Physician-Owned Therapy Programs
Case Study 1:
Agency Type: Private for Profit Physician Owned Outpatient Clinic
Location: Southwest United States
Client Challenges:
- Poor financial performance
- Inability to recruit clinicians
- Lack of systems
- Poor documentation
- Lack of clinical protocols
- Misunderstanding of federal regulations (Stark, Self-Referral, etc….)
- Lack of reporting standards
- Underutilization of practice management system and EMR
Analysis:
The therapy department had operated for several years as a clinical compliment to the medical practice. Due to a misunderstanding of the state and federal regulatory environment, the practice had imposed restrictive covenants regarding operations. Due to a lack of operational reporting, staff was not held accountable and struggled with initiatives to improve operations. The practice had a very favorable payer mix but limited its internal referrals based on improper interpretation of insurance guidelines. The agency did not have a compliance plan and therapy documentation was sub-standard. Clinical staff was average and hiring practices had been based on resumes vs. clinical skill and competency. The therapy department did not have a true rehab manager and was under the direction of a practice manager with limited understanding of therapy operations.
Solution:
ARMG was retained to address agency deficiencies. Following an in-depth analysis, ARMG proposed an outsourced manager model. ARMG assumed management responsibilities for rehabilitation services via an onsite manager. Changes were immediately made to address documentation standards, billing deficiencies, scheduling protocols, and self-limiting operational models. Scorecards were created at the associate and clinic level and all staff were evaluated on clinical skill, compliance standards, and operational results. Front office procedures were implemented to address scheduling, customer service, and quality initiatives. A formal compliance plan was introduced and all clinical staff were trained on defensible documentation. Education was provided regarding quality charging practices and compliance with payor specific policies.
The Results:
- Therapy staff transitioned to a high-skill, customer-oriented team
- Net operating income increased by 900%
- Documentation quality and standards improved
- The practice is fully complaint with all applicable federal and state regulations
- Physicians were able to add ancillary cash flow and market such to potential partners
- Therapy generates significant net operating income
- Therapy practice is recognized as the gold standard for spine care in the region
- The practice is able to aggressively pursue bundling initiatives based on care model
Case Study 2:
Agency Type: Private For-Profit Physician-Owned Outpatient Clinic (3 locations)
Location: Mid-Atlantic United States
Client Challenges:
- Poor financial performance
- Inability to recruit clinicians
- Lack of systems
- Poor documentation
- Lack of clinical protocols
- Misunderstanding of federal regulations (Stark, Self-Referral, etc….)
- Lack of reporting standards
- Underutilization of practice management system and EMR
Analysis:
The clinic had operated for several years under antiquated regulatory rules. The result was an inability to expand, burdensome internal protocols, poor financial performance and an inability to recruit talent. Due to the meager cash flow, the physicians were hesitant to expand or remodel the physical plant resulting in inefficient operations and patient flow. There was also a lack of understanding regarding an ever-changing regulatory landscape and self-imposed limitations that were unnecessary. The clinic did not have reporting instruments and staff was unaware of best billing practices. There was not a mechanism for the practice to monitor operations or benchmark the clinic. Finally, due to a lack of understanding of therapy, the practice did not fully utilize their practice management system or document well.
Solution:
ARMG was retained to address agency deficiencies. Following an in-depth analysis, ARMG proposed a full outsourced management model. 60-days later ARMG assumed ownership of existing client therapy staff and management responsibilities for rehabilitation services. Changes were immediately made to address documentation standards, billing deficiencies, scheduling protocols, and self-limiting operational models. Within 30-days operations and cash flow improved significantly. Planning for a new facility began as recruiting efforts were successful in fully staffing the clinic. 1-year later the clinic transitioned into a new 5,000 square foot facility. Based on the success of the new clinic, plans were made to add therapy to the others physician sites. The physician practice now has 3 therapy clinics located within their buildings.
