Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
201 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
What are the responsibilities to being in private practice
|
stay in business for your patients
provide patient centric services take good care of your employees invest wisely watch out for the potholes make a profit |
|
|
|
Market Economy
|
prices are set by supply and demand
|
value of information goods and services is determined by free trade
|
|
|
Economic Cycle
|
Periods of expansion and contractions
booms and recession |
|
|
|
Recession
|
2 consecutive quarters of negative GDP
last between 6-16 months |
|
|
|
economic indicators
|
gross domestic product
national debt other indicators |
|
|
|
GDP
|
the value of all goods and services produced in a given country in a given period of time
generally figured by using either income or expenditures (income most common) |
changes in GDP up or down effect the stock market
bad economy (low gdp) means ower profits for companies and lower stock prices negative gdp growth is a factor in recession |
|
|
national debt
|
total amount of debt the federal government has on its books
|
high national debt
-high taxes, reduced benefits -interest rates/inflation -weak dollar |
|
|
Where to get money for the business
|
-business defensive assets
-private savings funds -loan sharks -credit card loans -hearing aid manufacturer loans |
|
|
|
inflation
|
rate at which the general level of prices for goods and services is rising and subsequently purchasing power is falling
-measure of the average change over time in the price paid by urban households for a set of consume goods and services |
|
|
|
other economic indicators
|
unemployment
gas prices retail sales growth pending home sales |
|
|
|
Reasons small businesses fail
|
lack of experience
insufficient capital poor location poor inventory management over investment in fixed assets poor credit arrangements personal use of business funds unexpected growth competition low sales |
|
|
|
Why have formal business plans
|
set specific objectives for managers
share strategies, actions and specifics with spouse, partner, or sig others deal with displacement decide need to lease a new space hire new people need new assets share and explain your objectives with your management team select business alliances deal with professionals selling your business valuation of the business creating a new business seeking investment seeking lenders growing your existing business |
|
|
|
Impact of Flexner Report and Medical Professionalization
1901-1945 |
-Med education standardized
-physicians became professionals -emergence of 3rd party payment -employment based group insurance -outcomes improving |
|
|
|
Hill-Burton act
1946-64 |
-build/expand hospitals
-expansion of employment-based coverage -improved outcomes -retrospective reimbursement - care delivered then provider bills -provider determination of prices -provider automonomy in service selection -price increases continue |
|
|
|
1965-1980
|
-medicare and medicaid
-rapid growth of provider sector -increased bredth of services -rapid escalation of costs and prices -early HMO movement |
|
|
|
1981-1990
|
-commitment ot cost containment by market forces (competition)
-prospective payment by medicare -discount plans -PPOs, EPOs, etc -medicare set what it would pay for given services |
|
|
|
1991-1999
|
-beginning of managed care
-provider response: dislike -patient reaction: prefer providers make decisions, not insurance company |
|
|
|
Payer-based managed care
|
Externally Proctored Care
Extension of Utilization Review Concurrent Review Guidelines Emphasis on Costs/Prices |
|
|
|
Provider-based Managed Care
|
Peer-proctored Care
Concurrent Review Outlier Analysis and Variation RR d ti eduction Emphasis on Costs/Prices |
|
|
|
Capitation
|
Payment for Population
Payment for Outcomes/Health Status Measurement at Group Level Transfer of Risk to Providers |
|
|
|
Rand Health Insurance Experiment
|
How does cost-sharing or membership in an HMO
affect use of health care services compared to free care? How How does cost does cost-sharing sharing affect appropriateness of affect appropriateness of care received? What are the consequences for health? People will respond to changes in out-of-pocket payments. We know relatively little about the impact of marketing |
|
|
|
Consumerism
|
Health savings accounts
High-deductible health plans Consumer-directed health plans Choice: Medicare Part D and Florida Medicaid Reform Emphasis on information Rewarding healthy behaviors Private health insurance and Medicaid |
|
|
|
Coding Systems
|
Current Procedural Terminology (CPT)
Example: 92557 (Comprehensive audiometry) International Classification of Diseases (ICD-9-CM) 3, 4 or 5 digit codes to describe diseases/diagnoses Example: 389.15 (SNHL, unilateral) Healthcare Common Procedure Coding System (HCPCS) Hearing aids, dispensing fees, supplies Bundling vs unbundling/itemization Example: V5160 (dispensing fee, binaural) |
|
|
|
CPT codes
|
Owned by the American Medical Association
CPT TM five-digit codes, descriptions, and other data only are copyright 2007 by the American Medical Association (AMA). All Rights Reserved. No fee schedules, basic units, relative values or related listings are included in CPT. TM CPT TM is a trademark of the American Medical Association. |
AMA determines codes (CPT Editorial Panel
or the CPT HCPAC) AMA AMA determines the valuation (Relative Value determines the valuation (Relative Value Services Update Committee-RUC or the RUC HCPAC) CMS accepts or adjusts recommended values Payments are determined by resource costs needed to provide them Physician Physician work (time skill physical/mental effort work (time, skill, physical/mental effort, stress) 52% of total relative value (RVU) Practice expense (staff, rent, expenses) 44% of the total RVU Professional liability (malpractice) 4% of the total RVU |
|
|
Modifiers
|
-22 Unusual Procedural Services
Utilized when procedure is greater than that typ y q ypically required -26 PROFESSIONAL COMPONENT Someone else performed the procedure, you are doing the interpretation AND writing the report TC: Technical Component You only performed the test Interpreted by another provider such as an ENT, neurologist |
-52 REDUCED SERVICES
Procedure is partially reduced or eliminated -59 Distinct procedural service -76 Procedure was performed more than one time time on the same date of service on the same date of service Ototoxicity monitoring Glycerol or urea test |
|
|
MEDICARE
|
Many commercial payors base their
reimbursement fees on the MPFS Need Need physician referral for a medically physician referral for a medically necessary reason (until we obtain direct access) Upon direct access, medical necessity is still required in order to bill Medicare |
|
|
|
Medical Necessity:
|
Recommendations must be based on medical
necessity, especially for Medicare: NN i t ew signs or symptoms Changes in condition based on diagnosis or patient complaint(s) Occurrence of unrelated treatment that can affect hearing and/or balance (chemotherapy) Document status resulting from related treatment (e.g., ear surgery, medication for OME) May be included in the Local Coverage Determination (LCD) policy |
|
|
|
Medicare Eligibility
|
65 years or older
Some who are on disability (SSI and SSID) Currently Currently a 2 year wait from date of disability to a 2 year wait from date of disability to Medicare coverage Blind Those with End Stage Renal Disease |
|
|
|
Medicare Categories:
|
Part A
Inpatient hospital Audiologic Audiologic services are cov services are covered ered when billed by hospital when billed by hospital Those on disability may only be on this part of Medicare Hospice Nursing Care Home Health Care Medicare Part B: Outpatient Hospital Services Most audiologic billed services ENT offices Private Practice Other Ambulatory Surgery Services Home Health Lab |
