Pinnacle Blog

  • Women’s Network – Women in Finance and Valuation: Where Are the Numbers?">

    Women’s Network – Women in Finance and Valuation: Where Are the Numbers?

    By Allison Carty, JD, MBA

    In collaboration with AHLA’s Women’s Council, we take a look at how to engage talented women leaders within the healthcare valuation industry.

    AHLA_Connections_April 2021_Allison Carty

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  • 2021 Provider Benchmark Surveys – What’s the Covid Impact?">

    2021 Provider Benchmark Surveys – What’s the Covid Impact?

    Background

    The year 2020 was one characterized as an upheaval across the globe given the impact of Covid-19.  The effect of the pandemic on the healthcare industry was particularly notable.  Part of the reason is of course the industry’s close proximity to the virus; however, the closures of many office-based businesses (including medical operations) and cancellations on elective procedures during the apex of the crisis resulted in a further impact amongst the healthcare world.  While states imposed various mandates across the country, patient reticence also played a role in the decline in healthcare volumes.  With tele-health still in its early stages (pre-pandemic), many practices and facilities were ill-equipped to quickly pivot E&M visits to a remote model.  Likewise, particularly with medical and surgical specialties, a large volume drop occurred given the temporary ban(s) on elective procedures.

    Reacting to the pandemic and the impact on patient volumes, many entities froze compensation for providers during Covid.  Particularly for those providers on a production-based compensation model, organizations aimed to mitigate the impact of the pandemic.  The simultaneous freezing of compensation to hold providers at pre-pandemic levels along with falling production due to declining patient demand and bans on elective procedures caused a skewed impact on resulting metrics for the year.  Specifically, annual metrics for compensation remained relatively steady while annual metrics for production (e.g., work RVUs and collections) declined.  The result of these circumstances is a distortion between provider compensation and production data.  Of note, when using both compensation and production data for benchmarking purposes, a material change to one of these “input (i.e., annual) metrics” particularly affects the resultant “relational metrics”.  For example, in the instance of Covid, when compensation remains level but production declines, the resulting compensation per work RVU shows a notable spike.  In addition, other benchmarks such as physician losses may be unduly impacted as a result of Covid due to the same freezes in compensation and a decline in volume and revenue.

    As a result of these collective facts, care must be taken in reviewing and utilizing 2021 provider benchmarks for fair market value review, performance evaluation, or other purposes, as they are based on 2020 (i.e., very likely skewed) data.  While year over year changes can exist within the surveys, the unprecedented closures and societal impact of Covid-19 created a unique “force-majeure-like” effect on typically reliable benchmark metrics.  To-date, MGMA remains the only provider benchmark survey that has released its 2021 survey.  While we expect the effect across the 2020 data for other industry surveys to be similar, a high-level review of the MGMA data highlights some preliminary insights.  Outlined below is an overview of MGMA’s observations as well as Pinnacle’s initial recommendations and guidance as related to the review and use of the 2021 provider compensation surveys.

    Insights from MGMA

    As previously mentioned, MGMA remains the only provider benchmark survey that has released its 2021 survey.  In conjunction with that release, MGMA published a summary aimed to address the impact of Covid, entitled “Quantifying Covid-19 – Measuring the Pandemic’s Impact on Medical Practices.”  The overview summarized MGMA’s collection of monthly data during calendar year (“CY”) 2020 to quantify the impact of Covid.  Respondent sample varied from month to month and while there are some interesting observations related to the respondent pool, some overarching themes underscore what the industry recognized from a high-level standpoint.  In particular, MGMA highlighted some specific statistics related to declining volume, including the fact that 71% of practices reported a drop in patient volume of 50% or more (by early April 2020) and that work RVUs hit their lowest level in April 2020.  MGMA further reports that by June 2020, volumes began to rebound, with nonsurgical specialists reporting the largest decrease and increase, respectively.

    In addition to commentary on decreased volume, MGMA’s summary also references the fact that providers’ type of compensation model affected the impact on overall compensation levels (i.e., guaranteed salary vs. production-based models).  In addition to the freezes on provider compensation referenced herein (i.e., for practices affiliated with health systems), MGMA also highlights that fact that some provider compensation within medical practices was paid through Paycheck Protection Program (“PPP”) loans, Health and Human Services (“HHS”) stimulus funds, or other government relief efforts.  Further, MGMA emphasizes the expense side of the equation, pointing out that the demand for cleaning supplies and personal protective equipment (“PPE”) spiked in 2020, resulting in increased costs during a time when revenue/patient volume was on the decline.  This fact further exacerbated the impact on declining resultant collections (i.e., increased operating costs).

