gloStream Blog

There are several important metrics practices should benchmark and monitor regularly, but if you can benchmark only one metric, it should be your days in AR (Accounts Receivable). Your days in AR is the best indicator of how your billing and collections department is performing. AR is defined as the total dollar amount that is owed to you from patients and payers. Even if you know what your total accounts receivable is, unless you benchmark your days in AR, you really have no idea whether your AR is good or bad. Before going through the benchmark process with a practice, we often hear from the practice manager or one of the physicians that “we think our AR is fine” or “we are probably collecting everything we can.” In reality, most practices have no idea how much money they are leaving on the table. Once practices go through the benchmarking process, they come to understand how they are performing and can take action to improve their billing and collections processes. Days in AR is the one indicator that measures how long, on average, it is taking you to get paid for your services by insurance payers and patients. For instance, if your days in AR is 40, then it takes 40 days (on average) for you to be paid. AR essentially represents all of your outstanding money in terms of number of days’ worth of charges. If you charge out an average of $5,000 every day, and have $200,000 in outstanding AR, then your days in AR is 40 ($200,000/$5000). Here is how that is calculated:

Divide your annual gross charges by 365. The answer to this will be your average daily charges. Now divide your total AR by your average daily charges. Voila:  The answer is your days in AR. The ideal days in AR will vary some based on practice specialty. However, in general, most office-based services should be paid within 30 days and hospital/surgical services should be paid within 40 days. On average, if your days in AR are over 45-50 days, there is a problem that needs to be addressed. Additionally, it is important to look at days in AR by payer because this analysis will reveal specific collections issues. For example, your Days in AR could be great for Medicare, but not for Blue Cross. There are many causal factors that contribute to a high days in AR number, but most are related to three areas: Inability to regularly follow-up on unpaid claims, claim denials, and weak or non-existent patient payment policies (or a lack of enforcement of good policies).

To improve your days in AR – or if it looks good to ensure that it remains healthy, ask yourself the following questions:

Do I have dedicated and expert staff that are able to follow up on unpaid claims each day?  Very often, practice staff has multiple competing priorities and responsibilities, making it difficult for them to spend the time on following up on AR.

The practice of medicine has never been more difficult than it is today. Providing care to the average patient, billing an insurance company for services rendered, and then actually receiving payment for office visits and procedures has become increasingly complex and expensive. With Meaningful Use Stage-2, ICD-10 and payer reform on the way, it’s only going to get more challenging.

Fortunately, there’s a path forward for doctors who want to remain independent and thrive through all the change that’s happening in healthcare. By making data-driven business decisions based on information rather than intuition, through shedding fixed cost spending, and by partnering with business process experts so that medical staff focus exclusively on patient care, your practice can succeed. At gloStream, we call practices that have adopted this mindset pacesetting medical practices. They are smart, lean and focused and so agile that they don’t just handle change, they thrive right through it.

Critically important to becoming a pacesetting medical practice is adopting a continuous improvement mindset and integrating regular benchmarking. Benchmarking is the process of comparing your practice’s key performance indicators and business processes to industry norms. Common areas that are measured during a benchmark include: staff productivity, payment processing, claims processing, accounts receivable and operational costs.

Understanding where you stand and how you compare to your peers is an empowering exercise. It will provide you with critical information so you can make informed business decisions based on data rather than intuition. For example, a benchmark might reveal that the majority of your accounts receivable are over 180 days which is well outside of industry norms. That would prompt greater attention to A/R follow-up and management. Or, you might discover that your same day close rate is only 70 percent signaling that there’s a slowdown in how quickly claims are being distributed to payers and how quickly you are getting paid. 

Action on either one of these two measures can drastically increase profitability at the practice which is critical to every business owner.  Benchmarking might also reveal that your practice is meeting, or even exceeding, industry averages. That, too, is important information because unless you are measuring your effectiveness, you simply don’t know whether you are over or under performing as a practice.

Many practices are just learning about the new HIPAA privacy and security rule that came into effect on March 26th. The rule, more commonly known as the HIPAA Omnibus Rule, brings about a drastic change in the way practices are supposed to handle breach notifications. The new rule is the government's response to the rash of data breaches that have occurred recently.

Under the old rule, when a data breach occurred, healthcare providers were presumed innocent of harming patients until the patients proved otherwise. Under the new rule, when a data breach occurs, the opposite is true: healthcare providers are presumed guilty of harming patients, and will have to prove their innocence. Additionally, the new rule includes business associates such as vendors.

There are a variety of resources and programs available to help you understand the new rule and also conduct a risk audit. Most experts agree that the first step is to identify all parties with access to health records and ensure that records are secure. In many cases parties who don't need access are allowed to view records, and limited access by these individuals is a good step toward ensuring data security. Additionally, practices are advised to update their security  policies and make sure that all of they employees understand the new rules so they can help prevent data breaches. Finally, make sure you are using an electronic health record product that's safe and secure.

Although the rule was effective March 26th, providers and their business associates have 180 days to comply before the Office for Civil Rights begins enforcement on September 23. Until then, however, providers will still be held accountable under the old rules.