Medicare Part C
PPO’s and HMO’s that have the “extra’s”: Annual audiologic assessments Hearing Hearing aid benefit aid benefit Vision benefits Medicare Part D Drug benefit where applicable |
|
|
Medicaid
|
Joint federal/state agencies
May be fee-for-service, HMOs, etc. Coverage Coverage and reimbursement varies from and reimbursement varies from state to state Income based Children’s Health Insurance Program Allows for coverage up until age 19 Hearing aids are covered for children, not necessarily adults |
|
|
|
ICD-9 Description
|
Three to five digit code
5 digit code is the most specific and recommended Avoid those that end in “0” ICD-9 is for disease “Normal” is not a disease Code by signs, symptoms, the reason the patient presented |
|
|
|
INSURANCE WAIVER
|
Patient’s acknowledgement their fiscal
responsibility for fees not paid by their insurance insurance company company Have patient sign before providing services Time of education Itemize CPT codes to be performed |
Original retained in chart, copy to patient
Not the same as an ABN Completed Completed on Medicare recipients on Medicare recipients May be used if patient does not have a referral and desires services If Medicare, will need voluntary ABN as it will be non-covered without the referral |
|
|
Documentation
|
A chart is a legal document
Can be subpoenaed Provides continuity of care between health care proff i l essionals Third party payor requirement Quality Assessment/Peer Review Need to explain and interpret audiogram Don’t assume anyone other than an audiologist understands what it means |
Six elements
History Include Include chief complaints chief complaints What did you do? Findings? Recommendations? Original signature Date of evaluation May need to include date of dictation |
|
|
At – Will
Employment |
Under an at-will employment relationship, an employee may
be terminated for any reason or no reason barring any violation of the law. This relationship is for an indefinite term. |
Employers by their actions, policy manuals, procedures
or words can change an “at-will” employee relationship to a “just cause” relationship. |
|
|
Just Cause
Employment |
Employment for a definite term of years will establish a “just
cause” employment relationship requiring the employer to have “good cause” to terminate the employee. This relationship is the opposite of an “at-will” employment relationship. |
|
|
|
Non – Compete
Agreements |
– Must be reasonable –courts will generally use industry standards or
measure the term based on how long it may take to replace an employee or for a company to reestablish relationships with customers – Rarely will the courts uphold terms beyond a year absent extraordinary circumstances although two and five year terms have been upheld – Businesses have compensated former employees during the term of the non-compete to strengthen the duration of the non-compete |
– Limits the ability of an employee to work for a competitor
for a set period of time after leaving employment – Often require that an employee refrain from calling on or soliciting business from the customers of the employer or seeking to hire away employees of the former employer |
|
|
Psychological Contract
|
An unwritten expectation between
employees and employers regarding the nature of their work relationship that is, to some degree, based upon past experiences of both parties. |
• Individuals need to feel that they have control
and perceived rights within the company. • Strengthened by a cause in which the employee strongly believes. |
|
|
Title VII – Civil Rights Act - 1964
|
• Prohibits employment discrimination on the basis of race, color, sex,
religion, and national origin. Also prohibits harassment based on race, sex or other unlawful criteria. This includes sexual harassment. • A majority of states have enacted Fair Employment Practice statutes that parallel or exceeds the federal statute. Some states include height, weight, marital status, sexual orientation, and pregnancy. |
|
|
|
Types of Compensation
|
• Straight Straight Salary Salary
• Variable Pay • Skill Based |
|
|
|
Straight Salary
|
Employee obtains the same amount of salary
each month for the work provided if the clinic is active or slow. |
|
|
|
Variable Pay
|
Provides incentives for employees by allowing them
to share the profit that is generated by their increased contributions to the productivity of the practice. |
Profit Sharing
• Group Incentives • Recognition for achievement or creativity • Team Incentives |
|
|
Skills Based Pay
|
• Encourage skill development
• Reward learning • Increase individual productivity • Encourage more flexible staffing |
|
|
|
Empowering Employees
|
1. Demonstrate that you value people
2. Share your leadership vision 3. Share goals and direction 4. Trust people – especially employees 5. Provide information for decision making 6. Delegate authority, not just more work 7. Provide frequent feedback 8. Solve problems, don’t blame people 9. Listen, Learn, and ask questions to provide guidance 10. Reward employees and reward them for empowered behavior |
|
|
|
A PP Manual can serve any or all of the
following |
– Defines the terms of and conditions of employment
– Introduces new employees to the practices and procedures of the company procedures of the company – Announce, reiterate, modify, or clarify policies – Promotes uniformity and consistency in applying policies and procedures – Defines benefits clearly – Allows for written disclaimers – If well written and thought out, an Employee Handbook will be invaluable in defending against employment lawsuits. |
|
|
|
The Baby Boomers
|
Will seek hearing care sooner
Internet Information: Well-informed about their problem Will seek health care practitioners directly Accepting of non-physician providers Looking for advanced degrees/specialty certification Abruptly critical of perceived quality of care Critical of environment where services are delivered |
Low tensile strength regarding practice loyalty
Front office staff must be cordial and attentive Intolerant of too much after-purchase attention Sensitive to service costs despite insurance coverage Require wide scheduling opportunities Nights Weekends Location convenience is important |
|
|
The Patient Centric Practice
|
Considers the view through the patient’s lens
Exceed patient expectations at every visit Patients are partners Promises are kept, Patients are informed Fix errors fast: solutions take only one staff member Professionals & Staff should be well-wrapped Demeanor is everything Respect and courtesy must flow freely and effortlessly |
Satisfaction must be guaranteed
Consider the “Re’s”: Repair, Replace, Refund, Refer, Reward, Resolve Office environment must be immaculate and orderly Spend time, listen to all in the room Patient centric training must be an ongoing process Patients are the core of P&Ps Practice wraps around the patient, not vice versa |
|
|
Practical Steps to Improve PatientClinician Communication
|
Assess What the Patient Already Knows
Assess What the Patient Wants Knows Be Empathic Slow Down Keep It Simple |
Tell the Truth
Be Hopeful Watch the Patient’s Body and Face Be Prepared for a Reaction |
|
|
Purpose of buying groups
|
• Consolidation of purchasing
– Influence upon manufacturers – Influence on Clinicians – Influence on: • Patients • Distributional outlets • Other • Economics of Scale – “buy more, get a lower price” – Oth |
|
|
|
Who are these Buying Groups?
|
• Largest
– AHAA – Sonus – HearUSA • Company-owned or controlled – Beltone – Audibel, Audigy • Others – EPIC, AudNet, Hearing Planet, etc |
|
|
|
How Do These Groups Work?
