mgma datadive better performers performance and …

S E P T E M B E R 2 0 2 0

PERFORMANCE AND PRACTICES OF SUCCESSFUL MEDICAL GROUPS

M G M A D A T A D I V E B E T T E R P E R F O R M E R S

A N M G M A D A T A R E P O R T

Table of ContentsIntroduction3ldquoGood management is timelessrdquo4 By David N Gans MSHA FACMPE senior fellow industry affairs MGMA

Benchmarks7bull Provider compensation and productivity7bull Accounts receivable (AR)8bull Practice expenses and revenue8

Practice profiles9bull Missoula Bone amp Joint LLC9

By Christian Green MA writereditor MGMA

bull Charleston Allergy amp Asthma11Resources12

ABOUT MGMAMedical Group Management Association (MGMA) is the premier association for professionals who lead medical practices Since 1926 through data people insights and advocacy MGMA empowers medical group practices to innovate and create meaningful change in healthcare With a membership of more than 58000 medical practice administrators executives and leaders MGMA represents more than 12500 organizations of all sizes types structures and specialties that deliver almost half of the healthcare in the United States

mgmacom

2copyMGMA All rights reserved

Introduction ldquoIf yoursquore the smartest person in the room yoursquore in the wrong roomrdquo

This is the guiding philosophy behind the MGMA Better Performers dataset Benchmarking can show your practice is doing well but fully realizing its potential mdash what it could be mdash is a step beyond

After MGMA evaluated 3864 organizations 1036 of them stand out above the rest in at least one of four categories

Running a business especially in healthcare is not easy With this dataset itrsquos important to remember that these examples are the exceptions not the rules But if you are in a position where you can actively commit to advancing excellence this dataset is your North Star

This report in addition to presenting industry benchmarks for successful medical groups offers frontline insights into how many of these organizations have tackled the challenges of the COVID-19 pandemic to get back to focusing on exceptional business performance while still delivering high-quality care

Note The 2020 MGMA Better Performers data is data is based on 2019 data and reflects information prior to COVID-19 that affected practices in 2020 The reported data is a baseline for benchmarking 2020 operations Moving forward MGMA will consider adjusting the data collection to capture the new norm of medical practice operations

OPERATIONS bull Less than the median for percentage of total AR over 120 days

bull Less than the median for days adjusted FFS charges in AR

bull Greater than the median for adjusted FFS collection percent

PROFITABILITY bull Less than the median for total operating cost per work RVU

bull Less than the median for total cost per total RVU

bull Less than the median for total operating cost as a percent of total medical revenue

bull Greater than the median for total medical revenue after operating cost per physician

PRODUCTIVITY bull Greater than the median for total medical revenue per physician

bull Greater than the median for total medical revenue per staff

bull Greater than the median for work RVUs per staff

bull Greater than the median for provider work RVUs for at least 66 of providers -or-

bull Anesthesia practices greater than the median for ASA units for at least 66 of providers

VALUE bull Practice reports on quality metrics and

bull Practice qualifies for better performer status in at least one other category

Participation across all three surveys (Compensation and Production Cost and Revenue and Practice Operations) is required in order to be considered for Better Performer status across all categories Learn more about participating in the surveys

copyMGMA All rights reserved3

GOOD MANAGEMENT IS TIMELESSFOR THE PAST 23 YEARS MGMA has used its extensive database of practice expense and revenue information to identify practices with superior performance While the specific criteria for these ldquoBetter Performersrdquo have evolved over the years multiple measures have been used to assess different areas of the practice

Having multiple measures recognizes that a practice can outperform its peers in one area while being constrained in others For example a practice can have excellent revenue cycle operations but due to its payer mix report financial performance similar to its peers or a practicersquos physicians and staff can be highly productive but work in a high-cost community which affects profitability

Having multiple categories also recognizes that there is no single measure that defines a high-performance group Currently MGMA recognizes ldquoBetter Performerrdquo practices in four categories

1 Operations evaluating the revenue cycle by identifying practices with better and faster collections while also having lower total accounts receivable (AR)

