How To Reclaim

Money Your Practice May

Be Throwing Away
The Cost of
Inadequate Documentation
and Incorrect Coding
e-medtools.com
 Basic Premises
Most physicians
 Are not practicing medicine “for the
money!”
 Are competent, compassionate doctors
 Enjoy helping others
 Work long, hard, often thankless hours
 Deserve the money they earn!
 Stressors Physicians
Experience
Rising clinic practice costs
Generally 40-60% of a physician’s revenue
Practice costs expected to increase 20% in 2008
Decreased reimbursement from insurance companies
Increasingly complex medical field
Increased requirements and cost for maintaining
licensure
Increased pressure to improve quality without
compensation
Exorbitant, rising medical liability costs and jury
awards
Increasing violence directed at healthcare workers
28% of ED physicians are assaulted each year
Annals of Emergency Medicine 2005 46(2):142-7
 Additional Stressors
Unrealistic expectations from the general
public, legislators, lawyers, and
insurance companies

Idealistic, virtually perfect performance from

physicians
Quality is an unfunded mandate!
Essentially free medical care is a “moral
imperative”
(Hillary Clinton’s, 2008 Presidential Candidate, address to George
Washington University Medical News Today May 2007)
Healthcare providers will bear the cost of public
health
Emergency departments must treat all people who walk through
 There is No Free Lunch
Food, Shelter, Clothing and Healthcare
Should the government provide these for
free?
Should businesses be required to provide these for
free?

Why should doctors provide free

healthcare?
 What Physicians Already Do
“Physicians are an important source of healthcare for
many uninsured and underinsured patients, as
evidenced by the fact that a physician’s office is the
usual source of care for about one third of
uninsured persons, and physician uncompensated
care costs were estimated as high as $11 billion in
1994” Managed Care and Physicians’ Provision of Charity Care JAMA 1999 281:1087-1092

Physician Survey (American Medical News 2006)

76% of physicians provided free or low cost healthcare in 1996-
97
68% of physicians provided free or low cost healthcare in 2004-
2005

Physicians spent 10.6 hours/week providing

uncompensated care!
“A Growing Hole in the Safety Net: Physician Charity Care Declines Again” Center for Studying Health
System Change 2006
 Impact of Physician
Stressors
 Medical practices are BUSINESSES!
– A business is not sustainable unless income exceeds expenses
– Unlike most businesses, medical practices (physicians) are
legally restricted in setting fees for services

 Reimbursement for physician services are

decreasing, therefore physicians must
– See more patients to sustain the medical practice
– Spend less time with individual patients in order to see more
patients

 The consequences of an increased workload can

result in
– An increased likelihood of missing problems
– Decreased patient satisfaction
– A significant drop in physician job satisfaction
– Hastened “burnout”
 To Err Is Human . . .
But Don’t Err On Insurance
Documentation!
 Incorrect billing for the documentation
provided
Regardless of the complexity, lack of clarity, and unending
changes made to the system IS ASSUMED TO BE
FRAUD!
And can turn a doctor
into
In lessatime
criminal!
than it takes to receive
payment from the Centers for
Medicare and Medicaid!
 The Injustice
Demands from insurance companies are
increasing
-more paperwork, denial hassles, phone calls, audits, etc.
Meanwhile
 Physician practice costs have
increased by 20% since 2001 (AMA)
 Health insurance costs have nearly doubled

Yet insurance companies are reducing

reimbursement to physicians!
– By 2013 it is predicted that Medicare reimbursement
will be 50% of the reimbursement seen in 1991! (Vital
Signs March 2005)
– 2008 Medicare cuts will average 9.9% (AMA)
– 5% cuts are planned for 2009 (AMA News, Aug 2007)
 How Can Physicians Afford To
Work?
Give up coveted independence in favor of employed
positions?!
Stop seeing Medicare and Medicaid patients?! (MMWR
56(10);230)

In 2004 20% of physicians no longer accepted Medicare

patients
9.3% no longer accepted Medicaid
60% of physicians interviewed in 2007 by the AMA state that
they will limit the number of new Medicare patients as a
result of aggressive, proposed cuts to physician
reimbursement (AMA)
Surviving requires understanding AND playing the insurance
game!

