Description
In the Middleboro Physician Care Services, Inc. case, you are asked to examine the operations of an ambulatory, non-emergent care clinic which treats private and occupational health patients and provides services which do not include continuing or specialized medical care. Physician Care Services, Inc. is currently facing a number of challenges and opportunities which will impact their profitability.
To prepare for this Assignment:
Read Case 3: Physician Care Services, Inc., including Tables 3.2 and 3.3. Review the issues that surround provider productivity, to evaluate whether the organization can be successful in the new era of health care reform.
The Assignment:
In 2–3 pages, describe the metric(s) you will use to evaluate the organization’s productivity. Explain how you will use the metric in evaluating productivity, and how the data will help measure the potential of the organization’s success in the new era of health care reform.
295
295
Case 3
291
372
Physician Care
Services, Inc.
875
291
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P
hysician Care Services, Inc. (PCS), was founded as a for-profit corporation on January
1, 2000. Three physicians each own 20 percent of the stock, and one physician owns 40
percent. PCS currently offers nonemergent care services in two locations—at the Alpha
Center just outside the city limits of Middleboro in Mifflenville and at the Beta Center in Jasper,
close to the Jasper industrial park and suburban neighborhoods. At these locations ambulatory
medical care is provided on a walk-in basis. PCS centers do not offer emergency services. If a
patient arrives needing emergency services, an ambulance is called to transport the patient to
the nearest hospital emergency department.
The Alpha Center opened in January 2000. Originally, it only treated occupational
health clients. This policy was changed in 2004 when private patients were accepted. The Beta
Center opened in January 2006 and has always treated private as well as occupational health
clients.
PCS specializes in providing services that are deemed convenient by the general public.
Patient satisfaction remains its highest operational goal. At present, staff physicians employed by
PCS do not provide continuing medical care. PCS physicians refer patients to area physicians
as warranted for continuing and/or specialized medical care. Although patients often return to
a PCS center, chronic illness management is not provided.
77
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Health
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The Middleboro Casebook
P ati e n t S e r v ic e s
O ccu pat i o n a l H e a lt h C l i e n t s
Occupational health clients are sent to a PCS center by their employer for treatment of
a work-related injury (which is usually covered by workers’ compensation insurance), for
pre-employment or annual physicals, and for health testing, which are paid for directly by
the employer. Because of special work conditions, usually involving hazardous chemicals or
materials, some local corporations contract with PCS to provide comprehensive physicals
in accordance with Department of Transportation and other federal and state laws and
regulations. Local corporations consider PCS a cost-effective and convenient alternative to
a hospital emergency department. These corporations use PCS in lieu of employing a physician. Corporate clients expect PCS to assist with all phases of case management involving
worker injury. They hold PCS accountable that their workers receive timely, appropriate,
and cost-effective services.
Physicals for Occupational Safety and Health Administration compliance are currently priced between $300 and $500 each. Physicals for local police and fire include
pulmonary function tests (PFT), laboratory tests, and electrocardiograms (EKGs). They
are currently priced between $250 and $350 per physical, depending on contractual volume. Pre-employment physicals are typically priced between $60 and $95 and include a
urine dip test. Services provided for occupational health clients are billed directly to the
employer.
P r i vat e (R e ta i l ) C l i e n t s
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Private clients also seek medical care from PCS centers. All aspects of general medical care
are provided except OB/GYN. Private patients are attracted to PCS because they do not
need an appointment. PCS accepts cash, checks, and credit cards at time of service. As of
2008, PCS directly bills the larger health insurance plans covering its market area:
◆◆ Statewide Blue Shield
◆◆ American Health Plan
◆◆ Cumberland River Health Plan
◆◆ Central State Good Health Plan
At time of service, retail clients covered by these plans are screened to verify eligibility and to determine whether they have satisfied any required deductibles. If deductibles
have been met, patients will be required to pay just the copay amount, and a bill is sent
electronically to the insurance plan for the account’s balance. If deductibles have not been
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Case 3: Physician Care Services, Inc.
79
met, then the patient will pay the bill at time of service, and PCS will enter the bill into
the insurance company’s system as partial fulfillment of any outstanding deductible. If the
patient does not have coverage from one of these insurance companies, she receives a bill
to claim reimbursement directly from her insurance plan. PCS also directly bills Medicare.
A recent study suggested that these four private insurance companies and Medicare cover
approximately 85 percent of PCS’s private clients.
Any client who has a history of bad debt at PCS or is unable to pay at time of service is referred to a hospital emergency department for service. PCS maintains an aggressive credit and bad debt collection policy and does not serve Medicaid patients.
Patients living within a 30-minute travel distance from a PCS center typically constitute 80 percent of PCS’s private pay patients.
Copyright © 2013. Health Administration Press. All rights reserved.
O r g a ni z ati o n
and
M a n a gem ent
Each center is located in approximately 6,000 square feet of rental space devoted to patient
services. The Alpha Center is located on main roads between Middleboro and Mifflenville
in a small shopping center. The Beta Center is located on the first floor of a new office
building adjacent to a large shopping mall in Jasper. Ample parking is provided in both
locations. Each center maintains attractive signs.
Each center is open 60 hours per week, 8:00 a.m. to 7:00 p.m. on weekdays and
9:00 a.m. to 2:00 p.m. on Saturdays. Both centers are closed on Sundays and Memorial
Day, July 4, Thanksgiving, Christmas, and New Year’s Day. Each center has four fully
furnished patient examination rooms and one extra room. Currently each center has some
excess space.
For patient care the minimum staffing at each center is one receptionist/billing
clerk, one medical assistant, and one physician or nurse practitioner. Additional staff (e.g.,
advanced registered nurse practitioner, physician assistant, medical assistant) is scheduled
based on anticipated high-volume days. Typically the nurse practitioner works on Saturdays and assists with physicals and other services on high-volume days. Physician assistants
also assist on high-volume days.
