Achieving PM Clarity

In 2000, Ophthalmic Consultants of Long Island (OCLI) was plagued by the challenges facing many medical practices: how to ensure the health of its business and its patients during a period of spiraling costs and diminishing reimbursement. For OCLI, this one/two punch represented a particularly significant concern because the practice served a large elderly population. Consequently, most patients were Medicare beneficiaries, and Medicare fees were dropping even more precipitously than commercial payer rates. At the same time, Medicaid rates were being reduced, and the prevalence of health maintenance organizations (HMOs) also impacted payment levels.

To mitigate the deleterious effects of these reimbursement cuts, OCLI had to find ways to ensure it received all the fees it was due while uncovering opportunities for expanding service offerings without adding overhead. To accomplish these objectives, OCLI needed to implement advanced practice management technology that would provide the information needed to manage the business and revenue cycle more effectively.

Problem
After much internal analysis, OCLI identified four specific goals that would help the practice maximize revenue and optimize investment in both personnel and information systems. First, we needed to ensure clean, payable claims were submitted for services delivered to every insurer, every time to ensure faster payments and timely deposits. Secondly, we needed to market our services towards both new and established patients to meet aggressive growth goals. The third goal was to control costs through streamlined workflow and maximized productivity, while facilitating growth without additional support from full time equivalents (FTEs). Finally, we needed to improve physician-to-patient communication related to select disease states that have the greatest impact on patients and their families.

OCLI has realized many benefits by taking full advantage of the functions available through its PM system. The practice has become “data-driven”–relying on reports and analysis to help providers deliver better care and to seek out opportunities for growth.

Prior to 2000, however, the group was greatly inhibited in its ability to address each of these opportunities. OCLI had relied upon a “closed” practice management (PM) system, and the technology was severely limited in terms of reporting and analysis functionality. Without comprehensive reporting and analysis capabilities, the system was unable to supply the information practice leadership needed to make insightful and critical strategic or tactical decisions.

For instance, we were unable to track billing or coding problems effectively in order to target internal error patterns that consistently slowed payment and lengthened A/R days. Likewise, the practice was unable to adequately analyze the patient base or project areas of potential growth that would allow it to identify optimal locations for new offices or opportunities to introduce expanded services.

Solution
OCLI determined the best way to address this challenge was to implement a PM system that featured an open database structure. Such a system would provide practice leadership with the flexibility needed to extensively mine clinical and demographic data. In addition, automation would support efforts to manage claims processing more effectively and to streamline staff efficiency. Also, because we planned to implement an electronic medical record (EMR) in the future, practice leadership sought a PM system built on a platform that would support seamless integration between the two systems.

Towards the end of 1999, OCLI was in the process of merging with other ophthalmology practices in the region. It launched the search for a PM system in conjunction with several potential partners–all of whom agreed that any technology considered must exhibit strong enterprise functionality that supported activities at each practice location, as well as the centralization of specific tasks. The partners also required that the system offer robust reporting to support business processes and be scalable to accommodate future growth.

During the selection process, one of OCLI’s managing partners sat on a 3-person committee representing each member practice to review a range of systems. Several vendors were invited to provide demonstrations. The NextGen Enterprise Practice Management system was ultimately selected because it featured an open database structure and exhibited the capacity to handle the various functions of each practice within the emerging multigroup enterprise. The merger ultimately did not come to fruition, but the practice was listed on the licensing agreement as the system’s owner and therefore proceeded with implementation.

Implementation
Despite the fact that OCLI had used a rudimentary PM system in the past, staff members were wary of the new technology because the practice planned to expand the ways in which it would be used. Veteran staff with less information technology experience were concerned that their positions were in jeopardy, or that an improved technology might be too difficult to learn.

The first step our leadership took to counter these concerns was to communicate directly with the staff. In essence, leadership encouraged staff members to embrace the technology, explaining that it was not intended to replace staff but to help make their jobs easier.

Second, OCLI leadership provided comprehensive training on all system features, so users understood the potential benefits and became confident they could execute all tasks assigned to them. The training was comprised of demonstrations and how-to sessions, augmented with liberal time for questions and answers. Ultimately, the staff came to view the software as a vastly improved tool that they could use to benefit the practice and its patients.

With no internal staff dedicated exclusively to software implementation or training, the practice worked closely with vendor representatives to deploy the initial technology. Since then, it has developed a sophisticated 3-tier internal process to demonstrate and test upgrades or additional system modules to ensure they perform properly in the day-to-day practice environment.

With training at OCLI as an ongoing commitment, the business development director attends monthly office manager meetings and provides training to managers who, in turn, train staff at each site. When new features were recently introduced, such as the insurance card scanners installed at all practice locations, the director worked with senior staff at each site. Using this approach, roll-out of the new scanners was completed in just a week.

