February, 2014:

Dusting off Your Physician Compensation Plan: 5 Steps to Creating a Value-based Strategy

For most practices, I suspect physician compensation is not something you are frantically trying to change. However, the sense of urgency may grow as healthcare reform continues to evolve.

As we all know, reform is shifting the focus of compensation from physician productivity (volume) to care quality (value), and payers are beginning to include patient satisfaction and quality as part of various payment reimbursement methodologies. As a result, practices may want to consider aligning their compensation plans with the shift toward value in order to remain viable.

Before we discuss how to align, let us take a closer look at how value-based payment is changing physician compensation. In the past, physicians were paid a percentage of charges or cash collected. More recently, the industry standard shifted to wRVUs (work relative value units) to incent performance. This model uses a point system for services rendered, with the accumulated points converted to a monetary value at the end of each quarter or year.

The wRVU method is almost counterintuitive to healthcare reform as the new emphasis on value disrupts the traditional mindset of “the more services provided, the more providers get paid.” The new thinking rewards quality and efficiency, not performing more surgeries or sending patients for expensive MRIs. In fact, payers see the focus on volume as inconsistent with protocols for quality care.

As you can see, it is a good time to review your compensation plan and ensure it is aligned with healthcare reform. Below are five steps to guide the alignment effort.

1. Find a physician champion. Strong physician leadership can support a smoother alignment process as this individual can address and overcome any physician reservations. Simply put, administrators cannot do this work on their own. A good choice for physician champion might be the head of the practice or a department chair.

2. Form a multidisciplinary compensation committee. If your practice includes several different specialties, you may want to create a committee to review compensation, which includes respected leaders in the practice and representatives of each specialty. This group can communicate to the rest of the practice frequently and transparently.

3. Conduct research and educate the committee. Look for and share information about current payers offering incentives or bonuses based on quality. Good sources of information might be the Healthcare Financial Management Association (HFMA) and the Medical Group Management Association (MGMA) or anecdotal information from other practices in the market.

4. Determine incentive goals and measures. Goals must be fair, measurable, obtainable and lucrative enough to get physicians’ attention. Ideally, you should balance base salary, productivity, quality, satisfaction and other measures. In my opinion, it is best to employ one compensation methodology across the group while the actual measures and goals within the group can vary by specialty. If the practice is already measuring quality for meaningful use (MU), use one or two of those agreed upon measures per specialty. If you are currently measuring patient satisfaction, use a score that reflects how patients feel about the physicians. Regardless of the measures, review incentive amounts to ensure they are meaningful to the physician and specialty.

5. Before launching a new plan, verify your practice can fund it. Make sure you do the math to check that the highest payout scenario is affordable. You also may want to phase the plan in to ensure the goals are captured in the EMR and the plan is doable. Most importantly, design the plan to be adaptable, so it can evolve when you review it annually.

We all know physician compensation plans are a challenge regardless of external influences, such as healthcare reform and value-based reimbursement. While there is no need to rush in and dramatically change your approach, it is definitely time to assess the current landscape and begin planning for the future. Remember, this cannot be done overnight or in a vacuum, especially with all the other priorities such as MU and ICD-10. In my view, the practices that are proactive in aligning their compensation plans will be the most successful going forward.

johanna epstein

Johanna Epstein is vice president of management consulting services at Culbert Healthcare Solutions,


Don’t rely on the Unspecified in ICD-10 CM

For years, we have been consulting providers and teaching “if it wasn’t documented; it wasn’t done”.  ICD-10-CM confirms that not only will you need to document what was done, you need to code for it. The use of  “unspecified” codes has been a common topic of discussion in the industry, even prior to ICD-10-CM.  Some providers became accustomed to “adding a 0” in order to accommodate the fifth digit expansion in ICD-9-CM. This created a growth in the practice of utilizing these “unspecified” diagnosis codes.

 Providers frequently ask “are we going to have payment changes on October 1, 2014 with ICD-10?”  My answer is “Yes” and “No”. Initially, we may not be paid directly on ICD-10-CM codes, but the ramifications of incorrectly utilizing the new codes are enormous.

Some payers will look for reasons to deny the medical necessity of services that providers render and unspecified code usage certainly seem to be the target of additional pre-review questionnaires, denials and even third-party audits. This delay in payment can have a significant impact on your cash flow.

Provider claims can be a review target when you report a Level 4 or 5-  E/M code with an unspecified ICD-9-CM diagnosis code. Payers may presume that this “vague” and “unspecified” diagnosis may not support the medical necessity of the higher levels of  E/M services provided. The correlation can also be presumed that if the diagnosis is unspecified, then perhaps the E/M level might not be properly documented.

It will become even more important to avoid unspecified codes once ICD-10-CM takes place on October 1, 2014.  ICD-10-CM codes are generally more specific in nature and providers need to take advantage of this level of specificity to improve the process of getting paid and to tell the “story” of the encounter more effectively.

