Medical Practice Consulting

ABC ASSOCIATES, P.C.

PRACTICE ASSESSMENT

2

ASSESSMENT

As-sess-ment-noun

Dictionary.com

1. the act of assessing; appraisal; evaluation.

2. the act of judging or assessing a person or situation or event.

Fairfield Consultants

1. analyzes where a practice has been, where it wants to be and creates a blueprint on how to get there.

Random House Unabridged Dictionary 2006

3

METHODOLOGY USED

• Interview Providers And General Staff

• Observe Practice Operations• Analyze Pertinent Financial And Productivity

Information• Compare Actual Practice Results To Industry And

Other Standards

4

FINANCIAL• Increase Revenues

• Accounts Receivable

• Coding

• Fee Schedule

• Billing Function

• Ancillary Services

• Extender Productivity

OPERATIONAL• Organizational Structure

And Decision-Making

• Communication

• Staffing

REPRESENTATIVE PRACTICE ISSUES

FINANCIAL

6

ABC ASSOCIATES, P.C. FINANCIAL

FINDINGS

• Revenues Have Declined In Recent Years; However, They Can Be Increased.

• Accounts Receivable Aging Must Be Improved And Outstanding Monies Should Be Collected.

• While There May Be No Loss Of Revenue Due To General Under Coding, Additional Coding Training Is Essential.

• The Practice Fee Schedule Should Be Updated And Fee Increases Sought Where Possible.

7

ABC ASSOCIATES, P.C. FINANCIAL FINDINGS (cont.)

• A Billing Service Should Be Engaged.

• Ancillary Services Are Profitable.

• Extenders Should Be More Productive.

8

PROVIDERS

• Physicians Can Be More Productive.

• More Office Hours Should Be Made Available To

Patients (Early Morning, Evenings And Saturday).

• The Office Hours Provided By Extenders Exceed

Those Needed.

9

ABC ASSOCIATES, P.C. NET REVENUE ANALYSIS

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

NET REVENUES

PERIOD

2009201020112012 Annualized

2009 $4,715,928

2010 $4,444,864

2011 $3,452,808

2012 Annualized $4,143,370

Net Fee Revenue

Source: ABC Associates, P.C. Internal Data2012 Data Represent The Period January 1-October 31Annualized

10

REVENUE GROWTH

• Revenues Can Be Increased By:

• Increasing Physician Office Encounters

• Decreasing Physician Days Out Of Office

• Improving Collections Of Accounts Receivable

• Implementing A Practice Marketing Program

11

Source: MGMA Physician Compensation & Production Survey-2011 Report Based Upon 2010 DataABC Associates, P.C. Internal Data-Drs. A, B & C Ambulatory Encounters For Any Three Representative Months Of The Year Multiplied By Four

12

Doctors A & B Increased To MGMA MedianAssumes Each MD Office Visit Generates $70.00 Revenue (Primarily E&M Codes) Source: ABC Associates, P.C. Internal Data-CY 2012Assumes Each Lab Visit Generates $200.00 Source: ABC Associates, P.C. Internal Data-CY 2012Assumes A 3:1 Ratio (Office Visits To Lab Visit)

13Source: MGMA Physician Compensation & Production Survey-2011 Report Based Upon 2010 DataABC Associates, P.C. Internal Data

14

PHYSICIAN TIME OUT OF OFFICE ANALYSIS

Increase Weeks Worked To 75%Tile/90%Tile:One Week Two Weeks

Dr. A $10,000 $20,000Dr. B $11,000 $22,000

Dr. C $12,000 $24,000

Revenue Increase:

$33,000 $66,000

Source: ABC Associates, P.C. Internal Data Revenue Calculated By Using CY 2012 Data For Each Physician Divided By 46.

15

ACCOUNTS RECEIVABLE

• There Are Excessive Monies Uncollected In The 121+ Days Aging Category For Both Patients And Insurance Companies.

