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									MMA Preparedness Survey

Roberta Buell, MBA
Patricia Falconer, MBA
ANCO Consultants
Today’s Agenda
   Project Objectives
   MMA Revenue Loss Projections
   “Underwater” Drugs Compared to First
    Quarter ASP + 6%
   E&M Audits and Profiling
   Superbill Issues
   Charge Issues
   Accounts Receivable
   Action Items
   Estimate MMA revenue reduction
   Identify potential drugs that may
    be “underwater”.
   Determine quality of E&M coding
    and documentation.
   Assess charge profiles and accounts
    receivable management.
   Create action items to assist
    practices cope with 2005 changes.
Profile of Practices

   All Located in Northern California
   Practice Size Ranges from 1 to 11
   Average Practice Revenue of $11.2
MMA Model
   Compared reimbursement data for 21 ASP drugs
    published by CMS for Q1 2004 with current 2004
   Reduction of drug administration reimbursement
    from the 32% transitional rate to 3% in 2005
   Reimbursement increase of 1.5 % for E&M
   Scenario 1: 100% of payers convert to the MMA
    reimbursement methodology
   Scenario 2: Only Medicare segment converts to
    MMA reimbursement methodology.
MMA Results Scenario 1
All Payers

   Average Practice Revenue Reduction
    for Drug Reimbursement =
   Average Practice Revenue Loss on
    Drug Administration =$237,000
   Average Total Revenue Loss per
    Physician = $206,000
MMA Results Scenario 2
Medicare Only

   Average Practice Revenue Reduction
    for Practice = $337,000
   Average Total Revenue Loss per
    Physician = $101,000
MMA Results
   Average Percentage of Practice Revenue
    Lost Scenario 1 = 8%
   Range of % of Practice Revenue Lost
    Scenario 1 = 4-12%
   Average Percentage of Practice Revenue
    Lost Scenario 2 = 4%
   Range of % of Practice Revenue Lost
    Scenario 2 = 2-6%
   Cash profit impacts were far more
    profound, but profit calculations were
    quite variable.
MMA Results
   What makes the difference?
       Payer Mix
       Drug and Administration revenue relative to
        other revenue from E&M, research, legal,
        and/or medical directorships.
       Specific drug mix in terms of brand vs.
        generics such as paclitaxel and pamidronate.
       Volume of growth factors.
       Volume of Lupron and Zoladex
       Collected revenues
Potential “Underwater” Drugs
   Practice drug acquisition costs do NOT include
    accrued rebates!
   Drug reimbursement based on Q1 ASP.
   Drugs where acquisition cost exceeded ASP
       Taxotere
       Gemzar
       Procrit
       Lupron
       Zoladex
       Navelbine
       Pamidronate
       Camptosar
       Herceptin
Drug Purchasing

   Prices were truly variable. Best
    prices were not always contingent
    on practice size.
   Everyone thinks they have the best
    deal, but the best deals take effort
    by your staff.
   Best prices achieved by purchasing
    from multiple sources.
Evaluation & Management

   Documentation Audit
       Number of charts audited = 169
       Average Office Visit Error Rate (99212-
        99215) = 36%
       Average Office Consult Error Rate
        (99241-99245) = 52%
       Average Overall Error Rate = 49%
Evaluation & Management

   Common Problems:
       Consults
          Definition—what is a consult?
          ROS in the history

          PFSH in the history

          8+ organ systems in the physical

          High level decision-making in Level 5s
Evaluation & Management

   Common Problems
       Office Visits (99212-99215)
          Modifier -25 „separately identifiable‟
          Legibility

          Chief complaint

          Missing notes or dictation

          Mis-matched dates of service
Evaluation & Management
   Avoiding Common Problems
       Read E&M guidelines once per year at minimum
       Make sure each of your consults notes document the
        referring MD, their request for your consult, and that you
        are conveying your advice and treatment plan.
       Dictate or type your notes. Dictate your note right after the
        visit and charge for the service based on your dictation.
       Use a consistent template matching AMA/CMS guidelines.
        Note ‘non-contributory’ (history) or within normal limits
        (physical) in areas that you have checked.
       Make sure all tests, path reports, and differential
        treatments considered are documented—particularly in
        high-level services.
       Do not use complicated charting systems like pasting in
        notes for each date. This causes backlogs and filing
Evaluation & Management