The Centers for Medicare and Medicaid Services (CMS) has provided clarification on the use of “unspecified” codes when using ICD-10.  They acknowledge that both ICD-9-CM and ICD-10-CM, “unspecified” codes have acceptable, even necessary, uses.  “While specific diagnosis codes should be reported when they are supported by the available medical record documentation and clinical knowledge of the patient’s health condition, there are instances when signs/symptoms or unspecified codes are the best choices for accurately reflecting the health care encounter.  Each health care encounter should be coded to the level of certainty known for that encounter.”

 Many EHR systems plan to use the GEM’s to crosswalk the existing diagnosis codes to the new ICD-10-CM codes. Although this plan sounds good in theory, the level of detail provided in the ICD-10 codes does not provide a direct match in many cases.  The more specific you are currently in ICD-9-CM, the better chance there is to map to an ICD-10-CM.

 An important step in your ICD-10-CM implementation plan is ensuring clinical documentation is sufficient for the new code set.

  • Identify your pattern of unspecified and other specified code use. 
    • In ICD-9, unspecified and other specified can be identified by looking at the 4th or 5th digit of the diagnosis code
      • Codes titled other or other specified are usually a code with a 4th digit of 8 or 5th digit of 9
      • Codes titled unspecified are usually a code with a 4th digit of 9 or 5th digit of 0
  • Identify providers that have a greater unspecified and other specified code usage
  • Target education and review to those providers to use a more specified code in ICD-9-CM, if available prior to the ICD-10-CM implementation.
  • Begin looking at current documentation and “dual code” for the services in ICD-10-CM

The complete, accurate, and detailed documentation of the encounter will be necessary for assigning appropriate ICD-10-CM codes just as it is in ICD-9-CM. Yes, there are “unspecified” codes, but some payers have stated that they are not going to reimburse claims with these codes under ICD-10-CM. Also, government and third-party payers are going to assign severity and risk scores based on the diagnosis codes billed, and these scores will help you justify higher level codes and better reimbursement in the future.  Start now to assign the accurate ICD-9-CM code for the documentation that you provide and you can make a step for easier transition on October 1, 2014. 



Patient Access in the Age of Healthcare Reform: Webinar March 21st 12:30 EST

Please join Johanna Epstein-VP Management Consulting Services for a free webinar

Improving your organizations’ access to physicians and other healthcare extenders has never been so important. Healthcare reform has created an environment where the patient is in control and the key to financial viability will be the providers’ ability to focus on the patient experience.


Epic Governance Webinar: Friday March 7th 12:30-1:30 EST

Culbert Healthcare Solutions invites you to join Brad Boyd, Vice President, and Jaffer Traish, Epic Practice Director, for a free webinar on Friday, March 7th at 12:30 pm Eastern for an insightful look into structuring enterprise governance and navigating the complexity of leadership and operational models to improve patient care and effectively compete in today’s changing healthcare landscape.


MIR_3989-Brad Boyd MIR_4025-Jaffer Traish

ICD-10 Revenue Neutrality: Where is Your Organization?

The transition to ICD-10 on October 1, 2014 will have a profound impact on the healthcare industry.  The benefits of such a transition are many; to include improved clinical reporting and potential increased revenue generation as submitted claims data will be far more specific than what is generated today.  As an industry, there has been a huge emphasis on physician documentation and coder education to ensure that the appropriate ICD-10 code is selected, populated in the electronic medical record and billed.  Plans are in place to begin the process of “dual coding” in an effort to proactively address the trouble spots; orthopedics and cardiology immediately coming to mind given the bilateral nature of limbs and arteries.  IT systems are being evaluated to ensure that any reference to ICD-9 is programmed to support ICD-10 nomenclature and payer contracts are being reviewed to ensure that any contract language related to ICD-9 is replaced with ICD-10.

The above initiatives are critical as you make your preparations for ICD-10.  But what about your revenue cycle?  Have you considered the concept of “Revenue Neutrality” as you march toward the compliance date for ICD-10?   What are you doing to prepare for the potential increases in claims edits, payer denials, and accounts receivable?  Batten down the hatches.  The ICD-10 tsunami wave is coming.  How significantly the wave will affect your organization is not yet known but the prediction based on a study published by WEDI (Workgroup for Electronic Data Interchange) is that your accounts receivable may increase by 20% – 40% and your denials may increase 100% – 200%! 

In an effort to minimize the impact of ICD-10 on your revenue cycle operation, immediately begin to assess your current processes from the beginning of the revenue cycle to the end.  Many organizations place their focus on the coding team and fail to assess other critical revenue cycle functions that may be impacted.  Flowchart your work flows to identify all areas where diagnosis coding is required.  If you have pain points now they will undoubtedly be exacerbated with ICD-10.

