As a medical practitioner, your first priority is quality of care for your patients. For decades, we have all benefitted from physicians’ collective focus on medical outcomes that has consistently delivered the best healthcare in the world. Ironically, within much of today’s “escalating cost of healthcare to the consumer” rhetoric, providers are either vilified and lumped together with those blamed for runaway healthcare costs, or they are silently factored into the cost equation at the point where more can be squeezed out of the system, “because doctors make too much money anyway.”
As you and your bank account are probably painfully aware, the truth is that over the past decade practices have been caught in the squeeze of increasing costs and falling reimbursements. Gross fee-for-service (FFS) collections have declined nearly 9% while total operating costs are up nearly 52%, reducing gains in medical revenue after operating costs by over 14% during the past ten years. Additionally, first-pass claim denial rates are running at more than 30%, and total average accounts receivable per physician are at $142,000, with more than 22% of this total at 120 days or more, essentially uncollectible.1
Now, more than ever, medical providers are under growing pressure to focus on the business side of their practices in order to remain profitable, or in many cases, just to keep the doors open. Once considered an annoying distraction from more important clinical work, escalating practice management and clinical efficiency/documentation issues have sent providers scrambling to find technologies and methods for improving the management of their practices.
Interestingly, many physicians are discovering that rather than wrestle with the problem, they can apply the same disciplined approach that delivers positive clinical outcomes to the business side of their practices, with equally positive results. Clinicians call it implementation of pathways or protocols. Business efficiency experts refer to it as optimization: implementing systems and practices that produce the best, highest value products at the lowest cost, thus maximizing profits in the process.
While any optimization is good, complete optimization is obviously better. Mesmerized by localized or incremental gains, many medical practices overlook the substantially greater leverage and improvements that are available through complete, integrated optimization within an overall framework. Additionally, many medical practices are unaware that complete optimization is often more broad and interconnected than might be intuitively evident. It takes a certain amount of experience and expertise to recognize all of the potential pathways and protocols that lead to optimal business outcomes.
There is a fundamental framework which a complete optimization can take place most effectively. This paper sets forth the distinguishing elements and infrastructure necessary to implement effective comprehensive MPO. It should be noted that just as the “practice” of medicine never ends, by its very nature, business optimization is not a one-shot, do-it-and-you’re-done event. It is an ongoing, incremental process that when practiced inside of an effective framework continues to deliver ever-improving business results.
A Comprehensive Framework for Medical Practice Optimization
An effective, comprehensive approach to medical practice optimization, or MPO, takes place within a framework comprised of six distinguishing components:
- Complete & integrated automation systems
- Easily accessible best practices implementations
- Data security & integrity
- Robust remote access
- Minimized IT cost & disruption
- Value pricing
Underlying this framework is the IT delivery platform, the foundation for the entire structure, which we will discuss in the following section, where cloud technology has distinguished itself as most capable of delivering the benefits of MPO.
1. Complete & Integrated Automation Systems
The number of medical software systems and features touted by vendors today has grown so large, and often become so expensive, that many practices feel forced into the corner of buying either the minimum feature set for the lowest price or acquiring every available option, “just in case.” As you might expect, the best option lies somewhere in between the two extremes. The trick is to determine which features are crucial to optimization success and ensure your system includes those features.
Distinguished Systems. Rather than get bogged down in the nuances of feature implementation, we have identified the key functions necessary to achieve complete MPO. We refer to them as distinguishing functions – those essential to building a solution capable of complete medical practice optimization with sustaining improvement. Thus, a distinguished system may not contain every possible feature or particular feature characteristic, but will be especially robust in key functional areas. This type of complete system is sometimes referred to as an “end-to-end” solution.
Complete Integration. From a software standpoint, the other key function of a distinguished system is what is known in software industry parlance as integration. While this term can mean many things to many people, for our purposes we define it from the user experience standpoint. A completely integrated system presents and manages the various technology pieces in a way as to be conducive, not disruptive, to efficient workflow in things like application or screen jumping, redundant data entry, and quick, logical access to labs, meds and images. We often refer to this as a seamless user experience, moving from one inter-related task to another across the workflow spectrum. Included is the challenge presented by multi-vendor systems, vs. centralized cloud solutions, where an upgrade to one system breaks other integrated systems, impacting work efficiency across the board.
One best practice to optimize practice functions and workflow is to integrate your EHR and Practice Management. According to Gartner, “We do not recommend establishing a partnership with an EHR vendor unless it offers a truly integrated product that includes both practice management and EHR. Moreover, we recommend replacing existing practice management systems with the integrated product when installing the EHR.”
A second, frequently overlooked aspect of complete integration is the possibility for deep and meaningful research achievable through fully integrated databases of medical information.
(Part 1 & 2 of 3) Complete System: Distinguished Practice Management, Revenue Cycle Management and EHR
A complete, distinguished MPO system provides a robust, seamless solution from first patient contact through scheduling, appointment and encounter, documentation, billing and payment, through referral and follow-up. This is best accomplished in an end-to-end system comprised of the following:
A. Distinguished practice management
B. Revenue cycle management
C. Electronic health record functions
A. Distinguished Practice Management
Practice management systems have been around for some time, and come with a wide variety of flavors and features. Key distinguishing functions must include the following:
- Advanced Scheduling. The scheduler should include advanced functionality like expandable column-based multiple provider/resource scheduling and color-coded appointments, simple-to-use wait listing and overbooking, and multiple office/mobile provider scheduling from a single screen.