    Interestingly, MGMA points out that not all the news with medical practices was negative.  They report that while PPE costs increased, some practices curtailed spending in other areas and decreased in-person visits to mitigate the impact on rising operating expenses.  In addition, MGMA highlighted the fact that many practices addressed declining patient volumes with initiatives that included pivoting to telehealth, revisiting payment and collections policies, and enhancing patient communication through practice website and social media tools.  One issue, however, whose impact is yet to be seen in changes to survey data is that MGMA indirectly stresses the overall influence on an already-strained physician supply.  Specifically, they report that 28% of healthcare leaders reported unexpected physician retirement in the past year.  While that fact may not have a direct influence on 2020 data, the effects of Covid could continue to influence data in years to come.

    With regard to its 2021 survey, MGMA has commented that it has not made any adjustments to the 2020 data to account for the pandemic.  MGMA specifically stated that it collected and reported on the 2021 surveys (based on 2020 data) in the same manner as previous years.  MGMA does, however, state that it recommends referring to both the 2020 MGMA survey and the 2021 MGMA survey for data review purposes.

    Pinnacle Guidance & Preliminary Recommendations

    While the industry has known there would be some measure of impact to 2020 provider compensation and production data, the issue becomes how to adjust or normalize the information to support compliant arrangements and leadership decision-making.  Further complicating matters in addition to the pandemic, changes in the 2021 Medicare Physician Fee Schedule (“MPFS”) on both work RVU values and reimbursement has added additional complexities on go-forward performance projections, contract language, physician expectations, and sustainable arrangements (also refer to https://askphc.com/medicare-physician-fee-schedule-changes-what-now/).

    In addition to MGMA’s commentary on the matter, Pinnacle performed a preliminary review of the data to assess year over year and multi-year trends on compensation, production, and resulting relational metrics.  This analysis indicates findings consistent with the trends described herein – consistent total/annual compensation with a notable decline in production on both work RVU and collections bases.  The result of these dynamics is the predictable outcome on relational metrics – an inordinate spike on the data, such as compensation per work RVU and compensation as a percent of collections.  These results reflect the emergency-like status of 2020 given the effects of Covid – while patient volume decline, total compensation was favorably supported (through both health system affiliations and government relief efforts) to promote provider retention and long-term continuity of patient care.

    Given the unique status of 2020 as a societal health crisis, the effect on provider data reflects somewhat artificial results.  Unless reviewed in isolation (i.e., comparing 2020 production amongst like providers), reliance on 2021 surveys – particularly for relational metrics such as compensation per work RVU – could pose an area of risk.  Many health systems are already discussing ways to best address these factors within their organizations.  In fact, Pinnacle’s FMV Consulting Guide advisory committee recently discussed the impact to benchmark data, with the advisory committee members largely agreeing that their organizations recognize the impact in methodology review and the need for adjustments in data use and physician discussions.  In addition to these and other client discussions, Pinnacle is performing a survey in order to assess the reaction and planning amongst healthcare organizations.  Please follow a link to participate in the survey here.

    In the interim, Pinnacle would advise prudence in utilizing 2021 provider benchmark surveys.  Given the unique circumstances, these resources may not provide adequate stand-alone decision support for application to compensation agreements.  Organizations must understand the magnitude of the pandemic and MPFS changes and their impact on physician arrangements.  We would advise continued thoughtfulness in communication strategies with physician groups, including rationale for any adjustments, as well as the impact on the industry and efforts to evaluate ongoing compliance.  While many factors have changed over the last year, the approach to provider arrangements must continue to be supported by fair market value and commercial reasonableness.

    Pinnacle will continue to monitor additional survey resources as they become available and will publish additional insights on an ongoing basis.  We will also be publishing the results of the above-mentioned survey and will conduct a webinar as related to the results and the impact to healthcare organizations.  Please check back as updates are ongoing in this area of healthcare compliance.

    For additional information on this blog, please contact Allison Carty at ACarty@AskPHC.com.

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  • Evaluation and Management Office/Clinic Visit Documentation Detour: A Bumpy Road Ahead (Medicare and Medicaid)">

    Evaluation and Management Office/Clinic Visit Documentation Detour: A Bumpy Road Ahead (Medicare and Medicaid)

    Autumn Hull and Kelly Loya published an article for the MiMGMA Spring 2021 Newsletter.

    MiMGMA March Spring 2021 Newsletter

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  • Managing Corporate Compliance in ‘Hybrid’ Healthcare Organizations">

    Managing Corporate Compliance in ‘Hybrid’ Healthcare Organizations

    Establishing an effective corporate compliance program, then managing and maintaining the program, is a complex and often difficult proposition for the traditional health care provider or health system.  When the health system is part of a “hybrid” organization, those tasks amplify in complexity to connect traditional care delivery to a completely parallel concept business workflow.  While business and health care compliance have underlying principal similarities to ‘always do the right thing’ regardless of the service being delivered, compliance needs for the health care delivery business component can be vastly different from the needs of the business entity.  In some cases, there may even be separate compliance plans and expectations for each business entity component within the larger organization.

