Practice Financial Management – Insights & Tips From MedCV That You Need to Quickly Maximize Your Income
Hospitals and medical groups are finally shaking off the economic fallout of the Covid-19 Pandemic, but now historic inflation and looming economic uncertainties continue to place significant pressure on them to improve their financial performance. That’s why John Rezen (FACHE, MHA) in collaboration with MedCV have brought back this series of 2-3 minute reads on how You can assess and improve your practice financial performance in 12 essential areas. Each installment will help you and your team quickly add cash to your bottom line by allowing your practice to work smarter and harder. The following checklist of performance measures will help physician enterprises identify financial opportunities and accelerate their improvements. Below are the 12 topics, to read a previous segment, click on the name/link. The current segment is in Blue and upcoming segments are in Black.
- Staffing minutes per encounter
- Average staff pay rate per hour
- Providers’ pay per wRVU
- Service costs-to-revenue
- Supply and drug costs-to-revenue
- Overhead costs-to-revenue
Even if you are not directly responsible for the management of your practice, knowing this information will help you make sure you are making the the income you and your team have earned. So let’s get started!
Tip 4 of 12 – Coding it right the first time makes you money! Reworking is costly!
- Improve wRVU per Encounter:
a. Assessment: Compare wRVU per encounter to MGMA benchmarks for each specialty. If your practice is below benchmark on this ratio there are two possible causes. One cause is under coding and/or inadequate documentation. This problem is particularly evident for E&M encounters as you can compare the percentage of visits at each level to MGMA benchmarks. A second cause is a service mix that is less intensive than your physicians’ peers. This intensity differential could play out in a higher proportion of visits to procedures or a procedure mix that generates a lower value of wRVU’s per case.
The amount of opportunity for this factor can be determined by calculating the difference between the actual wRVU per encounter and the MGMA benchmark for each specialty and then multiplying that value by the number of encounters. Next, multiply the total wRVU shortfall by the dollar collected per wRVU to identify the additional revenue opportunity for each specialty.
b. Improvement Action: Improving a low wRVU per encounter ratio first requires identifying the cause. If the cause is driven by coding and documentation issues, the corrective action will involve focused coding and documentation audits to address those providers generating ratios that are below benchmark. These audits can be conducted by in house coders if your organization has the required resources and expertise. Alternatively, several vendors offer this service. Bill Dunbar and Associates (BDA) for example is another trusted MedCV Teaming Partner that offers this service in a no risk arrangement with their clients. Their fees are based on a percentage of the actual revenue improvements which means there is no risk if you elect to have BDA help. You can learn more about BDA at: www.billdunbar.com
As a physician, if this sounds like a lot of work and maybe even has your “business anxiety level” up a few notches, you are not alone. The great news is that your role in this should just be to make sure it gets done and that those who are going to be responsible and accountable for this can explain and report details about what the plan looks like and its status to you.
Share this article with your practice manager, group administration, or hospital administration to make sure they are working on this or see what resources they have to get at this work. If they need help in getting started, they should consider connecting with John Rezen at Value Health. The key is to be able to have your baseline, you would expect your team to report to you the improvement(s) made and the results.
Stay tuned for Part 5 of 12, Encounters per Provider/Provider Production next week. If you can’t wait that long, no problem, just contact John for the full 12 part series. Again, it’s in your best financial interest to make sure each of these 12 Key Performance Indicators are optimized, you understand them, and take action, even if the action you take is to share the series and your new found business insight with your group or hospital administration.
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