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©SVMIC 2021

Operations & Financial MgmtTools to excel beyond the

spreadsheet

M i c h a e l C a s h , M H S A , F A C M P E

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Agenda

Discuss accounting methods and keys to success

Review income statement & benchmarking

Identify ways to access staffing

Review revenue cycle KPIs

Review proforma analysis

Review operational issues & benchmarks

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Physician

Offices

Cash Based

Accounting

Cash Flow &

Revenue and

Expense

Recognition

same in time

Hospital

Clinics

Accrual Based

Accounting

Cash Flow &

Revenue and

Expense

Recognition

differ in time

Cash vs. Accrual Accounting

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Financial Keys to Success

Timing Monitoring Accuracy

DemographicsBillingPayables

FinancialsRev CycleControls

CodingGeneral Ledger

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Benchmarking Basics

Identify Key Performance Indicators (KPI)

Assess what data you have available for your practice

Find sources of benchmarking standards

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Physician

Expense

Total

Expense

Support

Staff

Operating

Expense

Adv Pract

Expense

Expenses – Key Indicators

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3%

Other

10%

Cost &

Revenue

15%

Uncertainty

73%

Staffing

Biggest Pandemic Challenge for 2022

Sept 21, 2021

MGMA Poll

983 Responses

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Income Statement Review

MGMA Cost and Revenue 2021 based on 2020

YTD October 2021 Annualized YTD % Benchmark %

Total Revenue 2,127,302.50 2,552,763.00 100.00%

  Support staff 700,080.00 840,096.00 32.91% 28.13%

    Information technology operating cost 49,110.00 58,932.00 2.31% 2.24%

    Drug supply 147,555.00 177,066.00 6.94% 8.02%

    Medical and surgical supply 38,812.50 46,575.00 1.82% 1.71%

    Building and occupancy 142,572.50 171,087.00 6.70% 6.23%

    Furniture and equipment 4,090.00 4,908.00 0.19% 0.20%

    Furniture/equipment depreciation 12,322.50 14,787.00 0.58% 0.40%

    Administrative supplies and services 23,500.00 28,200.00 1.10% 0.99%

    Professional liability insurance 21,532.50 25,839.00 1.01% 1.18%

    Other insurance premiums 5,195.00 6,234.00 0.24% 0.20%

    Legal fees 2,457.50 2,949.00 0.12% 0.16%

    Outside professional fees 5,187.50 6,225.00 0.24% 0.27%

    Clinical laboratory operating cost 18,960.00 22,752.00 0.89% 0.62%

    Radiology and imaging operating cost 9,617.50 11,541.00 0.45% 0.42%

    Promotion and marketing 1,354.17 1,625.00 0.06% 0.18%

    Billing and collection purchased services 10,912.50 13,095.00 0.51% 0.41%

    Miscellaneous operating cost 17,000.00 20,400.00 0.80% 1.09%

  Total operating cost 1,210,259.17 1,452,311.00 56.89% 56.19%

  Total advanced practice provider cost 55,503.33 66,604.00 2.61% 7.96%

  Total physician cost 861,540.00 1,033,848.00 40.50% 40.29%

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Employee Comp Benchmark Comparison

Name FT/PT Hourly Position Yrs in Position Mean 25% Median 75% 90% Difference

Amanda FT 20.05$ LPN 2 21.54$ 18.40$ 21.00$ 24.29$ 27.66$ (1.49)$

Michelle FT 22.30$ LPN 5 21.54$ 18.40$ 21.00$ 24.29$ 27.66$ 0.76$

Nicole FT 34.20$ RN 7 33.06$ 25.63$ 31.72$ 39.06$ 46.72$ 1.14$

Sarah FT 30.00$ RN 1 33.06$ 25.63$ 31.72$ 39.06$ 46.72$ (3.06)$

Mary FT 16.00$ MA 3 17.84$ 15.23$ 17.55$ 20.04$ 22.70$ (1.84)$

Shelly FT 18.40$ MA 6 17.84$ 15.23$ 17.55$ 20.04$ 22.70$ 0.56$

Misty FT 15.00$ Front Desk 2 16.63$ 14.46$ 16.46$ 18.75$ 21.20$ (1.63)$

Jessica FT 16.50$ Front Desk 4 16.63$ 14.46$ 16.46$ 18.75$ 21.20$ (0.13)$

Lauren FT 19.10$ Business Office 8 20.53$ 15.36$ 18.90$ 22.96$ 28.85$ (1.43)$

Gina FT 20.80$ Business Office 10 20.53$ 15.36$ 18.90$ 22.96$ 28.85$ 0.27$

Stephanie FT 15.00$ Receptionist 2 15.75$ 13.39$ 15.30$ 17.61$ 20.65$ (0.75)$

Trisha FT 16.00$ Receptionist 4 15.75$ 13.39$ 15.30$ 17.61$ 20.65$ 0.25$

Christina FT 18.30$ Referal Coordinator 7 18.41$ 15.80$ 17.83$ 20.80$ 23.81$ (0.11)$

