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Using the Case Study Guidelines, Write-Up instructions, and Rubric posted on the modules page, analyze the following case study:
Plight After Oversight at Community Medical Services: pages 465-468
Use all of the information that you have learned in Module 3 to help you with this case study. Submit your write up in the drop box by 11:59 pm on Sunday. Community Medical Services (CMS) is a physician practice located in a quiet area outside the Baltimore metropolitan area. It is a small practice consisting of two primary care physicians (PCPs), Dr. William Stern, founder of CMS, and Dr. David Stern, Dr. William Stern’s son. Paul Parker, a physician assistant (PA), is also employed by the practice. Dr. William Stern’s wife has worked as the physician practice manager since the practice’s inception. The office staff consists of two nurses, a billing and coding specialist, and a receptionist. The CMS office setting is warm and inviting. Staff members are professional, courteous, and engaging. A patient is often quoted as saying, “The doctors and the staff at this facility treat me like family.” The surveys completed after patients’ visits resonate with these often-spoken words. They indicate the patients are quite pleased with the care they receive at CMS. High ratings are often given in “there was a minimal wait time before seeing a doctor” and “the quality of care I received met my expectations.” The doctors are cognizant of the fact the business is thriving. This fact is evidenced by the average number of years patients have been seen by each of the providers and is coupled with the increase in patient volume resulting after another local PCP retired. One day after working more than eight hours at the office, the older Stern told his son “I love practicing medicine, but a lot has changed since I first began practicing 40 years ago. Back in my day, I believe I saw higher reimbursement rates from private health insurance companies based on the services I provided. As of right now, I feel like I am working harder and getting paid less. I have gotten old, son. I think it’s time for me to retire.”
It was always understood that Mrs. Stern would relinquish her duties as physician practice manager when her husband retired. The couple planned to spend quality time traveling and enjoying the arts during their golden years. The doctors and Mrs. Stern expected a seamless transition of physician practice manager duties to the new hire. The daughter of one of David’s colleagues, Donna, accepted the offer for practice manager and is starting soon. Donna has a master’s degree in Healthcare Management and 10 years of physician practice management experience. Besides being the daughter of Dr. Charles Cooper, one of Dr. David Stern’s medical school colleagues, Donna was highly recommended by her previous employer. Mrs. Stern is ready to show Donna “the ropes” to help get her acclimated to CMS and the “way things are done around here.” Mrs. Stern plans to discuss special discount arrangements offered to Dr. William’s self-paying patients as soon as she meets with Donna. The younger Dr. Stern knows his father has a soft spot for his patients with no health insurance and thinks the older Stern’s kindness is contributing to his own angst about receiving lower reimbursements for his services. Residents in the area are hit hard by job losses and underemployment after a major employer went out of business. Dr. William Stern is known for offering major discounts up to 75% off the billed office visit rate, most of which goes uncollected, to his self-pay clients. Dr. David Stern, on the other hand, has a master’s degree in Healthcare Management in addition to his Medical Doctor’s degree. He is not as generous as his father because he knows the practice is a business. Office procedures involving collection for patients’ services require attention and process improvements. Dr. David Stern is sure he can count on Donna to address procedural shortcomings and to make any changes needed.
Although letters were sent out to patients informing them of Dr. William Stern’s retirement, Dr. David Stern began seeing most of his father’s former patients immediately after his father retired. He believes the increase in patient volume is due partly to the name association when patients call in requesting an appointment with Dr. Stern. To David’s credit, he is a younger version of his father, and patients feel at ease under his care. While David appreciates the compliment when he is told “You are just like your father,” he has a much keener sense about delivering quality care in tandem with effectively and efficiently running a business office.
