Delivering Physician Services:
A Horse of a Different Color.
Source: https://www.hermesdb.net October 2007 to September 2008 data, updated 01/08/2009 ALL OB Services excluded
• When is the right time?
• Should we hire, guarantee or other
support?
• Should we share our TIN or set up new?
• Should we set up RHC, FQHC or practice
model?
• How will it affect current medical staff?
• Are we “equipped” to handle delivering
physician services?
The Decision
Source: https://www.hermesdb.net October 2007 to September 2008 data, updated 01/08/2009 ALL OB Services excluded
Bad Practices:
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Hiring as knee jerk reaction or to bail out.
Hiring when not justified by outmigration.
Hiring when only bad payer mix subject to shift.
Hiring based on gut feelings (without proforma).
Hiring wrong specialty (PCP vs SCP).
Hiring with guarantee without mechanism to promote
proper set up and maximization of volume and
reimbursement.
• Hiring under hospital TIN.
• Hiring with physician “issues.”
• Hiring without executive leadership/oversight.
Best Practices:
Do Your Homework!
• Review market share analyses:
– HERMES data
– Outmigration by payer by specialty
– Lost cases with financial impact
• Develop proforma
– Use market share
– Identify specialized equipment, office space, staffing needs
– Project both hospital and physician impact
• Determine specifics of purchase
– Buying old A/R?
• Review licensure and any “issues.”
Best Practices:
Legal Set-Up
• Determine correct legal structure
– Separate physician group TIN (make TIN decision and stick
with it – avoid changes!)
– All physicians under one (non-hospital) TIN
– Establish physician group name (i.e. Evans Family Centered
Medicine)
– Establish as physician group practice initially; transition to
RHC.
Best Practices:
Corporate Set-Up
• Determine correct corporate structure.
– Hire good Practice Manager
– Hire experienced physician office staff
• Integrate functions that don’t hinder practice
effectiveness (i.e. HR).
The Preparation
Bad Practices:
• Insufficient lead time for enrollment and office set up.
• Failure to assist in practice set up.
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Provider enrollment
Office start-up
Billing
Training
• Establishing too much like hospital.
• Attempting to incorporate into hospital business
office.
• Adjusting corporate structure in middle of process
(changing TINs, adding addresses).
Best Practices:
Provider Enrollment
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Start early (very early)!
Determine participation strategy.
Identify staff member responsible.
Set up physician credentialing file.
Establish appropriate NPI numbers.
Establish CAQH.
Enroll electronically in Medicare and Medicaid.
Enroll in EDI/EFT.
Best Practices:
Contracting
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Contract as HEALTH SYSTEM!
Obtain PHO or Group contracts whenever possible.
Negotiate language and reimbursement.
Watch for operational implications.
Only Hospital CEO or CFO signs group contracts.
Train physician and office staff NOT to sign anything;
send to you.
Best Practices:
Research RHC Status
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Set up as practice initially (if qualifies and beneficial)!
Determine eligibility.
Review financial benefits.
Review operational requirements (NPs, etc).
Review billing components (POS and copay
differences).
• Understand time frame for conversion (9-12 months).
Note: Must be primary care with mid-level and at least 4,200 visits annually.
Best Practices:
Practice Operations
• Hire Practice Manager.
• Implement processes to support claim payment:
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Patient registration (ABNs, HIPAA notices)
ID card recognition
Referral/preauthorization
Check-out processes (ask for the MONEY!)
Billing
• Know how to handle OON patients (make whole?).
• Know what to collect and how to ask for it.
• Train, train, and retrain.
Best Practices:
Revenue Cycle Set-Up
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Set comprehensive charge master (get help with this!).
Select good practice specific software (not a hospital system!).
Set up insurance master accurately (get help with this!).
Load reimbursement schedules into software; analyze against
payments.
• Know payer plan participation status (when to take and not to
take contractual adjustments).
• Consider outsourcing to billing expert (i.e. PPM).
• Provide up-front training (i.e. HTHU and PPM).
Best Practices:
Insurance and Risk Management
Serving the Insurance Needs of
Georgia’s Healthcare Community Since 1918
Charley Malmquist CPCU, ARM, AAI
Potter Holden & Company
888-528-0589
Best Practices: Insurance and Risk Management
HTH SURVEY RESULTS:
HOSPITALS EMPLOYING PHYSICIANS
How many are employing physicians?
 88% currently employ physicians.
Of those hospitals…
88% employ 1-5 physicians,
12% employ 11 or more
 78% plan to hire new physicians in the next 18 months
57% in primary care,
42% both primary care & specialists
Best Practices: Insurance and Risk Management
HTH SURVEY RESULTS:
PHYSICIAN EMPLOYMENT
Who are you hiring?
 67% of the physicians responding hospitals typically recruit have
6 or more years of experience;
22% are new to practice;
11% have 2-5 years experience
How are you hiring?
 78% use outside search or recruiting firms
56% Recruit from physician practices within their community
22% recruit from referral of existing employees
Best Practices: Insurance and Risk Management
PRE-EMPLOYMENT CONSIDERATIONS
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Prior practice locations
Prior insurance carrier… compatibility
Prior Acts Coverage / Nose Coverage
Past loss history, open losses, & incidents
not yet reported
• Board consent orders or license restrictions
• Health issues / drug or alcohol abuse (*as it
relates to licensing)
• Prior insurance cancellations of declinations
Best Practices: Insurance and Risk Management
HTH SURVEY RESULTS:
PROGRAM STRUCTURE
How are you structuring coverage?
