Key Strategies for Economic Success Strategies for Economic Success Business Survival Skills for...

Key Strategies for Economic Success

Business Survival Skills for Clinical Endocrinologists

Bill Law Jr MD FACE/FACPBill Law Jr MD FACE/FACPClinical Professor of MedicineClinical Professor of Medicine

Chief, Section of EndocrinologyChief, Section of EndocrinologyUniversity of Tennessee Graduate School of Medicine at KnoxvilleUniversity of Tennessee Graduate School of Medicine at KnoxvillePast President, American Association of Clinical EndocrinologistsPast President, American Association of Clinical Endocrinologists

President, American College of EndocrinologyPresident, American College of Endocrinology

““Those who do not Those who do not remember the past are remember the past are condemned to relive it “condemned to relive it “

George Santayana

Sadly,Some Things Never Change

“One of the ways in which most, if not all, of our medical schools have failed to do their duty has been in graduating students into professional life without having given them the slightest idea of the economics of medicine.”

JAMA Feb 24, 1906 !

Obligations to Serve Versus Economic Reality

Sure, everyone would like to make more money!Sure, everyone would like to make more money!However, physicians are in a unique ethical situation, since However, physicians are in a unique ethical situation, since

our desire to provide our professional services to any our desire to provide our professional services to any patient that needs them may have significant adverse patient that needs them may have significant adverse financial consequences for our practicefinancial consequences for our practice

The high value placed on medical care by our society The high value placed on medical care by our society stands in sharp contrast with our general inability as stands in sharp contrast with our general inability as professionals to determine the value of our services professionals to determine the value of our services

This conflict is causing progressively more physicians to This conflict is causing progressively more physicians to make the socially undesirable, professionally painful, but make the socially undesirable, professionally painful, but financially necessary decision to limit or deny their financially necessary decision to limit or deny their services to indigent patients and to those insured by services to indigent patients and to those insured by Medicaid, Medicare, and other “low payors”Medicaid, Medicare, and other “low payors”

Economic Success – Economic Success – A Moral Imperative ?A Moral Imperative ?

Our current healthcare system doesn’t Our current healthcare system doesn’t guarantee that endocrinologists will be guarantee that endocrinologists will be compensated appropriately!compensated appropriately!

Therefore, we need to employ sound business Therefore, we need to employ sound business principles in the operation of our practice in principles in the operation of our practice in order to generate a personal income sufficient to order to generate a personal income sufficient to allow us to comfortably accept into our practice allow us to comfortably accept into our practice any patient that is in need of our servicesany patient that is in need of our services

““It’s easy to act professionally It’s easy to act professionally when you’re not worrying about money ! “when you’re not worrying about money ! “

Strategies for Economic Success

Bigger is Better !Bigger is Better ! ““Managed care”Managed care” companies are progressively consolidating companies are progressively consolidating

Learn from your opposition!Learn from your opposition!Hire Professionals & Keep Them Happy !Hire Professionals & Keep Them Happy !

Cheap inexperienced help with frequent turnover Cheap inexperienced help with frequent turnover is a very bad investment!is a very bad investment!

Capture Downstream Service Revenue !Capture Downstream Service Revenue ! YYou’re responsible for ordering the tests and actingou’re responsible for ordering the tests and acting on the results, so why not profit from your work?on the results, so why not profit from your work?

Leverage Your Expertise with Physician Extenders !Leverage Your Expertise with Physician Extenders ! Learn from your medical school classmates who chose Learn from your medical school classmates who chose anesthesiology, since many are already comfortably retired!anesthesiology, since many are already comfortably retired!

Bigger is Better !If you analyze the important recent trends in If you analyze the important recent trends in virtually any other area of business, one of the virtually any other area of business, one of the

strikingly repetitive themes is that of strikingly repetitive themes is that of CONSOLIDATIONCONSOLIDATION

Growing economic pressures have prompted Growing economic pressures have prompted many airlines, financial services firms, retailers, many airlines, financial services firms, retailers, etc. to progressively amalgamate into a smaller etc. to progressively amalgamate into a smaller number of larger corporate entities.number of larger corporate entities.

This combination of strengths and resources then This combination of strengths and resources then allows them to operate more competitively and allows them to operate more competitively and cost-effectively. cost-effectively.

Bigger is Better !In order for endocrinologists to continue to uphold the In order for endocrinologists to continue to uphold the

hallowed ideals of our profession and to be able to hallowed ideals of our profession and to be able to afford to provide our services to any patient that needs afford to provide our services to any patient that needs our expertise, I believe that the same business our expertise, I believe that the same business principles must be applied to our own practices.principles must be applied to our own practices.

As the founding partner of a consultative endocrinology As the founding partner of a consultative endocrinology group that has now grown to nine endocrinologists group that has now grown to nine endocrinologists and six physician extenders, I am convinced that the and six physician extenders, I am convinced that the logistical, economic, and “quality of life” advantages logistical, economic, and “quality of life” advantages of associating with other endocrine colleagues into a of associating with other endocrine colleagues into a single, dominant corporate entity will greatly outweigh single, dominant corporate entity will greatly outweigh the disadvantages for most physicians. the disadvantages for most physicians.

Bigger is Better !Shared Capital ExpensesShared Capital Expenses

TThe fixed costs of a DEXA or ultrasound machine, gamma he fixed costs of a DEXA or ultrasound machine, gamma counter, or laboratory analyzer can be paid off much more counter, or laboratory analyzer can be paid off much more rapidly if many physicians share in these expenses. rapidly if many physicians share in these expenses. Once these costs are paid, these investments become Once these costs are paid, these investments become revenue revenue centers rather than centers rather than costcost centers. centers. Multiple economies of scale really mount up quickly!Multiple economies of scale really mount up quickly!

Shared Professional StaffShared Professional Staff A 1-2 physician practice might find it difficult to afford the services A 1-2 physician practice might find it difficult to afford the services

of an MBA practice administrator, RN/RD/CDE, or a certified of an MBA practice administrator, RN/RD/CDE, or a certified ultrasound technologist. ultrasound technologist. However, with many physicians contributing to these costs, both However, with many physicians contributing to these costs, both

physicians and patients can greatly benefit from the services of physicians and patients can greatly benefit from the services of these highly trained professionals on-site in your office.these highly trained professionals on-site in your office.

Bigger is Better !Decreased On-Call Responsibilities

Your family will particularly appreciate this! Your family will particularly appreciate this!