    The seven (plus one) elements of an effective compliance program are well known.

    • Compliance Officer / Commitment to Compliance Program (“Tone from the Top”)
    • Written Standards (e.g., Compliance Plan, Code of Conduct, Policies and Procedures, etc.)
    • Training / Education
    • Audit
    • Open Communication / Hotline
    • Investigation of Complaints
    • Well-Publicized Disciplinary Standards
    • Risk Assessments / Risk Management

    However, some of the elements may not uniformly fit every aspect of the larger healthcare organization.  Specifically, compliance plan focus, policies and procedures, training and education, audits and risk assessments may be different.

    Here are a few examples of these types of hybrid entities below.

    Health System and Charitable Foundation

    A corporate compliance program for a health system includes training and education geared toward healthcare rules and regulations on scopes of practice, provision of care, and billing and coding claims, at a minimum.  These types and amounts of training are not appropriate for a charitable foundation staff or Board of Trustees.  Additionally, the most appropriate and effective training formats may be significantly different (e.g., online vs. in-person.)  While there may be some cross-over in topics, such as Anti-Kickback Statute issues, among others, these are few.

    Audits and risk assessments of the entities will focus on quite different things as well, similar to the training topics.

    Health System and University

    As opposed to healthcare systems, university compliance plans may focus on academic issues, government issues, athletic issues, Title IX, and others. These are not the type of issues one might expect to see in a typical health system compliance plan.

    Health System and Private Equity Firm

    Private equity firms must address Sarbanes-Oxley Act requirements, as well as SEC regulations, if publicly traded.  The focus of the compliance efforts for this part of an entity would be vastly different in terms of training and audits.

    It is important for these entities to find common threads to support each other in their respective compliance functions and obligations.  Be aware of the differences, but make sure to address compliance in all entities.  Focusing on communication between the entities to eliminate duplication of effort and to leverage resources appropriately is one key to success.

    Please contact Allison K. Luke, JD, CHC, Executive Consultant, Pinnacle Enterprise Risk Consulting Services, at aluke@askphc.com with any comments or questions.

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  • Six Things Every Rural Hospital CEO Must Do: Part Six">

    Six Things Every Rural Hospital CEO Must Do: Part Six

    Rural hospitals are closing at a record pace, and many of the reasons why could have been avoided.

     

    By Robert Thorn, MBA, FACHE

    Director, Pinnacle Healthcare Consulting

    Last week, in Part Five of this six-part series on “we examined Topic #5, Telepharmacy.  This week, in Part Six, we examine Board Education, and how being accountable for care in a community requires the ability to make informed decisions.

    Part Six: Board Education

    I once had the opportunity to hear a legendary, now since-retired hospital CEO-turned-university professor give a presentation to a group of Critical Access Hospital boards with whom I was working.  Once each year, at the least, I would bring rural hospital boards together for an educational summit where they could put community differences aside (who won the most recent football game could be cause for some very hard feelings), to learn about their roles and responsibilities as board members.  This guest lecturer started his presentation with a simple question: “Who is responsible for the care provided in your community?”  He went around the room to hear the different answers.  Most people said it was the doctors, thinking that was the obvious answer.  Some said it was the nurses, who “really do the work” prescribed by the doctors.  And, others gave answers ranging from the CEO, who brings all the “moving parts” together, to the EVS staff, who keep the environment clean and warm-looking, thus reassuring patients they came to the right place for their care.  While the guest lecturer agreed with all these answers, that each was responsible for their pieces of the puzzle, he asked again which one position, out of all the people in the organization, was responsible for the care provided in the community.  The consensus went to the doctors.

    The gentleman chuckled and smiled, and slowly walked to a front row table, slamming his hand down, jolting even those in the back row.  “WRONG!,” he exclaimed.  “Look around.  Who do you see?  A Board member.  The answer lies in this room.  Board members are ultimately responsible for the care.  After all, do they not sign-off on every member of the medical staff, attesting to the skills and education of each?  Do they not set strategy, instruct the CEO on identifying the most existential matters, and approve budgets from which to operate, provide services and ensure new equipment can be purchased?  Yes, each one of you has the ultimate responsibility for the care provided in your community; and, the accountability and legal responsibility that goes with it.”

    The room went silent.  I was starting to wonder what I had done, inviting the board members into their own private episode of “Scared Straight.”  However, it was a very effective reminder, almost a re-booting of these boards, to understand what their individual and collective purposes were.  He now had their attention, and they spent the day learning about topics before which many had no knowledge, and to whet their appetite for learning more.

