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October 28, 2014

It’s All About the Numbers

Numbers

As nephrologists we are all “about the numbers.” It’s how we make our living; it’s what distinguishes us from our colleagues. It’s what makes us different, special.

BUN, creatinine, anion gap, electrolytes, blood gases and on and on—we’re the experts, and patients depend on our knowledge and expertise. We rock!

But what about the numbers we don’t know (or the ones we ignore)? The numbers we depend on others to manage. The numbers that make the difference between a successful practice and a failing one. The numbers that put food on our tables!

As a physician you know a few numbers going in the wrong direction can dramatically impact a patient’s outcome. Same with your practice. Knowing the numbers that influence the financial health of your practice can mean the difference between good and great. A thorough understanding of some key metrics can help you assess if your practice is operating at peak performance or if there is room for improvement.

Days in Accounts Receivable (DAR)

The DAR is the average number of days from when a claim is entered into a system until it’s paid. The national average is 45 days; the longer a claim is in limbo, the higher the risk of it not being paid. You have done the work and should expect to be paid in a timely manner, but you must have the right processes in place or you will be leaving money on the table.

It’s nothing to be embarrassed about; it’s not what we were trained to understand or deal with. But like any other responsible business owner, we must see to it that we have delegated practice management to competent individuals.

You deserve the highest return you can get on your hard work; that takes talented people with specialized skills. What should you focus on? What are the numbers?

Revenue Realization Rate (RRR)

This is simply the percentage of claims that are paid to your practice, also known as the net collection rate. The higher this percentage the more cash flow your practice is driving. When claims are denied or go unpaid someone in the practice must address it in a timely manner. Wait too long, and you will miss your window of opportunity for payment.

Consider this example: an RRR of 85% means you are making only 85 cents on the dollar—yikes! That along with other practice income erosions (risk contracts, Medicare, Medicaid and commercial cuts) could put you in more trouble than you may realize.

Denial Rate

This term describes the percentage of claims denied by the payor. The industry average is 5-12%. Numbers beyond this range usually stem from challenges with billing procedures (i.e., your billers are doing a poor job). Billing correctly the first time will speed up cash flow and reduce work on the back end (and save you money).

A good practice-management system can detect coding errors and missing information early on (called scrubbing of claims). Reworking a denial claim is costly. The Medical Group Management Association (MGMA) found the average cost to rework a denied claim is more than $25! A hundred denied claims cost your practice $2500 in administrative costs! Additionally, MGMA says 50-65% of denials are never reworked. Do you know how many of your claims are being denied? Reworked? Again, more financial opportunity lost.

Missed Billing Entries or Slips

This refers to tracking of patient encounters and/or services you provide. Encounters not tracked immediately following the patient visit (or misfiled) can result in payment delay or missed payment opportunity. Educating your staff, revising your procedures and having a good practice-management system in place are a few ways to help manage this.

Overhead (OH) Percentage

A well-run nephrology practice has an OH of ~42%. Each practice is unique and there is a bell-shaped distribution of OH costs. Your OH percentage does not necessarily mean your practice is successful or is failing. Some practices with high OH are very successful (maybe their OH is due to costly deliverables or equipment) while simply having low OH does not guarantee success (low OH could be due to such measures as cutting back on staff who could deliver more of your billings). What is important is to track this number over time, know what it represents and understand its positive or negative impact on you business.

We are entering a new era in the business of medicine: an era where professional management of your business has become much more attractive, if not a necessity. Successful management can drive your bottom line, sending the savings directly to the practice. You can reach out to me or any teammate at Nephrology Practice Solutions if you would like to discuss your concerns or ask any questions. Or stop by the DaVita booth, #601, at ASN and ask for us.

October 2, 2014

Managing Your Practice Wisely—What’s Next?

practice management-blog

For those of you who know me, what I am about to opine on will not come as a surprise. For those of you who are new to me, my thoughts and my opinions, I welcome your feedback!

Let me start by laying out a historical timeline of nephrology practices over the past 20 years.

When I started practicing in 1988, the focus of most practitioners was to see patients, render good care, submit your billing, collect a paycheck and, at the end of the year, determine how the practice was doing financially.