The central administrative and billing office is an additional 2,500 square feet and
is located adjacent to Alpha Center. The central office staff includes the president, medical
director, director of nursing and patient care, business office manager, and the billing and
bookkeeping staff.
Charges
Each center uses the same price schedule. The basic visit charge (CPT 99202) has changed
each year.
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Health
Administration
Press, 2013.
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The Middleboro Casebook
January–December
Private Pay ($)
Occupational ($)
2010
94
161
2011
99
170
2012
104
180
2013
110
189
2014
120
201
Current detailed prices include:
CPT Procedure
Copyright © 2013. Health Administration Press. All rights reserved.
Code
Description
Price ($)
99201
Office visit, brief, new
96
99202
Office visit, limited, new
120
99203
Office visit, inter, new
201
99204
Office visit, comp, new
226
99211
Office visit, min, est
65
99212
Office visit, brief, est
96
99213
Office visit, limited, est
201
99214
Office visit, inter, est
201
99215
Office visit, comp, est
294
Additional charges are levied for ancillary testing and specialized physician services,
such as suturing. A patient returning for a medically ordered follow-up is charged $96
for the return visit. Based on Current Procedural Terminology (CPT) comparison, PCS
fee levels are competitive within the area. No similar medical service is offered within a
45-minute radius from each center. In the past—as part of an advertising campaign to
attract private pay patients—each May and June PCS has offered discounted physicals,
such as camp physicals for children at $48 and for all children in a family for $69.
Steve J. Tobias, MD, board chair and president of PCS, says national studies suggest that urgent care visits are at least $10 less than a visit to primary care physician in
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: Healthcare
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Case 3: Physician Care Services, Inc.
81
private practice. Other studies indicate that urgent care visits cost $250 to $600 less than
emergency department visits for the same CPT code.
Some occupational health clients are charged based on a negotiated volume-based
price, especially for physicals. PCS’s medical director negotiates specific fees for physicals and specific medical tests ordered by an employer. Typically, an employer approaches
PCS in need of a specific type of physical, such as the annual physical required by the
Department of Transportation for all operators of school buses, or specific medical test for
employees. PCS submits a bid to perform a specific number of physicals based on a flat
rate per physical.
As of 2007, PCS does its own payroll. Employees must have direct deposit with a
local bank. Each employee receives an electronic pay stub biweekly (with accrued balance
of vacation and sick time) and a W-2 at the end of the year.
Board
of
Directors
Copyright © 2013. Health Administration Press. All rights reserved.
The board of directors is composed of the four physician owners and meets quarterly to
review operations. The annual board meeting occurs in December, at which time officers
are elected for the coming year. As majority stockholder, Dr. Tobias is chairman of the
board and president of PCS. Jay T. Smooth, MD, is the board secretary. Other board members are Rita Hottle, MD, and Laura Cytesmath, MD. Current owners have the option
of buying any available stock at its current book value. An outsider can purchase stock in
this company only if all the current owners refuse to exercise this option and he receives
the approval of the existing owners. It should be noted that PCS has paid a stock dividend
in three of the last five years.
President
and
M e d ic a l D i r e c t o r
Dr. Tobias is also the medical director of PCS. He is a graduate of the medical school at
Private University and has completed postgraduate medical education at Walter Reed Army
Hospital in general internal medicine. He is board certified in general internal medicine,
emergency medicine, and occupational health. He also holds a master’s in public health
from State University. As medical director, Dr. Tobias is responsible for medical quality
assurance programs and the recruitment and retention of qualified physician employees.
He is also responsible for securing the services of consulting radiologists to read all X-rays.
He receives a separate salary as medical director and as president. Compensation for the
medical director position began in 2008. Before Dr. Tobias founded PCS, he was a full-time
emergency physician at Middleboro Community Hospital. He originally worked to establish joint venture urgent care centers with Middleboro Community Hospital. When this
approach failed, he recruited the other stockholders and moved ahead with PCS. As president, Dr. Tobias is responsible for the management of all resources and strategic planning.
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Health
Administration
Press, 2013.
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The Middleboro Casebook
Dr. Tobias schedules the other physicians and the nurse practitioners. He also works
in the centers and provides on-call services as needed. He has consulting medical staff
privileges in the Department of Medicine at Middleboro Community Hospital.
C l i n ic a l S ta f f
In total, the clinical staff is composed of seven physicians, three nurse practitioners, and
two physician assistants. All physicians hold medical staff privileges at an area hospital.
Name
Medical Specialty
Certification
Bennet Casey, MD
Family practice
Board certified
Mark Welby, MD
Family practice
Board certified
Steve Tobias, MD, MPH **
Emergency medicine
Board certified
Jay Smooth, MD *
Emergency medicine
Board certified
Rita Hottle, MD *
Emergency medicine
Board certified
Laura Cytesmath, MD *
Emergency medicine
Board certified
Micah Foxx, DO, MPH
Occupational health
Board certified
Melisa Majors, MD
Occupational health
Board certified
Carl Withers, ARNP
Family and adult health
Jane Jones, ARNP
Family and adult health
Gerri Mattox, ARNP
Family and adult health
Copyright © 2013. Health Administration Press. All rights reserved.
Rutherford Hayes, PA
Mary Fishborne, PA
* Owner
** Owner and president
Until 2007, staff physicians were retained as independent contractors and received
no benefits above their hourly wage. Beginning in 2007 when nurse practitioners were
added, physicians (and all other employees) who worked more than 1,000 hours were
provided comprehensive benefits, including family medical coverage. Also as of 2007, PCS
reimburses all physicians and nurse practitioners for their medical malpractice insurance.
Full coverage is provided when a member of the medical staff works 1,400 hours at PCS.
Others receive a partial reimbursement.
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Health
Administration
Press, 2013.