Maximize reimbursement through

Adequate and thorough documentation
Appropriate Coding
 Many Physicians Under
Code!
Most physicians do more work than their documentation
supports!
And, as the saying goes,
if it isn’t documented, it didn’t happen!
Fear of fines and loss of licensure have forced
physicians into under-coding!
 How Much Is At Stake?
33-52% of patient encounters are under coded
(JABFP 2001;14:184-92 and FPM October 2003 “How to get all the 99214s you
deserve”)

Assumptions
$30 difference in reimbursement (99213 to a
99214)
30 patients per day
= lose ~$300 per day!
[33%(30 patients/day) x $30/patient = $300/day]

For a physician working 5 days/week for 50

weeks, that is $75,000 annually per
physician!!!
That’s no small chunk of change!
What Is The Gain?
 Decreasing billing and coding errors by just
50% could mean an increase of nearly
$40,000 per year in practice revenues!
 The equivalent of seeing an additional 775 (99213)
patients/year
 Or, an extra 3 patients/day!
 WITHOUT THE EXTRA WORK!
 $40,000 per year / $58 per patient = 690 patients per year
 690 patients per year / 250 work days per year ~ 3 patients per day

 Put another way . . .

Losing $300 per day is like seeing nearly 3 new patients per day for free!
($90 per each 99203 new patient)

This won’t make physicians rich!

This merely decreases the impact of ongoing losses
due to decreasing reimbursement and shifting healthcare costs!
 Tools to Improve
Documentation
 Electronic Medical Records (EMRs)
– Electronic medical records are available, but are often cost-
prohibitive
 Standardized forms
– Proven to improve documentation
– Less expensive
– Most are designed to be completed by hand and kept in a
paper chart
– Many are specific for particular complaints
 such as cough, sore throat, etc.,
 yet lack the scope needed to address multiple comorbidities
– Few contain reminders
 Physician Quality Reporting Initiatives
 Risk of excessive alcohol intake
 Severity index scoring, etc.
Electronic Medical Records
 In 2004 President Bush created the Office of
the National Coordinator for Health
Information Technology whose mission is to
– “Implement an interoperable health information
technology infrastructure nationwide”
 System costs
– Software, hardware, training, implementation, ongoing
maintenance and support
 Induced costs
– Costs involved in the transition to an electronic medical
record, such as the temporary decrease of productivity

A Cost Benefit Analysis of Electronic Medical Records in Primary Care The American Journal of Medicine 2003
114(5):397-403

E-Health 101:Electronic Medical Records Reduce costs, Improve care, and Save lives American Electronics Association
 Electronic Medical Records
Capabilities May Include*
 Viewing
– Medical notes, labs, reports, formularies
 Documenting
– Medical notes, labs, reports
 Ordering
– Prescriptions, labs, tests, consults, durable medical
equipment
 Messaging
– Physician-Staff; Physician-Physician; Physician-Patient
and vice versa
 Care Management/Follow up
 Analysis and Reporting
– Adverse drug reactions, drug-drug reactions, chronic
disease reminders, preventive care reminders, statistical
analysis
 Patient-directed
 Billing and Scheduling
 Who Uses Electronic Medical
Records?

~ 25% of office-based
physicians used
some form of EMR in
2005

National Center for Health Statistics

National Ambulatory Medical Care
Survey
 Implementing Electronic Medical
Records
 $2,500 - $44,000 initial start-up cost/provider
– Software
 50-200% of initial costs
– Hardware
 $5,000-10,000/provider
– Implementation
 $3400/provider
– Additional maintenance costs
 $700-1500/provider per month
 Providers include MD, NP, RN, LPN, PA, MA, receptionist
 Lost productivity estimated at >$10,000 in the first
year
 Average time to return on investment is 2.5 years
– This makes electronic medical records unobtainable by most
Themedical practices
Value of Electronic Health Records in Solo or Small Group Practices Health Affairs 2005 24(5):1127-
1137

A Cost Benefit Analysis of Electronic Medical Records in Primary Care The American Journal of Medicine 2003
 Benefits of Electronic Medical
Records
 Improved documentation
 Reduce paper chart pulls
– Estimated to cost $5/chart
 Decrease costs for transcription
 Reduce redundant labs and tests
ordered
 Some provide prompters
– Preventive care
– Medication options
– Adverse drug interactions

