Blog and Helpful Articles

ICD-10 Implementation is not just Doom and Gloom

Doomsday predictions certainly abound – Heaven’s Gate, Y2K, the Mayan apocalypse – and they all came and went with a fizzle.  ICD-10 has its own group of “end of the healthcare world as we know it” zealots who predict catastrophe for the transition of code sets.  Certainly, the change is huge: our healthcare system will go from the ICD-9-CM system of approximately 14,000 codes to the 70,000+ ICD-10-CM codes, seemingly overnight.  We tell our clients that the change is akin to going to sleep on September 30, 2014 speaking English and waking up the next day, needing to speak another language, fluently and exclusively.  It boggles the mind!

All in all, we’re probably the lone voices in assuring that the transition to ICD-10 for most small providers won’t be as bad as everyone thinks, assuming that the technological requirements are met.  The components are analysis and preparation; it’s their timing that is the key.  The sheer volume of ICD-10 codes can be intimidating, but the reality is the codes are laid out much like the ICD-9 series.  In addition, the new code set removes a great deal of ambiguity in code assignment because rather than having, for example, a table with fifth digits, the codes are laid out completely in their own rubrics.

It would be behoove every small provider to begin today by conducting a thorough analysis of its organization in order to plan the transition.  Single specialty practices work with a much smaller subset of diagnoses than what is ICD-10, so the first step is to know what those are.  Next, it’s important for the provider to learn about the coding changes affecting those conditions.  ICD-10 revises and even adds certain guidelines that will affect coding and impact claims payment.  This is the point at which most providers will determine the type of assistance that best fits their organization: hands-on training and coaching; web-based, ‘self-service’ modules; or some combination.

The largest part of the assessment process, and likely the most challenging, is evaluating whether provider documentation will facilitate or impede proper code assignment in ICD-10.  Once the organization’s assessment reveals frequently used diagnoses, obtaining a baseline of current documentation’s ability to provide enough information for coding will help the organization create a preparation plan to meet the October 1, 2014 deadline.

It is widely believed that the ICD-10 transition pains are due to new codes; our perspective is that inadequate clinician documentation is the primary issue, and it’s not a new one.  Coding in ICD-9 is just as affected by imprecise charting as ICD-10 will be.  The widespread adoption of EMRs is alleviating some of the consternation of coders and practice managers, but the substantiation of coded diagnoses will continue to be a problem until clinicians address their poor documentation habits.  CMS, through its RAC and other audits, has been forcing the issue of documentation for quite some time so in a sense, ICD-10 is just the next step along that continuum.

Education on the changes in code sets – for clinicians and staff – is important, but cannot occur too early.  Using the language fluency scenario above, one wouldn’t master a language today that cannot be used for 17 months, but there is basic education regarding the coding format and most frequently diagnosed conditions that can occur over the next six months.  The bulk of education, depending on the organization’s complexity, should begin in the early spring of 2014.  Ideally, the clinicians and staff will have some advance knowledge of the changes and a reduced “fear factor” so they can apply the information in a training environment.

That brings us to the practice component.  Various methods of practicing ICD-10 exits from the more manual, such as coding a percentage of materials in both code sets, to using software programs.  A rational training curriculum is critical so the education and application process lead to a smooth transition.  As it is, experts predict it can take six months to a year for productivity to return to per-implementation levels.  This can wreak havoc in small organizations because of the associated decrease in revenue.

The last part of the transition is to secure lines of credit early.  Again, depending on organization size and complexity, transition to ICD-10 could require adjustments in the number of patients seen, how quickly claims can be reviewed and filed, and even how denials and appeals are handled.  Adequate cash flow will minimize one large stressor so the organization can focus on the transition itself and preserve the quality of patient care.

Further delays in ICD-10 implementation are not likely so developing a transition plan is the first order of business.  Excellent resources abound from CMS, professional organizations and consulting firms.  The keys are analysis and preparation, and there is sufficient time to do both and skate through this massive change.

Read Full Post | Comments 1

Tagged , , , , , , , , , , , , , , |

HR Issues for the Small Business: Disciplinary policies (Part 3)

Let’s face it, disciplining employees can be distasteful and this discomfort leads managers to follow the “let’s ignore the problem and see if it goes away” course of action. Not a good idea!  Every business should have a standardized written policy that covers performance standards and disciplinary steps. In addition to having these policies, managers must make sure that they have been communicated to every employee and that they are being followed.  The best approach is to discuss the organization’s disciplinary policies in the orientation of every new employee.  We encourage you to read our blog about orientation, an area that should not be overlooked.

