Reed Tinsley, CPA

What can you learn from Benjamin Franklin?

Reed Tinsley — 2012-05-25T11:53:17-04:00

I don't know about you but I really like to read blogs. I subscribe to numerous blogs and it seems I always walk way learning something new after I read them. One post I recently ran across discussed 14 action lessons that could be learned from Benjamin Franklin. It was posted at Dumb Little Man (http://www.dumblittleman.com/).

Benjamin Franklin was clearly a man who knew how to get things done. Here are some lessons we can learn from him, whether you are a physician or a practice administrator:

Less Talk, More Action
“Well done is better than well said.”

Talk is cheap. Talking about a project won't get it completed. We all know people who constantly talk about the things they are going to do but rarely ever take that first step. Eventually people begin to question their credibility. Taking action and seeing the task through to completion is the only way to get the job done.

Don’t Procrastinate
“Never leave that till tomorrow which you can do today.”

This is probably one of the first quotes I remember hearing as a teenager. With an impressive list of achievements to his credit, Benjamin Franklin was not a man hung up on procrastination. He was a man with clear measurable goals who worked hard to turn his vision into reality. What are you putting off till tomorrow that could make a difference in your life today?

Be Prepared
“By failing to prepare, you are preparing to fail.”

You need a plan to accomplish your goals. Charging in without giving any thought to the end result and how to achieve it, is a sure way to fall flat on your face. Think like a boy scout. Have a realistic plan of attack and a systematic approach for getting where you need to be.

Don’t Fight Change
“When you're finished changing, you're finished.”

Whilst many of us don’t like change, others thrive on it. Either way change is inevitable. The stronger we fight against it, the more time and energy it consumes. Give up the fight. Focus on proactively making positive changes, instead of having change merely thrust upon you. Wherever possible, try to view change as a positive instead of a negative.

Get Moving
“All mankind is divided into three classes: those that are immovable, those that are movable, and those that move.”

There’s a reason we use the expression, movers and shakers. Movers are the ones who take action, the people who get things done, while the immovable are sitting around scratching their heads wondering how others could possibly be so successful. Which group do you want to belong to?

Avoid Busywork
“Never confuse motion with action.”

We are always running around doing things. We rush from one meeting or event to the next, sometimes without achieving a great deal. At the end of the day, how much of our busywork are we proud of? How much of that running around improves anyone’s life (including ours) for the better? Make your motion mean something.

Give Yourself Permission to Make Mistakes
“Do not fear mistakes. You will know failure. Continue to reach out.”

If we fear making mistakes, we become scared to try new things. Fear leaves us nestled in our comfort zone. Staying in your comfort zone rarely leads to greatness. Taking risks and giving yourself permission to make mistakes, will ultimately lead you to whatever your version of success may be.

Act Quickly on Opportunities
“To succeed, jump as quickly at opportunities as you do at conclusions.”

Opportunities are everywhere. The trick is being quick enough and smart enough to seize them when they arise. Instead of jumping to the conclusion that something won’t work or can’t be done, allow yourself the freedom to ask what if?

Continue to Grow
“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.”

We all have vices of some description. The key is to keep them under control or preferably eradicate them entirely. Be kind to those around you, whether they are neighbors, family, co-workers or friends. Never accept that you have finished growing as a person.

Keep Going
“Diligence is the mother of good luck.”

Have you ever looked at a successful entrepreneur or business person and thought how lucky they are? Most of the time, luck has nothing to do with it. Hard work and sacrifice on the other hand have everything to do with it. Successful people deal with failure. They tackle their demons head on. They pick themselves up and keep going.

Know Yourself
“There are three things extremely hard: steel, a diamond, and to know one's self.”

Understanding ourselves is not easy. Sometimes we just don’t want to see ourselves for who we really are. It’s much easier to hold onto a romanticized version of ourselves or to simply view ourselves through other people’s eyes. Start by being brutally honest with yourself. Follow through with understanding, compassion and acceptance.

Don’t Self-Sabotage
“Who had deceived thee so often as thyself?”

