Friday, April 30, 2021

E&M CODING IN 2021: Four Questions, Four Answers

2021 has brought about the most extensive changes to CMS’s Evaluation and Management (E&M) guidelines since 1997. Have you noticed? Me neither, at least not yet. I have no doubt, though, that Medicare will begin looking at shifts in E&M coding in the next few months. They will audit to see if the new emphasis on medical decision-making as the E&M code arbiter is reflected in both coding and documentation. In this article, I take a quick look back before offering an easy way to see how your coding stacks up to your peers.


Before I begin, please answer these four questions:
For those old enough to have coded in the pre-EMR world, has your use of level 4 and level 5 increased in the EMR world?
Medicare accounts for _____ % of my work RVUs and _____ % of my payments.
What are the two most used CPT codes?
Do you know if you under-code or over-code relative to your peers?



One


The answer to the first question is probably ‘yes’. Use of level 4 and 5 codes increased more than 25% in the decade when EMRs went mainstream. We documented more, we billed what we documented, and – ta da – an unintended consequence of EMRs came to be.


Two


For the GI practice I lead, Medicare accounts for 37.9% of our work RVUs but just 14.8% of our payments. In other words, we work harder to make less for Medicare than we do for other payers. Every cut in Medicare reimbursement compounds the effect. It is important for each physician to understand margins for each payer, and the work RVU/payment ratio is an easy way to track it.


Three


Of the thousands of CPT codes, which two were voted “Most Popular”? The runaway winner was 99214, which was used 106,712,184 times in 2019. Coming in second was 99213 with was used 92,423,972 times. 99213 and 99214 were two of the biggest winners in Medicare’s 2021 fee schedule redistribution. An additional $2.3 Billion will be paid out this year in these two fees alone! With Medicare payment being a zero-sum game, reimbursement for many other CPT codes went down as an offset.


Four


I hope you know where you balance on the E&M coding bell curve. If you are under-coding relative to your peers, you likely can increase your revenue with de minimus downside risk (assuming your documentation supports your coding). If you are under-coding, you are a greater risk of audit and attendant takebacks when Medicare resumes the auditing of E&M codes.

I have learned many physicians are both over-coders and under-coders. I have several in my practice who tend to over-code new patient visits while under-coding established patient care, while some do the opposite. The data to see where you fall relative to peers in your specialty can be found at the following here

The report in the above hyperlink is easier to use than it appears. Find the number of times 99202-99205 and 99211-99215 were used in your specialty, (99201 went away this year so you can fold its count into 99202). For 99202-99205, calculate the frequency each code as used as a percentage of the 99201-99205 sum. Do the same thing for 99211-99215.


It will produce a formatted summary and chart quickly. The only things you need to enter are the percentages you calculated in Column D and your utilization of each code in Column G. We use family medicine in our example, so all family practice doctors need to do is enter utilization for each code.

This tool creates a chart to show the financial impact of your over-coding/under-coding and a bell curve…sometimes a picture is worth a thousand numbers. To use it with multiple providers, make a copy for each provider.


In Closing


Now is the time to take a few minutes to assess your coding. If you are coding close to your specialty’s bell curve and if your documentation supports your coding, take a deep breath. If you find you are an outlier, don’t panic. Time is on your side.

Under-coders of the world, look to increase your coding. Your documentation likely supports a higher code. Over-coders, make sure your documentation supports your higher coding.

You are at higher risk for an audit, and your best defense will be solid documentation.


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Wednesday, April 28, 2021

Planning your medical practice pre-acquisition strategy

When you think of a physician practice acquisition, what comes to mind? Physicians often think of medical practice acquisitions as being messy like when big corporate entities are involved in such transactions. Consequently, physicians are frequently unsure about how to proceed with the purchase or sale of a medical practice, and who can help them through the process. Even if you think these transactions are more of a “corporate issue”, it is actually something physician practices should prepare for as well. Tremendous opportunities may exist in your area for such a transaction, leading to growth and/or staving off a competitive threat. It may also be a means of an exit strategy or succession planning for yourself. As a result, you should be educated on mergers and acquisitions, even if selling or buying (or merging) isn’t on your near-term horizon.


