The Business of Neuropsychology (Oxford Workshop Series: American Academy of Clinical Neuropsychology)

THE BUSINESS OF NEUROPSYCHOLOGY

OXFORD WORKSHOP SERIES: AMERICAN ACADEMY OF CLINICAL NEUROPSYCHOLOGY

Series Editors Susan McPherson, Editor-in-Chief Ida Sue Baron Richard Kaplan Sandra Koffler Greg J. Lamberty Jerry Sweet

Volumes in the Series The Business of Neuropsychology Mark T. Barisa Neuropsychology of Epilepsy and Epilepsy Surgery Gregory P. Lee Adult Learning Disabilities and ADHD Robert L. Mapou Board Certification in Clinical Neuropsychology Kira E. Armstrong, Dean W. Beebe, Robin C. Hilsabeck, Michael W. Kirkwood Understanding Somatization in the Practice of Clinical Neuropsychology Greg J. Lamberty Mild Traumatic Brain Injury and Postconcussion Syndrome Michael A. McCrea Ethical Decision Making in Clinical Neuropsychology Shane S. Bush

THE BUSINESS OF NEUROPSYCHOLOGY: A PRACTICAL GUIDE Mark T. Barisa, PhD, ABPP

&&& OXFORD WORKSHOP SERIES

1 2010

1 Oxford University Press, Inc., publishes works that further Oxford University’s objective of excellence in research, scholarship, and education. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam

Copyright Ó 2010 by Oxford University Press, Inc. Published by Oxford University Press, Inc. 198 Madison Avenue, New York, New York 10016 www.oup.com Oxford is a registered trademark of Oxford University Press, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press Library of Congress Cataloging-in-Publication Data Barisa, Mark T. The business of neuropsychology : a practical guide / Mark T. Barisa. p. ; cm. — (Oxford workshop series) Includes bibliographical references. ISBN: 978-0-19-538018-7 1. Clinical neuropsychology—Practice. 2. Clinical neuropsychology—Economic aspects. I. American Academy of Clinical Neuropsychology. II. Title. III. Series: Oxford workshop series. [DNLM: 1. Neuropsychology—economics. 2. Neuropsychology—organization & administration. 3. Practice Management, Medical—organization & administration. WL 21 B253b 2010] RC386.6.N48B37 2010 616.8—dc22 2009035254

1

3

5

7

9

8

6

4

2

Printed in the United States of America on acid-free paper

Acknowledgments

The information presented here represents a conglomeration of years of advice, guidance, cooperation, collaboration, and mentoring from numerous individuals working in a variety of settings including clinical practice, hospital administration, corporate compliance, managed care administration, quality improvement, physician relations, and even consumers/patients. As such, many of the ideas and concepts presented are the result of multiple perspectives combined in a manner that hopefully blends information into a ‘‘usable’’ product for the reader. The collaborative and blended nature of the information presented here at times made it impossible to cite specific references for all aspects of this text. Suffice it to say that despite the ‘‘single author’’ nature of this text, the information presented within reflects the knowledge and guidance of multiple individuals, without whom this text would not be possible. I would like to express my gratitude to Susan McPherson and other members of the AACN conference program committee for allowing me the opportunity to present at what has become one of the strongest neuropsychology conferences and for the honor of translating this presentation into book form. It has been a challenging undertaking, but it also has been a very rewarding experience. Shelley Reinhardt, Joan Bossert, Aaron van Dorn, and other staff at Oxford University Press have been very helpful and made this process, which was new to me, smooth and worry-free. Additionally, the reviewers provided excellent insight and their recommendations truly improved the value and overall quality of this text. While it would be impossible to acknowledge every person who assisted in the development of this text, a few notable individuals are recognized for the significant contributions they have made regarding the information contained herein, as well as assisting in my own personal and professional development in this area. Chuck Callahan’s knowledge and influence served as the catalyst for my initial interest and subsequent passion for the business aspects of clinical practice. It was his mentorship that started the journey which lead to this text and his influence can be seen across many areas of this text. I greatly appreciate all of the knowledge and influence he has provided over the years and truly believe that had I not had the opportunity to work with him, I would

not be where I am today. Jon Thompson was invaluable as we worked together at St. Vincent Hospital to put the concepts presented in this text into practice as we partnered to redevelop the process and systems within our own department. His work on many of the forms, documentation templates, and financial spreadsheets presented herein certainly helped raise the bar as to the usefulness of this text. Robin Stickney and his guidance and work on departmental process development, implementation, and quality auditing provided a model for departmental process development as well as adding to the quality assessment aspects of this text. Multiple others provided valuable insights and activities that helped to make this text a reality, including India Brown, Kim Springer, and Lydia Ball who were instrumental in the initial development and ‘‘trial runs’’ and modifications of the office processes described in these chapters. Hopefully, the growing pains we felt along the way will minimize the trials and tribulations others may face as they try to improve their own office processes by using the suggestions in this text. Numerous others helped along the way, providing insight, commentary, reviews, and suggestions during the development of the AACN presentation and subsequent transition to a book format. Shelley McDaniel served as a primary reviewer, providing frank and honest feedback; making this a better book than it would have been otherwise. Others who provided insight, commentary, and review include David Christian, Christopher Bassin, Ann Marie Warren, and the multiple interns and residents who have had to listen to me endlessly discuss the various subject areas within this text over the years. Finally, I don’t believe that we express enough gratitude and appreciation for the work of Antonio Puente, Neil Pliskin, and the many others who have contributed time and energy through the NAN/PAIO, AACN Leadership, APA Practice Directorate, APA Divisions 40 & 22, and the many other individuals and professional groups that work tirelessly on our behalf to try to keep us in business. In closing, I would like to express my sincerest gratitude to my wife, Mary; my sons, Brian and Zachary; and even our dog, Elvis, who saw less of me while I saw more of my computer during the preparation of this text. Their love, support, patience, and understanding through this process have been immeasurable, and I hope that I can demonstrate the same for them over the coming years.

