a healthcare consulting division of vero orthopaedics

A Healthcare Consulting Division of Vero Orthopaedics & Neurology

Business Plan

June 10, 2019

This business plan is being submitted in partial fulfillment of the requirements of Fellowship in the American

College of Medical Practice Executives

Table of Contents

I. Project Summary ……………………………………………………………………………………………………………………………………3

II. Executive Summary………………………………………………………………………………………………………………………………..3-5

The Company

Market Opportunity

Capital Requirements

Mission Statement

Vision Statement

Values

Management

Competitors/Competitive Advantage

Financial Projections

III. Summary Description of the Business…………………………………………………………………………………………………….6-12

Mission

Business Model

SWOT Analysis

Strategy

Strategic Relationships

Key Stakeholders/Key Decision-Makers

Products and Services

Administrative Plan

Operational Plan

IV. Marketing………………………………………………………………………………………………………………………………………………….12-17

Market Analysis/Target Market

Competition

Market Trends

Marketing Strategy

Pricing

V. Financial Documents………………………………………………………………………………………………………………………………..17-19

Financial Needs

Pro Forma Cash Flow

Income Statement

VI. Innovative Elements and Expected Business Outcomes ………………………………………………………………………….19

VII Appendix 1 (Documents Needed for Analysis for new client)/The Core Group Marketing Flyer

Project Summary

Vero Orthopaedics & Neurology (VOVN) is an Orthopedic and Neurological establishment looking to enhance and

develop ancillary service lines of business outside of the usual and customary lines of business. VOVN is the largest

Musculoskeletal group in Indian River County. The practice has been in existence since 1976 and has a stellar reputation

in the community from both a medical and business standpoint. Jennifer Davison, the CEO for Vero Orthopaedics has

been with the practice for 21 years. She currently holds a bachelor’s in healthcare administration and is certified in

practice management through the Medical Group Management Association. She was the Business Office Manager, as

well as, the Director of Operations for several years prior to taking on the CEO role. Her passion for helping smaller

practices in the community started when asked to analyze the revenue cycle of an Urgent Care practice. Smaller

practices face challenges in having the appropriate resources available. Physician practices and healthcare organizations

are experiencing ever-increasing pressures in pursuit of efficiently managing services such as: human resources,

financial analysis, purchasing, compliance, MIPS and Electronic Health Record selection and implementation to name a

few. The Core Group was founded by me and is an extension of my current practice to provide day to day overall

operational management, as well as, financial management and unique expertise to smaller practices in the community.

Executive Summary

The Company

VOVN is located on the East Coast of Florida in Vero Beach. With a vastly growing population, Vero Orthopaedics

& Neurology is only five minutes from the Atlantic Ocean. Vero Beach is home to beautiful coastlines, fishing,

boating, tennis and an overall great family and retirement community. Since 1976, the practice has provided

comprehensive Orthopaedic and Neurological care within the community.

The initial founder, Dr. James Cain, who was a foot and ankle orthopedic surgeon had a vision of providing a

private subspecialized Orthopedic Group to provide quality care to all musculoskeletal areas, as well as, state of

the art treatments to the Indian River County community. His vision quickly became a reality as we grew

exponentially from one physician to fifteen physicians, all subspecialty specific, and developed the ancillary lines

of business to provide a one stop shop for the surrounding patients. Currently the practice has onsite MRI,

Physical Therapy, X-Ray, IV infusion suite, Neurodiagnostics, Durable Medical Equipment and a Dietary program

for our patients. This expansion led to a satellite office opening in Sebastian, FL (approximately 20 miles north of

the current location) so that we can further serve the needs of the ever-growing Indian River County population.

To put it in perspective, the population of Indian River County has grown 183% since Vero Orthopaedics &

Neurology’s inception, and we continue to be the preferred Orthopedic provider in the area. VOVN’s tradition of

excellence and strength in experience has been a cornerstone to the organization as it continues to grow. With

such rapid expansion, the practice has held on to a solid management team for over 20 years with additions along

the way and maintained 25 days in Accounts Receivable throughout its transitions. Collections steadily increase

year after year and staff turnover is minimal.

The Core Group was a concept that began in 2018 when smaller practices began to request consulting assistance

for Revenue Cycle and EMR selection and implementation assistance. Since VOVN had implemented and been on

3

an EMR since 2004 and had done so successfully, we wanted to find a way to offer assistance to the surrounding

smaller practices. Jennifer Davison CEO, began networking with the surrounding practices to discuss what their

current needs were. Working in the healthcare field with VOVN for over 20 years, running a successful practice

and wanting to share the knowledge with others was the beginning of what started the concept of The Core

Group.

Market Opportunity

Current population within Indian River County is 157, 413. As the population continues to increase annually, the

need for more physicians increases. New practices, as well as, mergers and expansions are on the rise. This will

further increase the demand for Healthcare Consulting services in our community. With a current 57% Medicare

population, and the complexity of MIPS, this also opens a market opportunity to assist the surrounding smaller

practices.

Capital Requirements

No capital funding was needed. All infrastructure was in place to get started. Should expansion needs occur there

may be an additional member of the management team salary added to help offset.

Mission Statement

To share our healthcare management expertise with a focus on delivering high quality solutions through aligning

technology and operations with an emphasis on efficiency in financial performance.

Vision Statement

As an extension of our practice, we are committed to providing our clients with a team of healthcare professionals

who combine current industry knowledge and practice experience to create effective practice management

solutions with the highest level of integrity.

Management

The business partners of The Core Group combined provide a wealth of knowledge in the Healthcare industry,

Management Consulting, Operations, Revenue Cycle, as well as IT solutions. Jennifer Davison is the current Chief

Executive Officer of Vero Orthopaedics & Neurology. Jennifer has over 20 years in of healthcare management

experience, holds a Bachelor’s Degree in Healthcare Administration, and is certified through MGMA’s practice

management accreditation program. She is a member of the Medical Group Management Association, the American

Academy of Orthopedic Executives, and currently serves on the Board of Directors for the Bones Society of Florida.

