“Should I join?” “Should I stay?” “Should I go?” A Look Into Three Viewpoints of...

Should I join? Should I stay? Should I go? A Look Into Three Viewpoints of Alignment Ramona Osborne, CMPE Surgical Practice Preconference October 6, 2013

Learning Objectives Understand key factors in the alignment decision process Avoid common pitfalls when undertaking your desired alignment strategy Identify practical steps that will improve physician satisfaction during implementation of your chosen strategy

Ohio Valley Surgical Specialists

Should I join? Practice Profile Ohio Valley Surgical Specialists Eight surgeons and one physician assistant General, thoracic, and vascular surgery In-house ICAVL accredited vascular laboratory Governance: Board of Directors, Managing Partner, Executive Director Compensation - 100% productivity Implemented EPIC EMR in October 2011 MGMA Better Performing Practice for four consecutive years The roots of the practice extend back to the early 1920s

Should I join? Market Description 8 out of 9 general surgeons in primary service area employed by Ohio Valley Surgical Specialists One acute care hospital in primary service area

Should I join? Internal Assessment

Should I join? External Assessment Passage of the Affordable Care Act Evolution of State Health Exchanges No long term SGR fix Surgeon shortage Call burden Certificate of Need restrictions

Should I join? Preparation and Negotiation Decision support Options for affiliation and best fit for group Strategy - This is a marathon, not a sprint. Staff communication Timeline The vote Pitfalls and frustrations Role of outside advisors (attorney, accountant, etc.)

Should I join? Integration with the IDS Governance Compensation model Role of the administrator Staff How will we measure success going forward?

Lessons Learned What I wish I knew then Positive outcomes Negative outcomes Impact on referrals Staff turnover Surgeon satisfaction If I had to do it all over again...

Contact Information Ramona Osborne, CMPE Director of Managed Care Owensboro Health 270-685-7590 [email protected] www.owenborohealth.org

Should I Join, Should I Stay, Should I Go? A Look into Three Viewpoints of Alignment Strategies for Maintaining an Independent Surgical Practice John P. Berlin, MBA, CMPE Chief Executive Officer, North Florida Surgeons, P.A. Presented at: MGMA Annual Conference, October 6, 2013, San Diego, CA

13 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Learning Objectives Understand the key factors in the alignment decision process Avoid common pitfalls when undertaking your desired alignment strategy Identify practical steps that will improve physician satisfaction during implementation of your chosen strategy

14 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con North Florida Surgeons - Background - Providers Founded in 1996 as a physician-owned General Surgery practice Single specialty 1996-2008 Multi-specialty as of 2008 with over 40 surgical providers in 2013 (General, plastics, hand, otolaryngology, ophthalmologic) Revised Group Strategy/CEO Hired

15 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con North Florida Surgeons, P.A. Background Service Area North Florida Surgeons Office Locations Service Area 1996 - 2008: (purple circle) Service Area 2008 - 2013 : (green line )

16 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con North Florida Surgeons- Background Service Lines and Corporate Structure Comparison Group model 1996 - 2008: General Surgeons only Ad Hoc growth Shareholders responsible for all votes Compensation is 100% productivity Shared expenses on a fixed/variable model. Seven divisions/offices in three health systems ER call PM system only (MEDIC/Athena) Group model 2008 on: Multi-specialty surgical with PAs Managed growth Executive Committee as key leaders Compensation is 100% productivity Shared expenses on a fixed/variable model. 20 divisions/offices in five health systems ER call, trauma call, surgicalists PM/EMR (Allscripts Enterprise) Attested for Meaningful Use in 2011 Hospital and lab interfaces

17 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Factors Driving Physician Mergers or Acquisitions Regulatory Impacts: PPACA CMS fee reductions CMS compliance ACOs 4010/5010 conversion ICD-10 Payer Impact: Rate squeeze on smaller groups PPACA clinical cost component Employer retrenchment

18 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Factors Driving Physician Mergers or Acquisitions (cont.) Physician Specific Issues: Physician recruiting and doctor shortages Work/life balance issues Physician strategic vision and business savvy Desire to avoid the day to day business hassle Advice from business advisors Market Conditions: Hospital attitude towards physician acquisition/hospital finances Number of large groups in the market, region or state Scale and Scope issues Referral re-alignment: Health system acquisition of referral sources ACOs