|
• Goal
– Profit – Market control |
• Advertised Benefits to Clinicians
– Consolidation of purchases • (Middle man, distributor methods) • Better pricing to customers – Ancillary services • Marketing-advertising help • Office support |
|
|
Potential Group Shortfalls
|
• Some groups CANNOT always provide:
– “best cost” – Appropriate marketing and advertising – Complete objectivity • Advice, price, patient issues, etc. – Bias-free information – “arms length” isolation from ethical issues – Greater margin for clinic success |
|
|
|
Sole Proprietorship
|
• Definition
− Practitioner has no partners or stockholders − 2/3 of the businesses in The United States • The Owner is the Business • Most Audiology practices • Debts to the owner, Profits to the owner • SP is ideally suited for small informal businesses |
|
|
|
Sole Proprietorship
Advantages |
Ease of establishment
• Lack of regulations governing this structure • Revenue is only taxed once as personal income • May establish tax-exempt retirement plans |
|
|
|
Sole Proprietorship
Disadvantages |
• Opportunity to raise capital
limited to personal Net worth • Sole Proprietorship dies with the owner • Personal responsibility of the owner for malpractice, financial and tax obligations |
• Unlimited Personal Responsibility
of Owner − Business Bills − Taxes − Malpractice − Employees • Liable for Their Own Acts • Liable for the Acts of Their Employees |
|
|
Partnership
|
• Definition
− Money is pooled by 2 or more individuals to establish, run and maintain a business. • Relationship is drawn up by an attorney − In absence of legal agreement, defined by Uniform Partnership Act (UPA) − Equal Ownership |
Same benefits, rights and responsibilities
as sole proprietorship − Liability is now spread over the partners − Still no shelter for debts or malpractice or employees • “Know Thy Partner” |
|
|
Corporations
|
• Shelter for personal responsibility
− Business Expenses − Malpractice − Employee malpractice or embezzlement • Many different types of corporations |
• Definition
− A corporation is a distinct legal resident of the state and is a totally distinct entity from its owners. − Owners are known as Stockholders • Individuals that purchase shares • Managed by a Board of Directors |
|
|
C-Corporations
|
• Disadvantages of C-Corporation
− Double Taxation • Once on your Salary – Whatever your tax bracket • Once on the Corporation – Usually 35% • Goal is to not make profit in the corporation |
|
|
|
S-Corporations
|
• Allowed since 1950s, income
treated like a Partnership • Has all of the legal, financial, and malpractice sheltering characteristics of a regular corporation except that the profits are not taxed • Not as flexible as a Limited Liability Corporation |
|
|
|
Professional Corporation (PC)
|
• Reserved for Dentists, Physicians, other
Professionals • Allowed to expose them to more personal liability than regular or S-Corps • Business component has limited liability • Professional can still be sued for malpractice, even if they are an employee |
|
|
|
Limited Liability Corporation (LLC)
|
• Similar to S-Corp, but much less regulation
• Lots of flexibility Documents filed are Articles of Organization |
|
|
|
Reasons to Perform a
Valuation |
Financial Planning
Estate Planning Insurance Coverage Partnership Agreements Practice Benchmark Buy/Sell Agreements |
|
|
|
What is Goodwill?
|
In other words this is the prospect of future business
based on the reputation of the company |
|
|
|
Valuation Methods
|
Emotional Evaluation - Value based on what the owner
“feels” their business is worth. Economic Evaluation - Value of tangible assets based on fair market value or the expected future return those assets will bring Experience Evaluation - Value based the sale of similar types of practices in the marketplace. |
|
|
|
Mechanics of the Valuation
Process |
Non Disclosure Agreement
Clinic Due Diligence Financial Due Diligence “Normalize” income/expenses Assign a multiple Offer is made |
|
|
|
Clinic Due Diligence
|
9 Review inventory and equipment list
9 Review accounts receivable aging and reimbursement history 9 Interview employees that will stay with the business 9 Review current premise lease. Make sure lease is assignable to new ownership. 9 Review past marketing 9 Review referral sources & contract status 9 Review 100 random patient files 9 Try to get accurate count of active patient files |
|
|
|
Financial Due Diligence
|
Analyze 3 years of financial data including the most
current period. Partial year financials will need to be annualized Analyze tax returns as well as financial statements Determine whether the practice uses the “cash” or “accrual” accounting method |
|
|
|
“Normalizing” the Income
Statement |
Normalizing the income statement is the act of
adjusting the expenses to reflect the true cost of running the practice, thus determining an adjusted EBITDA profit, on which a multiple can be applied. |
|
|
|
Assigning a Multiple
|
9 Multiples attempt to account for the “goodwill” of the practice.
The higher the multiple the higher the “goodwill” is perceived to be. 9 On average, multiples range from 1x - 5x earnings 9 Multiples are factored with the EBITDA profit that was obtained to find the “value” of a practice |
Multiples can based on many things:
Length of time practice has been around Amount of production by the owner Higher % of Private Pay Newer Equipment Amount of active patient files |
|
|
The Offer
|
Most offers will not be 100% cash
Do not be offended by the first offer Prepare a counteroffer. Use your own, independent appraisal to even the playing field. Resist offers with stock or “earn out” clauses unless you plan on staying with the new company |
|
|
|
Seller Checklist
|
Mindset - establish a clear understanding for the
reasons the practice is being sold Independent appraisal 1 year prior to sale date Have organized the items a potential buyer will want to review Develop tax strategy with your lawyer and accountant Be honest with your staff Do not stay with practice after transition period |
|
|
|
Buyer Checklist
|
Mindset
Ask for or have an independent appraisal done Do in-depth clinic and financial due diligence Develop alternative financing sources other than a bank. |
|
|
|
Balance Sheet
|
• Presents
– Assets – Liabilities – Owners or Stockholders Equity • Assets – left side • Liabilities – right side |
Assets= Liabilities +
Owners Equity |
|
|
Assets
|
• Current Assets
– Accounts Receivable – Merchandise Inventory – Total Current Assets • Plant and Equipment – Equipment – Accumulated Depreciation • Total Assets |
|
|
|
Liabilities
|
• Current Liabilities
– Short Term Debt – Accounts Payable – Other Accrued Liabilities – Total Current Liabilities • Long Term Debt – Total Liabilities • Owners Equity • Total Liabilities & Owners Equity |
|
|
|
Income Statement
|
• Net Sales
– Sales Less Returns and Discounts • Cost of Goods Sold – Supplier costs for products • Earmolds • ALDs etc • Net Profit • Selling and General Administrative expenses |
• Income from
Operations (EBIT) • Interest Expense • Income before Taxes (EBT) • Income Taxes • Net Income |
|
|
Statement of Cash Flows
|
• Cash Flows from
Operating Activities • Cash Flows from investing • Cash Flows from Financing |
• Cash Flows from
Operating Activities – Depreciation Expense – Accounts Receivable Increase – Increase in Merchandise Inventory – Increase in Liabilities – Net Cash from Operations |
|
|
Statement of Cash Flows (cont'd)
|
• Cash Flows from
investing activities – Cash Paid for Equipment |
