Archives : reimbursement

Vantage Forums: Health Insurance Coverage by State

The US Census Bureau has tons of great information that can be used to perform effective market analysis. One area that we didn’t cover in detail during the Market Analysis 101 presentation was the ability to obtain information on the health insured in the US.

This page (http://www.census.gov/hhes/www/hlthins/ … index.html) of the US Census website provides links to historical health insurance tables which break down the insured and uninsured by state, age, historical year, type of insurance, and more. It’s a great resource.

via Vantage Forums: Health Insurance Coverage by State.

Dear Doctor: Here is half your money, take it or leave it

I recall as a student when – somewhere near the last day of school – an instructor would share the funniest things that they’d seen come across their desk throughout the year.  It was usually some 5-word blooper from a student or a simple, yet funny misstatement of history that found it’s way into a writing assignment; something that managed to set itself apart from the rest, truly catching the attention of the instructor through a countless sea of papers, essays, tests, and homework assignments.  Only the real gems would make it to that last day of school.

We’ll, I wish I could say that I’ve got a “gem” for you, or perhaps even a blooper.  If not that, then at least something that is a bit rare and unusual.  Unfortunately, the only qualification that my statement has is that is has caught our attention, and it should catch yours as well.  It’s not funny, rare, or even a blooper.

One of our functions is as a provider of medical billing services, and we consider this to be a “sign of the times” in health care and in our economy, and the statement is simply this (taken from an actual letter from patient to doctor):

Dear Doctor:

I am your patient and I have a bill for $400.  I will send you half within the month if you will agree to write off the balance.  Please sign below acknowledging this agreement.

Sincerely,

Your Patient
 
Approved:

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Medical Practice Authorized Representative

Our recommendation is simply this: If you believe in your services, your prices, and your policies, then don’t fall hostage to anyone, not even a patient.  If you feel that arrangements such as this are in the best interest of your practice, and your financial policy supports this behavior, then it certainly might be right for you.  But understand the risks of too quickly going after the quick buck in lieu of collecting the sum of what is rightfully yours as a provider of health care services.

There are no easy answers, but it is in your interest to know that these letters are coming and you should at least know how you will respond.

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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.

Increased reimbursement = lower healthcare costs?

Paradoxical, yes, but according to new recommendations presented by the American College of Physicians (ACP), this is exactly what is required in order to reduce healthcare costs: Increase reimbursement for primary care physicians as part of the effort to lower the cost of medical care.

The argument goes something like this.  By increasing reimbursement to primary care physicians, we will reduce the primary care shortage (currently a shortage of 16,000 physicians nationwide), which in effect will improve the quality of healthcare resulting in fewer “big ticket” costs such as hospital admissions, surgeries, and ER visits.

Makes sense, and I support efforts to address the primary care shortage, though I’d be interested to see the actual math as well as the ACP’s thoughts on why specialists wouldn’t respond with equal demands for increased reimbursement.

The annual report recommends reforms to the primary care payment policies that would enable primary care physicians to achieve market competitiveness with other specialties. The disparity between the salary range of primary care physicians and non–primary care physicians is a large factor in the declining number of medical students deciding on careers as general internists or family physicians.

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There is increasing evidence that augmenting the number of primary care physicians improves quality and lowers the cost of medical care. For example, recent studies indicate that communities with a greater proportion of primary care physicians have fewer hospital admissions, fewer emergency department visits, and fewer surgeries. Furthermore, a 5% decrease in the rate of hospital admissions could result in a healthcare savings of up to $1.3 billion.

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Tannus Quatre PT, MBA is a practice consultant and principal with Vantage Clinical Solutions, Inc., a national healthcare consulting and management firm based in Oregon and Colorado.  Tannus can be reached through the Vantage Clinical Solutions website by clicking here.

Pay more up front, save more later

Interesting theory here: pay more money to the initial point-of-contact physicians, allow them to spend more time with the patient, let them perform a more thorough screening, and just maybe it will save money in the long run.  It makes very good sense and early experiments in several states by multiple payers presented in this article show that it might just be true.  It might also entice more medical students back toward primary care.

The idea is that by paying family physicians, internists and pediatricians to devote more time and attention to their patients, insurers and patients can save thousands of dollars downstream on unnecessary tests, visits to expensive specialists and avoidable trips to the hospital.

Nationally, Medicare and commercial insurers pay an average of only about $60 a visit to the office of a primary-care doctor and rarely if ever pay for telephone or e-mail consultations. Many health policy experts say the payments are not enough to let the doctors spend more than a few minutes with each patient.

Medicare cuts causing physicians to drop contracts, leave the profession

We blog a bit about healthcare policy at The Healthcare Entrepreneur, but mostly about the impact that policy has on practice owners and how practice owners must adjust in order to stay afloat in the midst of our turbulent healthcare landscape. 

There is no bigger influence on this landscape than Medicare, and the recent activity in Congress surrounding the scheduled 10.6% cuts to the physician fee schedule have had us all on edge, as we now wait for a final answer from President Bush who The White House confirms intends to veto legislation to reverse the cuts (HR 6331) – the legislation was recently passed by the House of Representatives and the Senate.