2 Productivity evaluating provider and staff output at the practice level and individually 3 Profitability recognizing practices with lower operating costs per unit of output and greater revenue after

operating costs4 Value identifying practices that report quality metrics while qualifying as having better performer status in

operations productivity or profitability

While every medical organization has its own specific goals opportunities and obstacles there are common elements that contribute to its success The 1998 Performance and Practices of Successful Medical Groups Report described how better performing practices followed consistent routes to their success1 These organizations employed formal strategic planning rigorous financial management and customer-focused innovations It also described their culture as having open communication effective compensation mechanisms trust between physicians and administrators and high levels of physician job satisfaction

Practice leaders identified ldquorewarding our physicians for hard workrdquo as the factor contributing most to their financial success basing provider compensation on productivity efficiency in managing care and seeing more patients benefited the practice and provider These medical groups reported more staff than the norm mostly in direct patient care or physician support positions registered nurses licensed practical nurses (LPNs) and medical assistants Having extra staff relieved the physicians of administrative tasks and enabled them to be more productive and the added revenues more than covered the cost of the extra staff

BY DAVID N GANS MSHA FACMPE SENIOR FELLOW INDUSTRY AFFAIRS MGMA


Another hallmark of these better performing groups was a commitment to serving their many customers mdash patients insurers employers and group physicians

The 1999 Performance and Practices of Successful Medical Groups Report outlined six performance areas in which Better Performers excelled

1 Strategic and profit planning 2 Cost management 3 Capital structure and instruments 4 Tax policy and management 5 Internal controls 6 Financial reporting and performance evaluation2

The 2020 MGMA DataDive Cost and Revenue quantifies how little has changed in how Better Performers outperform their peers

Figure 1 shows that in physician-owned multispecialty groups Better Performer practices reported almost 9 greater medical total operating cost per full-time-equivalent (FTE) physician than their peers These groups also had substantially greater total medical revenue per FTE physician which translated to 19 higher median total physician compensation and benefits in these practices showing that investments in staff facilities and operations pay off in the bottom line

Source 2020 MGMA DataDive Cost amp Revenue

FIGURE 1 REVENUE AND EXPENSES PER FTE PHYSICIAN FOR PHYSICIAN-OWNED MULTISPECIALTY GROUPS BY BETTER PERFORMER STATUS

$1400000

$1600000

$1200000

$1000000

$800000

$600000

$400000

$200000

$0

$1319983

Median total medical revenue

$1555473

Median total operating costs

$814342$884979

Median total physician compensation and benefits

$437213$520516

All practices Better Performers

The 2003 Performance and Practices of Successful Medical Groups Report described a qualitative analysis of better performing practices over the previous five years that identified the characteristics elements and systems that contributed most to practice success The most common elements among Better Performers were

bull Implementing effective recruitment and staffing techniques

bull Compensating physicians based on productivity

bull Improving patient flowbull Using data to drive decision-makingbull Employing technology to improve

efficiencybull Providing adequate staffing and

employee cross-training3


Those higher staffing levels contribute to slightly higher expenses for Better Performer multispecialty groups Figure 2 shows how these practices have a greater investment in the business office (resulting in better collections) and in their clinical support staff Better Performers reported 20 more staff in the business office and 18 more nursing staff than the median of all multispecialty practices Having additional nursing staff enables providers to care for additional patients thereby increasing overall practice productivity As shown in Table 1 Better Performer groups had 20 more encounters which is reflected in these practices having 24 greater work RVUs (wRVUs) and 10 greater total RVU production

These similarities in financial performance between 2020 and the earlier reports suggest that good business practices have not changed much In 1998 the Performance and Practices of Successful Medical Groups Report concluded

Successful group management is no mystery It involves the application of tested business strategies to the unique challenges of medical group practice day-to-day maintenance of relationships and finances and keeping an eye on whatrsquos happening in the local environment4

What was true 22 years ago is still valid today mdash good management techniques are timeless

