4 Strategies for Medical Practices to Survive Reimbursement Changes
The changes in reimbursement policies and payment models have made it challenging for independent practitioners to maintain financial stability, let alone see a growth in revenue. In addition, stiff competition from large physician groups and clinicians employed with healthcare systems puts small practices and solo practitioners at risk of decreased revenue. This risk can be mitigated to some extent with robust revenue cycle management and electronic health record systems. Yet, there are other key actions independent practitioners can take to succeed in these changing times.
The rules and regulations for payment are constantly changing. Many experts believe these changes are particularly harsh on independent physicians and make it difficult for them to stay competitive. To stay relevant and up-to-date, it is critical for small medical practices to gain an in-depth understanding of current reimbursement policies.
Changes in Reimbursement
The key change is a move from the fee-per-service model to the value-based model. Instead of being reimbursed for the number of tests ordered or the number of patient encounters, physician performance will be measured and reimbursement will depend on quality care.
Under the Merit-Based Incentive Payment System (MIPS), the performance of eligible providers will be scored under four categories. The system is designed to simplify the payment process, but it also puts practitioners under pressure to meet high standards of patient care in order to avoid negative payment adjustments.
Another change that has affected independent physicians is a growing number of health plans with high deductibles. An increase in the number of self-pay patients means medical practices must restructure their revenue cycle management process to keep accounts receivable low.
Here are 4 strategies for medical practices to survive reimbursement changes:
#1: Financial Performance
To stay competitive, independent practices must focus on every aspect of financial performance. This includes implementing best practices for billing, collections, and cash flow management. Processes should be reviewed periodically. It is also vital to monitor some key metrics such as:
- Net collection rate
- Cash collection rate
- Collection at time of encounter rate
- Accounts receivable over 120 days
- Claims denial rate
#2: Connectivity and Integration
Independent practices cannot function in isolation. In today’s internet-enabled world, it is vital for small medical practices to develop robust connectivity with other healthcare systems. It is important to remember that integration is not a one-time investment in technology, but rather is an ongoing process. The goal is to implement strategies that improve outcomes, enhance access, and reduce the cost of healthcare.
Surveys have shown that care coordination is particularly challenging for independent practitioners. Access to EHR software can make integration and data exchange easier, which ultimately will translate to better patient outcomes. For many practices, budgetary constraints are an obstacle to clinical integration and coordinated care. However, the challenge can be met with tight revenue cycle management and discovering fresh revenue opportunities to increase cash flow.
#3: Risk-Based Care
Many physicians are averse to risk, yet surviving and thriving in a risk-based healthcare environment makes it necessary for health professionals in independent practice to embrace it. With time and practice, risk-based care becomes easier and may even become second nature.
For independent physicians to navigate risk-based contracting successfully, they must believe in it, figure out a way to start, and understand what needs to be done. Speaking about succeeding in a risk-based environment, Farzad Mostashari, who heads Aledade, an ACO services company, said the key is for practitioners to develop a deep knowledge about their patients. This includes identifying high-risk patients and employing a specialist, if needed, to clearly communicate value-based features, especially during the transition of care. To this end, analytics is imperative and data quality is critical for independent practices to flourish with risk-based care.
The ability to adapt is vital for physicians and medical practices to survive reimbursement changes. In the face of constant updates and new regulations, practitioners must be willing to adopt new technologies and review best practices. In fact, a proactive approach may prove to be critical to success. To remain competitive, ongoing training, advance preparation for new policies, resource management, and performance tracking are vital.
Resistance to change can prove expensive to small medical practices in terms of both compliance and scaling up operations. Ongoing review and updating ensure that a complete overhaul is not necessary every time there is a new reimbursement policy.