Casey FT 20.00$ Billing Specialist 3 19.41$ 17.00$ 19.10$ 21.83$ 25.30$ 0.59$

Lori FT 22.20$ Coding Specialist 6 23.86$ 19.52$ 23.09$ 27.53$ 32.66$ (1.66)$

MGMA Management & Staff 2021 based on 2020 data

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MGMA Staffing per Provider

MGMA Cost and Revenue 2021 based on 2020

Primary Care Nonsurgical Surgical Multispecialty

Benchmark Median Median Median Median

Total advanced practice providers 0.36 0.35 0.43 0.33

  Total physician 0.64 0.65 0.57 0.67

  Total support staff 3.17 2.49 2.57 3.95

  Total business operations support staff 0.82 0.61 0.59 0.9

  Total front office support staff 0.84 0.74 0.84 0.84

  Total clinical support staff 1.27 1.08 0.82 1.44

  Total ancillary support staff 0.21 0.29 0.29 0.62

Cost and Revenue

2021 REPORT BASED ON 2020 DATA

All Practices Staffing per FTE Provider for Physician Owned

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Production & Compensation per Physician

MGMA Physician Compensation and Production

2021 REPORT BASED ON 2020 DATA

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Turnover Rates

Benchmark Group Count Mean 25th %tile Median 75th %tile 90th %tile

Physician turnover 159 10.39% 0.00% 0.00% 12.50% 37.17%

Advanced practice provider turnover 138 20.54% 0.00% 0.00% 27.39% 81.67%

Business operations support staff turnover 187 14.62% 0.00% 0.00% 5.00% 50.00%

Front office support staff turnover 186 23.83% 0.00% 0.00% 33.75% 75.17%

Clinical support staff turnover 206 21.14% 0.00% 12.05% 33.33% 53.39%

Ancillary support staff turnover 81 11.77% 0.00% 0.00% 11.27% 50.00%

Primary Care Single Specialties

Turnover Rate = Average Number of Employees

Number of Employees Terminated

MGMA Operations 2021 REPORT BASED ON 2020 DATA

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Revenue – Key Indicators

Gross Collection

Ratio

Adjusted

Collection Ratio

AR Aging

Days in AR

Collections divided by charges

Net collections divided by allowed amounts

Unpaid balance for duration outstanding

Total A/R balance divided by average daily charge

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AR Aging

Days 0-30 31-60 61-90 91-120 >120 Total

Insurance 278,606.74 79,115.23 32,229.08 24,642.83 63,921.29 478,515.17

Patient 16,599.66 36,179.33 14,125.49 11,429.34 23,904.53 102,238.35

Credits (5,000.00) (5,000.00)

AR including credits 290,206.40 115,294.56 46,354.57 36,072.17 87,825.82 575,753.52

AR withouth credits 295,206.40 115,294.56 46,354.57 36,072.17 87,825.82 580,753.52

% of Total AR 50.83% 19.85% 7.98% 6.21% 15.12% 100.00%

MGMA Median 64.38% 12.95% 5.93% 3.30% 9.17%

Collection Metrics Clinic MGMA

Gross Collection % 61.14% 56.14%

Adj Collection % 95.33% 99.74%

Days in AR 31.20 28.52

Aged Trial Balance

MGMA Cost and Revenue 2021 based on 2020

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Days in Accounts Receivable

Average number of days it takes a

practice to collect payments due.

• Below 50 days at minimum

• 30 to 40 days is preferable

Total AR - Credits

Avg Charge per Day

/ 6,794,069/365

31.2 Days in AR

575,753.52 - (-5,000)

580,753.52/18,613.89

Calculation

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Total AR per Physician

68,205

113,152

183,303

77,827

144,100

300,763

143,416

211,913

342,082

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

25%tile 50%tile 75%tile

Primary Nonsurgical Surgical

MGMA Cost and Revenue 2021 based on 2020

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Projects estimated cash flow and

volume.