Convenient Collegial InteractionsConvenient Collegial Interactions It is quite gratifying to be able to easily discuss a It is quite gratifying to be able to easily discuss a

complicated patient with your partner down the hall, complicated patient with your partner down the hall, who may have a particular interest in that area of who may have a particular interest in that area of endocrinology, rather than to try and chase down endocrinology, rather than to try and chase down someone else for a second opinion by phone.someone else for a second opinion by phone. In addition, each partner brings unique talents and In addition, each partner brings unique talents and insights into the group relationship, which can be insights into the group relationship, which can be applied for the benefit of the entire organization. applied for the benefit of the entire organization.

Bigger is Better !Improved Contracting AbilityImproved Contracting Ability This is the most compelling economic imperative favoring This is the most compelling economic imperative favoring

association into larger single-specialty entities.association into larger single-specialty entities. Since we are basically unable to negotiate higher allowances from Since we are basically unable to negotiate higher allowances from

Medicare (and usually from Medicaid as well), our only hope is to Medicare (and usually from Medicaid as well), our only hope is to make our “profit” on services provided to individuals who are not make our “profit” on services provided to individuals who are not insured by governmental entities. insured by governmental entities.

Even a modest increase in revenue from services you’re already Even a modest increase in revenue from services you’re already providing makes a huge difference in providing makes a huge difference in netnet revenue to the physician, revenue to the physician, since your costs are already paid.since your costs are already paid.

As an example, if one is paying 65% of receipts as overhead, your net As an example, if one is paying 65% of receipts as overhead, your net revenue is the remaining 35%. If you increase your total receipts by revenue is the remaining 35%. If you increase your total receipts by only 10% through improved contracting, your only 10% through improved contracting, your netnet income just income just increased by almost 3increased by almost 30%!0%!

“ “Gentleman, either we all hang together, or most assuredly, Gentleman, either we all hang together, or most assuredly, we will all hang separately”! we will all hang separately”! (Benjamin Franklin)(Benjamin Franklin)

Hire Professionals & Keep Them Happy

Competent, experienced and loyal staff are a practice’s most valuable assets

Treat them nicely and compensate them well, and Treat them nicely and compensate them well, and they’ll build your business for you ;they’ll build your business for you ;

Disgruntled or incompetent staff will offend your Disgruntled or incompetent staff will offend your patients and severely undermine your patients and severely undermine your professional reputationprofessional reputation

Outside consultants are rarely worth the Outside consultants are rarely worth the investmentinvestment!!

Hire Professionals & Keep Them Happy

Avoid the Peter Principle trapAvoid the Peter Principle trap!! as your practice grows, be wary of as your practice grows, be wary of

promoting your promoting your most senior employee most senior employee to practice administratorto practice administrator

There’s no substitute for an MBA There’s no substitute for an MBA with healthcare experiencewith healthcare experience if you’re serious about operating a if you’re serious about operating a successful professional business!successful professional business!

Capture Downstream Service Revenue

You’re ordering these services anyway, You’re ordering these services anyway, You’re responsible for acting on the results, You’re responsible for acting on the results, So why not directly supervise and profit from your work ?So why not directly supervise and profit from your work ?

Providing ancillary services on-site isProviding ancillary services on-site is much easier for your staffmuch easier for your staff more efficient for your practicemore efficient for your practice

Above all, providing ancillary services on-site isAbove all, providing ancillary services on-site is MUCH MORE CONVENIENT FOR YOUR MUCH MORE CONVENIENT FOR YOUR

PATIENTS!PATIENTS!

Evaluation & Management is Economically Marginal

Assume solo Endocrinologist doing E & M only:Assume solo Endocrinologist doing E & M only:Yearly practice overheadYearly practice overhead

2.5 – 3.0 FTE employee costs2.5 – 3.0 FTE employee costs $100 - 110,000 $100 - 110,000 (inc billing, collections, & accounting svcs)(inc billing, collections, & accounting svcs)~1000 sq ft space ~1000 sq ft space $19 - 25,000 $19 - 25,000Liability InsuranceLiability Insurance $10 - 20,000 $10 - 20,000Transcription (consults & correspondence only) $ 7 - 9,000Transcription (consults & correspondence only) $ 7 - 9,000Postage, Computer & Phone ServicesPostage, Computer & Phone Services $ 8 - 12,000 $ 8 - 12,000General Office SuppliesGeneral Office Supplies $ 8 - 12,000 $ 8 - 12,000Amortized Capital Expenses Amortized Capital Expenses $ 8 - 12,000 $ 8 - 12,000 (phone system, computers, FAX, copier,(phone system, computers, FAX, copier,

office and waiting room furniture, etc) office and waiting room furniture, etc)

TOTAL ~ $150 - 200,000TOTAL ~ $150 - 200,000

An Endocrinologist’s Time is Grossly Undervalued !

Assumptions for 2010 Yearly Revenue CalculationsAssumptions for 2010 Yearly Revenue Calculations:: Solo Endocrinologist doing E & M only for 48 wks/yrSolo Endocrinologist doing E & M only for 48 wks/yr 7 hours of billed time daily (X 240 days/yr)7 hours of billed time daily (X 240 days/yr)

(1 hour daily of empty slots, no-shows or last minute cancellations)(1 hour daily of empty slots, no-shows or last minute cancellations) Average allowance (all charges) 110% of MedicareAverage allowance (all charges) 110% of Medicare

and collection rate 95% of allowed chargesand collection rate 95% of allowed chargesAverage daily service distribution:Average daily service distribution:

3 Level 4-5 new pts (NOT consults) 1 hr each @ $180 = $5403 Level 4-5 new pts (NOT consults) 1 hr each @ $180 = $5405 Level 4 visits (2 hrs total) @ $100 5 Level 4 visits (2 hrs total) @ $100 = $500= $5008 Level 3 visits (2 hrs total) @8 Level 3 visits (2 hrs total) @ $70$70 = $560= $560

Total Total = $1600= $1600

Total Yearly E & M RevenueTotal Yearly E & M Revenue: 0.95 X 1600 X 240 =~$365,000: 0.95 X 1600 X 240 =~$365,000

An Endocrinologist’s Time is Grossly Undervalued !

Total Yearly E & M RevenueTotal Yearly E & M Revenue: ~$ 365,000: ~$ 365,000Total Office ExpenseTotal Office Expense:: ~$ 150 - 200,000 ~$ 150 - 200,000Net Physician IncomeNet Physician Income ~$ 165 - 215,000** ~$ 165 - 215,000******This figure is clearly optimisticThis figure is clearly optimistic, since it assumes:, since it assumes:1 - the ability to fill office schedule 7 hrs/day;1 - the ability to fill office schedule 7 hrs/day;2 - a level of efficiency in charge generation and collection that may be 2 - a level of efficiency in charge generation and collection that may be

difficult for many to achieve;difficult for many to achieve;3 - no weekday time off;3 - no weekday time off;4 - no income lost during office hours in provision of potentially less time-4 - no income lost during office hours in provision of potentially less time-

efficient hospital services, volunteer teaching of residents, etc.efficient hospital services, volunteer teaching of residents, etc. Any decrease in revenue Any decrease in revenue directlydirectly reduces your income, reduces your income,

since expenses are fixed!since expenses are fixed!

