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Of Hospital CXOs

Benchmarks versus Hunches

By Dr. David Edward Marcinko; MBA, CMP™

Publisher-in-Chief

By Hope Rachel Hetico; RN, MHA, CMP™

Managing Editor

As administrators and physician-executives, we have often wondered about the managerial thought processes of some former hospital CXOs.

Our History in Georgia

For example, since arriving in Atlanta in the early 1980s, we have seen more than a dozen hospitals and five free-standing outpatient treatment centers shuttered due to fiscal insolvency.  Included among the closures were urban and suburban entities, as well as private and public organizations following both profit and not-for-profit business models. 

The recent public plight of Grady Memorial Hospital, our only Level III trauma center, is another good illustration. And, there seems to be no commonality among the casualties. 

CXO Hunches

We can only surmise that these healthcare organizations were run according to CXO “hunches” regarding cash flow analysis, revenue augmentation and cash conversion cycles, etc.

If true, this reinforces our belief that, although providing high-quality medical care remains the primary concern of all healthcare organizations, profitability does matter … and the maxim “no margin, no mission” still applies. 

CXO Benchmarks

Fortunately, we are better informed today as real [entity specific] business benchmarks – not best guesses – can be used to help us make wiser strategic and more profitable financial decisions for almost any healthcare organization.  

Assessment

Therefore, we are grateful for the opportunity to edit this blog’s companion print journal guide, Healthcare Organizations [Financial Management Strategies] www.HealthcareFinancials.com

It’s a behemoth at 1,200 pages – in 2 volumes – and produced in arm’s length fashion by iMBA, Inc www.MedicalBusinessAdvisors.com

We trust you, and your healthcare organization, will review, use and profit by it.

Print TOC: http://www.stpub.com/pdfs/toc_ho.pdf

PS: Don’t forget to review-read-rave and rant online at this communications forum:

www.HealthcareFinancials.wordpress.com

Conclusion

Let benchmarks, this blog, and Healthcare Organizations: [Financial Management Strategies] take precedence over your gut in guiding your decisions.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Practicing Medicine “Bare”

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Understanding Hold-Harmless Managed Care Contract Clauses

[By Dr. Charles F. Fenton, III; JD]

Most doctors would not think of “practicing medicine bare”; yet perhaps the definition of this term should be re-framed?

Historical Definition

In the past, the term “practicing-bare” meant that a medical provider did not have malpractice insurance.

However, some current managed care contracts require that providers not only have certain limits of malpractice insurance coverage, but also furnish the company with evidence of same. Therefore, some of these providers are under the impression that they are not “practicing-bare.”

Hold Harmless Clauses

Unfortunately, most medical providers have no protection from adverse results arising out of a “Hold-Harmless” clause in a managed care contract or provider-agreement. And, most malpractice insurance companies do not provide such coverage.

So, if your malpractice insurance company does not provide coverage for such events, it is incumbent upon you and your associations to lobby malpractice insurance carriers to provide this coverage.

An additional rider, at an additional premium for Hold-Harmless coverage, would help the doctor sleep better at night.

Contract Considerations

The first question doctors should ask is: Would I consider practicing without malpractice insurance?

If the answer to this question is “no”, then the next question that should be asked is: “Why am I assuming the risk under the Hold Harmless Clause?” 

If you cannot provide a lucent answer to this question (stating: “I have no choice,” is not a lucent answer!), then you should consider not signing the managed care contract.

Judgment Proof

Nonetheless, if a medical provider has signed a managed care contract, then they should understand that they are essentially practicing bare, and should take steps to reduce this exposure. In effect, the provider should attempt to become “judgment-proof.”

Such a step does present its own risks. Ultimately, the first step for every physician who signs a managed care contract, with hold harmless agreement, is to read the contract and then consult an attorney or other professional. Of late, plaintiff-attorneys are beginning to make inroads in suing managed care companies. The managed care attorneys foresaw such events and provided protection for the company in the contracts most providers have signed.

As your patients and other plaintiffs become successful in suing and recovering from managed care companies, those companies are going to seek indemnity from you; the provider. Unless you protect yourself, you are likely to become a collateral casualty to some degree or another.