We spend so much time worrying about other people hurting us, yet fail to comprehend the damage we inflict on ourselves. If you are using negative self-talk, lying to yourself or indulging in addictive behavior you are self-sabotaging. Life can dish up enough challenges without us adding to the mix. Be kind to yourself. Treat yourself like you would a best friend.

Don’t Give Up
“Energy and persistence conquer all things.”

Achieving our goals can be downright exhausting. There will be days when you want to give up. There will be times when your energy levels flatline and you wonder why you bother getting out of bed. Yet you push forward, day after day because you believe in yourself and you have the determination and strength to back up that belief.

Wise Up
“Life's tragedy is that we get old too soon and wise too late.”

Benjamin was definitely onto something with this one. Who hasn’t had the thought - I wish I could know then, what I know now? Unfortunately there is no time machine; there is no going back. The key is to wise up as early as you can to start forging a life of purpose, achievement and happiness.

Take a look at your 90+ old receivables category

Reed Tinsley — 2012-05-23T09:28:34-04:00

A good indicator of how well the office is collecting its accounts is the percentage of receivables that is more than 90 days old. If the percentage is unusually high, something is wrong in the office. Again, a high percentage could be traced to a systems problem, a people problem, or a combination of both. A good benchmark for most medical practices is to keep receivables more than 90 days old at less than 15 to 20 percent of the total amount of accounts receivable. A good specific benchmark would be that no more than 18 percent of the accounts receivable should ever be 90 days or older. Medical practice statistical surveys, such as the one produced by the Medical Group Management Association, could be used for comparison.

Aetna begins to deselect physicians (i.e. kick em out of their network)

Reed Tinsley — 2012-05-21T09:39:07-04:00

Back in April Aetna informed 130 physicians in Texas that they were being deselected from the Aetna network effective July 1st, 2012. Apparently this action is singular to Texas - it's a program that's national in scope. Over a year ago Aetna warned these deslected physicians of its concern about billing practices primarily involving levels 4 and 5 E&M codes. If you ever receive this type of warning, you must take action immediately. Set up a meeting with your provider representative to discuss and review any and all coding issues raised by the insurer.

This action by Aetna has impact beyond one major insurer dropping a physician - It most likely represents a “sea change”. Aetna’s confidence in eliminating physicians due to researched billing practices is a dramatic escalation of data-based medical management capability, i.e., third party administration with a definite directive to lower expense. Also, the decision to state “billing patterns” as a causative reason for winnowing physician ranks raises questions as to the undisclosed analysis of quality outcomes. Even more important, it also causes anxiety about how other managed care plans will react when it becomes public information that a physician is excluded from medical panel participation by Aetna. Will there be an industry move in aggregate to exclude that physician from other managed care panels?

I wonder which insurer is next to take this action against its physicians.

Don't forget importance of quality & outcomes in managed care negotiations

Reed Tinsley — 2012-05-17T09:17:19-04:00

To me the most powerful form of leverage in any managed care negotiation is utilization and outcomes data (i.e. quality). Practices and their physician owners who are progressive enough to obtain, assemble, and analyze outcomes data will have a significant amount of leverage against managed care plans. Why? Managed care plans usually pay most all doctors at the same rate schedule. If a practice can present data showing it is a lower cost provider than the other doctors of the same medical specialty on the panel, the managed care plan will usually consider giving the doctors some kind of an increase in reimbursement. If the managed care plan does not, it shows the employer community that is does not care about quality and reducing medical costs. Obviously they do not want something like this to be exposed.

The following are a few samples of some of the most common quality indicators:

 Cost per patient for a particular series of diagnosis codes
 Surgeries performed as a percent of patient encounters
 Usage of ancillary services
 Lengths of stay in the hospital
 Specialist referrals as a percent of patient encounters or by diagnosis codes (for primary care doctors)
 Number of repeat visits due to surgical complications

Keep in mind quality can also be defined by clinical outcomes as well as by hard figures. One example is asthma and allergy: What are the number of days missed from work for those patients the practice is treating? For Glaucoma specialists: How well was eyesight restored after glaucoma surgeries or are there complications?