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Case 3: Physician Care Services, Inc.
83
Physicians are paid $100 per hour. Nurse practitioners receive $50 per hour. These
payment levels have been fixed for two years and are considered within the appropriate
market range. Drs. Smooth, Hottle, and Cytesmath also work as emergency physicians at
Middleboro Community Hospital. Dr. Casey serves as medical director one day per week
at an area corporation, where he specializes in occupational health. Dr. Welby also works
at Convenient Med Care, Inc., in Capital City. Dr. Foxx, who recently relocated to Jasper
with her family, is available to work no more than six shifts per month, a condition she
has established until her children reach school age. Dr. Majors also works as an emergency
physician in Capital City. Physician assistants are paid $40 per hour and assist physicians
on anticipated high-volume days.
Dr. Tobias schedules all members of the medical staff for work on a monthly basis
with the understanding that if a physician is unable to work, it is her responsibility to
secure a replacement from the qualified medical staff of PCS. Physicians and nurse practitioners work an entire shift (e.g., 11 hours on a weekday). Fridays and Saturdays are
typically assigned to the nurse practitioners. Physician assistants are on call for busy days
to assist physicians.
The clinical staff of PCS meets quarterly to review areas of concern. Dr. Tobias
does random reviews of medical records to ensure compliance with standards of clinical
practice. He is also responsible for all issues involving credentialing.
M e d ic a l A s s i s ta n t s
Copyright © 2013. Health Administration Press. All rights reserved.
Medical assistants at each center are trained to take limited X-rays, draw specimens for
laboratory testing, do EKGs, and conduct simple vision and audiometric examinations.
Each center is equipped to do:
1.
On-site X-ray
2.
PFT
3.
EKG
4.
Audiometric and visual testing
5.
Some laboratory testing (e.g., strep screen, dip urine)
6.
Drug and breath alcohol testing
A regional laboratory processes more advanced laboratory work.
Two medical assistants are assigned to each weekday shift. One is assigned for 7
hours per day (i.e., 35 hours per week) and the other is assigned for 4 hours per weekday and Saturdays (i.e., 25 hours per week). Responsibilities include examination room
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Administration
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The Middleboro Casebook
preparation, assisting the physician or nurse practitioner, patient testing, case management, scheduling visit follow-up care, and addressing patient questions. Each center maintains a pool of qualified medical assistants who are trained, evaluated, and scheduled by
the director of nursing and clinical care.
C e n t r a l O f f ic e S ta f f
Dr. Tobias devotes his time to being both the president and medical director at PCS and
filling in at a center when needed. As president he is responsible for the overall management of PCS. Joan Carlton, LPN, is director of nursing and clinical care. She trains,
supervises, and schedules the medical assistants. She is also responsible for ordering medical supplies, meeting with occupational health employers as needed, and general administrative duties as assigned by Dr. Tobias. If needed, she substitutes for a medical assistant
at a center.
Martha Coin directs the business office and has three full-time staff. She schedules the receptionist staff at each center. She and her staff assist the receptionists and
billing clerks at each center, manage all insurance billing, and manage the general ledger, including accounts payable and accounts receivable. If needed, she or a member of
her staff substitutes for the receptionist at a center. The central office billing staff also
maintains a list of available (and trained) fill-in receptionists to cover absences and other
needs.
R e c e p t i o n i s t S ta f f
Copyright © 2013. Health Administration Press. All rights reserved.
One full-time (35 hours per week) front desk receptionist is hired for each center. Aside
from greeting and registering all patients, the receptionist is also responsible for appointments, billing, records for occupational clients, and managing cash receipts. One or more
additional receptionists are hired for the remaining 25 hours per week.
A d d i t i o n a l I n f or m ati on
In 2008 PCS began using URGENT CARE MIS, an electronic medical information, general ledger, and billing system. Computer terminals were installed in the reception area in
each center, at the central office, and in each examination room. PCS uses this system for
all phases of financial and medical record keeping and billing, appointment services, case
management, staff scheduling, and data management. This system captures, stores, and
reports all CPT codes and links medical procedures with revenue and expense information. The health insurance billing system has a direct Internet link with the participating
insurance companies and Medicare. PCS purchased the hardware and leased the required
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Health
Administration
Press, 2013.
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Case 3: Physician Care Services, Inc.
85
software for ten years. It receives hardware maintenance, software updates, and technical
assistance from the vendor.
A 2013 study of medical records indicated that the most common CPT codes at
PCS are
◆◆ 99212/3 and 99202 Office/Outpatient Visit,
◆◆ G0001 Drawing Blood,
◆◆ 85029 Automated Hemogram, and
Copyright © 2013. Health Administration Press. All rights reserved.
◆◆ 71010/2 Chest X-Ray.
Injuries and rechecks generally account for 20 percent of all visits.
Paper medical records that existed prior to 2008 are retained in active file for seven
years, and then transferred to closed files.
When interviewed, Dr. Tobias indicated that discharging Nancy Stone, RN, as
director of nursing and clinical services in 2012 was a hard decision. Some employees
still regret this situation. Stone was well liked but just could not get along with some of
the physicians and had a great deal of difficulty coping with multiple job responsibilities.
At the end of her tenure she refused to provide patient care as needed at the Beta Center.
After she was discharged, Stone complained that she had “too many duties to do well, and
PCS was more interested in getting patients in and out than in providing patients quality medical care.” She has retained an attorney and informed Dr. Tobias that she is suing
him and PCS for “wrongful discharge.” As she stated at the initial hearing for the lawsuit,
“Meeting job expectations was hard when the job lacked any formal job description.” Dr.
Tobias shared in the interview that he felt compelled to act even though Stone is the sister
of the vice president for human resources at Carlstead Rayon, a growing occupational
health client of the Alpha Center, and that additional details are not available given that
this case is currently being handled by legal counsel.
