Documenting and Selling the Value of Your Effort and Getting Paid for It

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Documenting and Selling the Value of Your
Effort(and Getting Paid for It)

• David S. Wilkinson, MD, PhD
• Professor and Chair
• Department of Pathology
• Virginia Commonwealth Virginia
• Richmond, VA

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Richmond on the James River
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MCV Campus of VCU
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Faculty Provide BothPart A and Part B Services

• Part A
• Role as a lab director
• Services provided to the facility or for the
  benefit of patients in general (autopsies)
• Part B
• Services provided to individual patients
• Surgical pathology
• Transfusion medicine
• Interpretive services

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How Important is Part A for Academic Departments?

• 20 of Faculty Effort
• 10 of Departmental Income
• Part A-9
• GME-1

2006 APC Practice Management Survey
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Are You Getting Your Fair Share?

• 67 of Departments receive some Part A
• 25 of Departments do PC billing for Part A
• Some Departments receive no Part A
• 26 of Departments did not generate surplus in
  2005
• Range
• Part A 0-7.2 M(1.2 M median)
• Res Sup 0-0.92 M(148,000 median)

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Origin of the Terms Part A and Part B

• Medicare Program (1965)
• Part A-entitlement program that provides
  in-patient insurance to all eligible
  beneficiaries at no premium for coverage. Only
  hospital fees are covered. Does not cover
  physician fees.
• Part B-supplemental insurance program that covers
  out-patient services (including lab tests) and
  physician services (wherever incurred) provided
  to individual patients. Eligible participants
  must pay a small monthly premium.

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What are Part A Services?

• Part A services
• physician services that generally benefit the
  facility and all patients (lab director)
• reimbursed to hospitals in the Part A payment
• Note pathologist must negotiate payment from
  hospital
• Compensation arrangements between pathologist and
  hospital must address how pathologist will be
  paid for Part A services for all payors.

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Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA)

• Clarified Part A and Part B services and payments
• Eliminated professional component billing on
  routine laboratory tests for Medicare inpatients
  (other payors have adopted this policy)
• Defined reasonable compensation equivalent (RCE),
  now set at 219,500/FTE/yr for metropolitan
  areas lt 1 million

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Part A Services

• Autopsies
• Medical Administration
• Supervisory and
• Consulting Activities
• Medical Education

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Clinical Laboratory Improvements of 1988Codified
the Role of Lab Director

• Assure accuracy of test results
• Interact with medical staff
• Establish parameters for performance of tests
• Recommend additional diagnostic/therapeutic tests
• Advise lab personnel regarding aberrant results

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Clinical Laboratory Improvements of 1988Codified
the Role of Lab Director

• Select, evaluate and validate test methodologies
• Direct performance and evaluation of quality
  control and quality assurance procedures
• Evaluate clinical data establish process for
  review of tests prior to issuance of patient
  reports
• Assure compliance with accrediting agencies

A good starting point for your Part A
negotiations. Its the LAW!
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Documenting Part A Effort

• Diary
• Estimate
• Faculty effort certification reports
• Your hospital is probably using some method to
  estimate your effort for their Medicare Cost
  Report (do you know how they do it?)

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Part A Diary
Excel Spreadsheet One tab for each day
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Relate Effort to Outputto Show Value Added
Must use numbers that matter to the
administrators!
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Dont Forget GME Supervision
Your hospital may allocate the GME by various
mechanisms, often on a resident FTE basis. The
GME payment may be a separate line item or rolled
into your main Part A payment. Make sure you
understand the basis of the payment.
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Putting a Value on Your ServicesQuantitative
Measures of Effort and Outcome

• Effort Faculty FTE
• Margin Net Revenue Direct Costs
• Profit Margin Indirect Costs
• Growth in profit
• Cost/Test, Cost/Discharge, Cost/APD
• Tests/FTE
• Physician satisfaction
• Employee satisfaction
• Continued accreditation

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Negotiating Your Part A Payment(Service Level
Agreements)

• Clinical effectiveness
• Clinical efficiency
• Regulatory compliance
• Communication
• Staff recruitment, retention development
• Performance improvement

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Negotiating Your Part A Payment(Service Level
Agreements)

• Business Development
• Budget Development
• Professionalism
• Quality management
• Medical staff scheduling

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Negotiating Your Part A Payment

• Baseline contract
• Faculty FTE
• Incentives
• Productivity (tests/FTE benchmarks)
• Cost effectiveness (cost/test benchmarks)
• New business ( gross, net)

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The Reasonable Compensation Equivalent(Based on
40 hr week)
Last updated in 2003 http//www.cap.org/apps/docs/
statline/RCEupdates.pdf
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Benchmarking Part B Performance

• Charges
• Receipts
• Procedures
• RVUs
• Receipts/Charges
• Denials
• Receipts/RVU
• RVU/clinical FTE

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Faculty Practice Solutions Center(AAMC)
FPSC is now on the Deans radar screen.
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Managed Care and Contracting

• Pathology must be at the table
• Avoid diversion of specimens from your medical
  center
• Make sure your reimbursement rates are reasonable
• Make sure you get your share of case rates
  (transplantation)
• Dont discount acute care services

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Referral Consultation Services

• Know your market strength
• Avoid getting dumps of uninsured cases
• Avoid receiving cases with inadequate patient
  insurance information
• Consider offering only premium services (cash
  up front with no patient billing)

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Take Home Points

• Know how your faculty spends its time on Part A
  and Part B services
• Make sure you are getting paid for your Part A
  effort
• Measure and Manage your Part A effectiveness
• Benchmark your Part B productivity and payments
• Be at the table for contracting decisions

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