Congressional hearings on mobile healthcare application regulation suggest the future is bright for this technology, says mHIMSS executives Tom Martin and David Collins.

The hearings, held March 19-21, considered the importance of allowing innovation to flourish vs. the importance of regulation for patient safety.

Discussed in the hearings were the dangers of strict FDA oversight and the potential threat of Obamacare taxes on apps—concerns that were dismissed by most witnesses. According to Martin and Collins, while a few developers are waiting on the FDA’s final medical app guidance before submitting apps to the market, many developers are bringing innovative products to market, and venture funding for healthcare startups is at an all time high.

A new report suggests that 2013 may be the year of the great electronic medical records (EMR) vendor switch given that many EMRs are falling short of providers' expectations. To come to that conclusion, Black Book Rankings polled roughly 17,000 active EMR adopters and found that many may switch out their first-choice EMR by the end of the year. The reason: in light of Meaningful Use Stage 2 provider demands are increasing and EMR users are reporting that many EMRs aren’t living up to expectations.

Thirty-one percent of survey respondents indicated they were "dissatisfied enough" with their EMR to consider switching and of those users, the reasons cited for the potential switch were as follows: the EMR didn't meet the practice’s needs (80 percent); the practice had not adequately assessed its needs before choosing the EMR (79 percent); the EMR design did not fit the medical specialty (77 percent); and the EMR vendor was unresponsive to requests (44 percent).

At gloStream we've replaced more than a few EMRs. We understand that practices can only succeed through the use of highly personalized solutions that let them practice medicine on their terms. We also know that doctors need tailored training and that's the reason our training program is always delivered on site and in person.

Since the Meaningful Use program began, more than $10 billion has been paid out to eligible healthcare professionals. A good number of physicians have successfully attested and received their funding.

“Stage 1 was about beginning the journey, collecting the data, and starting toward using decision support” said Farzad Mostashari, National Coordinator for Health Information Technology. “Stage 1 is off to a terrific start with…64% of eligible providers registered and 33% paid to date” 

Practices can earn up to $44,000 per physician over five years from Medicare, or up to $63,750 over six years from Medicaid by meeting all the requirements of the program. Stage 2 begins in January 2014 and requires 90 days performance to achieve compliance in that year. 

Under stage 2 the bar for patient engagement has been raised, and providers must give more than 50% of patients seen during the reporting period timely online access (within 4 business days of a visit) to their health information. In addition, more than 5% of patients seen in that period must actually view their health information, download it, or transmit it to a third party (e.g. another provider).

In order to meet these requirements, most practices will need to implement an integrated patient portal that offers online access to records and secure messaging. Therefore, providers need to begin thinking about what they want their online access to look like and ensure that it is designed in a way that patients will actually use it.   

Achieving the thresholds outlined above is not a guaranteed slam dunk. For that reason practices should immediately start focusing on collecting email addresses for the majority of their patients. We estimate that practices need to have at least 40% of their patients registered on their portal to comfortably achieve Stage 2 measures. This also means practices need to start thinking about their portal strategy right now.

The great news is that practices have resources who can help. A good first step for doctors using an electronic medical record is to reach out to your EMR provider. They can help you understand Meaningful Use criteria and help make sure that you've got a portal in place by 2014 so you can take advantage of meaningful use incentives. Keep in mind that your portal must integrate with your EMR solution.

We’ve written previously about ICD-10 but since it’s such an important topic for practices in general and medical billing in particular, we’ll continue to dedicate time on the gloBlog to it as we move forward and get closer to the 2014 deadline.

While there’s a big impact to billing and each practice’s reimbursements could be at risk, ICD-10 needs to be thought of as a challenge to the entire practice. Anything that needs an ICD-9 code, is affected by ICD-9, or helps determine ICD-9, will be impacted by ICD-10.

Here are two examples that detail how ICD-10 will impact the clinical side of a typical practice:

Encounter forms will need to be redesigned to account for ICD-10. (Some experts have even said that it may not be possible to continue using them.)

The steps and thought processes (protocols) clinicians go through during the patient encounter will need to be revised to ensure the doctor/staff are able to determine additional levels of detail required by ICD-10. The documentation of the exam note will need to include this extra detail.

One great way for practices to begin getting ready for the transition is to develop a comprehensive project plan, and begin assessing all areas that are going to be affected by ICD-10. That could mean changing workflows, and if so, you want to know that sooner rather than later. It also means starting to educate your team members. With 21 chapters in the ICD-10 code book, now is a great time to start reviewing ICD-10 nomenclature.

Preparation also means communicating with your EMR vendor to ensure you’ll have the right technology in place. Understand that companies which produce form-based EMRs will have a more difficult time transitioning to ICD-10. All those pop-up forms that take in patient visit information will need to be re-thought and re-worked, often at an individual practice level since practices almost always personalize their own forms.

In 2014 the healthcare industry is going to be transitioning from ICD-9 to ICD-10 codes. This is going to be a significant change, and practices are advised to start preparing for the switchover right away. In particular, medical billers will need to be familiar with the new codes or the practices where they work may not be paid for the services of their providers.