vi

Acknowledgments

Introduction

On the surface, the premise of this text may seem peculiar to neuropsychologists who are accustomed to reading books designed to provide insight and information to enhance clinical practice. Graduate school catalogs and training program brochures reveal a broad array of educational opportunities designed to prepare future professionals for independent practice in neuropsychology. However, little is offered to prepare neuropsychologists for the business realities that await them in the workplace. The expectation that they will simply see patients and do quality clinical work is often constrained by institutional goals of making money so that the doors can remain open. The result can be a cataclysmic ‘‘crash’’ when altruistic ideals meet capitalistic needs. The concepts of ‘‘cash is king’’ and ‘‘no margin, no mission’’ are foreign to most neuropsychologists until our own fiscal bottom line is affected. It is that reality – our own fiscal bottom line – that sets the stage for this text. During the preparation of this text and the CEU presentation at the AACN conference in Boston, MA in 2008, I had commented to colleagues that I was concerned that the basic business theories and ideas presented in this book would be less than intriguing to neuropsychologists. I assumed that the popularity of the presentation and this subsequent text would lie in the fiscal aspects of the information rather than the process that gets us there. I had planned several Tom Cruise ‘‘Show me the money!’’ lines to try to keep audience and reader interested, but these colleagues advised against this, stating that it would not be necessary. They assured me that the ‘‘how to get there’’ aspect was going to be just as popular as the ‘‘where do we go from here.’’ I must admit that they were right. The positive comments I received following the AACN presentation focused much more on the ‘‘process’’ aspects of my presentation and less so on the ‘‘profit.’’ To this end, this text will take on a similar approach to that noted in the initial workshop. The purpose of this text is to provide an overview of basic business principles and how they can be used to enhance the stability and fiscal responsibility of neuropsychological practice. The principles discussed are presented in a fashion that will include an overview of concepts as well as a practical approach to promote application of the information. It is designed to

benefit professionals at varying levels of practice regardless of their work setting, but focuses primarily on the issues related to neuropsychological practice. Additionally, administrators that oversee neuropsychological practice may find this text useful to gain a better understanding of the interaction between clinical activities and the fiscal responsibility of their department. The reader will be exposed to a variety of basic business principles in a way that will increase understanding of business process and system variables associated with the practice of neuropsychology; basic budget and fiscal tracking abilities; and communication strategies that are helpful in conveying departmental information effectively to internal and external stakeholders. Additionally, practice development and organization needs are discussed, including the basics of front and back office flow and processes; accurate and consistent billing, coding, and documentation activities; marketing and referral relationship development; and staff growth and development. Issues related to balancing the needs of training programs with fiscal responsibilities of departments are presented briefly along with some other threats to the fiscal bottom line. The text closes with discussions of professional roles based on the professional’s level of experience. The text is divided into three sections. After initial chapters present some basic business principles and system processes that are applicable regardless of setting, the second section focuses on applying the business principles within the practice of neuropsychology. Where applicable, differentiation between private and institutional settings is delineated along with specific issues related to private, institutional, and government-based settings. Throughout this text, there is an emphasis on applying a ‘‘private practice’’ model to the various settings in an effort to promote consistency and fiscal responsibility, regardless of setting. Many chapters include practical examples and tools to provide easy application of the information presented. The final section of the text focuses on issues related to professional development based on level of experience in the field of neuropsychology. Within this section there is information for new professionals focusing on securing their first job, including tips on professional development. The chapter aimed at the more experienced neuropsychologist’s professional development includes a discussion of increasing financial stature, diversifying practice referrals including medico-legal sources, professional diversification, consideration of administrative roles, and end-of-career issues. The goal of this text is to provide a unique resource to bridge the gap between clinical practice and institutional/practice demands. As the viii

Introduction

economics of psychological and neuropsychological practice are being negatively impacted by changes in reimbursement, new (and not necessarily improved) rules for billing and documentation, insurance reimbursement reductions, national economic trends, hospital budgetary strains, and competition from within as well as outside professionals, the need for greater understanding of business principles has become essential. This is demonstrated through the growing popularity of lectures, seminars, and other educational opportunities that touch on these issues at local, national, and international conferences. Similar presentations are consistently well-received, demonstrating the broad interest in this area as financial and business demands creep into clinical practice. While the idea of learning business concepts may seem daunting to many neuropsychologists, it is hoped that the information provided in this book is presented in such a way that it is easily understood and more importantly, applicable in daily practice. In essence, it is designed to ease the pain of acquiring new concepts and stimulate a desire for further learning by providing information in such a way to promote an easy transition from knowledge to action.