It is important to remember that managed care plans do not on their own go out to doctors on their own volition and give them an increase in reimbursement rates. Doctors must be the ones to ask for such an increase. Medicine needs to become more efficient, but this is a process that is not going to happen overnight. However, it is the practices that do become efficient and cost effective that will most likely end up the true winners in the managed care reimbursement playing field.

Are you using your PM system to its full capabilities?

Reed Tinsley — 2012-05-15T07:07:28-04:00

We all know how important efficiency is to any medical practice, especially its billing and collection functions. To maximize your billing and collection processes, you need to dig deeper into your practice management system’s features. Think about the things that require manual steps to track and accomplish with the current practice management system. Make a checklist. It could be anything from eligibility and verifying benefits to patient reminders and dunning messages placed on patient statements, or it might be automated collection letters and re-set reminders on outstanding claims. Perhaps it is electronic remittances or the ability to sort data and provide meaningful management reports that are laborious to obtain manually. Another important feature is the ability to identify incorrect payer reimbursements.

These are features you should expect from a good practice management system, along with ease of use, accuracy and reliability across the board. If the vendor tells you theses feature are in research and development, it may be a long wait and time is not on your side. Regardless, you need to know if there is an opportunity to get more out of the current system and your vendor is the one to tell you. With the cost of running a medical practice, efficiency and reliability of the practice management’s system is vital to your future.

If you discover there are available system features the practice hasn’t tapped into, work with the vendor on how to get the staff trained and up to speed. I find many medical practices are not using their practice management system to its full capabilities. Don't let this happen to you.

The Importance of a Recall System for Physician Practices

Reed Tinsley — 2012-05-14T10:11:25-04:00

Medical practices can run a serious risk if its patients are not recalled for follow-up as required by medical protocols and just as important, also lose revenues. Practices can easily develop a recall system using their own computer system. This type of system should ensure that patients will not “fall through the cracks.” Recalling patients for follow-up attention is more than just good marketing. It's an essential aspect of good medical care. In fact, a practice could be courting trouble with a potential malprac¬tice issue if it does not bring certain patients back.

For instance, take a gastroenterologist who has seen a patient with early indications of potentially cancerous polyps. Professional protocols call for re-examination on a regular basis. If the patient ends up dying of colon cancer, an effective malpractice attorney is going to wonder and ask if the gastroenterologist had recalled the patient as the pro¬tocols require.

Many practices have a very simple recall system. This is when the receptionist pulls the charts of patients he or she had listed for recall when they checked out from their prior visits. But the receptionist, in a busy front office, often misses some names and never check to see if the people ac¬tually recalled made and kept their appointments. Worse yet, the system would probably collapse if the receptionist ever quits.

A practice’s computer billing system is the logical device for highly effective patient recall. When the physician marks “months," or "one year" on the patient's fee slip, for example, the instruction can be punched into the computer system along with the fee for the current visit. Having a set of codes for "reason for recall" (such as to recheck polyps) allows storing the reason until the patient is actually re-contacted.

A practice’s system should then be able to automatically print out recall letters a month before the visits are due. Those letters may include pre-drafted sentences or paragraphs, keyed to your "reason for recall" codes, telling the patient why the visit is important to his or her health. The system should also print out a list of patients to be recalled so your staff can check them off as they are actually scheduled and seen.

Some computer systems can automatically check off the recall patients as they are later billed for their visits. It can then generate a list of patients who have not responded to the recall and who should thus be followed up further. If appropriate, the practice should send a final warning letter, retaining a copy in the chart, to each patient who fails or refuses to honor the recall effort. The computer should be able to generate this final letter as well.

An effective recall system can be handled by most medical software systems. If a practice’s system cannot handle this, make sure at least a manual recall system is in place and is being implemented properly. Whether to provider a better service, to avoid potential liability or to increase practice income, a recall system is too important to be left ignored.