Lindsey Reed is the current Chief Operating Officer for Vero Orthopaedics and Neurology. She holds a Master’s Degree

in Healthcare Administration and is a member of the Bones Society of Florida, as well as, the American Academy of

Orthopaedic Executives. Sandra Katzor, current Business Office Manager, has her coding certification and has been

leading the business office at Vero Orthopaedics for over 10 years. She is well versed in financial metrics, accounts

receivable summaries and payor contracts and credentialing. Jordan Jankoviak, current IT Director, provides a wealth of

knowledge in Network Securities, Server Development, EMR support and program development. Dr. Seth Coren is the

current President of VOVN and serves as the physician director of the program and EMR Champion and trainer within

the practice.

4

Competitors

In Indian River County, there are currently no other practices offering consulting services. The closest competitors would be the larger consulting firms outside of the area such as Doctors Management and ECG Management Consultants.

Competitive Advantage

The company has a competitive advantage as it is linked to a successfully run business which has been in existence

since 1976. There are no other practices in the area that are providing this type of service or who has the

infrastructure to do so.

Financial Projections

Revenue projections based upon clientele

Year 1 Goal – 3 New Consulting Clients

1 New Ongoing Management Client

Year 2 Goal – 6 New Consulting Clients

3 New Ongoing Management Clients

Year 3 Goal - 10 New Consulting Clients

6 New Ongoing Management Clients

5

43000

$15,000 $28,000

$89,000

$20,000

$69,000

$180,000

$25,000

$155,000

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

Annual Revenue Annual Expense Net Income

The Core Group Income Projection

Year 1 Year 2 Year 3

Summary Description of the Business

Mission

The Core Groups mission is to share our healthcare management expertise with a focus on delivering quality solutions

through aligning technology and operations with an emphasis on efficiency in financial performance.

Company Goals:

✓ To provide affordable and quality service to our clients

✓ To maintain professionalism by conducting our business with the highest degree of integrity.

✓ To deliver quality products and services that provide value to those with whom we work, our

associates and clients.

✓ To meet our clients’ needs and to ensure processes are smooth, efficient and transparent

✓ To provide the highest quality in customer service.

✓ To provide our clients with the most technological advancements as possible.

✓ To provide up-to-date current information regarding government legislation and Medicare Incentive

Programs.

✓ To provide revenue cycle management and strength in financial performance.

✓ To provide training and management support with open access for our clients.

Long term goals consist of continuing to build clientele and adding additional services as needed. Continuing

to build a physician liaison service for training and program development.

Business Model

Physician practices and healthcare organizations are experiencing ever-increasing pressures in pursuit of efficiently

managing services and resources. The Core Group is a small specialty-consulting firm formed for the purpose of helping

physicians with Healthcare Management, Government Incentive Programs, Electronic Health Record implementation

and IT services with a specific expertise in practice management and revenue cycle solutions. The Core Group provides a

comprehensive suite of services designed to maximize practice efficiency, while reducing overhead and increasing

revenue. This model is a unique service in the fact that it allows smaller practices to have the resources of a larger

practice while maintaining their independence and saving on costs they would with hiring a larger company to get the

more top-level management and IT support.

6

SWOT Analysis

INTERNAL STRENGTHS

• Years of knowledge in the industry

• Good understanding of Healthcare Management

• Significant IT experience

• Available resources

• Recruitment

• Credentialing

• Contracting

• Financial Management and Compensation strategies

• Revenue Cycle Management

• Electronic Health Record Implementation

• Up-to-date on current legislative issues as well as incentive programs

• Ancillary Service development and implementation

• Marketing expertise

INTERNAL WEAKNESSES

• Staffing resources to start business

• Training challenges

• Time that can be dedicated to projects

• Marketing

• Pricing structure for clients

EXTERNAL OPPORTUNITIES

• Enhance business community relationships to market the service

• Conduct seminars to educate the community on healthcare incentive programs.

• Opportunity to market with small group practices who are interested in EHR but cost restricted.

• Significant need for EHR in the community

• Significant need for practice development

EXTERNAL THREATS

• Increasing complex requirements of government regulators such as CMS and OIG.

• Growth of hospital based employed physicians

• Decreasing Medicare and commercial reimbursements making it difficult for physicians to purchase

additional services.

• Physician slow adoption to trust cloud and modern technology.

7

Strategy

Goal/Objective Action Timeline Desired Outcome

Marketing Create website and develop marketing plan to capture and educate the community about our services

Immediate Capture new business

Customer Service Provide quality services to

our clients. Manage

quantity of clientele so we

can provide excellent

service

Ongoing Doing business with the

highest degree of integrity

Education Continue to stay up-to date

on government legislation,

programs and NextGen

Healthcare should client

choose to be licensed

through VOVN Enterprise.

Ongoing Always be on the cutting

edge of technology

advancements

Implementation

Provide a smooth

implementation transition

for physicians and practices

creating an efficient and

stream-lined workflow and

training process.

Ongoing

Creating an efficient

workflow solution for

practices increasing

revenue and keeping

current with ever-changing

healthcare needs.

Technology Deploy Test environment for demo, production environment as well as NG test environment.

Immediate Delivery system with maximum up time and SLA agreements being met

8

Strategic Relationships

The Core Group is part of Vero Orthopaedics & Neurology which is a mid-size orthopedic and neurology group.

There are two locations approximately 15 miles apart from each other, both serving a different demographic area

one being Vero Beach and the other being Sebastian. VOVN has many relationships with the other provider

practices in the area and plans to utilize those relationships to build out clientele.

Key Stakeholders/Key Decision-Makers

VOVN is comprised of a board of directors of 6 physicians with Dr. Seth Coren being the President and Dr. John

Peden Vice President. They have assigned Jennifer Davison, CEO, as The Core Group President with Dr. Seth Coren

as the acting Physician Director. Her role will be to recruit new providers to the entity and oversee all decisions

both financial and operational.