19 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Factors Driving the Independent Physician Model Surgeon Mindset: Physician ownership and entrepreneurial Compensation is productivity driven Lead Huskies RVU productivity and compensation above average Merged/acquired practices are same mindset as base group Hospital/physician relations: Collaboration vs. competition Running successful programs (trauma, surgicalist, co-management) Alignment of surgeons to health systems Surgeons holding key hospital leadership roles

20 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con The Physician Alignment Decision Making Process Be proactive: Conduct research into your alignment options varies by region and specialty Review your Vision, Mission and how those align with the available options Develop your roadmap for the short, medium and long term Look at back up options if the primary option is not feasible Open up dialog with all potential partners

21 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con The Physician Alignment Decision Making Process (cont.) Determine if you will be an acquirer or be acquired: Do you have the culture to align? Determine your best fit potential partners or suitors Do you have the resources for alignment, or will your partner provide them? Is the best partner a physician group, insurance carrier or a health system? You may not be a fit with anyone in the market

22 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Steps to a Successful Group Integration Clear governance policy: Mergers of equals rarely work need a clear leadership team in charge Consistent surgeon contracts and shareholder paths Merged/acquired practices must have the same mindset/culture as the core group Avoid pyramid schemes Understand mergers take time may be measured in years! Manage the four key naysayers from the acquired group: Accountants Lawyers Consultants/vendors Office managers

23 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Steps to a Successful Group Integration (cont.) Clear value equation: Why should they join YOUR group? Determine the mergers impact on existing relations with hospitals, insurance carriers and referral sources Can you show that the benefits (particularly financial) outweigh the costs for both sides? Sounds great but payer contracts may prohibit! Corporate indebtedness: Assign and allocate existing debt of acquirer and acquired groups up front Make sure existing tax liability or NOLs are allocated Put everything in writing!

24 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Steps to a Successful Group Integration (cont.) Aligning benefits: Is your benefit program provide more attractive cost costs and coverage? Profit sharing and/or pension plan Long term disability policy Compensation Models: Must be agreed upon in advance Productivity alignment with a shared ancillary revenue approach Clear expense allocations Review for Stark and regulatory compliance

25 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Steps to a Successful Group Integration (cont.) Risk management: Ensure corporate structure supports an asset protection scheme Ensure Medical Malpractice risk is either confined or accepted Exit Options: Policies are clear and consistent. Non-compete policy is set by contract and agreed by all Termination, retirement and/or buy out clauses strict or lax? Make sure tail policies are defined

26 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Practice Merger Project Management Steps 1.Negotiations 2.Credentialing 3.Human Resources 4.Payroll 5.Banking and Accounting 6.Practice Management System 7.Technical review 8.Electronic Health Records

27 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Tips for Maintaining Surgeon and Administrator Sanity Physician Champions smooth the path: Both the acquired group and the acquirer must have administrative and physician champions to make sure the integration succeeds. Get buy in up front for the acquisition from both practices and make sure physician champions continue to express the value of the merger Show your integration checklist to the physician champions and get their buy in. No surprises! Make sure the new physician group champion has immediate feedback (as diplomatically as possible) if the naysayers are slowing the process Consider inviting the new surgeons to shareholder or other group meetings, but keep the personalities and meeting agenda in mind

28 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Tips for Maintaining Surgeon and Administrator Sanity (cont.) Administrators Dont forget your existing practice: Make sure you hire coders, claims analysts, payment posters, bookkeepers, and other business office staff with plenty of lead time to train and shake out they may fail in their probationary period Keep a close watch on the revenue cycle Watch out for signs of stress on current staff many have never worked on a merger When integrating business office staff from the acquired group, be ready for culture clash and shake outs When successful, make sure your physicians understand the value of your team: Develop a bonus pool for the acquisition Awards and recognition events

29 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Tips for Maintaining Surgeon and Administrator Sanity (cont.) Administrators Have a plan for the integration: Have the existing shareholders ensure the administrator role is extremely clear Set expectations for your timeline and meet or exceed them If you have documents that need to be reviewed and sign, have those ready as soon as possible If you think you can go live with PM and EMR at the same time, think again Do not get into battles with an acquired groups administrative staff use your physician champions This is your real job interview with the new doctors set expectations up front and be a rock star!