To put it bluntly – and quite obviously – this is a pretty big bummer for our Medicare practices.  With payment rates dropping by approximately 40% over the past decade, and practice costs rising every year, why would anyone think that medical practices wouldn’t have cause to adjust – if they don’t, they’re not going to survive.

So, as one would expect, physicians and other healthcare providers who accept Medicare patients are quite simply beginning drop the program.  Even worse, some are talking about leaving the profession altogether.  This ABC News report speaks to the pain that physicians are feeling and how they are responding to the pressure.

To [Dr.] Tipsword, this round of Medicare reimbursement cuts, to become effective July 15, could make or break her family practice. (In many states, these cuts affect Medicaid too.)

“I have struggled to build up my practice, but my outlook gets worse each year,” Tipsword said. “The current round of Medicare cuts — which will cut my repayments, which are miniscule right now — as well as increasing malpractice insurance coverage, despite an A+ rating, makes it less feasible for me to continue practice.”

However, the meeting yielded no short-term fix for the problem, and by the end of the session it was clear that the 10.6 percent cut would likely go through anyway.

Now, Tipsword says she is working on an exit strategy from the program. At times, the bureaucratic demands of the job make her consider going even further.

“Due to all the daily headaches of practice — referrals, endless duplicate paperwork to prove medical necessity, phone calls, documentation, etc. — I would honestly love to get out of medicine altogether,” she said.

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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.

Independence day in healthcare: Are we really free?

Everyone loves a holiday.  Thanksgiving, Memorial Day, the Fourth of July…most of us get a day off and enjoy spending time with family and friends.  I know I do (except, of course when the family is out of town and I choose to spend the day blogging instead of watching the Fourth of July pet parade).

As cool as they are though, holidays are like just about everything else that’s good in life – they soon become taken for granted and the true meaning they were originally intended to bring soon play second-fiddle to what we’ve made of them.  The Fourth of July is no different, but today I did want to take a step back from the fireworks, put the watermelon down, and comment on the concept of freedom in America, and how, if at all, this impacts the healthcare industry (believe me, I’ll get to the fireworks and watermelon a bit later).

We often hear about “freedom” and “independence” in America, and how the “land of the free” is one of the most sacred constructs of our way of life in this country.  I agree that it is.  We are free to choose how we live, free to go where we want to go, and free to do what we want to do.  Freedom really is a pretty cool thing, and even though many of us prefer a cold beer and a hamburger on Independence Day rather than a deep discussion about our founding fathers and the Declaration of Independence, I think it’s OK as long as we’re living “freedom” and “independence” in our everyday lives, providing living testimony to the significance of our freedom.

Living “free” has many benefits, and has allowed our country to evolve into the technologically advanced and economically powerful force that we are today (Did I just say that?  Give it a couple of years, we’ll swing back around).  Living free allows us to express ourselves creatively and try new things, hoping to improve ourselves and others through an endless pursuit of the biggest, the brightest, and the best.  And while many fall down in their pursuits (I know I have), we as Americans are free to stand back up, try again, and get it right the next go around.

Now, freedom, as great as it is, is an interesting concept as related to healthcare.  In my opinion, there’s no other industry in which freedom should play more of a role – innovation, creativity, compassion, progress, and many other by-products of freedom form the cornerstone of the healthcare industry, allowing us to care for each other, improve the quality of our lives, and form the foundation for future generations of healthy individuals.  The problem is, this isn’t the way it works.

Unfortunately, the healthcare industry is far from “free.”  On the provider side we don’t have the freedom to choose the treatments that we know will help our patients because they aren’t reimbursed, we don’t have the freedom to spend the time we need with our patients because we need to see large volumes in order to keep our doors open, and we don’t challenge the system with new business models and delivery methods because of fear of professional fallout and failure.  On the patient side we don’t have the freedom to choose our providers because they aren’t part of our insurance plan, we don’t have the freedom to leave our employers because they insure our health, and we don’t have the freedom to work as a team with our providers because they don’t have the time to spend with us.  Doesn’t sound too “free” to me.

So, what’s the answer to this apparent lack of freedom in healthcare?  Well, I think it’s entrepreneurship.  I think we need to spend more time evaluating the drivers of good healthcare, and how to align the incentives of our healthcare business models with those of our patients (our “customers”).  I completely understand the argument that there are many who will fall through the cracks in a system that doesn’t provide a safety net – I get it, and I agree.  I don’t agree however that the safety net should effectively reduce the “freedom” of our best and brightest to find new, more efficient, and more profitable ways to deliver healthcare to our country – entrepreneurship as I would call it.

There’s not a simple fix to the healthcare problem in America, but I firmly believe that innovation and creativity is the foundation from which the tides will begin to turn.  Much of our freedom has been lost in the healthcare industry, but the good news is that getting it back is not as far off as one might think.  Making the decision to say “no” to insurance companies that won’t allow you to provide good care and deciding that you will find a way to be profitable using new, perhaps even untested business models in your area is a profound, but good first step.  There are many great new models of care out there that may or may not work change healthcare as we know it.  But my hat is tipped to all that are trying something new in an effort to be “free” and to improve our system through innovation, creativity, and entrepreneurship.
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Tannus Quatre is a passionate blogger and writer, as well as a principal/consultant with Vantage Clinical Solutions.

