Tips and Traps when using WRVUs to Measure Your Physician Compensation. Click below to download our PowerPoint presentation for the 2018 WV FHMA Fall Conference.
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Alta Partners provides its billing clients with a monthly Provider Scorecard. (Click here to download a sample) This scorecard summarizes key indicators that are useful to assess performance. By using this scorecard, you can ensure that performance is on-track, identify problems early, and see how changes have impacted operations (both positively and negatively). We wanted to offer a refresher on the different sections of the scorecard and how these measures can be used to improve performance to ensure that you are making the most of the Provider Scorecard.
1. Production Summary
The production summary is the first section of the scorecard. This section includes two years of monthly figures for production measures such as charges, payments, wRVU’s, and visits. Providing two years of data on a monthly basis allows you to compare performance month-to-month and also look for trends in the data or sudden changes. For example, if payments each month were stable but dropped suddenly one month, you would be able to easily recognize the decrease and take a closer look what may have caused the decline that month. While the scorecard cannot specify the exact issue, it helps you to identify where a problem may or may not lie. Changes may not be sudden; there may be a trend of slowly decreasing production over time that may be an indicator of issues such as lower patient volume or lower productivity. The production summary may also highlight positive actions that the practice has taken. Analyzing positive increases is also important because you can see the positive financial impact the actions have had on the practice as well as take steps to ensure that the upward trend continues.
wRVU’s (work Relative Value Units) are an important measure to track because these reflect level of productivity. wRVU’s are used by Medicare to determine the amount of work performed for each CPT code. Comparing wRVU’s instead of visits is preferred because counting visits applies the same weight to each visit even though the workload can vary. Using wRVU’s accounts for this difference and allows you to see the level of work being provided under a common standard of measurement.
The visit section of the scorecard can be used to see the number and type of visits being performed. As previously mentioned, changes can be sudden or slowly occur over time. If there is a sharp drop in visits, it may be due to seasonality or a physician’s vacation time, with a possibility of being easily reversed back to normal. A slowly declining trend in visits may be an indicator of hidden issues that need addressed. You can also analyze visits by looking at New Patient Visits and Established Patient Visits (both preventative and office visits). If the practice is trying to grow, the new patient visit statistic can be used to see how many new visits are happening each month and how they are trending (upwards, downwards, or steady).
2. Payer Analysis
The payer analysis looks at different payers for the practice including commercial payers, Medicaid, Medicare, and Self Pay. Understanding your practice’s payer mix is important because payer mix affects the production and reimbursement of the practice. For example, a high mix of Medicare may indicate an older patient demographic and drive different types of procedures and lead to different levels of office visits than a practice with a low mix of Medicare patients. A high Medicaid population may negatively affect payments as Medicaid typically has a lower reimbursement rate than commercial payers and/or Medicare.
Another important component of this section is the “Denial %” which shows what percentage of charges for each payer are denied. This allows you to quickly see which payer(s) has the highest denial rate from which you can examine closer to determine the cause. There may be something specific about claim submission for this payer that is not being done right or a step in the process that is being missed. This section also shows what the charges and payments for that payer are as a percent of Medicare (based on the Medicare allowable rate for the procedure codes charged to that payer). If payments are a low percent of Medicare, they may be issues such as low contract rates or not receiving full payments from this insurer. Finally, this section shows the average payments per wRVU for each insurer. Using wRVU’s as a base makes it easier to compare different insurances, regardless of the procedure mix billed through each payer. Looking at the average reimbursement per wRVU is another way to easily and quickly identify if there is an insurance that is reimbursing lower than other insurers and whether it needs addressed.
3. Accounts Receivable Analysis
This section breaks down your accounts receivable (A/R) balance by payer and by the responsible party (insurance vs patient) along with the total A/R balance. Next to this are two figures that will help you to assess whether there is an issue that needs addressed. The “AR % of Total” column shows you how much of your A/R balance can be attributed to the different payers. Certain payers may commonly be a higher percentage of your A/R while others may not and serve as a red flag. The “AR % Over 90 Days” column total shows what percent of your total A/R is over 90 days old; it is then broken out to show you what percent is attributable to each payer. The total percent of A/R over 90 days is an important statistic to determine how effective your practice is at collecting payments for services. This section allows you to find red flags that may indicate difficulty in collecting from a particular payer.
4. Monthly Activity
Monthly activity offers a more detailed look at charges and payments. The first section shows charges and charge errors. If charge errors are high or there is an increasing trend, it would be beneficial to review the cause and meet with staff to resolve the issues causing the charge errors. Below this section is the breakdown of payment and adjustments. An important figure to watch is the denial adjustments. If denials are high or show an increasing trend, you should review the primary denial codes and work with your staff to clean-up the currently denied claims and prevent denials in the future. A detailed look at denial codes is provided in the “Other Statistics” section of the scorecard.
Charges less payments and adjustments will show the change in A/R for the month. A positive change in A/R indicates that your payments for the month were less than your charges; a negative change indicates that payments for the month were greater than charges. The monthly change in A/R affects the ending A/R balance or your outstanding accounts receivable. Below the ending A/R balance is your days revenue outstanding (DRO). A DRO of 50 days or less is considered good; the lower the number, the more effective your practice is at collecting revenues. Below this figure is your charge lag which represents how long it takes to enter the charge from the date of service. Lower numbers are better, with an average of 3 days or less being ideal. Both the DRO and Charge Lag figures have an average for your specialty provided for comparison purposes.
The final part within the monthly activity section is the Patient Coding Profile that uses graphs to compare your E&M coding to averages within the Alta Partners’ database for your specialty. This is useful to see how your coding compares to others. When reviewing this, remember that this is an average of other physicians within your specialty and coding may vary based on patient demographics and provider preference.
5. Other Statistics
This section has two main components to it. The first part shows your average charge per visit and your average wRVU (work RVU) per visit. While it is good to know the average charge per visit, the important statistic here is the average wRVU per visit. As discussed above, wRVU’s are a universal productivity measure that can be used to show the level of work being performed for each visit. This statistic is also important because it is tied to reimbursement. The Medicare allowable rate is determined based on RVU values, including wRVU. The higher the wRVU per visit, the higher the expected payment per visit.
The second part of “Other Statistics” is the denial breakdown. This section takes the information from the denial adjustments and shows your top denial codes. If your denials are high, you can use this breakdown to identify which denial code to tackle first. You can dig further to determine the pattern causing this denial code then work with your staff to develop a plan to reduce these errors.
Reviewing key indicators is an on-going process that should occur on a monthly basis. After review, any issues should be followed through on to understand why the variance is occurring and determining how to fix it if necessary. Changes may be sudden or occur over time. Either way, once a variance is identified, it is important to ask “why”. Before a problem can be fixed, it has to be understood, from its cause to its effects. Once there is a firm grasp on what the problem is, you can move on to implementing changes to correct it. In an ever-changing industry such as healthcare, small and simple steps can make a difference in productivity and profitability.
Click here to view the latest Medicare update newsletter including topics on top rejections, denials & inquiries, as well as CERT improper payment rates.