Confessions of a Pediatric Practice Consultant

We continue to get daily calls and requests for information about the ARRA funding.  We were even told by a potential client that they went with a well-known (but little liked) vendor now in order to maximize their ARRA $$, even though the money itself may be a mirage and they don't even know what their state is going to do. 

Big sigh.

One thing we do know is that, for pediatricians, there is a "20% Medicaid" requirement on the Federal level.  Note that individual states may have additional requirements, we just don't know what they are, yet.   So, how many pediatricians actually qualify for the minimum known requirement so far?  

One-third.  1/3.  Not even, really - 31%!

That's right - only one-third of you private practice pediatricians appear to have 20% or more of your visits fall under the Medicaid category.  Sure, PCC's sample is likely to be biased (we don't have a massive RHC contingent), but I bet it's pretty close to reality. 

Here's how we figured this out.

According to CMS:

"Ps must annually meet patient volume thresholds, measured by a ratio where the numerator is the total number of Medicaid patient encounters (or, in the case of eligible professionals practicing predominately at FQHCs and RHCs, needy individual encounters) over any representative continuous 90-day period in the most recent calendar year and the denominator is all patient encounters over that same 90-day period.  For all EPs except pediatricians, the patient volume threshold is 30 percent; for pediatricians, it is 20 percent."

Each state is then responsible for certifying patient volume and distributing the money via Medicaid.  

Well, we counted up the total visits for each of our "full time" providers and counted the Medicaid visits.  Overall, 18% of the visits were Medicaid, which means that the "average" pediatrician doesn't qualify.  Still, Medicaid visits are not distributed evenly, so it turns out that 31% of PCC's providers reach ARRA's minimum standard for ARRA fundin.  It's possible that a few more might qualify during any given quarter (you don't need to have that volume for an entire year), but we have already learned that moving 5-10% of your visits from private pay to Medicaid for even a quarter eats up your funding pretty quickly.

I don't know what to think except that a lot of the SOAPM folks I know are not even close to the required Medicaid volume.

Thoughts?

A few years ago I passed a church as a wedding party pushed out onto the lawn at the end of the ceremony. My boys were in the back seat and the younger looked out the window and said out loud, "Dad, I don't want to have to get married."

I wasn't too surprised, really, because even then, at the age of4 or 5, he was full of funny exclamations. "Why not, buddy?"

"Because sometimes...sometimes, I just need a day off."

Well, I need a day off from "work" so I can get to the blog. Whenever you see a gap in my posts like I've had recently, it's because there's so much happening in the world of pediatrics that I don't have time to blog it all. Thus, I'm relegated to the shotgun post.

• PCC has another AAP endorsed pediatric coding and practice management event in Miami, FL at the end of January. I know a few of you are already signed up, but we still have room. For non-PCCers who have attended similar events, there are a few new classes. For PCCers who attend everything we do (you know who you are, Lynn Cramer), there's at least one AWESOME new class in here that will make the entire trip worth your while.

  We're about to announce an other event in Virginia any moment now.

• Many of you probably already read the HISTalk interview with Bill Zurhellen, but if you haven't, please do. Bill was the brave soul who stood up at the CCHIT committee meeting and said, "...if our work isn't about improving healthcare, then why are we here?" I don't know if he realizes - and is therefore thankful or spiteful - that I put the HISTalk folks in touch with him or not. I think the interview is excellent, though I am a little dissapointed that he toned it down!
• PCC's world has started to circle around the Meaningful Use drain, though we're doing our best to get caught in it as little as possible. I remember learning about the "Bread and Circus" back in junior high and I can't think of a better analogy. Nearly everyone we speak to these days wants to know if they're going to get their money. I've written about this issue for the AAP before. Pediatricians need to focus on REAL meaningful use, imo. If you want to read the 700+ pages related to the bill - in it's "Preliminary Final" form (what does that mean?), you can get the details here and here.
  You can also find some interesting summaries and helpful documents here and this summary by HISTalk is quite helpful.

How is this not a giant waste of money?

Over on PedSource, we just ran an in-depth piece about the effects of the recession and the Swine Flu on our clients from 2008 to 2009. 