 89% provide professional liability protection for their employed
physicians.
75% under the hospital’s policy: 25% on a separate policy.
33% said the hospital’s deductible applies to their physicians;
22% said the hospital’s deductible does NOT apply, and
55% said they weren’t sure/didn’t respond.
 100% of respondants provide $1 mil/ $3 mil limits of liability for their
employed physicians
Best Practices: Insurance and Risk Management
How are you structuring coverage?
 “Does your hospital’s umbrella/excess policy
include coverage for employed physicians?”
44%- yes
22%- no
22% - hospital does not carry an umbrella or excess policy
11%- aren’t sure
Best Practices: Insurance and Risk Management
PROGRAM STRUCTURE ISSUES
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Ownership of policy
Policy type— claims made or occurrence
Individual or group policy
As an endorsement to the hospital’s policy
Separate or shared limits
Application of any retention or deductible
Retirement options
Best Practices: Insurance and Risk Management
HTH SURVEY RESULTS:
EMPLOYMENT CONTRACTS
“How do you address employed physician's malpractice exposure prior
to joining your hospital? (prior acts coverage)
89%- It is the responsibility of the physician to purchase tail coverage
0%- hospital assumes the prior acts by maintaining an original
retroactive date
11%- weren’t sure
“Does the hospital have a clearly defined plan to address the cost of
“tail coverage” should the physician leave the employment of the
hospital?”
67% said ‘yes’
22% said ‘no’
Best Practices: Insurance and Risk Management
EMPLOYMENT CONTRACTS
Clearly identify insurance responsibilities:
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Who will purchase coverage?
What constitutes an acceptable insurer?
What limits of coverage required or provided?
Who will hold consent to settle? (if available)
Who is entitled to receive dividends or return
premium?
• Will moonlighting be allowed?
• Mutual hold harmless or indemnification clauses
Best Practices: Insurance and Risk Management
OTHER INSURANCE CONSIDERATIONS
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Workers Compensation
Business overhead
Key man life
Billings Errors & Omissions
Business Interruption
Medical Equipment
Offices Premises Liability
Best Practices: Insurance and Risk Management
BEST PRACTICE- “DO’S”
• Do your due diligence on the physician
candidate before you employ
• Do ask for full disclosure on any potential,
pending or open claims
• Do consider all potential ramifications
associated with insuring the physician
before finalizing your approach
Best Practices: Insurance and Risk Management
BEST PRACTICE- “DON’Ts”
• Don’t make assumptions regarding each
party’s responsibilities – spell them out
clearly in writing
• Don’t assume unknown liabilities
• Don’t assume all insurance policies are the
same
• Don’t assume a departing physician will
automatically purchase “tail” coverage: get
proof
The Oversight
Source: https://www.hermesdb.net October 2007 to September 2008 data, updated 01/08/2009 ALL OB Services excluded
Bad Practices:
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Payment addresses; mixed payments.
Mixed physician and hospital posted on general ledger.
Little to no oversight over practice A/R.
Little to no practice reports reviewed.
Reporting GL and A/R/Revenue to hospital center.
Best Practices:
Practice Payments
• Establish lock box for payments (separate from
hospital).
• Ensure cash poster is properly trained.
• Use payment verification software component.
Best Practices:
Reporting
• Review routine A/R reports; ask questions.
• Review variance reports; require payment
verification/write-off support.
• Review Collectability Analyses.
• Review routine A/P reports; ask questions.
• Establish PM reporting lines; meet regularly.
• Set up separate GL department for physician practice.
Best Practices for Integrating
Physician Services into Your
Hospital
HINDA GREENE,D.O., SR VP, MEDICAL
AFFAIRS
HOSPITAL PHYSICIAN PARTNERS
APRIL 30, 2010
Integrating Physician Services
 Emergency Department
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Great Care
Standardization
Protocols in triage
Quality Review
 Shorten LOS
 Door to admission or discharge
 Patient Satisfaction
 Staff satisfaction
 Hospitalist Program
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Great Care
Less “push back” for admissions
Increased Risk Aversion
Quality review: inpatient
 Shorten LOS
 By decreasing LOS, increase
reimbursement
 Patient Satisfaction
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Staff satisfaction
Less on call
Vacation Coverage
Protect office time
Win Win
 Emergency Department
 Hospitalists
 Initial workup and
 Increased admissions
stabilization
 Less resistance for
admissions
 Standard protocols
 Decreased length of stay
 Standard admission
orders
Coordination
 Emergency Physicians and Hospitalists work
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together
What can I do for you?
Expedite exit from ED
Cover hospitalist for a few hours per night by
bundling admissions and use of standard orders
Patients and hospital both win
Happiness is spending less time on a one-inch
mattress
Mike Scribner
Strategic Healthcare Partners
Helen Williams, CPC
Precision Practice Management
Charley Malmquist, CPCU, ARM, AAI
Potter-Holden & Company 888-528-0589
Dr Hinda Greene
Hospital Physician Partners
What else can I say?