The following list identifies just a few of the Revenue Cycle areas that you need to consider:

  • Will all of your IT systems and any vendor systems utilized be updated from ICD-9 to ICD-10?
  • Are ICD codes required during your registration or scheduling process? 
  • Will your scheduling and registration systems accommodate the extended length of the ICD-10 code?
  • Will your medical necessity process accommodate the length of the ICD10 code?
  • Will there be any prior authorization concerns?
  • Will your physicians be able to order ancillary tests by providing the proper ICD-10 code?
  • Will your claims scrubber vendor be fully compliant and able to test ICD-10 claims months prior to the implementation?
  • What is your current denial rate?  Do you understand the root cause of these denials?  Pay close attention to denials related to Medical Necessity as these types of denials are bound to be impacted by the ICD-10 implementation.
  • Focus on improving all key performance metrics now.  Close and bill encounters in a timely fashion.  Reduce your claims edit rate and work your accounts receivable to ensure that you are able to manage any increases that occur upon implementation.
  • Develop dashboards to measure these metrics now and post ICD-10 to ensure you are reaching your revenue neutrality goals.
  • Document your ICD9 to ICD10 boundary Cutover Concerns and develop plans to address them.

In summary, the transition to ICD-10 will affect just about every facet of your organization.  As with any major change, developing a plan that includes revenue cycle preparedness is the key to realizing the benefits of the implementation in years to come.

 Reference from Workgroup for Electronic Data Exchange White paper Impact Assessment


Optimizing Clinical Documentation

Optimizing Clinical Documentation
Now Is the Time to Get Started

Many healthcare organizations capture clinical documentation via electronic health records (EHRs) and other technology-enabled channels. The ability to fully leverage clinical documentation to improve care, compliance and reimbursement depends on its quality. In my experience, engaging in clinical documentation optimization is a valuable exercise that can yield tangible benefits.

The October 1, 2014 ICD-10 deadline is probably the most compelling reason to focus on optimizing documentation right now. ICD-10 requires a high degree of specificity, and if your documentation doesn’t have it, you could see a drop in reimbursement and/or an increase in claims denials. On the other hand, if your documentation is detailed and reflects a true picture of the patient experience, coders can more accurately code claims, ensuring you receive full reimbursement for services rendered.

While a significant impetus for improvement, ICD-10 compliance isn’t the only driver for optimization. By striving for more detail and accuracy in clinical documentation, your organization can elevate care quality through better communication among providers. Strong documentation ensures everyone who interacts with the patient is on the same page about diagnosis, treatment and patient response. Embedding care alerts and reminders for patients in documentation can further enhance quality.

Comprehensive documentation also ensures you use technology—electronic health records, for example—to its full potential, which can drive physician productivity as well as adoption.

Thorough documentation can also enhance reporting, which in turn, supports better care delivery. Discreet levels of data are necessary to generate accurate quality reports.

Finally, better documentation fosters more timely claims submission, which results in improved cash flow and reimbursement and leads to fewer denials, ultimately preserving your revenue cycle integrity.

Acknowledging the importance of enriching clinical documentation is the first step toward optimization. To make meaningful progress, I suggest organizations consider and customize the following high-level next steps:

1. Establish goals. Be specific about objectives, timelines, training and who will do the work to drive and manage the improvement process and subsequent changes.

2. Determine early focus. High-volume, high-reimbursement clinical areas and processes make a logical place to start work. In my experience, strengthening documentation in these areas can prevent substantial hits to cash flow and revenue.

3. Examine specialties. Concentrate on those areas that have the most significant changes in documentation requirements, such as cardiology and orthopedics. The physicians in these areas will need to significantly “up their game” when it comes to documentation and can provide valuable input for system workflow retooling.

4. Identify areas of “quick wins.” Give special attention to areas of strong physician support because physician champions can serve as positive role models for adoption in other areas. Identify key players within specialties and promote their demonstrated success to break down change management challenges in other areas.

While ICD-10 makes optimizing clinical documentation a top priority now, improvement work in this area should be an ongoing process with the ultimate goal of elevating clinical care. Organizations that commit to a continuous effort to enhance detail, accuracy and consistency, can see real benefits in terms of both revenue and patient care. Although the idea of revamping clinical documentation may seem daunting, organizations can see big improvements with small changes. The key is acknowledging the importance of the work and getting started on the journey; in my mind, there is no time like the present.

Brad Boyd


ICD-10 Prepare for Impact:Safeguarding the Revenue Cycle-Webinar Feb 12th 3:30 est

Countdown to ICD-10 -Are you Ready?  Join the Webinar that covers 5 topics within ICD-10 including :

Safeguarding The Revenue Cycle led by Jim Akimchuk- Culbert’s VP of Revenue Cycle Services

Please join Jim  on  Wednesday February 12th 3:30-4:30 ESTMIR_4008-Jim Akimchuk

Please sign up on the link below