Introduction

ix

This page intentionally left blank

Contents

PART ONE

BASIC BUSINESS PRINCIPLES

Chapter 1

Basic Principles of Business

Chapter 2

Business Planning and Financial Basics

Chapter 3

Process, Quality, and Consistency

PART TWO

BUSINESS PRINCIPLES APPLIED TO NEUROPSYCHOLOGY

Chapter 4

Setting Up the Office Process

Chapter 5

Recordkeeping Guidelines and Regulations 89

Chapter 6

Billing, Coding, and Documentation

Chapter 7

Show Me the Money!

Chapter 8

The Playground of Healthcare Reimbursement 161

Chapter 9

Business Development and Marketing

PART THREE

PROFESSIONAL DEVELOPMENT

Chapter 10

Where Did the Time Go?

3 23

53

69

111

135

183

167

Chapter 11

Survival Guide for the New Professional

Chapter 12

Professional Development for the ‘‘Seasoned’’ Professional 207 Index

xii

193

217

Contents

PART ONE &&& &&&

BASIC BUSINESS PRINCIPLES

This page intentionally left blank

1 &&& Basic Principles of Business

To understand the ‘‘business of neuropsychology,’’ there must first be a general understanding of what ‘‘business’’ is. The etymology of ‘‘business’’ relates to the state of being busy either as an individual or society as a whole. Business is also known as doing commercially viable and profitable work. The term ‘‘business’’ has at least three usages:

• the singular usage (above) to mean a particular company or corporation • the generalized usage to refer to a particular market sector, such as ‘‘the music business’’ • compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. The American Heritage Dictionary (Picket, et al, 2000) outlines multiple variations regarding the definition of ‘‘business,’’ including the type of work a person is engaged, a specific occupation, a specific commercial enterprise, the volume or amount of trade, dealings or patronage, personal areas of involvement, serious work or endeavor, an activity, or even an informal use as in a scolding (i.e., giving me the business for being late). The ‘‘business of neuropsychology’’ also has many dimensions that are covered throughout the course of this text. If you review the definitions provided above, it is easy to see that many of them apply to neuropsychological practice or business. In fact, as we move through the various aspects of this book, the complex nature of business is realized to the point that most 3

aspects of this broad definition are included in the discussion. For now, let’s hold on to that ‘‘definition’’ and get down to business.

The Structure of Business Businesses are set up under some sort of framework or structure based on legal and financial responsibilities and not necessarily on how clinical practice occurs. It is vitally important to understand how a business relationship/ organization is structured to know the extent of personal and professional liability and financial implications therein. A perusal through any bookstore’s business section will uncover multiple books that can provide detailed insight into the structure of business relationships and organizations. For the neuropsychologist wanting more detailed information regarding business structures, a few books prove most useful due to the simplicity of their presentation and the usefulness of the ancillary tools provided. These include Nolo’s The Small Business Start-Up Kit: A Step-by-Step Legal Guide (Pakroo, 2006), The Harvard Business Essential’s Entrepreneur’s Toolkit (Luecke, 2004), Start Your Own Business (Lesonsky, 2007), and Small Business For Dummies (Tyson & Schell 2008). All of these texts provide an overview of business basics, including a ‘‘how to’’ format for those interested in embarking on a new business. Additionally, there is substantial information available via Internet searches that provides both general and specific information regarding business organizational structures. For the purposes of this book, a brief overview is provided based on the information obtained from these sources. There are basically four primary types of business organizational structures:

• Sole Proprietorship: a business owned by one person. • Business Partnership: two or more people operate for the common goal of making profit.

• Corporation: a for-profit, limited liability entity that has a separate legal personality from its members.

• Cooperative (Often referred to as a ‘‘co-op business’’ or ‘‘co-op’’): a for-profit, limited liability entity that differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. In a sole proprietorship, the business is owned by one person who may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability of the debts incurred by the business. 4

The Business of Neuropsychology

Profits ‘‘pass through’’ the owner in terms of tax purposes and the owner is personally responsible for all of the practice’s debts and liabilities, as well as the actions of employees. There is no limited liability in terms of protection from both professional and personal assets. In a partnership, two or more people operate for the common goal of making profit. As with a sole proprietorship, each partner has total and unlimited personal liability of the debts incurred by the partnership. There is no limited liability unless the partners form a limited liability company (LLC). This is discussed in the upcoming section. There are three typical classifications of partnerships. General partnerships are formed by two or more persons and the owners are all personally liable for any legal actions and debts the company may face. From a legal standpoint, this is created by agreement, proof of existence, and estoppel. Limited partnerships are different in that the hierarchy within the partnership is not equally weighted. In addition to one or more general partners, there are one or more limited partners. The general partner(s) has the same role as that described in a general partnership in controlling day-to-day operations and is personally liable for business debts. The limited partner(s) contributes financially but has minimal control over business decisions and operations and cannot bind the partnership to business agreements. However, in return, the limited partner is protected from personal liability. It is important to clearly define various aspects of the relationship between partners and have an attorney draw up a legal partnership agreement. In limited liability partnerships (LLP or LLC), all partners have a form of limited liability similar to that of shareholders of a corporation. Unlike corporate shareholders, the partners have the right to manage the business directly. Limited liability is granted to all partners, not to a subset of non-managing ‘‘limited partners.’’ As a result, the LLP/LLC is more suited for businesses where all investors want to take an active role in management. Like a general partner, any member of a member-managed LLP can legally bind the entire LLP to a contract or business transaction. In a managermanaged LLP, any manager can bind the LLP to an agreement. In an LLP, limited liability is not absolute, so further investigation is warranted with consultation from legal professionals before embarking blindly into an LLP. Another form of an LLP/LLC is the S corporation (‘‘S’’ stands for subchapter S of Chapter 1 of the Internal Revenue Service Code). Prior to the development of LLP/LLCs, S corporations provided an option to limit personal liability without incorporating. An S corporation is like a normal corporation in most respects, except that business profits pass through to the owner (as in a sole Basic Principles of Business