FIGURE 2 STAFFING PER FTE PHYSICIAN FOR PHYSICIAN-OWNED MULTISPECIALTY GROUPS BY BETTER PERFORMER STATUS

300

250

200

150

100

050

ndashMedian total business

operations support staff

152

183

Median total front office support staff

146 139

Median total ancillary support staff

093097

Median total clinical support staff

233

275 All practices Better Performers


TABLE 1 RVUs AND ENCOUNTERS FOR PHYSICIAN-OWNED MULTISPECIALTY GROUPS BY BETTER PERFORMER STATUS


Median work RVUs (wRVUs) 8441 10437

Median total RVUs 21424 23620

Median total encounters 5587 6701


rdquoldquoNOTES

1 MGMA 1998 Performance and Practices of Successful Medical Groups Report 1998 Englewood CO2 MGMA 1999 Performance and Practices of Successful Medical Groups Report 1999 Englewood CO3 MGMA 2003 Performance and Practices of Successful Medical Groups Report Based on 2002 Data 2003

Englewood CO4 MGMA 1998 Performance and Practices of Successful Medical Groups Report 1998 Englewood CO


BenchmarksPROVIDER COMPENSATION AND PRODUCTIVITY

Physicians in Better Performer practices report higher productivity when compared to all reporting practices Many also report earning more in total compensation

PERCENTAGE DIFFERENCE BETWEEN BETTER PERFORMERS AND ALL PRACTICES

Total compensation Work RVUs (wRVUs)

Cardiology (invasive) 1676 2803

Cardiology (noninvasive) 1279 2038

Dermatology 2776 2963

Family medicine (without OB) 1544 1556

Gastroenterology 948 2043

Internal medicine (general) 1368 2279

Neurology 1059 2055

Obstetricsgynecology (general) 1569 2438

Pediatrics (general) 2641 2429

Surgery (general) 836 2139

Urgent care 2432 2328


DIFFERENCE IN MEDIAN TOTAL COMPENSATION

$700000

$800000

$600000

$500000

$400000

$300000

$200000

$100000

$0

Cardiology (invasive)


Cardiology (noninvasive)

Dermatology

Family medicine (without O

B)

Gastroenterology

Internal medicine (general)

Neurology

Obstetricsgynecology

(general)

Pediatrics (general)

Surgery (general)

Urgent care


ACCOUNTS RECEIVABLE (AR)

Better Performer practices report collecting 6 to 9 more AR in the first 30 days leaving less to age into the 120+ days bucket

Mean reported

PRACTICE EXPENSES AND REVENUE

Better Performers in primary care practices report spending slightly more in total operating cost when compared to all responding practices However Better Performer nonsurgical and surgical specialty practices report spending 5 to 9 less Total operating cost includes support staff and general expenses such as information technology (IT) medical and surgical supply building occupancy furniture and equipment etc

Regardless of specialty and ownership these same Better Performers report earning substantially more in total medical revenue after operating cost mdash 40 to 50 more when compared to all reporting practices


Primary care

practices

Nonsurgical specialty practices

Surgical specialty practices

Multispecialty practices

0-30 days in AR 675 635 658 943

31-60 days in AR -033 005 029 -098

61-90 days in AR -051 -013 -013 -051

91-120 days in AR -066 -040 -052 025

120 or more days in AR -524 -586 -622 -818


PHYSICIAN-OWNED HOSPITALIDS-OWNED

Total operating

cost

Total medical revenue after operating cost

Total operating

cost


Primary care practices 230 4663 314 4984

Nonsurgical specialty practices -895 4019 -783 4281

Surgical specialty practices -488 4082 -509 4207


Practice profilesMISSOULA BONE amp JOINT LLCBETTER PERFORMER OPERATIONS

IN THE BUCOLIC NORTHERN ROCKIES OF WESTERN MONTANA where five valleys and three rivers converge lies the statersquos second-largest city Missoula A destination for outdoor enthusiasts and home to the University of Montana it is also the location of Missoula Bone amp Joint LLC