30 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Summary Understand the key factors in the alignment decision process Avoid common pitfalls when undertaking your desired alignment strategy Identify practical steps that will improve physician satisfaction during implementation of your chosen strategy

31 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Contact Information John Berlin, MBA, CMPE Chief Executive Officer North Florida Surgeons, PA Telephone: 904-396-1725 E-mail: [email protected]

32 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Practice Merger Tips Handouts 1.Negotiations: a)Conduct due diligence on acquired group b)Search on medical licenses, DEA, OIG, etc. c)Have sample contract ready on day one. Explain that no deviations are possible d)Allocate 60 days to years (!) for this process 2.Credentialing: a)Get credentialing information before contract signed and documents ready before contract signatures are dry. Consider acquiring automated software to handle large volumes of applications b)Validate malpractice policies c)Include website policies and prepare website bios and photos d)Allocate 90-120 days 3.Human Resources: a)Provide employee handbook and brief on benefits b)Significant paperwork required to bring on new offices including health, dental, vision, disability, life and other insurances, property and casualty policy, voluntary benefits, pension or profit sharing plan, employee handbook receipt, arbitration policies, etc. c)Allocate 30-60 days

33 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Practice Merger Tips Handouts (cont.) 4.Payroll: a)In concert with HR on-boarding, complete W-4s, I-9s, background searches, drug screening (if a drug free workplace) b)Determine policy in advance for PTO accruals and grandfathering of hire dates c)Allocate 30-60 days for this process 5.Banking and Accounting: a)Notify bank and lockbox for payments b)Set up on credit card and check processors. Acquire card readers/machines c)Walk physicians and office managers through financial policies including accounts payable policies, refunds and write offs d)Make sure office managers are aware of cash and insurance policies, including posting e)Allocate 30-60 days 6.Practice Management System: a)Add physicians and departments and set up provider schedules b)Add/validate most used carriers c)Demographic conversion with vendor (if required) d)Set up training time and system process e)Allocate 60-120 days

34 North Florida Surgeons, PA MGMA Fall 2013 Surgical Pre-Con Practice Merger Tips Handouts (cont.) 7.Technical review: a)In concert with all other steps, determine acquired group network compatibility with all systems b)Order equipment as needed c)Set up on e-mail, secure text, remote users, firewall configuration, insurance carrier sites, and hospital CDR access for claims representatives, etc. d)Allocate 30-60 days for this process 8.Electronic Health Records: a)Set up walkthroughs and demo for physicians and staff. Show existing forms in the system and compare with acquired group notes and forms b)Determine what will be converted from existing EMR c)Add providers to eRx, CMS, PQRS, MU reporting, hospital and lab interfaces d)Interview physicians and set up note templates e)Set up transcription or Dragon f)Set up patient portal g)Set up training sessions for physicians and staff h)Allocate 120+ days

Should I Join, Should I Stay, Should I Go A Look Into 3 Points of Alignment John P. Sano Practice Administrator / Director of Finance The Vascular Group 518-262-4339 [email protected] www.albanyvascular.com

THE VASCULAR GROUP the whole is greater than the sum of its parts 19 BOARD CERTIFIED VASCULAR SURGEONS Located in Upstate New York 13 HOSPITALS 10 ANGIO SUITES 1 Outpatient Angio Facility owned by Group 1 64 slice CT Scanner owned by Group 10 VASCULAR LABS (including Mobile Labs) Independent Research/Education Foundation 131 Employees

How We Function Team approach Pairs/Multiple surgeons in the OR cases done expeditiously and safely keep the surgeons fresh everybody asks for help Shared responsibility Minimizes stress Objective assessment of results Continuous self assessment

HISTORY 1990- 1990- Albany Medical Center Albany Medical Center Clinical Departments Clinical Departments AnesthesiaOphthalmology AnesthesiaOphthalmology OB/GYNEmergency Medicine OB/GYNEmergency Medicine NeurologyPediatrics NeurologyPediatrics MedicinePsychiatry MedicinePsychiatry Family PracticePM&R Family PracticePM&R Surgery Surgery General, Trauma, Urology, Vascular, etc. General, Trauma, Urology, Vascular, etc.