5

proprietorship or partnership), rather than being taxed to the corporation at business tax rates. Some sources suggest that LLCs offer a better option because they are not bound to the numerous regulations that govern S corporations, such as ownership restrictions, allocation of profits and losses, corporate meeting and regulation rules, and tax treatment of losses. Despite the seeming ‘‘no brainer’’ decision to start an LLC over an S corporation or other pass-through arrangement, some additional facts should be noted. An LLC is more cost-intensive to start than a partnership or sole proprietorship. The fees for filing for an LLC vary by state, so further investigation into this might be warranted if a new business lacks start-up capital. However, corporations of any type will always have a higher cost, as well as additional legal and accounting fees, and some LLCs must comply with securities laws. The third primary type of business organization is the corporation. A corporation is a for-profit, limited liability entity that has a separate legal personality from its members. A corporation is owned by multiple shareholders and is overseen by a board of directors that hires the business’s managerial staff. Shareholders are normally protected from personal liability for business debts, but some personal liability risk remains, including personal guarantees on loans to the corporation, taxes (IRS or state tax agencies may go after the personal assets of corporate owners for overdue tax debts), liability for negligent or intentional acts, breach of fiduciary duty or ‘‘duty of care’’ (legal duty to act in the best interest of the company), and blurred boundaries between corporation and its owners (occurs when corporate formalities are ignored and the company is run like an unincorporated business). Risk regarding the latter can be minimized by maintaining appropriate protocol and recordkeeping. In a corporation, the corporation itself— not just the shareholders—is subject to income tax. This increases the overall tax burden and subsequently can reduce profitability. Publicly traded corporations are a different matter altogether and will not be discussed here. In discussing corporations, the S corporations need to be addressed again. As noted previously, an S corporation is like a normal corporation in most respects, except that business profits pass through to the owner, rather than being taxed to the corporation at business tax rates. Owners are protected from personal liability and business debts, just as are general corporations and members of an LLC. Being structured as an S corporation avoids the twotiered tax structure of a general corporation. However, there remains the ‘‘corporate’’ complexities of ownership restrictions, allocation of profits and losses, corporate meeting and regulation rules, and tax treatment of losses. 6

The Business of Neuropsychology

The LLC is a newer option and since its inception, fewer S corporations are being organized. The fourth business structure is the cooperative, often referred to as a ‘‘co-op business’’ or ‘‘co-op’’. A cooperative is a for-profit, limited liability entity that differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. It is a business owned and controlled by the people who use its services. They finance and operate the business or service for their mutual benefit. By working together, they can reach an objective that would be unattainable if acting alone. The purpose of the cooperative is to provide greater benefits to the members, such as increasing individual income or enhancing a member’s way of living, by providing important needed services. The cooperative, for instance, may be the vehicle for obtaining improved markets or providing sources of supplies or other services otherwise unavailable if members acted alone. Even though cooperatives are similar to many other businesses, they are distinctively different in certain ways. Some differences are found in the cooperative’s purpose, ownership, control, and distribution of benefits. Cooperatives follow three principles that define or identify their distinctive characteristics: user-owned, user-controlled, and user-benefited. The user-owned principle means the people who own and finance the cooperative are those who use it. ‘‘Use’’ means buying supplies, marketing products, or using services of the cooperative business. Members finance the cooperative through different methods by a direct contribution through a membership fee or purchase of stock, by an agreement to withhold a portion of net earnings (profit), or by assessments based on units of product sold or purchased. The user-controlled principle (also called democratic control) says those who use the cooperative also control it by electing a board of directors and voting on major organizational issues. This is generally done on a onemember/one-vote basis, although some cooperatives may use proportional voting based on use of the cooperative. The user-benefited principle says that the cooperative’s sole purpose is to provide and distribute benefits to members on the basis of their use. Members unite in a cooperative to receive services otherwise not available, to purchase quality supplies, to increase market access, or for other mutually beneficial reasons. Members also benefit from distribution of net earnings or profit based on the individual’s business volume with the cooperative. With so many options available, a neuropsychologist considering starting or expanding a private practice must not do so lightly. Careful consideration of Basic Principles of Business

7

these options is imperative to make the transition as smooth as possible. The information presented here serves as a summary and overview and the reader is encouraged to investigate all options carefully. Additionally, assistance and guidance from outside legal and accounting professionals is strongly recommended. A little investment on the front end can pay large dividends not only from a financial perspective, but also from a reduction in sleepless nights. In determining the most appropriate structure, two factors play major roles in determining the best course of action. The first centers on the personal liability for the owners. The degree of risk individuals are willing to bear goes a long way in determining what options will even be considered. The second factor is financial. Start-up capital can play a large role in determining what business structure can be employed. When there is a need to control costs early in a new business, the expense of corporations and even LLCs can be too much to manage. The decision of ‘‘what structure is best for me’’ hedges on the balance between personal liability risk and start-up costs. If the goal is to minimize personal risk as much as possible, a sole proprietorship is less likely to be considered, whereas individuals who are willing to take on more personal risk as a means to decrease financial start-up costs are less likely to look at more corporate options. The legal structure of a business can change as the business matures, and it is not uncommon for businesses to start as sole proprietorships or partnerships and later file for LLC or corporate status. Such expectations can be built into business plans with a target for incorporation at a set time in the future based either on financial success or possibly adding additional professionals to the group. Whatever structure is employed should be based on personal preference as well as consultation with an attorney or business advisor.