• Cash flows from
Financing Activities – Cash received from issues of long term debt – Cash from sale of Common Stock – Net Cash from financing Activities • Net Cash increase for the year |
|
|
Statement
Calculations |
• By themselves are of little
significance • Two types – Cross sectional – Comparison to Industry Standard –Time Series – Comparison of same practice to different points in time. |
• Comparisons of Statements
– Month to Month – Year to Year • Looks at two points in time to compare practice performance |
|
|
Ratio Analysis of Statements
|
• Ratio Analysis – Tracked by
Spreadsheets to demonstrate trends and the health of a practice • Use of Ratio Analysis – Management – Supplier Credit – Bank Loans |
• Ratio Analysis can be to demonstrate
– Liquidity – Activity – Debt and Profitability • Primarily Conducted on – Balance Sheet – Income Statement |
|
|
Balance Sheet
Ratio Analysis |
• Ratio Analysis of Balance Sheets
– Liquidity Ratios measure the short term ability of practice to pay bills – Activity Ratios measure the efficiency of the practice in turning assets into cash – Debt or Leverage Ratios measure the overall solvency of the practice |
|
|
|
Balance Sheet
Liquidity Ratio Analysis |
• Current Ratio
– a calculation of how many times the practice’s current assets cover its current liabilities and if the practice has sufficient resources to meet those liabilities. • Can the practice pay its bills? |
|
|
|
Current Ratio Calculation
|
Current Ratio =
Current Assets/ Current Liabilities |
• If less than 1
– Business cannot pay its bills – May have difficulty staying in business • If 2 or more – Business can pay bills with money left over – Healthy Business • Includes Prepaid expenses – Insurance – Inventory • Most clinics do not have inventory |
|
|
Quick Ratio Calculation
|
• Also called the Acid Test Ratio
– Figures without prepaid expenses – Insurance & Inventory |
Quick Ratio =
Cash + Marketable Securities+ Accounts Receivable divided by Current Liabilities |
|
|
Defense Interval Measure
|
• DIM - measures the time span that the practice
can operate without any external cash flow or how long the practice can operate if there is no business. • Allows Manager to project the amount of emergency cash needed (DA or Defensive Assets) to keep business going if business drops off. • To figure the DIM you must know the Projected Daily Operating Expenses (PDOE) • PDOE = How much it costs to keep the practice open each day |
Defense Interval Measure = Defensive Assets divided by Projected Daily Operating Expenses
|
|
|
Balance Sheet
Activity Ratio Analysis |
• Allows manager to know how
efficiently assets are turned into cash – Accounts Receivable Turnover Ratio – Inventory Turnover Ratio – Total Assets Turnover Ratio |
|
|
|
Accounts Receivable Turnover Ratio
|
• Many times the Accounts receivable is turned into
cash each year – Need to know the average AR Balance – Take balance at end of last year + balance at end of current year / 2 |
Accounts Receivable Turnover Ratio= Net Sales divided by Average Accounts Receivable
• The higher this calculation the better • Example 5.3 = AR is turned into cash 5.3 times per year or every 2.26 months • Or every 68.8 days |
|
|
Inventory Turnover Ratio
|
• Similar to Accounts Receivable Turnover Ratio
• Many times the Inventory is turned into cash each year – Need to know the Average Inventory – Take inventory at end of last year + Inventory at end of current year / 2 |
Inventory Turnover= Cost of Goods Sold divided by Average Inventory
Example: If ratio is 5.9 then inventory will turn almost 6 times per year, almost every two months Information assists in planning for stock orders |
|
|
Total Assets Turnover Ratio
|
• How efficiently assets are turned into
cash. • The TAT ratio looks at the sales for goods and services and divides by the total assets to arrive at how many times the practices assets turnover per year. |
Total Asset Turnover= Sales divided by Total Assets
• How efficiently assets are turned into cash • The higher the better, suggesting that the assets are used efficiently to generate cash |
|
|
Balance Sheet
Debt/Leverage Ratio Analysis |
• Two ratios, beneficial in providing the practice
manager with information as to how much practice debt is relative to its assets: – Debt to Assets (DA) Ratio – Times Interest Earned (TIE) • These ratios give indications whether the practice has the capability to support more debt – for adding equipment – opening another location, or other activities. |
|
|
|
Debt to Assets Ratio
|
• Presents the liability the practice has for every
dollar of assets – provides the creditors with information about the ability of the practice to withstand losses without impairing the interest of the creditors. – Frequently used for loans by banks |
Debt to Assets Ratio = Total Liabilities divided by Total Assets
• The lower the better, suggesting that the practice is less depending upon borrowing. • A higher DA Ratio indicates that if business is bad for a time that it could cause problems |
|
|
Times Interest Earned Ratio
|
• TIE is an indication of how many times the
practice earns the amount of interest charged on the money that it has borrowed. • TIE is computed by taking the earnings before interest and taxes and dividing it by the interest. |
|
|
|
Times Interest Earned Ratio
|
Times Interest Earned Ratio= Earnings Before interest and Taxes (EBIT) divided by Interest Charges
|
• Freeman (2002) indicates that this ratio should be between
3 and 5 for Audiology Practices • Indicates that earnings are 3 to 5 times greater than the interest charges, if less than 1 cannot pay interest |
|
|
Income Statement
Analysis |
• Most routine analysis are conducted on
the Balance Sheet • Ratios that may tell the most about a practice are the profitability ratios that are conducted on the income statement. |
• Profitability ratios are clues as to how well the
practice has performed: – Adequacy of net income – Rate of return on Assets – Profit margin as a percentage of sales. • Routine Ratios conducted are: – Profit Margin On Sales (PMOS) – Asset Turnover (AT) Ratio (discussed under Balance Sheet) |
|
|
Profit Margin On Sales (PMOS)
|
• Profit Margin On Sales presents the profit margin
achieved after all of the expenses are subtracted and how much of every dollar of sales are profit • If calculation yields $0.20, then 20 cents of every dollar collected is profit. |
Profit Margin On Sales= Net Profit divided by Sales
|
|
|
Tracking and
The Ratios |
• Easily conducted with spreadsheets
• Can demonstrate issues that need improvement • Why there are problems in the practice |
|
|
|
Accounting
101/102 |
• Have accountants present ratios to you
• They can track problems • Give insights as to changes that need to be made to stay profitable • It is the wise audiologists that knows these ratios and what they mean |
|
|
|
• Fixed (sunk) Costs
|
costs you have to pay whether you are in
business or not |
|
|
|
Variabl ble Costs (( bl separable, escapabl ble, avoidd bl )
|
allll your costs
that will go away if you stop the activity |
|
|
|
Short Run
|
period in which at least one cost is fixed
– Lease obligations, equipment, insurance: |
|
|
|
Long Run
|
period in which all costs can be varied
– You own it all (for better or worse!) – no fixed costs |
|
|
|
Two Big Economic
Assumptions |
• All firms want to maximize profits and
minimize costs • Firms with negative profits will keep producing so long as they lose LESS by producing than by not producing |
|
|
|
Marketing is...
