%), the report says. The report indicated that PCMH pilots and demonstrations were highly utilized. As many as 75% of existing PCMHs reported they were participating in a pilot or demonstration. Ninety percent of pilot participants also were receiving fee-for-service payments from payers as part of the pilots and only 57% indicated receiving management fees. The full report is available at no cost through the MGMA’s online store (www.mgma.com/store/default.aspx).

nation’s neediest populations, these sites will play a critical role in improving the health care status of medically underserved and vulnerable populations and decreasing health disparities. Eligible applicants included public or nonprofit private entities, including tribal, faith-based, and community-based organizations that meet health center funding requirements. Current Health Resources and Services Administration (HRSA) grantees could apply as well as health care provider organizations applying for the first time. Health Center New Access Point grants, listed by organization and state, are available at http://tinyurl.com/3nmt4yr.

Practice Options/September 2011 15


DIABETES PRACTICE

OPTIONS

September 2011

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