Hospital-Based Structures The business structure of hospitals can be quite complex, the details of which have been the subject of books, chapters, articles, etc. in their own right (e.g., Barocci, 1980; Barton, 2006; Burns, 2005; Griffith & White, 2006; Kovnar & Knickman, 2008). For the purposes of this text, discussions are limited to the issues of ‘‘for-profit’’ and ‘‘not-for-profit’’ (nonprofit) status and psychologist structure within hospital settings. To a large extent, hospitals are licensed as either ‘‘not-for-profit’’ or ‘‘forprofit.’’ The terminology is somewhat misleading in that this implies that the former is an organization that is not in the business of making money. This could not be further from the truth. If any business truly does not have some 8

The Business of Neuropsychology

level of profit margin from year to year, it would simply cease to exist. Hospitals under both structures are in the business of making sufficient profit margins to remain not only open and viable for the future, but also to allow for continued growth and expansion of services for years to come. Consider this in the context of ever-developing technological, pharmaceutical, interventional, and other scientific advances in medical diagnostic and treatment options, and it is easy to see that if hospitals do not have capital to invest in the future, their viability will diminish in an ever-growing competitive market for the healthcare dollar. In short, the difference between the for-profit and not-for-profit hospitals is not so much whether or not they make money, but how they use the profits that are generated. Not-for-profit businesses are typically operated by a religious entity or other nonprofit organization. They certainly can, and hopefully do, make a profit, but they do not pay it out to investors. Instead, they must reinvest profits, such as in capital improvements or charity care. One large advantage and incentive for licensing structures in this manner is that these corporations are exempt from paying many taxes and this certainly adds to the potential for increased profit margins. Briefly, for-profit hospitals are operated by individuals, partnerships or corporations with the intent of making money for those entities or their investors. These institutions can sell stock and pay out profits to investors based on profit margins. While dividends can be paid out based on profits, it would be short-sighted for these organizations to simply distribute these profits to investors without looking at re-investing a portion of these dollars into the hospital for the reasons described above. These organizations do not benefit from the same tax reductions/exemptions afforded to not-for-profit entities and subsequently have a heavier tax burden. However, this is often offset by local and state governments that offer tax benefits to the organizations in return for opening the facility in their area, resulting in increased service availability, jobs for the community, and secondary tax increases from additional businesses that open due to the presence of the hospital. Charity/ indigent care, as well as care for the underinsured, can be provided by these facilities, but decisions regarding this are based on corporate business plans and are not necessarily included in the mission of the hospital. Whatever structure is the basis for the hospital, the need for profitability remains – no margin, no mission. There is ever-increasing competition for the healthcare dollar and this is seen not only in the technological and scientific advances, but also in the environment where care is provided. Think about Basic Principles of Business

9

your own community and the ways that healthcare is being marketed to you. Many larger cities now build smaller hospitals in suburban communities in the hopes of drawing business from a more lucrative population rather than focusing on large facilities within the urban areas. This allows a better payor mix regarding insurance versus Medicaid and charity care while also expanding market share. Additionally, the land values are oftentimes much lower in these areas and there frequently are tax incentives as these communities are looking for improved services and jobs for their areas. As these newer and smaller hospitals open, they often are designed and built to look more like hotels than hospitals, with all of the comforts of home. There also tends to be an emphasis on more profitable or high-prestige valued services, again to respond to market demands and customer perception. One example of this can be seen in the marketing of maternity services.

Models of Psychology Practice in Hospital Settings Psychologists and neuropsychologists often work in hospital-based settings. The structure of their clinical activities from a business sense can be variable, and many times psychologists and neuropsychologists are unsure of what structure they are working under. How a neuropsychology service line is organized plays a large role in the financial and reporting structure of a department and in some ways the security and stability of the job of the neuropsychologist. As described by Callahan (2008), three different models of practice will be presented here:

• Hospital-employed psychologist – when the psychologist is an employee of the hospital

• Consultant to hospital – when the psychologist is an independent practitioner through a private practice or possibly as a member of a physician’s group directly or indirectly linked to the hospital/facility • Independent psychologist – when the psychologist is distinct from the hospital/facility Hospital-based psychologists are direct employees of the hospital where they work. They typically work under a salary arrangement with benefits the same or similar to other employees of the hospital. Contracts are sometimes utilized similar to those seen for some hospitalists, intensivists, radiologists, and others in the medical field. Overhead costs such as risk management, 10

