Looking for someone to explain the business of emergency medicine!

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Asking for a friend...

Would one consider a private group with an overhead of 30-35% (i.e. amount taken off gross income to cover practice expenses) to be good? inefficient? something else?
 
Asking for a friend...

Would one consider a private group with an overhead of 30-35% (i.e. amount taken off gross income to cover practice expenses) to be good? inefficient? something else?
That seems....at best....inefficient. A lean SDG in my limited experience is around 15-20%. A CMG on the other hand...
 
CMG
...A CMG on the other hand...

A CMG can magically up-code most encounters and only have a federal settlement every few years as a cost of doing business, they also aggressively use PAs and NPs and take a huge cut off the top.
 
Asking for a friend...

Would one consider a private group with an overhead of 30-35% (i.e. amount taken off gross income to cover practice expenses) to be good? inefficient? something else?
A lean SDG should be under 15% and that includes everything including billing/coding and med mal. Of course that dpeneds on how much you bring in. In general it will cost $8-12 to bill and code a chart. If you are collecting 100/pt thats roughly 10%.

If you are collecting 200/pt then it is 5%.

I would say the 15% rule is right, 20 max. above that someone is skimming or the leadership of said group is ******ed.
 
I think that before throwing out a number we have to agree what all expenses we are going to call practice expenses. Under 15% sounds like a good rule of thumb if we are just talking about billing/coding, medmal, scheduling, and administrative time (committees, c-suite time, contract negotiation, etc), accounting, bank fees, etc. I might throw out a higher number if we are going to include scribe and midlevel pay.

We have a pretty efficient SDG, but if you include scribe and midlevel pay in our practice expenses then we were a little over 20% on our last payroll spreadsheet. If you take those two expenses out, our practice expenses are at 10%.


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We have a pretty efficient SDG, but if you include scribe and midlevel pay in our practice expenses then we were a little over 20% on our last payroll spreadsheet. If you take those two expenses out, our practice expenses are at 10%

I would not include mid-level pay in overhead as nurse practitioners and physicians assistants are revenue-generating. Scribes are part of overhead as their performing administrative function (however, they may have a net gain on productivity).
 
More specifically, why don't SDG's hire business executives to run their groups so that exec can focus on maintaining the contract(s) while utilizing a physician as a VP of sorts to liaison between said business exec and the group at large? To be frank, it seems that most docs don't want to take time to deal with pt/physician complaints, interface with hospital execs, or massage metrics because, presumably, most ER docs go into EM to care for patients. Why not just hire a suit to do "suit" things while keeping him/her firmly under the thumb of the group with the above-stated physician VP as the "hammer so-to-speak? The group can even make said exec an electable position with contingent termination parameters. As a resident I feel the spectre of ignorance lurking over me. Please help me understand why this isn't done?
 
More specifically, why don't SDG's hire business executives to run their groups so that exec can focus on maintaining the contract(s) while utilizing a physician as a VP of sorts to liaison between said business exec and the group at large? To be frank, it seems that most docs don't want to take time to deal with pt/physician complaints, interface with hospital execs, or massage metrics because, presumably, most ER docs go into EM to care for patients. Why not just hire a suit to do "suit" things while keeping him/her firmly under the thumb of the group with the above-stated physician VP as the "hammer so-to-speak? The group can even make said exec an electable position with contingent termination parameters. As a resident I feel the spectre of ignorance lurking over me. Please help me understand why this isn't done?

Some places do this for the reasons you mentioned. My SDG does not.

The thing about independent groups is that they tend to like to be independent, and in most cases, they want to stay independent despite the recent shift towards CMGs in the last many years.

Even though it shouldn't be this way in principle, when you hire someone for administrative duties such as these, you concede control and direct involvement in ways that are sometimes difficult to spell out on paper but are significant to staying independent (and the benefits of being that way, both financial and practical). The control and direct involvement is part of how independent groups survive and thrive. While there are lots of case studies on SDN where decades of working relationships between SDG and hospital brass didn't prevent a takeover / "sellout" of contract / buyout, that doesn't mean it isn't necessary or even protective to a degree.