So how do you begin to think about these transactions? Here are some preliminary basics.


Evaluate Fit


Just as with hiring personnel, fit is key. If the two practices have goals that are incompatible, merging them can be counter-productive. A thorough analysis of the compatibility of financial structures, patient base, referring physician patterns, and culture is extremely important. Do not rush this part.


Assess Culture


Just because culture is an intangible factor, it doesn’t mean this aspect is any less important. Medical practices are like any other business, in that they have internal dynamics that can either help or hinder an acquisition. This is why it is important to speak with the staff (not just the physician) at the other practice. While you may not be able to discuss a potential transaction with staff members, you can certainly gauge how open to change they are and how easy, in general, they are to work with.


Pricing Strategy


You need to ensure to start with a proper perspective, no matter which side of the table you are sitting at. Oftentimes (but not always!) a valuation is done on the target practice and a lot goes into those valuations, as I have written about several times before. Just remember that emotions are high on this subject: sellers always feel the price is too low and buyers always feel the price is too high; sellers want a high dollar amount attributed to goodwill and buyers want to limit that amount. These emotions and misaligned perspectives are actually why many transactions fall apart during the negotiations.
Ask the right questions

Of course, a seller and a buyer are looking to accomplish different goals and have their own set of agenda items. That being said, here are just a few questions to ponder depending on which side of the table you sit at:

Sellers may consider:
  • Which type of sale (asset or stock) is most beneficial to me?
  • What price can I realistically get for my practice?
  • Is there any buy-out to my other partners that must be contemplated?
  • Are there any obligations I have to employed physicians regarding sale of the practice and/or partnership path?
  • Is the buyer seeking financing for the acquisition?
  • What professionals do I have/need to assist me with the transaction?


Buyers may consider:
  • Which type of sale (asset or stock) is most beneficial to me?
  • What is a realistic price to pay for the practice?
  • What risks am I taking on?
  • How do I get the current staff of the target practice to remain on board?
  • How do I minimize loss of patients and disruptions with physician referrals?
  • What does a new financial pro forma (of the newly combined entity) look like?
  • What contracts need to be renegotiated (vendor and staff)?
  • What all needs to be accomplished immediately post-transaction (also known as the 100-day plan)?
  • What professionals do I have/need to assist me with the transaction?
  • Where is the cavalry?

Do you run a practice all by yourself? Do you routinely do medical procedures without the assistance of any other clinical staff? Of course not. So why would you attempt to go through a business transaction without some cavalry on your side?

Whether it is a merger, acquisition, or joint venture, professional advice is key. Acquisitions are complex and risky and so it is important to seek out a transactional consultant from the first stages when you are beginning to strategize and “kick the tires”. Much later in the process, you will also need to engage an attorney and consult with your accountant. Just make sure that your consultant and attorney have experience with transactions; this is not the time to engage those that work in the field of practice management.


Final Thoughts


With the everchanging healthcare landscape and the increasing competitiveness among physician practices and hospitals, many physicians are looking at acquiring other practices and bringing them into the fold. Unfortunately, we have often seen physicians who would like to jump to valuations or due diligence of a medical practice without having first established their own strategy as it relates to potential acquisitions.

Medical practice acquisitions are complex and nuanced, and mergers are some of the most difficult maneuvers to accomplish. As a physician practice owner, it is imperative that you are meticulous with your contemplations about a potential transaction from the very start. These are very daunting tasks, which when pulled off correctly amount to great success, but done haphazardly or without diligent forethought and preparation can spell disaster.