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.

Email in medical care: Starting to catch on?

On April 23rd I wrote about the benefits of using email in physician-patient communication, and how trends in this area are inevitably going to change the standards of communication in years to come.  I’ve also written about Dr. Jay Parkinson and the company, Myca, who are pushing the use of technology to improve the efficiency and cost effectiveness of the physician-patient relationship through the use of instant messaging, video-conferencing and email.

Email and other efficient modes of communication are undoubtedly in our near future as healthcare providers.  Now if we could just get the payers to notice…

Well, it looks like they are starting to notice.  As part of the medical home model, Capital District Physicians’ Health Plan is entering a 2 year pilot program which will, among other things, pay physicians for using communications such as email to improve the efficiency of interaction with patients.  This article from Times Union explains.

Currently, doctors are paid only for face-to-face visits. There’s little incentive for busy doctors to explore other types of interactions, said Bruce Nash, chief medical officer and senior vice president of medical affairs at CDPHP.

“The rest of the world’s used e-mail for a decade,” he said. “It’s been limited to a physician, because it hasn’t been paid for.”

Doctors aren’t paid to think

If you read this blog regularly, this won’t be the first time you’ve read a post about the growing trend in medicine that favors reimbursement for procedures over time spent with patients, regardless of how important or necessary that time is to the overall plan of care.  As the leader of many trends in medicine, Medicare is the driving force behind this direction our reimbursement system is taking, and there isn’t an immediate end in sight.  This article from the Wall Street Journal explains how this trend is reducing the availability of needed specialty care in the United States by providing a disincentive for medical students to pursue specialty areas that rely on cognition rather than procedural expertise.

A discipline built on spending time with patients to gather clues for a diagnosis, neuro-ophthalmology could become another casualty of a medical payment system that favors high-tech procedures over low-tech exams. The median income of a neuro-ophthalmologist at a teaching hospital is $200,000, according to the North American Neuro-Ophthalmology Society. That’s a third less than most general ophthalmologists, who undergo less training but can see more patients, and do more pricey procedures, in a given day.

Many in health-policy circles have focused on how the current health-care payment system is helping create shortages among primary-care doctors, internists and others on the front lines of medicine. But often lost is how the system is endangering some of the country’s most highly trained specialties as well.

Endocrinologists, rheumatologists and pulmonologists — specialties that also don’t involve performing many procedures — face acute shortages. Many of the severest deficits affect children. Though nearly 300,000 children in the U.S. are diagnosed annually with juvenile arthritis, lupus or other complex rheumatic diseases, there are fewer than 200 pediatric rheumatologists to take care of them, according to the U.S. government’s Health Resources and Services Administration.

Email: The new frontier in physician-patient communication?

For many of us, email has become a primary means of building relationships, conducting business, and keeping in touch.  It is very effective in doing so, and while it isn’t a full replacement for phone and face-to-face interaction, it does provide a very efficient means by which to communicate.

In business, email has another important benefit; it provides a document trail that can be used to record activity and conversation, creating a transcript of all that is said (and not said) via electronic format.  Along with other benefits, the efficiency of use and ability to document in real time provides some obvious appeal to those who communicate with clients on a regular basis.

Enter physicians, dentists, physical therapists, and other healthcare providers that interact with clients (i.e., patients) on a daily basis.  While drawbacks exist in the use of email as a means of communicating with patients, we are finding that patients like it and doctors are on the verge of getting reimbursed for it; both important drivers for the regular use of email in the near term.  There will be many pitfalls to avoid for the physician and patient alike, but we will soon be seeing more and more use of email between provider and patients in the years to come.

This article in Modern Medicine explains in detail the key benefits associated with the use of email between physicians and patients, and speaks to the trends that are currently underway in this important area of medical practice.

If you haven’t yet begun using e-mail to communicate with patients, there are plenty of reasons to start. First is the increasingly loud patient clamor for e-mail, as indicated in one survey after another. The latest is a Harris Interactive/Wall Street Journal poll in which three out of four respondents said they should be able to schedule medical appointments via e-mail or the Internet, and e-mail their doctors as part of their overall medical care—at no extra charge.

Ironically, that proviso is precisely what has discouraged many time-pressed doctors from giving their patients e-mail access. But as patient demand rises, the “no extra charge” barrier is slowly but surely coming down.

Late last year, Aetna and Cigna HealthCare announced that they would dramatically expand programs that reimburse physicians for “virtual visits.” Until recently, only a handful of health plans paid doctors for this service, and the news has sparked speculation that other insurers will soon follow. Not surprisingly, the number of physicians who communicate with patients electronically is also on the rise—going from 19 percent in 2003 to 31 percent in 2007, according to a Manhattan Research survey of more than 1,300 doctors. Among physicians who did not yet use a secure online messaging service, one in four said they intended to start in the next 12 months.

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