Rick Rutherford, CMPE Director – Practice Management American Urological Association,Inc. 9/18/20091WV-MGMA Meeting 2009.

Rick Rutherford, CMPEDirector – Practice Management

American Urological Association,Inc.

9/18/2009 1WV-MGMA Meeting 2009

Patients seen in accordance with doctor’s time parameters

Fees set through negotiation and relative amounts of work and costs

Quality measured by patient satisfaction and lack of lawsuits

Government oversight primarily via retrospective reviews

Payers controlled costs by downward pressure on payments

Consumer choice focused on payers, steered by employers

Claims data analysis for follow-up

9/18/2009 2WV-MGMA Meeting 2009

Patients seen in accordance with their needs

Fees set based on data publicly available to patients

Quality set by consensus and medical evidence – measured by reporting against benchmarks

Payments determined by meeting quality standards

Government oversight driven by drilling into clinical or claims data

Payers control costs by fixed budgeted outlays

Consumer choice focused on cheapest source of “quality” care

9/18/2009 3WV-MGMA Meeting 2009

Major payers are testing various quality measurement processes

Medicare PVRP followed by PQRI Aetna Aexcel United Health Premium Providers

Consumers are assuming more responsibility for treatment options

Browsing the Internet for information on conditions Developing Personal Health Records using computer assistance Participating in health savings accounts

Payers are publishing provider fees online

Baby boomers demand more service, faster with better results

9/18/2009 4WV-MGMA Meeting 2009

What do you think?

Employer costs are rising

Medicare is going broke quickly

Too many Americans remain uninsured

Utilization is rising rapidly

Outcomes undefined New technology

becomes available We live in an era of

mistrust

9/18/2009 5WV-MGMA Meeting 2009

Successful managers will change their view from looking inside to looking outside the practice walls

Efficient business operations will be considered a minimum acceptable standard for employment

Effectiveness will be measured by scanning the horizon for opportunities to demonstrate:

Superior performance in delivering clinical care Optimal cost to benefit ratios from a patient/payer viewpoint Rapid delivery of care at the optimal site of service

Marketing skills as important as operational skills

9/18/2009 6WV-MGMA Meeting 2009

Trend Number 1

9/18/2009 WV-MGMA Meeting 2009 7

Institute of Medicine - The degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.

9/18/2009 WV-MGMA Meeting 2009 8

Reality bites

Currently Q=most likely outcome available at lowest cost

Medical evidence is just now making its way into quality measures in a serious way

Can measures be refined as new evidence is published?

Congress, President & CMS very interested in paying for “quality”/evidence-based medicine

CMS has been a contract payer in the past -wishes to become “a value-based purchaser”

MedPac recommends research into “comparative effectiveness” – comparison of treatments based on outcomes AND costs

9/18/2009 WV-MGMA Meeting 2009 9

Physician Voluntary Reporting Program (PVRP) – 2006

36 measures to choose from – only 16 reportable by CMS

Reported via claims data

Comprised of re-written hospital measures and consensus based patient-care measures from NQF and AQA

Participation was very low

9/18/2009 WV-MGMA Meeting 2009 10

Physicians Quality Reporting Initiative (PQRI) 2007

74 quality reporting measures

Claims based reporting –about 100,000 individuals reported

1.5% incentive bonus to successful participants – 51,000 payments to be made for 2007

Success = minimum of 3 measures (with exceptions) - reported on 80% of eligible patients/cases

Reporting started July 2007 – bonus paid July 2008

Performance reports must be downloaded from CMS website

9/18/2009 WV-MGMA Meeting 2009 11

2008 – 119 measures – dual entry dates 1/1/2008 and 7/1/2008

Claims based reporting plus experimentation with registries and EMR reporting

1.5% incentives

2009 – 153 measures in seven measures groups

Three reporting options plus testing of EMR extraction

Claims based using CPT Category II codes Registry using Medicare approved contractors (dual entry dates) Measures groups – all measures in group for a batch of consecutive patients EMR reporting available for certain systems in 2010

Program made permanent by MIPPA w/ 2% bonuses through 20109/18/2009 WV-MGMA Meeting 2009 12

United HealthCare Premium (2 Star) rating system Quality & Cost Efficiency*= quality physician; **= quality + efficiency of care physician (efficiency translates to lowest charges)

Patients driven to * * Doc’s Purported to save employers 2-5%Ingenix Software used by other payers

9/18/2009 WV-MGMA Meeting 2009 13

Network doctors reviewed for : case volume clinical performance hospital readmission

rates complications or

adverse health events other specialty-specific

measures (if they exist)

Only those with lowest 4% of index scores are reviewed and may be excluded

Overall cost efficiency compared to adjusted average in their regions determines star designation.

