Practice Perfect: The RVU Fallacy – Back to Compensation Plan Basics 5/9/11

The RVU Fallacy – Back to Compensation Plan Basics

Resource Based Relative Value units and their sub-component, Work RVUs (WRVUs), too often create perverse incentives for the participant physicians in a compensation plan when used as the main measure of productivity.

This is a controversial statement in today’s physician compensation environment. But it is not so controversial when viewed in light of the changes coming in the form of ACOs and other forms of reimbursement that emphasize collaboration and outcomes over “RVU piecework.”

Examples abound where current productivity-based compensation plans have created bad situations. We have seen plans where the physician is owed more in compensation than the organization has to spend (comp based on WRVUs without regard to paid WRVUs). Physicians have slighted post-surgical follow-up.

They have criticized an otherwise well-functioning IT revenue cycle product and process because of a lack of trust in how it captures and creates the WRVUs that drive their compensation. This has been heightened, perversely, by the move to integrated EHR and revenue cycle IT platforms.

Using WRVUs in a compensation plan is not a bad thing, but it should not be the main thing. The goal is to balance and align the needs of the individual with those of the organization. Align productivity (measured by WRVUs) with the ongoing changes in reimbursement linked to quality indicators and a plan becomes a forward-thinking approach to physician compensation. A plan that simply rewards physicians for producing WRVUs mistakes productivity for achievement.

To design and implement a good physician compensation plan requires a basic set of principles that are understandable, relatively simple, measurable, and widely held by the members of the group. The following are often overlooked principles that a compensation plan should be grounded in.

1. It must be fair economically. Not necessarily producing equal compensation, but fair.
2. It must be easily understood, especially to the physicians that are part of the group and therefore the plan.
3. It must not be difficult to monitor and administer and it must be flexible enough to allow for reasonable modifications as the practice and the environment change.
4. It should be consistent with the financial situation of the practice and responsive to changes in the financial situation. It must incent participants to control cost reasonably and as a normal part of their daily work.
5. Most importantly, it must stimulate its physicians to be effective and aligned with the group, with definable financial rewards for behavior and activity the practice needs and wishes to encourage.

In our experience, a base salary + incentive plan is the most common and best meets the needs of most of our clients. This is because it addresses the two most important concerns mentioned in the beginning of the article and, critically, it is the most flexible of all the models. There are as many ways to implement base + incentive compensation plans as there are physician groups.

In summary, the most important thing to remember when designing an effective and efficient compensation plan is, “Exactly what kind of behavior am I trying to elicit?” Make sure there is a clear understanding of your data source quality (aka, your revenue cycle product). Ask yourself; is it really more RVUs that are important to success of the practice? Or is it new patients, reduced wait times, increased room and equipment usage, better outcomes, higher margin, or increased grant or research activity?

There is no cookie cutter solution. Each group or subspecialty might have some basic principles, but each will almost certainly have slightly different goals.

Victor Arnold is managing partner with AsquaredM Resources.

DOCtalk by Dr. Gregg 5/6/11

A, O, Oh, Way to Go, Ohio

Chrissie Hynde (The Pretenders) wrote and sang that line condemning Ohio’s industrialization, pollution, and general state of ill health back in 1982. She’s an Akron gal, but often associated with Cleveland. That whole northeast corner has been hit hard by excessive and poorly planned industrialization, the subsequent “Rust Belt” blues, and, most recently, the dis from home town wunderkind LeBron.

Columbus has more recently been hit in its favorite point of pride, THE Ohio State University Buckeyes, with the memorabilia-for-tattoos swapping by some of the sainted Buckeye football squad along with the implications of improper handling by their otherwise extraordinarily ethical coach, Jim Tressel.

Depending upon your political affiliations … well, actually, your redness or blueness doesn’t really matter, as Ohio has had tons of complaints from both Dems and the GOP on its elected officials and election results during recent years.

And, of course, our state’s economy is just a mess, though I suppose we’re not alone there.

Ohio sure needs some good news.

Well, thank you, thank you, thank you, and praises be — we have some! No, LeBron isn’t coming back. But, I did hear some gospel that I thought was worth sharing, just in case you haven’t noticed anything good out of Ohio for a while.