Dr. Tobias stated that the owners should look forward to achieving even greater
corporate profitability. Dr. Tobias indicated that no one foresaw the terrible first three years
of financial losses. He also said that within the past few years, PCS has earned its place in
the regional medical care system and its future appears solid. It should be noted that, at
the end of 2007, one of the original physician partners, who is no longer affiliated with
PCS, exercised his option to be bought out by another stockholder. Dr. Tobias was the
only partner willing at that time to increase his ownership in PCS.
Dr. Tobias also indicated that the owners might now be in the position to open a
third and even fourth location. He also discussed purchasing buildings to house the existing
centers and adding some services to better serve their occupational and private pay clients.
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
and Operations,
Health
Administration
Press, 2013.
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The Middleboro Casebook
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“We are a debt-free corporation that is beginning to earn serious profits,” he
said. “Along the way we have distinguished ourselves by the high quality of care we have
provided—our patients and occupational health clients are delighted with our highestlevel commitment to patient care, convenience, and affordable prices. While it has been
a long road, I have every reason to believe we will continue to prosper and expand.”
The original real estate leases on the Alpha and Beta Centers expire at the end of
2015. Dr. Tobias said that he timed the expiration of these leases to coincide with when
PCS would be ready to make a major strategic move. Each current lease has a renewal
clause for up to 36 months, with an escalation clause so that rents do not increase more
than 15 percent per year. Tobias estimates that appropriate facilities could be acquired for
$150 per square foot (including land, site improvements, and facilities) and that it would
take approximately six months from the time the contract was executed to when the center
could be fully operational.
When asked to identify future challenges, Tobias noted that he felt that volume had
just about hit the level at which total service time averages about 20 minutes. He did indicate, however, that there might be a need for larger waiting rooms and that those patients
waiting for more than 90 minutes might be a problem. Tobias was, however, pleased that
patients generally reported “complete satisfaction” with the quality of care provided by
PCS. Dr. Tobias repeatedly cited the competent clinical and administrative staff. Overall,
he indicated that he was concerned about continued rapid growth. “Our early success with
occupational health may be slowing. If we lose a significant amount of manufacturing in
our area, we potentially lose occupational health clients. Our future in occupational health
will follow the local economy.”
Dr. Tobias noted that regional unemployment has already affected occupation
health. Fewer people are being hired and working. Fees paid by the workers’ compensation program have been fixed for 24 months. People who are unemployed lack health
insurance. Dr. Tobias expressed a great deal of optimism that the full implementation of
the new federal health insurance plan (the Patient Protection and Affordable Care Act)
would significantly expand PCS’s pool of private clients.
Two years ago, PCS instituted an appointment plan for occupational health clients,
which Dr. Tobias reported has been very successful. Under this plan, occupational health
clients are scheduled for physicals or medical testing. Under the “call before you come” system, patients (or employers) can call ahead to determine the approximate wait time, make
a decision, and—if they want service—register for service at an approximate time that
day, thereby ensuring themselves a specific place in the queue for service even before they
arrive at a center. Every patient who arrives at a center is given an approximate wait time by
the receptionist and told they need not wait in the waiting area to preserve the scheduled
time for their appointment. While “first in, first out” is generally used, urgent care cases
(especially injuries) are bumped ahead of nonemergency patients. Signs in the waiting area
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
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Health
Administration
Press, 2013.
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Case 3: Physician Care Services, Inc.
87
explain to patients that some occupational health clients are served by appointment and
that appointments override arrival order.
PCS advertises its services in the regional market. It uses billboards on main roads
and newspaper advertising. It also uses an extensive website and social media. The director
of nursing and patient care visits current and prospective occupational health clients and
typically answers approximately 15 to 25 telephone inquiries per month regarding quotes
for specific services, such as employee physicals.
When interviewed, other PCS physicians offered different perspectives. Three physicians expressed concern about the manner in which Dr. Tobias schedules the physicians.
They were never sure exactly how many shifts per month they would work and at which
center. All prefer to work at only one center and indicated that this type of stability leads
to a better medical care team.
Records suggest that certain physicians may have productivity profiles significantly
different from those of other physicians. It appears that on busy days, revenue per visit
drops, a trend that suggests that physicians do less ancillary testing when they are busy. The
target for physicians and nurse practitioners is 3 to 4 patients per hour. Three physicians
have also requested extra compensation for busy days. They contend that they tend to be
scheduled on “very busy days” and receive the same hourly compensation as physicians
who work on slower days. Dr. Tobias indicated that he does not feel that their claim is
warranted.
In 2010, two (nonowner) physicians said that because they are paid by the hour,
they should be paid for the time they spend treating those patients who arrive right before
closing time. Up until this change, all staff were only paid for the hours in their shift (e.g.,
11 hours), which was sometimes less than the number of actual hours worked. Employees
are expected to treat all patients that arrive during working hours even if this extends their
work time beyond closing time. All physicians reported that they felt that their pay level
was reasonable given their responsibilities.
Six occupational health nurses at area corporations were interviewed. Each indicated that she and her corporation were satisfied with PCS. A number of these nurses
indicated that they appreciated PCS—specifically the medical assistants—keeping them
informed about specific patients and that PCS was creative in explaining restriction and
suggesting “light duty,” medically appropriate work an injured worker could perform for
the employer as an alternative to her regular duties until she was ready to resume her
regular duties.
Dr. Tobias recently returned from a professional meeting with statistics that he felt
could help PCS better estimate its future market. These statistics apply to this state:
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The Middleboro Casebook
Average Number of Physician Visits—Ambulatory Care per Person,
per Year, by Age and Sex (National Statistics)
Age
Males
Females
0–14
3.37
3.09
15–44
1.99
3.92
(includes OB/GYN)
45–64
2.98
4.34
65+
4.51
5.19
NOTE: Visits unrelated to workers’ compensation and occupational health
At this meeting, Dr. Tobias also learned that other urgent care corporations use the
following parameters in their fiscal and market planning.
