How changes to Section 179 can positively affect your bottom linePosted on: 09.27.18
If you own a private practice and are considering the purchase of new or pre-owned medical equipment, the recent revisions to Section 179 of the IRS tax code, which were included in the Tax Cuts and Jobs Act, could offer some significant tax advantages. Here’s a quick look at some of the changes and how they might motivate you to make a purchase sooner than later.
What is Section 179?
Section 179 was added to the IRS tax code as an incentive for business owners to invest in themselves, grow their market share, and improve their chances for long-term success. It allows for accelerated depreciation of equipment, including machinery, computers, software, office furniture, vehicles, and other tangible goods. Although large businesses benefit from Section 179’s tax treatment, the legislation’s original intention was to provide much-needed tax relief for small businesses like private practices.
For much of Section 179’s history, it offered a relatively small tax deduction, but beginning in 2003, Congress began increasing the expense limits and deductions while expanding the list of qualifying equipment. The 2018 revisions to the tax code are the most generous and advantageous to date.
Generous updates to Section 179
As a result of the newest revisions, business owners are able to deduct 100% of the purchase price, lease price, or financed amount of qualifying equipment, as long as it was acquired and put into service during the same tax year. The code previously applied to only new equipment but has been expanded to include pre-owned equipment as well.
Prior to 2018, the maximum equipment deduction was $500,000, but effective on January 1, 2018, that amount was increased to $1 million. In addition, the new legislation raised the annual maximum spending threshold from $2 million to $2.5 million and set the 2018 bonus depreciation rate at 100%.
Consider your next step
Upgrading or purchasing new equipment is an smart way to invest in your practice. With these tax advantages, it may be time to reevaluate your needs. Talk with your tax advisor and see how the new Section 179 tax treatment might offer you the opportunity and the motivation to take that financial leap.
For more information on Section 179, including a list of qualifying items, an illustrated calculation example, and an interactive tax deduction calculator, visit the official website.
5 Ways Cardiologists Can Increase Referrals From Primary Care PhysiciansPosted on: 09.20.18
The patient volume that’s generated from physician-to-physician referrals is a significant factor in the success of any cardiology practice. In fact, some studies suggest that as much as 45% of new patients were received by referral.
With a host of cardiologists vying for their referral business, primary care doctors need to feel some level of comfort in recommending one over the other. To earn the confidence of other physicians and, in turn, their referrals, you’ll need to actively work on differentiating yourself and your service from the rest of the pack. Here are some practical ways to increase referrals from your network of primary care physicians:
1. Cultivate your relationships
The most obvious way to grow referrals is to leverage your existing relationships with primary care physicians and work at building new ones. Most of the time, physicians refer patients to specialty practices where they know the doctors and the staff. They have a firm understanding of the comprehensive services they offer, confidence in their skill, knowledge of their reputation, and assurance that they’ll provide referred patients with excellent service at the next level of care. Cultivating those relationships is critical.
Take initiative in getting to know not only the primary care doctors in your referral network, but also the office staff. Remember their names and learn some things about their families or their hobbies. When you take an interest in people, it makes an impression.
Developing a relationship from scratch is a little more work. See what information you can find about a new primary care physician and find a connection. Where did they go to med school? Are they a diehard Mets fan, or do they follow the Atlanta Falcons? Do they play golf, or run marathons? Reach out to them, introduce yourself, and ask how you can meet their needs. Invite them to your office for a tour, some introductions, and lunch. Afterward, take the time to send a hand-written note thanking them for stopping by.
It’s important to remember that real relationships take time, and you probably won’t see results overnight. If you continue to cultivate your relationship with them, you’ll climb to the top of their referral list.
2. Make referring physicians look good
Primary care physicians want to know that you’re taking good care of their patients and treating them right. When they refer their patients, your office serves as an extension of theirs and a reflection of what they value, so make a memorable impression.
Patients routinely report back to their primary care physicians about their experience with a specialist and the care they provided. Appointments should be able to be booked in a reasonable amount of time and patients shouldn’t have to wait more than 15 minutes to be seen.
