Conducting a Medical Practice Assessment

PurposePurpose To determine the readiness of the medical practice to receive payment by a given reimbursement mechanism –i.e. capitation, discounted FFS

Assessment Items 1. Number of active clients 2. Average visits/client/year 3. Average number of new clients/year 4. Total referrals from organization/year - Principal resource(s) employed 5. Total clients referred to organization/year - Principal source(s) of referrals

Assessment Items 6. Average referral income/client/year - Principal source(s) of income 7. Average number of in-office ancillary service units/year - i.e. medical emergency 8. Percent (%) active clients/source of payment - i.e. FFS, private pay, commercial insurance, Medicare, Medicaid, managed care, etc.

Assessment Items 9. Average length of time for receipt of A/R - Information subsets: collection rate, bad debt write-off, time difference between date charge generated vs. data billed to payer, ratio of denied claims, etc. 10. Listing of businesses & organizations employing significant number of employees who refer to organization for clinical services - Significant number = 100+

Assessment Items 11. Average number of outpatient clients seen/week - Principal source(s) of referral 12. Average number of inpatient/residential admissions/week & average LOS 13. Average number of hospital consults, physician, psychologist, social worker/week & principal source(s) of referral

Assessment Items 14. Principal CPT codes for which charges are generated & corresponding RBRVS value - Number performed/year - Average charge/treatment - Average allowed charge/year - Average reimbursement/procedure

Assessment Items 15. Comparison of cap rates offered to organization with cost of providing services to clients - RBRVS 16. Relationship of cap rates to total revenues generated/year - If it is a risk assumption contract, must be 20+%

Assessment Items 17. For MCOs employing a withhold, how is it structured - Policy regarding withhold for PCP & specialist 18. Productivity of direct services staff - Average time spent in direct service 19. Results of ongoing client satisfaction surveys

Assessment Items 20. Impact studies of capitation - For each cap rate offered, convert monthly revenue stream to FFS equivalent CCF - e.g. 50K ss x $0.50/ss/month = $25K/month Month #1 = $25K/100 ss = $250/visit rec’d Month #2 = $25K/2K ss = $12.50/visit rec’d

BenchmarkingBenchmarking

Benchmarking Defined Collect data Analyze data Trend data Compare data Identify best performers

Internal vs. External Benchmarking Internal Benchmarking –Intra- or interdepartmental External Benchmarking –Best industry performers –Reluctance of some organizations –Confidentiality agreements

What to Benchmark Comparative professional liability claims –Number of incidents/year –Number of PCEs/year –Number of claims/year –Number of lawsuits/year

What to Benchmark Comparative PL claims (cont.) –Number of closed cases With settlement or judgment Without settlement or judgment –Amount(s) reserved

Benefits of Benchmarking Summary reports –Tracking & trending Average costs incurred as a function of claims Legal costs vs. plaintiff costs Number of claims/insured physician Number of claims/insured bed Number of claims/1,000 patients

Benchmarking Leads to Studies Frequency of claims –Aggregate stop loss Severity of claims –Specific stop loss

Ultimately… Benchmarking  Control Costs

Risk Management Areas Applicable to Benchmarking Employee satisfaction as a function of education & training opportunities Risk financing cost comparisons Workers’ compensation claims as a function of implementing an EAP Infection control as a function of incentives for an infection free environment

Risk Management Areas Applicable to Benchmarking Incident reporting comparisons per quarter Productivity measures as a function of incentives for production of billable services Patient satisfaction as a function of compliance with organizational quality standards

Risk Management Areas Applicable to Benchmarking Patient complaint resolution Safety & security compliance

What Must Be in Place to Facilitate Benchmarking Program Administration support is essential Must determine in advance what activities or processes are to be benchmarked Determine processes within activities & processes being benchmarked

What Must Be in Place to Facilitate Benchmarking Program Determine who performs activity or process well Develop data collection method(s) Compare performance against a standard Determine changes required

What Must Be in Place to Facilitate Benchmarking Program Plan ways to implement changes Monitor results of changes which are implemented