Set Expectations

Assesses impact on your current

operations.

Reduce Risk

Determines financial viability

Objective

Models anticipated results

Future

“Helps a practice make important decisions such as bringing on a new provider, a new service line, expanding current services or opening a new location.”

https://www.mgma.com/resources/financial-management/developing-a-pro-

forma-financial-statement

Pro Forma Development

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Pro Forma/Breakeven Analysis

Identify

Expenses

EXPENSES

Include equipment,

supplies, and

people

Identify Revenue

Per Unit

REVENUE

Include CPT codes

billed, patient mix,

fee schedule

Determine

Volume

VOLUME

Identify units it takes

to cover expenses

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Pro Forma/Breakeven Adv Practitioner

Estimated Schedule

Clinic Weeks per Year 48.00

Total Patients per Clinic Day 9.64

Clinic days per week 4.50

Incident To Visit Percentage 50.00%

Revenue

CPT CODEMedicare

Reimbursement

CPT

Distribution

Units Gross REV/YR

99212 52.67$ 10% 208.22 10,144.62

99213 85.98$ 75% 1,561.68 124,202.75

99214 122.31$ 10% 208.22 23,557.79

99203 105.40$ 3% 62.47 6,090.24

99204 158.16$ 2% 41.64 6,092.55

2,082.24 170,087.95

Expenses

Advance Practitioner Salary 100,000.00

Adv Practitioner Benefits 20% 20,000.00

Total Adv Practitioner Exp 120,000.00

LPN Salary 41,600.00

LPN Benefits 20% 8,320.00

Total LPN Expense 49,920.00

Total Staff Expense 169,920.00

Profit/(Loss) 167.95

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Pro Forma/Breakeven Ultrasound

Expense

Equipment

US Equipment 50,000$

2,500$ 2,500$ 2,500$ 2,500$ 2,500$ 12,500$

7,500$ 7,500$ 7,500$ 7,500$ 7,500$ 37,500$

62,400$ 62,400$ 62,400$ 62,400$ 62,400$ 312,000$

12,480$ 12,480$ 12,480$ 12,480$ 12,480$ 62,400$

84,880$ 84,880$ 84,880$ 84,880$ 84,880$ 424,400$

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Total

10,000$ 10,000$ 10,000$ 10,000$ 10,000$ 50,000$

Total Exp 94,880$ 94,880$ 94,880$ 94,880$ 94,880$ 474,400$

Revenue

Code Medicare

Reimbursement

Units Gross

REV/YR

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Total

76801 $113.84 200 22,768$

76805 $130.64 450 58,788$

76815 $78.63 100 7,863$

76830 $115.20 50 5,760$

95,179$ 95,179$ 95,179$ 95,179$ 95,179$ 95,179$ 475,895$

Net Profit 299$ 299$ 299$ 299$ 299$ 1,495$

Annual

Supply Maintenance 2,500$

Service Agreement 7,500$

Technican 62,400$

Technican Benefits 12,480$

Total Annual Exp 84,880$

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E&M Coding

Code

Current

Frequency

Current

Practice

Profile

National

Dist. %

Variance:

Practice

vs.

National

New

Frequency

if at

National %

99201 0 0.00% 0.48% -100.00% 0

99202 1 8.33% 9.99% -16.58% 1

99203 5 41.67% 47.39% -12.08% 6

99204 6 50.00% 37.16% 34.55% 4

99205 0 0.00% 4.98% -100.00% 1

Totals 12 100.00% 100.00% 12

New Patient Office Visits - Office

Code

Current

Frequency

Current

Practice

Profile

National

Dist. %

Variance:

Practice

vs.