• Typically, Once Accounts Receivable Reach The 91 Day Aging Category, The Net Collection Ratio Can Decline To :

• 50% Of The Practice’s Overall Net Collection Ratio For The Insurance Company Segment

• 25% Of The Practice’s Net Collection Ratio For The Patient Segment

16

ACCOUNTS RECEIVABLE AGING

Source: ABC Associates, P.C.

Categories 0-30 Days 31-60 Days 61-90 Days 91-120 Days 120+ Days Totals

patient $25,000 $20,000 $15,000 $10,000 $430,000 $500,000

patient % 5.00% 4.00% 3.00% 2.00% 86.00% 100.00%

insurance $975,000 $180,000 $45,000 $30,000 $270,000 $1,500,000

insurance % 65.00% 12.00% 3.00% 2.00% 18.00% 100.00%

total $1,000,000 $200,000 $60,000 $40,000 $700,000 $2,000,000

total % 50.00% 10.00% 3.00% 2.00% 35.00% 100.00%

17Sources: ABC Associates, P.C. Internal DataMGMA Cost Survey-2011 Based Upon 2010 DataBilling Service: XYZ Billing Service, LLC

18

ACCOUNTS RECEIVABLE COLLECTIONS OVER 90 DAYS OLD

Source: ABC Associates, P.C. Internal Data-Assumes Normal 50% Net Collection Ratio

91-120 Days 120+ Days Totals

Patients Accounts Receivable $10,000 $430,000 $440,000

Projected Collection Ratio 12.50% 12.50% 12.50%

Projected Revenue Collected $1,250 $53,750 $55,000

Insurance Accounts Receivable $30,000 $270,000 $300,000

Projected Collection Ratio 25.00% 25.00% 25.00%

Projected Revenue Collected $7,500 $67,500 $75,000

Total Projected Collected Revenue $8,750 $121,250 $130,000

Total "Lost" Revenue $11,250 $228,750 $240,000

19

MARKETING

InvestopediaThe activities of a company associated withbuying and selling a product or service. Itincludes advertising, selling and deliveringproducts to people……..

The four “Ps” of marketing are product, place, priceand promotion.

Investopedia Inc. June 6, 2007

20

MARKETING AND PUBLIC RELATIONS PROGRAM

Sample ProgramMinimal Outlay• Community Programs (Speaking Engagements,

Practice-Sponsored “Topic For An Evening”)• Newspaper “Women’s Health” Special Inserts• Supermarkets• Insurance CompaniesHigher Outlay• Advertising (Radio Commercials, Movie Theatres,

Etc.)• Periodic Breakfast/Lunch Meetings With Referring

Physicians

21

EVALUATION & MANAGEMENT-HOSPITAL IN-PATIENT CODING

• There Appears To Be Over Coding Of Certain Evaluation And Management And Hospital In-Patient Codes When Compared To The MGMA Model.

• There Appears To Be Under Coding Of Hospital In-Patient, Subsequent Care Codes When Compared To The MGMA Model.

• Financially, There Is A Nominal Financial Gain For ABC Associates, P.C. When Compared To The MGMA Models.

22

E & M CODING ANALYSIS

Source: ABC Associates, P.C. Internal Data For CY 2012; MGMA 2004 Coding Profile Sourcebook (General Surgery Patients Aged 65 & Over)-Based Upon 2002-2003 Data

99201 99202 99203 99204 99205 Totals

ABC Associates, P.C. 0 103 852 46 0 1,000

MGMA 217 271 321 150 41 1,000

Charges $90.00 $130.00 $200.00 $205.00 $230.00 n/a

Payments $45.00 $65.00 $100.00 $103.00 $115.00 n/a

MGMA Revenue $9,756 $13,455 $32,130 $15,399 $4,715 $75,455

ABC Associates, P.C. Variance ($9,404) ($8,385) $53,020 ($10,661) ($4,715) $19,856

99211 99212 99213 99214 99215 Totals

ABC Associates, P.C. 24 1,308 2,640 22 6 4,000

MGMA 193 1,650 1,728 362 69 4,000

Charges $45.00 $60.00 $87.00 $140.00 $200.00 n/a

Payments $23.00 $30.00 $44.00 $70.00 $100.00 n/a

MGMA Revenue $4,434 $49,488 $76,014 $25,312 $6,880 $162,129

ABC Associates, P.C. Variance ($3,882) ($10,248) $40,146 ($23,772) ($6,280) ($4,037)