Representative Representative Economic Models Economic Models

of Downstream of Downstream Revenue PotentialRevenue Potential

Disclaimer:

The following economic modeling The following economic modeling purports to vaguely represent data purports to vaguely represent data from a real world single-specialty from a real world single-specialty

group endocrinology practice.group endocrinology practice.

Every practice situation is Every practice situation is different !different !

Economics of Thyroid Ultrasound

Approximate Acquisition CostApproximate Acquisition Cost (one-time capital expense)(one-time capital expense)

Phillips HD11Phillips HD11 (fixed location) (fixed location) $ 75,000$ 75,000Sonosite M-TurboSonosite M-Turbo (portable)(portable) $ 35,000$ 35,000

Ongoing Yearly ExpensesOngoing Yearly ExpensesMaintenance Contract Maintenance Contract $ 6,000$ 6,000SpaceSpace $ 2,000 $ 2,000Supplies Supplies (transducer covers, gel, printing)(transducer covers, gel, printing) $ 3,000$ 3,000

TOTAL ~ $ 11,000TOTAL ~ $ 11,000

+/- U/S Tech Salary & Benefits+/- U/S Tech Salary & Benefits $ 75,000$ 75,000


Potential Additional RevenuePotential Additional Revenue (assuming collection ~110% Medicare)(assuming collection ~110% Medicare)

Diagnostic Ultrasound (76536)Diagnostic Ultrasound (76536) $ 110 $ 110U/S Guidance for FNA (76942)U/S Guidance for FNA (76942) $180 $180FNA Using U/S Guidance (10022)FNA Using U/S Guidance (10022) $140 $140

bill togetherbill together

[[FNA alone (10021) = $135 FNA alone (10021) = $135 ]]


Assume each Dr bills weekly for 48 weeks:Assume each Dr bills weekly for 48 weeks:5 diagnostic U/S 5 diagnostic U/S $550$550 2 FNA using U/S guidance2 FNA using U/S guidance $640$640

$ X 48 = ~ $57,000/yr/Dr$ X 48 = ~ $57,000/yr/Dr

However, if 4 physicians are using this machine, However, if 4 physicians are using this machine, that’s ~ $230,000/year !that’s ~ $230,000/year !

Now you can afford to hire the tech full-time, Now you can afford to hire the tech full-time, completely pay off the machine in 6 months, completely pay off the machine in 6 months, then each make an extra $35,000/yr after that!then each make an extra $35,000/yr after that!

Economics of DXA

Acquisition CostAcquisition Cost ~ $60,000~ $60,000

(one-time capital expense)(one-time capital expense)

Yearly ExpensesYearly Expenses Maintenance Contract Maintenance Contract $ 7,000 $ 7,000SpaceSpace $ 3,000 $ 3,000

TOTAL ~ $ 10,000TOTAL ~ $ 10,000

+/- +/- 25% FTE25% FTE DXA Tech S & BDXA Tech S & B $ 10,000 $ 10,000

Economics of DXA

Potential Additional RevenuePotential Additional Revenue:: (assuming collections ~ 110% Medicare)(assuming collections ~ 110% Medicare)

5 DXA/wk/Dr X 48 weeks @ $100: ~$25,0005 DXA/wk/Dr X 48 weeks @ $100: ~$25,000++/yr/yr

However, if 4 Drs using machineHowever, if 4 Drs using machine: ~: ~ $100,000 $100,000++/yr !/yr !

Now you can afford to hire the tech full-time, have Now you can afford to hire the tech full-time, have him/her handle your radioiodine needs also, him/her handle your radioiodine needs also, completely pay off the machine in the first year, completely pay off the machine in the first year, then each make an extra $15,000/yr after that!then each make an extra $15,000/yr after that!

Economics of Retinal Scanning (Inoveon)

Yearly Fixed ExpensesYearly Fixed Expenses Lease for retinal cameraLease for retinal camera $ 15 - 20,000$ 15 - 20,000SpaceSpace $ 2,000$ 2,000SuppliesSupplies $ 500$ 500

TOTAL ~ $ 20,000TOTAL ~ $ 20,000

Yearly Variable ExpensesYearly Variable Expenses$50 per scan fee to ophthalmologist for report$50 per scan fee to ophthalmologist for report

~$20 per scan for staffing S & B (for smaller practices)~$20 per scan for staffing S & B (for smaller practices)Alternatively, you can pay ~ $80/scan and the company will provide Alternatively, you can pay ~ $80/scan and the company will provide

everything, and you pocket the difference (if any)everything, and you pocket the difference (if any)

Economics of Retinal Scanning (Inoveon)

Potential Additional RevenuePotential Additional Revenue(assuming collection 110% Medicare)(assuming collection 110% Medicare)

5 studies/wk/Dr X 48 weeks @ $70:5 studies/wk/Dr X 48 weeks @ $70: $17,000 $17,000 minus $50/scan interpretation fee X 240: -$12,000minus $50/scan interpretation fee X 240: -$12,000

minus $20/scan staff costs X 240:minus $20/scan staff costs X 240: -$ 5,000 -$ 5,000Profit per Dr per year:Profit per Dr per year: ~$0000 ~$0000

minus fixed costs !!minus fixed costs !! ~ ~ $20,000$20,000 = (???) net = (???) net Therefore , even with 4 physicians, one must average 4-5 scans/Dr/day Therefore , even with 4 physicians, one must average 4-5 scans/Dr/day

and/or your collection rate for all services must average significantly and/or your collection rate for all services must average significantly more than 110% Medicare in order for this program to be financially more than 110% Medicare in order for this program to be financially feasible under the current fiscal model.feasible under the current fiscal model.

The costs of the Inoveon iSite program are structured to be profitable The costs of the Inoveon iSite program are structured to be profitable only for practices managing at least 3,000 diabetic patients yearly, only for practices managing at least 3,000 diabetic patients yearly, and/or those with significantly higher contractual allowances.and/or those with significantly higher contractual allowances.