◆◆ For every 15 percent increase in a basic visit fee, there will be a 25 percent
reduction in utilization of retail patients without health insurance (i.e., who
pay by cash, check, or credit c
295
Case 3
291
372
Physician Care
Services, Inc.
875
291
Copyright © 2013. Health Administration Press. All rights reserved.
P
hysician Care Services, Inc. (PCS), was founded as a for-profit corporation on January
1, 2000. Three physicians each own 20 percent of the stock, and one physician owns 40
percent. PCS currently offers nonemergent care services in two locations—at the Alpha
Center just outside the city limits of Middleboro in Mifflenville and at the Beta Center in Jasper,
close to the Jasper industrial park and suburban neighborhoods. At these locations ambulatory
medical care is provided on a walk-in basis. PCS centers do not offer emergency services. If a
patient arrives needing emergency services, an ambulance is called to transport the patient to
the nearest hospital emergency department.
The Alpha Center opened in January 2000. Originally, it only treated occupational
health clients. This policy was changed in 2004 when private patients were accepted. The Beta
Center opened in January 2006 and has always treated private as well as occupational health
clients.
PCS specializes in providing services that are deemed convenient by the general public.
Patient satisfaction remains its highest operational goal. At present, staff physicians employed by
PCS do not provide continuing medical care. PCS physicians refer patients to area physicians
as warranted for continuing and/or specialized medical care. Although patients often return to
a PCS center, chronic illness management is not provided.
77
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The Middleboro Casebook
P ati e n t S e r v ic e s
O ccu pat i o n a l H e a lt h C l i e n t s
Occupational health clients are sent to a PCS center by their employer for treatment of
a work-related injury (which is usually covered by workers’ compensation insurance), for
pre-employment or annual physicals, and for health testing, which are paid for directly by
the employer. Because of special work conditions, usually involving hazardous chemicals or
materials, some local corporations contract with PCS to provide comprehensive physicals
in accordance with Department of Transportation and other federal and state laws and
regulations. Local corporations consider PCS a cost-effective and convenient alternative to
a hospital emergency department. These corporations use PCS in lieu of employing a physician. Corporate clients expect PCS to assist with all phases of case management involving
worker injury. They hold PCS accountable that their workers receive timely, appropriate,
and cost-effective services.
Physicals for Occupational Safety and Health Administration compliance are currently priced between $300 and $500 each. Physicals for local police and fire include
pulmonary function tests (PFT), laboratory tests, and electrocardiograms (EKGs). They
are currently priced between $250 and $350 per physical, depending on contractual volume. Pre-employment physicals are typically priced between $60 and $95 and include a
urine dip test. Services provided for occupational health clients are billed directly to the
employer.
P r i vat e (R e ta i l ) C l i e n t s
Copyright © 2013. Health Administration Press. All rights reserved.
Private clients also seek medical care from PCS centers. All aspects of general medical care
are provided except OB/GYN. Private patients are attracted to PCS because they do not
need an appointment. PCS accepts cash, checks, and credit cards at time of service. As of
2008, PCS directly bills the larger health insurance plans covering its market area:
◆◆ Statewide Blue Shield
◆◆ American Health Plan
◆◆ Cumberland River Health Plan
◆◆ Central State Good Health Plan
At time of service, retail clients covered by these plans are screened to verify eligibility and to determine whether they have satisfied any required deductibles. If deductibles
have been met, patients will be required to pay just the copay amount, and a bill is sent
electronically to the insurance plan for the account’s balance. If deductibles have not been
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Case 3: Physician Care Services, Inc.
79
met, then the patient will pay the bill at time of service, and PCS will enter the bill into
the insurance company’s system as partial fulfillment of any outstanding deductible. If the
patient does not have coverage from one of these insurance companies, she receives a bill
to claim reimbursement directly from her insurance plan. PCS also directly bills Medicare.
A recent study suggested that these four private insurance companies and Medicare cover
approximately 85 percent of PCS’s private clients.
Any client who has a history of bad debt at PCS or is unable to pay at time of service is referred to a hospital emergency department for service. PCS maintains an aggressive credit and bad debt collection policy and does not serve Medicaid patients.
Patients living within a 30-minute travel distance from a PCS center typically constitute 80 percent of PCS’s private pay patients.
Copyright © 2013. Health Administration Press. All rights reserved.
O r g a ni z ati o n
and
M a n a gem ent
Each center is located in approximately 6,000 square feet of rental space devoted to patient
services. The Alpha Center is located on main roads between Middleboro and Mifflenville
in a small shopping center. The Beta Center is located on the first floor of a new office
building adjacent to a large shopping mall in Jasper. Ample parking is provided in both
locations. Each center maintains attractive signs.
Each center is open 60 hours per week, 8:00 a.m. to 7:00 p.m. on weekdays and
9:00 a.m. to 2:00 p.m. on Saturdays. Both centers are closed on Sundays and Memorial
Day, July 4, Thanksgiving, Christmas, and New Year’s Day. Each center has four fully
furnished patient examination rooms and one extra room. Currently each center has some
excess space.
For patient care the minimum staffing at each center is one receptionist/billing
clerk, one medical assistant, and one physician or nurse practitioner. Additional staff (e.g.,
advanced registered nurse practitioner, physician assistant, medical assistant) is scheduled
based on anticipated high-volume days. Typically the nurse practitioner works on Saturdays and assists with physicals and other services on high-volume days. Physician assistants
also assist on high-volume days.
The central administrative and billing office is an additional 2,500 square feet and
is located adjacent to Alpha Center. The central office staff includes the president, medical
director, director of nursing and patient care, business office manager, and the billing and
bookkeeping staff.
Charges
Each center uses the same price schedule. The basic visit charge (CPT 99202) has changed
each year.
