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Investing in the Business of Medicine

Becoming a physician is a lengthy process, including completing a four-year undergraduate program and four years in medical school, followed by three to seven years in a residency program. Once finishing those steps, though, he or she is never done with continuous education and learning more about being an M.D.

Physicians are continually bolstering their education, whether it be through patient care or studying new medical research. Unfortunately, a sizable number of graduating doctors previously got little to no training in medical school about the “business of medicine.” Basically, this term refers to the financial and operational side of healthcare. Think medical billing and coding, relative value units (RVUs), payment models and employment contracts.

As more doctors deal with high stress and even higher student debt, however, there’s been a shift toward ensuring medical students and residents procure training in what the American Medical Association (AMA) calls “healthcare economics.” This includes topics such ascost-effective use of services, practice management and risk management, modes of practice and quality assurance and strives to ensure “young doctors can effectively navigate a rapidly changing payment system.”

The American Osteopathic Association (AOA) recommends five things every physician can do to better understand the business of medicine:

  • Get involved by joining a committee in your hospital. 
  • Make connections, and don’t be afraid to ask questions.
  • Consider an advanced degree and/or a certificate (i.e. master of health administration).
  • Brush up on coding and billing procedures.
  • Educate yourself.

Practical Knowledge for Practicing Physicians

The suggestions offered by the AOA offer practical advice for medical students, residents and practicing physicians. For this blog, though, we’re delving deeper into some specific areas for doctors interesting in learning more about the business of medicine, including physician payment models, basic coding rules and regulations and compensation.

Physician Payment Models

Codes encompass a major part of how many doctors get paid by their employer(s). A key facet of codes in physician payment models is the resource-based relative value scale (RBRVS). Essentially, the RBRVS breaks down the total cost of providing a particular physician service into three components. These elements are expressed in RVUs, which account for on average the cost of each service.

As we discussed in a previous blog[HM1] , work RVUs represent about 50.9 percent of the total RVUs for each service, practice expense RVUs represent about 44.8 percent and the expense relative values of professional liability insurance (malpractice) RVUs amount to approximately 4.3 percent of the physician fee schedule payment. To convert an RVU fee schedule into dollars, the total RVU of a given service is multiplied by a conversion factor, which for CY 2020 is $36.09.

Coding Rules and Regulations

The World Health Organization (WHO) created the International Classification of Diseases, a diagnostic tool utilized globally for epidemiology, health management and clinical purposes. All codes in ICD-10, the tenth revision of ICD, have full descriptions. In 2020, there are a total of 72,184 codes, with 490 new ones planned for 2021.

Although coding rules initially appear complex, they can be mastered with practice, and they offer a useful tool for physicians who want to “self-audit” their work, especially for compensation purposes. The goal of coding is to achieve efficient documentation and, more importantly, patient care.

How a patient is classified is another crucial part of correct coding. There are specific rules for whether someone is categorized as a new or returning patient. A new patient is one who hasn’t received professional services from you or a member of your group in any location (e.g. hospital) in the past three years. For example, an established patient that has not been seen by you 2015 would be considered a new patient. Conversely, a returning patient is one to whom you or another physician in your group have provided services, including inpatient hospital consultations.

A few points to remember in patient classification include:

  • The location or type of the service does not matter.
  • Your group is defined as those physicians with the same Medicare billing group identification in the same specialty. 
  • If you’re billing a patient who hasn’t been seen before or was seen more than three years ago, you must fulfill new patient documentation guidelines.

Compensation

Physician salaries vary widely depending on geographic location, specialty and years of experience. It’s up to you as a doctor to convince your prospective employer that you’ll be sufficiently productive and cost-efficient to justify your desired level of compensation. Plus, it’s essential that you understand the compensation formula your employer will use to calculate your salary and incentive pay.

Because payment based solely on salary is unusual beyond a physician’s first year of employment, the methodology and variables for calculating incentive payments usually determine the attractiveness of the offer. Most incentives tied to productivity often are defined in terms of RVUs, charges and net or gross collections. Occasionally, other performance variables – patient satisfaction, utilization, quality improvement measures – are added to reflect patient satisfaction. As a physician, it’s important for you to analyze which of the incentive variables are beyond your control (i.e. net collections).