|
Everything associated with identifying
the particular wants and needs of a target market of customers, and then going going about satisfying those about satisfying those customers better than the competitors. |
|
|
|
Luxury Market
|
` Patients are sophisticated
` Like one-to-one attention ` What do they need? ` What do they value? ` What appeals to them? |
|
|
|
Appeal to your Audience
|
` Know what the product or service
can do for your patient and then sell that. ◦ “Don’t talk about your grass seed, talk about my lawn.” ~ Nagen, 2002 |
|
|
|
Outrageous Customer Services
|
` Random
` Unexpected ` Out of proportion to the circumstance ` Highly personal |
|
|
|
Database Management
|
` Internal marketing to your patients
` Contact at least 4 times per year |
` Customer behavior is a much stronger
p y p predictor of your future relationship with a patient than demographic information ever will be. |
|
|
The Art of War in Audiology is governed
by Five Predictors of Success |
1. Clarity of Purpose
2. Business Climate 3. Information 4. Leadership 5. Execution |
|
|
|
SWOT
|
STRENGTHS
Excellent reputation Loyal customers Market leader WEAKNESSES Small business Profit margin too low OPPORTUNITIES Expand to new, larger location Buy local competitor to increase revenues Sell business and start new career Losing too many employees THREATS New competitor Online retailers Bad team member |
|
|
|
Sales Methods
|
• Traditional “High Pressure” Techniques
• Negotiation • Thought Process Selling • Need Based Selling |
|
|
|
High Pressure “Closing” Approaches
|
∗ The “Snooker” Close
∗ The “Embarrassment” Close ∗ The “Bride” Close ∗ The Bride Close ∗ The “New Decision” Close ∗ The “Gloomy Gus” Close |
|
|
|
Lessons From the High Pressure Techniques
|
1. Some of these types of closures are
intuitive and reasonable. 2. Some are a natural progression of a sales situation. 3. Others are offensive and unprofessional and reminiscent of door-to door sales tactics. |
4. Many traditional closing
“procedures” may increase the chances of a sale with low cost products. 5. With expensive products or services, many of these techniques reduce the chances of making a sale. |
|
|
Rules for Negotiating
|
1. Listen to the customer’s argument.
2. Focus on best interests of Patient and clinic. 3. Search for reasonable solutions. |
|
|
|
Sales based on Thought Process
|
Cognition Thinking
Divergent Thinking Convergent Thinking |
|
|
|
Cognition Thinking
|
Allows the patient to
understand the situation presented to them. |
What? How Much?
Where? When? Why? |
|
|
Divergent Thinking
|
Assists the person to
explore the options and solutions. |
How about? We Could?
What If? Lets consider? |
|
|
Convergent Thinking
|
The process of selecting
the best solution. |
We should?
The logical choice? Its obvious. |
|
|
Passive Order Taker
|
Assumes the customers know their own
needs Customers resent attempts to influence them • Customers prefer courteous and passive sales people |
|
|
|
Active Order Getter
|
• Sales-Oriented Approach
• Customer-Oriented Approach |
|
|
|
Marketing
Social Definition |
Societal process by which individuals and
groups obtain what they need and want Kotler, 2002 groups obtain what they need and want through: – Creating – Offering – Exchanging products and services of value |
|
|
|
Marketing
Managerial Definition |
The “art of selling products”
Kotler, 2002 • To know and understand the customer so well that that you know what product or service fits them |
|
|
|
Marketing
Operational Definition |
A process of planning and executing the
Oblinger, 2006 conception pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. |
|
|
|
Target Markets and
Segmentation |
The identification and profiling of
distinct groups of buyers according to: • Geographic • Demographics • Psychographic • Behavioral |
|
|
|
Multi-Attribute Segmentation
|
• Putting many of these factors together to
identify a specific group • Targeted to specific traits, age, household income, etc. • Example: all over 60 that ride motorcycles, income over 60,000 per year, reside in their own home in a particular zip code. |
|
|
|
Product Offering
|
Any Offering That Can
Satisfy a Need or a Want |
Goods • Places
• Services • Experiences • Events • Persons Kotler, 2002 Places • Information • Properties • Organizations • Ideas |
|
|
Brand
|
• Product offering from a known identity
• Bernafon, Oticon, Siemens, Resound, etc. |
• Audiology Associates, Hearing Center, Hear
USA • Doctor of Audiology |
|
|
Brand Competition
|
All Competitors Like YOU! In the same Market
|
• All Au.D. Branded Individuals.
• All Au.D. From Sonus, etc. • Otolaryngologists that Dispense |
|
|
Industry Competition
|
• All Competitors that Sell Amplification
– Independent MA Audiologists – Independent Ph.D, Ed.D., Sc.D, Audiologists – Audiologists that work for physicians – Otolaryngologists – Dispensers |
|
|
|
Form Competition
|
• All in the Same Business
– Independent MA Audiologists – Independent Ph.D., Ed.D., Sc.D., Audiologists – Audiologists that work for physicians – Physicians – Dispensers – Internet sales – Door to door sales |
|
|
|
Generic Competition
|
• All Products that cost the same
– Cars – Cruises – Vacation – Funds for grandchildren’s college. – Etc |
|
|
|
Marketing Mix – 4 Ps
|
Product
Price Promotion Place |
Product = Customer Solution
Price = Customer Cost Promotion = Communication Place = Convenience |
|
|
SWOT Analysis
|
Strengths, Weaknesses, Opportunities, Threats
• Introspective-Extropective Review of the Market • To Identify of Practice’s Target Audience • Involves a Qualitative and Qualititative Review • Success of SWOT analysis is the amount and accuracy of the Data as its basis. |
• Threats and Opportunities Considered
External • Strengths and Weaknesses Considered Internal • Software assists in the Process |
|
|
Threat Analysis
|
• Practice’s philosophy or mission?
