Issue link: https://viewer.e-digitaledition.com/i/266572
P ATIENTS ARE FLOWING, employees are happy and the bottom line is healthy. Your practice seems perfect. Actually, there is no such thing as a perfect practice. There is always room for a "tune-up" to increase practice efficiencies and processes, as well as to improve profit and physician compensation. Performing a practice assessment can help identify areas for improvement. Step 1 — Volumes, Billing and Collection Start with analyzing revenue sources. Review and evaluate charges by payor, collections by payor, payor collections by provider, provider RVU's, patient volumes – clinical and ancillary, incoming physician referrals and E/M coding by physician. Payor analyses can help identify areas for better contract compliance and future negotiations. Volume and RVU levels measure effort and efficiency. Referral measurement and E/M coding reviews help determine if a practice is seeing new patients or relying only on existing patients for volume. After analyzing revenue numbers, turn to collections. Measure gross collection percent, net collection percent, days charges in A/R, accounts over 90 days, front desk collection rates on co-pays and A/R balances, timing of patient visit to bill submission, denial reports, and EOB reviews. Compare all of these numbers to last year and to industry statistics. Negative variances can point you to collection cycle areas that need improvement. Step 2 — Practice Efficiencies Practice efficiencies can be measured by performing a patient walk-through from appointment, to check-in, to exam room, to check out, to billing, to patient and payor collections. Measure time in minutes, hours and days and compare to prior periods. Also, assess what patients are told at time of appointment, when insurance is verified, demographics are entered into EMR, co-pays are collected, unpaid claims are followed up on, statements are mailed, accounts are turned over to collections, etc. Step 3 — Coding Review Proper coding depends on proper docu- mentation and documentation starts with the physician. Review E/M codes, CPT frequency reports, and use of modifiers. Be sure all services billed are services that are performed and documented. Perform EOB reviews and charge ticket reviews. Review coder education level and frequency, especially with ICD-10 going live in October 2014. Physicians must also be trained and knowledgeable on ICD-10. Charge-tickets that previously worked for a practice will need to change significantly. Step 4 — Overhead and Staffing Analysis Compare financial statement expense accounts to prior years, budgets and industry benchmarks. Review inventory turnover and control, vendor contracts, and vendor bids on supplies and services. Review per- sonnel numbers against patient flow and physician volumes. Create an organization chart and measure FTE's against collections and benchmarks. Review scheduling and overtime policies, benefit structures, and performance evaluations. Managing your overhead is just as important to the bottom line as increasing volume. Step 5 — Employee Input Employees observe the day-to-day office activity and can provide great input on what works well, what can be improved and how to improve it. Conduct an employee survey to help focus on areas needing attention. Step 6 — Compliance Review Perform a check-up on compliance with respect to Stark, HIPAA, OSHA, hospital contracts, payor contracts and other regula- tory influences. Compliance violations can cause unwanted expenses and lost profits. Ron Pavlovich is a CPA and senior manager in the Medical Practice Management Group of CBIZ MHM, LLC, in Akron, Ohio. ■ Is Your Practice Perfect? By Ronald F. Pavlovich, CPA 2 0 1 4 M A R C H /A P R I L ■ M D N E W S . CO M ■ MD NEWS Cleveland/Akron/Canton | 3 5