The Business of Neuropsychology

malpractice insurance, office space, administrative and technician staff, office supplies, and equipment are incurred by the hospital/facility. Depending on the structure, these are typically accounted for in departmental budgets and carefully monitored in profit/loss statements. The departmental/reporting structure can be quite variable for neuropsychologists in a hospital-based practice setting and all iterations cannot be addressed here. Department structure can range from a single identified ‘ Department of Neuropsychology’’ that reports directly to an upper level hospital administrator to a service line practice where a neuropsychologist is subsumed as a supporting cast member within a larger department such as Geriatrics, Physical Medicine and Rehabilitation, Neurology, Neurosurgery, or Psychiatry. In some instances, a neuropsychologist works within a larger Department of Psychology with a variety of doctoral level psychology practitioners in the group providing a wide array of psychological services. A final structure worth mentioning is that of neuropsychologists being housed under an ‘ allied health services’’ or a ‘ behavioral health’’ department that includes a variety of behavioral health professionals such as social work, case management, and clinical nurse specialists. The supervisory lines in some of these environments are quite variable, and in some situations the neuropsychologist may be reporting to and evaluated by a professional from another discipline, a paraprofessional serving as an office coordinator, or an administrator with a business degree, but no clinical experience. Consider the possibility that you are preparing for a yearly performance appraisal. Who is best qualified to evaluate the quality of your clinical and professional activities? For a hospital-based neuropsychologist, awareness of the departmental structure and lines of reporting are very important in knowing expectations for service provision, financial reimbursement, billing and coding activities, professional responsibilities, and performance appraisal, just to name a few. One particular point of concern is the fiscal security of the department and the neuropsychologist. Details regarding the financial aspects of hospital-based neuropsychologists are discussed in subsequent chapters describing billing and coding and reimbursement issues. Briefly, in most cases, hospital-based neuropsychologists are eligible for ‘‘provider based’’ billing, which allows the hospital to bill additional ‘‘facility fees’’ for outpatient clinical work in addition to the professional billing on the part of the neuropsychologist (some states do not allow for professional billing by doctors employed directly by the hospital). Implications for this are outlined in later chapters. Within hospital-based settings, neuropsychologists are often called upon to perform nonbillable services such as team conferences and consultation, hospital Basic Principles of Business

11

committee activities, hospital mandated safety and other joint commission training activities. Neuropsychologists are also called upon to perform clinical activities that may result in little or no direct reimbursement so that a more lucrative clinical activity can be performed (e.g., completing a neuropsychological evaluation and Wada test on a patient with Medicaid so that a neurosurgical procedure can be completed at the hospital). The ‘‘value-added’’ services do little for the fiscal bottom line of the department, but may be quite beneficial to the larger department or hospital as a whole. With these considerations in mind, it is important to know how your value is measured—service versus revenue generation or a combination of the two. Some psychological and neuropsychological services are considered ‘‘valueadded’’ or ‘‘bundled’’ in terms of billing, with little or no inpatient billing, but there is more consistent billing noted for outpatient services. This concept may seem odd, but some psychologists and neuropsychologists are surprised to find that they live under this arrangement and there is essentially no billing and subsequently no revenue generated for their inpatient services. It is important to be aware of the department’s value as a professional versus service department in terms of financial expectations. Under the second structure, neuropsychologist serving as a consultant to hospital, the neuropsychologist is an independent practitioner through a private practice or as a member of a physician’s group directly or indirectly linked to the hospital/facility. Under this structure, the neuropsychologist is paid by a practice rather than the hospital, but obtains privileges from the hospital to allow patients to be seen in the hospital setting. Risk management, malpractice insurance, benefit costs, practice overhead, etc. are incurred by the practice group. Administrative structure and lines of supervision are established within the practice, which can take on any of the business structures described previously. The coverage provided may consist solely of a consultation-based practice or may include some contracted services to allow for some of the ‘‘value-added’’ services described above or coverage for patients with limited or no reimbursement prospects. Billing is done through professional charges by the provider through the practice group. Additionally, if outpatient services are provided geographically on the hospital grounds, the hospital is able to bill additional facility fees aside from the neuropsychologist’s professional charge. This resembles a surgeon or radiology practice model where the patient is seen using hospital facilities and staff. The physician bills for the professional activity (the surgery or reading of MRI) and the hospital bills associated facility charges. 12

The Business of Neuropsychology

A blended model of the hospital-based and consultation structures is possible, where the psychologist is employed by the hospital, but professional billing occurs through the hospital’s physician network group practice. The structure here is more consistent with the hospital-based model described above in terms of daily activities, risk management, malpractice coverage, overhead, etc. The primary difference is that the clinician’s professional billing and coding passes through the physician network group rather than the general hospital billing department. As with both models, the hospital is eligible for provider-based outpatient facility billing for services provided by the neuropsychologist at the hospital location. Under the third structure, the neuropsychologist functions as an independent practitioner, providing their own office space, staffing, materials, and overhead. The practice may actually rent space within the hospital, but it is an independent entity in that it is separate both physically and financially. All risk management, malpractice insurance, salary and benefit costs, overhead, etc. are incurred by the individual or practice group. Professional and technical components (global) are billed by the practitioner or practice group at nonprovider based (bundled) professional rates. The hospital is not eligible for additional facility fees. This can be thought of as a private practice housed within the hospital. The practitioners are again privileged through the hospital to see patients, but the practitioner is not affiliated with the hospital. As can be ascertained from the information above, further discussion of billing and coding practices within these models is warranted and is presented in detail in subsequent chapters. In particular, this will include a discussion of the theoretical basis for the Centers for Medicare and Medicaid Services (CMS) approach to billing and reimbursement and how that applies to neuropsychological practice in a variety of settings.