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The Middleboro Casebook
January–December
Private Pay ($)
Occupational ($)
2010
94
161
2011
99
170
2012
104
180
2013
110
189
2014
120
201
Current detailed prices include:
CPT Procedure
Copyright © 2013. Health Administration Press. All rights reserved.
Code
Description
Price ($)
99201
Office visit, brief, new
96
99202
Office visit, limited, new
120
99203
Office visit, inter, new
201
99204
Office visit, comp, new
226
99211
Office visit, min, est
65
99212
Office visit, brief, est
96
99213
Office visit, limited, est
201
99214
Office visit, inter, est
201
99215
Office visit, comp, est
294
Additional charges are levied for ancillary testing and specialized physician services,
such as suturing. A patient returning for a medically ordered follow-up is charged $96
for the return visit. Based on Current Procedural Terminology (CPT) comparison, PCS
fee levels are competitive within the area. No similar medical service is offered within a
45-minute radius from each center. In the past—as part of an advertising campaign to
attract private pay patients—each May and June PCS has offered discounted physicals,
such as camp physicals for children at $48 and for all children in a family for $69.
Steve J. Tobias, MD, board chair and president of PCS, says national studies suggest that urgent care visits are at least $10 less than a visit to primary care physician in
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Case 3: Physician Care Services, Inc.
81
private practice. Other studies indicate that urgent care visits cost $250 to $600 less than
emergency department visits for the same CPT code.
Some occupational health clients are charged based on a negotiated volume-based
price, especially for physicals. PCS’s medical director negotiates specific fees for physicals and specific medical tests ordered by an employer. Typically, an employer approaches
PCS in need of a specific type of physical, such as the annual physical required by the
Department of Transportation for all operators of school buses, or specific medical test for
employees. PCS submits a bid to perform a specific number of physicals based on a flat
rate per physical.
As of 2007, PCS does its own payroll. Employees must have direct deposit with a
local bank. Each employee receives an electronic pay stub biweekly (with accrued balance
of vacation and sick time) and a W-2 at the end of the year.
Board
of
Directors
Copyright © 2013. Health Administration Press. All rights reserved.
The board of directors is composed of the four physician owners and meets quarterly to
review operations. The annual board meeting occurs in December, at which time officers
are elected for the coming year. As majority stockholder, Dr. Tobias is chairman of the
board and president of PCS. Jay T. Smooth, MD, is the board secretary. Other board members are Rita Hottle, MD, and Laura Cytesmath, MD. Current owners have the option
of buying any available stock at its current book value. An outsider can purchase stock in
this company only if all the current owners refuse to exercise this option and he receives
the approval of the existing owners. It should be noted that PCS has paid a stock dividend
in three of the last five years.
President
and
M e d ic a l D i r e c t o r
Dr. Tobias is also the medical director of PCS. He is a graduate of the medical school at
Private University and has completed postgraduate medical education at Walter Reed Army
Hospital in general internal medicine. He is board certified in general internal medicine,
emergency medicine, and occupational health. He also holds a master’s in public health
from State University. As medical director, Dr. Tobias is responsible for medical quality
assurance programs and the recruitment and retention of qualified physician employees.
He is also responsible for securing the services of consulting radiologists to read all X-rays.
He receives a separate salary as medical director and as president. Compensation for the
medical director position began in 2008. Before Dr. Tobias founded PCS, he was a full-time
emergency physician at Middleboro Community Hospital. He originally worked to establish joint venture urgent care centers with Middleboro Community Hospital. When this
approach failed, he recruited the other stockholders and moved ahead with PCS. As president, Dr. Tobias is responsible for the management of all resources and strategic planning.
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82
The Middleboro Casebook
Dr. Tobias schedules the other physicians and the nurse practitioners. He also works
in the centers and provides on-call services as needed. He has consulting medical staff
privileges in the Department of Medicine at Middleboro Community Hospital.
C l i n ic a l S ta f f
In total, the clinical staff is composed of seven physicians, three nurse practitioners, and
two physician assistants. All physicians hold medical staff privileges at an area hospital.
Name
Medical Specialty
Certification
Bennet Casey, MD
Family practice
Board certified
Mark Welby, MD
Family practice
Board certified
Steve Tobias, MD, MPH **
Emergency medicine
Board certified
Jay Smooth, MD *
Emergency medicine
Board certified
Rita Hottle, MD *
Emergency medicine
Board certified
Laura Cytesmath, MD *
Emergency medicine
Board certified
Micah Foxx, DO, MPH
Occupational health
Board certified
Melisa Majors, MD
Occupational health
Board certified
Carl Withers, ARNP
Family and adult health
Jane Jones, ARNP
Family and adult health
Gerri Mattox, ARNP
Family and adult health
Copyright © 2013. Health Administration Press. All rights reserved.
Rutherford Hayes, PA
Mary Fishborne, PA
* Owner
** Owner and president
Until 2007, staff physicians were retained as independent contractors and received
no benefits above their hourly wage. Beginning in 2007 when nurse practitioners were
added, physicians (and all other employees) who worked more than 1,000 hours were
provided comprehensive benefits, including family medical coverage. Also as of 2007, PCS
reimburses all physicians and nurse practitioners for their medical malpractice insurance.
Full coverage is provided when a member of the medical staff works 1,400 hours at PCS.
Others receive a partial reimbursement.
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Case 3: Physician Care Services, Inc.
83
Physicians are paid $100 per hour. Nurse practitioners receive $50 per hour. These
payment levels have been fixed for two years and are considered within the appropriate
market range. Drs. Smooth, Hottle, and Cytesmath also work as emergency physicians at
Middleboro Community Hospital. Dr. Casey serves as medical director one day per week
at an area corporation, where he specializes in occupational health. Dr. Welby also works
at Convenient Med Care, Inc., in Capital City. Dr. Foxx, who recently relocated to Jasper
with her family, is available to work no more than six shifts per month, a condition she
has established until her children reach school age. Dr. Majors also works as an emergency
physician in Capital City. Physician assistants are paid $40 per hour and assist physicians
on anticipated high-volume days.
