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MGMA’s Project SwipeIT: Standardization of health insurance cards

The Medical Group Management Association (MGMA) is taking on waste…IT style.

It’s a great initiative, and I recommend that we consider getting on board.  The goal is to prevent up to 2.2 billion in waste that occurs each year through the use of non-standardized insurance cards.  By using machine-readable cards, patients, private practice clinics, and insurers can all save.  Click below to learn more about this great initiative.

MGMA’s Project SwipeIT for standardized health insurance cards

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Tannus Quatre PT, MBA is a private practice consultant and principal with Vantage Clinical Solutions, Inc., a nationwide healthcare consulting and management firm located in Bend, OR and Denver, CO.  Tannus specializes in the areas of healthcare marketing, strategy, and finance, and can be reached through the Vantage Clinical Solutions website.

Is the recession really changing our medical practices?

It looks like the recession is changing how we run our medical practices.  And we’re not talking comments from the pundits – we’re talking serious research by the Medical Group Management Association (MGMA).

While many of us could probably surmise as much (because we’re probably living it), putting numbers behind how the economy is affecting us and our peers is important an informative. 

From a study of 1,850 practice administrators, the probable effects of the economic downturn are (final results to be published in the July 2009 issue of MGMA Connexion:

1. An increase in uninsured patients
2. Improved billing and collections and/or denial-management processes
3. Decreased revenue
4. Delayed capital expenditures
5. Operating budget cuts
6. Staff hiring freezes

Take the pain out of collecting from patients

Collecting co-pays and responsible portions from patients is uncomfortable for many in the front office, and for clinicians as well.  Unfortunately, choosing to avoid the pain of collecting can land a private practice in a world of hurt, especially in our current economic environment.

This article from the Medical Group Management Association (MGMA) speaks to some ways to make the collections process a bit easier, more professional, and systematic – ensuring that your practice won’t “see red” at month end.

Developing and implementing a sound collection policy is vital to running a successful practice. If staff is not well informed and patients not educated on payment expectations, the likelihood of late payment or nonpayments increases. Ensure that your practice’s terms of payment are clearly stated in writing for both staff and patients. If you don’t have a systematic invoice and billing system, get one. The faster you mail invoices, the sooner you’ll be paid. An invoice should clearly show the amount due and when payment is expected, otherwise it will fall to the bottom of a patient’s payment stack.

Creative advertising has a place in medicine

I’ve felt resistance before from those within the healthcare industry that feel that marketing or advertising is “below them.”  Back in July, I actually blogged about this issue in a post titled, “The ‘M’ word in private practice: Marketing.”  Marketing, and advertising specifically, does not have to liken your practice to the used car lot across town.  I would go so far as to say that if your practice truly has something of value to offer your community, you have an ethical obligation to spread the word – and marketing is a valuable tool used to do just that.

I really like this article from the MGMA, as it is a classic story of creative advertising in the medical arena.  The campaign is rife with humor, wit, and success – and sounds like it was a whole lot of fun too.

What started with a phone call from a local journalist wanting to write a column about the “funniest advertising campaign he’d ever heard of” turned into a media torrent: features in or on The Oregonian, CBS Morning News, ESPN Radio, CNN, newspapers in cities not only across the country but across the seas, and more. Even a reporter from Forbesmagazine called wanting to know why the practice chose March Madness over the Masters (demographics, FitzPatrick says).

Economic impacts on healthcare

Our economic woes are far from over.  This article published by the Medical Group Management Association (MGMA) validates some of what many of us already know to be true:

1. Healthcare services are being viewed as discretionary.  Patients are foregoing certain operations, services, and prescriptions simply because they can’t afford it.  This is impacting private practices through reduced volumes of services rendered and procedures performed.

2. The uninsured are increasing.  With increasing job losses, reliance on COBRA coverage has increased, but at a significant cost to the insured.  As coverage expires and patients become unable to pay for the expensive coverage, growth in the uninsured population will likely continue. 

3. Payment for services are slowing.  For those patients that do seek healthcare services, payments for those services are slowing.  Co-pays and responsible portions of claims that go to the patient find themselves competing against payment of other household bills such as credit card debt, mortgages, and groceries.

All is not bleak, but private practice owners must be prepared. Make sure you are collecting your co-pays at the time of service, setting up reasonable payment plans with paying patients, and stockpiling cash reserves in order to weather the economic storm that is likely to last a while.

Published in July, the Rockefeller Foundation/Time Campaign for American Workers Survey revealed that because of costs:

• 23 percent of respondents had not filled a prescription, up from 17 percent in 2007;
• 23 percent had gone without health insurance, up from 20 percent in 2007; and
• 25 percent had not visited a doctor, up from 18 percent the year before.

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Click here or call (888) 827-5613 for information on a free program dedicated to helping private practices throughout the U.S. strategically adjust to the slowing economy.  Free program runs through March 31st, 2009 and is open to practice owners and administrators of any healthcare discipline.

Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm located on the west coast.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

Setting and maintaining appropriate fee schedules for your practice

When working with clients, we often find 2 things: (1) practice owners want to be more profitable, and (2) cutting expenses is not always an option.  At its most fundamental level, a healthcare practice’s profit is based on the equation: revenue – expenses = profit.  So, if expenses can’t be reduced significantly, the next place to look is at the revenue side of the equation.

Revenues are controlled by 2 elements, volume and price.  Increase either and you increase revenue.  We love to see increased volumes, but sometimes the easier (and quicker) fix is to make sure a practice is collecting the maximum amount allowed by its payers (i.e., “allowable” price is maximized).

Enter fee schedules.  In the complex healthcare environment we live in, selling a healthcare service is not as easy as charging a price, getting paid, and going home.  A healthcare practice that gets reimbursed from insurance companies must set a fee schedule which dictates how much the practice will charge for each procedure performed within the practice.  It is off of this fee schedule that the insurer will allow payment for the procedures performed.

If there are multiple payers for the practice it can be a bulky task to have a fee schedule set for each individual payer, so practice owners sometimes opt to use one fee schedule for all payers.  Getting back to the revenue issue, this is where problems sometimes lurk.  Insurance companies have different rules and allowable expenses for medical care, and they don’t all reimburse the same.  So, if a practice has a fee schedule set for one insurer that doesn’t exceed what they “allow” as payment, money is left on the table by the practice.  This can easily happen when using one fee schedue for all payers and is of obvious concern to practice owners.  The good news is that, relatively speaking, it’s an easy fix.

To make sure fee schedules are maximizing reimbursement from payers, make sure that they are set above the allowable amounts for each payer, for each charge.  If one fee schedule is to be used for all payers, then make sure the fee schedule exceeds the amount allowed by the highest reimbursing payer (for each charge).  If multiple fee schedules are being used, make sure that each schedule establishes a fee that exceeds the allowable amount for the payer (again, for each charge).

As you can see, the concept is fairly simple, but the time necessary to establish and maintain proper fee schedules for a medical practice can appear daunting.  It is recommended that the time and energy is spent however, as a significant sum of money can be easily left on the table by not establishing appropriate fee schedules. 

This article excerpt from the Medical Group Management Association (MGMA) provides more information on this important topic.

Medical practices may leave large sums of money on the table because they don’t devote enough attention to developing and maintaining fee schedules. Your practice’s fees should match or exceed reimbursement levels from your best payer to maximize the negotiated amount it can receive.

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