Physician group acquisitions must take place for strategic reasons, such as to improve competitive capabilities, expand footprints, achieve economies of scale, increase patient base, test new geographies, and enhance brand equity, rather than superficial reasons like tax benefits or to save oneself from market risks. Physician owners must have a clear rationale for a transaction or truly understand a deal’s impact on their practice’s long-term financial future. The transaction must be considered as a means to fulfill far greater strategic outcomes rather than a mere end in themselves. The challenge is to stay true to your strategic direction, not allowing yourself to be distracted by acquisitions that don’t keep you on the intended path.


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Monday, April 26, 2021

How to name a medical practice








You’ve decided you want to go out on your own and open a medical practice. Congrats! Now that you’ve decided that, the second most important decision you’ll make: what to call your practice.

Finding the perfect name is no small task, and there’s a lot riding on the decision.

It’s important to find the appropriate name on the first try. Otherwise, you may struggle to build your practice or with rebranding in the future (think time, effort, and marketing, not to mention the cost of any signage or promotional materials.)

For some physicians, the name comes naturally. Maybe it’s a name that magically comes to them while they’re shampooing their hair. Maybe it’s a name they’ve had in mind since they first wanted to be a physician or open their own practice. For the majority, naming their practice is probably more difficult than naming their babies. This becomes all the more challenging when establishing a group medical practice, as more people means more ideas for names-and potentially more disputes over those ideas.

Larger practices, hospitals, or health systems may hire professional marketing and branding services to help with their name, but that may not be feasible for small medical practices. Does that mean smaller practices should not pay attention to this critical aspect of the overall branding strategy? Certainly not, but it does mean you should take the naming process seriously.

  


Names are powerful. A practice’s name is core to its overall healthcare marketing strategy. Names build recognition and helps patients, as well as the larger community, identify with the practiceand its specialization. Therefore, thoughtful consideration is required to strengthen the effectiveness of marketing efforts.

A medical practice name should be easy to say, hear, spell, and remember-unlike prescription drugs. It should be appealing and resonate with your target patient base.

Here are three common naming methods small medical practices use. Some of these naming conventions are based on personal preferences and aspects, including local reputation; uniqueness or commonness of the physician’s name; andpersonaldreams, visions, or plans.
Name of the doctor

Thisis one of the most common methods wherein a part, or all of, the doctor’s name is usedin the practice’s name. Even though it offers personalization and the benefit of immediate recognition, it is suitable only for solo practices. The possibility of adding other associates is difficultand does not communicate the practice’s mission or specialization. Another variation of this could be the initials of doctor’s name(s) or abbreviation of doctor’s name(s).

Localized or geographic name


These types of names elevate the geographic location as the most critical aspect. It is possible to highlight the practice’s activities along with the location. This makes it easier for your target audience to find




your practice location and specialization, if coupled with practice activities, such as Cedar Rapids Eye Care. However, these types of names may become outdated over time or limit the scope for the practice if additional services are offered.


Random name


One of the top 10 primary care medical practices in New York goes by the name Leaf Medical. It could be the name of a doctor. However, it is possible the practice chose a random name that is unique and memorable. It may have an abstract relationship to the practice or practitioner(s). Another possibility is to draw an analogy between the practiceand the patients or their desired state, such as Smile Dental Clinic or Get Well Medical Clinic. However, a disadvantage with these random names is that they appear impersonal and may require more promotion and marketing efforts in order togain patient recognition.

There are other, perhaps more personal, factors that can influence a medical practice’s name. You may also consider studying the competition for any trends in the marketplace, and then choose either to follow or buck the majority.

Regardless of methodology, it is important to consider the long-term implications of your practice’s name up front, even before you see your first patient. While the focus should be on your long-term goal and vision of the practice, it is also important for you to consider some of the legal and proprietary aspects such, as trademark and website URL.

Once you have chosen a name for your practice, and made sure the name isn’t already in use, you should consult an attorney to help with trademark and other legal aspects to protect this vital piece of your practice’s identity, its name.


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