    This one education session hit me like a ton of bricks.  For most people in the room, this one day was their only real education as board members.  Compare that one day to the education efforts of the organizations these board members govern, where licensed professionals are required to maintain skills and demonstrate competencies.  However, board members, who are often lay people, serve on their boards for a variety of reasons.  Some are elected, others appointed, but rarely are they required to demonstrate industry knowledge or preparedness.  Rather, by design, they represent all walks of life, and often join and start serving without much more than a brief orientation.  According to a survey by the American Hospital Association (2019), only 29% of hospitals and health systems said they required continuing education for board members in the last year.  Some states, such as Georgia, now require board members, CEOs and CFOs to receive continuing education in Healthcare Finance.  While one could argue that the subject of Finance is only one aspect of healthcare, an often complex and confusing one at that, it is a start.  Compliance, Quality and other important subjects will hopefully follow; but starting with Finance is certainly understandable, as it has been the one area where rural hospitals have been struggling, and a leading cause of rural hospital closures.  Researchers at the University of Washington (2019) examined rural hospitals and found that while the closings of urban hospitals had no impact on their surrounding communities, rural hospital closings caused their populations to see mortality rates rise 5.9 percent. In the case of the State of Georgia, it has recognized that in order to hold a fiduciary responsibility to an organization, and an accountability for the care provided in their communities, board members must have an understanding of how its system works.  Board education is the way that State plans to address it.

    To those serving rural and Critical Access Hospitals outside of Georgia, we can raise the bar from the 29% of organizations that require board education.  It does not take a lot of money to bring in an expert such as the guest lecturer used in this example.  State hospital associations and other groups offer sessions for boards regularly.  Yet, before COVID, when I attended these conferences, most of the participants I saw were hospital executives and possibly a small delegation of board members, usually those whose turn it was to attend that year.  Now, with the pandemic upon us, more and more of these educational conferences are being offered virtually.  Even if the registration cost is the same as it had been for in-person conferences, there is no travel, lodging or meals out with a virtual conference.  It does not get much simpler, or cheaper, than this.  As board members often serve as unpaid volunteers, virtual conferences can help keep them from missing work, which may have been a reason why just over a quarter of hospitals have not required continuing board education.

    I am not suggesting a board become more educated to manage the hospital and possibly assume responsibilities of the CEO; rather, just the opposite, to support the CEO in collectively making informed, well-educated decisions.  A strong and well-educated board will know the difference between governance and management.  As challenges continue to face rural and Critical Access Hospitals, which are closing at a record pace, now more than ever is the time to invest in board education.  By educating boards, the people at the tip of the accountability spear, the stage is set that the right decisions are being made for the right reasons by the right people at the right time.

    If you would like to consider board education options for your rural or Critical Access Hospital, please let me know and I will be glad to speak with you.  I may be reached at rthorn@askphc.com or (720) 598-1443.

     

     

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  • Evaluation and Management Office/Clinic Visit Documentation Detour: A Bumpy Road Ahead (Medicare and Medicaid)">

    Evaluation and Management Office/Clinic Visit Documentation Detour: A Bumpy Road Ahead (Medicare and Medicaid)

    Change is frequently difficult; however, without it, progress is stifled.  As part of the Medicare Physician Fee Schedule Final Rule, in 2019 The Centers for Medicare and Medicaid Services (“CMS”) announced significant revisions are coming for reporting physician time and effort as it pertains to office / outpatient Evaluation and Management (“E/M”) visit services.  These changes are tied to the 2018 ‘Patients over Paperwork’ initiative and they bring the biggest shift in documentation and reporting visit services since the early 1990s.  Below we will discuss these changes and how to manage the necessary adjustments.

    The COVID-19 public health emergency (“PHE”) took center stage in 2020.  As a result, CMS has more widely embraced telehealth, phone visits, and other distanced healthcare options in the name of public safety.  Despite the upheaval, changes impacting the new 2021 E/M guidelines for coding and reporting did become effective January 1, 2021, with very little fanfare.  Despite being overshadowed by the PHE, the new rules finalized and published by CMS   require physicians implement these important changes now.

    Documentation and coding guidelines have not changed for E/M services in the past twenty-three (23) years.  To put this into perspective, if we consider a physician’s career averages thirty-five to forty (35-40) years, providers who began their career in 1992 could realistically be facing retirement soon and must learn yet another major change in how to document their most frequently billed services!  On November 1, 2018, CMS finalized bold proposals addressing provider burnout and their intent to provide clinicians immediate relief from excessive paperwork tied to outdated billing practices.  Healthcare professionals impacted by these processes will find this requires a significant shift in their methodology.  Though this change will have a major impact on almost every specialty practice in the United States, other than in coding and auditing circles, little attention has been given to the anticipated changes in documentation, code assignments, and the corresponding reimbursements for these commonly utilized codes.  Unless the provider organization has taken the initiative to prepare for these changes, providers may still be unaware of the change and impact this may have on their coding and documentation practices.