Economics of Ankle-Brachial Index (ABI) Testing

ExpensesExpenses Initial equipment costs Initial equipment costs (often less than this)(often less than this) $15,000$15,000Yearly costs:Yearly costs:

Lease cost of spaceLease cost of space $2,000$2,00010% of salary/benefit of staff10% of salary/benefit of staff $3,000$3,000

Revenue ProjectionsRevenue Projections (assumes collections ~110% MC)(assumes collections ~110% MC)Segmental (multiple level) ~ $150 (TC) Segmental (multiple level) ~ $150 (TC)

2/wk per user X 48 wks = ~$15,000/yr/user2/wk per user X 48 wks = ~$15,000/yr/userWith 4 usersWith 4 users, machine is paid off in several months, and , machine is paid off in several months, and

then each doc nets ~$15,000 extra yearlythen each doc nets ~$15,000 extra yearly

Economics of Radioiodine Services*

Initial Equipment CostsInitial Equipment Costs $25000$25000

Yearly CostsYearly CostsLicenseLicense $ 150$ 150Maintenance FeesMaintenance Fees $ 75$ 75Radiation Physicist ReviewRadiation Physicist Review $ 900$ 900Radiation BadgesRadiation Badges $ 125/person$ 125/personLease cost of spaceLease cost of space $ 2000$ 200010% of salary/benefit of staff support10% of salary/benefit of staff support $ 3000$ 3000

TotalTotal $ 6250$ 6250* Scanning not included* Scanning not included

Economics of Radioiodine Uptake & I131 RX*

Revenue ProjectionsRevenue Projections * * (assumes practice collections ~110% MC allowances):(assumes practice collections ~110% MC allowances):

RAI Uptake (78000) RAI Uptake (78000) $ 65 $ 65Prof Fee for I131 Rx HyperTx/Cancer (79005) $ 150Prof Fee for I131 Rx HyperTx/Cancer (79005) $ 150

Assume: 50 HyperTx pts/year X $215 Assume: 50 HyperTx pts/year X $215 ~$11,000 ~$11,000

25 Cancer pts/yr X $15025 Cancer pts/yr X $150 ~$ 4,000 ~$ 4,000Total revenue ~ $ 15,000/yr*Total revenue ~ $ 15,000/yr*

*Medicare only reimburses the invoice cost of the I131 dose (A9517), *Medicare only reimburses the invoice cost of the I131 dose (A9517), and ~ $40.00 for RAI Dx Capsule (A9528), but the fee for these and ~ $40.00 for RAI Dx Capsule (A9528), but the fee for these services may often be adjusted upwards when charged to private services may often be adjusted upwards when charged to private insurors and add to net revenue insurors and add to net revenue

Economics of Radioiodine Uptake & I131 RX*

SummarySummary::Initial Equipment CostInitial Equipment Cost $25,000$25,000Annual CostsAnnual Costs $ 6,250$ 6,250Annual Revenue (per physician)Annual Revenue (per physician) $15,000+$15,000+

Using the above volume assumptions, a solo physician, Using the above volume assumptions, a solo physician, once once licensedlicensed, can pay for the initial and ongoing costs in ~2 yrs , can pay for the initial and ongoing costs in ~2 yrs and then make an extra $10,000and then make an extra $10,000++/year after that/year after that

Marked improvement in convenience for your patientMarked improvement in convenience for your patientIncreased control of the process by the endocrinologistIncreased control of the process by the endocrinologistThe economics are much more favorable if volume is higher !The economics are much more favorable if volume is higher ! (additional endocrinologists, thyroid-focused practice, etc)(additional endocrinologists, thyroid-focused practice, etc)

Economics of Endocrine Laboratory

Main clinical advantage is ability to obtain same-visit Main clinical advantage is ability to obtain same-visit test results – strong negotiating point!test results – strong negotiating point!

Economic viability is critically dependent upon high Economic viability is critically dependent upon high volume (equipment and salary costs are fixed) and volume (equipment and salary costs are fixed) and consequent ability to negotiate third-party consequent ability to negotiate third-party payment, payment, since many managed care plans since many managed care plans typically typically requirerequire participating physicians to send participating physicians to send out specimens to their contracted lab*out specimens to their contracted lab*

Can be VERY profitable and convenient for your Can be VERY profitable and convenient for your patients patients IFIF above conditions met above conditions met

*Few physicians are still able to buy lab tests from commercial lab, be *Few physicians are still able to buy lab tests from commercial lab, be paid a higher fee by private insurer for tests, and pocket the differencepaid a higher fee by private insurer for tests, and pocket the difference

Leverage Your Expertise with Physician Extenders!

The productivity of most physicians is still The productivity of most physicians is still determined by their personal piecework.determined by their personal piecework.

The owner of a business can only achieve The owner of a business can only achieve maximum profitability through delegation.maximum profitability through delegation.

We can TRAIN non-physician clinicians to We can TRAIN non-physician clinicians to do an excellent job of providing routine do an excellent job of providing routine follow-up endocrine care under our direct follow-up endocrine care under our direct supervision, thereby leveraging our supervision, thereby leveraging our expertise !expertise !

Physician Extenders:To Add or Not To Add ?

1 – Critical requirements for success1 – Critical requirements for success

2 –Practice objectives facilitated by 2 –Practice objectives facilitated by addition of practice extendersaddition of practice extenders

3 – Practical issues that must be 3 – Practical issues that must be addressedaddressed

Critical Requirements for Success

1- Current or anticipated demand for services is sufficient 1- Current or anticipated demand for services is sufficient to keep another care provider fully busyto keep another care provider fully busy

2 – Sufficient space and infrastructure is available to 2 – Sufficient space and infrastructure is available to comfortably accommodate the addition of provider comfortably accommodate the addition of provider and patients {office, exam rooms, reception area, and patients {office, exam rooms, reception area, support staff, record storage (if no EMR), etc}support staff, record storage (if no EMR), etc}

3 – Extenders are available, bright and highly motivated, 3 – Extenders are available, bright and highly motivated, capable and willing to be trained to become capable and willing to be trained to become

extensions of the physician’s practice philosophy extensions of the physician’s practice philosophy and to provide subspecialty-level quality of care to and to provide subspecialty-level quality of care to patients under the endocrinologist’s supervision patients under the endocrinologist’s supervision

4 – Hospital patient coverage by extenders (if desired) is 4 – Hospital patient coverage by extenders (if desired) is allowed by your institutionallowed by your institution

Clearly Prioritize Your Objectives !

This decision will govern the design of your This decision will govern the design of your logistical arrangements and training logistical arrangements and training

program!program!Potentially competing objectives include:Potentially competing objectives include:

1 – Changing physician case mix1 – Changing physician case mix2 – Obtaining phone and/or hospital call coverage2 – Obtaining phone and/or hospital call coverage3 – Enhancement of physician net income3 – Enhancement of physician net income

Actions that facilitate optimal achievement of one Actions that facilitate optimal achievement of one objective may force compromise on another, so objective may force compromise on another, so physicians need to think through this before physicians need to think through this before proceeding (proceeding (and achieve consensus if in a group !and achieve consensus if in a group !))