Most importantly, report back to the primary care physician quickly and if it’s the very first referral, follow up with a phone call thanking them for their confidence and trust. Finally, don’t be afraid to ask for more referrals. Simply ensure the primary care physician that there will always be room for their patients at your practice.
3. Commit to becoming a full-service cardiology practice
Most primary care physicians don’t want to refer their patient to you, only to have you refer the patient to another specialist, hospital, or office location for an additional test. In order to keep and grow your referral base, it’s important to be as much of a full-service provider as possible.
Becoming a full-service provider involves staffing your office and investing in state-of-the-art equipment that can perform the most comprehensive range of tests and services. Referring physicians choose specialists who are best prepared to offer the highest level of care coupled with the advantages of the latest technology.
If you’re unable to purchase new equipment or hire new staff you can use a mobile imaging service to provide a wider range of services inside your office. The full-service approach is a key differentiator and one that can help lead you to the top of your game.
4. Share your knowledge
Primary care physicians appreciate being kept up to date on developments in your field. Whether it’s a few extra minutes on a phone call about a particular case or a quarterly newsletter you distribute, find opportunities to share your specialty.
Host an open house for referring physicians and their staff to introduce them to new equipment, view a demonstration, or even test drive a new software program. Provide drinks and light snacks and encourage attendance with a door prize, like a gift card, for example. It’ll give you and your staff an opportunity to get to know them better in a relaxed setting without distractions.
Are there any specific topics that may be interesting to your referral network and their staff? From procedures to new technology to patient satisfaction, invite a guest speaker, or speak on a particular topic yourself.
5. Survey your primary care physicians and their staff
Asking the right questions can help you determine what’s working and what areas need improvement in the eyes of your primary care physicians. Periodically, it’s a smart idea to create a survey or hire a third party that specializes in referral network and peer-to-peer surveys, to help you gain a clearer and more comprehensive view of your practice. Once you review the results, you’ll be able to make improvements and resolve some specific issues.
Share the final results with your network. You’ll be able to brag about the positive feedback and announce the changes you’ve made to improve upon any shortcomings. It’ll also show that you care about meeting the needs of your referral network and you’re committed to quality service and care.
7 critical considerations for practices considering de-integrationPosted on: 08.09.18
After a significant wave of practices choosing to merge with hospital systems, physicians are starting to consider de-integration and returning to private practice.
It seems that integrated health care, the solution that many thought would be the answer to a variety of our healthcare industry’s challenges, might not have the impact or the endurance it was thought to have. As many healthcare organizations continue to expand, practitioners are contemplating their next step.
Should they work together and become even more woven into the organization? Or, do they throw in the towel and start taking steps to re-establish their private practice? While some might prefer to cut ties, the decision to separate the hospital system brings with it a lot of uncertainty.
Factors to Consider
Each practice has its own unique situation and there is not a clear-cut answer for everyone. Selling your practice to a larger system was not an easy decision, so buying it back, or de-integration shouldn’t be either.
It’s critical to weigh all the information and make a decision that meets your needs, your patients’ needs, and those of a successful business. Here are some key considerations if you’re thinking about diving into de-integration:
1. Evaluate your patient base and payer mix
While the patients in your new private practice may be better insured, they’ll also be a highly sought-after slice of the market that many will compete for. With this type of change, your practice could potentially experience up to 40% erosion in existing patient base. That’s a significant decrease in volume that shouldn’t be ignored.
2. Assess your insurance contracts
The benefit each insurance contract delivered across your entire partner hospital was likely a weighty negotiating factor. Specifically review the reimbursement levels for physician services to see if they’re feasible to continue at the current rate. On the bright side, your potential new status could also offer the opportunity to discuss contracting with the same insurers for additional services.
3. Evaluate available new revenue streams
Raising rates is not the answer, especially in a competitive market, so finding other sources of income is a necessity. Consider adding back the ancillary services that integration did not allow, like in-office x-rays and lab services.
4. Consider your billing and collections system
After de-integration, you’ll need to employ a third-party billing company, or invest in your own computer system and hire people with the necessary skills. Since your patient base will experience some erosion, it’s critical that you’re able to effectively manage billing and maximize collection rates.