Reimbursement was robust, so practices didn’t need to be efficient; we could be a little “loosey-goosey.” Our practice managers and billers were trained on the job, rarely experienced and never certified. This couldn’t and didn’t last long!

As regulations proliferated and reimbursement decreased, it became apparent to me that we needed to treat our practices as the small businesses they are. I began speaking and writing on this topic first as a Renal Physicians Association (RPA) board member and then as the RPA president. Many of you listened and benefited.

What are the key focuses in a fee-for-service world? Market what you are “selling,” do it well, increase your market, stratify your income streams (joint ventures, real estate, vascular access centers, etc.) and manage costs!

Many practices related to renal disease grew, expanded and prospered. But the majority of us have smaller practices (the average size is four nephrologists) and these account for 80 percent of care delivered. They render expert care in smaller markets. This puts extreme pressure on them to squeeze efficiencies from a relatively small book of business and remain viable.

As if that is not enough, the future will be risk management and integrated kidney care. You will be expected to focus on “patient-centered” care to consistently deliver better outcomes at lower costs; i.e., value-based care.

So, what is one to do to? How does one remain focused on excellent patient care while staying viable, profitable and not so stressed that it is no longer fun to practice?

Professional nephrology management!

Outsourcing expense management and achieving operational efficiency are key to your future success.

Determining your practice’s optimal staffing, overtime management, copay collections and collection ratios while maintaining cash flow is critical! There is no doubt that outsourcing these tasks to professionals is the most cost-effective path forward. Its gives you economy of scale and saves you time and grief.

An additional benefit: professional management will assist you in regulatory management (the Physician Quality Reporting System will put 4 percent of your reimbursement at risk in 2017).

Assistance managing your clinical data to present to and negotiate with payers, as well as help with intelligently participating in risk contracts, is critical to staying viable.

Costs—do you even know what it costs you to provide care? How can you accept a payment for a service if you do not know what that service costs you?

Stop the madness! You can stay independent and be professionally managed.

As nephrologists, partnerships are important. We have witnessed our colleagues in primary care, oncology, cardiology and other fields flock to the hospitals. This makes sense for them clinically and financially, but hospitals have absolutely no expertise in our world!

Our natural ally in caring for ESRD patients, when and where appropriate, is our dialysis partner. We have already tested the water with dialysis joint ventures, and while rarely perfect, they have been outstanding at providing great care for our patients in an economically responsible partnership.

Taking that relationship to the next level is appropriate and sensible. It is a smart business decision.

July 24, 2014

Socioeconomic Impact on ESRD?

Before I get started opining about my observations of the socioeconomic impact on end stage renal disease (ESRD), let me state that I am not an expert on this critical science and its implication on healthcare. Rather—after practicing 25 years in Detroit, once a proud city boasting the highest per capita income in the world (in 1960)—I am, as a physician, a keen observer of the impact of a failing city, its resources and its support systems on our most vulnerable citizens.

Priorities. We all have them, right? Family. Work. Church. Oh yes, and healthcare. Of course it’s there if or when you need it, right? That little card in our wallet is our safety net. Our focus on healthcare as a priority changes as we age or if we develop a chronic condition requiring attention.

One may argue that the above image is a concocted anomaly predicated on employment and therefore a vision held by the employed. So what of others, the chronically unemployed or even the recently unemployed, the less fortunate among us? What happens when the support system collapses around them?

Read more…

December 13, 2013

Working Can Benefit Those Suffering with a Chronic Illness

Physicians are trusted resources for patients. We have the ability to reinforce patients’ understanding of how they may live longer, healthier and happier lives. Assisting them in deciding whether to continue working when they start dialysis falls within the realm of being a resource. We can help patients evaluate many factors, such as the health conditions surrounding their kidney disease, dialysis modalities appropriate for them, their family life etc. Take Robert Gandy (mentioned below) for instance. Robert was able to fit dialysis into his lifestyle and continue working. He states, “Going to my job takes me away from the fact that I have end stage renal disease”—a sentiment that’s been echoed by many of my patients over the years. After reading about Robert and the benefits of working on dialysis, I hope you’re able to approach your next patient, the one after that, and so on and so on with the dedication and care of an educator. Read more…

December 3, 2013

NEWS: School Bus Driver and PD Patient Gets Kidney Transplant

It’s no secret that dialysis patients who continue to work while on dialysis are two times more likely to get a kidney transplant(1), and the story of former DaVita patient Stephanie Carson is a great example. I’m happy to be able to share this coverage of Stephanie’s transplant with all of you and hope to see more news like it moving forward.