Practice Objectives Facilitated by Physician Extenders

Provision ofProvision ofmore servicesmore services to to

more patientsmore patients more efficiently !more efficiently !

Decreased waiting time for new patient consultations Decreased waiting time for new patient consultations pleases patients as well as your referring pleases patients as well as your referring physiciansphysicians

Prompt scheduling of visits for established patients Prompt scheduling of visits for established patients reduces their apprehension and your no-show rate!reduces their apprehension and your no-show rate!

Practice Objectives Facilitated

by Physician Extenders

Change in Physician Case MixChange in Physician Case MixAllows transition of stable patients to extender for Allows transition of stable patients to extender for

ongoing care rather than transferring care back ongoing care rather than transferring care back to PCP, while keeping loyal patients (and their to PCP, while keeping loyal patients (and their revenue stream) within the practicerevenue stream) within the practice

Frees up time on endocrinologist’s schedule to see Frees up time on endocrinologist’s schedule to see more new consults with less delaymore new consults with less delay

Extender’s practice can be concentrated on specific Extender’s practice can be concentrated on specific areas (diabetes, lipids, HBP, thyroid, bone, etc), areas (diabetes, lipids, HBP, thyroid, bone, etc), increasing their focused expertise and allowing increasing their focused expertise and allowing physician to see more pts of personal interestphysician to see more pts of personal interest

Practice Objectives Facilitated by Physician Extenders

Phone & Hospital Call CoveragePhone & Hospital Call Coverage

so critical for quality of life in smaller practicesso critical for quality of life in smaller practices

Enhancement of Physician IncomeEnhancement of Physician Income should be realized by practices that meet should be realized by practices that meet

critical conditions for successcritical conditions for success

Non-NP/PA Physician Extenders (RN, CDE, etc)

Can be trained to review records and generate background Can be trained to review records and generate background historical data for new consult or OV, which can then be historical data for new consult or OV, which can then be reviewed and evaluation completed by endoreviewed and evaluation completed by endo

Can draft F/U communications to patients and referring Can draft F/U communications to patients and referring clinicians and prepare visit documentation (facilitated by clinicians and prepare visit documentation (facilitated by use of disease-specific templates) for review and signature use of disease-specific templates) for review and signature by endocrinologistby endocrinologist

Teach patient skills (use of BG meters, injection techniques Teach patient skills (use of BG meters, injection techniques for insulin/glucagon/exenatide/teriparatide/GH/testost, etc)for insulin/glucagon/exenatide/teriparatide/GH/testost, etc)

Physician must personally see each patientPhysician must personally see each patient but allows many more billable physician services but allows many more billable physician services

to be completed in a specific time periodto be completed in a specific time period

Practical Issues That Must Be Addressed

State Regulatory Requirements (PA/NP)State Regulatory Requirements (PA/NP)Definition of Specific Supervisory RolesDefinition of Specific Supervisory Roles““Incident To” Guidelines Incident To” Guidelines Patients and referring clinicians must be Patients and referring clinicians must be

familiarized and made comfortable with the familiarized and made comfortable with the incorporation of extender colleagues into your incorporation of extender colleagues into your practicepractice

Integration of Extender and Endo Schedules Integration of Extender and Endo Schedules Committing sufficient time for Personalized Committing sufficient time for Personalized

Training of your extenders is CRITICAL !!Training of your extenders is CRITICAL !!

Possible Concerns

1 – “1 – “My Referring Physicians won’t accept itMy Referring Physicians won’t accept it””Change is always stressful and resistance to it Change is always stressful and resistance to it

is natural. I can only respectfully observe that is natural. I can only respectfully observe that many excellent consultative endocrine practices many excellent consultative endocrine practices across the country have been doing this for across the country have been doing this for years, with only minimal and transient resistance years, with only minimal and transient resistance from their referring physicians. In fact, many from their referring physicians. In fact, many practices find that their referral sources become practices find that their referral sources become much much HAPPIERHAPPIER overall, since their new patients overall, since their new patients can now be seen much more expeditiously !can now be seen much more expeditiously !

Possible Concerns

2 – “2 – “My Patients won’t accept itMy Patients won’t accept it””As much as we would like to think that we are As much as we would like to think that we are

the only individuals that can meet our patients the only individuals that can meet our patients needs, the reality is that this transition to care needs, the reality is that this transition to care directed by an extender directed by an extender under our personal under our personal supervisionsupervision is remarkably uneventful. is remarkably uneventful.

Patients trust our extenders Patients trust our extenders because they trust us !because they trust us !

Possible Concerns

3 – “3 – “I’m Training my own competitionI’m Training my own competition””While it is true that some states allow independent practice While it is true that some states allow independent practice

and billing by NP’s (but not PA’s), the reality is that such and billing by NP’s (but not PA’s), the reality is that such action would be very unlikely to materially impact an action would be very unlikely to materially impact an endocrinologist’s practice:endocrinologist’s practice:

1 – they would have to set up, run, and pay for their practice 1 – they would have to set up, run, and pay for their practice with 85% of gross physician E & M paymentswith 85% of gross physician E & M payments

2 – they are precluded from operating an on-site lab or 2 – they are precluded from operating an on-site lab or doing most procedures to generate additional revenuedoing most procedures to generate additional revenue

3 – they would be unaffiliated with an endocrine specialist 3 – they would be unaffiliated with an endocrine specialist yet dependent on referrals (who would YOU want to see!)yet dependent on referrals (who would YOU want to see!)

4 – Most endocrinologists are busier than they want to be, 4 – Most endocrinologists are busier than they want to be, and would just hire another extender to take their place!and would just hire another extender to take their place!

Summary:Benefits of Adding Extenders

1 – 1 – Provision ofProvision ofmore servicesmore services to to

more patientsmore patients

more efficientlymore efficiently2 – Hospital and Call Coverage2 – Hospital and Call Coverage

3 – Change in Physician Case Mix3 – Change in Physician Case Mix4 – Enhancement of Practice Revenue 4 – Enhancement of Practice Revenue

(see additional slides at end of syllabus)(see additional slides at end of syllabus)

To Add or Not To Add?

Remember:Remember: It’s nice to show a profit, but there are It’s nice to show a profit, but there are

manymany other positive considerations other positive considerations associated with adding physician associated with adding physician extenders to your practice that extenders to your practice that

should be factored into should be factored into your analysis !your analysis !


Bigger is Better !Bigger is Better !