That's not to mention the issues that stem from a non-physician administrator being hired on in an executive capacity for a physician group.
 
More specifically, why don't SDG's hire business executives to run their groups so that exec can focus on maintaining the contract(s) while utilizing a physician as a VP of sorts to liaison between said business exec and the group at large? To be frank, it seems that most docs don't want to take time to deal with pt/physician complaints, interface with hospital execs, or massage metrics because, presumably, most ER docs go into EM to care for patients. Why not just hire a suit to do "suit" things while keeping him/her firmly under the thumb of the group with the above-stated physician VP as the "hammer so-to-speak? The group can even make said exec an electable position with contingent termination parameters. As a resident I feel the spectre of ignorance lurking over me. Please help me understand why this isn't done?
What you're missing is "to deal with pt/physician complaints, interface with hospital execs, or massage metrics" isn't suit level work. That's what facility medical directors (FMDs) do on a daily basis. The amount of time and effort that would go in to training a non-physician to be good at those tasks in a way that was ultimately favorable for the average pit doc isn't feasible. You can hire companies to do the "real" suit stuff - payroll, scheduling, negotiating with insurance companies, maintaining malpractice, etc. But the second you've got someone that's not you or someone like you at the table when the important decisions are being made, you've already slid into CMG territory.
 
What you're missing is "to deal with pt/physician complaints, interface with hospital execs, or massage metrics" isn't suit level work. That's what facility medical directors (FMDs) do on a daily basis. The amount of time and effort that would go in to training a non-physician to be good at those tasks in a way that was ultimately favorable for the average pit doc isn't feasible. You can hire companies to do the "real" suit stuff - payroll, scheduling, negotiating with insurance companies, maintaining malpractice, etc. But the second you've got someone that's not you or someone like you at the table when the important decisions are being made, you've already slid into CMG territory.
Agree. The minute an SDG hires an MBA without medical experience, you've just thrown in the garbage 99% of what makes a physician owned group worth having, and while you may technically not be a CMG, you're sleeping with one.

As an aside, my current group (multispecialty, 100% physician owned) recent had our physician CEO, who had a tremendous amount of outside business experience, step down. We debated whether or not to have another MD do the job, or to do an outside search for a non-medical MBA type. We settled on having the company run by a combination of the physician board of directors and president, along with a non-physician CFO and a non-physician COO, both of whom had 20 years experience with the company. We decided that bringing in an outside non-physician MBA type CEO, without any experience with our company, would risk killing what makes our company such a great place to work. And the other physicians on the board, myself included, all had the option of stepping up and being CEO, if we wanted to. We all turned it down on the grounds that we not only didn't have enough business acumen, but that it would be a pay cut.

Another interesting aside: We used to have 4 ED contracts. 3 of them got gobbled up by greedy CMGs and hospital CEOs who undercut us for cheaper labor, while threatening us with loss of contract every year. With the final EM contract, we actually told the hospital to pound sand, walked away and terminated them.

How ya like them apples?
 
Agree. The minute an SDG hires an MBA without medical experience, you've just thrown in the garbage 99% of what makes a physician owned group worth having, and while you may technically not be a CMG, you're sleeping with one.

As an aside, my current group (multispecialty, 100% physician owned) recent had our physician CEO, who had a tremendous amount of outside business experience, step down. We debated whether or not to have another MD do the job, or to do an outside search for a non-medical MBA type. We settled on having the company run by a combination of the physician board of directors and president, along with a non-physician CFO and a non-physician COO, both of whom had 20 years experience with the company. We decided that bringing in an outside non-physician MBA type CEO, without any experience with our company, would risk killing what makes our company such a great place to work. And the other physicians on the board, myself included, all had the option of stepping up and being CEO, if we wanted to. We all turned it down on the grounds that we not only didn't have enough business acumen, but that it would be a pay cut.