   Following this slide are:
       Northern California practices versus
        2002 Medicare medical oncology
        profiles for:
          Office visits
          Consults
   Office Visit Profile
                                OFFICE VISITS VS. MEDICARE 2002





% OF eNCOUNTERS                                                            MC % of
                                                                           ANCO %



                        99212     99213                    99214   99215
            Consult Profile
                                      OFFICE CONSULTS VS MEDICARE 2002





% OF SERVICES                                                                            MC % of

                30%                                                                      ANCO %



                      99241   99242                  99243               99244   99245
Evaluation & Management
   Northern California Profile:
       Aggressive coding—this is fine as long
        as your patients are complex, have a
        cancer (not anemia) diagnosis, and
        your charts are organized and legible.
       Clustering—consistent billing of
        Established Patient Office Visits at Level
        4 and Level 5. This acceptable as long
        as the documentation matches the
        level of service. This coding pattern
        may attract attention.
   Common Problems
       If your profile shows clustering, you must have
        all levels of service on Superbills.
       Include 99271-99274 for confirmatory
        consults. Use them for second opinions.
       Include 36550 for de-clotting of ports.
        Medicare pays for this!
       Include 36540 for blood draws through a port.
        Privates pay for this.
       Investigate whether your private payers will
        pay for a facility fee for 96549.
New CPT and HCPCS Codes

   Make sure any new CPT and HCPCS
    codes for 2005 are set up in your
    billing system and reflected on your
    Superbill before January 1, 2005.
Accounts Receivable

   Average Total Account Receivable
    =3 Million
   Average % Accounts Receivable
    over 90 days old = 25%
   Average months outstanding =2.2
Accounts Receivable
   Common Issues
       No Pre-Certification process
       No financial plan established with patients prior
        to treatment
       No procedure for routine collection of patient
        co-payments at the time of service
       Poor management of A/R
       Employee turn-over
       Poor organization, training, and delegation of
        responsibilities to business office staff
       No physician notification of diagnosis and/or
        therapy change prior to treatment
Action Items
   Establish Pre-Certification Process
       All patients treatment reviewed for treatment
        compared with diagnosis. Is diagnosis FDA
        approved or Compendia supported? Use the MOASC
        Drug Grid as a tool.
       All patients insurance must be verified prior to
        treatment. Benefits, co-payments, authorization
        requirements should be determined.
       Patient should be advised of out of pocket costs.
       Payment arrangements need to be made. Get a
        credit card on file.
       Advanced Beneficiary Notice signed in cases where
        denial is probable and/or you think that drug will be
        paid for my someone other than Medicare.
Action Items

   Evaluate Drug Purchasing and
       Average time to collect was 68 days.
       Weigh drug cost reduction benefit for
        shorter payment terms with financial
        consequence of drug inventory
       Decrease your A/R days
Action Items
   Effective Accounts Receivable Management
       Make sure your outstanding Medicare A/R is
        collectable. Medicare pays within 14 days for
        clean claims. If there is Medicare A/R over 45
        days old, you have a problem or these accounts
        may not be transferred to the supplemental
        insurance or patient.
       Have physicians evaluate the denials that occur
        on a frequent basis. This way, they can see why
        money is not coming in the door. Is it a billing or
        clinical problem?
       Make A/R a centerpiece of your management
        meetings. Ensure you know what the status is
        and that cash never waivers. Some of you will
        not survive without better cash flow
Action Items
   Data Management
       Review Management Reports Monthly
           Accounts Receivable Aging

           Productivity Reports

           Financial Statements

       Invest In Practice Management Software
       Use data to evaluate important practice bench
        marks, i.e. profit per physician, injections and
        infusion hours billed per MD, infusion hours
        billed per Nurse per month, hours of infusion
        per chair, and $ collected per month per
Action Items

   Proper Documentation and Coding
       Quarterly Evaluation & Management
       Review Productivity Reports for Coding
       Group Practices are Liable for All
Action Items

   Ensure that Nurses Manage:
       Inventory
       Charge capture
       Proper documentation of “Incident to”
        services per Medicare requirements.
       Cost effective strategies to deliver care
       Purchasing
What We Learned
   Most practices will survive but physician
    income will decrease.
   Managing cash will be critical to ensure
    successful operations next year.
   Practices need to assess and use data
    more effectively.
   Nurses need to “own” the documentation
    and reimbursement process for drug
   Physicians will need to play a more active
    and interventional role in the financial
    management of their practices.

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