Results
 Before PM system adoption, OCLI benchmarked its cash flow, focusing efforts on accounts receivables aging analysis. Practice leadership had characterized its aging trends as “fair” prior to implementing the new system, but recognized that it needed to receive payment faster in order to maintain a healthier bottom line during a period of reimbursement cuts. They recognized this could be accomplished by using the PM system to generate cleaner claims and to follow up with payers more quickly to resolve outstanding problems.

As a result, OCLI saw great improvements in A/R aging trends between 2000 and the close of 2006. By the end of that year, for instance, 60 percent of accounts receivables (A/R) were younger than 30 days, compared to only 48 percent in 2000. Likewise, it was able to “shift” more dollars from the A/Rs that were in the 61-days-and-older category to the 30- and 60-days-or-less categories. “Days sales outstanding” figures have also improved dramatically and now exceed ophthalmic industry benchmarks of 35 to 50 days by a wide margin. OCLI has consistently averaged 25 days since 2002. Because of its increased revenue cycle management capacity, OCLI also negotiated a contract to provide billing services for a regional ambulatory surgical center, which generates additional income.

Practice Growth
During this timeframe, the practice grew significantly, with the overall volume of patient visits increasing 35 percent for 40,895 additional visits. This represented a 36 percent increase in established patient visits, a 30.68 percent increase in new patient visits and a 35 percent increase in no-charge visits.

The practice grew from 15 to 20 ophthalmologists, and added two new doctors of optometry and two new physician assistants. As a result, it was able to open three new offices, bringing the total number of locations to 10. Despite this aggressive growth, the enterprise functionality of the PM system meant OCLI had to add only one FTE to its billing staff while overall, revenue increased 49.35 percent.

To achieve these results, the practice fully utilized claims processing functionality–specifically, an edits engine–to ensure that clean claims were being sent to payers the first time around. Administrative errors, such as consultation claims that are missing referring physician ID numbers, are corrected early in the process. Likewise, the system alerts staff when medically necessary diagnoses are missing from specific procedural services. In addition, OCLI focuses on meeting specific payer requirements.

The practice also built a robust database using information captured during every patient encounter, and has developed postal, e-mail and telephone contact lists that can be ordered for various purposes, such as identifying glaucoma patients that have not been tested in the recommended time frame. In this case, automatic reminders are sent and staff members follow up with the patient to ensure appointments are made and kept.

Similarly, when cataract patients choose to have only one eye treated at a time, they occasionally neglect to make an appointment for the second operation. OCLI uses its database to generate lists so staff can contact these patients and learn why the subsequent procedure was not done and resolve the discrepancy. OCLI also identifies and contacts patients who might be eligible for cosmetic or elective procedures such as LASIK.

Likewise, OCLI is proactive as new treatments become available for chronic conditions, such as age-related macular degeneration, which may slowly lead to blindness. As new treatments become available, OCLI practice staff generates lists of patients for whom the therapy might be appropriate. They can then contact these individuals to let them know there may be new alternatives to help them retain their vision longer.

Patient Tracking, Work Routing
The practice was historically unable to consistently identify no-shows, and has now instituted a 4-step recall system. These patients receive three PM-generated letters, followed by a staff member’s phone call if there is no response. This allows OCLI to reschedule visits and capture revenue that would have otherwise been lost, while also reducing the practice’s liability. Many of the no-show patients have been diagnosed with serious pathologies, so OCLI’s rigorous follow-up protocol documents its efforts to provide quality and conscientious care.

The PM system features work-routing functionality, which allows managers to direct tasks to specific staff members electronically. Supervisors are able to monitor progress made on these assignments and ensure they are executed in a timely manner. Once completed, any assigned tasks are automatically removed from all affected parties’ to-do queues. Additional time is saved through automated reporting. OCLI prioritizes a set of routine reports that have been “memorized” and scheduled to run automatically at night or at other convenient times. This allows system bandwidth to be reserved for staff-prompted functions during business hours, which enhances efficiency.

OCLI has realized many benefits by taking full advantage of the functions available through its PM system. The practice has become “data-driven”–relying on reports and analysis to help providers deliver better care and to seek out opportunities for growth. Patients are more likely to remain healthier because providers can keep a close eye on the progression of their disease states, and are able to proactively monitor compliance with care plans and treatment recommendations. Practice leadership is equipped with a wide range of tools that allow it to meet the often-contradictory objectives of taking good care of business while taking equally good care of patients.

Nancy Cammalleri is director of business development for Ophthalmic Consultants of Long Island.