Products and Services

The Core Group provides a comprehensive suite of services through all phases of Healthcare Management,

Practice Management, Electronic Health Records implementation and optimization, Financial analysis, Billing

and IT. These services include:

EHR

Project Management Workflow Analysis Implementation and Training System Configuration System Customization Go Live Support

EPM

Project Management Workflow Analysis Implementation and Training Report Creation Revenue Cycle Management System Configuration Go Live Support

Healthcare Management

MIPS training and assistance E-prescribing set up Risk Management Policies and Procedure Development Management Consulting Services Billing Revenue Cycle Analysis Human Resources 9

Compliance Start up practice Credentialing Contracting IT Solutions

360 IT Service coverage and consulting Server management Purchasing, planning and budget Cloud management & service Communications (Exchange, spam, etc) Software & Security protection (virus, spyware, intrusion protection Virtualization & Consolidation Administrative Plan

As the Physician Director, Dr. Seth Coren, will work closely with CEO Jennifer Davison on all new physician

practices. Dr. Coren has been a physician in Indian River County for over 35 years and has built several

relationships with surrounding physicians. He is trusted in the community by many. He will be the first point

person for the new physician to speak with. Once initial point of contact has been established and Dr. Coren

outlines Vero Orthopaedics business history and how The Core Group was formed will Jennifer Davison delve into

the first analysis (Appendix 1 contains the Documents Needed for Analysis and checklist). Following this

analysis, a detailed report will be provided to the Physician for review to include a brief financial analysis, and IT

Analysis performed by Jordan Jankoviak, IT Manager, as well as, an executable plan with a detailed contract and

pricing sheet outlining options. Once this has been signed, Jordan Jankoviak, IT Manager, will then analyze the

current IT structure to ensure appropriate access to the system and security measures are implemented.

10

Physician Director

Seth Coren, MD

Lindsey Reed

Chief Operating Officer

Sandra Katzor

Business Office Manger

Jordan Jankoviak

IT Manager and Training Officer

Jennifer Davison

Chief Executive Officer/President

Lindsey Reed, COO, will review the current operations and completed analysis by Jennifer Davison to learn where

the operational inefficiencies are and what enhancements need to be made.

Sandra Katzor will then review the billing and revenue cycle and formulate a plan of action to correct or get them

placed under our billing modules should they so choose.

Vero Orthopaedics Core Group team will assist with all policy and procedure development, HR, group purchasing

analysis and ongoing management for all clients.

Operational Plan

All operations will be run through the parent company Vero Orthopaedics & Neurology. We will work with

NextGen our current EMR/EPM Vendor to enterprise our license out for any clients that would like to utilize our

Vendor for their current system. Since we have been a client since 2004 and are well versed in the system we

would play a fundamental role in training and system development at an affordable price.

We will begin with an advertisement on social media and an email blast to all surrounding physicians. Jordan

Jankoviak will develop a website www.coregroupvero.com so that we can route potential clients there to submit

inquiries. Key milestones as follows:

11

Develop Website April 2019

Second Client May 2019

Strategic Planning Meeting

June 2019

Nextgen Licensing

January 2019

Social Media/Email Blast

Feb 2019

First Client March 2019

http://www.coregroupvero.com/

Possible roadblocks to include:

• Nextgen enterprise licensing taking longer than anticipated.

• Technical resources being limited on the client side making it difficult to provide adequate services should

they need to purchase any capital expenditures for IT.

• Due to Vero Orthopaedics & Neurology’s current growth, there is concern of not having enough resources

to manage clientele should more than one request services.

• Marketing dollars are limited, therefore, we need to rely on social media and email advertising no print

articles will be done.

• Dr. Coren takes a significant amount of time off during the summer months, therefore, t here is concern of

access to him should a new client need him onsite.

Marketing

Vero Orthopaedics & Neurology’s branding is well established in Indian River County. Since The Core Group is an

extension off the current practice we will utilize the same marketing tactics to help grow the business. Our goal is

to ensure our clients’ practices will be treated like our own. The same philosophies we apply in our own practice

is what we will apply to all clientele. Since the practice is known by the community physicians as a leader in the

Healthcare business for over 40 years we will utilize these principles as we market this extension of the practice.

The current practice utilizes S.M.A.R.T Objectives when evaluating marketing strategy and will carry this strategy

with The Core Group.

Specific: Clarifying the who, the what and the when while marketing the services.

Measurable: Measuring our objectives is critical. This instills accountability into all subseque nt decisions and

also guarantees learning as you move forward.

Acheivable: Marketing goals must be achievable and setting aside the commitment to devote the time needed to

these goals.

Relevant: Objectives must be relevant. “Should it be done?” and “What will be the impact?” . Is the objective

aligned with the strategic plan.

Time-Limited: Time constraints are imperative for an objective to be clear, accountable, and achievable.

The Core Group understands the current struggles Independent physician practices are faced with in this era of

medicine. We want to market the ability to ease those fears. To give physicians the tools and guidance needed to

successfully make informed business decisions. Whether it is consulting only or full suite management we want to

provide value in all that we do.

With the rise of social media our first target will be to advertise on Facebook, as well as, establish a Linked In

profile.

Below are samples of the email blast/Social Media blast, as well as, a services flyer we will utilize for Marketing.

12

13

Social Media

Email Blast

Flyer to be distributed

outlining services

Market Analysis

Indian River County is a county located in the Treasure Coast region of Florida. With a population of over 150,000

people, it is Florida’s 7th richest county and in 2000 was the 87 th richest county in the US by per capita income.

Indian River County includes both the Sebastian-Vero Beach area. Both areas continue to grow in population

annually.

As the market continues to expand and grow, more and more physician practices are opening and/or expanding or

recruiting. The Core Group’s target market are as follows:

✓ Physician Practices of all specialties and sizes.