9/18/2009 WV-MGMA Meeting 2009 14

Various agencies and coalitions fighting for lead in measurement development

Performance criteria and structural necessities

Cost per patient to third parties

Patient satisfaction – CAHPS & S-CAHPS being considered – Consumer Assessment of Health Providers and Systems

Outcomes – does compliance with measures actually improve patient health?

9/18/2009 WV-MGMA Meeting 2009 15

Revenue affected more by effective care delivery & less by effective billing practices

How to achieve performance without seeing the patients

How to take proactive steps toward quality

9/18/2009 WV-MGMA Meeting 2009 16

Electronic medical records – the ability to efficiently get at the data

Quality reporting training camp – start practicing now

Development of internal quality code processes

Formulate a quality team to institute changes

Learn from hospital activities

Constantly measure patient expectations and satisfaction

Closely track clinical guidelines

9/18/2009 WV-MGMA Meeting 2009 17

Trend Number 2

9/18/2009 WV-MGMA Meeting 2009 18

According to National Center for Policy Analysis: Health Savings Accounts (HSA) now available to 250 million

non-elderly Americans Patients using them – 1.5 million in 2002 – expected to grow to

18 million by 2012 Patients who have HSAs forego health care for less serious

conditions twice as often as those covered by traditional policies

70 percent of HSA purchasers are > 40 years of age

How many in this audience are covered by an HSA or Health Reimbursement Arrangement (HRA)?

9/18/2009 WV-MGMA Meeting 2009 19

EMPLOYERS Converts variable cost item into “semi-fixed” cost item Enhances attractiveness of employer to young, healthy

employees Reduces the administrative and contract hassles with

managed care companies

EMPLOYEES Allows more flexibility in provider choice Provides opportunity for increased retirement funds Incentivizes natural trend toward self-diagnosis and treatment

9/18/2009 WV-MGMA Meeting 2009 20

Patients’ Moments of Decision – before visit Internet research – “Find

a Doctor” Web sites, YELP, Angie’s List, even Zagat

Ease of obtaining appointments – open access schedules on Web

Clear explanations of financial arrangements

Patients’ Moments of Decision – during and after visit Doctor’s willingness

to listen Level of patient

involvement in treatments

Accommodative nature of staff

9/18/2009 WV-MGMA Meeting 2009 21

Do the research to know what employers are offering in your area

Train appointment, front desk and billing staff on selling your practice

Improve your practice Web site

Consider VIP appointment slots for cash payers

React quickly to patient satisfaction ratings

Create your own patient blog about your practice tied to Web site

9/18/2009 WV-MGMA Meeting 2009 22

Trend Number 3

9/18/2009 WV-MGMA Meeting 2009 23

The patient decides what they need based on a doctor’s recommendation.

The patient decides if they can afford it and how they will pay the price.

The patient undertakes comparison shopping to see if there is a better deal.

The patient makes a decision.

The patient receives the service.

9/18/2009 WV-MGMA Meeting 2009 24

John W. Rowe, M.D., retired Aetna Chairman defines it as “the opaque inner workings of the health care system are made much more transparent”

“Aetna members in Connecticut and 10 other states, plus the District of Columbia, now have online access to physician-specific cost, clinical quality and efficiency information. “http://www.cbsnews.com/sections/i_video/main500251.shtml?id=2240034n9/18/2009 WV-MGMA Meeting 2009 25

Data release rules should be multi-tiered General public Limited data set for analytic purposes Comprehensive data set for policy work

General public needs information that can be used to “shop” for healthcare services Aggregate data: cost of entire episode of care Cautionary notes should be included in release: small sample

size, severity of population differences, aggregate data explanation

Website is easiest dissemination tool

9/18/2009 WV-MGMA Meeting 2009 26

Section 1. Purpose. It is the purpose of this order to ensure that health care programs administered or sponsored by the Federal Government promote quality and efficient delivery of health care through the use of health information technology, transparency regarding health care quality and price, and better incentives for program beneficiaries, enrollees, and providers. It is the further purpose of this order to make relevant information available to these beneficiaries, enrollees, and providers in a readily useable manner and in collaboration with similar initiatives in the private sector and non-Federal public sector. Consistent with the purpose of improving the quality and efficiency of health care, the actions and steps taken by Federal Government agencies should not incur additional costs for the Federal Government.

9/18/2009 WV-MGMA Meeting 2009 27

Price Transparency: Insurers and third-party administrators will be asked to disclose their prices on the most frequent medical procedures, so that consumers can have a clear picture of the overall cost, not just of the procedure, but in relation to a specific doctor or hospital.