First off, the state’s HIE/REC, OHIP (Ohio health Information Partnership) is leading the country in signing up PPCPs for their Meaningful Use journey. OHIP has nearly 3,700 providers signed up and many more nearing “signage.” (Fair notice: I was recently added to their board of directors, so I am a little extra proud.)

Secondly, I just heard some great news about one of the local companies in Columbus, Ohio, that I wrote about briefly in a pre-HIMSS HIStalk piece earlier this year, Health Care DataWorks. HCD was just listed by Gartner as one of their Cool Vendors in HealthCare Providers, 2011. This is a pretty excellent acknowledgement from Gartner, as these are the companies that they see as leading the way in healthcare with innovative and “potentially transformative” solutions.

Third, my alma mater, the Ohio University-College of Osteopathic Medicine, just announced this weekend that they have received something definitely transformative. The Osteopathic Heritage Foundation just awarded them $105 million, the largest private donation ever given to any college or university within the state of Ohio. They’re planning on using it to help bridge the impending “doctor gap” of primary care physicians by becoming “…nothing less than the leader of primary care [medical] education.”

Plus, they’re creating research centers for diabetes (a disease that is expected to skyrocket in coming years) and for musculoskeletal disorders. (Please don’t quote me, but I also heard from “well-placed sources” that there would be “some impact” upon HIT here in Ohio.)

OK, so this isn’t all the most HIStalk Practice-specific stuff, but from one hard-hit state, it is all definitely news we needed and some fun stuff we can finally crow about a bit — at least until the next election.

A, O, Oh, way to go, Ohio!

From the Ohio trenches…

“I’m just a lucky slob from Ohio who happened to be in the right place at the right time.” – Clark Gable

Dr. Gregg Alexander, a grunt in the trenches pediatrician at Madison Pediatrics, is Chief Medical Officer for Health Nuts Media, directs the Pediatric Office of the Future exhibit for the American Academy of Pediatrics, and sits on the board of directors of the Ohio Health Information Partnership (OHIP).

Pretzel Logic: Stage 1’s Nasty Little Surprises 5/5/11

Meaningful Use attestation began on April 18, which means that there is now some field experience on how to meet Meaningful Use Stage 1 requirements. I polled my staff to see what we’ve learned through the process. Which requirements seem to be the hardest? What are the best ways to meet those requirements?

The findings, though obviously not statistically meaningful in any way, were quite interesting and instructive (well, interesting at least to that perverse sliver of humanity who find health IT and Meaningful Use interesting enough to write and read about it).

Looking at the Core Requirements, the most difficult requirements seem to be (in order of difficulty):

Capability to exchange key clinical information. The biggest difficulty with this objective seems to be figuring out what the heck it means. What are “different legal entities?” What are “distinct certified EHR technologies?” What is “key clinical information?” What does it mean to “electronically exchange” key clinical information?

There are some answers available at CMS, but health care delivery is too complex, and the FAQs a tad too vague, to be really useful in many if not most circumstances.

One large source of confusion with this requirement is whether it requires some kind of connection to a Health Information Exchange. The answer is a resounding NO. Indeed, meeting the requirement doesn’t seem to require an electronic connection to another practice at all. All it requires is that a valid clinical summary CCD/c32 be generated from one certified system, and that an attempt be made to upload it into another distinct certified system.

Thus it would be perfectly acceptable to create the file using your certified EHR system, encrypt it (using a cheap and easily available commercial utility like WinZip, for example), pass the file to another practice on a CD or a thumb drive or even using commercial e-mail (like Gmail or Yahoo), and ask them to try to upload it into their system.

Doesn’t have to be through an organized HIE activity. Doesn’t have to be structured data. Doesn’t have to be transported electronically, since ONC somehow decided not to create any standards for that. Doesn’t even have to be successfully uploaded by the receiving practice! It’s like testing my high school son’s ability to show up for the SAT exam on time and with a number 2 pencil, rather than his ability to actually answer the questions on the test. (He’d be thrilled!)

If you are part of an organized HIE activity (like the New England Health Exchange Network, for example), you can transport your test file electronically. And some EHR vendors are helping their customers meet this requirement by matching up different customers with each other and facilitating transport through their own proprietary exchange infrastructure.

