Prior to medical school, I started to pursue a master’s degree in business but I only went the first semester. Even though it was a very short time, I learned so much about business. I read books on business every chance I get so I can become just as proficient in business as I feel I have in regard to treating conditions like lower extremity wounds.
So why is it important for you know what it costs you to see your patient? We have seen a decline in reimbursement over the years and this will likely continue as we move away from the fee-for-service model. With these constraints, it becomes even more important for us to determine if a given service is profitable for the practice and if you should be continuing to provide it to your patients.
Use your practice management system/electronic medical record (EMR) system to run a report on all of the evaluation and management (E/M) codes you billed in 2017. Include code 99024 as well as post-op follow-up as these patients still take up time and resources even though “the payment is included in a global fee.” Then divide total expenses for 2017 by this number to get the average cost to see a single patient. Do this for the previous year and see if the cost has gone up or gone down. Compare this average cost to Medicare reimbursement or the reimbursement levels of your top five private payers for your average visit type. For example, consider doing this exercise for codes 99213 or 99203 for an established and/or new patient type. Are you making any money on these?
Don’t forget your total expenses, which should include the compensation to the doctor(s). Did this this make a difference in the cost?
Your practice management system/EMR should be able to produce reports so you can pinpoint specific services, such as X-rays or orthotics, and do a similar analysis on all of the services you provide. Then determine if you should continue to provide these services without losing income or profit, or if you perhaps should renegotiate some of the costs of some items or look for vendors that offer better pricing.
Knowing what it costs to deliver the care becomes more important when insurance plans come to us with case rate payments. This is not the same as capitation. In the near future, insurance plans including Medicare are likely to include in the payment everything they determine is needed to care for a particular condition. An example we have now is that insurance companies pay outpatient wound centers a bundled payment for cellular- and tissue-based products. It behooves a wound center to know what products cost and product outcomes so the center can control the financial bottom line.
We will likely need to evaluate the contracts specifically based on procedure codes and diagnosis codes, which have bundled payments, and some of these may have a timeline or specific numbers of visits allowed to treat the condition. Having an EMR software that tracks this information and is able to produce the information readily will be important. Knowing our outcomes may also be of greater importance when it comes to resource use and provider profiling, which I will cover in future DPM Blogs.
For more info, go to www.healthy-feet.com .