Taking Care of Business: Four Strategies for a More Dynamic Medical Practice
Greg Koelling, CPA
If there is one thing that has been obvious over the past decade in health care, it is that change is a fact of life. To survive turbulent times, medical practices need to take some basic steps to protect and enhance their bottom lines. Here are four strategies that can help your practice take care of business by creating a more dynamic operation that can withstand the winds of change.
When it comes to reimbursement, there is only so much you can do. What insurers and government payers are willing to reimburse is largely out of physician control. As fee-for-procedure shifts to fee-for-quality, government implementation of various metrics measurements, such as the Medicare Access and CHIP Reauthorization Act (MACRA), the Merit-based Incentive Payment System (MIPS) and the Alternative Payment Model (APM), increasingly play a role in business decisions.
In addition, medical practices will have to evaluate the cost of complying with these incentives to determine whether the related revenue is worth the additional administrative cost. This pathway can be dubbed as the “cost-compliance balance.”
Understanding both your business and your costs can help you arrive at the best cost-compliance balance for your practice. This will ensure that your practice does not get stuck with penalties or struggle to comply with regulations at a cost that exceeds the penalties.
Physicians have a lot more leverage concerning costs than they do concerning reimbursement. When evaluating potential areas of cost containment, you will need to consider staffing levels, automation of certain tasks and any opportunity costs, such as decreased time for revenue-producing activities as a result of the cost cutting measures.
Determine Your Brand
Before you can market your practice, you should determine how you want to brand it. Ask the fundamental questions of:
- Who are you and why are you in this practice?
- How do you want your practice to be perceived in the market?
- What sets your practice apart from other practices in your area?
Whatever makes your practice unique, recognize it and develop it. These are so-called “non-clinical factors.” In essence, they involve that part of your practice that helps develop patient-physician rapport.
Market the Practice
Once you have identified and established your practice brand, you can use this message in the marketplace. Do not wait for patients to walk through the door. Be proactive. Generally, a good marketing plan has four pillars:
- Web-Based Marketing
This includes the practice website, social media, online videos, review sites and potentially even Google search rankings.
- Referral Marketing
Your practice needs an appropriate and effective referral program for medical and non-medical sources.
- Internal Marketing
This includes everything that happens as soon as a patient pulls into your parking lot. It includes signage, your building, its cleanliness and layout, how staff greets patients and how you as a physician interact with them. It also includes whatever methods you use to stay in touch with patients, including follow-up e-mails, reminder phone calls and newsletters.
- External Marketing
The single most important thing a practice can do is generate a steady flow of new and regular patients. Reach out to the community and sponsor events or sports teams if that makes sense for your practice. You can also attend health fairs and work with large employers in the area.
Hire Good People and Lead
Physicians cannot do it alone. Patients often spend more time in the presence of your nurses and receptionists than they do with you. Good technical skills matter, but so do the so-called “soft skills”: personality and attitude.
A physician in a private practice has a lot of job titles, such as doctor, employer, business person, biller and contractor. However, one of the most vital titles is leader. There is a difference between a leader and a boss. A boss tries to get things done, while a leader empowers and motivates the team to get things done together.
Evolving with the Times
These are just a few ways you can stay competitive in the midst of the many regulatory, economic and competitive challenges of the health care industry. Above all, the key is to evolve with the times and never let your practice stagnate.
Sidebar: Cooking Up a ‘Spaghetti’ Fund
Sometimes, a physician practice just wants to try something new to see whether it works. As the old saying goes, “Throw it against the wall and see if it sticks!” If this approach appeals to you, budget for it by creating a “spaghetti fund.” This way, the experiment becomes a planned expense rather than a potentially unpleasant financial surprise.
After you try the new process or procedure, be sure to analyze the results. If you find that the new process or procedure is not working, do not hesitate to abandon the experiment. Adapting and reinventing are key strategies to survival and success.
Catching Up with Meaningful Use in 2017
Larry Sophian, CPA
As most in the medical profession know, “meaningful use” refers to use of certified electronic health record (EHR) technology. Implemented in 2011, meaningful use has had three stages: Stage 1 ran from 2011 to 2013, Stage 2 began in 2014 and Stage 3 began in 2016.
Each stage has overall objectives. For Stage 1, the objective was data capture and sharing; for Stage 2, it was advanced clinical processes; and for Stage 3, the objective is improved outcomes.
The Medicare Access and CHIP Reauthorization Act (MACRA) essentially replaces the current meaningful use criteria starting in 2017, which complicates matters. There are two ways to participate in MACRA: 1) the Alternative Payment Model (APM), and 2) the Merit-based Incentive Payment System (MIPS).
Providers who do not meet the qualifications for the APM — that is, through participation with an Accountable Care Organization (ACO) — will automatically default to the MIPS program.
Components and Compliance Options
Each of four components is weighted and, taken together, generate a provider’s unique composite score. The components are quality (formally, Physician Quality Reporting System [PQRS], but now consisting of only six measures), weighted at 50%; improvement activities (formally, meaningful use), weighted at 25%; advancing care information, weighted at 15%; and cost (waived in 2017), weighted at 10%.
The composite score ultimately determines the provider’s fee schedule and is posted on the Centers for Medicare and Medicaid Services (CMS) website. The CMS will exempt physician practices with less than $30,000 in Medicare charges or fewer than 100 Medicare patients per year. MIPS provides three compliance options for 2017:
If you submit a minimum amount of 2017 data to Medicare (for example, one quality measure or one improvement activity for any point during the year), you can avoid a downward payment adjustment.
If you submit 90 days of 2017 data to Medicare, you may earn a neutral or positive payment adjustment.
If you submit a full year of 2017 data to Medicare, you may earn a positive payment adjustment.
The size of your payment will depend both on how much data you submit and your performance results.
In October 2016, the CMS published a final ruling for meaningful use that carries through 2017. The rule also has provisions that encompass Stage 3 in 2018 and beyond.
For instance, there is a 90-day reporting period for new participants in 2016 and 2017, and for any provider moving to Stage 3 in 2017. According to the CMS, “New participants who successfully demonstrate meaningful use for this period and satisfy all other program requirements will avoid the payment adjustment in Calendar Year 2018 if the eligible professional (EP) successfully attests by October 1, 2017.”
In addition, there are 10 objectives for EPs, including one public health reporting objective. This is down from the 18 total objectives required in earlier stages. The Clinical Quality Measures (CQM) reporting requirements for EPs remain the same as previously finalized.
And in 2017, the Stage 3 requirements are optional. All providers will be required to comply with Stage 3 requirements starting in 2018 using EHRs certified to the 2015 Edition.
Stage 2 Tweaks
Stage 2 objectives and measures have been tweaked for 2017 to align more closely with the forecasted Stage 3 requirements of meaningful use. Notable provisions include eight objectives for Eps — in Stage 3, more than 60% of the proposed measures require interoperability (up from 33% in Stage 2). In addition, public health reporting has flexible options for measure selection, and CQM reporting aligns more closely with the CMS quality reporting programs and has finalized the use of application program interfaces (APIs) that will enable the development of new functionalities to build bridges across systems. These changes are expected to improve data access and efficiency.
It is also worth noting that, on November 30, 2016, the American Hospital Association contacted then-President-elect Donald Trump to ask that his administration cancel Stage 3 of the meaningful use program. With the Republican-controlled House sending “repeal and replace” legislation to the Senate, there is some uncertainty surrounding meaningful use requirements. Contact your CPA for the latest updates.