For example, eClinicalWorks, Medent, and Epic provide this service to their customers. But if you don’t happen to have such options, you can go just do it the old-fashioned way described above, and maybe even make it a little fun. “Hey Dr. Jayne, bring your flash drive on Wednesday morning and we’ll take care of MU before our tee time.”

Protect Health Information. This objective requires that the practice implement “appropriate technical capabilities” to protect health information and validate that they have done so by “conducting or reviewing a security risk analysis” of their internal capabilities. We’ve found that most providers generally know what the privacy and security rules are, but they’re shockingly unfamiliar with the details and they probably don’t know the severity of the punishments for violating such rules. Obviously, knowing the penalties should make people focus on the rules, but no one thinks it’s going to happen to them, so they put it on the back burner, if it’s on the stove at all.

You don’t have to be Sony to get seriously whacked by the long arm of the law. If you have some kind of breach and are determined by federal authorities to be “cavalier” toward protection of health information, for example, you could face a $250K fine, and up to $1.5M if you seem to be repeatedly “cavalier.” If you lose track of information on over 500 individuals (by having a laptop stolen, for example), you could be required to issue a press release to media outlets in your area and have your practice name listed on a federal Web site, in addition to any fines you might face.

And that’s just the federal requirements. Some states, like my own state of Massachusetts, have equally strict laws that correlate with, but don’t exactly match, federal rules.

This requirement is deceptive because it leads one to believe that protecting health information is just a technical issue, when any privacy/security professional would say that it’s mostly policy, procedure, and attitude. Because this requirement is so vague and so focused on technical capabilities, there is a risk that an EP merely checking the box on this one could be lulled into thinking that they’ve adequately addressed federal and state privacy and security rules when they might not even be close.

The best way to address this requirement is to hire a well-respected third party security audit firm. If you don’t know where to find one of those, your hospital or a large practice in your area would almost certainly be able to point in the right direction. Your IT vendor may say that they can provide this service, but be careful — some will only focus on technical issues like firewalls and will give scant attention or completely ignore the policies and training that you and your staff need to really meet the letter and the spirit of the law.

And in no circumstance should you rely on your EHR vendor for this. They’ll be highly unlikely to have the holistic view of your operations necessary to protecting you and your patients. And as much as it hurts, it might be worth paying you lawyer for a short chat about your legal exposure in this brave new world.

Provide patients with an electronic copy of their health information, and Provide clinical summaries for patients for each office visit. I lumped two objectives together here because both of them involve providing information to patients, which makes them incredibly important because they are customer-facing and directly embedded in day-to-day and visit-to-visit workflow.

The general difficulties practices have with these requirements are: What information am I supposed to provide? Do I really have to provide in any way that they want? And how long do I have to provide it?

In terms of what to provide, the requirement itself is a long list that seems fairly innocuous on the face of it, but has a few undefined oddities, like “recommended patient decision aids.” The harder part is that the EHR certification requirements don’t match exactly with what’s supposed to be included in the patient information, so any hope of automating this process in your office could get seriously bollixed up (a technical term) if the information you’re supposed to give to patients isn’t what the software spits out.

The other barrier we’ve experienced is that, as much love as we have for patients, they aren’t always as well behaved as we might like. So terms that say “per patient preference” can start to get complicated if it means that some patients want it on paper, others ask for it in a patient portal, others want it in their PHR, still others want it on a CD, and the rest want it on a thumb drive (the latter being patient-provided and possibly virus-laden and unencrypted, of course). And that just covers the reasonable options.

The reality so far is that the electronic information requirement is manageable because few patients are requesting the information and, I suspect, few providers are pushing it. The clinical summary information is a little easier because most EHRs do create some kind of post-visit summary, which is maybe probably mostly hopefully compliant with what the objective requires … or close enough for government work, anyway.

All of this isn’t to suggest that the other requirements are a walk in the rose garden (quality measures, for example, are like a whole new set of requirements). These are just the ones that we’ve found particularly troubling for those pioneering physicians who are attesting now.