• The practice product (both goods and services) features, benefits or quality? • The competitive advantage of the practice? (Is there a competitive advantage?) • How the services are conducted, patient and referral source satisfaction. |
• Practice pricing structures? Are the goods
and services of this practice priced much higher or lower than the competition? • Target market's awareness of your practice and its services? |
|
|
Opportunities Analysis
|
• Quality/effectiveness of past promotions and other
marketing efforts • Pricing in the practice compared to others for the value obtained. • The practice’s geographical or convenient service advantages |
|
|
|
Strengths and Weaknesses Analysis
|
• Internal Factors Important to the Management of
the Treats and Opportunities • Those conducting the SWOT are often very close to the information and impartiality is difficult • Develops a Plan of Attack for the Threats and Opportunities. |
The practice’s operational leadership, how the
practice effectively operates in the community. • The financial strength of the practice to combat the threats and take advantage of the opportunities observed • Practices physical capabilities, large enough facility, equipment, etc. • Responsiveness of workforce in the practice, enough people, motivated etc. |
|
|
Baby Boomers
|
• Baby boom after WWII
• Before WWII were less than 2 Million births per year • Between 1946 & 1964 – 3.2 to 4 Million births per year |
Describes the largest generation people
ever born in developed countries. |
|
|
Baby boomers
|
• Global Economies
• Internet Access • Birth Control – Have Children or not? Baby Boomers • Most Jobs do not guarantee Retirement • Healthcare – Most diseases controlled…. • Old is how you feel – Average of 14 years younger • Retirement – Quit one job …move to another |
Marriage
• 40+ % Stay Together • Over 50% Divorce • Some Remarry, Stay Together • Some Divorce again…again • Some do not Remarry • Some never Marry |
|
|
Baby boomers
|
Jobs
• Jobs are not for life… • 5-6 year average on the job • Some leave jobs go back to school • Others simply work for themselves |
Retirement
• Very few will retire from the first job • Some may retire from their 2nd -3 rd job • Some go back to school, get a different job • Some have retired early • Some will never retire |
|
|
Non-Linear Lifestyles
of Baby Boomers |
• There are no predictable events, Baby Boomer life is
extremely diverse and unpredictable. • Difficult to predict market segments by age alone. |
|
|
|
Distinctive Traits
of Baby Boomers |
Entitlement
• Personal Gratification • Work Ethic • Control • Optimism • Will Not Accept “Normal” |
|
|
|
Key Drivers for
Baby Boomers |
Affluence
• Health and Wellness • Social Networking • Desire for New Experiences • Individualism • Convenience • Live for Today • Self Improvement • Working Retirement • Value for Money • Savvy & Information Hungary • Ethics & Environmentalism |
|
|
|
Baby boomers
Effect on Your Business |
Will seek hearing care sooner
• Internet Information: Well-Informed • Will seek health care practitioners directly • Accepting of non-physician providers • Looking for advanced degrees/specialty certification Abruptly critical of perceived quality of care • Critical of environment where services are delivered |
• Low tensile strength regarding practice loyalty
• Front office staff must be cordial and attentive • Intolerant of too much after-purchase attention • Sensitive to service costs despite insurance coverage • Require wide scheduling opportunities – Nights – Weekends • Location convenience is important |
|
|
10 Rules for Marketing
to Baby Boomers |
Rule 1: Treat Everyone Equally
Rule 2: Use Emotionally Meaningful Concepts, Words and Images Rule 3: Be Positive Rule 4: More Information is Better Rule 5: Tell a Story |
Rule 6: Understand Changing Values
Rule 7: Make it Relevant to ME! Rule 8: Play in the Gray Rule 9: Use Life Stage…Not Age Rule 10: Learn Baby Learn |
|
|
Fraud and abuse are encompassed by
“the big three”: |
| The Antikickback Statute;
| The Stark Self-Referral Prohibitions; and | The False Claims Act |
|
|
|
The Antikickback Statute
|
The Antikickback Statute’s primary focus is
payment for referrals. The Antikickback statute prohibits any knowing and willful conduct involving: | the solicitation, receipt, offer, or payment of any kind of remuneration; | in return for referring an individual for services or recommending or arranging the purchase, lease, or ordering of any item; | that may be wholly or partly paid by a federal health care program. |
|
|
|
The Stark Self-Referral Prohibitions
|
The Stark laws focus on prohibiting physician referrals of
patients to entities in which the provider has a financial interest. If the physician or immediate family member | has a financial relationship with an entity, then: | the physician may not make a referral to the entity to furnish designated health services for which payment otherwise may be made by a federal health program; and | the entity may not present a claim to a federal health program, or bill any individual, third party payor, or other entity for the service. |
Designated health care services laundry list:
clinical laboratories services; physical therapy services; occupational therapy services; radiological services; radiation therapy treatment; durable medical equipment and supplies; parenteral and enteral nutrition and equipment; prosthetics, orthotics, and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. |
|
|
The Law:
The False Claims Act |
The False Claims Act prohibits submission of false claims
and fraudulent billing: | under any federal health care program; | for any item or services; | provided by a person who: z knowingly and willfully has made any false statement or representation in application for payment including claims for uncovered services; or z has furnished services or supplies that are determined to be substantially in excess of those needed or is so lacking as to be worthless. |
|
|
|
Qui Tam Actions
|
“Qui tam pro domino rege quam pro se ipso in hace parte
sequitur.” | Also known as the “whistleblower’s statute.” | Allows for private individuals with knowledge of fraud and abuse violations to report it to the government. | If recovery is made against provider, person who brought information to government gets a 10-30% cut of the proceeds! |
|
|
|
False Claims Act – The Criminal Side
|
| Fines of up to $25,000 per violation;
| Imprisonment of up to 5 years; and | The “death penalty”: exclusion from federal and state health care programs. |
|
|
|
False Claims Act – The Civil Side
|
| Fines of up to $5,000-10,000 for each fraudulent claim;
| A penalty assessment of three times the amount of damage sustained by the federal government; and | Other penalties imposed by the Medicare and Medicaid laws. Note: Being convicted under criminal FCA does not preclude prosecution and conviction under civil FCA! |
|
|
|
Antikickback Statute – The Criminal Side
|
| Fines of up to $25,000 per violation;
| Imprisonment of up to 5 years; and | The “death penalty”: exclusion from federal and state health care programs. |
|
|
|
Antikickback Statute– The Civil Side
|
| Fines of up to $50,000 per violation;
| A penalty assessment of three times the amount of damage sustained by the federal government; and | Other penalties imposed by the Medicare and Medicaid laws. Note: Being convicted under criminal Antikickback Statute does not preclude prosecution and conviction under civil Antikickback Statute! |
|
|
|
Stark Laws-Kind of a break: Only Civil Sanctions
|
| Fines of up to $15,000-100,000 per violation;
| Denial of payment for any services in violation of the law; and | Refunds by the provider made by the government for such services. |
|
|
|
More Laws You Could Learn About the Hard Way:
Providers have been prosecuted under federal: |
| conspiracy laws;
| false statements laws; | general false claims laws; | mail and wire fraud laws; | money laundering laws; and | racketeering laws. | But don’t forget all those state law equivalents! |
|
|
|
Audiology:
Rule 4c |
| “Individuals should not participate in professional
activities that constitute a conflict of interest.” | “Conflict of interest” is comprised of “all endeavors related to the practice of audiology in which professional advice, actions, or judgments may be compromised or appear to be compromised by financial or other professional factors. |
|
|
|
Potential Problems:
Patient Perceptions |
| Short term: patients may not have actual
knowledge at present, so common scenarios may be okay, but… | Long term: once information is publicized, a trust and confidence issue arises! |
|
|
|
Potential Problems:
Provider Perceptions |
| Media discovery will provide poor public
relations. | Federal government will quickly become involved. | States will join the bandwagon and become involved |
|
|
|
Torts
|
Torts are civil (as opposed to criminal) wrongs
committed by one party against another’s person, property, or interest. They are a function of state law, but each state is generally similar. If the party who sues, the plaintiff, wins, he/she can generally get compensatory damages – cashola! |
|
|
|
The Two Major Torts of Concern in Audiology:
|
Malpractice; and
Lack of Informed Consent. |
|
|
|
The Negligence Rule
|
Malpractice and lack of informed consent
claims based on the rule of negligence. Negligence rule requires plaintiff to show by preponderance of the evidence: a pre-existing duty; a breach of that duty; that caused; damages. |
|
|
|
Malpractice
|
Providers are obligated to render that level of
care and skill to patients that a member of the profession in good standing would provide under similar clinical circumstances. If ya do less than this, it’s malpractice! |
|
|
|
Pre-Existing Duty:
|
Pre-existing duty: easy – audiologist with a
relationship with a patient has to provide nonnegligent care! |
|
|
|
Breach of Duty:
|
Breach of Duty: harder – audiologist must be shown
through expert testimony that he or she has not met the level of care defined by the profession. Problems for the defendant here: “Expert” doesn’t necessarily have to be an audiologist! The hired gun problem – can always find someone who’ll say anything ya want! |
|
|
|
Causation:
|
Causation: harder again – audiologist must be
shown through expert testimony breach of duty caused the patient’s injury. Problems for the defendant here: Such a breach only needs to be one or a plausible cause of the patient’s injury! The hired gun problem again! |
|
|
|
Damages:
|
Damages: easy – any injury to the patient!
|
|
|
|
Res Ipsa Loquitur:
|
“The thing speaks for itself”.
