Transcript MMA Preparedness Survey

MMA Preparedness Survey
Roberta Buell, MBA
Patricia Falconer, MBA
ANCO Consultants
Today’s Agenda
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Project Objectives
MMA Revenue Loss Projections
“Underwater” Drugs Compared to First
Quarter ASP + 6%
E&M Audits and Profiling
Superbill Issues
Charge Issues
Accounts Receivable
Action Items
Objectives
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Estimate MMA revenue reduction
Identify potential drugs that may
be “underwater”.
Determine quality of E&M coding
and documentation.
Assess charge profiles and accounts
receivable management.
Create action items to assist
practices cope with 2005 changes.
Profile of Practices
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All Located in Northern California
Practice Size Ranges from 1 to 11
Physicians
Average Practice Revenue of $11.2
Million
MMA Model
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Compared reimbursement data for 21 ASP drugs
published by CMS for Q1 2004 with current 2004
SDP
Reduction of drug administration reimbursement
from the 32% transitional rate to 3% in 2005
Reimbursement increase of 1.5 % for E&M
services.
Scenario 1: 100% of payers convert to the MMA
reimbursement methodology
Scenario 2: Only Medicare segment converts to
MMA reimbursement methodology.
MMA Results Scenario 1
All Payers
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Average Practice Revenue Reduction
for Drug Reimbursement =
$519,000
Average Practice Revenue Loss on
Drug Administration =$237,000
Average Total Revenue Loss per
Physician = $206,000
MMA Results Scenario 2
Medicare Only
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Average Practice Revenue Reduction
for Practice = $337,000
Average Total Revenue Loss per
Physician = $101,000
MMA Results
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Average Percentage of Practice Revenue
Lost Scenario 1 = 8%
Range of % of Practice Revenue Lost
Scenario 1 = 4-12%
Average Percentage of Practice Revenue
Lost Scenario 2 = 4%
Range of % of Practice Revenue Lost
Scenario 2 = 2-6%
Cash profit impacts were far more
profound, but profit calculations were
quite variable.
MMA Results
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What makes the difference?
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Payer Mix
Drug and Administration revenue relative to
other revenue from E&M, research, legal,
and/or medical directorships.
Specific drug mix in terms of brand vs.
generics such as paclitaxel and pamidronate.
Volume of growth factors.
Volume of Lupron and Zoladex
Collected revenues
Potential “Underwater” Drugs
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Practice drug acquisition costs do NOT include
accrued rebates!
Drug reimbursement based on Q1 ASP.
Drugs where acquisition cost exceeded ASP
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Taxotere
Gemzar
Procrit
Lupron
Zoladex
Navelbine
Pamidronate
Camptosar
Herceptin
Drug Purchasing
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Prices were truly variable. Best
prices were not always contingent
on practice size.
Everyone thinks they have the best
deal, but the best deals take effort
by your staff.
Best prices achieved by purchasing
from multiple sources.
Evaluation & Management
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Documentation Audit
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Number of charts audited = 169
Average Office Visit Error Rate (9921299215) = 36%
Average Office Consult Error Rate
(99241-99245) = 52%
Average Overall Error Rate = 49%
Evaluation & Management
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Common Problems:
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Consults
Definition—what is a consult?
 ROS in the history
 PFSH in the history
 8+ organ systems in the physical
 High level decision-making in Level 5s
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Evaluation & Management
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Common Problems
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Office Visits (99212-99215)
Modifier -25 ‘separately identifiable’
service
 Legibility
 Chief complaint
 Missing notes or dictation
 Mis-matched dates of service
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Evaluation & Management
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Avoiding Common Problems
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Read E&M guidelines once per year at minimum
Make sure each of your consults notes document the
referring MD, their request for your consult, and that you
are conveying your advice and treatment plan.
Dictate or type your notes. Dictate your note right after the
visit and charge for the service based on your dictation.
Use a consistent template matching AMA/CMS guidelines.
Note ‘non-contributory’ (history) or within normal limits
(physical) in areas that you have checked.
Make sure all tests, path reports, and differential
treatments considered are documented—particularly in
high-level services.
Do not use complicated charting systems like pasting in
notes for each date. This causes backlogs and filing
delays.