    E/M visits are reimbursed less than many diagnostic and procedure codes; however, E/M codes are by far the most common charges submitted regardless of medical specialty or billing provider type.  According to CMS’ interim final rule (“IFR”) outlining changes through CY2020 and those planned for CY2021, in total, E/M visits of all types represent approximately 40% of allowed charges for physician fee schedule (“PFS”) services; and office/outpatient E/M visits, in particular, comprise approximately 20% of allowed charges for PFS.

    A notable change includes reducing the impact of the history and examination component for office / outpatient E/M code selection.  This change allows the E/M level to be selected solely upon medical-decision-making or time.  Without being in the trenches of coding, billing, and auditing it can be difficult to grasp how these changes could significantly impact revenue, compliance, quality, and even patient care.  To some degree, every provider offering outpatient / office services will be affected.

    What effects are we talking about exactly?  These new guidelines will have far-reaching effects in outpatient professional-fee clinics, and offices.  The new documentation rules establish new concepts and can be confusing to those who practice in more than the office / outpatient area, since the ‘old-school’ E/M documentation and coding logic will remain in place for all settings except outpatient clinics and office settings.  Now providers must learn a new way to document and value their services in their office / clinic but continue to apply old rules when delivering services outside of their office.  Imagine a  provider review during which both office / outpatient and inpatient services are scored for accuracy.  If the provider fails to remember to adjust their code selection based on the service area, it will result in decreased quality scores, provider frustration, possible missed revenue, additional staff time to make corrections and time spent on additional education efforts.

    Since there are no guarantees other carriers will follow suit, it is almost certain to lead to some level of confusion for providers.  Potential hazards include providers over- or under-valuing their visits,  providing inadequate documentation, overcompensating to meet new guidelines – and all while trying to treat a patient and keep their care first and foremost.  CMS’ recognition of the need to decrease paperwork burdens and allow greater focus on patient care is to be commended.  However, if providers lack the time or resources to prepare for the change it could have the polar-opposite effect.

    Information Highlights and What Next?

    Stepping Back: Reducing the Documentation Burden after January 1, 2019.

    In 2019, CMS released documentation guidelines indicating when relevant information is already documented in the medical record, practitioners may choose to focus their documentation on what has or has not changed since the last visit.  Providers need not re-record the defined list of required elements if there is evidence the practitioner reviewed the previous information and updated it as needed.

    New and established patient office / outpatient E/M visits do not require the practitioner to re-document the patient’s chief complaint and history that has already been entered by ancillary staff or the beneficiary.  The practitioner must document in the medical record that he or she reviewed and verified this information.

    Stepping Forward: Reducing the Impact of History and Exam in 2021

    Continuing CMS’ 2019 focus on providing guidelines to reduce physician burden, 2021 rules indicate ancillary staff may document relevant history and providers may include an examination pertinent to the current encounter; however, using the new “MDM-only method,” the history and exam would not be counted towards the level reported.  This will allow practitioners to focus their documentation on what has or has not changed since the last visit and code based on MDM or time.

    Without diving into coding jargon, the new 2021 medical-decision-making methodology simply disperses the former, separate table of risk throughout the diagnosis and data portions, resulting in one table with three (3) columns instead of three (3) distinct tables for medical decision making.  This is a significant change from the prior table structure and will be used differently.

    CMS will engage in further conversations with the public over the next two (2) years to further refine policies.

    Other Changes to CMS Payment Rates and Logic in 2021

    There was discussion CMS would finalize a single payment rate for E/M levels two through four (2-4) for office/outpatient visits: one rate for new patients and one rate for established patients; however, that currently appears to be on hold.  For 2021, CMS has removed the lowest level new patient visit code and slightly increased the values of the others; in addition, there will be new codes and requirements for related prolonged services.  All of the time requirements for each of the codes have been altered in the code definitions to accommodate billing on time, clarify what time can be counted and how it must be documented.

    What should you do now to implement the change?

    Start by reviewing the final rule at the link below.  Review or attend Medicare Administrative Contractors (“MAC”) education sessions or review their published information for providers.  Focus on how the medical-decision-making scoring and documentation requirements must appear in the record and what documentation may no longer be needed by reviewing the new MDM table using the American Medical Association link below.  Ensure coding and auditing staff have access to the appropriate resources and hold provider preparation meetings.  We have spoken to several providers who were unaware of the E/M changes described as of the writing of this article!

    The 2021 E/M rules are now the new standard, changing how office/outpatient E/M code levels are reached and the corresponding reimbursement for these codes.

    What Changes?

