Customized Financial and Statistical Reporting for Physician Groups
MACPA April 28, 2011
Customized Reporting
The opinions as those of the seminar leader and not the MACPA or Alma College Questions are welcome during and after the program.
Customized Reporting A number of spreadsheet models are provided as a supplemental handout. They are keep-it-simple models that can be improved and adapted to your groups. The numbers are fictional and do not represent any reality.
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So what is bothering docs....
FINANCIAL PRESSURE
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Sources of Pressure PPACA Economics Demographics Inadequate Outcomes Politics Costs
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The 1980s – show me the money! The 1990s – maybe discipline is good The 2000s – let's procrastinate Now – it is time to fix the problems!
Customized Reporting Some hot issues: ...are we losing money on Medicare/Medicaid? ....do we add or ditch in-office ancillaries? .... do we add or delete physicians? .... do we need new compensation models?
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The Next New, New Thing Accountable Care Organizations
Customized Reporting From the Department of Health and Human Services, Center for Medicare and Medicaid Studies, Office of Legislation, comments on an Open Forum regarding Medicare ACOs, in February 2011:
Q. What is an “accountable care organization” A. an Accountable Care Organization, also called an “ACO” for short, it an organization of health care providers that agrees to be accountable for the quality, cost and overall care of the Medicare beneficiaries who are enrolled in the traditional fee-for-service program [and] who are assigned to it (ACO).
Customized Reporting “What's an ACO” “An ACO is generally defined as a local health care organization with a network of providers such as primary care physicians, specialists and hospitals that are accountable for the cost and quality of care delivered to a particular population. The purpose is to deliver more efficient and coordinated care that is rewarded with a financial bonus for achieving perfromance benchmarks set by the Centers for Medicare and Medicaid Services (CMS). The Patient Protection and Affordable Care Act (PPACA) refers to an ACO as a legal entity that includes both physicians and hospitals, has at least 5000 [Medicare] lives under contract, has the ability to pay participants, and includes both Medicare and commercial lives. Managed Care, October 2010, by Boland, Polakoff, Schwab
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Or maybe...... Bundled payments Hybrid capitation Evidence based medicine Outcomes based reimbursement
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All of the solutions have one common theme More sophisticated management will be required at the physician practice level
Customized Reporting NEEDS Precise product/service line data Precise cost/volume profit Contribution margin data Budget models Sensitivity and Scenario analysis Decision models
Customized Reporting NEEDS An ability to marry: Dollars with statistics Dollars with outcomes
Customized Reporting An ability to: Precisely measure productivity, then Precisely measure productivity vis-a-vis QUALITY OF OUTCOMES
Customized Reporting Also: An ability to monitor coding for: Accuracy Completeness Integrity (compliance plans are rapidly moving from “recommended” to “required” pursuant to PPACA and the CMS-OIG)
Customized Reporting In the good old days.......... Physicians made money easily Physicians wanted tax planning from CPAs The good old days are over
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The standard package: Compilation statements Tax returns Financial and tax planning
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Financial format compilation statements are of little value OPINION OF COURSE
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These changes will not happen overnight. But.... These changes will happen sooner than later.
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CPAs need to stay relevant to physician groups or other professionals will.
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And let's not forget.... Accounting personnel for hospital based groups will face the same challenges
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Greatest need? Product line, contribution margin financials (see Woody Creek example)
Customized Reporting One of the challenges of contribution statements is determining what is fixed costs versus variable. The only right answer is consistency within the group's analysis. Costs tend to be highly fixed in most practices.
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Customized Reporting Reading List: Draft Regulations for Comment; Medicare Program; Medicare Shared Savings Program, Accountable Care Organizations, DHHS-CMS, 42 CFR Part 425, PDF available at: Accountable Care Organizations Learning Network (a service of the Brookings Institution) www.acolearningnetwork.org Health Policy Brief: Accountable Care Organizations (what are they and will they work?) HEALTH AFFAIRS , updated 8-13-2010 Miller, How to Create Accountable Care Organizations Center for Healthcare Quality and Payment Reform Š 2009 www.chqpr.org
Customized Reporting