I haven’t yet talked about the Menu set, which is a minefield onto itself. And whether meeting all these requirements is actually getting us to a world of better and more affordable health care is an even bigger issue that I won’t even try to tackle here. Gotta save something for future entries …

Micky Tripathi is president and CEO of the Massachusetts eHealth Collaborative. The views expressed are his own.

News 5/5/11

The HIT Policy Committee suggests delaying Stage 2 Meaningful Use one year until 2014. Providers and vendors have told the panel, ONC, and CMS that they need the extra year to develop and implement the new technology since the final Stage 2 rule is not expected to be released until mid-2012. An added benefit of the date push-back: more providers might participate in the Stage 1 qualification process since they would have an additional year to qualify.

iPhones continue to dominate the physician market and 75% US physicians now own an iPhone, iPad, and/or iPod. A year after its introduction, 30% of physicians use an iPad and 28% plan to purchase one in the next six months.

Emdeon acquires EquiClaim, a provider of healthcare audit and recovery services, for about $41 million in cash.

Healthcare consulting company Arcadia Solutions announces that it has entered into a definitive agreement to acquire the assets of Concordant, Inc. Concordant is a provider of consulting and implementation services for ambulatory practices.

AMA introduces a series of CME-accredited online tutorials to help physicians select and implement new HIT systems for their practice.

MedInformatix offers a lower-priced EHR option for one- to three-physician practices. It includes an EHR module, e-prescribing, a patient portal, and a Meaningful Use reporting module.

Nuesoft Technologies names the spring 2011 winners of its College Health Scholarship Program, awarding the five college and university health centers an in-kind donation of  up to $5,000 towards the purchase of Nuesoft’s college health center or EMR. Grant recipients are American River College, Folsom Lake College, Winthrop University, Sacramento City College, and Consumnes River College.

3M introduces its Mobile Physician solution, which allows physicians to manage their daily schedule, review patient information, dictate progress notes, and log charges.

Phreesia rolls out an asthma control assessment tool as part of its automated check-in solution.

St. Jude Medical says its Merlin.net Patient Care Network is now fully integrated with GE Healthcare’s Centricity EMR, as well as Scottcare’s OneView CRM device management system. Merlin.net is an Internet-based repository of patient and implantable device data.

The estimated cost to transition to ICD ranges from $83,000 for a small (3-9 physicians) practice, to $285,000 for a mid-sized (10-99 physicians), and up to $2.7 million for a large (100+ physicians). These figures reflect training requirements and technology upgrades.

Nuesoft posts a video called Reworking Workflow to Maximize Revenue, which features advice from Nuetopia billing consultant Cara Buckhaulter.

A temporary employee uses a low-tech scheme to steal money from patients at a Connecticut clinic. Melba Witter told patients that she didn’t know how to operate the credit card machine. If patients wanted to pay by credit card,  she photocopied the card and told patients the office manager would process the payment. Two weeks later, patients began calling to report the fraudulent charges. Witter has since been arrested and charged with 11 counts of third-degree identity theft, illegal use of a credit card, and sixth-degree larceny.

WebPT releases its WebPT Pediatric module for the WebPT EMR.

Pediatricians and family and  practitioners with obstetrics have the highest collect rates of all specialties, according to a new report from the National Society of Certified Healthcare Business Consultants. Physicians in these specialties had higher collection rates (66%), but, earned less than providers in other specialties. The report also notes that overhead as a percentage of collected revenue ranges from 58% (family practice) to 38% (anesthesiologists).

E-mail Inga.

News 5/3/11

AMA and MGMA collaborate to develop an online directory of software vendors to help physicians determine what PM systems are compliant with the 5010 standard. The directory provides detailed vendor profiles that include installed customer base, target market, number of years the PM software has been offered, and affiliated EHR products.

Boston Business Journal ranks eClinicalWorks #13 on its 2011 Pacesetters list of fastest-growing private companies in Massachusetts, based on revenue growth.

Despite record bonuses in 2009, only about 21% of eligible providers participated in the PQRS program and only 12% earned bonuses. One possible reason for the low participation and qualification rates: information on final incentive payments comes about nine months after the reporting period ends. Because of the lack of timely feedback, physicians have inadequate time to correct issues for the following reporting year.