Another interesting aside: We used to have 4 ED contracts. 3 of them got gobbled up by greedy CMGs and hospital CEOs who undercut us for cheaper labor, while threatening us with loss of contract every year. With the final EM contract, we actually told the hospital to pound sand, walked away and terminated them.

How ya like them apples?
I love it. This contract sucks, we're out.
 
More specifically, why don't SDG's hire business executives to run their groups so that exec can focus on maintaining the contract(s) while utilizing a physician as a VP of sorts to liaison between said business exec and the group at large? To be frank, it seems that most docs don't want to take time to deal with pt/physician complaints, interface with hospital execs, or massage metrics because, presumably, most ER docs go into EM to care for patients. Why not just hire a suit to do "suit" things while keeping him/her firmly under the thumb of the group with the above-stated physician VP as the "hammer so-to-speak? The group can even make said exec an electable position with contingent termination parameters. As a resident I feel the spectre of ignorance lurking over me. Please help me understand why this isn't done?
Because we're a physician group. We don't want a non physician suit (other than our legal counsel) at the table in negotiation, handling issues with patients, nurses, etc. We have necessary non physician staff, including our PAs, HR department, credentialing department, and a couple other admin staff, but our physicians own the group and are in all leadership roles, and they are paid to do it.
 
Bumping again.

One thing I still don't understand is whether in an RVU-based reimbursement structure (i.e. 100% RVU, "eat what you kill"), are you paid per your work RVUs generated or total RVUs generated? Or does this depend on the specifics of your individual contract?

I understand how the Total RVUs equation is generated:

[(Work RVUs x Work GPCI) + (Practice Expense RVUs x Practice Expense GPCI) +
(Professional Liability Insurance RVUs x PLI GPCI)] = Total RVUs
Total RVU x Conversion Factor = Medicare Allowable Payment

For example, a level 5 (99285) chart is worth 3.8 wRVU and 4.9 total RVU. Assuminng I am getting paid for RVUs generated (not collected), and assuming a conversion factor near Medicare's rate of $36, by generating a level 5 chart am I making 3.8 wRVU x $36 = $137, or am I getting paid 4.9 tRVU x $36 = $176?

I can't seem to find this information anywhere.
 
Bumping again.

One thing I still don't understand is whether in an RVU-based reimbursement structure (i.e. 100% RVU, "eat what you kill"), are you paid per your work RVUs generated or total RVUs generated? Or does this depend on the specifics of your individual contract?

I understand how the Total RVUs equation is generated:

[(Work RVUs x Work GPCI) + (Practice Expense RVUs x Practice Expense GPCI) +
(Professional Liability Insurance RVUs x PLI GPCI)] = Total RVUs
Total RVU x Conversion Factor = Medicare Allowable Payment

For example, a level 5 (99285) chart is worth 3.8 wRVU and 4.9 total RVU. Assuminng I am getting paid for RVUs generated (not collected), and assuming a conversion factor near Medicare's rate of $36, by generating a level 5 chart am I making 3.8 wRVU x $36 = $137, or am I getting paid 4.9 tRVU x $36 = $176?

I can't seem to find this information anywhere.

Generally would be work RVU. My current RVU group doesn't assign a specific dollar amount to each one generated. There's a total collections for the month, and then we are paid out based on the portion of our RVUS generated. This means the $/RVU fluctuates some times by a lot monthly. To make it easier to calculate, I look at my gross pay/#patients. Generally I can expect $74-$80 per patient I see (and my PA sees), which includes all acuity levels.
 
Bumping again.

One thing I still don't understand is whether in an RVU-based reimbursement structure (i.e. 100% RVU, "eat what you kill"), are you paid per your work RVUs generated or total RVUs generated? Or does this depend on the specifics of your individual contract?

