Volume 4, #3

October 2007

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Emergency Medicine: Business Myths and New Realities

Jeff Wajda, DO, MS, FACEP
Vice President, Clinical Services

Emergency Physician training is appropriately focused on the knowledge, skills and decision making that assures that patients are safe in our hands. During our three to four years of residency training, very little emphasis is placed on business and the revenue implications of our practice. After residency, we are focused on the significant clinical challenges of assimilation into our first attending physician position. As a result, EPs often are unaware of the details behind RBRVs, RVUs and the alphabet soup associated with our professional compensation. In fact, EPs are often surprised to learn of the significant downstream effects that their documentation has on not only their individual income but also hospital revenue. New regulations and increasingly complex compensation metrics have created the need for important alignments between emergency physicians and the hospitals they practice in. For hospitals to achieve their quality and revenue goals, they must realize a strategic alignment with their EP groups. And in many cases, this means dispelling old myths and accepting new realities.

Myth Number One

Emergency Physician documentation has no effect on inpatient hospital reimbursement when ED doctors admit patients.

Reality

Government studies show that a majority of the time, the diagnosis and documentation originated by the ED doctor flows through to the final hospital charge. The important reality for EPs is that the clinical documentation that we create is very often insufficient and does not allow the hospital to get paid for the illness severity and the intensity of service. Several thousand dollars can be lost as a result of an admission poorly documented by the EP. It is true that physicians are paid under the CPT (Common Procedural Terminology) system and hospitals under a different system called ICD-9 (International Classification of Diseases - 9th version). Hospital reimbursement under the ICD-9 rules however, is dependent on physician documentation. Unfortunately, EPs are neither adequately informed about the importance of nor receive enough training in the administrative documentation associated with ICD-9 which, incidentally, is so important for both hospital compliance and appropriate billing.

Myth Number Two

Hospitals have their quality Core Measures which are different from physician PQRI (Physician Quality Reporting Initiative) measures.

Reality

Congress and CMS are focused on aligning physician quality measures with hospital core measures. As a result, EPs should expect increasing financial risk if not partnered with their hospitals.

Myth Number Three

If my ED has good customer satisfaction scores and the medical staff is happy with our EPs, our physician group contract with the hospital is secure.

Reality

While the above may have been true for decades, new hospital performance metrics and reimbursement rules are leading to an increasing role of the ED in contributing to a hospital’s financial viability. Examples of these changes include POA (Present on Admission) codes which require that EPs accurately document conditions present at the time of admission from the ED. Failure to do this leads to lost hospital reimbursement and compliance issues.

Another new regulation is the implementation of new Medicare Severity adjusted DRGs known as MS-DRGs. These new MS-DRGs are the first update to the DRG inpatient payment system since the arrival in 1994 of the current severity DRGs. This more complex, inclusive system requires that admitting doctors, including EPs, capture and document both severity and intensity of service indicators. As a result, it is becoming more difficult for hospitals to get paid for admission originating in the ED. The American Hospital Association upon studying the new MS-DRG system is concerned that this new system could result in a $20 billion loss for hospitals over the next five years.

Clearly, EPs need to partner with their hospitals to assure that the hospital is getting paid appropriately for the admissions originating in the ED. The good news is that you can effectively partner with your hospitals and assure that the looming pay-for-performance initiatives and reimbursement changes do not adversely affect your hospital or your contract security. In fact, this is an outstanding opportunity for EPs to become instrumental in the ongoing success of their hospitals. LYNX Medical Systems has solutions and consulting offerings that can help facilitate an appropriate, mutually beneficial partnership with your hospital. Talk to your LYNX account executive about our proprietary software which has been designed to capture the documentation necessary to help hospitals improve appropriate reimbursement for the ED patient care you provide. And LYNX also has nationally recognized experts who can help you negotiate win / win contracts with your hospital that will recognize your important role in appropriate inpatient disposition from the ED.