The current practice of medicine presents may perils and risks to doctors and other providers. A doctor may not be able to insure against all these risks, and should take defensive steps to avoid future problems.

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Conclusion

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The NPI and One DDS’s Opinion

A Dentist Offers his View on the NPI Deadline Issue

pruitt

By Darrell Pruitt, DDS

I have a unique perspective of the National Provider Identifier [NPI] issue. 

As a dentist who has no contracts with any insurance company, I refuse to apply for an NPI number. Legally, I am not compelled to “volunteer” for the number, regardless of whether it is a mandate or not.  HHS does not license dentists. States do. Texas says that it is fine by them for me to practice here on the east side of Fort Worth.

Why Volunteer?

Why should I volunteer for the NPI mess?

The NPI does nothing to improve the quality of care I provide. It benefits only payers, and any time anyone fouls up at National Plan & Provider Enumeration System [NPPES], it can only mean one thing – payments will be delayed, earning insurers even more interest on money meant to pay for work already done and long gone out the door.

I should remind you that inflation is due to soar soon as well, making the reimbursement worth even less to the provider the longer it is delayed.

The IRS

And, there is more.

I assume you heard about the IRS sticking their fat fingers into the pie. That happened just recently, completely unexpectedly.

Now the IRS can delay claims as well if one has an NPI number. What a mess. Why would I want to be part of it? If having an NPI forces me to raise my fees, it hurts my patients.

Part of the Hippocratic Oath is to do no harm. It is clearly unethical for a doctor to have an NPI number. Allow me to show you how far ethics will take a Texas dentist these days.

My Situation

Since I am not on any managed care plans, my BCBSTX-covered dental patients who I have treated for years did not pick me off of BCBSTX’s annual preferred provider list. They chose my practice as a consistent dental home, year after year, because they were more than likely referred by a satisfied patient.

When the BCBSTX agents sold my patients’ employers their dental plans, the insured was told to tell employees that they could see any dentist they choose. This is called a traditional indemnity plan, which honors freedom of choice as opposed to the cheaper managed care plans that penalize clients for not going to dentists that the insurance company prefers.

The Managed Care Misnomer

Calling managed care in dentistry “insurance” is a misnomer. It is actually nothing more than a discount dental brokerage service with annual lists of the lowest bidders in the market, and there is no quality control.

Until recently, I have had an unwritten agreement with BCBSTX that I would honor their insurance by allowing their clients to pay only their estimated part of the dental bills, and I would wait for BCBSTX’s share to come later in the mail – however long that takes.

That is called “accepting assignment,” and it is based on trust between dentists and BCBSTX, and is a favor to patients, not a requirement.

I have to say that BCBSTX is so slow at paying their part of their clients’ bills that patients would soon become very impatient if they had to wait as long for their money as I have to wait for mine. My practice, as well as my patience, can tolerate delays … up to a point.

In the end, if a claim is unreasonably delayed by an insurer, I can ultimately call on the state insurance commission to fight for fairness for my patient. Who can I complain to if payment is delayed by the IRS?

Assessment

In the last week, BCBSTX rejected three of my claims because I don’t have an NPI.  What am I to do?  

Ultimately, I may have to go against my own ethics and apply for an NPI number in order to stay in business.

The NPI does nothing to improve the quality of care I provide to my patients. It only delays payment.

Conclusion

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Physician Owned Hospitals

New Patient Disclosure Rules

Staff Reporters

According to Bloomberg News, August 19, 2008, doctors with financial stakes in hospitals where they work must tell patients being referred to those facilities about the ownership link, under new rules from Medicare.

Patient Queries

Patients who ask about investors in a physician-owned hospital must be furnished with a list of all doctors, and their immediate family members, who own or have an investment interest and make referrals.

Assessment

Medicare is seeking to make it harder for doctors to boost their payments by referring patients to their own facilities; and it already bars self-referrals for 11 services. The agency said it would end reimbursement agreements with physician-owned hospitals that don’t follow the new disclosure requirements.

Conclusion

What do you think about this, “if they don’t ask – don’t tell” policy; your informed opinions and comments are appreciated. Is it too much disclosure, or not enough?