As background, ICD-9 codes, which are used to report medical diagnoses and inpatient procedures will be replaced by ICD-10 code sets. ICD stands for the International Statistical Classification of Diseases and Related Health Problems. ICD-10 codes will be more robust and descriptive than ICD-9 codes, which are 30 years old and have many outdated and obsolete terms.

Will this apply to you? Almost certainly. Anyone covered by HIPAA must transition to ICD-10 including payers who do not deal with Medicare claims. It's important to remember that all activity happening in the doctor's office will be covered and failing to act will be problematic.

For those doctors who have thus far waited to implement an electronic medical record, add a tax deduction to the reasons that you should act now. Section 179 of the tax code allows you to write-off the purchase price of your EMR but only if you purchase before the end of 2012. We don't know if this deduction will be extended in 2013.

How does the deduction work? Let's take an example - say you buy $150,000 worth of equipment and software. The calculation below details how much it actually costs you after applying tax incentives:

Equipment purchase: $150,000

First year (2012) write-off: $139,000

First year depreciation: $150,000-$139,000 x 50% = $5,500

Normal first year depreciation: 20% in each of five years on remaining amount = $1,100

Total first year deduction: $139,000 + $5,500 + $1,100 = $145,600

Tax savings: $145,000 x 36% tax rate = $50,960

Cost of equipment after tax benefits = $99,040

Remember, successful business take advantage of tax incentives to help lower operating costs. The Section 179 deduction gives businesses such as yours an incentive to invest in the business, and it's just another reason that purchasing and implementing an EMR makes sense.

Cloud computing is still a relatively new information technology concept, but it's already beginning to be relevant in healthcare and practice management - because it utilizes economies of scale to provide mass computing power and storage to users who sign up for a service.

Here are four ways cloud computing is transforming healthcare:

Resiliency. Economies of scale allow cloud-based service providers to build large, redundant data centers that emphasize backup and uptime at a lower cost. This means your data will be available as long as you have an Internet connection.

Privacy. The level of security the cloud offers is much higher than what you see in a local IT department. Security in a doctor's office or hospital may mean just keeping the door to the server room locked, and that can be hacked with relative ease. Data on many cloud servers, in contrast, features high levels of encryption.

Innovation. Cloud-based service providers can improve their services rapidly, cheaply and with minimal interruption to service. the upside to this is that it frees local IT staff to engage in value-added task and initiatives.

Doctors - it's time to catch up: consumers are increasingly willing to interact with you using health information technology, according to a new survey. The survey, conducted by Optum Institute and Harris Interactive, polled 4,270 doctors, patients and hospital executives.

According to the survey, patients are ready to mix technology and healthcare. Eighty four percent said they'd like online prescription refills, 75% would like to receive test results and access their medical records online; and 60% want to communicate with their doctors via email. And that's the case not just for younger generations, but for older ones as well. More than half of seniors surveyed are willing to go online to communicate with their physicians and manage medical records.

Unfortunately, technology already in place and used by doctors lags. While nearly 70% of physicians basic electronic medical record software (EMRs), only 40% engage with patients via email or provide patients with access to their electronic records. Email has been widespread for two decades now, yet most patients still can't reach out to their physicians through email.

With healthcare reform making clinical outcomes more vital, payers and providers should both see the value in collecting and analyzing data in order to affect future decision-making. Payers can use it to justify healthcare expenses and drive preventative healthcare programs, while providers can use it to improve clinical outcomes and improve business operations.

Despite its value, the use of such "business intelligence" as it's called is rare in medical practices. According to IDC Health Insights, recent surveys show that about 44 percent of providers see the value in analytics, yet only 26 percent have a business intelligence program in place.

Electronic medical record and practice management technology makes data collection and analysis easier. More and more we're seeing data in consistent formats. Down the road, we may even see vendors begin integrating analytics applications into workflows.

IT has been called upon to help make new care models, including accountable care organizations, successful--and technology such as gloEMR will play an important role.

Today, patient care is dispersed. Many members of a patient care team don't know what other members are doing. In some cases, a patient may have several doctors who are not communicating, while others may have a far broader patient care team that is not collaborating. this can include family members, healthcare providers and payers.

According to industry experts, EMRs will play a large role in bridging the divide and helping care teams communicate and collaborate. To do so, however, EMR technology must be interoperable, flexible and usable.

Hospitals that have implemented advanced electronic medical records (EMRs) enjoy a broad range of benefits when it comes to quality of care and operational efficiency, according to a new report—and it’s not a stretch to think the same is true for physicians who implement EMRs.

The February 2012 report from the HIMSS Analytics and The Advisory Board is based on the first survey to produce results from hospitals that have achieved Stage 6 or Stage 7 on HIMSS Analytics’ EMR Adoption Model (EMRAM), offering insight about the benefits that can accrue for those medical practices further along the development track.

A number of outside influences tend to affect attitudes around electronic medical record implementation and training. We’ve come to expect that our technology is plug-and-play, thanks to Windows and the Apple computer. But EMR software can be more complicated. EMRs are more complex than other technologies because they exist in a complicated environment—one that is dominated by regulation, documentation, and coding. The medical industry just isn’t simple.