Dr. Tobias schedules all members of the medical staff for work on a monthly basis
with the understanding that if a physician is unable to work, it is her responsibility to
secure a replacement from the qualified medical staff of PCS. Physicians and nurse practitioners work an entire shift (e.g., 11 hours on a weekday). Fridays and Saturdays are
typically assigned to the nurse practitioners. Physician assistants are on call for busy days
to assist physicians.
The clinical staff of PCS meets quarterly to review areas of concern. Dr. Tobias
does random reviews of medical records to ensure compliance with standards of clinical
practice. He is also responsible for all issues involving credentialing.
M e d ic a l A s s i s ta n t s
Copyright © 2013. Health Administration Press. All rights reserved.
Medical assistants at each center are trained to take limited X-rays, draw specimens for
laboratory testing, do EKGs, and conduct simple vision and audiometric examinations.
Each center is equipped to do:
1.
On-site X-ray
2.
PFT
3.
EKG
4.
Audiometric and visual testing
5.
Some laboratory testing (e.g., strep screen, dip urine)
6.
Drug and breath alcohol testing
A regional laboratory processes more advanced laboratory work.
Two medical assistants are assigned to each weekday shift. One is assigned for 7
hours per day (i.e., 35 hours per week) and the other is assigned for 4 hours per weekday and Saturdays (i.e., 25 hours per week). Responsibilities include examination room
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The Middleboro Casebook
preparation, assisting the physician or nurse practitioner, patient testing, case management, scheduling visit follow-up care, and addressing patient questions. Each center maintains a pool of qualified medical assistants who are trained, evaluated, and scheduled by
the director of nursing and clinical care.
C e n t r a l O f f ic e S ta f f
Dr. Tobias devotes his time to being both the president and medical director at PCS and
filling in at a center when needed. As president he is responsible for the overall management of PCS. Joan Carlton, LPN, is director of nursing and clinical care. She trains,
supervises, and schedules the medical assistants. She is also responsible for ordering medical supplies, meeting with occupational health employers as needed, and general administrative duties as assigned by Dr. Tobias. If needed, she substitutes for a medical assistant
at a center.
Martha Coin directs the business office and has three full-time staff. She schedules the receptionist staff at each center. She and her staff assist the receptionists and
billing clerks at each center, manage all insurance billing, and manage the general ledger, including accounts payable and accounts receivable. If needed, she or a member of
her staff substitutes for the receptionist at a center. The central office billing staff also
maintains a list of available (and trained) fill-in receptionists to cover absences and other
needs.
R e c e p t i o n i s t S ta f f
Copyright © 2013. Health Administration Press. All rights reserved.
One full-time (35 hours per week) front desk receptionist is hired for each center. Aside
from greeting and registering all patients, the receptionist is also responsible for appointments, billing, records for occupational clients, and managing cash receipts. One or more
additional receptionists are hired for the remaining 25 hours per week.
A d d i t i o n a l I n f or m ati on
In 2008 PCS began using URGENT CARE MIS, an electronic medical information, general ledger, and billing system. Computer terminals were installed in the reception area in
each center, at the central office, and in each examination room. PCS uses this system for
all phases of financial and medical record keeping and billing, appointment services, case
management, staff scheduling, and data management. This system captures, stores, and
reports all CPT codes and links medical procedures with revenue and expense information. The health insurance billing system has a direct Internet link with the participating
insurance companies and Medicare. PCS purchased the hardware and leased the required
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Case 3: Physician Care Services, Inc.
85
software for ten years. It receives hardware maintenance, software updates, and technical
assistance from the vendor.
A 2013 study of medical records indicated that the most common CPT codes at
PCS are
◆◆ 99212/3 and 99202 Office/Outpatient Visit,
◆◆ G0001 Drawing Blood,
◆◆ 85029 Automated Hemogram, and
Copyright © 2013. Health Administration Press. All rights reserved.
◆◆ 71010/2 Chest X-Ray.
Injuries and rechecks generally account for 20 percent of all visits.
Paper medical records that existed prior to 2008 are retained in active file for seven
years, and then transferred to closed files.
When interviewed, Dr. Tobias indicated that discharging Nancy Stone, RN, as
director of nursing and clinical services in 2012 was a hard decision. Some employees
still regret this situation. Stone was well liked but just could not get along with some of
the physicians and had a great deal of difficulty coping with multiple job responsibilities.
At the end of her tenure she refused to provide patient care as needed at the Beta Center.
After she was discharged, Stone complained that she had “too many duties to do well, and
PCS was more interested in getting patients in and out than in providing patients quality medical care.” She has retained an attorney and informed Dr. Tobias that she is suing
him and PCS for “wrongful discharge.” As she stated at the initial hearing for the lawsuit,
“Meeting job expectations was hard when the job lacked any formal job description.” Dr.
Tobias shared in the interview that he felt compelled to act even though Stone is the sister
of the vice president for human resources at Carlstead Rayon, a growing occupational
health client of the Alpha Center, and that additional details are not available given that
this case is currently being handled by legal counsel.
Dr. Tobias stated that the owners should look forward to achieving even greater
corporate profitability. Dr. Tobias indicated that no one foresaw the terrible first three years
of financial losses. He also said that within the past few years, PCS has earned its place in
the regional medical care system and its future appears solid. It should be noted that, at
the end of 2007, one of the original physician partners, who is no longer affiliated with
PCS, exercised his option to be bought out by another stockholder. Dr. Tobias was the
only partner willing at that time to increase his ownership in PCS.