    • Logic and leveling will affect all medical specialties
    • Old E/M guidelines to remain in place for all other settings, e.g., inpatient visits
    • New codes and requirements for related prolonged services
    • Ancillary staff may document relevant patient history
    • Billing providers may include an examination pertinent to the current encounter
    • Documented history and examination of E/M office/outpatient visit not counted towards visit leveling
    • Code selection solely based on medical decision making or time
    • Disperses the table of risk throughout the diagnosis and data portions, resulting in one table with three (3) columns instead of three (3) distinct tables for medical decision making
    • CMS removes the lowest level new patient visit code and slightly increases values of the others

    Challenges

    • Providers and coders will need to know when (and where) to use these new E/M guidelines versus old E/M guidelines
    • While the codes and definitions change in CPT text, it is unclear if all other payers will follow the new CMS scoring and leveling requirements
    • Preparing for major change during a health care crisis, e.g., orienting providers to the guidelines, providing staff education and additions / revisions to some documentation templates depending on how and which requirements will be followed across payors

    For further discussion, questions, or information about our provider coding and documentation training services please Contact Us Online or give our coding compliance experts a call at 303-801-0111.

    About Pinnacle:

    Pinnacle Integrated Coding Solutions (PICS) offers experienced and knowledgeable coding resources with broad experience in revenue cycle and reimbursement compliance.  Our team serves clients nationwide with coding reviews, education & training services for providers and coders, specialized coding services, and much more.  Our coders, auditors and leadership are trusted advisors to hospitals, physician practices, ambulatory surgery centers and health systems looking to improve their business performance, reduce their risk, and enhance compliance.

    Pinnacle Enterprise Risk Consulting Services (PERCS) provides compliance, litigation support, internal audit, medical necessity review, revenue cycle improvement and Independent Review Organization (IRO) services.

    References:

    Complete 2018 Final Rule

    https://www.govinfo.gov/content/pkg/FR-2018-11-23/pdf/2018-24170.pdf

    Most recent IFR from CMS (for 42 CFR parts 410, 414, 415, 423, 424, and 425)

    https://www.govinfo.gov/content/pkg/FR-2020-12-28/pdf/2020-26815.pdf

    American Medical Association overview

    https://www.ama-assn.org/system/files/2019-06/cpt-office-prolonged-svs-code-changes.pdf

    BY:

    Autumn Hull, CPMA, CPC, CEMC, CPAR

    Supervisor of Professional Audit Services

    Kelly Loya, CPhT, CPC-I, CHC, CRMA

    Associate Partner

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  • Six Things Every Rural Hospital CEO Must Do: Part Five">

    Six Things Every Rural Hospital CEO Must Do: Part Five

    Rural hospitals are closing at a record pace, and many of the reasons why could have been avoided.

     

    By Robert Thorn, MBA, FACHE

    Director, Pinnacle Healthcare Consulting

     

    Last week, in Part Four of this six-part series on “Six Things Every Rural Hospital CEO Must Do,” we examined Topic #4, Telehealth.  This week, in Part Five, we will look at Telepharmacy and how it can become a routine and relied-upon part of rural healthcare.

    Part Five: Telepharmacy

    As I travel to rural communities and learn more about how they operate, one constant challenge I see is related to in-house pharmacies for Critical Access Hospitals (CAHs).  Many of these CAHs are too small to justify a pharmacist on staff; rather, dispensing of medications is often left to one or two well-trusted nurses.  These nurses are sometimes supported by a traveling pharmacist or retail pharmacist in the community, who ensures medication inventories are monitored and that everything is properly accounted for.  However, while these pharmacists provide a valuable and much needed service to their community hospitals, the number of rural pharmacists is declining.  Consequently, many of them do not consult with physicians prospectively and review and verify orders prior to dispensing, as they commonly do in larger hospitals that have pharmacists in-house.

    Just as primary care physicians may send EKGs to a cardiologist or images to a radiologist, medication orders can be securely sent electronically to a remotely-located clinical pharmacist for review.  And, the improvement in coordination of care can be felt very early on.  Specifically, when one particular telepharmacy program was started by a regional tertiary medical center with five Critical Access Hospitals, every time a new hospital was brought on-line, there was a pharmacist-initiated intervention within the first two weeks.  These were all good, quality rural hospitals with quality physicians and staff.  However, when orders were passed in front of the knowing eyes of a clinical pharmacist for review, in real-time prior to dispensing, things were seen that may have been previously missed.  And, once you go to that level of care, you will wonder why you had not done it sooner (and possibly, shudder…).  Besides patient safety, the improvements you will see with the involvement of a clinical pharmacist in real-time consultations, review and verification of orders, include the possibility of less waste from use of lesser-effective medications.

    If you would like to discuss how to set up a telepharmacy program in your hospital, please let me know and I would be glad to speak with you.  I may be reached at rthorn@askphc.com.