✓ Physician practices in need of assistance with Regulatory Programs.

✓ Physician Practices in need of Healthcare Management Consulting

✓ Physician Practices in need of Financial performance analysis

✓ Physician Practices in need of Revenue Cycle Management

Competition

In the current market, there is no area competition aside from the larger consulting companies outside of the

surrounding area. The larger companies can potentially provide a larger pool of resources than what we can

provide which can be an advantage. The disadvantages to these larger companies are access. The Core Group has

the ability to offer a more hands on personalized approach with direct access to our physician liaison Dr. Seth

Coren, MD, as well as, onsite support when needed.

Market Trends

As the population increases so do the number of physicians. The Indian River County Medical Society is the hub

for physicians in the county. As new physicians and practices join the society, we will partner with the society to

provide new physicians The Core Groups information for assistance.

Market Research

Since provider market research is limited in our area for this type of business, we relied upon evaluating the

current number of smaller private practice, the current growth trends of physicians in the community which

consists of about 2% annually. Since we have had two practices who have reached out to our physicians

requesting an internal analysis be done, we anticipate once we begin to market our services word of mouth will

expand.

Marketing Strategy/Implementation of Marketing

The plan is to utilize limited marketing dollars on advertising The Core Group. Since the practice spends a flat rate

with the current marketing company we will utilize them to create the advertisements. We want to focus on

marketing to Indian River County specifically, with a plan to develop this market in the next five years. Due to our

longtime history, this extension of the practice can be developed into a niche opportunity.

Since we actively do a lot of social media advertising and email advertising, we will continue this extension off of

Vero Orthopaedics & Neurology, as well as, some print materials such as those displayed above to deliver to the

surrounding practices. Furthermore, the development of a website will be a key component to receive secure

inquiries, as well as, a potential practice management blog section.

14

Our implementation focus will be geared towards private practices and our success will depend solely on our

ability to show adequate results and benchmarking success. By providing the local practices with some

transparency of current VOVN metrics this will give them the confidence needed.

Website Development in Progress: (coregroupvero.com)

Marketing Budget/ROI (Annual):

Beginning Balance $3000

Expenses

Flyers $500

Facebook Monthly Advertisement ($75/month) $900

Website Development (performed internally by IT with a Bonus) $1000

Pens (distribute with flyers) $600

_________________________________________________________________________________

Total Expenses $3000

Ending Balance $0

Year 1 : 3 New Consulting/1 Ongoing Management Revenue $40,000

Monthly Revenue $3333.33

Marketing Monthly Dollars $250.00

Total Net (Marketing expense only) $3083.33

15

Pricing

Hourly Rates

• Management Consulting Hourly Rate $125/hour

o Financial Analysis

o Compensation Models

o Marketing

o Risk Management

o Human Resources

o Policy and Procedure Development

o Credentialing/Contracting

• Physician Consulting Hourly Rate $375/hour

o EMR analysis and training

o Dragon Training

• Billing Office Hourly Rate $85/hour

o Training Manuals

o Coding assistance

Flat Rate Options

• Full Day onsite practice overview with analysis $1500 plus travel

• Billing Training Onsite at VOVN $500 per day

• Billing Training Offsite at their location $750.00 plus travel

• Full practice startup - $5000 one-time fee includes:

o Contracts and Credentialing (Medicare, Medicaid, and Commercial)

o Full EMR and Billing setup and advise

o Credentialing support for unlimited payors.

o IT Startup services advise

o Practice Consulting and Administrative support for the payor agreements

• Billing and Practice Administration – NextGen Client Cloud Based

o One-time fee of $5000 for setup

16

o $1500 per month for support and maintenance (no license fee, VOVN has a special arrangement with

NG for licensure. Enterprise license after year 1 paid in full.)

o Billing Services – 3% of total collections (can do tiered levels)

▪ Charge posting, claims submission, EOB posting, denial management, coding and compliance

▪ Guaranteed MGMA Benchmark AR revenue Cycle

Financial Documents

Financial Needs

Since The Core Group is a current extension of Vero Orthpaedics & Neurology, most of the staff are currently in

place. We would need to hire one additional core management team member to assist with the marketing, as

well as, be the front-line person to filter questions or respond to inquiries given.

Since the current structure is in place at VOVN, there would be no need for any large capital expenditure. The

discounted license fees should they request an extension off of our EHR would be paid by the client dir ectly.

VOVN will put an initial investment of $10,000 to start the project with some capital and for marketing.

The current managers involved in the project will be paid separately for any work related to The Core Group.

Hours will be submitted on a monthly basis and be compensated the payroll following the end of the month.

The following aspects will need to be outsourced at the client’s expense: Accounting, legal and building

maintenance, however, The Core Group and VOVN will assist clients with finding the appropriate individuals to

manage these items.

All net revenue will be distributed amongst the current partners of VOVN equally except for Dr. Seth Coren who

would be compensated separately in addition to any distributions for his consulting needs.

Proforma Cash Flow Statement (Budget)

Cash Flow Statement Proforma

The Core Group

For the year ending 2019

Cash at Beginning of Year $10,000

Operations

Cash Receipts from clients $43,000

Cash paid for

Marketing ($3000)

17

General operating and administrative expense ($2,000)

Wages ($10,000)

Net Cash Flow $38,000

Per partner distribution (6 partners) $6333.33

2019 2020 2021 [42]

Sales revenue 43,000 89,000 180,000

(Less sales returns and allowances)

Service revenue

Interest revenue

Other revenue

43,000 89,000 180,000 [42] [42]

[42]

Advertising 3,000 3,500 4,000

Bad debt

Commissions

Cost of goods sold

Depreciation

Employee benefits

Furniture and equipment

Insurance

Interest expense

Maintenance and repairs

Office supplies

Payroll taxes

Rent

Research and development

Salaries and wages 10,000 20,000 40,000

Software 300 300 300

Travel 500 1,000 1,000

Utilities

Web hosting and domains 200 200 200

Other

14,000 25,000 45,500

Net Income Before Taxes 29,000 64,000 134,500

29,000 64,000 134,500 {42} [42] [42]

Total Expenses

Income from Continuing Operations

The Core Group Income StatementProjection for Three Years (2019-2021)

Revenue

Total Revenues

Expenses

18

Essentially the Balance sheet, Break-even analysis and Profit & Loss statement is reflective of the Income Statement and

Cash Flow Statement. Since the current practice is in in place the revenue far outweighs the expenses due to the

current infrastructure already being in place. Expenses strictly consist of Marketing, Salaries and any travel related

expenses for conferences and or outside of the area referrals. The board will need to decide if they will run this through

the current compensation model or create a separate LLC versus a DBA.