The bottom line: it looks as though the average PCC client has similar overall revenue in 2009 vs. 2008, but it took a lot more visits to do it.  The reason?  Many of those summertime well visit slots were taken up with sick visits.  I'll show off the diagnosis impact of the swine flu, but it's impressive.

Anyway, enjoy the article.  There's a lot of subtle data in there.

I had grand plans to keep track of all the different payers and publicize/shame many of them, but by the time the data came in...it was too late.

Still, how have PCC clients fared with the new H1N1 administration code? 

Better than I would have guessed.

The bottom line is that PCC clients averaged $14.90 from insurance companies and $16.73 from patients when they billed for the H1N1.  That's actually higher than our clients average for the 90465 or 90471, at least when I looked at it last year. 

Of course, the variance is large, but not entirely the fault of the payers.  I might look at a state - like AZ - and see that 1/2 of our clients are using the Medicare Code (G9141) and getting paid a penny because they charged a penny...while their neighbors use the 90470 and charge $25 and get paid $20.  Same procedure, two very different billing methods.

However, there are clearly some super-lame payers out there. A payer in NY - let's call them United - might pay $25+ to one practice and then $7 to another in the same county.  

The clear "winner" for our clients is Tufts, available to folks in Massachusetts, often paying is excess of $40 per H1N1 admin.  Many of the payers in New England paid higher than the rest of the country, no question.  $25-35+.

Interesting stuff.  

Boy, I love it when my readers do all the work for me.  I encourage the rest of you to do the same.

The subject?  How do deal with prior auth issues, especially when our insurance friends change their minds after-the-fact.

The lead in:

Hey Chip! Thought I would pass this on to you, perhaps it can help you for the coding. We found this out as insurance companies would sometimes deny payment when we had called for prior auth for the VEP, 95930. However there are specific laws governing this matter. Here is a form letter we have for our denials when we get prior auth for the 95930 and they refuse to pay, but it has much larger implications.

Realistically we also call to get prior auth for things like well visits, hearing tests, and immunizations, and sometimes insurance companies would refuse to pay. Before we would often unfortunately just have to make the parents pay, which was horrible after we had verified that their insurance would pay. But legally insurance companies are liable.

As I am in California the initial section deals with California law, but there is precedent in federal law as well.

Hope this helps you! Thanks for your advice in the past!

And now, the letter:

Dear [Patient->Primary Insurance Name],
On [Visit->Date Occurred] our office called to verify that
[Patient->Full Name] was indeed an enrollee covered under your plan.
On that date, ***NAME OF CONTACT *** verified that [Patient->Full Name]
was covered for CPT code 95930.
At no time were we told that:
(1) the enrollee’s right to receive benefits was subject to
forfeiture or reduction;
(2) the enrollee’s coverage was contingent upon further
investigation of the facts, or that
(3) you would conduct a post-claim investigation to determine the
availability of benefits to the enrollee.
If you had made such representations we would have sought reimbursement
from other sources.  Based on your assurances of coverage we provided
necessary treatment to the enrollee.  The cost of that treatment totaled
$___________.
You afterwards informed our office that you are denying our claim because
the enrollee is no longer eligible for benefits.  This denial is against
California law that prohibits a Knox-Keene plan or insurance company
that authorizes treatment and/or verifies eligibility from rescinding or
modifying the authorization/verification after the physician renders the
service in good faith and pursuant to the authorization for any reason,
including, but not limited to, the plan’s subsequent determination
that it did not make an accurate determination of the enrollee’s or
subscriber’s eligibility.  (Health and Safety Code 1371.8; Insurance
Code 796.04.)  Further, regulations implementing CMA sponsored unfair
payment legislation, A>B>1455 (2000), deem a plan or IPA’s
denial under these circumstances unlawful.  (28 C.C.R. 1300.71 (a)(8)(T).)
Therefore, since the care referenced above was authorized you must pay
us even if your employee made a mistake and the patient was not covered
for the specific services provided.  This denial is also contrary to
federal law, I.E., the Case of The Meadows v. Employers Health Insurance
(9th Cir 1995) 47F.3d 1006.  In this case an ERISA plan denied coverage
to a drug treatment facility after previously verifying eligibility.
The court allowed a suit to be brought against the plan for breach of
contract and negligent misrepresentation, among other things.  The court
stated that if eligibility is verified such verification cannot later
be rescinded as plans are not insulated “from the consequences
of their own misrepresentations” to providers.
Pursuant to the above referenced California law, please remit the amount
of $____ to our office within 30 days. If we do not receive payment by
that date we regretfully will send this to the Department of Managed
Health for further legal action.  Thank you for your cooperation.

