In today’s complex healthcare environment, private physician practices face many unique challenges and may operate with fewer resources compared to hospital-owned practices. To help mitigate these challenges, PYA has identified seven key strategies that leaders should consider to position their practices for success in 2024.
PYA’s Top 7 strategies offer opportunities for practice leaders to optimize revenue, improve day-to-day operations, and lead practices to success. Implementing the strategies early in the year will aid the practice in achieving its fiscal and operational goals in 2024.
Medicare Physician Fee Schedule Final Rule
The Centers for Medicare & Medicaid Services (CMS) published the Calendar Year 2024 Medicare Physician Fee Schedule (MPFS) on Nov. 16, 2023, to finalize a range of updates including but not limited to a notable reduction to the conversion factor, addition of an evaluation and management (E/M) visit add-on code, telehealth service provisions, and initiatives aiming to expand coverage and payment for certain services.
CMS has finalized a reduction to the conversion factor from $33.89 to $32.74. While the impact of this change on private practices will vary, the addition of add-on CPT[1] code G2211 for E/M visit complexity will benefit physicians who typically manage the comprehensive care of their patients. Physicians who can bill G2211 frequently (e.g., primary care physicians and others primarily seeing patients for a single, serious, or complex condition) may see an increase in Medicare reimbursement. Meanwhile surgeons and other proceduralists may be impacted negatively due to overall fee schedule reductions for other services as required by budget neutrality.
Additionally, CMS finalized several telehealth-related provisions including
- Temporary expansion of the scope of originating sites for services furnished via telehealth to include any site in the United States where the beneficiary is located at the time of the telehealth service, including an individual’s home;
- Expansion of the definition of telehealth practitioners to include qualified occupational therapists (OTs), qualified physical therapists (PTs), qualified speech-language pathologists (SLPs), and qualified audiologists; and
- Continued coverage and payment of telehealth services included on the Medicare Telehealth Services List until Dec. 31, 2024.
Top 7 Strategies for Private Practice Success
Strategy 1: Monitor Managed Care Contracts
Keeping a close eye on managed care contracts is imperative for optimizing reimbursement. Physician practices should be loading allowables into their practice management system and ensuring claims are being paid correctly per contract. While the ability to materially shift managed care contracts is often challenging in today’s environment, physicians have opportunities to analyze current variances in reimbursement and identify potential missed revenue.
Strategy 2: Review Fee Schedule/Chargemaster
Practices should annually review the chargemaster against current contracted allowables. Most managed care payer contracts include “lesser of” language indicating reimbursement is either the contracted rate or the charge amount, whichever is lower. If charge amounts are not reviewed and increased periodically, they can quickly become out of date (less than contracted rates), resulting in reduced payer reimbursement. Practices should remember to adjust charges, so the practice does not “leave money on the table” with low charges. While this may increase contractual adjustments and impact the gross collection rate, the increase in captured reimbursement should outweigh the additional adjustments.
Strategy 3: Review Financial Controls
By performing a financial controls review, a practice can determine the nature of its current controls, whether such controls are capable of reasonably assuring material errors are avoided, and whether the prescribed controls are being followed and are operating effectively. This review should evaluate procedures related to billing and collections, cash receipts and disbursements, payroll, and petty cash. If weaknesses are identified, practices can make improvements to ensure appropriate checks and balances and segregation of duties are present, especially after process changes that may have been adopted over time and during the COVID-19 pandemic.
Strategy 4: Assess Revenue Cycle
Conducting a focused revenue cycle assessment and reviewing key financial performance indicators are critical to identifying areas of opportunity and/or risk. A review of processes such as patient registration, insurance verification, charge capture, point-of-service collections and posting, unpaid and denied claims, identification and handling of credit balances and overpayments, etc., can expose gaps and delays in the revenue cycle. Practice staff have a significant responsibility in the process and have the power to reduce preventable denials. Reviewing policies and procedures, properly training and providing continued education to employees, and having the right information technology resources in place empower the team to increase collections and efficiency. Minor adjustments and improvements to operational workflows could significantly increase collections year over year, and reinforcing best practice policies can improve the practice’s financial health.
Strategy 5: Analyze Monthly Financial Reporting
In addition to annual revenue cycle assessments, analyzing monthly financial reports can help “check the pulse” of the practice’s financial health. By identifying and monitoring changes in patient volume, charges, expenses, and revenue month over month, a practice will gain additional insight into strengths, areas of opportunity, and trends. More specifically, reviewing the profit and loss statement (P&L), accounts receivable (A/R), adjustments, credit balances, and denials reports can assist in identifying unexpected trends early, so the practice can get back on track without significant loss. Workflows can be modified as needed to improve efficiency, and leadership can make informed decisions regarding the practice’s revenue streams.
Strategy 6: Evaluate Staffing Approach
To remain successful in a complex labor market, physician practices must think creatively and remain proactive in maintaining adequate staffing levels. Practices should review onboarding processes, as well as general policies and procedures to appropriately train and develop employees. Additionally, every practice should review areas of vulnerability such as lower-than-market wage rates, excessive work hours, and limited benefit offerings. By remaining competitive in these areas, practices minimize turnover and increase employee well-being, which in turn support stronger practice operations.
Strategy 7: Evaluate Clinical Research
Participation in clinical research trials continues to increase in medical practices as physicians desire to save lives, provide cutting-edge therapies for their patients, and improve community health. Participation also provides an opportunity to attract new patients and minimize patient outmigration or loss of existing patients, and it provides new revenue streams. Providers currently in clinical trials should regularly evaluate their operations and processes to ensure these are being provided safely and compliantly. Practices not currently participating in clinical trials may consider the evaluation of opportunities that are appropriate for the practices’ specialties and patient base a worthwhile endeavor.
Reference
[1] Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) are registered trademarks of the American Medical Association.
How PYA Can HELP
Each of these strategies presents leaders with an opportunity to improve key functions of their practice. PYA has extensive experience assisting physician practices by conducting reimbursement, revenue cycle, and operational assessments and providing ad hoc consulting to meet specific needs.
If you are interested in learning more about the strategies outlined above, our executive contacts would be happy to assist. Contact them at the email addresses below or by calling (800) 270-9629.