Since the current Vero Orthopaedics business history is strong, we will apply the same philosophies to The Core Group

extension.

Innovative Elements and Expected Business Outcomes

The current challenges physician practices face in this era of healthcare are ongoing. Smaller practices lack the business

resources necessary at times to operate efficiently making it difficult to sustain financial viability. The ability to have a

larger pool of resources and analytics available will only add value to the smaller practices. Assisting them with added

ancillaries, new innovative ideas, MIPS, EMR selection, billing, and financial metrics to name a few will not only enhance

their business outlook but give them the tools needed to succeed.

One challenge imposed during this process are the anticipated expenses for additional layers of security that may be

needed to protect the other practices information and patient data should they choose to be an extension of our current

system. Another challenge would be resource allocation. Due to Vero Orthopaedics & Neurology being such a busy

practice a concern would be the ability to provide the needed services timely and efficiently for the other practices. In

order for The Core Group to succeed we need to allocate resources appropriately within the current practice to enable

the additional load of clients. To offset this, we would be selective in how many clients we take on at a time to ensure

we deliver the best service we can.

In order to proceed with this action plan, we will have a planning meeting with the current administrative team

members of Vero Orthopaedics & Neurology and begin outlining a plan of action. Roles will be defined, and tasks added

to a spreadsheet to complete prior to launching. Once this is in place, a meeting will be held with the current Board of

Directors of Vero Orthopaedics & Neurology to review the business plan, identify the key members and review resource

allocation and financial proformas.

Documents Needed for Analysis

1. Annual income and expense statement and balance sheet for last two years plus YTD

2. Computer printout or manual summary of physician productivity reports on procedures

and services performed

3. Copy of fee schedule

4. Listing of employees, their wages, hours they work per week and position title and date of

hire.

5. Compliance policy

6. Report on charges, adjustments and receipts for last two years and year to date

7. Copy of encounter form (charge ticket, superbill)

8. Any patient satisfaction surveys and results

9. Any previous consultant reports, auditor reports or health care plan evaluations

10. Report on payor mix of practice

11. Accounts receivable aging report

12. Personnel policy

13. Job descriptions

14. Any written policies and procedures

15. Office forms, clinical forms and sample of medical chart

EMR/EPM Software

Areas to Analyze Retrieving Information Ranking & Comments

1 Compliant 2 Marginal 3

Deficient

Copy of agreement with

EMR/EPM vendor.

Rank:______ Comments:

What is the relationship

between software and

intermediary?


Once chgs posted, is the fee

automatically adjusted in

computer according to payor?


Who is the clearinghouse the

software program uses?

Are claims scrubbed prior to

being transmitted.

Is the practice currently set up

for Digital Radiography or

Computerized Radiography?

Does the EMR/EPM vendor do

the billing and if so what is the

percentage?

Patient Information & Scheduling



Deficient

Lobby Image: neat, clean,

comfortable, magazines, TV, etc


How does the receptionist greet

the patient?

Is there eye contact? Smile? By

name? Professional appearance?


How is the back office notified

that the patient has arrived? Is

it an efficient method?


Patient arrives, signs in. Take

10 patients and check waiting

time in lobby.


What is the policy on patients

arriving late


Are the forms prepped and

ready for patient to be seen by

provider?

Who preps the items needed for

physician?





Deficient

What is length of time for new

patient to be scheduled for

appointment? Is it beyond 1-2

weeks?

.


Are patient info pulled the day

before appointments with a

copy circulated to other staff?


Are there protocols for

receptionist on how to schedule

patients based on their reason

for visit? How complete are

they? Are there triage policies?


Are policies and procedures

explained to patients when

calling for appointment? Are

they asked to bring insurance

verification? Are they told

some payment, co-payment or

deductible required? Are they

given directions to the office?

.


What is the average waiting

time for patient to be seen by

doctor from the time they come

into the office? Does it exceed

15–20 minutes?


Does the office see patients

consistently after regular office

hours requiring staff overtime?

.





Deficient

Do the physicians, nurse

practitioners and physician

assistants begin seeing patients

on time as scheduled?


How does practice record and

handle cancellations, no-shows

and walk-ins? Is there

documentation and patient

follow-up?


Do appointment scheduling

protocols allow for adequate

number of patients to be seen

based on patient visit industry

norms by specialty?


What are procedures for after

hours emergencies? Does

system provide adequate

communication to patients?


Do office staff request updated

information from established

patients – change of address,

insurance coverage,

employment, etc.?


Are employees reviewing

appointments aware of


managed care requirements

and protocols?

Does office have appointment

reminder system?

.





Deficient

Is there overbooking or double

booking appointments causing

delays?


Does physician notify office

when he/she will be running

late for office appointment so

patients can be advised?


Is there a patient recall system

based on health care follow-up

needs?


Are there adequate protocols

for staff regarding patient calls,

prescription refills, phone

messages and handling urgent

calls?


Do patient registration

procedures consist of

completion of patient

information form, authorization

for medical records, assignment

of benefits, and health history

form completion?


Is there a clear procedure for

patient checking out of office by

seeing receptionist/cashier?


Are all patient questions

answered regarding billing and

insurance?


