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Work Smarter, Not Harder Contracting Savvy for Physicians

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Purpose… † Level the playing field between physicians

and Healthplans/Payors. † Assist physicians in building a more efficient

and profitable practice.

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Current Status… † Payments are rapidly declining while physicians are

working harder. † Office practice costs are increasing: MPI average

annual increase of 5% † Stacked contracting as a result of physicians signing

multiple agreements severely reduces rates. † Reconciling contract payments seems an impossible

task. 4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Causes… † Physicians are busy seeing patients; Healthplans

spend the day with attorneys and accountants making contract language impossible to understand. † Lack of training of front office staff – example: out of

panel patients are turned away in error. † Physicians bought into the fear factor that they

needed to sign any and all agreements. † 100% Medicare Allowable became the standard

payment. 4/16/2008

Coastal Healthcare Consulting Group, Inc.

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More Causes…

† Physicians eventually accepted sub-standard conditions

assuming they have no choice. † Physicians sign contract/credentialing documents without

any review. † Physicians do not budget nor staff for a contracting person.

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Ok, But What Does That Mean To Me? † Average physician-generated revenue dropped

19% from 2004 to 2007. † Office practice costs increased 5% a year on

average. † Pending Medicare cuts in 2008 could bring another

10% decrease in reimbursement. † Physician and office staff salaries are stalled or

decreasing. 4/16/2008

Coastal Healthcare Consulting Group, Inc.

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How Do I Fix It? † Request copies of current contracts from

your top 10 Healthplans. † Request copies of fee schedules for your

top 10 codes.

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Sample of Reimbursement Comparison by Plan* PROCEDURE CODE

DETAILED CONSULT

CHARGE

MEDICARE

MEDI-CAL

WORK COMP

TRICARE TRIWEST

AETNA

BLUE CROSS

BLUE SHIELD

99213

ESTB VISIT

$135.00

$60.86

$24.00

$47.60

$42.48

$57.71

$56.31

$54.72

99243

DETAILED CONSULT

$312.00

$124.37

$59.50

$131.62

$93.61

$126.82

$128.45

$126.62

25605

CLOSED REDUCTION RADIUS

$1,346.00

$553.73

$271.41

$413.10

$516.18

$538.66

$542.08

$565.53

20610

INJECTION MAJOR JOINT

$178.00

$69.25

$45.79

$45.90

$46.87

$70.97

$56.28

$74.71

27130

TOTAL HIP

$3,332.00

$1,355.47

$759.12

$2,703.51

$1,355.47

$1,396.42

$1,995.04

$1,471.53

27447

TOTAL KNEE

$3,600.00

$1,459.37

$1,489.20

$2,514.56

$1,459.37

$1,509.01

$2,036.51

$1,589.56

29888

ACL REPAIR

$2,400.00

$1,144.83

$674.61

$2,296.53

$941.01

$1,005.53

$1,556.64

$1,058.93

29877

ARTHROSCOPY/DEBRIDE KNEE

$1,398.00

$576.74

$477.29

$1,133.73

$576.75

$586.21

$968.64

$616.42

73562

X-RAY KNEE

$84.00

$33.44

$23.38

$47.50

$33.34

$33.80

$34.38

$35.15

73218

MRI UPPER (73221)

$1,324.00

$547.39

$436.28

$695.88

$547.39

$500.00

$512.75

$543.54

73718

MRI LOWER (73721)

$1,324.00

$543.39

$436.28

$665.00

$543.40

$500.00

$512.75

$543.54

Q4083

HYALGAN J7317 (AWP-$94.00)

$283.00

$104.85

NOT COVRD

$105.66

$123.25

$109.54

$111.53

$497.00

$186.66

NOT COVRD

$198.09

$208.60

$166.00

$209.30

*ForQ4084 demonstration purposes only SYNVISC J7320 (AWP-$186.33) * For demonstration purposes only

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Sample Volume Report* Amount Billed

Healthplan

Amout Received

Amount Received Compared to 100% of Medicare

Aetna

$350,000

$170,000

93%

Blue Cross

$750,000

$300,000

89%

Blue Shield

$300,000

$170,000

102%

CIGNA

$60,000

$38,000

104%

Health Net

$50,000

$20,000

88%

Tri West

$100,000

$30,000

66%

Medi-Cal

$30,000

$5,000

28%

XYZ MedicalGroup

$80,000

$65,000

130%

*For demonstration purposes only

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Terminate Low Volume Healthplans † Simple Volume Report – amount billed vs.

amount collected. † Terminate anything under 80% of Medicare. † It’s not only the Plan, it’s the Affiliates… † You are providing discounts for no reason.

