Physicians: How to manage in uncertain times
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Physicians: How to manage in uncertain times

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John A. Lutz, FACMPE, FACHE presents to the Northeastern New York Medical Group Management Association. The presentation entitled, What Can We Expect in 2009?, discusses the new administration, the ...

John A. Lutz, FACMPE, FACHE presents to the Northeastern New York Medical Group Management Association. The presentation entitled, What Can We Expect in 2009?, discusses the new administration, the economy, an uncertain future, unrealistic expectations, physician shortage and demanding patients.

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Physicians: How to manage in uncertain times Physicians: How to manage in uncertain times Presentation Transcript

  • Northeastern New York Medical Group Management Association What Can We Expect in 2009? John A. Lutz, FACMPE, FACHE Principal – Lutz Healthcare Consultants, LLC December 9, 2008 Clifton Park, New York
  • NEW ADMINISTRATION ECONOMY IN RECESSION UNCERTAIN FUTURE UNREALISTIC EXPECTATIONS PHYSICIAN SHORTAGE DEMANDING PATIENTS NYMGMA – December 9, 2008 What Can We Expect in 2009?
  •  
  • 1. THIRD PARTY PAYERS 2. HOSPITALS 3. REGULATIONS 4. PHYSICIAN SUPPLY 5. PATIENTS 6. OPPORTUNITIES TO THRIVE NYMGMA – December 9, 2008 What Can We Expect in 2009?
  •  
  • MEDICARE: – Medicare Improvement for Patients & Providers Act (MIPPA) 2008. - 0.5% Conversion Factor (CF) increase through 2008. - 1.1% CF increase for 2009. - 2-year voluntary program to test appropriateness criteria 2010. - established accreditation for advanced imaging 2012. - Budget Neutrality Factor (BNF) movement in payment formula. - Without Congressional action CF would have been 5.4% lower. - CMS will continue to propose payment cuts until new leadership is in place. NYMGMA – December 9, 2008 THIRD PARTY PAYERS
  • BNF – First implemented in 2007 to prevent the changes in Work RVU’s from increasing Medicare expenditures more that the statutory permissible amount. The 2008 increase in this factor eliminated any increase in the 0.5% CF change. Pre-MIPPA – Physician Payment Formula (RBRVS): [RVU (Work) x BNF x GPCI (Work)] + [RVU (Practice Expense) x GPCI (Practice Expense)] + [RVU (Malpractice) x GPCI (Malpractice)] x Conversion Factor = MEDICARE ALLOWED PAYMENT NYMGMA – December 9, 2008 MEDICARE (CONTINUED)
  • MIPPA – Revised Physician Payment Formula: [RVU (Work) x GPCI (Work)] + [RVU (Practice Expense) x GPCI (Practice Expense)] + [RVU (Malpractice) x GPCI (Malpractice)] [ BNF x Conversion Factor = MEDICARE ALLOWED PAYMENT In 2009, the BNF is applied to the CF which will be $36.0666. The more technical revenue, the greater the negative impact! NYMGMA – December 9, 2008 MEDICARE (CONTINUED)
    • How did moving the BNF impact professional fees?
    NYMGMA – December 9, 2008 MEDICARE (CONTINUED)
    • Conversion Factor History:
    NYMGMA – December 9, 2008 MEDICARE (CONTINUED)
    • New CPT-4 & ICD-9 Codes: Many changes – learn them now.
    • New CCI edits have not been released – look out for them.
    • Physician Quality Reporting Initiative (PQRI):
    • - 2009 & 2010 incentive is 2% of allowable.
    • 153 PQRI measures for 2009 (i.e. Measures 135-186 are new).
    • - www.cms.hhs.gov/pqri/ & www.QualityNet.org
    NYMGMA – December 9, 2008 MEDICARE (CONTINUED)
    • E-Prescribing: MIPPA
    • - 2% increase in allowable in 2009 & 2010;
    • 1% increase in allowable in 2011& 2012;
    • -1% reduction in allowable in 2012 for not using;
    • -1.5% reduction in allowable in 2013 for not using;
    • -2% reduction in allowable in 2014 for not using.
    • Prerequisite: a functional eRx system.
    • Electronic Medical Records: Time to seriously consider one.
    NYMGMA – December 9, 2008 MEDICARE (CONTINUED)
    • All market third party payers are reporting losses in 2008.
    • Reduced Medicare RVU’s will result in lower physician payments from other third party payers.
    • These payers will struggle to maintain premium income while employers reduce benefits and employees to save money. At the same time, other competing plans aggressively attempt to lure groups away with gimmicks.
