Transcript Pharmacy - Healthcare Financial Management Association

Tackling Two CAH Financial
Challenges
HFMA Forum Networking Event
July 17, 2014, 10 a.m. to 11 a.m. Central Standard Time
Lenne Bonner
CFO
St. Mary’s/Clearwater Valley Hospital and Clinics
Ralph J. Llewellyn, CPA, CHFP
Partner
Eide Bailly, LLP
Chad Mulvany
Director, Healthcare Finance Policy, Strategy and Development
HFMA
Course Agenda and
Learning Objectives
Agenda:
1.
Emergency Department and Pharmacy Issues in the CAH Setting
2.
A Provider Case Study: Emergency Department—Physician Availability Allowed in Cost
Report
3.
Q&A/Discussion
Learning Objectives:
•
Understand how to restructure ED on-call physician contracts to address costs and
physician availability.
•
Identify new strategies for ED physician compensation
•
Understand how CAHs can tackle pharmacy challenges, including improving customer
service and handling pressure to enter the retail pharmacy market.
•
Identify methods to improve pharmacy accuracy, communication with physicians, and
customer service.
2
Emergency Department
And Pharmacy Issues
In the CAH Setting
Ralph J. Llewellyn, CPA, CHFP
Eide Bailly LLP
3
Polling Question #1
What is your greatest challenge with physician staffing in your
emergency department (ED)?
• Ability to staff the ED with physicians
• Developing payment models for ED physicians services
• Structuring contracts with ED physicians
• All of the above
4
ED Physician Availability
• Operational history
– Rural “old-time” physicians covered the ED in
addition to their daytime clinic/hospital obligations
 Minimal cost
 No Cost
5
ED Physician Availability
• Operational history
– As time progresses
 Demands for time in ED increase
 Societal norms change
 Costs rise
 Some providers opt out of covering ED
6
ED Physician Availability
• Reimbursement history
– Part B component (cost for providing professional
services)
 Unallowable cost on cost report
 Patient specific
 Reimbursed based on various fee schedules
7
ED Physician Availability
• Reimbursement history
– Part A component (on-call or availability)
 Nonpatient specific
 Greater good of all
 Cost allowable on cost report
• Not on-call elsewhere
• Not providing professional services elsewhere
• Originally had to be onsite
8
ED Physician Availability
• Challenge
– How to structure contracts with providers to supply
the best documentation that supports allowable
costs
– Strategies vary
 Free-standing physicians
 Provider-based physicians
 Rural health clinic physicians
9
Polling Question #2
What is your greatest challenge with pharmacy services in
your hospital?
• Physician/pharmacy communication
• Ability to staff pharmacy with qualified staff
• Pharmacy/hospital management communication about
processes for dispensing medication
• All of the above
10
Pharmacy
• Historically, local retail pharmacies in rural America
thrived
– Independent
– Stable professional workforce
– Profitable
– Multiple entities in the community
11
Pharmacy
• Current
– May be dependent–more corporate entities
– Less stable professional workforce
 Major competition for labor
 Lifestyle changes
12
Pharmacy
• Current
– Financial viability may be at risk
 Reimbursements
 Mobility of customer base
 Mail order
– 340B may offer some financial benefits
13
Pharmacy
• Rural providers may find themselves in a bind
– No retail pharmacy
– Single retail pharmacy
– Limited hours of service
– Frustrated community looks to hospital to resolve
the issue
 They remember the past level of service
14
Pharmacy
• Addressing the issues
– Purchasing
– Managing
– Competing
15
Pharmacy
• Challenge
– Addressing the community concern
– Preserving or improving overall financial
performance of the organization
 Retail pharmacy
 Cost report
16
Polling Question #3
What solutions are you planning to implement to meet ED and
pharmacy challenges?
• Developing a team of healthcare leaders to develop
recommendations for solutions
• Assigning one healthcare leader to reach out to
stakeholders
• Relying on senior leaders to make recommendations for
solutions
• Conducting surveys of stakeholder opinions to develop
recommendations for solutions
17
A Provider Case Study:
Emergency Department—
Physician Availability Allowed in
Cost Report
Lenne Bonner
CFO
St. Mary’s/Clearwater Valley Hospital and Clinics
18
ED Physician Availability
• What is allowed in cost report?
– The time the physician is paid to be “available”
• Time Studies
– Required: Two separate two-week time studies per
year
– Allow for dictating, documenting, reviewing test
results, etc.
19
ED Physician Case Study
• Physicians requesting a pay increase
• Medical Group Management Association (MGMA) showed
us at median with current compensation structure
• Current ED physician pay model
– $30 per hour Monday-Friday from 8 a.m. to 6 p.m.
– $50 per hour Monday-Friday from 6 p.m. to 8 a.m. and
weekends
• Current availability percentage from ED time studies is 80
percent
20
ED Physician Case Study
• New pay model
– $0 per hour Monday-Friday from 8 a.m. to 6 p.m.
(disallowed time)
– $100 per hour Monday-Friday from 6 p.m. to 8 a.m. and
weekends
– Increased total call pay $234,000 annually, which is
$39,000 per year per physician with six in the call
rotation
– Only cost facility $155,000
– Puts us at 75 percent MGMA total compensation
– Saved us 34 percent by changing ED call pay rather than
base salary
21
Pharmacy Case Study
• Scenario
– Local retail pharmacy independent of hospital
– Only pharmacy in town, no competition
– Receiving many complaints
 Delay in filling prescriptions
 Out of medication, causing delays
 Delays in filling bubble packs, causing us discharge
problems
 Wrong medications filled
 Multiple medications in same bottle
22
Pharmacy Case Study
• What we did
– Met with pharmacist (CEO, CFO, COO, physician)
– Discussed concerns
• What was discovered
– Frustrations with some of our processes
– Cash flow problems
– Short staffed
23
Pharmacy Case Study
• Ideas to Explore
– Set up communication process for pharmacist to
direct problems to us (e.g., discharge orders,
questions on prescriptions, paper versus electronic
prescriptions)
– Rent pharmacy retail space in our hospital to
minimize traffic in the pharmacy store and offer
convenience to our patients
– Research 340B contract pharmacy agreement
– Caution: Involve cost report preparers in all analysis
24
Questions & Answers
Ask the speakers a question or share your
CAH experiences. Just type your question or comment into the
Q&A box on your computer screen.
25
Contact Information
Lenne Bonner
CFO
St. Mary’s/Clearwater Valley Hospital and Clinics
[email protected]
Ralph J. Llewellyn, CPA, CHFP
Partner
Eide Bailly, LLP
[email protected]
Chad Mulvany
Director, Healthcare Finance Policy, Strategy and Development
HFMA
[email protected]
26