It is harder than ever to run a successful independent medical practice. As value-based reimbursement becomes more common alongside the fee-for-service model, physicians will be on the hook for demonstrating clinical outcomes and providing seamless care coordination in order to receive payment.
In recent times, there have been a number of changes in the reimbursement models and payment methods for independent medical practices. This has meant physicians in private practice are facing new and different challenges every day. The financial stability of small medical practices is in jeopardy due to stiff competition and changes in insurance coverage.
To mitigate the risk of decreased revenue, perhaps the most important thing an independent medical practice can do is to ensure efficiency in Revenue cycle management (RCM) and integration with the Electronic health record (EHR) system.
If healthcare providers in independent practice do not keep up with changing reimbursement policies, rules, and regulations, there’s a good chance they will simply be unable to compete in this dynamic healthcare environment.
The ability and willingness to adapt to new regulations and policies are critical to the success of any medical practice. It is possible to scale up your practice and maintain or increase revenue without completely overhauling your revenue cycle management.
Here are four ways to survive reimbursement changes and grow your independent medical practice:
- Embrace Value based care:
The fee-for-service payment model is giving way to value-based care. Physicians will no longer be reimbursed based on the number of patient encounters or tests requested. Instead, providers will be scored according to the merit-based incentive payment system (MIPS) where reimbursement is linked to meeting certain standards of care.
Another consequence of the push towards value-based care is an increasing number of patients with health plans that have high deductibles. These low premium plans are patient-friendly, but independent medical practices must adjust their RCM strategies to collect payment from patients who are responsible for a greater proportion of initial costs. Of course, independent providers must continue to provide the highest quality of care while doing this to be eligible for the reimbursement bonuses under the new payment models.
- Focus on Financial Performance
To remain financially stable in a competitive market, smaller independent practices must focus on every aspect of financial performance.
A commitment towards best practices in billing, collections, and cash flow is necessary for a multipronged approach to surviving reimbursement changes.
Medical practices should measure a number of metrics and compare them to industry averages:
- Denial rate.
- Collections at the time of patient encounters.
- Accounts receivable past due more than 120 days.
- Net collection rate.
- Cash collection rate.
- Outstanding accounts receivable.
- Establish Connectivity
For independent practices to flourish in the current healthcare scenario, it is critical to establish connectivity and integration with other providers and healthcare systems. Rather than looking at integration as a one time investment in technology, independent medical practices should develop integration strategies that lead to ongoing improvement in the quality of care and a reduction in costs.
An EHR that offers seamless care coordination and exchange of data can make the integration process less taxing for independent clinics. For most practices, the budget is a limiting factor in implementing integrated care.
- Practice Risk-Based Care
To most physicians, a risk-based environment is an alien environment. However, to thrive in the face of changing reimbursement policies, it’s a good idea to embrace risk and practice risk-based contracting. The trick is to know your patients well, identify patients who are high-risk, communicate value-based care to patients, and make appropriate referrals to specialists for the transition of care.
Business analytics plays a key role in identifying high-risk patients and is strategically imperative to survive reimbursement changes.
Independent medical practices need to maximise efficiency and financial performance, and be prepared to handle new methods of reimbursement. Typical revenue cycle management solutions are not sufficient to meet the demands of practising in a new, value-based health care system. That’s because new models of reimbursement require that revenue cycle systems track and submit cost and quality data, as well as receive and appropriately distribute compensation based on practice performance.