MBJ opened its first outpatient surgery center in 2001 and recently opened a 31949-square-foot state-of-the-art facility with four surgical suites and private recovery rooms In addition to offering ankle foot hand hip knee shoulder and wrist surgical procedures the new facility provides total joint replacement procedures and outpatient spine procedures allowing patients to stay at the clinic up to 23 hours

According to Sami Spencer FACMPE CMM chief executive officer the practice has around 200 employees including 115 FTEs at its main clinic in Missoula There are 14 physicians including 12 board-certified orthopedic surgeons 10 physician assistants 10 physical therapists and one hand therapist Besides its main clinic MBJ has three satellite clinics in western Montana

As a better performer in operations MBJ surpassed MGMArsquos criteria in the following areas

bull Less than the median for percentage of total AR over 120 days (MBJ 576 median for ORS 2782)

bull Less than the median for days adjusted FFS charges in AR (MBJ 6013 days median for ORS 14258)

bull Greater than the median for adjusted FFS collection percent (9841 median for ORS 9413)

Contributing to MBJrsquos success in these areas were effective EHR and technology adoption embrace of value-based care strong referrals tracking no-shows and controlling costs

EHR TECHNOLOGY AND PATIENT SATISFACTION MBJ went live with its EHR in 2016 and the practice has separate EHRs for orthopedics and physical therapy At the time of adoption its EHR platform was dermatology-based so the practice worked closely with its vendor to meet its needs as an orthopedics practice The platform was also iPad native which has allowed physicians more flexibility in carrying the devices with them in the practice While still working

BY CHRISTIAN GREEN MA WRITEREDITOR MGMA


toward full EHR integration Spencer said several features have helped transform quality reporting and documentation such as voice recognition and MIPS solutions ldquoWhatever field yoursquore in in the EHR you can click on a microphone and talk right into the iPadrdquo Spencer said who added that MBJrsquos physicians enjoy the voice recognition they can use while meeting with patients

MBJ also uses dashboards to help assess patient satisfaction surveys Poor reviews or comments are flagged in real time and notifications can be received even as patients are in the waiting room These reviews then go to a process improvement committee consisting of staff from different departments ldquoAny time there is a bottleneck or an issue we get all departments involved so that we can do process improvement brainstormingrdquo Spencer noted

The practice also has a financial counselor who provides estimates to patients about their out-of-pocket expenses for surgeries MRIs and pain injections so they know where they stand with their deductible and coinsurance prior to a procedure ldquoWe get a 50 deposit paid before the surgery or the procedure and then we set up a payment plan for the restrdquo Spencer explained ldquoThe patient can focus on healing and then they donrsquot have any surprisesrdquo

VALUE-BASED CAREMBJ began participating in MIPS before reporting became mandatory The practice also participated in the BPCI Advanced Model which led them to share cost information and best practices with physicians regarding skilled nursing facilities (SNFs) inpatient rehab facilities and rural hospitals that only have step-down units ldquoFor the physicians to understand the cost of where they are sending patients has been a big eye-opener for all of us which we never had before being in that programrdquo Spencer stressed

REFERRALSMBJ tracks referral sources through its practice management system (PMS) as well as tracking referring physicians and primary care physician (PCP) information through the EHR In addition the practice has a full-time marketing employee who analyzes trends such as performance of radio and other advertising ldquoIf a referring physician drops off in referrals shersquoll make an inquiry to see whatrsquos going onrdquo Spencer said Other helpful tools the practice used before COVID-19 to target referrals were its lunch and learn program and breakfast with its physicians This ldquogot our doctors some face-to-face time with the [PCPs] hellip They would give us a topic they were interested in and wanted to learn more aboutrdquo Spencer noted ldquoIt was amazing how referrals would pick up after that face-to-face time and educationrdquo MBJ also surveys its referring providers to receive feedback on PCPs about what the practice is doing well and opportuni-ties for improvement

OPEN SLOTS AND TRACKING NO-SHOWSMBJ has a waiting list for filling open slots in its schedule The practice also tries to spread out scheduling particularly during COVID-19 to avoid crowding the office and maintain social distancing This scheduling


also allows for providers to see walk-in patients from the practicersquos urgent care