National

New

Frequency

if at

National %

99211 5 0.49% 2.11% -76.68% 21

99212 8 0.79% 2.14% -63.21% 22

99213 665 65.45% 39.27% 66.67% 399

99214 338 33.27% 53.37% -37.67% 542

99215 0 0.00% 3.12% -100.00% 32

Totals 1016 100.00% 100.00% 1016

Established Patient Office Visits - Office

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Operational Considerations

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Evaluating Medical Practice Operations

Technology Leverage technology to

improve efficiency

People optimizing the skills and

talents of their staff

ProcessesStandardize when possible

Reimbursement Value based

payment/Quality

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Self

People

Process

• Evaluate strengths & weaknesses

• How do you deal with change

• How do you lead

• Anticipate resistance

• Different approaches

• Communication

• Awareness

• Desire

• Knowledge

• Ability

• Reinforcement

Change Management

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Medical Practice Challenges

Legal Risk

Data Security

Redundant Systems

Phone Calls Lack of Edu/Training

Complexity of Workforce

Schedules

Payer Issues

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24hrs, 63%

48hrs, 17%

72hrs, 12%

Other, 5%

Did not report, 3%

Multispecialty provider time to close a patient chart after an encounter

MGMA Operations 2021 based on 2020 data

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No Show Rate No Show Fee

Primary Care Specialty

Non-surgical Specialty

Surgical Specialty 44.26%

36.91%

42.18%

Minutes late until

considered a no

show

Charge a No-Show fee

25%

46%

53%

Appts with a lead time of < than a week

Appts with a 1 - 2 week lead time

Appts with a lead time of > 3 weeks

MGMA Patient Access & Scheduling Report

New Patient No Show Rate

5-7% $35-$100

15 Min

No Show Statistics

MGMA Operations 2021 based on 2020 data

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Scheduling Inefficiency

• Patients can only call during business hours

• They are put on hold

• Navigate the phone commands

• Cannot see appointment availability

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Scheduling

Avoid scheduling too far out

Utilize a patient wait list

Consider patient self scheduling

Automate reminder appointments

Simplify appointment types

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Patient Self Scheduling

75% of patients rank the ability to book and modify appointments

online as important

• Reduced patient no-shows

• Enhanced patient experience

• Increased practice efficiency

10%

20%

30%

40%

80%

90%

100%

70%

60%

50%

https://www.softwareadvice.com/resources/patient-self-scheduling/

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Scheduling - No Shows

No Show Rate < 5%

No Show Discipline

No Show Follow-up

No Show Charge

No Show Policy

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Claims

denied on

first

submission

4%

Same day

appts

10%Total wait

time

20

Minutes

3rd next

available

appt

3 Days

% of co-

pays

collected at

TOS

81%

Appt

cancelation

%

8%

Operational Metrics

MGMA Operations 2021 based on 2020 data

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12:00 PM

Patient Portal Usage

6%

20%

53%

26%

32%

61%

5%

20%

53%

14%

6%

61%

8%

14%

57%

11%

5%

67%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

Schedule appointments

Pay bills

Access test results

Communicate with providers andmedical staff

Refill a prescription

Logged into portal

Surgical Nonsurgical Primary

MGMA Operations 2021 based on 2020 data

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First Impression - Appearance

• Parking lot

• Signage

• Waiting room

• Exam room

• Bathroom

• Security

Facilities• Dress code

• Professionalism

• Cleanliness

Personnel

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• Traditional waiting rooms can

be very unhealthy

• Patients are less tolerant of

wasting their time

• Practices want and need to run

their offices more efficiently, and

traditional methods are

outdated

• Evaluate which aspects of the

patient visit, such as check-in,

patient education, financial

counseling, etc., can be moved

to phone, video, or online

Waiting Room and Intake/Checkout Process

The Doctor Will See You Now (repertoiremag.com)

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Use of apps or texting to allow patients to wait in the car prior to the appointment

Electronic Check-in

Testing & Vaccines

Patient Education

Check-out

Car Waiting

Delivered electronically before or after visit to prepare patients with alternatives, procedures and or follow ups

Check-out and schedule follow up appointments in exam room

Drive through vaccines and/or allow patients to skip waiting room

Demographic & insurance updates, co-pays, patient forms complected electronically before the visit

Waiting Room Efficiency

The Doctor Will See You Now (repertoiremag.com)

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Question Process to Improve Experience

• How can we improve communication with patients?

• How can we make it easier for patients to access health information?

• How can we improve convenience?

• How can we empower patients?

• How can we stay engaged with patients?

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Patient Termination

Provide a 30 day notice

Send certified letter and regular letter

Keep copy in medical record

Consider treatment plan

Send copies of record at patient request

Refer to medical society

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Final Considerations

Is it easy to understand

What value it will add

Is the information timely

Is data actionable

Who is the target audience

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SVMIC can help!

Physician Productivity

Compensation

Assessments

Benchmarking

Pro Forma/Breakeven

Analysis

Financial & Operational

Assessments

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Questions

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