Disciplinary policies sound negative to many managers, but their primary purpose should be to motivate and encourage your employees to perform at the acceptable standards you have set.  This often proves successful and the employment relationship is positive; however, sometimes a disciplinary plan must be established to deal with problem employees.  The plan, and associated policy, should include coaching and giving the employee time to improve, a clear expectation of what will happen if no improvements are made and a consistent commitment by management to follow through with these steps.  All employees should be held to the same performance standards and policies must be applied to all members of your team with consistency.  Inconsistency in a disciplinary process accounts for a large percentage of the claims lodged with the EEOC and can result in hefty damages if they result in a lawsuit.

In addition, consistent documentation protects the company from legal problems when your actions are challenged.   When an employee is coached verbally it is just as important to document the main points of the conversation in addition to the employee’s reaction.  It is crucial to avoid the complacent mindset that written warnings are the only documentation needed to substantiate the difficult decision of disciplinary action up to and including termination.

Attention to all aspects of the human resources sphere and solid HR policies that are consistently applied are keys to top performance as well as avoiding costly fines and morale problems in your company.

Read Full Post | Comments Off on HR Issues for the Small Business: Disciplinary policies (Part 3)

Tagged , , , , , , , , , , , , , , |

What We’re Reading – Three Additional Income Opportunities for Physicians

Today’s economy and low reimbursement rates are forcing physicians to put on their “entrepreneur hats” since they cannot solely rely on shrinking insurance payments.  This article provides some good suggestions for revenue generation that will help your bottom line and lower your stress level.

First, if you don’t have one already, consider establishing an in-house lab.  Creating a “one-stop shopping experience” will benefit your patients with greater convenience for lab tests and clinicians will have faster access to test results. Another revenue source is doing speaking engagements for a pharmaceutical company.  Many physicians may shy away from public speaking opportunities, but if you really believe in the drug and would prescribe it without being a paid spokesperson, this can benefit your colleagues, their patients and your checkbook. Another great option is conducting independent medical examinations for legal cases.  Attorneys contract physicians to examine the plaintiff, conduct a physical exam and review medical records.  The physician gets paid regardless of the outcome of the case.  Lastly, clinical research studies benefit science as a whole and your patients, and are conducted by pharmaceutical and other companies.  Although research involves time, expertise and perhaps hiring additional personnel, such as a research coordinator, it can be a win-win for everyone.

Greater creativity and an entrepreneurial mindset will more needed than ever to sustain a vibrant practice that benefits medical science as well as individual patients.

Read Full Post | Comments Off on What We’re Reading – Three Additional Income Opportunities for Physicians

Tagged , , , , , , , , , |

HR Issues for the Small Business: Payroll issues (Part 2)

Last Monday, we reviewed hiring issues that can wreak havoc in small companies.  In this second blog of our three-part series, we will look at the two areas in payroll administration that, if not handled correctly, can lead to serious problems in your business.

One of the main headaches of operating a small business, especially in the first year, is the difficulty in maintaining a good profit margin and “keeping your head above water.” However, it would behoove every small business owner to beware of becoming lax and not managing payroll taxes. The IRS can be unforgiving when it comes to falling behind on payments owed to them. The three major penalties are failure to file, failure to deposit, and failure to pay. There are defined periods for the payments of payroll taxes and deposits must be made within three days of the payroll check date.  If you fall behind, the IRS will assess a penalty of 33% plus interest and the Trust Fund Recovery Penalty (TFRP) allows the IRS to recover uncollected taxes from a business owner individually. Because small businesses account for the largest source of uncollected tax, they are always on the IRS’s radar, so to speak. Unpaid payroll taxes can also result in criminal charges if the IRS can prove that the taxes were intentionally not paid.

Another business area that is fodder for employee lawsuits results incorrect payroll practices, especially as they relate to state and federal minimum wage laws and overtime.