Awesome. Thanks.

Over on PartnerTalk (the PCC user mailing list), one of our clients mentioned trying to get UHC to the table three times and failing.  I pointed out that the insurance companies have no motivation to pay attention to a small pediatric practice until you force them to do so - namely, by dropping them.

I sent everyone on PartnerTalk over to the awesome Pediatric Inc. blog to read a piece I wrote a few months back about the math of the dominating payer.  I should probably turn my long comment (in the middle, hard to miss) into a proper blog entry for myself.  Anyway, a PCC client added this comment yesterday:

Taking heart from Chip’s remarks, I discovered that one of the networks
that we were contracted with (an arrangement we “had”to make because a
local employer had gone with them) was now paying 50% of charges. They
had changed name several times with mergers etc., and were very
difficult to actually find some one to talk to. I indicated that we
would have to drop them if they did not offer us a better rate. No
reply. Sent a registered letter with a sample letter informing patients
that we could no longer participate and named a date when we would send
it out. we got the signature card back, but no answer. Made a phone
call and were told that there was nothing to negotiate. Sent another
sample letter, this time telling the patients that we were disconsolate
that their insurance co not only would not cover their children
adequetely, but refused to talk to us. We were promised a new fee
schedule to look at , but it did not come in a month. So one last email
telling them Sayonara, and we got back a contract offering 135% of
medicare. What do you think, Chip?

I can't make this stuff up!  This is a small, small rural practice in Vermont!  It isn't some 25 physician, multi-specialty group with a professional negotiator. 

135% of Medicare in a small rural VT practice.  With a few letters.  How hard was that?

Apparently, I never ran the piece I wrote about medical missions for the spring SOAPM newsletter.  D'oh. I was reminded of this when one of the local Ghanians sent me some pics out of the blue this morning. Enjoy.

In March, I participated in a medical mission to Ghana. Although I obviously never treated any patients, I got pretty good at identifying inguinal hernias in teenage boys in addition to the more commonplace matters of maintaining the schedule of surgeries, coordinating with patients, taking photos to help document the trip, and otherwise acting as a jack-of-all-trades. In five days, our group performed over 200 surgeries ranging from fixing the aforementioned hernias to cleft palate and cataract repair.

Even with my limited clinical input, the experience was...amazing? Eye opening? Unforgettable? As facile as the English language is, it lacks the adjectives to describe what I saw, did, and felt. I'm sure there's a word for it in German - something like Bludswetundtearstrang. In short, it was an overwhelming and rewarding experience that I was privileged to contribute to.

Although my work helping pediatric offices is wonderfully rewarding (particularly for SOAPM members!), monkeying around with CPTs and RVUs or negotiating a new payer contract has never affected me the way getting a full van of African orphans–and full van in Africa is a FULL VAN–checked into a hospital after hours, thus avoiding having to send them to sleep on the streets.

No surprise there, really. But in the context of a SOAPM newsletter, I have been asked to ask myself: How does this help my business? Or, for you, can participating in a medical mission really strengthen your practice?

The answer, unequivocally, is yes. And as pediatricians, you know this preternaturally. Only a fool would choose pediatrics as the path to financial glory so that's not why you do it. You're a pediatrician because, among other things, you care for children and relish that daily opportunity to make a difference in their lives. But given that so many of you already sacrifice time and income to help those who can't otherwise afford your care, how can helping a blur of kids you're unlikely to ever see again make any difference at home?

Having experienced a mission, I know the answer, but thought should see if others feel the same. Jill Stoller, MD, whom you should all know, was the medical director for our mission, and my estimation and appreciation for her went from amused tolerance (just kidding!) to profound respect. I asked her directly what benefit she returns to her practice as the result of her trip. She replied succinctly:

The missions have proven to me how incredibly lucky we are to be living in the United States with all the opportunities–medical and otherwise–that we have here. That perspective makes me a better person, and therefore, a better doctor.