Analyze potential social security benefits as source of retirement income

Reed Tinsley — 2012-05-10T08:54:03-04:00

I'm a strong believer of planning for your retirement; unfortunately most physicians are not very good at it if they attempt to do it at all. If you haven't started any form of planning, start now - meet with your financial planner or accountant to begin the process. For you younger physicians, the earlier you can start the better.

One simple place to begin is to take a look at your potential social security benefits as a source of retirement income. Go to http://www.socialsecurity.gov/mystatement/ and get the following information:

• Estimates of the retirement and disability benefits they may receive;
• Estimates of benefits their family may get when they receive Social Security or die;
• A list of their lifetime earnings according to Social Security’s records;
• The estimated Social Security and Medicare taxes they’ve paid;
• Information about qualifying and signing up for Medicare;
• Things to consider for those age 55 and older who are thinking of retiring;
• General information about Social Security for everyone;
• The opportunity to apply online for retirement and disability benefits; and
• A printable version of their Social Security Statement.

Dear Physicians - Start paying attention to your practice

Reed Tinsley — 2012-05-08T09:03:52-04:00

Does this scenario sound familiar: Medical practices delegates all oversight, supervision, and daily office management to the practice administrator yet only to find out later that things are REALLY screwed up? I recently saw this again at a large specialy practice and the situation was familiar to those in the past - the doctors just wanted to practice medicine and leave everything else to the administrator.

This just can't happen; physicians need to realize that a medical practice IS THEIR medical practice and as such need to take ownership of it. To avoid such instances from happening, a physician or physician group should do these things:

1. Have a monthly financial meeting. Review the finances of the practice and engage a formal agenda to review and discuss all other practice issues;

2. Implement checks and balances. Make sure your CPA is looking at your finances on an ongoing basis and is asked to attend your monthly financial meetings;

3. If large enough, implement physician committees. This will keep physicians involved;

4. Survey the employee group. Employees see what is going on each and every day - get their feedback on how the office is running, how they are being treated, and ideas to improve the office.

Keep payer from cutting your physician negotiated fee schedule

Reed Tinsley — 2012-05-07T13:17:59-04:00

Best Option: Attach fee schedule and require your consent to changes.

The best way to plug this loophole in your plan contracts is to attach the fee schedule to the contract, make it clear that the schedule is incorporated into the contract, and bar the plan from changing it during the contract without your consent. Many plans will agree to make this change if you raise the issue. Plans are most likely to agree if you have some negotiating leverage or if the plan needs your services. For instance, a plan may want to add you to its panel so that it can expand into your geographic area or so that your specialty will be represented on the panel.

Here is a sample contract language you can use:

Plan shall pay Provider for Covered Services rendered to Plan Members in accordance with Plan's fee schedule dated [insert date] attached hereto as Exhibit [insert #] and incorporated by reference herein. Changes to Exhibit [insert #] shall be made only upon mutual written consent of Plan and Provider.

If your contract has an automatic cost of living or other escalator clause, be sure to exempt that from the mutual consent. It would unnecessarily delay the increase's implementation. To exempt that type of clause, add a phrase to the last sentence of the model language above, such as "except for the annual cost of living increase, as provided in Exhibit [insert #]

RVU physician compensation model

Reed Tinsley — 2012-05-02T09:48:45-04:00

I'm often asked about compensation modeling, especially during these times when there are continued pressures on physician practice net income. Many practices, especially those owned by hospitals, are moving to some sort of a RVU-based compensation model. If you are looking at this type of model, here is what I see as the most common one out there:

Base salary consistent with expected MGMA production

RVU target consistent with expected MGMA production and salary (based on physician work RVUs)

5-10% risk corridor either way

Physician gets a bonus of x% of base where X is the amount that total RVUs exceed RVU target, except that no bonus is payable if total RVUs are within risk corridor

Base salary is increased or decreased in following year by Y% where Y is the amount by which physician's annual total RVU's exceeded or failed to meet the target, outside of the risk corridor

Following year's RVU target is = to current year's total (actual)