     

    In next week’s edition of this six-part series, we will explore our final subject, topic #6 of the “Six Things Every Rural Hospital CEO Must Do.”  I hope you will join me.  Should you have any questions in the meantime, please feel free to contact me at rthorn@askphc.com or (720) 598-1443.

     

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  • Six Things Every Rural Hospital CEO Must Do: Part Four">

    Six Things Every Rural Hospital CEO Must Do: Part Four

    Rural hospitals are closing at a record pace, and many of the reasons why could have been avoided.

     

    By Robert Thorn, MBA, FACHE

    Director, Pinnacle Healthcare Consulting

     

    Last week, in Part Three of this six-part series on “Six Things Every Rural Hospital CEO Must Do,” we examined Topic #3, Strategic Planning.  This week, in Part Four, we will look at Telehealth, how it has become more commonplace due to the COVID-19 pandemic, and how it can remain a routine and relied-upon part of rural healthcare.

    Part Four: Telehealth

    With the introduction of COVID-19 into our world, providers have been scrambling to develop alternatives to people coming into the office to be seen.  The government cleared a lot of hurdles to allow providers and patients to see one another via video platforms.  Medicare even changed its restrictions for reimbursement; state licensure has at least been temporarily waived, as well.  Regardless of whether these changes are temporary or permanent, having a solid plan to provide safe alternatives for patients and doctors to use in getting together will be required to navigate the “new normal.”  Moving forward, it is the patients’ expectation that providers offer convenient, effective and secure telehealth options. So, where do you start?

    In my previous post, Part Two, “Physician Demand Analysis,” I wrote about the need to assess your medical community and identify where there may be opportunities for an increased presence of specialists.  While there can be an argument made that nothing is better than for a doctor and a patient to be in the same room at the same time, there is also an argument that can be made as to whether having a doctor and a patient in the same room is always a good idea.  Besides the COVID-19 pandemic, patients living in rural communities have other factors to consider, such as driving long distances, sometimes in questionable weather, and often having multiple appointments requiring multiple trips.  Therefore, if you have not done so already, it is time to assess your community’s medical staffing needs; and, based on these needs, determine which physician specialties are needed, and can they be supported through a virtual presence?  Do they need a face-to-face exam, or will data (medical test results, remote patient monitoring, images, etc.) prove to be more meaningful to the physician? Furthermore, where do opportunities lie for recurring treatments, such as dialysis?  Can they be coordinated and safely offered in a setting previously considered unacceptable because the specialist is not routinely physically present?  Telehealth has opened the door for rural hospitals to provide diagnostic and therapeutic services that could both benefit the patient through increased local access, and the hospital through an ability to offer services and retain the revenues that were going to another community.  It can also help position the hospital for value-based models of care, allowing the hospital to better manage its risk by addressing chronic conditions proactively and cost-effectively, rather than reactively and costly.  After all, telehealth is more than two-way video that has come into the limelight as a result of the COVID-19 pandemic.  It is yet another tool providing valuable information that providers can use to assess, treat and manage care, driving a more responsive approach and, in many cases, a higher quality outcome for the patient.  If you have not considered telehealth as a viable option for you community, or if the specialists to whom your physicians refer patients have not, please contact me and I would be glad to discuss options with you.  I may be reached at rthorn@askphc.com.

    In next week’s edition of this six-part series, we will explore Topic #5 of the “Six Things Every Rural Hospital CEO Must Do.”  I hope you will join me.  Should you have any questions in the meantime, please feel free to contact me at rthorn@askphc.com or (720) 598-1443.

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  • Medicare Physician Fee Schedule Changes – What Now?">

    Medicare Physician Fee Schedule Changes – What Now?

    By Allison Carty, JD, MBA

    Director, Pinnacle Healthcare Consulting

     

    Medicare Physician Fee Schedule Changes – What Now?

     

    An Introduction…

     

    As many in healthcare have been tracking, the Centers for Medicare & Medicaid Services (“CMS”) released the calendar year 2021 Medicare Physician Fee Schedule (“MPFS”) which contained key changes to evaluation and management (“E&M”) coding and documentation requirements.  These changes will have substantial compliance, coding and documentation, reimbursement, and compensation plan administration implications, including a notable impact on organizations that compensate physicians on a productivity model.  The question looms: how should organizations respond to the new rule?  How is your organization responding?

     

    Preliminary Observations and Options

     

    Based on the changes in the fee schedule, a few key observations are apparent:

    Preliminary Observations and Options

     

    Based on the changes in the fee schedule, a few key observations are apparent:

     

    • Physicians who are compensated on a per work relative value unit (“work RVU”) model may earn higher or lower compensation under the 2021 MPFS;
    • Specifically, physicians billing a notable amount of E&M codes on a work RVU model may meet their production threshold more quickly than in prior years;
    • Hospitals/employers may receive less reimbursement and thus greater losses unless changes are made to physician agreements (i.e., particularly with rising physician compensation); and,
    • Due to increased amounts of work RVUs under the new MPFS, physician compensation per work RVU may decrease if compensation remains similar to prior years.