Hire Professionals & Keep Them Happy !Hire Professionals & Keep Them Happy !

Capture Downstream Service Revenue !Capture Downstream Service Revenue !

Leverage Your Expertise!Leverage Your Expertise!


Business Survival Skills for Clinical Endocrinologists

Bill Law Jr MD FACE/FACPBill Law Jr MD FACE/FACPClinical Professor of MedicineClinical Professor of Medicine

Chief, Section of EndocrinologyChief, Section of EndocrinologyUniversity of Tennessee Graduate School of Medicine at KnoxvilleUniversity of Tennessee Graduate School of Medicine at KnoxvillePast President, American Association of Clinical EndocrinologistsPast President, American Association of Clinical Endocrinologists

President, American College of EndocrinologyPresident, American College of Endocrinology

Additional Detail SlidesAdditional Detail Slides


State Regulatory Requirements (PA/NP)State Regulatory Requirements (PA/NP)Highly variable, and your responsibility ! !Highly variable, and your responsibility ! !

Continuous physical presence of supervising physician is Continuous physical presence of supervising physician is rarely required, but virtually all rarely required, but virtually all states require states require

immediate physician availability by some means immediate physician availability by some means (phone, radio, etc) and formal designation of (phone, radio, etc) and formal designation of alternate alternate supervisory physician if primary MD/DOsupervisory physician if primary MD/DO unavailable. unavailable.

For specific info, check with your state medical licensing For specific info, check with your state medical licensing board, the annual summary of legislative issues affecting board, the annual summary of legislative issues affecting APRN’s published in The Nurse Practitioner journal, and APRN’s published in The Nurse Practitioner journal, and the American Society of Endocrine Physician Assistantsthe American Society of Endocrine Physician Assistants


State Regulatory Requirements (PA/NP)State Regulatory Requirements (PA/NP)Prescribing authorityPrescribing authority – Virtually all states – Virtually all states allow non-scheduled drugs; many allow allow non-scheduled drugs; many allow schedule III-V, and some allow schedule IIschedule III-V, and some allow schedule IISome states require Some states require Specific FormulariesSpecific Formularies to be to be

agreed upon between Physician and extenderagreed upon between Physician and extenderPhysician chart reviewPhysician chart review generally required, but generally required, but

many states do not specify details of volume many states do not specify details of volume or frequency. Some do require chart review or frequency. Some do require chart review within specific time interval from service datewithin specific time interval from service date


State Regulatory Requirements (PA/NP)State Regulatory Requirements (PA/NP) Periodic meeting and performance reviewPeriodic meeting and performance review

is usually required, particularly if PA/NP off-is usually required, particularly if PA/NP off-sitesite

Geographic restrictionGeographic restriction as to distance allowed as to distance allowed off-site frequently existsoff-site frequently exists

Periodic personal evaluation by physicianPeriodic personal evaluation by physician of patients primarily managed by NP/PA is of patients primarily managed by NP/PA is

rarely requiredrarely required Scope of PracticeScope of Practice is typically limited to that of is typically limited to that of

the supervising physicianthe supervising physician


Definition of Specific Supervisory RolesDefinition of Specific Supervisory RolesThere should be a clear delineation of supervisory responsibility within any group practice, so the extender can clearly identify to whom patient management questions should be addressed

Questions are ENCOURAGED! Extenders MUST feel totally comfortable to ask for advice at any time, without fear of ridicule or embarrassment.

Remember:It’s YOUR Reputation at Risk

if they mess up!


““Incident To” Guidelines Incident To” Guidelines ( Medicare carrier regulation 2050.1)( Medicare carrier regulation 2050.1)

• The initial and subsequent services furnished as part of The initial and subsequent services furnished as part of the course of treatment need to reflect the the course of treatment need to reflect the

physicians' active participation in the management physicians' active participation in the management course of treatment. course of treatment.

• Direct supervision requirements must be met if NP/PA Direct supervision requirements must be met if NP/PA services are billing under the physician’s provider services are billing under the physician’s provider identification number.identification number.

• Direct supervision guidelines require that the physician Direct supervision guidelines require that the physician must be within the office suite when the service is must be within the office suite when the service is performed , and immediately available to render performed , and immediately available to render

assistance if necessary.assistance if necessary.


Patients and referring clinicians must be familiarized Patients and referring clinicians must be familiarized and made comfortable with the incorporation of and made comfortable with the incorporation of extender colleagues into your practice. extender colleagues into your practice.

List extender names and degreesList extender names and degrees proudly on your proudly on your office marquee, stationary, etcoffice marquee, stationary, etc

For New patientsFor New patients - introduce this paradigm - introduce this paradigm immediately in your general practice welcome immediately in your general practice welcome brochurebrochure

For Established patients being transferredFor Established patients being transferred – –introduce your extenders personally and explain introduce your extenders personally and explain their essential role in your practicetheir essential role in your practice

TRAINING IS CRITICAL !

Patients and referring clinicians rightly expect that Patients and referring clinicians rightly expect that the care patients receive through your office will the care patients receive through your office will be sub-specialty level quality, regardless of who is be sub-specialty level quality, regardless of who is primarily seeing the patient.primarily seeing the patient.

NP/PA’s are not endocrinologistsNP/PA’s are not endocrinologists ! ! They are trained as generalists, so you have to They are trained as generalists, so you have to rigorously supplement their general clinical rigorously supplement their general clinical background before they can be expected to background before they can be expected to function competently at a specialist level with function competently at a specialist level with minimal supervision.minimal supervision.

YOURYOUR reputation is on the line here! reputation is on the line here!

Option 1: Extender does Primary Eval. Of New DM Pts

First WeekFirst Week: No charge generation !: No charge generation !Give background review articles/guidelinesGive background review articles/guidelinesShadow endocrinologist/NP/PA while seeing ptsShadow endocrinologist/NP/PA while seeing ptsConduct individual educational sessions with Conduct individual educational sessions with endoendo

Spend several days with RN/RD CDE’s learningSpend several days with RN/RD CDE’s learning : : CHO counting/ratio development techniquesCHO counting/ratio development techniques Principles and practice of MDI and intensive RxPrinciples and practice of MDI and intensive Rx Insulin pump features and programming detailsInsulin pump features and programming details Features of various meters & injection devicesFeatures of various meters & injection devices


Extender and Physician Extender and Physician Schedules Schedules Must be IntegratedMust be Integrated For New Patients For New Patients

or Initial Patient Transfer Visitsor Initial Patient Transfer VisitsThis is critical to maintain maximum efficiency and This is critical to maintain maximum efficiency and

patient satisfaction:patient satisfaction: Both parties must be cognizant of time, so Both parties must be cognizant of time, so

they don’t throw the other way behind;they don’t throw the other way behind;Both schedule templates must be integrated, so that Both schedule templates must be integrated, so that

the endocrinologist’s schedule is blocked the endocrinologist’s schedule is blocked when the extender should be ready to when the extender should be ready to present the case;present the case;

CConsider booking new/Tx patients early am/pm to onsider booking new/Tx patients early am/pm to minimize potential for schedule minimize potential for schedule

mismatchesmismatches


22ndnd Week Week::Schedule one new patient am & pmSchedule one new patient am & pmBlock 2 hours on extender scheduleBlock 2 hours on extender schedule

60 min - History & Physical60 min - History & Physical30 min – review with endo and see pt30 min – review with endo and see pt

(have to coordinate time block on ENDO schedule also!)(have to coordinate time block on ENDO schedule also!)