The Results:
- Therapy staff increased from 2 therapists to 19
- The practice grew from 1small clinic to 3 sites representing 12,000 square feet
- The therapy program will manage 50,000+ visits annually
- Documentation quality and standards improved
- The practice is fully complaint with all applicable federal and state regulations
- Physicians own all real estate affiliated with clinics, providing a substantial real estate portfolio
- Physicians are able to add ancillary cash flow and market such to potential partners
- Therapy generates significant net operating income
- Therapy practice is recognized as the gold standard for orthopedic care in the region
- The practice is able to aggressively pursue bundling initiatives based on care model
Hospital / Hospital System
Case Study 1:
Hospital Type: Large Regional Non-Profit
Location: Mid-Atlantic
Client Challenges:
- Inability to compete in an aggressive therapy market
- Unsuccessful launches of outpatient departments
- Inability to recruit top-tier clinical talent
- Inability to develop specialty clinical programs
- Lack of understanding of therapy coding and billing
- Lack of operational controls and reporting
- Under-productive staff
Analysis:
The hospital had unsuccessfully run therapy operations for decades, failing to create a profitable therapy program, and despite a desire to expand beyond the hospital’s four walls, limiting market expansion.
The organization struggled to recruit top clinicians, and a lack of reporting fostered an unproductive environment. Unfamiliar with therapy coding and billing, the hospital also struggled with collections and denials. Referral growth stagnated, as physicians in the market expected clinical programs and protocols, neither of which were offered by the hospital’s therapy program.
Solution:
ARMG set-up proper billing strategies to assure quality collections and the avoidance of denails. Clinical programs were developed to include orthopedic specialty care, spine and pain programs, vestibular and balance programs, and hand therapy to name a few.
When ARMG began it’s relationship with the client, the program consisted of three therapy clinics. ARMG guided the hospital through the acquisition of a local therapy company, establishing a growth platform. ARMG then worked with the hospital to develop a de novo strategy, overseeing the opening of 3 clinics within the first two years of the contract. ARMG also assisted with the acquisition of two clinics. This brought the client’s clinic footprint to 8 clinics within 3 years, and, when considering clinics under development, a clinic footprint of 10 clinics within 4 years of the contract.
The Results:
- The hospital is the largest therapy provider in the region
- Effective de novo strategy has fueled market expansion
- Effective acquisition strategy has supported growth objectives
- High quality outcomes are the norm
- Diverse clinical programs support a broad patient case load
- Highly respected clinical staff
- Effective and compliant billing practices
- Over 10,000 new therapy patients annually
Case Study 2:
Hospital Type: Local Non-Profit Hospital (Managed by a Regional Hospital System)
Location: Southeast United States
Client Challenges:
- Inability to compete in an aggressive therapy market
- Underperforming hospital-based outpatient clinics
- Inability to recruit top-tier clinical talent
- Lack of understanding of therapy coding and billing
- Lack of operational controls, benchmarking, and reporting
- Underproductive clinical staff
Analysis:
The hospital’s outpatient therapy locations, while meeting budget, were not optimized to achieve their full revenue potential, and year-over-year growth was stagnant.
The program lacked an understanding of proper billing standards, and, among other billing and
collections challenges, struggled to accurately adjust for denials.
Clinical staff were not providing patients with the optimal therapy programs and time required per visit to ensure best-in-class outcomes.
Solution:
ARMG took ownership of the therapy staff, enabling ARMG to instill it’s management philosophies, to ensure that performance of the therapy program would exceed expectations. As a result, therapy visits and gross revenue of the outpatient program doubled in the first 18-months of the partnership. The outpatient program has surpassed budget, and realized significant year-over-year growth every year of the more than 4-year relationship.
ARMG also established proper billing strategies to assure quality collections and the avoidance of denials. Clinical programs including orthopedic specialty care, vestibular and balance, and hand therapy were also developed.
ARMG also worked closely with hospital leadership to develop a de novo expansion strategy, creating a roadmap for 3 new clinics.
The Results:
- The hospital is the largest therapy provider in their immediate region
- Effective de novo strategy has fueled market expansion
- Establishment of strong reporting structures
- Significant improvement in therapist productivity
- High quality outcomes are the norm
- Diverse clinical programs support a broad patient case load
- Highly respected clinical staff
- Effective and compliant billing practices
- Over 6,500 new therapy patients annually
Home Health
Case Study 1:
Agency Type: VNA Non-Profit Medicare Certified Home Healthcare Agency
Location: Northeastern United States
Client Challenges:
- Negative cash flow
- Extremely high ADR rate
- Lack of institutional controls
- Underutilization of practice management system and EMR
- Poor outcomes performance related to improper OASIS scoring
- Low employee morale
- Poor documentation
Analysis:
The agency sustained significant administrative turnover with resulted in a lack of the systems and controls. The only data the agency measured was case mix with no additional systemwide accepted metrics or goals and lacked a reporting structure with no clinician or agency benchmarks identified.
