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Case Studies

Revenue Cycle Performance Improvement

Clinical Performance

Strategic Planning

Practice Reorganization / Sale

Interim Management

Revenue Cycle Performance Improvement

The Problem
Despite being financially successful, a ten (10) physician orthopaedic practice was leaving millions of dollars in accounts receivable uncollected every year. Upon completion of a preliminary practice assessment, it was determined that the practice was writing off in excess of $2 million dollars a year as a result of a failure to appeal denied claims, meet timely filing deadlines, and improper submission of claims. More than 30% of the A/R outstanding were at least 150 days past due, and the practice was taking an average of 45-60 days to post charges.

The Solution
The following is a sample of the many initiatives that were utilized to improve the financial and operational performance of the practice:

Recruited additional billing & A/R management personnel and reorganized the billing department to accommodate additional staff and an influx of volume;
Redesigned all front desk operations and implemented protocols for collecting all patient demographics and appropriate fees: self pays, co-pays, deductibles (if applicable), non-covered services and patient balances;
Implemented a daily review to monitor that charges are posted daily and claims submitted within 48 hours of the date of service;
Redesigned the accounts receivable collection processes;
Implemented systems to appeal all denied claims within 72 hours of receipt of rejected EOBs (explanation of benefits); and
Created and implemented a skills assessment test for billing department personnel as part of a performance appraisal initiative.

The Results
During the twelve (12) month revenue cycle performance improvement engagement, the MDMANAGEMENT consultants achieved the following results:

Increased total charges 36%
Increased annualized net collected revenue more than $1,300,000
Decreased accounts receivable more than 27%

Clinical Performance

The Problem
A pediatric group practice with approx. 70,000 annual patient visits was experiencing below normal productivity and revenue collections, poor teamwork and unsatisfactory patient satisfaction scores after the acquisition of (2) other group practices. Over 55% of the patients audited at the front desk had outstanding balances that were not being collected, non-covered services were not being collected in a routine manner, and the business office was averaging 10-11 days to enter a claim. Additionally, patients experienced an average of 2.5 to 3.0 hours of waiting time during the patient care delivery process.

The Solution
In coordination with management, MDMANAGEMENT implemented the following performance improvement initiatives:

Created a centralized call center;
Reorganized patient flow, with the guidance of the physicians, to improve the efficiency of patient examination rooms and staff utilization;
Improved skilled labor and productivity at each position through training, education and protocol creation; and
Reengineered all front desk operations and implemented protocols for collecting all appropriate fees.

The Results

Front desk patient payments increased by 65%
Patient volume increased more than 20%
Reduced patient check-in process from an average of 30 minutes to approximately 5 minutes; and
Reduced total patient waiting time from an average of 55 minutes to less than 15 minutes

Strategic Planning

The Problem
A large medical group practice experienced five straight years of significant losses in profitability after it was acquired by a local health system. The practice's overhead was approximately 80%, it was taking an average of 189 days to collect a claim and more than 45% of the dollars outstanding were at least 120 days past due . In addition, the practice had extremely high turnover as a result of no teamwork, lack of accountability or inappropriate human resource management.

The Solution
The following initiatives were utilized by MDMANAGEMENT to improve the financial and operational performance of the practice:

Recommended and facilitated the buy-back of the practice from the health system;
Provided interim Director of Operations to formulate an organizational structure;
Implemented an employee performance review system to identify and retain skilled staff;
Recruited sub-specialty physicians to capture revenue which was otherwise being referred to other practices;
Reengineered the billing / collection process to accelerate cash flow
Purchased real estate to expand the practice and add an ambulatory surgery center (ASC) to increase their marketshare.

The Results
As a result of MDMANAGEMENT implementing the above initiatives, the practice achieved the following results over the ensuing three years:

Decreased overhead from 80% to 56%
Reduced days in accounts receivable to 45 days
Increased revenue by 46%
Increased net distributable income by 167%
Reduced staff turnover to less than 5%

Practice Reorganization / Sale

The Problem
The sole shareholder of an ENT group practice desired to sell his ownership stake to several of his employed physicians within the group practice. After a practice assessment, MDMANAGEMENT advised our client that the practice - in its current state - was not worth the desired sale price. The overhead was approximately 83%, the collection of patient and insurance accounts were neither timely or efficient, and there were no financial controls in place.

The Solution
In order for the owner to receive the desired value, MDMANAGEMENT recommended - and received permission to implement the following initiatives to improve the equity in the business:

Recruited for, interviewed, hired and mentored a new practice administrator and business office team leader. Restructured the responsibilities and duties of both positions;
Implemented business process protocols to accelerate cash flow and reduce operating expenses;
Redefined job descriptions for the entire staff and implemented a performance-based appraisal system;
Placed a moratorium on all non-revenue producing spending for the practice;
Implemented a labor productivity management system; and
Established ancillary revenue systems within the practice (allergy testing, audiology, hearing aid sales, and office-based CT)

The Results

During a two year engagement, MDMANAGEMENT achieved the following results:

Reduced days in accounts receivable from 150+ days to 45 days or less
Created a high performance management team that ensured staff accountability
Lowered the practice overhead to 53% \
Increased new patient volumes 25%
Increased surgical volume by 40%
Increased shareholder equity in practice by $2,400,000 - as documented by net proceeds of sale to employed physicians

Interim Management

The Problem
A private plastic surgery group practice, equipped with (2) two office-based surgical suites, had been operating at a loss for three consecutive years despite having been purchased by a local hospital as an established, profitable enterprise. The office-based surgical suites were less than 50% utilized and the provider schedules were underutilized at all (3) three office locations. Additionally, the physician shareholders had taken minimal salaries from the practice over the previous year and were considering home equity loans to meet monthly obligations.

The Solution
The following initiatives were utilized to improve the financial and operational performance of the practice:

Provided interim CEO to train and support current management staff
Restructured administrator priorities and duties to effectively oversee operations
Restructured physician scheduling templates to emphasize productivity
Established front and back office staff pods to bolster efficiency and communications
Implemented a labor productivity management system
Improved skilled labor and productivity at each position
Initiated an operating expense reduction project
Designed marketing approach for expansion and market segmentation
Restructured all internal systems of accounting and implemented theft prevention protocols

The Results
During an eighteen (18) month interim management engagement, MDMANAGEMENT achieved the following results:

Reduced practice debt by $460,000
Brought all accounts payable vendors to current status
Increased practice annualized revenue by $1,245,000
Increased patient annualized appointments by nearly 135%