Staff members, along with Dr. David Stern and the PA, Paul Parker, feel the effect of the growing practice after accepting new patients, who are former patients of the other local PCP who retired. Dr. David Stern expected he and the PA would begin seeing more patients, so the office hours were extended during the week and include Saturday morning appointments. Since Donna is salaried and the practice manager, she is expected to work during office hours. The two nurses, who are hourly staff, rotate on weekends to allow one another to take every other weekend off. The remaining hourly staff are not expected to work overtime, but it is offered to them on a weekly basis. Dr. David wants to make sure the physician practice maintains its good reputation in the community. Additionally, he welcomes the opportunity to grow the business.
Donna appears to be a good fit for the practice. She is quite personable and contributes to the familial atmosphere of the office. More important, the office appears to be running smoothly under her management. Dr. David is impressed with the new practice manager and asks to meet with her 90 days after her initial start date to discuss her performance. In their meeting, the younger Dr. Stern tells Donna he is pleased with how she manages the office. His father worked hard to establish the business, and he desires to continue his legacy. Most of the former patients are like family to him, and he wants to ensure new patients are made to feel the same. The younger Dr. Stern tells Donna “We want to continue receiving high marks on our patient surveys.” Donna is at a loss because she was not informed by Mrs. Stern of any patient surveys; however, she did not let on that she is clearly uninformed about customer satisfaction scores. Dr. David Stern requests that he and Donna meet in 1 week to discuss office performance metrics and to review the financial reports. Donna is elated to hear Dr. David believes she is doing a good job. She is, however, surprised to learn about unfavorable customer satisfaction scores after she accesses patient surveys on the practice’s website. How had she missed this? She didn’t want to disappoint Dr. David or other members of the staff. Donna believes if she tells Dr. David of her oversight, his perception about her could change. Her poor performance could also spill over to her dad’s and Dr. David Stern’s relationship. After all, the doctors forged a friendship and kept in touch after meeting in medical school. Donna is in a dilemma and does not know what she should do. To add fuel to the fire, she discovers most of the other retired PCP’s former patients are uninsured or have high deductible health plans (HDHPs). The HDHPs are designed by health insurance companies as a cost-sharing measure to address rising health care costs. Since many of the new patients are responsible for patient services’ reimbursements resulting from these HDHPs, payments were not collected at the time of patients’ visits. There was no determination of the out-of-pocket expenses each individual needed to satisfy before the insurance company reimbursed the practice. Patients were told no payments were required at the time of service, and they would be billed later. Dr. David Stern has not been informed of the influx in this type of insurance coverage or the high number of uninsured patients by his experienced, newly hired physician practice manager. Industry focus on shared responsibility and the need to compel individuals to manage their health and associated costs are affecting the practice’s bottom line unfavorably. There are delays in reimbursement or failed attempts to collect for patient services. Former uninsured patients continue to receive discounted rates of 75% off billed charges for office visits. Donna expects to find the new uninsured patients are also receiving the same 75% reduction in fees. She plans to spend the next 7 days focusing on the current state of the office. Mrs. Stern bragged about her husband’s successful business and the good relationships he established during his tenure at CMS. Did Mrs. Stern misrepresent the business’s viability when she transitioned the practice management role to her? What is the real reason behind Dr. William’s decision to retire? Did the good doctor see the “handwriting on the wall”?