Purpose of Business and Strategic Planning To be successful in any business, the purpose of that business needs to be clearly defined. What a business does can be defined in a variety of ways from general to specific. As examples, businesses might be categorized from a general sense, or sectors, such as manufacturing, retail and distribution of Within each of these sectors, there are more specific businesses such as commercial properties in real estate, electricity in utilities, or internal medicine in healthcare. No matter how the business is described or defined, it must have some sense of purpose, whether it is to sell more houses or provide Basic Principles of Business

13

consistent and reliable electrical service to a community. Whatever that purpose is, it cannot be fully achieved without a plan. This concept of ‘‘purpose’’ must also be defined in terms of neuropsychological practice. As we look to define the purpose of neuropsychology, various questions are explored that range from the general or sector perspective to the more specific. We need to ask ourselves, ‘‘What is the purpose of neuropsychology?’’ Consideration of the following questions contributes to the final defined purpose of our business in neuropsychology: What is the purpose of business in neuropsychology?

• • • • • • •

To help patients and caregivers? To contribute to the science research/knowledge base? To train future professionals in the field? To enhance the reputation/value of the discipline? To add value to our respective places of employment? To earn money to sustain the practice? To earn extra money to obtain my own needs, wants, and desires?

We must decide what we do and why we do it. To formalize this process, strategic planning is essential. Strategic planning is the formal consideration of an organization’s purpose, plan, and future course. Ginter, Swayne, and Duncan (2002, p. 14) define strategic planning as ‘‘the set of organizational processes for identifying the desired future of the organization and developing decision guidelines. The result of the strategic planning process is a plan or strategy.’’ There are multiple resources available to assist in the development and implementation of a strategic plan, including books and Web sites that serve as guides or companies that provide consultation to assist other businesses. A quick search on the Internet reveals multiple Web pages that provide a wealth of information and guidance in this area. For the purposes of this book, a summary of strategic planning is provided. All strategic planning deals with at least one of three key questions:

• What do we do? • For whom do we do it? • How do we excel? or How do we do it better than everyone else? 14

The Business of Neuropsychology

The answers to these questions are found in well-developed strategic plans. These answers are presented in a hierarchical fashion that ultimately flows from general to specific. Strategic plans focus on three basic areas – vision, mission, and values. Vision defines where the organization wants to be in the future. It reflects the optimistic view of the organization’s future, defining where it ultimately wants to be. The mission defines where the organization is going now, basically describing the purpose or identifying why this organization exists. Values reflect the main values and beliefs protected by the organization during the progression, reflecting the organization’s culture and priorities. These values define how an organization will behave in achieving its vision and mission. Vision statements are used to present an organization’s vision to the organization itself as well as to those outside of the organization. Multiple principles are followed to aid in the development of an effective vision statement. First and foremost, the statement should be concise, motivating, and memorable. People should be able to remember and be influenced by the statement. An effective vision statement is vivid, something you can describe that people can picture in their minds. It should capture an image of the future so clear that it seems lifelike and attainable. It should not only capture the aspirations of the organization, it should be easy to remember and therefore remain in focus. The language does not need to be complex, but should reflect confidence. Simple language with passion is more compelling than long formal statements including high level verbiage. Some examples of strong vision statements include Henry Ford’s ‘‘A car every working man can afford;’’ Microsoft’s ‘‘A computer on every desk in every home running Microsoft software;’’ and Pepsi’s ‘‘Beat Coke.’’ These statements are short, simple, memorable, passionate, and developed with confidence. While the vision statement serves to unite people by pointing toward a destination, the mission statement specifies how the organization will get there. A well-formulated mission outlines the who, what, and why. It identifies at a minimum the type of business it is, its markets, its customers, and its goals. Unlike vision statements, which by definition are brief, mission statements may vary in length, from a couple of sentences to several paragraphs. Again, the language needs to be simple and the structure needs to be easy to follow. The idea is not to show the intellect or formality of an organization, but to convey the mission to the reader in an understandable and memorable way. An example of this can be seen in the ‘‘unofficial’’ mission statement provided by President John F. Kennedy on May 25, 1961, when he said, ‘‘I believe that Basic Principles of Business

15

this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth.’’ This statement outlines the who, the what, and the when in very clear terms that ultimately served as the driving mission not just for NASA, but for a nation. If vision and mission statements supply the long-term direction of an organization in terms of its business, markets, customers, and financial objectives, then values express the ethics that will guide the behavior of the organization and its members as they seek to achieve their vision and mission. Values express the ethics that constantly direct an organization’s day-to-day behavior and the unwavering beliefs of the organization’s leadership. These are the principles that influence decisions every day at every level. They should not be written as ideas, good thoughts, or statements that reflect the ‘ spirit’’ rather than fact. Instead, effective and meaningful values should clearly define the way you treat your customers, workers, suppliers, and neighbors in tangible ways. They define how you are willing to operate as you pursue your mission, by outlining what behavior is appropriate or permissible, and what is not. Once the vision, mission, and values are established, the organization and its members can then focus on the goals and objectives necessary to reach the mission and vision. Goals and objectives are specific targets of where an organization or an individual wants to be within a specific time frame. They should be built on a secure foundation in order to be meaningful and to help the organization achieve its mission. They are designed to bring the vision and mission to all levels within an organization by allowing individuals to see how their own performance contributes to the overall vision and mission of the organization. They also allow performance evaluation to be based on tangible behaviors that can be directly related to the vision, mission, and values of an organization. For goals and objectives to be motivating and useful they must have some key elements:

• • • • •

Goals must be specific Goals must be measurable Goals must be targeted Goals must be time specific Goals must be meaningful and attainable by the department and/or individual • Goals should have an identifiable link to the identified vision and mission • Goals should be motivating and supportive rather than pejorative 16