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Terminate Silent PPO’s † Terminate Silent PPO, Network and Affiliate

Contracts. A Silent PPO is an administrative organization who leases/sells physicians discounts for a fee. They have no members and they are not licensed as insurance companies. They have “ Affiliates” that use your discount, they also “rent” physician to “networks” for a fee. 4/16/2008

Coastal Healthcare Consulting Group, Inc.

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How Do I Know It Is A Silent PPO? Look at your EOB’s † Probably no contract signed. † They are not the Payor. † Look on their website for claims “chop shop”

language.

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Sample Of A Bad EOB

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Website “Chop Shop” Language “We offer management services aimed at eliminating unnecessary medical costs. In 2007, clients enjoyed a savings to cost ratio of 8:1. Working closely with you to design and build effective cost containment solutions, XYZ will customize a review program to suit your needs.”

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Silent PPOs…Declining To Be Included [[Physician’s Letterhead] [Date] [Contact Person] [Healthplan] [Address] [City, St Zip]

VIA CERTIFIED MAIL – RETURNED RECEIPT

Re: [Name of Physician] Dear [Contact Person]: This letter is to confirm that pursuant to California law, I hereby exercise my right to decline to be included in any list of contracted providers that is sold, leased, transferred, or conveyed by you to any current or future payors that do not actively encourage the payors’ beneficiaries to use the list of contracted providers when obtaining medical care. See Business & Professions Code §511.1; Health & Safety Code §1395.6; Insurance Code §10178.3; and Labor Code §4609. Also, please include my fee schedule. I have enclosed, in a separate form, my top 15 codes for you to price. Thank you for your attention to this matter. Sincerely.

[Physician’s Name] cc: File

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Once Terminated… “Out of Network” Is Good Business † “Out of Network” usually pays 2 times in network

rates. The exception is Blue Cross. † Must educate staff. You DO take XYZ insurance,

you are simply out of network.

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Renegotiating Contracts IS Good Business 4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Typical Renegotiation Results* Healthplan

Increase %

Additional Revenue Per Year

Blue Cross

5%

$30,000.00

Multiplan

PacifiCare/United

20%

$70,000.00

Health Net

10%

$5,000.00

CIGNA

10%

Net Increase

Silent PPO

Silent PPO Terminations 30%

$54,000.00

Interplan

30%

$20,000.00

Focus

35%

$5,000.00

$3,000.00

First Health

20%

$7,000.00

$108,000.00

Add. Income

Annual Net Increase

$86,000.00

$194,000.00

* Based on a 3-Physician practice

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Recap † Organize contracts. † Construct a grid. † Eliminate Silent PPOs. † Renegotiate key contracts. † “Out of Network” is good business.

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Summary To work smarter, not harder, you must: † Get smarter. † Allocate human resources to manage your

revenue. † Train your human resources to maximize your

revenue. † Be more selective and diligent about your

contracted revenue. 4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Conclusion… Diligent Contracting Results In: † An increase in revenue of $30,000 to $70,000 a

year per physician. † Less stress. † Higher level of efficiency which equals…. † Working less and making more. 4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Contact Information… Kim Fenton Coastal Healthcare Consulting Group, Inc. Phone: (714) 544-5488 Fax: (714) 544-7188 Cell: (714) 651-7319 E-mail: KimF@HealthcareConsultant.org Website: www.HealthcareConsultant.org

4/16/2008

Coastal Healthcare Consulting Group, Inc.

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Office practice costs are increasing: MPI average annual increase of 5% Physicians sign contract/credentialing documents without any revi...

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