How can any of us with children - and you, who help to train their parents - disagree that putting perspective on our day-to-day troubles is beneficial? Sure, there are some indirect, but measurable, benefits to her practice from the work:

The press involved can be a PR bonus for the practice. Our local newspapers have written stories about my mission work and I get lots of compliments and questions from my patients and their parents. Some of my patients have made monetary contributions toward the organization I volunteer with. I also think my medical charity work serves as a good role model for the patients in my practice.

This article makes a good case for Dr. Stoller's point about PR, especially for me, doesn't it? We've now spread her name (again) all over the Interwebs. However, pediatricians, as a matter of course, already do a lot of charity work. How is a medical mission different? As Dr. Stoller points out, refreshing your perspective is like a booster shot to your career. Your first ten minutes working with families who are both desperate and thankful - and with kids who swallow any meds you give them without blinking! - rekindles a fire that you will bring home to your practice. There are clinical and management benefits as well:

I was ultimately responsible for the well-being of all the patients and staff. That's true at home, of course, but not at all in the same way. I also needed to hone my skills related to fluid and post-operative pain management.

As for my perspective, PCC is a small business little different from most of yours. And we have recognized several important benefits to supporting our employees in these endeavors.
First, employees who volunteer, on a mild or grand scale, appreciate their jobs – and their companies - more than those who don't. Having happier, more well-rounded employees, is irrefutably good for business.

Second , volunteer work provides a unique opportunity for real-world experience that you can't get anywhere else. Did I learn things about myself in Africa? I sure did. There's a reason why so many people who participate have a bizarre craving to go back. As an employer, imagine choosing between two identical new employees, except that one is a veteran of several medical missions...no choice, really?

Lastly, but perhaps most importantly, supporting work like OCI's mission to Ghana helps to build a more attractive place to work. Finding and keeping good employees is the number one challenge for every small business. Supporting a cause such as this is a relatively inexpensive way to keep employees and do an incredible amount of good.

I know these things not only from gut instinct – there is plenty of data to back me up. Just 'google' something like “business benefits of employee volunteer” like I did and find the dozens of WWW sites supporting volunteer work. Or just read the half-dozen references that Volunteer Match assembled, with results like “64% of executives surveyed say that corporate citizenship produces a tangible contribution to the company bottom line. Among executives at large companies, 84% see direct bottom-line benefits... - Center for Corporate Citizenship at Boston College and Business Civic Leadership Center, 2005”

While it's not possible for every pediatrician to take the time to participate directly in a medical mission, I would encourage practice owners to support this type of charitable work in one capacity or another. What can you do, given that you can't get on the next plane to Ghana? Dr. Stoller suggested the following important alternatives:

If you know friends or colleagues going on medical missions, offer to help sponsor their trips. Maybe your child’s school or boy/girl scout troop could collect supplies for the mission. Speak to the formula and drug reps and collect samples to send on the mission. You can't believe how every little bit helps!

Ultimately, your participation in a medical mission should be limited primarily by your comfort and ability to travel to the location in question, whether it's Ghana or Newark, NJ (sorry, Newark fans). The return on your investment, whether personal or for your employees, is far greater than the investment itself.

My friend Kwame and his crew at Our Children Africa:

Hey, check out frequent Chip's Blog poster Brandon Bettancourt making a splash on the AMA WWW site in a piece about chosing a PM system during this age of EHR purchasing.  I have to say that I can't argue with the list of questions everyone should ask any potential PM vendor.

Meanwhile, back with some data.  One assumption made by many is that larger practices make more money per provider - not necessarily true, as I have pointed out before.  In fact, I think that practices who merge (vs. grow organically) make less money. 

Although the graph below doesn't address the cost side of the balance sheet, it provides interesting detail about the earning potential of pediatric practices. To summarize: there is a slight negative correlation between the size of a practice and the expected income per physician.  In other words, our smaller clients earn more $$.  More about that in a second.