30 min – discussion with pt & dictation30 min – discussion with pt & dictationRemaining two hours am & pm spent Remaining two hours am & pm spent shadowing other NP/PA’s (or endo or CDE, shadowing other NP/PA’s (or endo or CDE, as they feel most needed)as they feel most needed)


33rdrd – 6 – 6thth week week (for DM-focused pts) :(for DM-focused pts) :schedule 3 new patients daily as before, with schedule 3 new patients daily as before, with remaining time allotted for 30 - 45 minute remaining time allotted for 30 - 45 minute follow-up visitsfollow-up visits (don’t overwhelm them!).(don’t overwhelm them!).

66thth - 12 - 12thth week week::schedule 2 – 3 new patients daily, with schedule 2 – 3 new patients daily, with remaining time allotted for 30 minute remaining time allotted for 30 minute

follow-up visitsfollow-up visits1212thth week on week on:: 2 new patients/day, rest 30” OV2 new patients/day, rest 30” OV

Be Penny-Foolish, Pound-Wise !Be Penny-Foolish, Pound-Wise !

Option 2: Extender sees only Established Patients Tx from Endo

Since established patients should generally Since established patients should generally not need to be seen back quickly, first not need to be seen back quickly, first several months will be spent seeing several months will be spent seeing patients new to the extender, whose patients new to the extender, whose schedule will need to be coordinated well schedule will need to be coordinated well in advance with Endo’s schedule to in advance with Endo’s schedule to ensure appropriate patient selection and ensure appropriate patient selection and allow adequate time for supervision of allow adequate time for supervision of transfer. Over time, their return pts will transfer. Over time, their return pts will predominate, requiring progressively less predominate, requiring progressively less of Endo’s time during working hours.of Endo’s time during working hours.

Option 2: Extender sees only Established Patients Tx from Endo

Depending on complexity of case, extender’s Depending on complexity of case, extender’s level of experience, and legibility/organization level of experience, and legibility/organization of chart, allow 30-45 minutes for extender’s of chart, allow 30-45 minutes for extender’s initial patient evaluation & relationship building initial patient evaluation & relationship building and 15 minutes for discussion of findings and and 15 minutes for discussion of findings and recommendations with Endo recommendations with Endo in the presence of in the presence of the patientthe patient (to reassure them re- extender’s (to reassure them re- extender’s command of their situation).command of their situation).

Can bill 99215, using time as basis of charge. Can bill 99215, using time as basis of charge. F/U visits will be with extender only.F/U visits will be with extender only.

Disclaimer:

““Garbage in, garbage out”Garbage in, garbage out”The following economic modeling purports to The following economic modeling purports to

vaguely represent data from a real world single vaguely represent data from a real world single specialty group endocrinology practice.specialty group endocrinology practice.

The validity of any modeling is critically dependent The validity of any modeling is critically dependent on the validity of the underlying assumptions.on the validity of the underlying assumptions.

Every practice situation is Every practice situation is different !different !

Addition of Extenders: Economic Analysis

Representative Extender Direct Costs (year)Representative Extender Direct Costs (year)SalarySalary $75,000$75,000Productivity BonusProductivity Bonus $15,000$15,000Other Direct Costs/BenefitsOther Direct Costs/Benefits $15,000$15,000 (health/life/disability insurance,(health/life/disability insurance,

retirement plan contribution,retirement plan contribution,medical liability insurance,medical liability insurance,CME, medical licenses, etc)CME, medical licenses, etc)


Representative Extender-Associated Costs (year)Representative Extender-Associated Costs (year)NP/PA’sNP/PA’s LPN/MA Salary/BenefitsLPN/MA Salary/Benefits $35,000 $35,000% Other Employees Salaries/Benefits $25,000% Other Employees Salaries/Benefits $25,000SSpace pace $8,000 $8,000

(office, exam room, %common spaces)(office, exam room, %common spaces)TranscriptionTranscription $6,000 $6,000% General Office Supplies/Expenses $9,000% General Office Supplies/Expenses $9,000

(phone, computers, postage, etc)(phone, computers, postage, etc) (+/-) Lab Costs (+/-) Lab Costs (Reagents, staff S/B, space, etc) (Reagents, staff S/B, space, etc) $35,000$35,000


IfIf Extender is seeing new consults, Extender is seeing new consults, ddon’t forget to include in your calculations:on’t forget to include in your calculations:

Value of Physician Value of Physician Supervision TimeSupervision Time


Value of Physician Supervision Time* :Value of Physician Supervision Time* :*work-day time only during initial year*work-day time only during initial year

(required to staff new/transfer patients – (required to staff new/transfer patients – this should decrease significantly over time)this should decrease significantly over time)

assumes average of 5 hrs/wk X 48 wks assumes average of 5 hrs/wk X 48 wks (4 weeks vacation & CME)(4 weeks vacation & CME)

= 240 hr/yr X $275/hr in lost MD = 240 hr/yr X $275/hr in lost MD receipts receipts

$ 65,000$ 65,000

Representative Extender- Associated Costs (year)

Total Extender-Associated Costs/YrTotal Extender-Associated Costs/Yr : :

$ 185,000: Direct & Associated$ 185,000: Direct & Associated$ 65,000$ 65,000: Physician Supervision: Physician Supervision$ 250,000 Total$ 250,000 Total

(+ $35,000 for Lab costs if applicable)(+ $35,000 for Lab costs if applicable)

Economic AnalysisNP/PA - Associated Revenue ProjectionsNP/PA - Associated Revenue ProjectionsNumerous variables to consider:Numerous variables to consider:

Is your demand for clinical services sufficiently great to Is your demand for clinical services sufficiently great to keep them busy?keep them busy?

Have you crafted a productivity bonus structure that will Have you crafted a productivity bonus structure that will motivate them to ensure that their schedule is full?motivate them to ensure that their schedule is full?