I understand how the Total RVUs equation is generated:

[(Work RVUs x Work GPCI) + (Practice Expense RVUs x Practice Expense GPCI) +
(Professional Liability Insurance RVUs x PLI GPCI)] = Total RVUs
Total RVU x Conversion Factor = Medicare Allowable Payment

For example, a level 5 (99285) chart is worth 3.8 wRVU and 4.9 total RVU. Assuminng I am getting paid for RVUs generated (not collected), and assuming a conversion factor near Medicare's rate of $36, by generating a level 5 chart am I making 3.8 wRVU x $36 = $137, or am I getting paid 4.9 tRVU x $36 = $176?

I can't seem to find this information anywhere.

According to your equations above, our billers (TeamHealth) bills total RVU. And we get credit for total RVUs. I know this because a 99285 generates 4.9 RVUs.

I think this is something you can ask your billing company, or CMG, for. Where we work, we get a log of all the patients seen, the CPT codes billed, and the RVUs for each CPT code.

Is this the same for all billers? I don't know but my guess is that you are getting total RVU credit.

It's the conversion factor, or the RVU multiplier, which can be considerably different from one shop to another. The RVU multiplier is a reflection of how lucrative your payer contracts are, percentage of patients who have insurance, and efficiency of collections.
 
Forget RVU-based, go to true eat-what-you-kill income-base P&L accounting... one less middle step 😉
 
Forget RVU-based, go to true eat-what-you-kill income-base P&L accounting... one less middle step 😉
Outside of the inner group in a SDG or upper management in a CMG, where are you going to get to see that data?
 
Ours is open-access from the first day you work for us. You don't have a "traditional" buy in or probationary period, and get your "profit" starting day one.

But agreed, it can be hard to see your earnings in most other practice settings. Other edge of the sword-- having completely open books, I see how damn much malpractice and all those nice health/dental/disability insurances cost. 🙂
 
Ours is open-access from the first day you work for us. You don't have a "traditional" buy in or probationary period, and get your "profit" starting day one.

But agreed, it can be hard to see your earnings in most other practice settings. Other edge of the sword-- having completely open books, I see how damn much malpractice and all those nice health/dental/disability insurances cost. 🙂

I'm envious. I've made that mistake with a SDG and won't be making it again!
 
If you see a patient who doesn't pay... you don't get paid!

This all averages out amongst us docs who see thousands of patients a year...

If someone was cherry picking patients by insurance status they'd have a rapid opportunity to seek new employment elsewhere. Thats just not how we work. We are staffed well enough that patients are getting picked up very rapidly when they get brought back... you get the next patient. Or you get the sickest patient if a couple come back at once. If its the end of your shift, cherry picking something good to "knock out" and not sign out is fine, assuming you aren't leaving a critically ill patient hanging.

Plus when they redesigned our EMR, to actually get into a patient's insurance status involves about a dozen obscure clicks... I don't think most of the staff know how.
 
If you see a patient who doesn't pay... you don't get paid!

This all averages out amongst us docs who see thousands of patients a year...

If someone was cherry picking patients by insurance status they'd have a rapid opportunity to seek new employment elsewhere. Thats just not how we work. We are staffed well enough that patients are getting picked up very rapidly when they get brought back... you get the next patient. Or you get the sickest patient if a couple come back at once. If its the end of your shift, cherry picking something good to "knock out" and not sign out is fine, assuming you aren't leaving a critically ill patient hanging.

Plus when they redesigned our EMR, to actually get into a patient's insurance status involves about a dozen obscure clicks... I don't think most of the staff know how.
If you're gonna do this, why not MSE them in triage and discharge?

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If you see a patient who doesn't pay... you don't get paid!

This all averages out amongst us docs who see thousands of patients a year...

If someone was cherry picking patients by insurance status they'd have a rapid opportunity to seek new employment elsewhere. Thats just not how we work. We are staffed well enough that patients are getting picked up very rapidly when they get brought back... you get the next patient. Or you get the sickest patient if a couple come back at once. If its the end of your shift, cherry picking something good to "knock out" and not sign out is fine, assuming you aren't leaving a critically ill patient hanging.