Business owners must ensure that regardless of the size of your business, you are paying at least minimum wage. Small companies sometimes have a tendency to make verbal agreements to pay employees lower than federal and state minimum wage and offer other “incentives” as compensation, such as flexible work hours or the ability to work from home. This does not stand up in court and companies are then forced to pay damages plus back pay. Wages are absolutely not negotiable below the federal government’s mandated standards, and also be sure to display the required notice regarding minimum wage in your place of business.

With regard to overtime, the Fair Labor Standards Act (1938) defines a maximum work week as 40 hours; overtime of one and one half times the regular hourly wage for all time worked over those 40 hours is required by law. The only employees who are not subject to this rule are those who are exempt (e.g., salaried vs. hourly). Remember that in order to be considered an exempt employee, the individual must earn a minimum salary of $455.00 per week and perform duties that are executive, administrative or professional in nature. There are some exceptions to this rule that are best explored with a certified professional in human resources or your CPA.

Payroll taxes and employee classification (exempt vs. non-exempt) are just two issues that can result in significant fines and penalties.  Next Monday, we will wrap up our three-part series by discussing disciplinary policies.

So far in this three-part series on common HR issues in small companies, we’ve looked at hiring practices that can be devastating and payroll issues that can prove tricky to navigate.  In this final installment we will discuss disciplinary policies.

Read Full Post | Comments Off on HR Issues for the Small Business: Payroll issues (Part 2)

Tagged , , , , , , , , , , , , , |

What We’re Reading: Four Easy Ways to Boost Patient Time of Service Collections

In this age of insurance plans with high cost-sharing (e.g., deductibles, co-insurance) requirements, a solid collections policy is critical for every medical practice. When practices are lax about checking patient eligibility for services and ensuring a complete picture of what the patient will owe for your services, cash flow suffers. This brief article provides four good tips to prevent this from happening to you.

Be confident and assertive.  Asking people for money can be uncomfortable, and without the proper training, your staff will not know how to ask or how to handle patients who “forget their checkbooks.”  Your office policies should delineate how payments are requested, whether they are prior to the service, or before scheduling a follow-up appointment.  In addition, when making appointment reminder calls, your staff can remind the patient about an outstanding balance or deductible payment that is due.

Don’t make promises you can’t keep. Because insurance coverage can change at any time, be sure to state that the charges are current as of the date the benefits were checked.  If you’ve ever called a health plan, you’ve heard the recording that hedges even the plan’s confirmation of the information.  Do the same.

Ask the right questions. Again, because of the discomfort factor, sometimes employees can phrase the payment as a request rather than a reminder.  If given the option of paying the bill, most patients will opt for later rather than now.  Having to bill a patient entails a cost to the practice, so it’s best to coach staff on the words and tone to use when (politely but firmly) asking for payment.

Prepare for the unexpected. Make sure staff knows how to handle the non-paying patient.  Keep in mind that establishing payment plans for large bills or coordinating the patient’s application with one of the many healthcare financing options are some ways to help the patient meet his or her obligation to your practice.

Read Full Post | Comments Off on What We’re Reading: Four Easy Ways to Boost Patient Time of Service Collections

Tagged , , , , , , , , |

HR Issues for the Small Practice: Hiring (Part 1)

Some fledgling organizations opt for hiring family members.  In some cases, they may be less expensive than external employees, and for some providers, there is a higher trust or loyalty factor to hiring kin.  Although we understand the many reasons, we strongly caution against this tactic.  Some of our clients have employed family members believing these people “have their back.”  It’s not uncommon to witness double-standards in these companies, which are not lost on the non-family employees.  Moreover, creating two “classes” of employees can have devastating effects on morale and on family relationships.

One former client employed his wife, three of her sisters and one sister’s boyfriend, in addition to non-family members.  What do you think happened when one sister came in late, or spent inordinate amounts of time on her cell phone during the workday?  Who picked up her slack, and how do you think he felt about it? Finally, who could the non-family member employee complain to?  The double-standard created by this kind of behavior is caustic, and leads to a culture of “untouchables,” who sometimes take advantage of their position.  Quality and productivity decline as the class war plays itself out in your business.

Trust and loyalty are earned, and it’s unwise to believe they are directly related to a bloodline.  One client of ours partnered unofficially with his only niece in running the company.  When the niece married, she secured a job for her new husband.  It wasn’t long before the niece and her hubby were running roughshod over the business, alienating non-family members, burying paperwork errors and attempting to extort higher salaries for themselves.  On the other hand, we’ve seen many a practice enjoy the dedication of long-tenured staff who behave, in some cases, better than a family member!  In a nutshell, don’t factor genetics into your hiring decisions; it may cost you more in the long run.