Combined ABC Associates, P.C. Variance           $15,819

23

HOSPITAL INPATIENT, INITIAL CARE

PATIENTS AGED 65 & OVER

Source: ABC Associates, P.C. Internal Data For CY 2012; MGMA 2004 Coding Profile Sourcebook (General Surgery Patients Aged 65 & Over)-Based Upon 2002-2003 Data

99221 99222 99223 Totals

ABC Associates, P.C. 0 0 50 50

MGMA 7 26 17 66

Charges $200 $250 $300 n/a

Payments $100 $125 $150 n/a

MGMA Revenue $700 $3,250 $2,550 $6,500

ABC Associates, P.C. Variance ($700) ($3,250) $4,950 $1,000

24

HOSPITAL INPATIENT, SUBSEQUENT CARE

PATIENTS AGED 65 & OVER

Source: ABC Associates, P.C. Internal Data For CY 2012; MGMA 2004 Coding Profile Sourcebook (General Surgery Patients Aged 65 & Over)-Based Upon 2002-2003 Data

99231 99232 99233 Totals

ABC Associates, P.C. 2,000 0 0 2,000

MGMA 1,203 584 213 2,000

Charges $65 $80 $95 n/a

Payments $35 $45 $50 n/a

MGMA Revenue $42,105 $26,271 $10,660 $79,036

ABC Associates, P.C. Variance $27,895 ($26,271) ($10,660) ($9,036)

25

FEE SCHEDULE

• A Preliminary Fee Schedule Analysis Indicates That Fees Paid By Certain Insurance Companies (Representing Over 80% Of Practice Charges) Should Be Negotiated Upwards

26

CPT Codes Volume ChargeCY 2012 Annual

ChargesCPT

Codes Volume ChargeCY 2012 Annual

Charges

99213 7,597 $80 $607,760 85025 845 $30 $25,350

90471 2,957 $25 $73,925 36416 820 $20 $16,400

92551 2,118 $25 $52,950 99391 811 $130 $105,430

99173 2,064 $20 $41,280 99000 709 $15 $10,635

81003 2,031 $20 $40,620 99394 682 $174 $118,668

87880 1,582 $25 $39,550 90633 631 $86 $54,266

99051 1,389 $80 $111,120 90669 580 $106 $61,480

90472 1,267 $20 $25,340 82465 532 $15 $7,980

87081 1,271 $15 $19,065 90658 500 $25 $12,500

99214 1,221 $150 $183,150 90723 435 $126 $54,810

99393 1,085 $160 $173,600 90715 432 $70 $30,240

99392 991 $150 $148,650 90647 419 $30 $12,570

Total $2,027,339

CY 2006 $2,402,870

ABC ASSOCIATES, P.C.

Source: ABC Associates, P.C. Internal Data

27

CPT Codes Charge Anthem

United Health Oxford Aetna Healthnet Connecticare CIGNA

99213 $80 $64.01 $51.86 $49.79 $56.53 $53.40 $66.14 $60.23

90471 $25 $21.96 $9.59 $11.77 $11.55 $15.16 $14.80 $11.92

92551 $25 $13.61 $13.93 $6.85 $12.88 $18.77 $10.07 $12.74

99173 $20 $15.26 $0.47 $3.23 $0.61 $8.81 $0.00 $12.54

81003 $20 $3.18 $3.20 $2.91 $0.39 $1.61 $3.17 $2.56

87880 $25 $17.65 $16.52 $6.02 $10.58 $8.25 $16.38 $14.66

99051 $80 $7.48 $2.94 $16.47 $18.83 $4.20 $0.00 $42.77

90472 $20 $13.62 $8.20 $8.19 $12.10 $9.15 $15.56 $12.05

87081 $15 $9.80 $4.24 $6.85 $5.90 $4.56 $9.25 $8.02

99214 $150 $106.28 $80.24 $75.77 $93.56 $85.80 $108.95 $59.09

99393 $160 $139.02 $82.68 $91.30 $104.16 $129.10 $129.10 $108.56

Source: ABC Associates, P.C. Internal DataBold Italics Indicates Fees That Should Be Negotiated Upward

