Gastroenterology practices and endoscopy centers still have the opportunity to profit, but margins are shrinking and challenges continue to arise as the healthcare industry is reshaped. The most successful practices and centers will have efficiency to ensure every dollar counts down to an art.
Top concerns in 2015
Bloated healthcare spending has yet to be effectively curbed. Gastroenterology is driven by procedures performed, and the demand and volume of these procedures has made the specialty the focus of potential cuts. “The biggest financial concern for gastroenterologists is substantial payment cuts to colonoscopy reimbursement. Colonoscopy performed for colon cancer screening and polyp surveillance is the main driver of gastroenterologist’s income,” says Rajeev Jain, MD, AGAF, chair, AGA Institute Practice Management and Economics Committee.
Lower GI/endoscopy codes, including colonoscopy, were up for CMS review this year, but through advocacy efforts led by the sister GI societies the review and subsequent revaluing of the codes delayed the review until next year. Reimbursement for these procedures will be maintained at CY2014 levels. But, the shadow of potential cuts still loom.
Reimbursement cuts are top of mind for gastroenterologists, but the shifting nature of practice patterns is also cause for concern. “The next greater threat is narrow networks, which can deprive practices of patient flow,” said Dr. Jain. Narrow networks, whether created by health systems or payers, are exclusive by nature. For those gastroenterologists naturally within the fold of such a network could benefit, but many physicians will be shut out.
Fine-tune financial operations
Change is endemic to healthcare. Rather than balk at change, create processes that optimize the practice’s position. “Gastroenterology practices need to start with well-negotiated contracts. Next, patient referrals need to be optimized to keep the clinician’s schedule full. Most importantly, offices need to accurately assess and collect co-pays and deductibles at or before time of service,” says Dr. Jain. Assess the practice or endoscopy center’s financial health and address any ailing areas of revenue cycle management.
If reimbursement cuts do come to pass, healthy revenue cycle function will soften the blow. Streamlined financial operations will ensure no money is left on the table and put dollars collected to maximum use.
Analyze market relationships
In 2013, nearly a quarter (24 percent) of gastroenterologists were participating in accountable care organizations and an additional 10 percent planned to join one, according to a Medscape report. ACOs, one of the more prominent narrow network models, may not have an immediate financial impact on GI practices and centers, but if they continue to proliferate referral patterns will shift and gastroenterologists could see their patient population drastically shrink.
Joining an ACO could integrate gastroenterology into a larger system of care. Gastroenterologists may be afforded the opportunity to be a voice for their specialty. If ACO participation is not viable, gastroenterologists would do well to strengthen their relationships with their referral sources: primary care physicians. Understand where these physicians stand in the market and prepare for any changes that may be made in their practice model.
Cut costs
While contract negotiation and collection policies can ensure everything owed for services rendered is received, financially efficient practices will create internal policies to improve cash flow. “As with other industries, GI practices will need economies of scale to be efficient, provide high value care, and remain economically viable and independent,” says Dr. Jain. “Endoscopy centers will need to combat margin compression by optimizing staffing and controlling supply costs. Endoscopy centers can use group purchasing organizations to control supply costs and outsource human relations and payroll functions to minimize overhead.”
Look inward for innovation
GI practices and endoscopy centers are only as good as the teams that lead them. Look to these teams for input and ideas; they will often have suggestions that could not only improve day-to-day operations, but also save money. “Our endoscopy center has invested in homegrown technology to automate scheduling, billing and collections. These back office technologic improvements enhance our balance sheet while not interfering with the quality of the care provided,” says Dr. Jain.