Monday, June 14, 2004

Incentive Compensation and training residents. How shall we manage the intersection? (Part 1)

Next month our third class of EM residents will start and we’ll have attained a full complement of emergency medicine residents, taking another step in our transformation from a purely service focused organization to a department delivering service and education while undertaking scholarly activities.

As I write this column the transformation comes to mind since we’ve just distributed our semi-annual profit-sharing and incentive payments, based as in the past on measurable clinical, academic, administrative productivity and my subjective evaluation of the individual physician’s contributions to the department. One quarter of the profit-sharing “pot” attributable to each factor. (I’m describing only our profit-sharing plan and not our base compensation plan which is that of hospital employed physicians.)

The residency program has imposed its own demands on practice earnings, though we’re not a medical school and thus pay no “dean’s tax.” I had agreed long ago when contracting with the hospital, that the faculty practice would support certain aspects of the residency in lieu of a dean’s tax. That agreement and the steadily increasing pressure on revenues all of us in medical practice have experienced over the years have appropriately raised staff concerns about profit-sharing income.

This month and next I’m going to describe our department’s efforts at improving financial performance while broadening the group members’ understanding of practice finances and fulfilling our educational mission. This month I’ll focus mostly on our billing improvement and educational efforts. Next month I’ll share some early thoughts about transforming our incentive program in keeping with the transformation of our department.

Recently, several outspoken physicians have worked on improving our charting quality as a first step to improving our revenues. We long ago had implemented straight-forward, housekeeping improvements: assuring charts were completed and signed, making sure we didn’t lose charts for billing, confirming that updates of insurance information to the hospital were shared with the practice. These and other best practices have been taught by many and I won’t review them here.

What’s new is our giving of near real time feedback to our physicians regarding the completeness of their charts. Though the value of regular feedback is obvious to all, making it happen can be a challenge with emergency physicians working shifts—coming and going each on his/her own schedule. In the era of paper charts and given realistic concerns regarding billing practices it had been impossible for us to accomplish. However, more recently our electronic medical record and the hospital’s virtual private network have permitted our staff to logon from home to complete their charts. One of our physician staff built a web based application that our coders use to send email to each physician about their incomplete charts and that tracks the physician’s completion of these incomplete charts as appropriate. Not all charts are appropriate for completion.

In consultation with hospital compliance and legal staff and discussion with several professional EM chart coding companies, we decided that only charts missing entire sections: history of present illness, past medical/surgical history, social history, family history, review of systems or physical examination would be referred for completion. Charts that addressed each area but appeared to our coders as lacking usual documentation would be referred for “educational review” but no expectation of chart completion would attach to the referral and coding and billing would be based on the original chart. We set a 72 hour limit on the physician’s response to the request. After 72 hours, even woefully incomplete charts are coded as-is.

Through this feedback and education process, coupled with attention to our coders’ training we’ve seen a reduction in incomplete charts and a general improvement (measured as RVUs/patient) in charting quality. It’s no surprise that some physicians have shown greater improvement than others. We anticipate revenue improvements as these early charting improvements translate into higher charges.

I’m sure you’re equally enthusiastic for improving collections, but not everyone has an electronic medical record and a hospital supported virtual private network. Yet, everyone does have colleagues who are not as preoccupied as you are. Engaging them in solving your revenue problem makes all the difference. It’s not merely a matter of demanding the behavior change; rather you want others invested in making the behavior change across all group members and make the change stick.

Supporting those junior colleagues requires both structure and constant mentoring from you. For a structure, I’ve created a faculty practice finance committee that will I expect develop further improvement ideas. For mentoring, I’ve offered my time and unfettered access to the semi-annual accounting of the practice plan’s revenues and expenses—though individual physician’s compensation will be available only in aggregate. I’ve also just ordered them each a copy of a book I first mentioned in my May 2000 column: Fisher and Sharp: Getting It Done: How to Lead When You’re Not in Charge. HarperBusiness, 1999; ISBN: 0887309585

With these efforts I expect that our team will not only develop solutions, but will bring others in the group in so as to improve upon the solutions the committee itself develops. Next month I’ll discuss how our group, now engaged in both clinical service and residency teaching might go about developing a profit-sharing plan that suits all medical staff even though physicians’ activities differ.