Dr. Tobias also indicated that the owners might now be in the position to open a
third and even fourth location. He also discussed purchasing buildings to house the existing
centers and adding some services to better serve their occupational and private pay clients.
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The Middleboro Casebook
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“We are a debt-free corporation that is beginning to earn serious profits,” he
said. “Along the way we have distinguished ourselves by the high quality of care we have
provided—our patients and occupational health clients are delighted with our highestlevel commitment to patient care, convenience, and affordable prices. While it has been
a long road, I have every reason to believe we will continue to prosper and expand.”
The original real estate leases on the Alpha and Beta Centers expire at the end of
2015. Dr. Tobias said that he timed the expiration of these leases to coincide with when
PCS would be ready to make a major strategic move. Each current lease has a renewal
clause for up to 36 months, with an escalation clause so that rents do not increase more
than 15 percent per year. Tobias estimates that appropriate facilities could be acquired for
$150 per square foot (including land, site improvements, and facilities) and that it would
take approximately six months from the time the contract was executed to when the center
could be fully operational.
When asked to identify future challenges, Tobias noted that he felt that volume had
just about hit the level at which total service time averages about 20 minutes. He did indicate, however, that there might be a need for larger waiting rooms and that those patients
waiting for more than 90 minutes might be a problem. Tobias was, however, pleased that
patients generally reported “complete satisfaction” with the quality of care provided by
PCS. Dr. Tobias repeatedly cited the competent clinical and administrative staff. Overall,
he indicated that he was concerned about continued rapid growth. “Our early success with
occupational health may be slowing. If we lose a significant amount of manufacturing in
our area, we potentially lose occupational health clients. Our future in occupational health
will follow the local economy.”
Dr. Tobias noted that regional unemployment has already affected occupation
health. Fewer people are being hired and working. Fees paid by the workers’ compensation program have been fixed for 24 months. People who are unemployed lack health
insurance. Dr. Tobias expressed a great deal of optimism that the full implementation of
the new federal health insurance plan (the Patient Protection and Affordable Care Act)
would significantly expand PCS’s pool of private clients.
Two years ago, PCS instituted an appointment plan for occupational health clients,
which Dr. Tobias reported has been very successful. Under this plan, occupational health
clients are scheduled for physicals or medical testing. Under the “call before you come” system, patients (or employers) can call ahead to determine the approximate wait time, make
a decision, and—if they want service—register for service at an approximate time that
day, thereby ensuring themselves a specific place in the queue for service even before they
arrive at a center. Every patient who arrives at a center is given an approximate wait time by
the receptionist and told they need not wait in the waiting area to preserve the scheduled
time for their appointment. While “first in, first out” is generally used, urgent care cases
(especially injuries) are bumped ahead of nonemergency patients. Signs in the waiting area
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Copyright © 2013. Health Administration Press. All rights reserved.
Case 3: Physician Care Services, Inc.
87
explain to patients that some occupational health clients are served by appointment and
that appointments override arrival order.
PCS advertises its services in the regional market. It uses billboards on main roads
and newspaper advertising. It also uses an extensive website and social media. The director
of nursing and patient care visits current and prospective occupational health clients and
typically answers approximately 15 to 25 telephone inquiries per month regarding quotes
for specific services, such as employee physicals.
When interviewed, other PCS physicians offered different perspectives. Three physicians expressed concern about the manner in which Dr. Tobias schedules the physicians.
They were never sure exactly how many shifts per month they would work and at which
center. All prefer to work at only one center and indicated that this type of stability leads
to a better medical care team.
Records suggest that certain physicians may have productivity profiles significantly
different from those of other physicians. It appears that on busy days, revenue per visit
drops, a trend that suggests that physicians do less ancillary testing when they are busy. The
target for physicians and nurse practitioners is 3 to 4 patients per hour. Three physicians
have also requested extra compensation for busy days. They contend that they tend to be
scheduled on “very busy days” and receive the same hourly compensation as physicians
who work on slower days. Dr. Tobias indicated that he does not feel that their claim is
warranted.
In 2010, two (nonowner) physicians said that because they are paid by the hour,
they should be paid for the time they spend treating those patients who arrive right before
closing time. Up until this change, all staff were only paid for the hours in their shift (e.g.,
11 hours), which was sometimes less than the number of actual hours worked. Employees
are expected to treat all patients that arrive during working hours even if this extends their
work time beyond closing time. All physicians reported that they felt that their pay level
was reasonable given their responsibilities.
Six occupational health nurses at area corporations were interviewed. Each indicated that she and her corporation were satisfied with PCS. A number of these nurses
indicated that they appreciated PCS—specifically the medical assistants—keeping them
informed about specific patients and that PCS was creative in explaining restriction and
suggesting “light duty,” medically appropriate work an injured worker could perform for
the employer as an alternative to her regular duties until she was ready to resume her
regular duties.
Dr. Tobias recently returned from a professional meeting with statistics that he felt
could help PCS better estimate its future market. These statistics apply to this state:
Seidel, Lee F., and James B. Lewis. Middleboro Casebook
: Healthcare
and Operations,
Health
Administration
Press, 2013.
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Created from waldenu on 2019-06-27 05:19:09.
00_SeidelLewis (2258).indb 87
11/22/13 8:44 AM
88
The Middleboro Casebook
Average Number of Physician Visits—Ambulatory Care per Person,
per Year, by Age and Sex (National Statistics)
Age
Males
Females
0–14
3.37
3.09
15–44
1.99
3.92
(includes OB/GYN)
45–64
2.98
4.34
65+
4.51
5.19
NOTE: Visits unrelated to workers’ compensation and occupational health
At this meeting, Dr. Tobias also learned that other urgent care corporations use the
following parameters in their fiscal and market planning.
◆◆ For every 15 percent increase in a basic visit fee, there will be a 25 percent
reduction in utilization of retail patients without health insurance (i.e., who
pay by cash, check, or credit c
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