ABC ASSOCIATES, P.C.FEE SCHEDULE ANALYSIS

PAGE 1

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ABC ASSOCIATES, P.C.FEE SCHEDULE ANALYSIS

PAGE 2

Source: ABC Associates, P.C. Internal Data

CPT Codes Charge Anthem

United Health Oxford Aetna Healthnet Connecticare CIGNA

99392 $150 $138.27 $86.99 $88.79 $104.81 $130.62 $121.87 $106.99

85025 $30 $11.75 $3.47 $11.90 $6.47 $5.47 $10.63 $9.52

36416 $20 $0.29 $2.93 $11.35 $1.13 $0.13 $5.36 $7.18

99391 $130 $123.60 $76.36 $78.75 $97.99 $112.22 $106.07 $98.46

99000 $15 $0.00 $0.39 $1.85 $0.00 $0.00 $0.00 $1.61

99394 $174 $150.50 $94.65 $101.78 $123.21 $146.13 $127.66 $118.55

90633 $86 $24.80 $33.19 $32.16 $32.09 $33.90 $34.54 $36.08

90669 $106 $73.90 $75.81 $77.74 $75.11 $75.81 $64.65 $86.36

82465 $15 $4.95 $2.20 $0.19 $3.39 $0.00 $0.00 $0.00

90658 $25 $12.60 $12.70 $13.78 $10.78 $12.52 $13.19 $17.31

90723 $126 $75.52 $77.28 $78.72 $66.34 $78.72 $82.00 $70.73

90715 $70 $37.39 $39.77 $39.15 $39.58 $39.56 $43.89 $43.43

90647 $30 $21.62 $24.84 $25.45 $27.37 $25.63 $28.27 $30.53

Bold Italics Indicates Fees That Should Be Negotiated Upward Note: CPT Code 90647 Charge Should Be Increased

29

ABC ASSOCIATES, P.C.FEE SCHEDULE ANALYSIS

PAGE 3

CPT Codes Maximum Increase 10% Increase CPT Codes Maximum Increase 10% Increase

99213 $64,376 $6,438   85025 $2,463 $246

90471 $18,265 $1,827   36416 $6,208 $621

92551 $10,946 $1,095   99391 $16,258 $1,626

99173 $15,265 $1,527   99000 $725 $73

81003 $1,200 $120   99394 $15,317 $1,532

87880 $5,484 $548   90633 $2,829 $283

99051 $35,255 $3,526   90669 $5,321 $532

90472 $4,435 $444   82465 $1,000 $100

87081 $2,924 $292   90658 $2,079 $208

99214 $21,824 $2,182   90723 $2,979 $298

99393 $27,393 $2,739   90715 $1,534 $153

99392 $22,130 $2,213   90647 $1,888 $189

Total Annual Charge Increase: $230,000 $23,000 Total Annual Revenue Increase: $150,000 $15,000

Source: ABC Associates, P.C. Internal DataRevenue Calculated At 65% Net Collection Ratio

BILLING

31

OUTSOURCE BILLINGADVANTAGES

• Reduce Operating Expenses– Staff Salaries– Taxes– Employee Benefits– Seminars/Continuing Education– Billing Software Technical Support– Supplies– Postage– Computer Hardware/Maintenance

• Improve Billing Cycle• Improve Accounts Receivable

Aging/Cash Flow• Improve Effectiveness Of Claim

Appeals/Resubmissions

• Collections Automatically Deposited Into Client’s Bank Account

• Patient Statements/Collection Agency Process

• Comprehensive Management Reports

• No Employee “Turnover” Headaches

DISADVANTAGES

• Typically, Fees Paid A Billing Company Or Service Are Often A Flat % Of Collections Or Other Restrictive Arrangement, With No Or Limited Financial Incentive For You To “Grow” Your Practice

