Hey, heart program, you have growth opportunities in 2018!
Wednesday, October 11, 2017 | Larry Sobal
Downsizing has become a regular part of health care these days as hospitals and health systems seek to shed expenses in response to declining (or negative) margins. At a minimum, I consistently see an intense scrutiny on labor costs and it often seems as if “per FTE” has become the predominant metric of success. I get that we are in a time when payer mix has shifted, once profitable volumes (e.g. open heart, SPECT and diagnostic cath) have declined, and the rewards that come from providing “value” are still not being financially rewarded to any large degree.
But does this mean that the opportunities for growth are nonexistent? Not at all if you are willing to take a more imaginative view of your growth options as you begin to finalize your 2018 strategy. And if you don’t yet have a 2018 strategy, now is a good time to start; a simple and inexpensive way to do that is through MedAxiom’s 2-day CV Impact Opportunity Assessment. We’ll give you our specific recommendations on the top opportunities to improve your heart program.
Here are some of the most common areas that we identify as growth opportunities.
Although some CV-related volumes are declining, there are still plenty of opportunities for appropriate volume growth if you are willing to take the steps to go after them. Possibly the most common opportunity relates to patient access and your recall list. Top performing MedAxiom members routinely have cardiologists seeing 25+ patients per physician per day, optimize APPs to manage an appropriate portion of their follow-up and specialty clinic patients, have same-day access for urgent patients, and get new non-urgent patients into the office the same week. Imagine taking your ambulatory clinic to that level of performance. Optimizing your ambulatory clinic model can result in a tremendous increase in office visits in 2018, often in the neighborhood of 20%-30% growth. Patients seen in the office, especially new patients, generate (appropriately) lots of downstream services including diagnostic testing, labs, procedures, etc. And, a poorly functioning clinic not only reduces volume, but has many abstract costs, such as higher employee turnover, harder physician recruiting, emotional stress, etc. This dysfunction is not only missing a growth opportunity, it is eating dollars from your bottom line in a multitude of ways.
Two commonly underserved populations are those with Peripheral Arterial Disease (PAD) and Atrial Fibrillation (A Fib). As part of the Impact Opportunities Assessment we typically try to speak to Family and Internal Medicine referring physicians. Consistent feedback is that your referral base is not fully aware of your capabilities for PAD or A Fib, but more importantly, is not well educated on how to best assess and refer those patients when seen in their office. When is the last time your cardiologists went out and visited your key referral groups and provided some useful PAD and A Fib advice? Do you make it super-easy to get those patients into your practice for a consult versus other options in your community? Do you have specialty clinics focused on acute PAD and A Fib patients? Population demographics all point to A Fib and PAD as being high growth—is 2018 the year you are going to capture it and become the heart center of choice for these patients? And don’t forget about the Podiatrists in your community—they are a great referral source for PAD patients.
It’s one thing to take the steps necessary to achieve volume growth, but the biggest (business) sin I see being committed by heart programs is not being fully paid (or paid at all) for the work they are already doing. Ten years ago, most cardiology groups were independent, still using paper medical records, with certified professional coders right down the hall, and the process of documenting, coding, billing and collecting was much simpler (and much more effective).
Today, you’d be unique if you could tell me your charge lag time, total days in A/R, net collection ratio, or your denial rate. Not knowing, and not having a finger on the pulse of your revenue cycle processes, is akin to burning money. Here’s what I commonly see:
- Your documentation and code selection for office visits do not accurately reflect the level of service provided.
- You are not capturing all the possible reimbursement from cath and EP lab procedures, both on the professional and technical side.
- You’re still doing work without adequate pre-authorization and not getting paid.
- You’re still collecting inpatient charges on pieces of paper that your physicians (hopefully) turn in.
- You’re not billing at all for certain activities because the process to capture and code the charges have fallen through the cracks (more common than you realize).
Want to add a million dollars of new revenue in 2018 without asking any providers to see more patients? Let us come in and do a revenue cycle audit – I think you’ll be amazed at the money being left on the table.