- Online Insurance Eligibility Verification. This functionality should be a quick (e.g. less than one minute), seamless part of the check-in process. Automated pre-verification based on next day’s schedule should also be available.
- Co-payment/Patient Portion. Significant improvement in revenue capture comes from collecting these payments at check-in and check-out. The system should seamlessly pull and present this information to the staff from the revenue cycle system.
- Anytime/Anywhere Access. The ability for providers and staff to get to the schedule anytime from anywhere is crucial, including your mobile phone, tablet and laptop.
- Advanced Reporting. A distinguished system will include a broad range of standard reports, as well as a robust custom report building capability (e.g. through ODBC programming). Reports should cover all crucial areas of your practice, from financial to staff productivity, claims and payer experience, diagnosis and procedure codes, and inventory.
- Simple to Learn & Train. Retraining costs due to staff turnover, and costs from inexperienced user errors, can quickly mount with systems that are capable but not user-friendly. Ensure that your system is simple to use, intuitive and includes abundant online help and training resources.
B. Revenue Cycle Management
The revenue cycle is the area of highest provider frustration, perhaps more than any other function on the business side of medical practice. Whether dealing with convoluted reimbursement rules, “squeeze and delay” tactics or government bureaucracy, many providers have become exasperated with the lack of power they feel over their own revenues and incomes. While outsourcing can reduce the pain level, unless the billing service is built on an optimized system and integrated with your practice, the results may be far from ideal.
While many hundreds of systems attempt to address the medical billing conundrum, very few possess the distinguishing functionality that can significantly impact positive improvements in reimbursement and cash flow. You need these distinguishing functions working for you in order to effectively optimize this critical aspect of your practice.
- Comprehensive Workflow. Since billing workflow is lengthy and complex, it’s imperative that the billing system captures each step, including adequate checks and balances, to ensure that nothing is lost through the cracks. For example, charges should be captured with electronic charge slips (which should be integrated with the EHR–see next section), and the system should include a simple, fool-proof method of accounting for each visit’s charge at the end of the day. Another example is denial management, where the system should flag denials and provide a simple, self-contained workflow for resolution, re-submission and tracking/reporting. The Medical Group Management Association (MGMA) best-selling book, The Physician Billing Process: 12 Potholes to Avoid in the Road to Getting Paid, 2nd Edition outlines the industry-standard best practices for medical billing. We recommend these twelve functions as the standard for any distinguished billing system workflow. Revenue Cycle Mastery – The AdvancedMD Training & Companion Guide is also an important reference source for implementing these billing practices.
- “Organic” Claim Scrubbing. Initial rejection of claims delivers a devastating blow to the non-optimized medical practice. On average, 30% of first-time submittals are rejected by payers; largely for inaccuracies in how the claim was completed. Of those rejections, only about half are corrected and re-submitted. State-of-the-art claim scrubbing software is able to find errors prior to submission and suggest fixes so claims are clean. The best technology today is delivering first-time rejections of only about 2% of claims submitted. A distinguishing function of systems delivering those results is the shared experience of thousands of users – facilitated through a cloud delivery model – that quickly shares payer rule changes or processing improvements to every user on the system. This organic improvement model delivers the collective best practices discoveries instantly on an ongoing basis, ensuring that medical practices of any size keep pace with changing requirements of even the largest payers.
- Centralized Claims Submittal. While any practices utilize a clearinghouse for claims submittal, many find this avenue too expensive for Medicare, Medicaid and other specialized payers, and split these claims from of the main workflow. A more effective process is to utilize an integrated, online solution where the clearinghouse is fully integrated with the claims management system. Because of large volumes and favorable contract terms, submittals can be handled profitably regardless of payer.
- Optimized Billing Services. Some practice may opt to outsource the entire billing function. This is a viable strategy, provided the billing service runs on an optimized platform as outlined above. An important part of this solution must be the ability to easily and inexpensively integrate your practice’s other functions with the billing provider’s system. This is best accomplished through a cloud delivery model that allows the billing service to act as a direct extension of the practice’s office.
Next week we’ll continue the discussion on Complete System: EHR
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AdvancedMD, based in South Jordan, Utah, is a leading provider of cloud solutions that support independent physicians and their staff: practice management, electronic health records, revenue cycle management, patient relationship management, business analytics reporting, telemedicine andhttps://www.advancedmd.com/products/physician-benchmarkingphysician-performance benchmarking. AdvancedMD serves an expansive national footprint of more than 21,500 practitioners and 500 medical billing companies.
Our comprehensive medical office software portfolio allows physicians to drive additional revenue and reduce administrative burden by automating medical practice processes, optimizing patient schedules and encounters, streamlining insurance claim creation, managing prescription and order processes, and by tracking and analyzing financial performance.
Independent industry analyst firm, KLAS, recognizes AdvancedMD as the #2 Ranked EHR and #3 ranked PM for their 2015/2016 Best in KLAS awards in the 1-10 Physician Ambulatory categories.