5. Determine new group membership
With any group of providers, not all may be on the same page or ready to take the next step. Discuss expectations, goals, interests, and the potential new group’s needs, which will ultimately help determine which providers should be included in the new medical group.
6. Manage the compensation discussion
The integrated solution likely came with a more generous salary option than a private practice can manage. As owners, providers must be willing to accept responsibility and tie compensation, to some degree, to their productivity. It’s an about-face from the reliable and predictable salary arrangement they had as an employee of the integrated system. In addition, the employee benefits package may suffer as well, making it a somewhat less attractive option for qualified, experienced staff.
7. Consider the size of your staff.
When re-establishing your practice, or branching out on your own for the first time, you have to watch your bottom line. While a hospital may have provided ample staff, you’ll need to decide where you can cut back, where to ramp up, and the different levels of service providers your practice requires.
The Bottom Line
In order to responsibly evaluate the opportunity to return to or move to private practice, accurate assumptions around patient volume, staffing, services, revenue, and operating costs are critical.
Be realistic and understand that any new venture will likely carry debt from the buy-back, as well as additional start-up costs. It’s all part of running a business, but if you do the work upfront, the end result should come without any major surprises.
Four new revenue streams for cardiologistsPosted on: 07.05.18
Operating a financially successful practice requires a daily focus on operational concerns, but it also necessitates seeking new opportunities for revenue streams. Many cardiologists overlook opportunities to offer ancillary services that will boost practice income.
Here are four revenue streams that could increase efficiency, referrals, and patient volume, while improving patient care and satisfaction across the board. As the market moves toward value-based services, these are worth considering:
1. Cardiac rehabilitation clinic
After a cardiac event, many patients are hesitant, even fearful, of exercising. Consider establishing a cardiac rehabilitation clinic where patients can safely work out, raise their heart rates, and improve physical function all under the supervision of a trusted doctor.
To qualify as a rehabilitation clinic, Medicare requires the program to include a medical evaluation and a comprehensive program that helps modify cardiac risk factors. Exercise and nutrition counseling and overall lifestyle education are critical components. You might also offer blood pressure and stress management, lipid management, and a smoking cessation program. While CMS provides reimbursement for up to 36 sessions, a self-pay maintenance program that continues after reimbursed services end could be especially profitable.
There are some costs to consider, however. A physician must be on the premises, so it’s critical to find space within your building. You’ll also need to hire an exercise physiologist and a medical professional who can provide education. While it’s a great way to stay connected with your patient base, it’s also a place where patients will be comfortable and feel a sense of camaraderie with other patients while they improve their health and reduce risk factors.
2. Device services
With more than 180,000 new pacemakers and defibrillators implanted every year, adding a maintenance service might serve you well. Pacemakers should be tested every three months, and batteries only last between six and ten years. Based on the size of your practice, an in-house service might make financial sense and contribute to the caliber of your overall patient care. It would allow you to follow your patients as you check for battery depletion, pulse generator malfunction, lead malfunction, and pacemaker pocket erosion. Between in-home monitoring, interpretation, and office visits, the revenue can add up quickly. With a large patient population, an extension of your device services could include group education and support for patients and families.
3. Chronic care management
While not exactly new, recent changes in the Physician Fee Schedule make it much easier for physicians to provide CCM services to their Medicare patients. Easier enrollment into the CCM program, the elimination of face-to-face visits for existing patients, no longer requiring separate consent forms, and additional reimbursement for time beyond the standard 20 minutes makes it much more financially attractive. The creation of a care plan will also boost reimbursement as will the treatment of moderate and high complexity patients.
The goal is better care coordination, the results of which have been well documented. But, the challenge is how to execute and operationalize this method of patient management. Several third-party vendors provide automated CCM programs that can help physicians manage their chronic care patients in a way that easily and successfully captures the maximum reimbursement.