     

    Because of these dynamics, some hospitals are considering adjustments to their physician arrangements to mitigate losses resulting from an environment characterized by rising physician compensation (i.e., due to increased work RVUs under the new MPFS) versus less incremental reimbursement.  Specifically, some hospitals are considering adjustments to physician compensation terms including increases in work RVU production thresholds and/or decreases in compensation per work RVU conversion rates. These same entities might also consider alternative forms of compensation to support specialists through affiliation agreements.

     

    In addition to these types of contractual changes, many hospitals and medical groups are in the process of determining a response for purposes of physician compensation plan administration.  For instance, many organizations are considering the following options for purposes of administering their contracts:

     

    • Retaining 2020 work RVU values;
    • Implementing 2021 work RVU values and absorbing the impact of the changes to reimbursement;
    • Implementing the 2021 work RVU values but adjusting the compensation per work RVU rate to offset the impact of the changes;
    • Moving away from a work RVU structure; or
    • Awaiting further legislation.

     

    Furthermore, some entities plan to make any changes quickly whereas others have yet to enter the planning phase to address the updates.  While most organizations have yet to make a definitive plan for how they will move forward, many are working to quantify the size of the impact, evaluate alternatives, or are seeking recommendations from internal or outside resources (legal counsel/consultants).

     

    How is Pinnacle Analyzing the Changes?

     

    Impact Assessment

    Pinnacle is currently working with several clients to assess the impact of the MPFS changes and to make recommendations for relevant physician compensation plans.  These analyses review the impact to both work RVUs and reimbursement based on the specialties and case mix of our individual clients.

     

    A Note on Benchmark Data

    In addition to the challenges inherent in the MPFS updates, these changes come on the heels of the COVID-19 pandemic, which is another factor that will undoubtedly have a material effect on benchmark data for physician compensation and production.  Using benchmark data without consideration of the impact of the MPFS changes may result in compensation that runs afoul of fair market value and/or commercial reasonableness requirements.

     

    Industry Survey

    Given the sweeping implications of the MPFS updates, Pinnacle is conducting a survey amongst our clients and contacts to determine how and when organizations plan to address these MPFS changes.  Results from the survey are still incoming; however, Pinnacle will publish an article which summarizes our findings and associated key takeaways.

     

    What’s the Current Takeaway?

     

    Think about what the MPFS changes mean for your physician contracts.  Pinnacle will continue to monitor regulatory updates and will publish our survey results in an upcoming article.  Please check back to review survey results and additional tools for assessing the impact to your organization.

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  • Six Things Every Rural Hospital CEO Must Do: Part Three">

    Six Things Every Rural Hospital CEO Must Do: Part Three

    By Robert Thorn, MBA, FACHE

     

    Director, Pinnacle Healthcare Consulting

     

    Last week, in Part Two of this six-part series on “Six Things Every Rural Hospital CEO Must Do,” we examined Topic #2, Physician Demand Analysis.  This week, in Part Three, we will look at the need for a Strategic Plan, and why it is an important tool every rural hospital CEO should leverage.

     

    Part Three: Strategic Planning

     

    One of the most common practices I see in rural hospitals is using the budget as the organization’s strategic plan, whether intentionally or by default.  However, for a budget to be truly effective, it should be based on strategies, which drive goals and tactics, and the resources to support them.  Planning assumptions, or premises, should be reviewed at least annually to drive each year’s budgets; and, if not annually, at least every two years a rural hospital should undergo a formal strategic planning process.  In today’s rapidly changing healthcare environment, other than planning for major capital expenditures, strategic planning windows of more than two years could result in missed opportunities, changes in the market and the need to respond to new payment models.  As an interim CEO who prepares an organization for its permanent leader, it is my job to walk the new leader, board, medical staff leaders and others through a post-leadership transition strategic planning process.  It serves as an excellent opportunity for the new CEO to get an overview of both internal and external factors, how well the organization is positioning itself and performing, and to confirm the strategies already in place are sound.  When a budget drives strategy, this opportunity does not exist.

    Regardless of whether your organization has conducted a strategic planning process in the past, has used the budgeting process to drive strategies, or is transitioning to a new leader, Pinnacle Healthcare Consulting can provide a strategic planning solution that both drives your budget as well as fits within it.  If you would like to discuss options, please let me know and I would be glad to speak with you.  I may be reached at rthorn@askphc.com.

    In next week’s edition of this six-part series, we will explore topic #4 of the “Six Things Every Rural Hospital CEO Must Do.”  I hope you will join me.  Should you have any questions in the meantime, please feel free to contact me at rthorn@askphc.org or (720) 598-1443.

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