• Loss Of Control Of Billing Policies And Procedures

– How Collections Are Processed– How Patient Interactions Are Handled

– How Appeals And Resubmissions Are Handled

– How The Billing Cycle Works

– How Billing Policies And Procedures Impact Your Accounts Receivable Aging

32

BILLING DEPARTMENT VERSUS BILLING SERVICE

See EXHIBIT IV For Assumptions

Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative

Annual Revenue $2,500,000 $2,600,000 $2,700,000 $2,800,000 $2,900,000 $13,500,000

Billing Department Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative

Salaries $60,000 $63,000 $66,150 $69,458 $72,930 $331,538

Taxes, Benefits $15,000 $15,750 $16,538 $17,364 $18,233 $82,884

Computer Support $12,000 $15,000 $18,000 $21,000 $24,000 $90,000

Supplies $1,000 $1,000 $1,000 $2,000 $2,000 $7,000

Continuing Ed $2,000 $2,000 $2,000 $2,000 $2,000 $10,000

Overhead Allocation $15,000 $15,000 $15,000 $15,000 $15,000 $75,000

Total $105,000 $111,750 $118,688 $126,822 $134,163 $596,422

Billing Service Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative

Service Fee $125,000 $130,000 $135,000 $140,000 $145,000 $675,000

Monthly Access Fees $26,460 $26,460 $26,460 $26,460 $26,460 $132,300

Total $151,460 $156,460 $161,460 $166,460 $171,460 $807,300

33

LOST REVENUE AGING FACTOR

See EXHIBIT IV For Assumptions---See Slide 18 For Lost Revenue Source

Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative

Annual Revenue $2,500,000 $2,600,000 $2,700,000 $2,800,000 $2,900,000 $13,500,000

Billing Department Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative

Salaries $60,000 $63,000 $66,150 $69,458 $72,930 $331,538

Taxes, Benefits $15,000 $15,750 $16,538 $17,364 $18,233 $82,884

Computer Support $12,000 $15,000 $18,000 $21,000 $24,000 $90,000

Supplies $1,000 $1,000 $1,000 $2,000 $2,000 $7,000

Continuing Ed $2,000 $2,000 $2,000 $2,000 $2,000 $10,000

Overhead Allocation $15,000 $15,000 $15,000 $15,000 $15,000 $75,000

Total $105,000 $111,750 $118,688 $126,822 $134,163 $596,422

Lost Revenue $240,000     $240,000   $480,000

Grand Total $345,000 $111,750 $118,688 $366,822 $134,163 $1,076,422

Billing Service Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative

Service Fee $125,000 $130,000 $135,000 $140,000 $145,000 $675,000

Monthly Access Fees $26,460 $26,460 $26,460 $26,460 $26,460 $132,300

Total $151,460 $156,460 $161,460 $166,460 $171,460 $807,300

Outsource Savings           ($269,122)

34

ANCILLARY SERVICES

35

ULTRASOUND FINANCIAL ANALYSIS

Amount %

Revenue $372,000 100.00

Expenses

Salary/Benefits $ 95,099 25.56

Equipment Lease $ 9,012 2.42

Supplies $ 2,947 .79

Overhead Allocation $ 84,600 22.74

Expense Total $191,658 51.52

Net Income $180,342 48.42Source: ABC Associates, P.C. Internal DataAssumptions: 250 Ultrasounds Per Month @$124 Payment Per Ultrasound; Overhead Allocation: Rent: $6,600 Rent Per Year, $3,000 For Telephone, Utilities And Office Supplies; $75,000 For Support Staff (2)

36

BONE DENSITY FINANCIAL ANALYSIS

Amount %

Revenue $85,680 100.00Expenses

Salary/Benefits $13,210 15.42Equipment Lease $15,811 18.45Supplies $ 300 .35 Rad. Install. Ann Fee $ 65 .08Overhead Allocation $16,000 18.67