4. Medication adherence program
With approximately 50% of all prescriptions not taken as directed and 25% of which are never picked up from the pharmacy, medication adherence is a significant problem in our healthcare system. If physicians had the opportunity to dispense the initial pack of medication at the point-of-care, it would not only increase compliance, but it would also generate an additional revenue stream. The program does not add any cost to the practice, or the healthcare system, and can be easily integrated into your current office workflow. By leveraging the physician-patient relationship, patients would be better educated on the need for medication adherence, and it would simplify the prescription process.
A medical adherence solution could also be tied to more effective chronic care management. CCM patients take multiple pills at different times of the day, and in a different order, so smartly designed, calendarized, compliance packaging or a simple conversation with a familiar and trusted CCM professional could easily prevent a mix-up–or a potential catastrophe. In the end, a medication adherence program could allow you to provide complete care and better outcomes, both that contribute to the greater satisfaction of your patients.
Making a wise choice
While additional revenue streams are attractive, you should evaluate each opportunity carefully and with proper consideration. Look for services that will best serve the size of your practice and the needs of your patients. Determine the cost of implementation and the potential to differentiate your practice, increase your reach, and attract new patients. Making an informed and educated choice to add additional services could be one of the most important business decisions you make.
How practices are making the shift to Value-Based carePosted on: 04.19.18
When you think about positioning your practice for success and overall sustainability, the transition to value-based care should be one of the first things that comes to mind. The shift from the fee-for-service model is no longer a trend, but a critical necessity in today’s healthcare environment. The value-based approach is the future of patient care and resisting–or even hesitating–will cost your practice the loss of potential revenue and overall viability.
The central idea behind value-based care is to create a system that is not measured solely by services rendered. Its objective is rooted in redefining quality care by enhancing both patient outcomes and experiences, and improving the health of the patient population, while ultimately reducing the increasingly high costs of healthcare.
Transitioning to this new school of thought will include modifications to organizational workflow and a move away from episodic care. Here are a few practical steps you can take as you prepare your practice for value-based success.
Know your patient population
Under the value-based reimbursement model, patient analytics is a critical factor in population health management. Patients with the highest risk of hospitalization, such as chronic or complex conditions, typically incur the highest health care costs. They’re also the ones who suffer most from fragmented care. Identifying this population will help you isolate areas for improvement.
Analytics also use trends to reveal gaps in care by identifying individual patients who may be accessing health care outside of the traditional channels. For example, when and why do patients visit an urgent care facility or emergency room? Is it after hours or on the weekend? Had they been recently discharged from the hospital? Implement a solution that drives utilization toward a high-quality, lower-cost alternative. Ultimately, patients must feel their needs are being met without going outside the box. In some instances, enrolling patients in a care transition program might be the answer.
Analytic software can also help you identify other unnecessary costs. Compare costs for imaging services used by your practice or the cost of supplies. Your findings may reveal that an imaging center used by your practice is more expensive than another comparable one in your area. That’s an easy way to reduce expenses.
Invest in the right technology
With value-based care reimbursement, it’s critical to employ the technologies that support your overall goal. Clinical decision support tools provide the knowledge and patient-specific information that enhances decision-making in the clinical workflow and ultimately improves care. By providing a playbook of protocols, these tools eliminate waste by minimizing unnecessary tests. They also improve patient safety by giving providers access to a patient’s complete medical records, a comprehensive view of their overall health, and a method of easily and quickly sharing patient data with other health systems as needed.
Improve patient engagement
Engaging patients in their health and care is a critical component of value-based care. Patients who are engaged have greater knowledge, ability, skills, and willingness to successfully manage their health and are more compliant with doctors’ orders and recommendations. Investing in engagement leads to better outcomes and lower costs, which are both critical in value-based care.
Patient portals are an ideal method of improving engagement because you effectively give patients access to your practice and a level of control that empowers them. Enrollment, visit summaries, online appointment booking, collecting family health history, and email communication are just some examples of the value and efficiency it can offer your practice and your patients.
Couple that with the creation of care teams who follow patients through their care cycle and beyond, you allow for a more longitudinal care approach. This approach can bring about sustainable change in your patient relationships and how they view their care.