CONTROLLING COSTS While Spencer credits MBJrsquos talented staff for their work in controlling costs three key areas she points to are

1 Getting approval for all non-essential items for business operations2 Reviewing most visits and all surgeries to ensure proper coding and appropriate modifiers are

included prior to billing3 Utilizing a claims scrubber to ensure claim accuracy ldquoThat automation has really helped with making

sure our claims are cleanrdquo Spencer said Rejected claims are addressed on a daily basis

PRACTICE CULTURE AND LEADERSHIPAnother key aspect of MBJrsquos success has been its culture which has been a priority since Spencer joined the group 12 years ago ldquoOur mission is dual purpose to be the orthopedic specialist of choice in our area and the employer of choice in healthcarerdquo Spencer emphasized MBJrsquos tagline describes how the organization wants to be perceived ldquoItrsquos great care from people who carerdquo This is not only reflected in the practicersquos reputation in the community but also the pride employees take in working for the group

Like many practices MBJ offers several perks to its employees including

bull Flexible schedules to help with worklife balance (most employees have a four-day work week)bull A fun committee organizes events such as barbeques picnics lip sync battles outdoor game nights

tailgate parties bowling nights As for organizational leadership MBJ has working supervisors in each department who have a finger on the pulse of employees as well as a management team composed of Spencer an operations manager a finance manager and a surgery center clinical director According to Spencer frequent communication is another key to practice success ldquoWe have department meetings to make sure people are heard we have townhall meetings to share information and answer questions we do an employee newsletter for any updates hellip and then most of the supervisors will do weekly email updates so that everybody is hearing the same informationrdquo

CHARLESTON ALLERGY amp ASTHMABETTER PERFORMER PROFITABILITY

Dave Proctor practice administrator notes that the practicersquos performance is a team effort and a result of everyone working together ldquoIt starts with the physicians and the culture they createrdquo he says which can be summed up in one phrase ldquoOur patients are our guestsrdquo

Physicians at Charleston Allergy amp Asthma code their own notes and the average lag time from date of service to notes completed is less than a day The lag time from date of service to claim submission for 2018 was 654 days and the practicersquos January-August lag time in 2019 was 394 days The practicersquos days in AR averaged 2786 days for 21 months

Proctor credits this as a ldquodirect resultrdquo of the practicersquos billing department and its manager in defining duties and responsibilities According to Proctor the department has adequate staff to allow for optimal performance and most of the staff has been with the practice more than 20 years with an average tenure of 17 years


Another key aspect of the practicersquos performance in profitability is communication with patients and monitoring balances ldquoOur front office staff does an outstanding job getting the much-needed information from our patientsrdquo Proctor says In turn the clinical staff know what information is needed for proper claim submission and communicate with the billing department ldquoWe benchmark our data and track our claims and provide immediate follow-up when neededrdquo Proctor adds

ldquoWe are a true team practice with an outstanding staff that works together with constant communication focusing on our patientsrdquo

R E S O U R C E S

MGMA DataDive Access industry-leading benchmarking data to understand the past and present to propel your practice into the future

MGMA Stat COVID-19 polls Find the latest real-time data on how healthcare leaders are responding to the pandemic along with expert insights and best practices

MGMA COVID-19 Recovery Center Find MGMArsquos latest operational resources tools and stories of success from across the healthcare industry

MGMA Consulting Leverage the industry leader in creating meaningful change in healthcare one organization at a time

Medical Practice Excellence Conference Join us Oct 19-21 for a new virtual experience

MGMA COVID-19 Podcasts Find all MGMA Insights and Executive Session podcasts from our ongoing COVID-19 series

copyMGMA All rights reserved 12

mgmacomdata

copyMGMA All rights reserved

Table of ContentsIntroduction3ldquoGood management is timelessrdquo4 By David N Gans MSHA FACMPE senior fellow industry affairs MGMA