Patient Billing, Collecting & Fees


1 Compliant 2 Marginal 3 Deficient

Are all charges and

payments posted daily?

.


Are co-payments and

deductibles collected at time

of service?


Does office staff have written

procedures or scripts to use

for effectively requesting

patient payments in person

and by phone?


Does staff obtain insurance

verification for new and

established patients?


Does billing encounter form

include up to date CPT &

ICD-9CM codes for

procedures and diagnoses

pertinent to practice

specialty?





Deficient

Are statements on accounts

outstanding sent consistently

on billing cycle, at least

monthly? Are there written

procedures for handling

accounts 30 – 60 – 90 – 120

days old?


What percent of total accounts

receivable are 30 – 60 – 90 –

120 and how do these

percentages compare to the

norms in the industry for this

specialty?


What is system for retrieving

information on charges for

hospital and other out of office

services by provider?


Are insurance claims processed

at least 2 – 3 times a week?

Are they reviewed for amount

paid, denials, under payments

and rejections?

Timely submission and follow-

up procedures by staff?

Adequate staff for keeping up

to date?


What are reasons for denials?

Coding errors? Electronic

claims utilized for carriers that

have capability?





Deficient

Does practice have good claim

appeals procedures? What

result does practice get? 50 –

70% favorable appeal on

incorrect payments?


Does practice use all

capabilities of its computer

billing software? Is staff

adequately trained to utilize?

Software updated with multiple

fee schedules and capability to

track managed care plan

payments?


Does practice have the most

recent CPT, ICD-10CM &

HCPCS reference books for

coding? Does computer

software have updated codes?

Are there organized files on

insurance carrier

requirements?


Is timetable for collection steps

followed? Does staff have

guidelines and scripts for

collection phone calls and

collection letters that adhere to

state regulations regarding

collecting?


Are changes in rules and

regulations on third party

payments and contracts

monitored and communicated

to staff?





Deficient

Are credit card payments

accepted by practice and

encouraged? Is payment plan

arrangements setup for

accounts with large balances or

those needing assistance?


Are refunds, discounts and

other adjustments to patient

accounts posted and approved

daily?


What level of training and

experience does billing staff

have on coding? What

education programs attended?

How often? Is extensive

attention given to procedure

and diagnosis coding?


Are HCFA 1500 claim forms

completed accurately by staff?


Are there clear and consistent

policies on adjustments and

write-offs? Does staff follow

policies timely?





Deficient

Does office have complete fee

schedule for services by CPT

codes? Is this updated

annually? Has there been a

complete fee schedule analysis?

Are fees within the norm and

competitive? Does practice

have multiple fee schedules of

carriers? Are they updated?


How do fees compare to

Medicare fee schedule?


Does practice have up to date

fee schedules from health care

plans?


Has practice analyzed it’s

discounted fees with managed

care plans?


Are physicians and providers in

the practice charging correct

level of service fees for

treatment given?


Are fees for all ancillary

services (lab, diagnostic testing)


being charged and recorded on

patient encounter?

Financial Management



Deficient

Does practice monitor and

review expenses monthly? Who

reviews and what information

reports are generated?

What is practice’s overhead

(non-physician expenses as a %

of total collected revenue)?


Are expense categories –

personnel, supplies, rent,

utilities, etc. – measured as a %

of revenue? How do these

percentages compare to the

norm for the specialty?


Are deposits made daily or a

lock box utilized?


Is there more than on person

who receives mail-in payments,

onsite cash payments and

makes deposits for the practice?

Is there daily reconciliation

manually or by computer?

Is there a record of checks and

cash received daily and

compared to deposits? Are

employees handling money

bonded?


Are bank statements

reconciled? By Manager or

physician? Are credit balance

refunds verified and approved?





Deficient

Are accounts payable up to

date? Are there vendor files

with invoices and payment

records? Are all checks in

check register accounted for

and monitored?


Who has check writing

authority? Are there

supportive documents for check

writing? If signature stamp

utilized, is it secure?


Is there a system to account for

all voided checks?


Is chart of accounts used set up

by accountant or similar to

MGMA standards?


Are pre-numbered purchase

orders and checks used?


Is there system for controlling

petty cash? All expenditures

itemized with receipts and

reconciled?





Deficient

Do physicians and manager

review the following at least

monthly: financial statements,

total collections, accounts

receivable, write-offs,

adjustments and expense ratio?


Does the practice have an

annual cash budget? Has

manager or accountant

prepared cash flow analysis?

Are capital equipment needs

planned and budgeted?


Is there an inventory control

system – manual or

computerized? Are there

policies to avoid over ordering?


Are purchase orders used?

Who has authority to purchase

and is there a limit to the

amount authorized?


When supplies are delivered to

practice, are packing slips

checked and matched to

invoices?


Does practice take advantage of

any group purchasing

arrangements for discount

pricing? Are vendors pricing

compared periodically by

manager?





Deficient

Does office maintain an

inventory list of equipment and

furnishings? Does accountant

have up to date list and

depreciation schedule?


Is the practice’s bank statement

reconciled monthly?


Does practice conduct any type

of business planning annually?


Does practice have contracts,

leases, agreements, employee

contracts and corporation

papers in organized filing

system?


Are there proper tax reporting

systems and filing?


Does practice’s financial

statement and balance sheet

reflect cash flow problems or

extreme liabilities?


Is practice taking advantage of

discounts and avoiding late

payment charges on bills due?


Compliance & Risk Management



Deficient

Does practice follow informed

consent with forms or

guidelines indicating what is

discussed with patient

regarding their treatment and

procedures performed and the

risks involved? Are discussions

and decisions noted in medical

chart?


Are office lab and x-ray licenses

displayed?


Is complete malpractice

insurance in effect for providers

and the practice?


Does office have policies on

release of information and

confidentiality of medical

records? Are authorization

forms signed and dated?


Does the office routinely inspect

and maintain equipment?


Is there a written OSHA policy?