The Daytona Beach News-Journal
South Daytona mom thankful for health, daughter’s kidney donation

My FOX Orlando
Daughter gives mother a kidney
FOX 35 News Orlando

Our patients are a part of a fragile population and this kind of news plants seeds of hope and determination that many of them need in order to maintain their jobs and make it through the rehabilitation process of dealing with kidney disease. However, I’d be remiss not to mention the other side of this topic. Please keep in mind that there are many medical reasons why people do not work and those same reasons can keep these individuals off the transplant list.

Have you seen any stories lately that you’d like to share? Paste the link below and this blog post can serve as a wall of reminders about the benefits of staying employed during dialysis.

  1. Source: http://onlinelibrary.wiley.com/doi/10.1111/ctr.12177/abstract

November 25, 2013

A Letter from a Patient to Nephrologists

Last week I invited Dr. Joel Topf to guest-blog about kidney disease, diabetes and patient empowerment. This week I’d like to introduce a diabetes and former dialysis patient. Michael Corona’s story is one of diabetes and how it eventually led to end stage renal disease. Dr. Topf presented the notion of patient empowerment from a physician’s perspective, and it’s only fair we hear from a member of our patient population encouraging us, as physicians, to help our patients become more empowered. Read more…

November 14, 2013

Kidney Disease, Diabetes and Patient Empowerment

This week’s  Mayo Clinic Tuesday Q & A question came from an individual whose father was recently diagnosed with diabetic kidney disease. The individual wanted to know what changes, if any, the father should make to his diet. The way in which the Mayo doctor responded reminded me of things I’ve heard my friend and colleague Joel Topf, MD, say about patient empowerment. Essentially, the advice was encouraging the patient to think critically about his care from a diet perspective.

In honor of World Diabetes Day and National Diabetes Month, I thought it fitting to ask Joel to write a guest blog post on kidney disease, diabetes and patient empowerment.   Read more…

October 22, 2013

Vaccination-Rate Success: It Takes a Village

As I sit here and write this blog, the influenza-vaccination rate for DaVita patients is 93 percent. That’s 93 percent! Considering the second leading cause of death of end stage renal disease (ESRD) patients is infectious disease, this is a remarkable feat! I recently came across a Kidney International manuscript published in 2003,[1] a mere decade ago, lamenting that the immunization rate of ESRD patients was at 47.8 percent. At the time the Healthy People 2000 campaign’s objective was a 60 percent vaccination rate, and that was increased to 90 percent for Healthy People 2010. Read more…

October 4, 2013

A Time to Retool (Our Pathway to Success)

Let’s face it; we physicians do not excel at the operational aspects of delivering care. We all know it. We have been trained to be clinically conservative in the name of protecting patients from unproven new therapies. Seeing patients is what we do; how this care is coordinated for delivery is not! In our changing world, moving from a volume-based care model to a value-based model is going to turn all aspects of care delivery (clinical and operational) on their heads. Read more…

September 12, 2013

Throwback Thursday: ESCOs and ACOs Google+ Hangout On Air

Throwback Thursday (more commonly known on Twitter as #ThrowbackThursday or #tbt) is here, and I’d like to reprise the ESCOs and ACOs Google+ Hangout On Air. For those of you that missed it, Allen R. Nissenson, MD – Chief Medical Officer, DaVita; Stephen McMurray, MD – Vice President, Clinical Integrated Care Management Services, DaVita; and myself outlined the structure of ESCOs and the nephrologists role in coordinated care management.

In this Hangout we were able to help clarify the differences between ESRD Seamless Care Organization (ESCOs) and Accountable Care Organizations (ACOs), especially with regard to participation and patient attribution.

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