Need help/advice on establishing a blended unit value

[BDanes]

We are trying to move the group away from eat what you kill to a blend but our office (don't ask) still hasn't been able to come up w a decent starting blended unit value after 3 months.

Our goal is to have everything collected over blend get distributed quarterly or biannually.

At this point we are probably going to hire someone to assess the situation externally. Who do we consult? A CPA?

Any recommendations or experience with setting up a blend?

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[IlDestriero]

I'm not sure why they can't give you an average unit value in 5 minutes. I know what we average per unit.
You could then pay some percentage of that (maybe 80%) and split the remainder at reasonable intervals.

 

[sleepallday]

Our billing company does it for us.

 

[deleted162650]

The "blended unit" is simply the total collections for a given month (or whatever time period you choose) divided by the total number of units billed during that same time period. The value will drift up and down a little depending on collections for the given month. There's really no need to pre-establish a value. If you want to PM me I can show you an example of how this breaks down. The partners are then paid according to the percentage of units each billed during that same time period.

If your really dead-set on establishing a value in advance, then just take the groups total collections for the previous year divided by the total number of units billed in that year (assuming your payer mix has not changed significantly since then).

 

[BDanes]

Yeah, it seems like this should be fairly simple, but our office is really wearing out its use for us.

It sounds like it will require more work than they want to do. Currently our situation is slightly complicated in that some areas of the practice are under separate management and rules.

Currently each member receives bimonthly deposits. Are you suggesting that we go to a monthly deposit? Since collections lag, how do you break down payments based on productivity? Ex: I work 20 hrs more than another partner, and bill less units? Or what if I bill more? Since collections lag, how does it work out fairly month to month?

This seems like it's gonna be a pain to get in place.

 

[deleted162650]

We are paid q2 weeks as well (I just used monthly as an example for simplicity), so our "blended unit" is figured out every 2 week pay period. Hours worked does not factor in to compensation. It's simply a product of how many units you worked. If I'm on first call (home call) and only do 1 case, then I only get paid for that case, we have no call stipend system.

I'm not sure I can explain this in writing in way that will make sense, but I'll try (all numbers that follow are just for simplicity sake and don't represent any real numbers):

Lets say the group is 10 anesthesiologists, all equal partners. For the month of January 2015 10,000 units were billed. Partner A worked/billed 10% of those units, Partner B 8%, and Partner C 12%, etc, etc. Every time money is collected on one of those cases/accounts, each payment is divided up among the partners. So if a check from an insurance company comes in for one of the cases done in January in the amount of $1000 then Partner A would get $100, Partner B $80, Partner C $120, etc, etc. Every paycheck I get is an amalgamation of the money collected on previous cases divided by the percentage of units I worked. I get a breakdown of all money collected by the group along with the total number of units billed and what percentage of those units I worked with each paycheck. I hope that made some sense.

This is the "purest" way to do a blended unit where compensation is strictly production based.

 

[pjl]

Salty,
So you guys have a record of every bill that goes out, which 2 week period it was performed in, and which % each anesthesiologist was for EVERY 2 week period, despite collections which may return after 2 weeks or 2 months?

Our setup is based on days worked rather than cases done, but all collections are distributed when they arrive for the % of total days worked per partner (yearly basis). This is paid out via a bimonthly base rate (lowest estimate of earnings, minus 5%), then quarterly bonuses for the rest, with a year end "true-up" for variations from the planned schedule. We used to do monthly bonuses, but we were able to drop some overhead by switching to quarterly.
I would think it would become overly complex to track which 2 week period a case was, the physicians & for that 2 week period, and when each bill is collected to distribute base on that, but I suppose it is probably easier than it seems to me.
Cases/units done should be almost as easy as days worked, but it seems like a lot to track if doing the biweekly, when the value likely is pretty close from cycle to cycle.

 

[periopdoc]

If your office can't figure this out for you, get another office. There are probably other things that they are doing wrong, possibly some things that will get you into some expensive trouble.

If that is not an option, consider an outside audit of their operation and a consultant to set this up for you.

-pod

 

[pjl]

We have no need for them to do this because of how we schedule and pay out, it just sounds like an easy way to have bills that are partial pay or late get lost, distributed wrong, and/or waste office staff time.
We just all work the same and get paid the same. I dislike having the allure of more money, as I would stay at the hospital chasing dollars. With our structure I understand that I may be gifting less hard working guys, but am happy to not be tempted to work even more.

 

[deleted162650]

So you guys have a record of every bill that goes out, which 2 week period it was performed in, and which % each anesthesiologist was for EVERY 2 week period, despite collections which may return after 2 weeks or 2 months?

Yes, we have this fancy gray box called a "computer" that keeps track of that kinda stuff for us . Each anesthesia record is dated so it's not hard to match up collections on a case with when that case was actually done. And you'd be surprised how much it can vary cycle to cycle.

Also, it's pretty unheard of to collect on a case in only 2 weeks (unless it was a cash pay plastics case that is paid up front). 2 months is more like it but even that's on the quick side. We are still collecting on some cases done over a year ago. I'm not sure if that speaks to the tenacity of our billers or the general dead beat nature of our patients.

We just all work the same and get paid the same. I dislike having the allure of more money, as I would stay at the hospital chasing dollars.

Different strokes for different folks. I understand where you're coming from, but I personally like the flexibility of being able to adjust my lifestyle on the fly. Sometimes not much else is going on so I'll choose to work more (and get rewarded for it) knowing that when I have other stuff to do I can scale back and enjoy the time off.