Loudoun Physicians for Women (VA) expands its use of Advanced Data Systems software to include MedicsDocAssistant EHR.

Peak Clinical Systems (CA)  is certified to resell gloStream’s EMR and PM software.

The 14-provider Long Island Plastic Surgical Group (NY) selects NexTech’s EMR and PM software.

GE Centricity user Heart & Vascular Center of Arizona achieves Meaningful Use on April 18, the first day of the attestation period. Meanwhile, SuccessEHS client Mississippi Family Medicine successfully attests for Meaningful Use on April 26.

Neurosurgery, Orthopaedics & Spine Specialists (CT) contracts for the SRS EHR for its 33-provider practice.

No surprise here: specialists earn more than twice as much as primary care providers, according to a new WebMD report. Primary care physicians average $159,000, while orthopedic surgeons and radiologists earn about $350,000. Across all specialties, male physicians earn a average of $225,000 compared to $160,000 for females. However, women tend to spend fewer hours seeing patients and are not as well represented in the higher-earning specialties. Physicians in practices with more than 100 doctors earn a median $167, 000, compared to $144,000 for solo physicians.

The South Florida REC says over 1,000 doctors have committed to convert from paper to EMRs.

News sites, specifically those of WebMD and health magazines, are named trusted online healthcare resource in a consumer survey. Sixty-eight percent of Americans access online news site for health information, compared to 54% for user-generated content on sites like Facebook and Wikipedia. The US government is seen as the most credible source of information.

Rosemarie Nelson of the MGMA Health Care Consulting Group offers a list of nine Web sites being used by savvy medical practices. It’s an eclectic list that includes a password manager, e-training  for software and technology, online appointment scheduling, and a credit card reader. Worth a look.

Amazing Charts says its EHR has been selected by four HIT RECs, including Alaska eHealth Network, eHealthConnecticut, Massachusetts e-Health Institute, and RI Regional Extension Center.

The American Academy of Pediatrics calls for the development and universal implementation of a electronic infrastructure to facilitate the pediatric information functions in the medical home model.  Functions that AAP says should be included: timely and continuous tracking of health data over a patient’s lifetime; secure transfer of health data between providers; central coordination of health information among multiple repositories; translation of evidence into actionable decision support; and, reuse of archived clinical data for continuous quality improvement.

CMS updates its FAQ section on the EHR incentive program. Here are a couple of particularly good ones:

For the 2011 payment year, how and when will incentive payments be made?

For eligible professionals (EPs), incentive payments will be made approximately four to eight weeks after an EP successfully attests that they have demonstrated meaningful use of certified EHR technology. However, EPs will not receive incentive payments within that timeframe if they have not yet met the threshold for allowed charges for covered professional services furnished by the EP during the year. Payments will be held until the EP meets the $24,000 threshold in allowed charges for calendar year 2011 in order to maximize the amount of the EHR incentive payment they receive. If the EP has not met the $24,000 threshold in allowed charges by the end of calendar year 2011, CMS expects to issue an incentive payment for the EP in March 2012 (allowing 60 days after the end of the 2011 calendar year for all pending claims to be processed). Payments to Medicare EPs will be made to the taxpayer identification number  selected at the time of registration, through the same channels their claims payments are made. The form of payment (electronic funds transfer or check) will be the same as claims payments.

To what attestation statements must an EP agree in order to submit an attestation, successfully demonstrate meaningful use, and receive an incentive payment?

Currently, the attestation process requires EPs to indicate that they agree with the following attestation statements:

• The information submitted for clinical quality measures (CQMs) was generated as output from an identified certified EHR technology
• The information submitted is accurate to the knowledge and belief of the EP or the person submitting on behalf of the EP
• The information is accurate and complete for numerators, denominators, exclusions, and measures applicable to the EP
• The information includes information on all patients to whom the measure applies.

CMS considers information to be accurate and complete for CQMs insofar as it is identical to the output that was generated from certified EHR technology. Numerator, denominator, and exclusion information for CQMs must be reported directly from information generated by certified EHR technology. By agreeing to the above statements, the EP is attesting that the information for CQMs entered into the Registration and Attestation System is identical to the information generated from certified EHR technology.

E-mail Inga.