Expense Total $45,386 52.97

Net Income $40,294 47.03

Source: ABC Associates, P.C. Internal DataAssumptions: 42 Tests Per Month @$170 Payment Per Test; Overhead Allocation: Rent: $5,200 Per Year,$2,400 For Telephone, Utilities And Office Supplies; $8,400 For Support Staff

37

EXTENDER ACTIVITY

Current APRN Weekly

Patient Volume 61.00*

Weekly Compensated Hours 72.00**

Weekly Hours Required 26.00***

Excess Weekly Office Hours 46.00

Annual Compensation “Cost” To Practice

$86,000**** * ABC Associates, P.C. Data For the Period _________________** From Internal Practice Information *** Assumes Weekly Productivity Level of 9 New OB Patients (.75 Hours Each), 5 New GYN Patients (.50 Hours Each) And 47 Established Patient Visits (3 Visits Per Hour)****Calculated as: ($49,998+$63,000*.35)*1.20 (Benefits, Taxes)

OPERATIONAL

39

ABC ASSOCIATES, P.C. OPERATIONAL FINDINGS

• There Is An Absence Of An Effective Organizational Structure.

• There Is No Effective Means Of Communication Within The Practice.

40

• Overall Staffing Level Is Higher Than The MGMA Median For This Specialty.

• If The Billing Function Is To Remain In-House, There Needs To Be Effective Billing Policies And Procedures To Ensure That The Aging Of Accounts Receivable Remains At An Acceptable Level.

OPERATIONAL FINDINGS (cont.)

41

ABC ASSOCIATES, P.C. ORGANIZATIONAL STRUCTURE

• Absence Of An Effective Organizational Structure– Need To Create

• Governance To Establish Clear Policies And Procedures

• Effective & Efficient Organizational Structure With Clear Reporting Lines

• Help Practice Manager Develop Leadership Skills

42

ORGANIZATIONAL STRUCTURE

PHYSICIAN OWNERS

PRACTICEMANAGER

RECEPTION SUPERVISOR

BILLING SUPERVISOR

BILLINGSTAFF

CLINICAL SUPERVISOR

EXTENDERSEMPLOYEE PHYSICIANS

RECEPTIONSTAFF

NURSESMEDICAL

ASSISTANTS

Source: ABC Associates, P.C.

43

COMMUNICATION

No Effective Means Of Communication Is

Currently In Place• Employee Handbook

• Job Descriptions

• Performance Appraisals

• Need To Institute Monthly Meetings (Type Of Which Deemed When And If Necessary):

– Physician Owners

– Physician Owners And Providers, Technicians

– Practice Manager And Physician Owners

– Practice Manager And Support Staff

44

PARETO’S LAW

Vilfredo Pareto-19th Century Economist80% Of Land In Italy Owned By 20% Of Population

• 80% Of Objectives (Effects) Are Achieved With 20% Of Means (Causes)

• Subsequently, It Takes 80% Of The Means To Achieve The Remaining 20% Of Objectives(Cost To Move From 80% To 100% 4X Greater Than Cost To Move From 0-80%)

45

ABC ASSOCIATES, P.C.

POSITION ACTUAL* MGMA** VARIANCE

General Administrative 5.00 1.40 3.60Business Office 4.60 4.00 .60 Medical Reception 4.90 4.60 .30 Medical Sec./Transcription 0.00 1.20 ( 1.20)Medical Records 3.00 2.30 .70Other Admin. Support 0.20 0.50 ( .30)Total 17.70 14.00 3.70-----------------------------------------------------------------------------------------------Medical Assistant 0.00 4.60 (4.60)RN 2.90 2.50 .40LPN 3.00 1.05 1.95Total 5.90 8.15 ( 2.25)Overall Total 23.60 22.15 1.45

* 7 FTE Providers** Based on MGMA 2011 National Cost Survey Report-Median Results For Specialty

46

STAFF ROSTER

General Administrative:

Business Office:

Medical Reception:

Medical Sec./Transcription:

Medical Records:

Other Admin. Support:

Medical Assistant:

RN:

LPN:

47

SUMMARY OF FINANCIAL OPPORTUNITIES

OPPORTUNITIES IMPLEMENTATION RANGE

Revenue Increases

Increase Office Encounters $ -0- $ 240,000Reduce Time Out Of Office $ -0- $ 66,000Collect A/R Over 90 Days Old $ -0- $ 130,000Fee Schedule Increases $ -0- $ 15,000

Total Revenue Increases $ -0- $ 451,000

Cost Savings

Outsource Billing Function $ -0- $ 54,000Reduce Extender Hours $ -0- $ 86,000Reduce Staff Where Needed $ -0- $ 30,000

Total Cost Savings $ -0- $ 170,000

Total Financial Opportunities $ -0- $ 621,000

48

RECOMMENDATIONS

REVENUE ENHANCEMENT

• Increase Office Encounters• Reduce Physician Time Out Of Office• Begin Collecting Outstanding Accounts

Receivable• Review Fee Schedule And Seek Payer

Adjustments, Where Possible

49

RECOMMENDATIONS (CONT.)

COST SAVINGS

• Engage Billing Service• Reduce Extender Hours• Reduce Staff

50

RECOMMENDATIONS (CONT.)

OPERATIONAL IMPROVEMENT

• Create An Effective Organizational Structure• Institute Monthly Meetings To Improve

Communication• Create Job Descriptions, Employee Handbook

And Performance Appraisal System• Additional Physician Coding Training• Physician Succession Planning

51

ABC ASSOCIATES, P.C.TIMELINE

Month 1 Month 2 Month 3

Increase Office Encounters XReduce Extender Hours XReview Outstanding A/R XCollect Outstanding A/R XReview Fee Schedule XObtain Payer Fee Increases XReduce MD Time Out Of Office XBegin Process To Engage Billing Service X X XReduce Staff XInstitute Governance XCreate Organizational Structure XInstitute Monthly Meetings XCreate Job Descriptions XCreate Employee Handbook X X XCreate Performance Appraisal System XCoding Training XMD Succession Planning X

52

EXHIBITS

EXHIBIT I: OFFICE VISIT ANALYSIS BY PROVIDER

EXHIBIT II: OFFICE VISIT ANALYSIS BY LOCATION

EXHIBIT III: GROSS CHARGES ANALYSIS

EXHIBIT IV: ASSUMPTIONS FOR BILLING

ANALYSIS

EXHIBIT I

OFFICE VISIT ANALYSIS BY PROVIDER

NOTE: Counts Do Not Reflect Patient “No Shows”

54Source: Internal Data Months: December, 2011; January, 2012; February; 2012

55Source: Internal Data Months: December, 2011; January, 2012; February; 2012

56Source: Internal Data Months: December, 2011; January, 2012; February; 2012

EXHIBIT II

OFFICE VISIT ANALYSIS BY LOCATION

NOTE: Counts Do Not Reflect Patient “No Shows”

58Source: Internal Data Months: December, 2011; January, 2012; February; 2012

EXHIBIT III

GROSS CHARGES ANALYSIS

60Source: MGMA Physician Compensation & Production Survey-2011 Report Based Upon 2010 DataInternal Data

EXHIBIT IV

ASSUMPTIONS FOR BILLING ANALYSIS

62

ASSUMPTIONS

Billing Service– Actual Service Fee Based

Upon The Following Factors:• Specialty

• Financial Class• Volume• Terms• Aging• Delivery Method

– Monthly Access Fee• $165 1st Station; $120 Each

Additional Station For 18 Stations.

Billing Department– Actual Current Expenses

Adjusted For Annual Revenue Increase

– Overhead Allocation:• Portion Of Most Practice

Expenses Based Upon The

Billing Office Space As A % Of Overall Office Space

Billing Service: XYC Billing Services, Inc.(203)XXX-XXXXBilling Department: ABC ASSOCIATES, P.C. Internal Information

63

JOHN P. CROCE

Tele 203-257-9784

e-mail: [email protected]

www.fairfieldconsultants.com