9/18/2009 WV-MGMA Meeting 2009 28

www.healthgrades.com

www.mass.gov/healthcareqc

http://www.nhhealthcost.org/

http://www.mihospitalinform.org/

https://www.mymedicalcosts.com/

9/18/2009 WV-MGMA Meeting 2009 29

Identify your practice strengths and market them aggressively Quality reporting participation Cutting edge services Insurance plan participation Rapid appointment access

Develop your own transparency plan Work with hospital to publish average episode of care costs Publish your patient satisfaction scores (if favorable) Publish favorable comments from patients or referral sources Publish E&M bell curve compared to averages

9/18/2009 WV-MGMA Meeting 2009 30

Anticipate and publicly justify Robotic surgeries incur

more equipment costs but better outcomes

Office charges are higher because we spend more time with our patients

“Hallmark” approach – when you care enough to choose the very best

9/18/2009 WV-MGMA Meeting 2009 31

Trend Number 4

9/18/2009 WV-MGMA Meeting 2009 32

9/18/2009 WV-MGMA Meeting 2009 33

Physician-Population Ratios (providing direct patient care) 1980 – 1/614 population 1990 – 1/500 population 2000 – 1/427 population 2005 – 1/413 population

Population > age 65 expected to increase by 36% between 2010-2020

AGE <35 35-44

45-54

55-64

1980 27% 25% 19% 15%

1990 22% 30% 20% 14%

2000 17% 26% 25% 15%

9/18/2009 WV-MGMA Meeting 2009 34

Residents and fellows 2000 – 95,725 2005 – 95,391

Council on Graduate Medical Education (COGME) recently predicted a 10% shortfall of physicians by 2020

9/18/2009 WV-MGMA Meeting 2009 35

Will Baby Boomers demand more services?

Will cost controls further reduce the physician supply?

Will technology adoption improve the efficiency of the process?

What will be the overall effect of wounded warriors?

Will the U.S. finally face the problem of uninsured?

Could the U.S. face a widespread pandemic?

What will be the effect of recession?

9/18/2009 WV-MGMA Meeting 2009 36

What management strategies can increase the efficiency of patient care delivery? Streamline the record keeping process through adoption of

electronic record keeping Expand capacity at low cost through use of non-physician

providers Investigate the potential for group patient visits Evaluate the practice’s payer mix and boost profit margins

per patient seen Demand more patient/family involvement in the health

care process Explore more efficient delivery of procedures

9/18/2009 WV-MGMA Meeting 2009 37

Surgical practices - Consider providing more office visit time for aging physicians – E&M reimbursement is on the rise

Primary care - Negotiate for reimbursement for e-visits

Prepare for shared reimbursement – DRGs for doctors

Economically advantaged areas - Consider the advantages of boutique practices – fewer patients for equal compensation

Specialists – investigate the potential for telemedicine

Reduce the number of Medicare patients

9/18/2009 WV-MGMA Meeting 2009 38

Trend Number 5

9/18/2009 WV-MGMA Meeting 2009 39

Sustainable Growth Rate formula – the annual roller coaster ride

Aetna caps out-of-network payments at 125% of Medicare rates (AMNews - Jan. 14, 2008)

California introduces law that requires physician seeing patient in an in-network hospital to accept in-network rates

CMS launches Acute Care Episode (ACE) demonstration project

Accreditation for imaging services required by commercial and state payers

State laws prohibit certain ancillary services in physician offices

CMS proposes physicians meet IDTF standards

9/18/2009 WV-MGMA Meeting 2009 40

Increase skills at business modeling based on controlling the volume of patients and services delivered by the practice Who and where are the profitable patients? What ancillary services are most profitable and least likely to be

regulated?E

nhance your ability to compile meaningful data from various sources Cost per encounter data Claims data Quality reporting data Disease management data

9/18/2009 WV-MGMA Meeting 2009 41

Managed care contract review and negotiations

Quality measurement and reporting

Target marketing to the most profitable patient cohorts

Hospitality service to keep those cohorts happy

Cost accounting to better control unit costs

9/18/2009 WV-MGMA Meeting 2009 42

Three major factors in political health care reform: Access Provider participation Cost control

Third rail – the cost of quality improvement

Massachusetts Health Care Reform Act improved access but costs ^ to 33% above U.S. average

What will it take to achieve universal provider participation? Mandatory participation? – No Financial incentives? – No Providers as fiduciaries? - Maybe

9/18/2009 WV-MGMA Meeting 2009 43

9/18/2009 WV-MGMA Meeting 2009 44