Shifts the burden of proof from plaintiff to defendant! Defendant negligence is presumed and defendant must rebut this presumption in order to prevail – you must prove your innocence! |
When Can Plaintiff Use It?
When the injury sustained by plaintiff was of a kind that does not ordinarily occur in the absence of negligence – no expert testimony necessary[!!]; The injury was caused by an agency or instrumentality in the defendant’s exclusive control; and The injury was not due to any voluntary action or contribution on the plaintiff’s part. |
|
|
Minority Practice Doctrine
|
If there are alternative and accepted standards of care
other than the majority standard, the “minority practice doctrine” applies. Defendant provider who follows minority practice is entitled to be assessed on the tenets of this practice. If defendant adhered to the tenets of the minority practice, he or she has not breached his or her duty to the patient. |
|
|
|
Workers’ Compensation Exams
|
Workers’ comp and other nontherapeutic examinations are
generally considered done for the employer or insurance company. These exams thus generally do not establish a patient-provider relationship, so there is no duty toward the patient! BUT: some courts have held that if the exam unearths facts that would assist the patient if disclosed, you have a duty to let the patient know what’s up. And don’t offer any advice or treatment – if ya do, you’ve established a patient-provider relationship! |
|
|
|
Failure to Refer
|
Failing to refer a patient to a specialist when a
provider lacks expertise to appropriately treat the patient may create liability! So even if you don’t treat the patient, you may still be held liable for malpractice if you don’t direct the patient to the “appropriate” provider! |
|
|
|
Informed Consent
|
Informed consent is the process by which providers
communicate and discuss material risks and benefits of each diagnostic and treatment alternative, including doing nothing, in terms which the patient can understand. Two general forms: patient-centered and providercentered. If ya don’t get it, you’re on the hook for liability, even if the care is medically appropriate and patient didn’t suffer injury from the treatment |
Implied Consent: theoretically, no need to get
oral or written consent, if by reasonable inference, patient's action indicates he/she consents. Ineffective Consent: consent may not be deemed effective if provider “coerces” patient into consenting, or patient mistaken in his or her understanding and provider knew or should have known. |
|
|
Pre-Existing Duty:
|
Pre-existing duty: easy – audiologist with a
relationship with a patient has a duty to obtain informed consent from patient! What’s your duty? The different standards: Patient-centered standard: duty to obtain consent based on what information reasonable patient would want; or Provider-centered standard: duty to obtain consent based on what information reasonable provider would give. In both situations, all “material” info must be provided, including results of doing nothing! |
|
|
|
The Specifics: Informed Consent
|
Breach of Duty: harder – audiologist must be
shown to have not met the duty using patient or provider standard. Problems for the defendant here: No expert testimony necessary for patient-centered standard! The hired gun problem again for provider-centered standard! |
|
|
|
Causation:
|
Causation: hard but not as bad as malpractice –
audiologist’s not obtaining informed consent must be shown to have caused the patient’s injury. Problems for the defendant here: Patient can simply say he/she relied on provider’s limited or nondisclosure of material information when deciding to go forward [or not] with treatment to fulfill this part of the claim! |
|
|
|
“Therapeutic Privilege”
|
Legal doctrine that indicates if disclosure of
particular information would be significantly detrimental to patient’s physical or mental well being, medical provider allowed not to disclose it. Dangerous ground! Need to carefully and closely document reasons and rationales for nondisclosure! |
|
|
|
“Consent Waiver”
|
Patient may validly waive his or her right to be
informed as to diagnosis and treatment consent. Another area of dangerous ground! Always preferable to get informed consent. If patient insists on waiver, it should be noted in detail in the patient's records and witnessed! Note also that waiver does not waive the patient’s right to change his or her mind! |
|
|
|
“Emergencies”: Part I – Adults
|
Definition: when patient is unconscious or
lacks capacity and needs immediate medical attention due to the threat of irreparable harm. “The Rule”: adults generally deemed to consent to diagnosis and treatment during emergencies. |
|
|
|
“Emergencies”: Part II – Kids
|
Generally like adults; but should get consent
from mom or dad if there’s any question whether there is a “true” emergency! This is particularly true if the harm isn’t “immediate” or “irreparable”! |
|
|
|
Legal
|
Conforming to all legal
requirements |
|
|
|
Moral
|
Conforming to personal or religious
beliefs |
|
|
|
What is an Ethical Business?
|
• Profitable
• Sound business principles • Good management and workforce • Quality goods or services—value based • Customers who “believe” & trust • Some degree of altruism – On the behalf of the customer – Not disregarding the company |
|
|
|
Integrity & Honesty
|
•Looking at things from a customer
viewpoint •The golden rule •Trustworthiness •Value •Customer Perceptions |
|
|
|
What Makes a “Bad”
Business? |
•Violation of above principles
•Silly managers •Bad products •Lousy services •No profits •No trust from customers •Customer Perceptions |
|
|
|
Add Healthcare to Business
|
•What does a health care business
require? – Public Trust – Public Responsibility |
•What does the health car business get
in return? – Respect, honor, etc. – Ability to govern itself |
|
|
Requirements in Health Care
|
•Obligations—in descending order
1. To the patient 2. Society in general 3. Other health professionals 4. Self |
•Rewards
1. Trust of society 2. Self regulation |
|
|
Obligations—To the Patient
|
•Up-to-date knowledge and skills
– Outcomes and expectations – Adequate equipment •When to call in others •Limits of scope of practice •No conflict of interest – Apparent – Implied |
•Patient interest above all else
– Altruism – Even profit •Conflict of Interest – AAA Code of Ethics, Rule 4C •Compromised judgment •Appearance of conflic |
|
|
Obligations—To Society in
General |
• Obligations go beyond patient to include
– Family •Within adherence to HIPAA – Communications that are •Within scope of practice • Necessary for the advancement of patient health or care • Implications – Advertising – Other promotional activities |
|
|
|
Obligations—To Other Health
Professionals |
•Communication with others
– Physicians – Audiologists •Promotion of audiology in appropriate manner •Participation in the science of all related health fields •Field that is open and available for inspection by others |
|
|
|
Obligations—To Self
|
•Relative to profits
– Never at patient expense – Always justifiable •Participation in the field – Reading research and applying – Using appropriate tests procedures, protocols •Upholding the professional image |
|
|
|
Rewards
|
•Trust of society
•Self regulation •Respect •Leadership •Level of income |
|
|
|
•What does YOUR Code of Ethics say?
