Becker's Hospital Review

Physician-Hospital Relationships 30 The high cost of physician onboarding A well-designed physician onboarding process can prevent many early mistakes and optimize the financial and strategic performance of acquired practices. Risk area Potential loss Mitigation strategy Market strategy Acquired practice does not support service line strategy and drains needed resources from other strategic investments Build physician strategy on well designed service line plan; use plan to analyze acquisitions Productivity Employment dynamics and new demands of health system participation reduce patient volume and practice productivity Introduce compensation incentives for productivity, quality and cost control Capital investment Acquisition includes purchase of office building, high-cost equipment or other physical assets Contract with physician under a provider services agreement to minimize capital request Payor contracting Practice carries underperforming health plan contracts with low fee schedules, restrictive policies and frequent payment delays Subject newly employed practices to payor review; drop or renegotiate low-fee contracts Revenue cycle Practice loses revenue on inefficient coding and billing and high denied claims rate Add expertise in physician billing; centralize revenue cycle operations or outsource to a third party Technology Practice EHR system is incompatible with hospital system, but hospital EHR is too complex and expensive for practice staff Support a range of ambulatory EHR systems and provide implementation project management Clinical integration Practice does not support quality, safety and cost control goals of overall health system Set quality and cost milestones aligned with hospital goals; provide support and performance feedback Source: Health Directions, LLC with the hospital's workers' compensation contracts. During this period, the system lost approximately $500,000 on under-reimbursed care. To avoid this scenario, create a centralized team whose sole responsibility is to manage physician credentialing. Develop standardized processes and employ a dedicated software application to ensure credentials for all providers stay completely up to date. As part of the credentialing process, take steps to optimize payor contracts. Many private practices accept health plan contracts indiscriminately, regardless of adverse fee schedules or adjustment policies. When a physician joins your organization, analyze the practice's payor mix and identify health plans to eliminate or leverage for better rates. 4. Declare war on payor denials According to the MGMA, medical practices have an average claim denial rate of 30 percent on first submission. Unfortunately, these denial problems can get even worse after acquisition. To maintain practice revenue, hospitals need to devote resources to combating payor denials. Here's how: • reate effective workflows. Establish solid processes for enterC ing charges, submitting claims, posting payments and appealing rejections. Assign clear responsibilities, whether the work is organized through a central billing office or a dedicated biller for each physician. • et benchmarks and monitor collections. Establish key S practice indicators for collections (daily, weekly, monthly) and denials by type (coding denials, prior authorization, etc.). Compare KPIs to industry benchmarks and act on variances. • reate a denial follow-up process. Appealing denials is laborC intensive, but it is crucial to maintaining revenue. Establish processes and timelines for denial follow-up. Identify staff members with the best appeal success rates and share their methods across the organization. • onsider outsourcing. Contracting with a billing company or C management services organization to manage the physician revenue cycle may be less expensive and more efficient than maintaining operations in-house. 5. Strike a balance on EHR Many physician electronic health record systems do not integrate well with hospital IT systems and do not support population management goals. Yet, forcing physicians to adopt the hospital EHR system can be dangerous. Hospital EHRs are usually too expensive and complex for ambulatory providers. Strike a balance between permissiveness and rigidity on EHR. One system will not work for all specialties and practice sizes, so study popular compatible vendors to find a range of appropriate options. All approved systems should support the hospital's strategic goals. Take a project management approach to EHR implementation. Create IT project teams to work directly with practices to optimize system capabilities. Before implementation, perform an onsite workflow analysis to spot opportunities to redesign daily practice operations. Wasteful workflows will only be exacerbated with a new EHR system. As part of the workflow analysis, perform a meaningful use gap analysis to make sure practices can earn government EHR incentives. The additional reimbursement will offset costs and help ensure the hospital gets the most value from its EHR investments. 6. Provide "concierge onboarding" Transitioning physicians to employment is a 90- to 180-day process that requires attention to hundreds of details. Important steps can slip through the cracks, causing frustration and negative first impressions for newly employed physicians. The solution? Establish a well organized onboarding approach that emphasizes physician service. Create an onboarding checklist with deliverables, timeframes and milestones. Cover activities such as human resources orientation; IT assessment and connectivity; revenue cycle optimization; office workflow redesign; credentialing and contracting; and marketing integration. Make the list as detailed as possible — down to ordering supplies and new office signage. Streamline the process for physicians. In many health systems, new physicians might have to interact with a dozen departments to iron out details in finance, HR, IT, etc. Instead, assign one liaison to each acquired practice to serve as the go-between and project manager for all onboarding issues. The concierge approach enables the hospital to customize the onboarding process to the specific needs of individual practices. Making sure every practice is "good to go" on day one will help maintain continuity in productivity and patient care. 7. Lay the groundwork for clinical integration The ultimate aim of physician employment is to achieve greater coordination around clinical improvement and cost management. Hospitals will receive less than full value on any employed practices that do not contribute toward this goal. Onboarding efforts need to focus on aligning physicians with clinical integration objectives in quality, patient care and cost control. First, establish measurement processes within acquired practices. Physicians and practice staff will need the right workflows, processes and IT tools to reliably capture cost and quality metrics. Second, create feedback systems to keep physicians focused on system goals. Provide regular dashboard reports with KPIs in productivity, patient volume, budget performance and clinical quality outcomes. Hold regular operations reviews (monthly or quarterly) to give physicians feedback on practice performance. Most importantly, establish organizational milestones for cost and outcomes goals. Physicians need to understand how they can help the system develop disease management initiatives, transition from fee-for-service to value-based payment and prepare to operate as an accountable care organization. Smooth transitions require preparation Without appropriate preparation, hospitals stand to lose significant money on employed physicians. The key to a sustainable investment is to focus on sound strategy, aligned incentives, practice efficiency and clear overall goals. Optimizing practices clinically, operationally and financially during the onboarding phase will minimize losses and help hospitals get the most out of physician employment. n Sabrina Burnett and Cami Hawkins, MHA, are vice president and managing associate, respectively, at Health Directions, a national healthcare firm dedicated to improving the financial, operational and strategic performance of hospitals, medical groups and physician practices. They can be reached by phone at (512) 795-5500 or by email at sburnett@healthdirections.com or chawkins@healthdirections.com .

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