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ICD-10 Code Set Disagreements

MGMA Targets Implementation Date

Staff Reporters

The Medical Group Management Association [MGMA], who previously has published commentary and material from our Executive-Post Editor-in-Chief, Dr. David Edward Marcinko, believes that the Centers for Medicare & Medicaid Services’ [CMS] proposed Oct. 1, 2011 compliance date for full implementation of the International Classification of Diseases, Tenth Revision (ICD-10) code sets is not workable.

Numerous Challenges

According to an August 19th edict, the MGMA said the government must overcome numerous challenges before the health care industry can fully implement ICD-10. The proposed rule for the next generation of the Health Insurance Portability and Accountability Act (HIPAA) electronic transactions (ANSI X12 version 5010), released with the ICD-10 proposed rule, must be put in place prior to ICD-10 and MGMA believes this will take several years for full implementation and testing.

Assessment

Because ICD-10 contains 10 times the number of codes as ICD-9, the newer code set will require vast changes for medical groups, hospitals and other health care facilities. MGMA surveys found that 95 percent of medical practices would have to purchase software upgrades for their practice management systems or buy all new software, while 64 percent concluded that they would have to purchase code-selection software, and 84 percent stated that they did not think public and private health plans would be ready to accept claims with ICD-10 codes by October 2011.

Conclusion

Your thoughts are appreciated. Will you be ready for ICD-10; please opine and comment.


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Stark Amendments [I-II-III]

A Review for Physicians, Consultants and Advisors

By Dr. David Edward Marcinko; MBA, CMP™

By Dr. Charles F. Fenton, III; FACFAS, Esq.biz-book2

The Stark Amendment to the Omnibus Budget Reconciliation Act of 1989 was a step by the federal government to prohibit physicians from referring patients to entities in which they have a financial interest.  Originally, the Stark amendment applied only to referral of Medicare patients to clinical laboratories in which the physician had a financial interest.

 

 

Stark I Provisions

The Stark Amendment provides that if a physician (including a family member) has a financial interest in a clinical laboratory, then he may not make a referral for clinical laboratory services if payment may be made under Medicare. A financial interest is an ownership interest, an investment interest, or a compensation arrangement.

Exceptions

There are certain exceptions to the Stark Amendment. For example; if a physician personally provides the service or if a physician or employee of a medical group, provides the services.

Safe Harbor Regulations

Like the Safe Harbor Regulations [SHRs], the Stark Amendment permits physician investment in large entities and provides an exception for rural providers. Under the Stark Amendment, large entities are defined as publicly traded entities with assets greater than $100 million.

But, there are certain other exceptions that are similar to the safe-harbor regulations. They include items such as provision for rental of office space, employment and service arrangements with hospitals, and certain service arrangements. These arrangements must be at arms-length and at fair market value.

Stark II

Stark II was passed in 1993 to modify and expand the Stark amendment.  In particular, it acts to bring numerous other entities, besides clinical laboratories, within the prohibitions of the Stark amendment. 

Stark III

The Federal Register notes that “Stark III” regulations went into effect on March 26, 2008.

Link: http://mamedicallaw.com/blog/2008/06/15/what-do-i-need-to-know-about-the-stark-iii-rules/

Assessment

Self-referral and over utilization may become less of a problem as managed care makes further in roads in medical practice control and quasi-subrogation. Future legislation is likely to address the concerns of the financial incentives towards under utilization of ancillary medical services.

Update

Quote: Self-referrals

Docs and dollars: This one’s a twofer. The first is a hotly-discussed NEJM paper showing that urologists (not radiation oncologists, as we’ve covered earlier) owning a stake in radiation therapy equipment tend to recommend that equipment more often than docs without an ownership stake. The second is a less-publicized government report showing that surgeons with a stake in device distributors also recommend those devices more than other surgeons. This shouldn’t surprise anyone — doctors are human, after all. The Stark laws designed to prevent physician self-referral, for some reason, make an exception for the IMRT conflict-of-interest in the first paper. And I don’t think any legislation foresaw the physician-owned-distributorships in the second article.

-Austin Frakt PhD

Conclusion

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