|
Rule 2F-Maintain Professional
Competence •Rule 4-Provide only services in the best interest of those served – Rule 4C-Conflict of Interest – Rule 4D-Supervision compensation •Rule 8C-You shall be the police |
|
|
|
The Anti-Kickback
Statute |
• Primary focus: payment for referrals
• The Statute prohibits any knowing and willful conduct involving – The solicitation, solicitation, receipt, offer receipt, offer or or payment payment of any kind of remuneration; – In return for referring an individual for services or recommending or arranging the purchase, lease, or ordering of any item; – That may be wholly or partly paid by a federal health care program |
• Audiologists are increasingly being paid a
percentage of sales for medical equipment such as hearing aids • Under Under the law audiologists in these the law, audiologists in these arrangements are know as “sales agents” • Federal government doesn’t like sales agents in medical environments • Some relevant suspect characteristics of sales agent arrangements: – Compensation based on percentage of sales – Direct contact between sales agent and physician in position or order items or services, services, and and – Direct contact between sales agent and health program beneficiaries |
|
|
Violation of AKB?
|
• If audiologists are being paid a percentage
of sales (hearing aids), and • If they have direct contact with physician making ( g the referrals (i.e. contract in the physician’s office), and • Have direct contact with health program beneficiaries, then • High risk for Anti-Kickback Statute Violation |
What does AKB mean for:
– Audiologists who dispense and are employed by a physician? – Audiologists Audiologists employed by a employed by a “chain chain” of of clinics clinics that primarily sell hearing aids? – Audiologists who purchase from a single manufacturer and receive discounts dependent upon number of sales? – Cooperative advertising? |
|
|
The Law: The False Claims Act
|
• Prohibits submission of false claims and
fraudulent billing – Under any federal health care program; – For any item or service; – Provided by a person who: • Knowingly and willfully has made any false statement or representation in application for payment including claims for uncovered services, or; • Has furnished services or supplies that are determined to be substantially in excess of those needed or is so lacking as to be worthless. |
• Audiologists billing states for Medicaid
reimbursement – How does one bill for therapy related to the hearing hearing aid? aid? – How does the audiologist provide an exact and true copy of the cost of a prosthesis? – If the audiologist bills for a procedure that is no longer covered by the state agency, or – If one bills for tests that will not be covered |
|
|
The Law: The Stark Self-Referral
Prohibitions |
• Focus: prohibiting physician referrals of patients
to entities in which the provider has a financial interest. If the physician or immediate family member – Has Has a financial interest then a financial interest, then – The physician may not refer to the entity to furnish designated health services for which payment otherwise may be made by a federal health program; and – The entity may not present a claim to a federal health program, or bill any individual, third party payer, or other entity for the service |
• Does not apply to a physician if the terms of
payment are “set in advance”. – No one seems to know exactly what this means • Personal services arrangements – What about “sales agents” with physicians who have partial or full ownership of the corporation? – What about contracts between physicians and audiologists in which the physician has some interest and gets compensation based in some manner on sales? |
|
|
Fines Associated with the Statutes
|
• AKB
– Range from $25K (criminal) up to $50K (civil) – Per violation – Excluded from federal programs for life • False False Claims Act Claims Act – Criminal-up to $25K, plus prison, plus exclusion – Civil-$5K to10K, plus penalty of 3x damages, per claim • Stark Laws – Civil-$15K to $100K per violation – Plus reimbursement the government |
• A violation can occur in both the civil and
the criminal arena—for the same offense • Other state and federal laws may also apply |
|
|
The Law: HIPAA– the Health
Insurance Portability and Accountability Act |
• Focus: maintaining privacy of patient-identifiable
healthcare information (PHI) – Prohibits Prohibits use or disclosure use or disclosure of of PHI without patient PHI without patient authorization – Prohibits sales of patient lists without authorization – Allows for marketing discussion of products and services if done face-to-face, in communication of treatment options that involve relevant products or services, or in communications involving products or services of only nominal value |
Audiology Issue re: HIPAA
• What is the interpretation if an audiologist were to sell a patient list to a buyer, marketing firm, manufacturer, etc.? – Does purpose matter? – Does Does buyer matter? buyer matter? • Fines: – $25K per violation – Criminal penalties up to $250,000 per violation – Up to 10 years in jail • Advice: Seek legal counsel |
|
|
Principle 1
|
PRINCIPLE 1: Members shall provide
professional services and conduct research with honesty and compassion, and and shall respect the dignity worth and shall respect the dignity, worth, and rights of those served. – Rule la: Individuals shall not limit the delivery of professional services on any basis that is unjustifiable or irrelevant to the need for the potential benefit from such services |
|
|
|
Principle 2
|
PRINCIPLE 2: Members shall maintain high
standards of professional competence in rendering services. – Rule Rule 2f: 2f: Individuals Individuals shall maintain shall maintain professional competence, including participation in continuing education. |
|
|
|
Principle 4
|
PRINCIPLE 4: Members shall provide only
services and products that are in the best interest of those served. – Rule 4a: Individuals shall not exploit persons in the delivery of professional services. – RR l 4b ule 4b: II di id l h ll t h f i t ndividuals shall not charge for services not rendered. – Rule 4c: Individuals shall not participate in activities that constitute a conflict of professional interest. – Rule 4d: Individuals using investigational procedures with patients, or prospectively collecting research data, shall first obtain full informed consent from the patient or guardian |
|
|
|
Principle 5
|
PRINCIPLE 5: Members shall provide
accurate information about the nature and management of communicative disorders and and about the services and products about the services and products offered. – Rule 5e: Individuals shall maintain documentation of professional services rendered. |
|
|
|
Principle 6
|
PRINCIPLE 6: Members shall comply with the
ethical standards of the Academy with regard to public statements or publication. – Rule 6a: Individuals shall not misrepresent their educational degrees, training, credentials, or competence competence Only degrees earned from regionally . Only degrees earned from regionally accredited institutions in which training was obtained in audiology, or a directly related discipline, may be used in public statements concerning professional services. – Rule 6b: Individuals' public statements about professional services, products, or research results shall not contain representations or claims that are false, misleading, or deceptive. |
|
|
|
Principle 8
|
PRINCIPLE 8: Members shall uphold the dignity of the
profession and freely accept the Academy's self-imposed standards. – Rule 8a: Individuals shall not violate these Principles and Rules, nor attempt to circumvent them. – Rule Rule 8b: 8b: Individuals Individuals shall not engage shall not engage in dishonesty or illegal in dishonesty or illegal conduct that adversely reflects on the profession. – Rule 8c: Individuals shall inform the Ethical Practice Board when there are reasons to believe that a member of the Academy may have violated the Code of Ethics. – Rule 8d: Individuals shall cooperate with the Ethical Practice Board in any matter related to the Code of Ethics |
|