Benchmarks7bull Provider compensation and productivity7bull Accounts receivable (AR)8bull Practice expenses and revenue8

Practice profiles9bull Missoula Bone amp Joint LLC9

By Christian Green MA writereditor MGMA

bull Charleston Allergy amp Asthma11Resources12

ABOUT MGMAMedical Group Management Association (MGMA) is the premier association for professionals who lead medical practices Since 1926 through data people insights and advocacy MGMA empowers medical group practices to innovate and create meaningful change in healthcare With a membership of more than 58000 medical practice administrators executives and leaders MGMA represents more than 12500 organizations of all sizes types structures and specialties that deliver almost half of the healthcare in the United States

mgmacom










































$1400000

$1600000

$1200000

$1000000

$800000

$600000

$400000

$200000

$0

$1319983


$1555473


$814342$884979


$437213$520516














300

250

200

150

100

050



152

183


146 139


093097


233









rdquoldquoNOTES














Neurology 1059 2055







$700000

$800000

$600000

$500000

$400000

$300000

$200000

$100000

$0




Dermatology


B)

Gastroenterology


Neurology


(general)


Surgery (general)

Urgent care




Mean reported





Primary care

practices




0-30 days in AR 675 635 658 943

31-60 days in AR -033 005 029 -098

61-90 days in AR -051 -013 -013 -051

91-120 days in AR -066 -040 -052 025

120 or more days in AR -524 -586 -622 -818



Total operating

cost


Total operating

cost









































R E S O U R C E S








mgmacomdata










































$1400000

$1600000

$1200000

$1000000

$800000

$600000

$400000

$200000

$0

$1319983


$1555473


$814342$884979


$437213$520516














300

250

200

150

100

050



152

183


146 139


093097


233









rdquoldquoNOTES














Neurology 1059 2055







$700000

$800000

$600000

$500000

$400000

$300000

$200000

$100000

$0




Dermatology


B)

Gastroenterology


Neurology


(general)


Surgery (general)

Urgent care




Mean reported





Primary care

practices




0-30 days in AR 675 635 658 943

31-60 days in AR -033 005 029 -098

61-90 days in AR -051 -013 -013 -051

91-120 days in AR -066 -040 -052 025

120 or more days in AR -524 -586 -622 -818



Total operating

cost


Total operating

cost









































R E S O U R C E S








mgmacomdata







300

250

200

150

100

050



152

183


146 139


093097


233









rdquoldquoNOTES














Neurology 1059 2055







$700000

$800000

$600000

$500000

$400000

$300000

$200000

$100000

$0




Dermatology


B)

Gastroenterology


Neurology


(general)


Surgery (general)

Urgent care




Mean reported





Primary care

practices




0-30 days in AR 675 635 658 943

31-60 days in AR -033 005 029 -098

61-90 days in AR -051 -013 -013 -051

91-120 days in AR -066 -040 -052 025

120 or more days in AR -524 -586 -622 -818



Total operating

cost


Total operating

cost









































R E S O U R C E S








mgmacomdata












Neurology 1059 2055







$700000

$800000

$600000

$500000

$400000

$300000

$200000

$100000

$0




Dermatology


B)

Gastroenterology


Neurology


(general)


Surgery (general)

Urgent care




Mean reported





Primary care

practices




0-30 days in AR 675 635 658 943

31-60 days in AR -033 005 029 -098

61-90 days in AR -051 -013 -013 -051

91-120 days in AR -066 -040 -052 025

120 or more days in AR -524 -586 -622 -818



Total operating

cost


Total operating

cost









































R E S O U R C E S








mgmacomdata




Mean reported





Primary care

practices




0-30 days in AR 675 635 658 943

31-60 days in AR -033 005 029 -098

61-90 days in AR -051 -013 -013 -051

91-120 days in AR -066 -040 -052 025

120 or more days in AR -524 -586 -622 -818



Total operating

cost


Total operating

cost









































R E S O U R C E S








mgmacomdata





































R E S O U R C E S








mgmacomdata


mgmacomdata


mgma datadive better performers performance and …

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