Are all staff trained for OSHA


requirements? Has there been

correspondence from OSHA?

Do they know how to respond to

OSHA inspection?

Compliance & Risk Management



Deficient

Is there a complete written

compliance plan for the medical

practice covering the 7 key

elements of HCFA

requirements? Who is

compliance officer?


Is there a system to periodically

audit medical charts and

charges for compliance?


If office has in-house lab, does

it comply with CLIA

requirements? Is there a

certificate posted?


Are there quality assurance

procedures and policies

regarding patient care? Does

practice adhere to managed

care plan requirements for

quality assurance?


Is there a policy to report and

resolve patient complaints?

Are there written standards?



Are notices of privacy practices

(HIPAA) provided to patients?

Is notice posted in office? Are

authorizations obtained for

disclosure of protected health

information for non-routine

requests? Are signed

agreements being obtained

from all service vendors of the

practice? Have all employees

been oriented to HIPAA

policies?

Do employees sign a

Confidentiality Statement and

is it located in their personnel

record?

Personnel Management



Deficient

Are there written personnel

policies? When last updated?

If not written, are there

enforced policies on vacations,

holidays, sick leave benefits,

employee evaluations, salary

increases, overtime,

attendance, training,

grievances, employee conduct,

personal calls, smoking,

bereavement leave, safety,

termination, discipline,

breaks, employee and patient

relations, adherence to

compliance rules, patient

confidentiality, non-

descrimination, workers

compensation and safety?


Are there written job

descriptions? Do they need

updating? Applicable to

present employees?


Are there adequate employees

based on number of physicians

and providers? Is practice

overstaffed?


Compare the practice’s number

of employees to full time


physician ratio with industry

averages.

Is employee turnover a

problem?





Deficient

Are new employees given

structured orientation and

training? How is training

handled and evaluated?


Do employees receive

continuing education

throughout each year such as

coding, billing techniques,

insurance processing, clinical

skills for nursing or other

business training for manager

and other front office

employees?


Are employee salaries and

benefits competitive to area and

appropriate to position and

responsibilities? Compare

salaries to industry averages.


Is receptionist and nurse

pleasant and helpful to patients

and visitors in the office?


Are personnel records in order

– payroll, taxes, documentation

of employee evaluations,

grievances; employment laws


followed regarding wage and

record keeping?

Are employees given timely

performance evaluations?





Deficient

Are there regular

manager/employee meetings

and manager/physician

meetings? Are meetings

effective?


Are any employees performing

duties that should be performed

by another position?

Example: Nurse doing what

nurse assistant or clerks should

do. Physician doing tasks that

nurse should do.


Are employees given cross

training?

Example: Can nurse, billing

person or medical assistant

adequately fill in for

receptionist at front desk?


Does office have time cards,

time clock or written

verification of employee hours

worked?


Is there excessive overtime? If

so, what are reasons?


Are employees aware of the

supervisory relationships, lines

of authority and decision

making within the practice? Is

there an organization chart?

.


Medical Records



Deficient

Does the practice have medical

chart filing system that is

standard for the medical

practice industry? Do charts

contain patient information

forms, progress sheets, history

forms, authorizations and

correspondence?


Are charts durable and have

alpha or numeric labels for easy

identification plus year

stickers? Are charts on shelf

easily accessible for staff?


Does medical record

documentation follow a SOAP

or similar system? Are records

hand written legibly or dictated

by providers?


Do medical records show the

following: patient name and ID

#, all entries dated, lab and x-

ray results and interpretation,

a problem list, allergies noted

are displayed, appropriate past

medical HX shown, pertinent

history & physical exam,

evidence of patient education,

provider ID # is shown,

standard medical abbreviations

are used and consent forms?


Medical Records



Deficient

Are medical charts purged

every year as active or inactive?


Are charts refiled daily, are

they scattered around office?


Does practice follow strict

procedures on obtaining

authorization for release of

records?


Are the medical forms printed

clear and up to date with

industry standards or are they

vague and very old with little

information requested?


How long are records stored

and are they secure and

confidential?


Does the practice adhere to

managed care organization

requirements for a medical

records system?


Has there been an audit by

outside source and if so were

any deficiencies corrected?


Patient Relations, Marketing & Managed Care



Deficient

Are all patients greeted by

receptionist as they enter

office?


Does practice have updated

patient information brochure

outlining policies and

procedures for answering

routine questions?


Does practice participate in

community events to promote

practice?


Does practice provide patient

education handouts?


Has there been a patient

satisfaction survey conducted?

If so, what were results?


Are newspaper ads, yellow page

ads, t.v., radio and direct mail

ever utilized to promote

practice?


Are thank you letters or calls

made to patient referral

sources?


Does practice participate in all

essential managed care plans in

the area? Should some be

added or deleted?





Deficient

Does manager/staff evaluate

feasibility, discounts, services

provided, costs, benefits, pros

and cons of plans? Is there

evidence that any plans are

detrimental?


Has practice adapted to

increased patient volume from

referrals?


Is there a completed manual or

notebook on each plan’s

requirements that is easy

reference for staff? Are all

correspondence on plans kept

with reference books? Is there

a summary of plan

requirements that gives basics?


What are office hours and

employees work schedule? How

do they compare to the norm for

this medical specialty?

Does practice have extended

hours to accommodate patients

– evenings or Saturdays?


Does practice have adequate

patient education with

materials and staff services? Is

there health prevention

counseling?





Deficient

Does receptionist answer phone

in friendly manner? Evaluate

phone skills and staff/patient

interaction.


When patients are referred to

other providers, does practice

assist patient with complete

information? Do they follow up

with provider referred to?


How are patient complaints

reported to manager and

physicians?


Have there been any training

programs for employees on

patient relations or managed

care plan requirements?


Does practice have capability to

gather information on

capitation patients and costs to

monitor revenue?


What is patient profile of the

practice – by age, sex,

Medicare, Medicaid, self-pay

and demographics? Is it typical


of specialty or does practice

need to change?

