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Mitigating Medicare Sequester Cuts By Ronald F. Pavlovich, CPA A a year of efforts to avoid it and a temporary delay, federal spending cuts, better known as sequestration, took effect on March 1, 2013. The healthcare industry shares in the impact of those spending cuts in the form of a 2 percent reduction in Medicare fee-for-service reimbursements. The Office of Management and Budget estimates the aggregate impact of the Medicare portion of the sequester to be $11.35 billion in the 2013 fiscal year alone, and $100 billion over ten years. Providers across the healthcare industry with higher concentrations of Medicare patients must take proactive measures to offset the effect of the Medicare sequester. Initial reactions for some administrators might be to aggressively reduce costs. Payroll is typically a large expense for medical offices; therefore employee layoffs and benefit reductions could result. Rather than making cuts that can affect quality and productive patient care, there are actions that can be taken to improve revenue. FTER MORE THAN Enhance use of your EHR and practice management systems. Many practices use only 30 percent of their software's capabilities. Expanded use of the software can result in efficient scheduling by sorting cases in a way that enable one or two additional patients per day. Automatic text or email appointment reminders can reduce no-shows. Charge capturing and coding can be enhanced with use of EHR software. Revenue beyond traditional fee-for service charges is available with EHR Meaningful Use reporting. In addition to Meaningful Use, Physician Quality Reporting Incentive (PQRI) money is also available. Meaningful Use and PQRI payments have also been reduced as a result of sequestration. However, both are still a source of additional revenue. Reallocate advertising efforts to more effective sources. Many new patients find a practice through a Google search. Take actions to make your practice first on the Google list. Update your website frequently; use keywords in the practice biography that people may use to search and locate your business on local listings. These actions as well as others can move your practice up the Google list. Seek guidance from your website design support team. Add ancillary services or products. Ancillaries can create significant extra revenue. Allocating profits from ancillary services must be done carefully as many are considered designated health services subject to strict rules concerning referrals and profit allocation. Hire mid-level providers. Physician assistants and nurse practitioners can help leverage higher patient volumes at a lower cost than adding a new MD. Midlevels can allow the MD to be more efficient with each patient and therefore see more patients in day. Medicare Part B "incident to" rules governs billing for services rendered by mid-levels. Consider strategic alignments. One basic alignment could be joining a group purchasing alliance to negotiate better pricing on supplies or equipment. Another alignment could be participating in other non-fee-for-service payments, such as directorship fees or quality incentives. A larger scale example of strategic alignments would be joining a clinically integrated network. These can potentially provide additional patient volumes. Ron Pavlovich is a Senior Manager in the Medical Practice Management Group of CBIZ MHM LLC in Akron, Ohio. I SEPTEMBER- OCTOBER 2013 I MDNEWS.COM I MD NEWS Cleveland/Akron/Canton | 41