HISTORY 1998 1998 Albany Medical Center Albany Medical Center Faculty Practice Plan (FPP) Faculty Practice Plan (FPP) AnesthesiaOphthalmology AnesthesiaOphthalmology OB/GYNEmergency Medicine OB/GYNEmergency Medicine NeurologyPediatrics NeurologyPediatrics MedicineVascular MedicineVascular Family Practice Family Practice Surgery Surgery General, Trauma, Urology, etc. General, Trauma, Urology, etc. Establishment of The Institute for Vascular Health and Disease Establishment of The Institute for Vascular Health and Disease

Role of Administrator Financial and Operational Director of the Department Financial and Operational Director of the Department Worked under the Governance of the Faculty Practice Plan Worked under the Governance of the Faculty Practice Plan Reported to Dept Chair and DOO of FPP Reported to Dept Chair and DOO of FPP Facilitated needs and issues of MDs and Department through the Hospital channels Facilitated needs and issues of MDs and Department through the Hospital channels Oversight of multiple departments Oversight of multiple departments

COMPENSATION MDs contracted under Medical College MDs contracted under Medical College Reported to Dept. Chair and Dean of Medical School Reported to Dept. Chair and Dean of Medical School Received Faculty Appointments Received Faculty Appointments Salaried by Faculty rack Salaried by Faculty rack Bonuses negotiated by Dept Chair with head of FPP and Dean Bonuses negotiated by Dept Chair with head of FPP and Dean Based on individual productivity and overall performance of both the Department and Faculty Practice as a whole Based on individual productivity and overall performance of both the Department and Faculty Practice as a whole

How Does One Decide? Benefits under Hospital Benefits under Hospital Fiscal security Fiscal security Share technical revenue Share technical revenue Less Administrative Pain Less Administrative Pain More Insulated Life More Insulated Life Benefits of Independence Fiscally Independent More Leverage Outside Venture Options Separate Pay Scales More Control of Staff Potential Improved Collection Better 401K Plans No Restriction of Practice

Independence vs Security

How Does One Decide? What Are Your Needs? What Are Your Needs? What is the Political Environment Competition, Leverage, Community Needs What is the Political Environment Competition, Leverage, Community Needs What is Important (Independence vs Stability) What is Important (Independence vs Stability) Cohesive Group or Individual Practices Cohesive Group or Individual Practices What are the Hospitals Needs What are the Hospitals Needs

Challenges With Independence Must Be Economically Viable Must Be Economically Viable Must Have Secure Infrastructure Must Have Secure Infrastructure Must Be Willing To Accept Risk Must Be Willing To Accept Risk Monitor Fee schedules and Rates Monitor Fee schedules and Rates Must Have Vision for Impending Change Must Have Vision for Impending Change Must Establish Alternative (non clinical) Revenue Must Establish Alternative (non clinical) Revenue

Why We Left Independence / Growth Independence / Growth Too many restrictions under the governance of the Medical Center Too many restrictions under the governance of the Medical Center Ability to decide where to practice Ability to decide where to practice Add other Hospital Systems to geographic footprint Add other Hospital Systems to geographic footprint To become accountable for Personal income To become accountable for Personal income High Performance / Low Yield High Performance / Low Yield Deans Tax based on Net Revenue Deans Tax based on Net Revenue Our Departmental profits spread over FPP Our Departmental profits spread over FPP Viewed as undesirable on paper Viewed as undesirable on paper

Why We Left (cont). Ancillary Revenues Ancillary Revenues Ability to bill Globally for Vascular Ultrasound Studies Ability to bill Globally for Vascular Ultrasound Studies Improved Efficiencies Improved Efficiencies