Can you provide the necessary space and support to Can you provide the necessary space and support to allow them to achieve maximum productivity?allow them to achieve maximum productivity?Do your contractual allowances, case mix and collection Do your contractual allowances, case mix and collection

percentage allow you to cover their costs and make a percentage allow you to cover their costs and make a profit?profit?

If Not, STOP IMMEDIATELY !!!If Not, STOP IMMEDIATELY !!!

Option 1: New Pts + OV’s Extender Revenue (year)*

NP/PA Is Seeing New DM Patients and OV’sNP/PA Is Seeing New DM Patients and OV’sNew Office PatientsNew Office Patients (2010 MC Allowance ~ $180)(2010 MC Allowance ~ $180) ~$ 88,000~$ 88,000

assume ave. 2/day = 440 level 5 @ ~$200 eachassume ave. 2/day = 440 level 5 @ ~$200 eachLevel 4 (30’’) OVLevel 4 (30’’) OV (2010 MC Allowance ~ $92)(2010 MC Allowance ~ $92) ~$144,000~$144,000

assume ave 6/day = 1440 @ ~$100 eachassume ave 6/day = 1440 @ ~$100 each+/- In-House Labs +/- In-House Labs (inc. lab-only visits)(inc. lab-only visits) ~~$115,000$115,000

(chemistries, A1c, lipids, TFT’s, ClCr, Uma, etc)(chemistries, A1c, lipids, TFT’s, ClCr, Uma, etc)( 1800 encounters @ $65 each)( 1800 encounters @ $65 each)

TOTAL:TOTAL: $230 - $230 - 345,000345,000**AssumptionsAssumptions: : 48 wks X 4.5 days/wk = 220 full working days/yr, 7 hrs billable/day48 wks X 4.5 days/wk = 220 full working days/yr, 7 hrs billable/day

average allowances at average allowances at 110% of Medicare110% of Medicarenet collection rate is at least net collection rate is at least 95% of allowed charges95% of allowed chargesbilling is done for on-site supervision using billing is done for on-site supervision using physician physician billing number at 100% billing number at 100%

allowance (revenue drops ~15% off the top if charges are billed using allowance (revenue drops ~15% off the top if charges are billed using NP/PA provider number, while expenses are unchanged!)NP/PA provider number, while expenses are unchanged!)

Option 1 Economic Analysisat 110% Medicare

NP/PA Is Seeing New DM Patients and OV’sNP/PA Is Seeing New DM Patients and OV’s

Total NP/PA Revenue Total NP/PA Revenue (+ Lab)(+ Lab) $230 $230 (345,000) (345,000)

Total NP/PA - Asso CostsTotal NP/PA - Asso Costs (+ Lab) (+ Lab) $250 $250 (285,000)(285,000)

(Loss)/Profit per Extender/Yr $(-$20) (no lab)(Loss)/Profit per Extender/Yr $(-$20) (no lab) $ +60 (with lab)$ +60 (with lab)

Capturing downstream lab revenue Capturing downstream lab revenue can make a huge difference !can make a huge difference !


Extender Is Seeing New DM Patients and OV’sExtender Is Seeing New DM Patients and OV’s Total NP/PA Revenue Total NP/PA Revenue (+ lab)(+ lab) $270 $270 (405,000(405,000))

Total NP/PA - Assoc Costs Total NP/PA - Assoc Costs (+ lab)(+ lab) $250$250 (285,000)(285,000)

Yearly Profit per NP/PA Yearly Profit per NP/PA $$+ + 20 (no lab)20 (no lab) $$++120 (with lab)120 (with lab)

Life Can Be Good !Life Can Be Good !

Option 2: Tx Pts & OV’s onlyExtender Revenue (yr)*

NO NEW PATIENTSNO NEW PATIENTS – OV’s & Transfer Pts only– OV’s & Transfer Pts only Level 5 OV Tx Pts (1 hrLevel 5 OV Tx Pts (1 hr) ) (2010 MC allowance ~ $123)(2010 MC allowance ~ $123) ~ ~$60,000$60,000

assume ave. 2/day = 440 level 5 @ $135 eachassume ave. 2/day = 440 level 5 @ $135 each

Level 4 (30’’) OVLevel 4 (30’’) OV (2010 MC allowance ~ $92)(2010 MC allowance ~ $92) ~$220,000~$220,000 assume ave. 10/day = ~2200 @ $ 100 eachassume ave. 10/day = ~2200 @ $ 100 each

In-House Labs (inc. lab-only visits)In-House Labs (inc. lab-only visits) ~$170,000~$170,000(chemistries, A1c, lipids, TFT’s, ClCr, Uma, etc)(chemistries, A1c, lipids, TFT’s, ClCr, Uma, etc)( 2650 encounters @ $65 each)( 2650 encounters @ $65 each)

TotalTotal: $280 : $280 (450,000)(450,000)**AssumptionsAssumptions: : 220 full working days/yr, 7 billable hrs/day220 full working days/yr, 7 billable hrs/day

average allowances at average allowances at 110% of Medicare110% of Medicarenet collection rate is at least net collection rate is at least 95% of allowed charges95% of allowed chargesbilling is done for on-site supervision using billing is done for on-site supervision using physician physician billing number at 100% billing number at 100%

allowance (revenue drops ~15% off the top if charges are billed using allowance (revenue drops ~15% off the top if charges are billed using NP/PA provider number, while expenses are unchanged!)NP/PA provider number, while expenses are unchanged!)


NO NEW PATIENTSNO NEW PATIENTS – OV’s & Tx Pts only– OV’s & Tx Pts onlyTotal NP/PA Revenue Total NP/PA Revenue (+ Lab)(+ Lab) $280 $280 (450,000)(450,000)Total NP/PA - Assoc CostsTotal NP/PA - Assoc Costs(+ Lab)(+ Lab) $250$250 (285,000)(285,000)Yearly (Loss)/Profit per NP/PA $ 30 (no lab)*Yearly (Loss)/Profit per NP/PA $ 30 (no lab)*

$165 (with lab)$165 (with lab) * *

Where do I Sign Up ! Where do I Sign Up ! *Direct physician income may be somewhat lower, assuming you do fewer MD *Direct physician income may be somewhat lower, assuming you do fewer MD

OV’s and more new pt consults, which typically generate less charges/hr.OV’s and more new pt consults, which typically generate less charges/hr.In addition, some time will need to be spent reviewing charts and discussing In addition, some time will need to be spent reviewing charts and discussing

cases with extender, which will likely decrease charge generation as well. cases with extender, which will likely decrease charge generation as well.

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