    • Increased scrutiny regarding appropriated compensation levels for Medicare & Medicaid managed care plans.
    NYMGMA – December 9, 2008 OTHER THIRD PARTY PAYERS
    • In 2009, New York State’s hospitals will be under more financial pressure than ever before as Governor Paterson & the Legislature struggle to reduce the cost of the Medicaid system at a time when the demand for uncompensated services will be at an all time high.
    • Many hospitals are attempting to secure their referral relationships by acquiring physicians once again.
    • Fortunately, this region’s hospitals have already consolidated services, however, opportunities exist for physician practices to establish more beneficial relationships.
    • Interoperability of information sharing between hospitals, physicians
    • & health plans.
    NYMGMA – December 9, 2008 HOSPITALS
  • NYMGMA – December 9, 2008 REGULATIONS Self-Auditing: Preventive Medicine for your Practice If you have been in practice management, you know that “the best offense is a good defense”. From Personnel Regulations to Tax Regulations. You do your best to know what you are doing, so document your efforts. Recovery Audit Contractor (RAC) Program – Code Correctly! First there was HIPAA; soon there will be “RED FLAG” Regulations. The Federal Trade Commission (FTC) has delayed the compliance date of the regulations that may require medical practices to establish an Identity Theft Prevention Program to May 1, 2009.
  • NYMGMA – December 9, 2008 REGULATIONS Anti-Markup Rules : See MGMA & CMS Websites for details. Independent Diagnostic Testing Facilities (IDTF ): CMS proposed requiring physician practices that perform diagnostic testing to enroll as IDTF’s; the proposal has been deferred indefinitely; however, MIPPA requires accreditation by January 2012. Advocacy – Get Involved! Call your elected officials! Support MSSNY & other advocacy organizations with real data.
  • NYMGMA – December 9, 2008 PHYSICIAN SUPPLY
    • Primary Care:
    • - Residency slots are not filling.
    • - Most residents are choosing to continue subspecialty training.
    • Specialists:
    • Many more positions than physicians available to fill them.
    • Geography & family effect.
    • Succession Planning:
    • When do your physicians plan to retire?
    • Are agreements in place to prevent retirements at the same time?
    • How long will it take to replace a retiring physician?
    • Will the new physician’s priorities be consistent with the needs of
    • your Practice?
    • - What happens if a physician is disabled in your Practice?
  •  
  • NYMGMA – December 9, 2008 PATIENTS
    • Patients expectations will run extremely high:
    • New President who promised to provide coverage for all.
    • Record unemployment (highest in 34 years).
    • Economy in recession (or worse).
    • Uncertainty about the future.
    • Aging population.
    • New drugs.
    • New technology.
    • Immediate gratification is a pill away!
    • No incentives to prevent disease (e.g. obesity is now an
    • epidemic).
  •  
  • NYMGMA – December 9, 2008 OPPORTUNITY TO THRIVE
    • Practice operating costs are increasing at a higher rate than practice
    • revenues in all areas of medicine.
    • You run a business – focus on the fundamentals!
    • Optimizing revenue must be your first priority:
    • Add ancillaries.
    • Invest in your facilities.
    • Implement EMR technology.
    • Incorporate your non-physician providers.
    • Target market.
  • NYMGMA – December 9, 2008 OPPORTUNITY TO THRIVE Your staff is your greatest non-physician expense – do you have the right people in the right roles? Practices with more FTE support staff were more profitable than those with fewer FTE support staff .
  • NYMGMA – December 9, 2008 OPPORTUNITY TO THRIVE Objectively Assess/Audit Your Practice : What are our goals? Do we have a plan & timetable to accomplish them? Are we moving in the right direction to achieve them? Can we create alternative revenue sources? Are our expenses appropriate? Can we do provide quality care in alternative ways? Are we coding & documenting compliantly? Establish specific metrics to objectively measure your performance.
  • NYMGMA – December 9, 2008 Have a safe, happy & health Holiday Season! Thank you!