A Cost Benefit Analysis of Electronic Medical Records in Primary Care The American Journal of Medicine 2003 114(5):397-403
 Financial Benefits of EMRs
 5-year net BENEFIT of a “full EMR”
– $86,000/provider
– Full EMR includes electronic prescriptions, chronic
disease reminders, drug interactions, and preventive
care prompters
 5-year net COST of a “light EMR”
– $18,000/provider
– used only to reduce paper chart pulls and transcription
costs

A Cost Benefit Analysis of Electronic Medical Records in Primary Care The American Journal of Medicine 2003 114(5):397-403
 MedicalTemplates
 Standardized patient encounter
forms
 Adobe PDF Technology
– Use as a paper form OR
– Use as an electronic form
MedicalTemplates Features
 Documentation prompters
– HCFA 1997 documentation guidelines
 Quality reminders
– Medicare PQRI
 Checkboxes
– Save time
– Save energy
– Time is Money
 Implementing
MedicalTemplates
Required Hardware and Software
– Free Adobe Reader from Adobe.com
– Basic computer ($350 or less)
 Intel Pentium III or better for Windows
 PowerPC G3 or better for MacOS
– One or more MedicalTemplates
 $150 per template
MedicalTemplate Benefits
 Inexpensive implementation
 Minimal learning curve
 Improved documentation
 Reduce paper chart pulls (if using electronic
format)
– Estimated to cost $5/chart
 Decrease costs for transcription
 Prompters/Reminders improve
– Preventive care
– Quality of care
– Treatment options
– Evaluation options
 MedicalTemplates ROI
Assumptions
 Template cost $150 per practitioner
 Computer cost $350 (most offices already have >1 computer)
 Baseline under coding rate 30% ($300 lost revenue/day)

 Reduction in under coding 50%

– If 33% of 30 patients seen in one day are under coded
 10 patients are under coded by $30 apiece = $300/day
 A 50% reduction = Only 5 patients are under coded
 Increased revenue = $30 x 5 patients now coded correctly
= $150

 Increased revenue of $150/day equates to a

savings of
$750/week $3000/month >$36,000/year!
At $150 per template, the template pays itself off in 1 day!
 MedicalTemplate ROI
Calculation
Including Computer Costs
In just 1 month,
the Return On Investment (ROI) could be:

Average improvement in reimbursement in 1 month

X 100 = ROI
Cost of Template + Cost of Computer

$3000
X 100 = 600%
$150 + $350
 MedicalTemplate ROI
Calculation
Without Computer Costs
In just 1 month,
the Return On Investment (ROI) could be:

Average improvement in reimbursement in 1 month

X 100 = ROI
Cost of Template

$3000
X 100 = 2,000%
$150
 Time to Recover Cost of
MedicalTemplate

MedicalTemplate + Computer ($500)

$500/$150 ~ 3 days

MedicalTemplate without Computer

($150)
$150/$150 = 1 Day!
 Savings Not included in ROI
Estimates
 Reductions in down coding
 Reductions in claim denials
 Reduced time spent on
documentation
 Reduced time pulling charts
 MedicalTemplates
General forms Problem specific
 Clinic H&P forms
 Clinic Follow Up Note  Asthma
 Hospital H&P  COPD
 Hospital Follow Up  Pneumonia
 Pulmonary/Critical Care  Pleural Effusion
H&P  Lung Mass
 Pulmonary/Critical Care  Interstitial Lung
Follow Up Disease
 Pulmonary Clinic H&P  Chest Pain
 Pulmonary
Hypertension
 MedicalTemplates
MedicalTemplates has created multiple
medical templates appropriate for
evaluating patients in the clinic or hospital
setting.
MedicalTemplates are fillable PDF forms that allow the
physician to type historical information directly into the
form.
They can be saved electronically for later reference.
Documentation time is decreased
Most components of the history and physical exam can be
completed by checking the appropriate box.

Reducing documentation time by 5-10 minutes per

patient could save the physician >2 hours per day!
30 patients / day x 5 minute decrease / patient = 2.5 hours / day
SAVED!