Each step on the way to value-based care should be viewed as a learning experience. As these experiences provide you with more knowledge and understanding about what works best, you can make the changes that will better meet your patient needs.
Five ways that cardiologists lose money each yearPosted on: 04.12.18
Every medical practice is a business and while improving their patients’ health is a physician’s ultimate goal, running at a profit is also critically important. The two may seem to be in direct competition with each other, especially when the healthcare industry is marked by escalating costs and a decline in reimbursement rates.
It’s estimated that, on average, practices experience a 10%-15% profit leak. While each practice is different, that could easily amount to over $100,000 each year. Let’s look at the five most common areas where money may be slipping through the cracks.
1. Billing and Collection Inefficiencies
Collecting patient payments, whether directly from the patient or through the insurance company, is one of the most significant obstacles all medical practices face. Failing to bill for services, track payments, and follow up on outstanding invoices causes practices to lose a considerable amount of money each year.
It’s critical to have adequate billing procedures in place and office staff that are expertly trained and can effectively communicate with patients and insurance companies. Front desk personnel should be trained to collect payment due at the time of service, as well as any past due balances. Benefits should be verified prior to the patient’s arrival and reviewed when services are rendered. Every viable payment option should be available in your office and, although some situations may warrant a payment plan, consider offering it only after exhausting all other options.
2. Inefficient and outdated technology
In the financially-stressed medical industry, technology is sometimes viewed as a luxury, when many times, it’s a necessity. In any business, improved technology should make your job easier, save time and money, and improve outcomes. Innovation in health care is no different. Medical practices are continually faced with the need to incorporate new technology, but it’s critical to choose solutions that let you manage your services more effectively, optimize workflow, and improve patient satisfaction. It could be the reason you’re able to reduce staff, attract patients, gain referrals, and ultimately increase revenue. Whether it’s an antiquated camera, an outdated PACS, or a scheduling system from the 1980’s, you need to evaluate your investment with the future in mind.
Thankfully, there are multiple ways to approach a technology upgrade. Purchasing a new or pre-owned system, signing a lease agreement, or even outsourcing services can be smart choices under the right circumstances. Choosing the appropriate technology upgrade can significantly reduce your long-term expenses and improve outcomes at the same time.
3. Improper CPT Codes and Downcoding
Incorrect CPT coding is one of the most common errors among practices, and the reason for it ranges from a simple mistake to downcoding. Downcoding is the selection of a lower billing code than the actual service provided, which can reduce payments by about 50 percent. Practices downcode in an effort to avoid attention from insurance companies and auditors—so much so that they’re willing to charge less than they should. It’s a pattern that not only causes the practice to lose considerable revenue, but it also opens it up to additional scrutiny and subsequent penalties.
4. Insurance Denials
All physicians know that insurance denials are on the rise. Payers are requiring more detailed information and documentation and are kicking claims back for as little as a clerical error. Shockingly, CMS reported that 60% of rejected claims are never resubmitted. That’s a considerable amount of money that could significantly impact your bottom line. Develop a tracking system for insurance payments and denials from each payor. A knowledgeable staff member who is dedicated to insurance claims should work to research the denials, correct them, and re-file the claim. Don’t make the mistake of assuming all insurance denials are correct.
5. Underutilizing your EHR system
Many practices have blamed their losses on their electronic health record (EHR) system. It’s an easy scapegoat, but not really the full story. A study at the University of Michigan found that the underutilization of a practice’s EHR system was the real culprit.
Many practices didn’t implement the operational changes an EHR system affords. It can increase revenue by simply allowing you to see more patients per day or helping with accurate billing codes and single claim submissions. Almost half of the practices they surveyed didn’t benefit at all from the electronic records feature because they continued to use paper. Understanding and taking advantage of the technology already available to you is critical. If not, you’ve not only lost money on your initial investment; you’re losing revenue with every passing day.
While capturing the 10-15% of profit that you’re losing might not be simple, it’s an effort that can pay real dividends. Tasking your administrative staff with addressing these areas can help your practice stay profitable and healthy over the long-haul.