In preparation for next week’s meeting, Donna decides to start with the patient satisfaction surveys. What is really going on? Upon her review of the surveys, Donna identifies both former and new patients are giving low scores in “there was a minimal wait time before seeing a doctor” and “the quality of care I received met my expectations.” Prior to her start date, patients gave high marks in these two categories. Based on the patients’ comments, Donna now understands that patients believe their wait times are longer, and the providers spend less time in the exam room with them. She should have known better. The timing of the declining scores coincides with Dr. Stephen Phillip’s office closing and the increase in volume at CMS. These findings leave Donna a bit unsettled. This type of oversight is not acceptable given her years of experience as a physician practice manager. How is she going to present her findings to Dr. Stern, and how will he react? Mrs. Stern led Donna to believe the office staff were highly functional and that the “office basically ran itself.” Donna knew she had to focus on learning CMS’s management software system, so she spent her first 90 days training on the software and “chatting it up” with the staff and patients. She wanted to be accepted as a member of the “family.” Everyone seemed to like her, so she believed she was doing a good job. On the surface, she even impressed Dr. David Stern. As the physician practice manager, Donna is expected to understand basic bookkeeping. She knows patients with HDHPs are on the rise, and the 75% discount offered is standard and aligns with the discounting given by industry providers to the uninsured. Donna did not know, however, that revenue cycle management was ineffective at CMS. Insurance company reimbursements were not timely, and Dr. William allowed patients to pay when they were able, which adds to her chagrin and more importantly to the amount of uncollected revenue. Donna exclaims “Oh, no! First the surveys, now this! Another oversight!” How is Dr. David Stern going to handle her reporting of the balance in uncollected revenue resulting from untimely reimbursements and the increase in discounting and patients with HDHPs? Her meeting with the younger Dr. Stern is scheduled for tomorrow at noon. Donna thinks, “I know. I’ll call my dad tonight to tell him about my dilemma. He always gives good advice”.
Later that evening Donna explains everything to her dad. He is not happy to say the least. His advice is to be forthcoming and transparent with her findings. Donna’s dad tells her the last thing she should do is to cover up the issues while trying to protect her image. Her dad says, “I’ve known Dave for years. We are friends. Everything will be okay!” The conversation Donna has with her dad calms her down. “Dad’s right. Everything will be okay,” she thinks. The next day Donna goes in her meeting with Dr. David feeling reassured. She tells Dr. David about the negative surveys and the increase in uncollected revenues. Donna is ill-prepared for what happens next. The younger Dr. Stern stands up and looks squarely at her with piercing eyes. Are her eyes playing tricks on her? She is willing to swear Dr. David’s eye color darkened. He says chillingly without raising his voice, “I will do anything to protect my father’s legacy. Charlie and I are friends, but this is business. You have 60 days to turn these results around. That’s all.” Donna leaves Dr. David’s office feeling deflated. It’s not that she is not capable. She believes she was misled by Mrs. Stern’s rave assessment of her husband’s practice and neglected to monitor the office’s performance. She became comfortable believing she was one of the family; however, after the meeting with Dr. David she knows he means business about his business.
“I have my work cut out for me,” Donna laments. “It is time to get busy. Not only will I turn these results around, I plan to elevate this practice to a new level. I didn’t go to graduate school to earn my master’s in Healthcare Management for nothing. I’ll show him.” Discussion Questions
What steps should be taken to improve quality of services and wait times at CMS?
What are the financial implications of this case?
Do you believe the quality of services provided by the physicians and staff at CMS is affecting patient reimbursement? Why or why not?
Describe revenue cycle management. Discuss why Donna could perceive it is ineffective at CMS.
What improvements could Donna make to increase future payments from its HDHP, private pay, and uninsured patients? Assignment 2
Healthcare management Chapter 9
Use your text to answer the following questions. If you use an outside resource, make sure to provide a citation.
1. Compare and contrast fee-for-service and pre-paid health plans.
2. What are the pros and cons of the different types of health insurance benefit packages that someone might purchase?
3. Compare and contrast Medicare and Medicaid in terms of eligibility, benefit packages, access to care, and other key dimensions.
4. What issues and concerns have arisen relating to Medicare Part D? How can they be resolved?
5. What factors make it difficult to provide healthcare coverage for everyone in the US?
6. Define healthcare finance and provide several examples of how it affects managers at all levels within the organization.
7. Compare and contrast the different inventory management techniques and discuss how each technique might play a role within different healthcare organizations.
8. How are health services paid for? Provide a definition for the term “third-party payer,” discuss the different payers currently operating in the market, and assess the importance of each.
9. How is working capital important to the healthcare organization of today? Why is it different in healthcare as opposed to other industries? 10. Discuss the various ways in which healthcare reform has affected and may affect the financial delivery of healthcare today and into the future. What are your ideas on how to improve healthcare reform?
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