Plus when they redesigned our EMR, to actually get into a patient's insurance status involves about a dozen obscure clicks... I don't think most of the staff know how.
There are other ways to cherry pick. We used to have this straight FFS model but when we moved to an RVU model it got so much better. In any system there are ways to "game" the system. The gaming is a lot less in the RVU model. There is no perfect way to do this.

One other issue in a straight FFS model is depending on your ED your self pay / homeless population may increase dramatically at night. The FFS provides a negative incentive for someone to work those night shifts.
 
If you're gonna do this, why not MSE them in triage and discharge?

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1) your hospital may not let you.
2) an MSE will get you bad publicity.
3) sometimes even if it harms you financially you should do the right thing
4) you do not obsolve your med mal risk
5) we all make decent money, so see #3
6) if you dont want the news plastering your bad stuff dont do bad things.
 
So then why not pay the doc for seeing the non paying Patient
1) your hospital may not let you.
2) an MSE will get you bad publicity.
3) sometimes even if it harms you financially you should do the right thing
4) you do not obsolve your med mal risk
5) we all make decent money, so see #3
6) if you dont want the news plastering your bad stuff dont do bad things.

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I agree, the night shift can/will pay differently in ANY productivity model, due to changes in volume, insurance type, complaint type, etc... true for straight P&L, but also in RVU models.

We handle this because everyone works the same number of nights, and if you don't you get taxed (or bonuses from said tax), and this bonus is >> the mean loss in revenue generation of a night shift versus a normalized non-night-shift.

But 100% correct, if we did nothing nights would generate a bit less revenue than days, and that would make it doubly unfair to anyone working "extra" nights.
 
There are other ways to cherry pick. We used to have this straight FFS model but when we moved to an RVU model it got so much better. In any system there are ways to "game" the system. The gaming is a lot less in the RVU model. There is no perfect way to do this.

Aside from avoiding self-pay, or "bad insurance" patients, what other ways can I game a FFS system that aren't the same as gaming an RVU system?
 
Who should pay?

It's simple. Just make every RVU worth the same whether insured or self pay. I've never heard of a system where the collections per patient are individualized to the doctor who saw them. Every productivity place I've worked pools the collections, and then just pays out fairly based on how productive each person is.
 
I've never heard of a system where the collections per patient are individualized to the doctor who saw them. Every productivity place I've worked pools the collections, and then just pays out fairly based on how productive each person is.

Hi, says the unicorn in the room.
 
The group?

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So lets be clear assuming you are an SDG "the group" is everyone. An SDG can decide how they want to do this. The issue is the MSE has very few RVUs. Cause by definition you arent doing any testing. Why in gods name would anyone do that? In a FFS model obviously you would get 0.

I will say the straight FFS which my current group had had its issues. Dig deeper and I bet you will find major chart picking especially if you have the typical 12-20% self pay.
 
Man I would not trust human beings to work in a real FFS model. That’s just me
Here is the deal. Give me a system and I will tell you how to game it. the key is to not have POS partners. Most SDGs have an abundance of great options and with a thorough job up front with hiring, strong leadership and overall a good work environment it lmits the tomfoolery you may see.
 
Hi, says the unicorn in the room.

Usually I use unicorn for positive things. I have always viewed it as a negative when a group pays you what you collect instead of what you bill. I have little control over collections while I work each shift, but I have a lot more control over what I bill for my services. Paying out based on collections encourages bad behavior and makes you even less excited about seeing a bunch of painful no pays on a shift. At least in my group I know I’m getting paid for the work I do regardless of whether I’m seeing insured or uninsured patients.
 
So here in MA most people have insurance, though maybe 10% of visits are no pay (they can be a little hard to predict, some patients you really would guess not to have insurance do have mass health coverage...)