There was also a lack of communication and coordination of care between the office and clinicians. Furthermore, the agency was losing $300 per case, largely due to poor therapy utilization and management. The agency was choking under the weight of ADR’s and was at significant risk of denials due to poor documentation. Clinicians lacked an understanding of proper OASIS scoring and Medicare standards, while other clinicians were following antiquated Medicare regulations. 5 Star ratings and outcomes measures were well below national standards.
Solution:
ARMG was retained to address agency deficiencies. Following an in-depth analysis, ARMG staff spent 12
days on site over a 5-month period. Services included OASIS training for all start of care clinicians with a special emphasis on functional scoring and outcomes data. All clinical staff were educated on Medicare standards and defensible documentation. Reporting instruments were created to include individual scorecards, departmental productivity reports, and agency performance scorecards. Workflow processes were evaluated and remodeled to improve efficiency and increase communication and coordination. Tools were created to identify therapy candidates and to monitor therapy utilization. All therapy staff were educated on proper utilization and regulations and standards related to Medicare and rehabilitation services. EMR templates were evaluated and revised to improve documentation quality and reduce redundancy. An auditing process was created to help identify and manage compliance and audit risk.
The Results:
- Agency transitioned from cash negative to breakeven within 60-days
- Cash flow positive within 90-days
- Agency achieved a $500 increase in case mix
- ADR requests dramatically decreased as OASIS scoring improved
- Agency received an increase in agency star ratings
- Documentation improved as the agency incorporated validated assessment tools and shifted to quantifiable measures
- Staff responded to scorecards and transparency in reporting, improving associate morale
- Agency shifted from financial conversations to clinical excellence
- Back office staff became more productive and absorbed additional patient volume without additional staff
- With ARMG guidance, the agency continues to execute the plan, operations continue to improve each month, and the agency now outperforms most of their cohort group
- ROI with ARMG in less than 30-days
Case Study 2:
Agency Type: Private for Profit Medicare Certified Home Care Agency
Location: Southeastern United States
Client Challenges:
- Poor financial performance
- High ADR rate
- Poor therapist retention rates
- Large percentage of visits performed by contract companies
- Unable to staff all disciplines in all areas
- Poor outcome performance related to improper OASIS scoring
- Lack of reporting standards
- Underutilization of practice management system and EMR
Analysis:
The agency had no systems in place to monitor therapy programs or operations and struggled to adapt to new Medicare programs. A disconnect between nursing and therapy departments led to resentment and dissatisfaction of therapy clinicians resulting in extensive turnover at the agency. The staffing issues forced the agency to use contract therapists to fill staffing voids which led to training backlogs and poor performance. Case mix rates were low due to a lack of therapy patients on caseloads and poor therapy utilization.
Costs related to therapy were high due to constant training costs, recruiting fees, unreimbursed visits, and ineffective contract staff. Documentation was poor and would not stand up under audit. Improper OASIS scoring led to ADR’s, decreased case mix, and low outcome scores. Marketing and development struggled as the agency was unable to staff all therapy disciplines in all areas and had a lack of clinicians with specific clinical skill sets. The lack of reporting tools and accountability measures led to poor performance and the inability to identify weak clinicians or trouble areas.
Solution:
ARMG was retained to address agency deficiencies. Following an in-depth analysis, ARMG proposed a full outsourced management model. 90-days later ARMG assumed ownership of existing client therapy staff and management responsibilities for rehabilitation services. Recruiting efforts were initiated and within a period of 120-days ARMG eliminated all contract staff and replaced them with full-time associates. Additional disciplines were added allowing the agency to accept referrals in all areas, for all disciplines. Software training was completed for all staff as was OASIS and documentation training. Metric scorecards were created at the associate, departmental, and agency level. Reporting processes started and accountability increased. Processes were implemented to identify therapy candidates, as well as, manage therapy utilization. Initiation of care standards were created, as were scheduling protocols and timely documentation requirements. Case conference templates were revamped to improve attendance and efficiency of meetings and associate satisfaction initiatives were created.
The Results:
- Over a 3-year period after retaining ARMG, the agency recognized in excess of $5,000,000 of new revenue without census growth
- The agency is fully staffed in all regions within all disciplines
- Therapy utilization improved
- Documentation quality and standards improved
- Personnel files became compliant
- ADR request decreased
- OASIS scoring improved
- Cost decreased as unreimbursed visits rates decreased and therapy metrics improved