Evaluation & Management
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Following this slide are:
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Northern California practices versus
2002 Medicare medical oncology
profiles for:
Office visits
 Consults
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Office Visit Profile
OFFICE VISITS VS. MEDICARE 2002
70%
60%
50%
40%
% OF eNCOUNTERS
MC % of
ANCO %
30%
20%
10%
0%
99212
99213
99214
LEVELS
99215
Consult Profile
OFFICE CONSULTS VS MEDICARE 2002
70%
60%
50%
40%
% OF SERVICES
MC % of
ANCO %
30%
20%
10%
0%
99241
99242
99243
LEVELS
99244
99245
Evaluation & Management
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Northern California Profile:
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Aggressive coding—this is fine as long
as your patients are complex, have a
cancer (not anemia) diagnosis, and
your charts are organized and legible.
Clustering—consistent billing of
Established Patient Office Visits at Level
4 and Level 5. This acceptable as long
as the documentation matches the
level of service. This coding pattern
may attract attention.
Superbills
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Common Problems
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If your profile shows clustering, you must have
all levels of service on Superbills.
Include 99271-99274 for confirmatory
consults. Use them for second opinions.
Include 36550 for de-clotting of ports.
Medicare pays for this!
Include 36540 for blood draws through a port.
Privates pay for this.
Investigate whether your private payers will
pay for a facility fee for 96549.
New CPT and HCPCS Codes
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Make sure any new CPT and HCPCS
codes for 2005 are set up in your
billing system and reflected on your
Superbill before January 1, 2005.
Accounts Receivable
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Average Total Account Receivable
=3 Million
Average % Accounts Receivable
over 90 days old = 25%
Average months outstanding =2.2
Accounts Receivable
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Common Issues
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No Pre-Certification process
No financial plan established with patients prior
to treatment
No procedure for routine collection of patient
co-payments at the time of service
Poor management of A/R
Employee turn-over
Poor organization, training, and delegation of
responsibilities to business office staff
No physician notification of diagnosis and/or
therapy change prior to treatment
Action Items
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Establish Pre-Certification Process
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All patients treatment reviewed for treatment
compared with diagnosis. Is diagnosis FDA
approved or Compendia supported? Use the MOASC
Drug Grid as a tool.
All patients insurance must be verified prior to
treatment. Benefits, co-payments, authorization
requirements should be determined.
Patient should be advised of out of pocket costs.
Payment arrangements need to be made. Get a
credit card on file.
Advanced Beneficiary Notice signed in cases where
denial is probable and/or you think that drug will be
paid for my someone other than Medicare.
Action Items
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Evaluate Drug Purchasing and
Terms
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Average time to collect was 68 days.
Weigh drug cost reduction benefit for
shorter payment terms with financial
consequence of drug inventory
financing.
Decrease your A/R days
Action Items
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Effective Accounts Receivable Management
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Make sure your outstanding Medicare A/R is
collectable. Medicare pays within 14 days for
clean claims. If there is Medicare A/R over 45
days old, you have a problem or these accounts
may not be transferred to the supplemental
insurance or patient.
Have physicians evaluate the denials that occur
on a frequent basis. This way, they can see why
money is not coming in the door. Is it a billing or
clinical problem?
Make A/R a centerpiece of your management
meetings. Ensure you know what the status is
and that cash never waivers. Some of you will
not survive without better cash flow
management.
Action Items
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Data Management
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Review Management Reports Monthly
 Accounts Receivable Aging
 Productivity Reports
 Financial Statements
Invest In Practice Management Software
Use data to evaluate important practice bench
marks, i.e. profit per physician, injections and
infusion hours billed per MD, infusion hours
billed per Nurse per month, hours of infusion
per chair, and $ collected per month per
employee
Action Items
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Proper Documentation and Coding
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Quarterly Evaluation & Management
Auditing
Review Productivity Reports for Coding
Trends
Group Practices are Liable for All
Members
Action Items
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Ensure that Nurses Manage:
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Inventory
Charge capture
Proper documentation of “Incident to”
services per Medicare requirements.
Cost effective strategies to deliver care
Purchasing
What We Learned
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Most practices will survive but physician
income will decrease.
Managing cash will be critical to ensure
successful operations next year.
Practices need to assess and use data
more effectively.
Nurses need to “own” the documentation
and reimbursement process for drug
administration.
Physicians will need to play a more active
and interventional role in the financial
management of their practices.