Are patients placed on

telephone hold excessively? Are

patients satisfied with voice

mail or perturbed?


Facility & Equipment



Deficient

Is the office size adequate? Are

there at least two exam rooms

per provider, preferably three?

Is the waiting area

accommodating or crowded? Do

patients move through the

office with ease?


Is the waiting room clean,

organized, uncluttered, good

lighting, attractive furniture

and décor, music or TV and

plants? Is there good selection

of current reading material?


Are clinical exam areas

comfortable or cold and sterile?

Is there a sense of privacy in

exam rooms? Can staff voices

and comments be heard

through walls, hallways or from

open reception areas into

waiting area? Acoustic

privacy? Are there clothes

hooks, mirror and cloth/paper

gowns?


Is there separate billing check

out area and private area to

review financial policies and

discussions?


Does exterior office have good

signage, landscape maintained,

easily accessible and adequate

parking?





Deficient

Is the facility safe? Is there fire

inspection report and are

extinguishers inspected?


Is office accessible to handicap?

If large practice, does office

adhere to ADA?


Is there adequate space for

billing and insurance

processing? Are work areas

conducive for analytical work?


Does office have security

system? Are drugs/narcotics

kept locked? Are medicine

samples stored out of reach to

patients?


Does the lab area and employee

lounge appear neat and clean?


Does the office have a signal

system or signs to alert staff on

status of patients in rooms? If

not, what is system for patient

flow?


Does facility have up to date

computer system and software?

Is system efficient for business

and clinical staff?





Deficient

Does practice have service

contracts on major equipment?

Is there any equipment that is

considered obsolete? Is any

equipment under utilized?

Does the practice lack any basic

equipment or furnishings?


Is there adequate telephone

system? Are patients getting

busy signal? Is voice mail

system needed? Additional

phone lines needed?


Does the office have adequate

housekeeping and maintenance

of interior and exterior of

facility?


Is there adequate storage and if

not, does it affect operations?


Are there some general

procedures for emergencies or

evacuation presented to

employees?


Are office employees prepared

for an OSHA inspection or is

retraining required?


Financial & Productivity Indicators

Indicator

Total

Gross

Charges

Medicare Charges

Percentage

Medicare charges

÷ Total charges

Medicaid Charges

Percentage

Medicaid charges

÷ Total charges

Capitation

Percentage

Capitation charges

÷ Total charges

HMO/PPO

Percentage

HMO/PPO charges

÷ Total charges

Self Pay &

Commercial %

Self pay insurance

Charges

÷ Total charges

Lab Charges

Percentage

Lab charges

÷ Total charges

X-ray Charges

Percentage

X-ray charges

÷ Total charges

Adjustments

Percentage

Adjustments

÷ Total charges

Types of

Adjustments %

Total adjustment

amount by type

÷ Total adjustments

Charge Per

Encounter/Visit

Total charges

÷ Patient visits

Hospital Gross

Charges Percentage

Hospital gross charges

÷ Total charges

Office Gross

Charges Percentage

Office gross charges

÷ Total charges

Gross Collection

Percentage

Gross collections

minus refunds

÷ Total gross charges

Total Annual Net

Collections

(Receipts)

Net Collection

Ratio

Collections–refunds

÷ Charges–

adjustments

Total Accounts

Receivable

Accounts

Receivable Change

Accounts

Receivable Ratio

Total A/R

÷ Average monthly

charges minus

adjustments

Cash Collection

Ratio

Collections at

time of service

÷ Total gross charges

A/R 90 days & Over

Accounts outstanding

90 days & over

÷ Total A/R

Average Days

Receivable

Total A/R

÷ Average per

day charges

Over the Counter

Collection %

Collections onsite

÷ Total collections

Total Number &

Amount of All

Outstanding

Accounts Sent to

Collections

Bad Debt

(write-off) %

Bad debts

÷ Total adjusted

charges

Average Collections

per Office Visit

Total collections

÷ Total office visits

Total Collections

per FTE Physician

Total collections

in practice

÷ Number of FTE

Physicians

Managed Care

Income %

Managed care income

÷ Total practice

collections

Managed Care

Encounters per

Member

Total MC patient

visits

÷ Average # per month

Gross Collection

Ratio per Health

Care Plan

Collection from plan

÷ Gross charges

from plan

Contractual

Adjustment Ratio

by Health Care Plan

Bad Debt Ratio by

Health Care Plan

Total Capitation

Payments per

Member per Month

Indicator

Other Income

Net Income

Percentage

Income – expenses

÷ Charges

Profit Margin

(Income – expenses)

÷ Operating revenues

Return on Equity

Net profit

÷ Total equity

Return on

Investment

Net profit

÷ Total assets

Debt/Equity Ratio

Total liabilities

÷ Total equities

Current Ratio

Current assets

÷ Current liability

Debt Ratio

Total liabilities

÷ Total assets

Accounts Payable

Ratio

Total A/P

÷ Average daily

purchases

Number of Office

Visits

Number of New

Patients

Hospital

Admissions per FTE

Physician

Physician Office

Visits per Hour

Office Hours

Employee Costs as a

% of Total

Operating Costs

Employee salaries &

benefits

÷ Total costs

Employee Absentee

Rate

# of hours

Employee absent

÷ Hours employee

scheduled

No-Show Rate

# of no-shows

÷ # of appointments

scheduled

Accounts Receivable Summary

Accounts Receivable as of __________________________

Age Amount ($) Percent (%) of Total

0 – 30 days

31 – 60 days

61 – 90 days

120 days +

TOTAL

100%

Elements of Medical Practice Compliance Plan

1. Policies and procedures plus a written code of conduct

2. Designation of a compliance officer

3. Effective employee training

4. Method for employees to report wrongdoing

5. Conducting a periodic audit on performance of billing claims

6. Methods to enforce and discipline violators

7. Plan of activities to correct any offenses