The Transition Negotiations with Hospital began 2 yrs. prior to separation Negotiations with Hospital began 2 yrs. prior to separation PLLC Established PLLC Established Opportunity to establish our own governance, Operating Agreement, and Compensation plan Opportunity to establish our own governance, Operating Agreement, and Compensation plan MD Credentialing MD Credentialing Hospital Affiliation Negotiated Hospital Affiliation Negotiated MDs remained on Faculty MDs remained on Faculty PLLC remained on Hospital Campus via rented space PLLC remained on Hospital Campus via rented space Source of income to Hospital Source of income to Hospital Seamless transition for our patients Seamless transition for our patients Partnership Approach Partnership Approach Non Partner Employment Contracts Non Partner Employment Contracts

NEGOTIATIONS WITH HOSPITAL Explain How You Can Help The Hospital System Explain How You Can Help The Hospital System Be The Best Solution Be The Best Solution Remember Metrics: Data, Cost, Outcomes, Remember Metrics: Data, Cost, Outcomes, Negotiate Honestly, Understand The Needs and Biases of With Whom You Are Negotiating Negotiate Honestly, Understand The Needs and Biases of With Whom You Are Negotiating Fair Market Value Is Defined By Defined Tasks Fair Market Value Is Defined By Defined Tasks not by Volume (Quality Not Just Quantity) not by Volume (Quality Not Just Quantity)

NEGOTIATIONS WITH HOSPITAL You Will Have to Negotiate One Way or Another You Will Have to Negotiate One Way or Another Negotiate from a Position of Power Negotiate from a Position of Power The Bigger the Group The More Leverage (and the more problems) The Bigger the Group The More Leverage (and the more problems) Negotiate with Singular Voice Negotiate with Singular Voice You Need To Sell a Package You Need To Sell a Package Be Positive and Constructive (Have a Plan) Be Positive and Constructive (Have a Plan)

Vendor Search Attorneys Attorneys Accountants Accountants IT IT Payroll Payroll Insurance Insurance Malpractice401K Malpractice401K Gen. LiabilityPractice Mgmt System Gen. LiabilityPractice Mgmt System EE BenefitsBanking Relationships EE BenefitsBanking Relationships

Role Of Administrator (aka Chief Cook and Bottle Washer) Set Up Set Up Corporate Infrastructure Corporate Infrastructure Accounting and Financial Reporting System Accounting and Financial Reporting System HR System HR System Pay Practices Pay Practices Benefits Benefits Policy and Procedure Manual Policy and Procedure Manual Practice Management System Practice Management System Payor Contracts Payor Contracts

THE VASCULAR GROUP - 2004 D.M. SHAH, MD R.C. DARLING, MD B.B. CHANG, MD P.S.K. PATY, MD S.P. RODDY, MD K.J. OZSVATH, MD M. MEHTA, MD P.B. KREIENBERG, MD

THE VASCULAR GROUP 2013

Then and Now 2004 2004 8 Partners 8 Partners 7 Employed Physicians 7 Employed Physicians 74 Employees 74 Employees 2013 2013 13 Partners 13 Partners 6 Employed Physicians 6 Employed Physicians 131 Employees 131 Employees

How We Keep It Together? Everybody Has To Be Heard Everybody Has To Be Heard Everybody Has To Work Equitably Everybody Has To Work Equitably We Are All Responsible For Success We Are All Responsible For Success Address Conflicts As They Arise Address Conflicts As They Arise Salary Is A Reflection Of Group Productivity Salary Is A Reflection Of Group Productivity Nobody Is Allowed To Leverage Group Nobody Is Allowed To Leverage Group

Philosophy of Our Practice Patient Care Patient Care Group Orientation Group Orientation All for one and one for all All for one and one for all Brand the Group not the Individual Brand the Group not the Individual Hire the best fit Hire the best fit Fiscal Responsibility to Group and Employees Fiscal Responsibility to Group and Employees Academic and Research Development Academic and Research Development Reasonable Lifestyle Reasonable Lifestyle

THANK YOU!!!!

“Should I join?” “Should I stay?” “Should I go?” A Look Into Three Viewpoints of...

Documents

Transcript of “Should I join?” “Should I stay?” “Should I go?” A Look Into Three Viewpoints of...