In the next installment of this three-part series on common HR issues, we will review payroll and the myriad ways small companies can get into trouble with a lax system.

Read Full Post | Comments Off on HR Issues for the Small Practice: Hiring (Part 1)

Tagged , , , , , , , , |

HR Issues for the Small Practice: How NOT to Fly by the Seat of Your Pants

Many small provider organizations operate in a more informal manner, dispensing with certain formalities like job descriptions, time sheets, and established disciplinary policies,

While we are not employment attorneys, we cannot over-emphasize how costly the lack of human resource policies can be in an organization, regardless of the size.

In this three-part series, we will explore the three HR areas where we see the most issues.

Read Full Post | Comments Off on HR Issues for the Small Practice: How NOT to Fly by the Seat of Your Pants

Tagged , , , , , |

What’s the difference between Type 1 and Type 2 Diabetes Mellitus?

According to the American Diabetes Association, diabetes mellitus (DM) is a “group of diseases characterized by high blood glucose levels that result from defects in the body’s ability to produce and/or use insulin.” 

Insulin is a hormone that helps the body use glucose for energy.  When we eat food, the body breaks down all of the sugars and starches into glucose, which is the basic fuel for the cells in the body. Insulin takes the sugar from the blood into the cells.

DM is described as Type 1 or Type 2.  In Type 1 DM or juvenile type diabetes (or DM I), the individual is deficient of insulin because the pancreas does not produce. Patients with DM I, or Type 1 DM, take insulin by injection or through a pump that releases the right amount of insulin the patient needs at scheduled times and as needed.

Individuals with Type 2 DM (DM II) have a disorder called insulin resistance.  These patients’ bodies produce insulin but either not in the required amounts, or their cells basically ignore the insulin.  When this happens, the insulin builds up in the blood, which can cause complications.  Patients with Type 2 DM take oral medications to cause the body to release more insulin and also to move the glucose into the cells. Type 2 DM is used as the default type of DM when the clinician does not specify whether the diabetes is Type 1 or Type 2.  Keep in mind that the use of insulin does not determine the type of DM.

The American Diabetes Association has specific criteria for the diagnosis of diabetes.  This diagnosis is made by monitoring the blood sugar level on various types of laboratory tests.  Coders should ensure that their clinicians are aware of the ADA’s guidelines which have been refined over the years.  This is specifically important because some laboratory reports may list different parameters for blood sugar readings which vary from the ADA’s guidelines.

The terminology of insulin-dependent diabetes mellitus (IDDM) and non- insulin-dependent diabetes mellitus (NIDDM) is outdated and was replaced with the terminology above in 2004.  It’s important for coding staff to query the clinician when there are inconsistencies or vague documentation of the condition. It is not unusual for a physician to document DMI on one visit and DMII on another.  In addition, coaching should be employed for those clinicians who still use outdated terms.

From a coding standpoint, DM can be tricky.  The ICD-9-CM guidelines require the coder to select from two basic categories of DM for Type 1 or Type 2:  uncontrolled, which means the patient’s blood glucose is not within normal limits, and not stated as uncontrolled. This last category means the clinician didn’t specify the status of the DM (e.g., didn’t say whether it was controlled or uncontrolled).  This designation is made by means of the fifth digit associated with the diabetes ICD-9-CM code.

In addition, DM can cause complications in the body, which range from acute issues, such as coma or shock, to chronic issues, which include kidney, eye, nerve or circulatory problems.

Sources:

  • American Diabetes Association (http://www.diabetes.org)
  • Medical Terminology for Health Professions, Ninth Edition by Ehrlich & Schroeder
  • Clinical Pathophysiology Made Ridiculously Simple by Berkowitz

Read Full Post | Comments Off on What’s the difference between Type 1 and Type 2 Diabetes Mellitus?