Understanding your employment contract and the benefits it includes also is pertinent because it plays a key role in determining the value of an offer. Physician benefits may include health, dental, vision and malpractice insurance; sick leave and vacation time; retirement and disability plans; professional membership duties and reimbursement for continuing medical education (CME); student loan repayment; and a signing bonus.

maxRVU: The Go-to Patient Encounter Platform for Residents

Three-fourths of the physicians who took part in our Healthcare Professional Survey respondent that they would have preferred more training on the business of medicine during their residency. Our maxRVU Charge Capture solution helps physicians track patient encounters at point-of-care and supports residents by helping them learn proper coding techniques that correspond to their specialty. It’s also a practical tool for better understanding CPT codes and tracking RVUs associated with them to estimate probable reimbursement levels.

Download our Business of Medicine webinar for more information on this topic. Or, start your free trial of maxRVU to start practicing on the go-to residency patient encounter platform.

  • LoneStar Orthopedics

    Being a physician assistant, I see a lot of patients in and out of the hospital. Keeping track of each charge sheet was immensely tedious and I’m pretty sure I lost a few of them. Ever since I started using maxRVU, I haven’t forgotten or lost a single charge. My biller even told me I’m coding more accurately which I think is because I can submit the session right after it happens, rather than waiting like I used to.

  • University of Louisville – Neurosurgery

    The Neurosurgery group at the University of Louisville were in the market for a better way to track individual RVUs for each physician; on top of ensuring every patient encounter was sent to the biller (including the unscheduled ones.) maxRVU became their quick and easy solution to a complex problem, and they’ve never looked back.

  • University of South Alabama – Mitchell Cancer Center

    Obviously I am a big fan of maxRVU. Very user friendly. Y'all have developed an impressive service.

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    maxRVU helps take a worrisome task and turns it into a pretty simple task I don’t worry about. I love that I can scan the patient labels to capture patient information.

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    The customer service has been super responsive and open to my ideas and suggestions.

  • Park Ridge Health

    My first two months after starting to use maxRVU were my two most productive months by far. My office assistant also loves it, and it makes it very easy for her to submit charges. Thanks!

  • ENTiCare

    I enjoy using the program and the main advantage for me has been more accurate procedure coding and wireless real-time communication with my biller; that has resulted in significant reduction in the time needed to process and submit claims.

  • Texas Brain & Spine

    I am very happy with the product. I like the layout and some of the latest features such as bundled codes and scanning of patient information.

  • Lone Star Orthopedics

    maxRVU has helped me streamline my patient billing…no more paper notes stuffed hastily in my pocket or a stack of superbills with hastily scribbled notes for my assistant to interpret. Most importantly, I am recovering all missed billing opportunities and getting insurance payments faster.

  • Atlantic Neurosurgical and Spine Specialists

    I previously relied on a cumbersome system of facesheets, patient stickers, and notecards to track my patient encounters leading to lost revenue. I discovered maxRVU to streamline my billing sessions and this program is incredible.

  • LoneStar Orthopedics

    We looked around and found solutions costing almost twice as much with the added cost of support. We're a midsize group and the savings with maxRVU made our decision a no brainier.

  • The Women's Cancer Center

    maxRVU has been a great tool for communication between our gynecologic oncologist, who spends 3.5 days per week in the operating room, and our billing/coding staff.

  • Austin Cancer Center

    With maxRVU we were able to reduce time to bill from weeks to days from the very start, while getting more visibility on our hospital activity.

  • Dr. Baolien Tu

    I appreciate very much all of the hardwork that you have put into upgrading and adding new features to the app. I have not purchased any app (game or productivity) that brings me as much satisfaction as maxRVU. BaoLien Tu, M.D

  • RPG Logo

    Thanks, as always for your prompt attention! It’s the one thing that I value most in our partnership with maxRVU. You really deliver on customer service.

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