Another large revenue opportunity, Chronic Care Management (CCM), is not new but the Centers for Medicare & Medicaid Services (CMS) implemented some changes for 2017 that make this opportunity much more attractive and feasible. Since 2015, CMS has been providing monthly reimbursement for CCM of patients not conducted during a face-to-face patient visit to help better treat patients with multiple chronic conditions. CMS ultimately aims to reduce preventable readmissions, emergency room visits, nursing home intakes and other utilization costs that often don’t have much of a positive effect on the patient’s long-term health.
Want to add a million dollars of new revenue in 2018 without asking any providers to see more patients?
The original attraction of CCM was that CMS would pay practices about $42 per month per patient for providing 20 minutes or more of (non-physician) care coordination. This is work you are likely already doing. The 2017 Physician Fee Schedule Final Rule implemented payment policies designed to make it easier and more financially attractive for physician practices to furnish CCM services to Medicare beneficiaries. These include easier enrollment of patients in your CCM program, no longer requiring a face-to-face visit for existing patients, elimination of separate consent forms, additional reimbursements for time increments beyond 20 minutes and expanding reimbursement to $68 upon creation of a patient’s care plan and additional reimbursements for CCM patients of moderate or high complexity.
The net result is that physicians have a greater financial opportunity for new revenue with CCM and the benefits of better care coordination have been well documented. Since cardiology practices have tens of thousands of Medicare Beneficiaries with two or more chronic conditions in their panel, who are thus eligible for CMS' CCM program, this is a multi-million new revenue opportunity.
A third opportunity for revenue growth is related to the impending BPCI Advanced program. CMS is sending strong signals that a relaunch of the BPCI program is coming soon. This is good news for heart programs, as there has been a shortage of qualifying, advanced alternative payment models for specialists under MACRA. Some recent data we saw with one MedAxiom member showed a potential $1,000-$3,000 per CHF episode opportunity under a simulated BPCI calculation. If you are interested in learning more about your BPCI opportunity, ask us about obtaining a free Advanced BPCI Scorecard report looking at your data.
No doubt that adding new volumes and new revenues will improve your heart program’s operating margin. But reducing costs, especially unnecessary costs, goes right to your bottom line. This is particularly true when you are being paid a fixed reimbursement for certain procedures, such as Medicare percutaneous coronary intervention (PCI). I repeatedly see heart programs that have not adopted a formalized same-day discharge (SDD) program for PCI procedures (or EP procedures), to the financial detriment of themselves and their Medicare patients. The bottom line is: when hospitals admit low-risk PCI patients, who should be candidates for SDD, overnight, there is no part of the reimbursement that covers the inpatient portion of that stay, whether you call them an observation patient or not. One published study demonstrated that combining same day PCI discharges and procedures performed transradially (TR) can be as much as $3,500 lower in costs, much of that due to lower length of stay. That cost avoidance would be a huge boost to your heart program’s net margin. If you are interested in seeing your performance in a cath lab profitability analysis tool, or if you would be interested in talking about a Cath Lab Optimization Assessment, talk to us. We have identified cost savings as high as $2.4 million while creating more efficient and higher performing cath labs, and improving patient experience and physician satisfaction.
In summary, growth opportunities abound in almost every heart program we work with. Let us help you capitalize on growth by making it a key part of your 2018 strategy.
Illustration: Lee Sauer
Larry Sobal is Executive Vice President and a Senior Consultant at MedAxiom. He has a 35-year background as a senior executive in medical group leadership, hospital leadership and health insurance. Larry consults, writes and presents on topics relevant to transforming physician practices and health systems. His weekly blog post comes out on Thursdays and can be accessed at www.medaxiom.com.
About the Author
Larry Sobal, MBA, MHA, is CEO of a yet-to-be-named cardiology practice which is transitioning from employment to an independent physician group effective January 1, 2019. He has a 37-year background as a senior executive in physician practices, consulting, medical group leadership, hospital leadership and health insurance.
To contact, email: email@example.com