I deliberately left off the values on the axes so that an extra-curious reader can't figure out information about some of our clients.  And, I removed from the image a few outliers who would have been easy to identify (namely, the larger practices).  But as you climb the Y axis, you are looking at larger practices.  As you extend on the X axis, you are looking at physicians generating more revenue. 

The implication here is that larger practices don't generate more income per pediatrician.  And, as a rule, they don't.  To test my theory, I ran a similar analysis comparing practice size and patient volume - it looks nearly identical.  Smaller practices are also busier.  What a surprise.

So unless there is some magic on the accounts payable side of the equation for larger practices (which there is...sometimes good, sometimes bad), smaller practices generate just as much revenue as larger practices on a per-provider basis.

What do you say about that?

Wow, I've got some awesome data today.  So awesome, it even trumps a series of important pediatric RVU and H1N1 announcements (care of the helpful people at the AAP) and Jill Stoller's NBC debut.

What would trump that kind of information? 

Igor and I (note how I take credit) have gone through all of the visits performed by PCC clients from 2003 through 2008 to help with some of our practice consulting, customer dashboards, etc.  It's a couple billion dollars' worth, so a decent sample size. We've deliberately narrowed it down to pediatricians who have charged at least $300,000 in a year to try to examine the full-full-time providers.  What did I learn?

•  Immunizations alone accounted for 21% of the charges posted by our clients in 2008. This is up from 15% or so in 2005.  Interestingly, vaccines themselves made up approximately 24% of the total revenue, so it would appear that PCC clients collect ~3% more for their vaccines than they charge, on average.  Not anywhere close to the 17-28% the AAP suggests we need to cover real expenses, but at least it's close to invoice break-even.  In fact, depending on how tightly our clients price their vaccines to their costs, this looks pretty good.
• PCC's providers averaged $816K in charges and $493K in revenue if we include immunizations for a collection rate of 61%.  If we exclude immunizations, we're looking at $671K and $396K.  The nerds among you will say, "Wait, that's a 59% collection rate, I thought your imms had a 3% margin!"  Rounding errors, OK?  But it means that each pediatrician carries an average of $100K in imms revenue and product every year - crazy!
• The average PCC provider produced 4107 office visits and 10,242 RVUs in 2008. This value has risen steadily from the ~2.0/vis we were seeing in 2003.  Awesome.  Worth of a chart (see below).

Depending on whose benchmark you use (ours or the MGMAs), the average PCC clients makes between $153 and $172K based on non-immunizations collections.  Sure, we have folks making 5-8x that amount, and plenty who don't make nearly that.  There's a $66K stddev. 

• More nerds will say...wait, we have dollars collected and RVUs performed.  Yup, PCC clients averaged approximately 108% of Medicare with their collections in 2008.  Pathetic, especially when you consider we've got the best of the best.

OK, that's a start...there's plenty more in here. I even made a cool chart, click on it to zoom in!

I've been erratic, I know, but that's life on the road (another broken hard drive!) and at home with two H1N1 kids.  Here's the latest:

•  Can't avoid swine flu issues. Did folks know that to add to all the confusion, it looks like the big clearinghouses weren't paying attention either. At least three of the biggest fish in the pond (Availity, Capario, Emdeon) were erroneously rejecting H1N1 claims last week.  How can this not be a float conspiracy?

Anyway, one of the big clearinghouses re-submitted all the claims - good work.  The others?  How's this for customer service?

Apparently, we discussed it [reprocessing affected claims], but since we cannot identify the procedure codes rejected in error, we have to [sic] requested the clients resubmit the claims."

Quote straight to our EDI guys from a clearinghouse.  Insane.

•  Greg @ OP has an interesting live blog from the experience his wife's office had with their flu clinic last weekend.  A must-read for those in the pediatric EHR biz.
•  More Swine follies.  From a client in NJ, his experiences with the NJ imms registry:
  

  The biggest problem is that it will accept the data only for those children already in the registry, predominantly those born in state in the last 7-10 years or however long this has been running. Anyone older or from out of state who was not entered subsequently will have to entered manually now. I didn't check but I'd bet that's the majority unless you are limiting the vaccine to the younger ages right now.

• Finally, I bet this ICD-9 to ICD-10 tool will come in handy.

Really, I mean it - interesting data ASAP.  I have a ton of it!