But it all evens out in the end. If you work for us, and see thousands of patients a year, and work hundreds of shifts... that clump of no-pay patients you got last May evens out. It all regresses to the mean. Especially since nights and weekends are split evenly. Yes that one shift might suck, but that other shift with all private patients rocked. If we bring in 8 million a year and split it by collections, or bring in 8 million a year and split it by RVU... its the same per person. Both systems encourage you to see lots of patients, document well, do and document your procedures, bill that critical care, and stay late to help when its swamped (and earn money doing it!). Both reward you for aa shift where you get hammered, and both make you sad when its a super slow day. Both systems require vigilant QI/QA to ensure people are going too fast and pushing too hard. Both systems ensure its rare for one doc to sign out a rack full of charts to another.

The only exception would be during our double coverage time, if one physician was able to seriously cherry pick the best-paying insurances and avoid no-pay patients. Which would be... just incredibly poisonous. It would be hard to do with our EMR, and massively unethical. I'm not saying I work with the worlds best people (though they are pretty damned awesome), but it just isn't a thing we would do to each other. We don't work in an unstable corporate environment with a hundred docs. We have more like a dozen, who've known each other years. People only leave when they are moving cross country. Do people fight over who gets to do the fun reduction? yeah... of course they do. Do people fight over who sees the Tufts Medicare Preferred patient versus the Tricare with civilian medicare part B? No... they don't even know how to get into that end of the damned EMR. We don't display payment demographics on any of the standard ED screens.

One nice thing about collections-based, aside from removing a couple steps of math and RVU compilation-- when you leave our group, you still get your tail of collections paid out for the next couple quarters. Its a very nice parting gift. I suppose in an RVU system you could try to do that too, but I've never heard of it.

As an aside, if one worked in a system where billed RVU is what earns you pay... could you not bill ridiculous things which will never get paid, but still "earn" from them?
 
If I was in Janders' system I would avoid peds patients. The vast majority of them are Medicaid these days (which pays very little). Most aren't sick, and thus bill out low acuity charts. They still take a lot of time explaining to worried parents why they will be fine and will go home. I'll take the 80 year old demented patient with Humana Medicare HMO all day long over low-paying peds patients.
 
So lets be clear assuming you are an SDG "the group" is everyone. An SDG can decide how they want to do this. The issue is the MSE has very few RVUs. Cause by definition you arent doing any testing. Why in gods name would anyone do that? In a FFS model obviously you would get 0.

I will say the straight FFS which my current group had had its issues. Dig deeper and I bet you will find major chart picking especially if you have the typical 12-20% self pay.
None of us reliably works in a place where there isn't another patient to be seen. So any patient that takes up time is taking it from the next. Sure, and night sometimes this happens, but even at the places I've worked that slow down at night or on Christmas morning, the number of times there were literally zero patients waiting to be seen was in the single digits. So if you MSE the non-emergency, then you have more time for the emergencies.
 
One nice thing about collections-based, aside from removing a couple steps of math and RVU compilation-- when you leave our group, you still get your tail of collections paid out for the next couple quarters. Its a very nice parting gift. I suppose in an RVU system you could try to do that too, but I've never heard of it.

We pay out the tail of your productivity for the 3 mos after you leave. Hopefully your collections aren’t going on for several quarters...

As an aside, if one worked in a system where billed RVU is what earns you pay... could you not bill ridiculous things which will never get paid, but still "earn" from them?
In general, your E&M codes are going to make up 80% of your charges with the procedures making up the other 20%. I can’t think of many quick procedures that would bill well but not reimburse well. What kind of procedures would you perform and bill that wouldn’t get paid?
 
Does anyone have any ballpark numbers for what the average pre-reconcilliation (i.e. Billing) and post-rec (collections) numbers are for amount billed/collected per RVU?

I understand there must be a wide range for what amount is ultimately billed or collected per RVU based on the ED's payor mix, but I'm curious to hear what a typical amount might be.
 
Does anyone have any ballpark numbers for what the average pre-reconcilliation (i.e. Billing) and post-rec (collections) numbers are for amount billed/collected per RVU?

I understand there must be a wide range for what amount is ultimately billed or collected per RVU based on the ED's payor mix, but I'm curious to hear what a typical amount might be.
For your CMGs it is usually 10-20%. The answer depends on payer mix and how aggressive you are with your charge master.
 
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