Tagged , , , , , , , , , , , , , , |

What We’re Reading – Effective Cost Management for Your Medical Practice

Given our country’s limping economy, having an effective cost management plan for your medical practice is crucial to keeping your doors open.  This article offers guidance on how to accomplish this without sacrificing quality of care to your patients.  A practice has several overhead costs that can be broken down into direct costs & fixed/variable costs.  As you know, direct costs are those related to taking care of your patients (employees and equipment).  Instead of just cutting overtime for your staff right off the bat, assess your employees to see if you have the right people in place to make your practice successful. Sometimes, overtime results from inefficiencies and improper staff members.  By evaluating staff performance, you might find “dead weight” that contributes to overtime costs because others are taking up the slack.

Fixed costs are ones that remain the same regardless of the number of patients seen; they include rent, insurance, etc.  The author suggests you review any contracts prior to renewal and ask vendors about any incentives or rebates for business loyalty.  Sometimes companies will offer incentives in the form of discounts, added benefits or features, or better payment terms to encourage your renewal.

Finally, variable costs rise and fall depending on the number of providers and/or patients in your practice.  One variable cost with huge budgetary implications is medical supplies.  Assess your medical supply use and inventory levels to assure just-in-time ordering and minimize dollars that “sit on the shelf.”  Check out the article for other ways to manage your overhead and have a thriving business.

Read Full Post | Comments Off on What We’re Reading – Effective Cost Management for Your Medical Practice

Tagged , , , , , , , , |

Long-Term Care: The Second Career That Benefits Our Healthcare System

The demographic changes affecting our country are inescapable and our healthcare system is feeling the strain.  The CDC reports:

  • 13% of the population is over the age of 65 and will increase to 19% by 2030;
  • In the same time period, the number of people over the age of 85 will grow from 5.8 million to 8.7 million;

As legislators attempt to stretch available dollars to cover the costs of care for our aging population, there is more news:

  • About 80% of older adults have one chronic condition, and 50% have at least two. Infectious diseases (such as influenza and pneumococcal disease) and injuries also take a disproportionate toll on older adults. (CDC)
  • 45.3% of adults have two or more of nine selected chronic conditions, which include heart disease, hypertension, diabetes and cancer; these conditions are among the top five contributors for home health care utilization by Medicare beneficiaries.  (CDC)
  • The National Academy on an Aging Society projects that by 2040, the number of people in the U.S. with chronic conditions will increase by 50%.

It’s important to keep in mind that our aging population increasingly requires two types of care:  skilled care, such as nursing or rehabilitative therapy, and personal care which entails assistance with activities of daily living (ADLs) and instrumental activities of daily living (IADLs).  These acronyms represent activities we take for granted:  bathing and grooming, preparing meals and eating, using the bathroom or the telephone, and ambulating independently and safely in and out of the home.  Skilled care is provided in a hospital or nursing facility, but can also be carried out by licensed professionals in the patient’s home at a fraction of the cost.  The National Association for Home Care and Hospice (NAHC) adds to the case for home care by pointing out the 4000% cost difference between one hospital day and a home health care visit.

Uncertain economic times and dwindling retirement accounts sometimes lure individuals to pursue entrepreneurial ventures.  The motivations range from wanting to exert more control over one’s future and finances as well as serving people in need to the challenge of delivering high quality health care while lowering overall system costs.  Whatever the allure, various structures exist to meet the urge to be self-employed in Florida:

Home health agencies providing skilled care – these are generally accredited and Medicare-certified organizations that provide nursing care and rehabilitative therapy.  A new agency can take a year to become operational.

Home health agencies  providing non-skilled care  – these organizations (which are sometimes called private duty agencies) provide assistance with personal care and activities of daily living, such as bathing, dressing, eating, toileting and ambulating.  Florida requires these agencies to be accredited, which translates to approximately an eight to 10-month start-up period.

Nurse registries – these companies can provide nursing care as well as personal care services, but cannot provide therapy services or bill Medicare for services.  Generally speaking, these organizations have lower capital requirements and can be operational in less than six months.

Homemaker/Companion services – these organizations meet the least number of regulations and provide homemaking services such as cleaning and laundry, as well as companion care.  This type of business can be operational in about six weeks.

Home health care has gone from an afterthought of the health care industry to its rightful place as a solid vehicle to lower healthcare costs, reduce re-admissions, improve patient care and preserve the independence of our country’s elderly.

Read Full Post | Comments Off on Long-Term Care: The Second Career That Benefits Our Healthcare System

Tagged , , , , , , , , , , , |