The Business of Neuropsychology

As an example, we can again look to the space program. Kennedy’s mission, ‘‘. . . before this decade is out, of landing a man on the moon and returning him safely to the Earth,’’ was not achieved without the completion of some specific goals that were both general and specific. Project Apollo’s goals went beyond landing Americans on the Moon and returning them safely to Earth. They set the tone for using this vision as a means for other activities:

• To establish the technology to meet other national interests in space. • To achieve preeminence in space for the United States. • To carry out a program of scientific exploration of the Moon. • To develop man’s capability to work in the lunar environment. These goals, too, were built upon earlier goals set forth in March of 1958 when the Ballistic Missile Division proposed an 11-step program aimed at the ultimate objective of ‘ Manned Space Flight to the Moon and Return.’’ The steps included instrumented and animal-carrying orbital missions, a manned orbit of Earth, circumnavigation of the Moon with instruments and then animals, instrumented hard and soft landings on the Moon, an animal landing on the Moon, manned lunar circumnavigation, and a manned landing on the lunar surface. Ultimately this was summarized through the ‘‘Man-in-Space’’ program that would be carried out in four phases (goals): 1. 2. 3. 4.

Man-in-Space Soonest Man-in-Space Sophisticated Lunar Reconnaissance Manned Lunar Landing and Return

History indicates that these goals and objectives were met and the ultimate mission was completed.

Strategic Planning in Healthcare Models of healthcare strategic planning are presented in numerous healthcare management textbooks (e.g., Begun & Heatwole, 2004; Ginter Swayne, & Duncan, 2002; Griffith & White, 2006; Zuckerman, 2005). In healthcare, hospital-based vision, mission, and values statements are very easy to find via a quick perusal of an organization’s Web site or descriptive materials. The quality and memorable nature of these statements vary across institutions and despite Basic Principles of Business

17

the heavy emphasis placed on these statements during orientation for new employees, they oftentimes are not remembered in such a way that promotes grassroots understanding and buy-in. Still, these statements are very important in understanding how a hospital will be managed from an administrative, decision-making standpoint. There are some expected similarities in content across various strategic planning documents, but how they are presented can be quite different and provides insight into the motivation driving patient care or the expectations that influence appraisal of staff performance. The following is used as an example and reflects the strategic planning information for St. Vincent Health in Indianapolis, IN (available at www.stvincent.org): St. Vincent Health Vision Statement: St. Vincent Health will be the leading, values-driven healthcare system in Indiana by promoting and advocating for a healthier society, in strong partnership with communities, physicians, associates and others who share compatible values - forging integrated and aligned partnerships and community based networks. Our partnerships will be known for having increased participation in leadership and decision-making that results in improved outcomes of those served. Our partnerships with associates will be based on our investments in professional, personal and spiritual development to create a committed and effective work force. St. Vincent Health Mission Statement: Rooted in the loving ministry of Jesus as healer, we commit ourselves to serving all persons with special attention to those who are poor and vulnerable. Our Catholic health ministry is dedicated to spiritually centered, holistic care, which sustains and improves the health of individuals and communities. We are advocates for a compassionate and just society through our actions and our words. St. Vincent Health Core Values: Service of the Poor - Generosity of spirit, especially for persons most in need Reverence - Respect and compassion for the dignity and diversity of life Integrity - Inspiring trust through personal leadership 18

The Business of Neuropsychology

Wisdom - Integrating excellence and stewardship Creativity - Courageous innovation Dedication - Affirming the hope and joy of our ministry The above statements, while being well-written, are quite lengthy and complex, making it difficult to understand the specifics relating to the vision and mission of the hospital system. In contrast, the following example provides the strategic planning information for Baylor Health Care System in Dallas, TX (available at www.baylorhealth.com): Our Vision: To be trusted as the best place to give and receive safe, quality, compassionate health care. Our Mission: Founded as a Christian ministry of healing, Baylor Health Care System exists to serve all people through exemplary health care, education, research, and community service. Our Objectives:

• Deliver safe, quality patient-centered care, supported by education and research • Be a leader in serving our communities. • Be responsible financial stewards. • Be the best place to work and to care for patients. Our Values: Integrity, Servanthood, Quality, Innovation, and Stewardship Notice the difference in language, ease of understanding, and ease of recall of the two examples provided. The purpose of these statements is to clearly present the reason the organizations exist, how they are going to get there, and what beliefs/values will guide their behavior in obtaining these objectives. Both sets of statements clearly identify these elements, but the second example does so in a more concise and memorable fashion with easier identification of the specific as well as more general objectives. These examples highlight the larger goals of a hospital organization. However, in such a large system, the key is to create buy-in at departmental and individual levels to promote the larger strategic plan within the smaller groups that are charged with carrying out this mission. Helping individual employees define how their individual performance influences the larger Basic Principles of Business

19

vision and mission is very valuable in improving performance and employee satisfaction. While working at St. Vincent Hospital, we worked to develop a mission statement for our department that would allow the vision and mission of the hospital to be identifiable for the individual members of the neuropsychology department. The goal was to bring the larger hospital vision and mission to the grassroots level including day-to-day operations: St. Vincent Hospital Neuropsychology Department Mission Statement: The mission of the Neuropsychology Department is to establish and maintain the highest standards for neuropsychology practice, training, and research. To this end, the department is committed to providing the following services in the Spirit of Caring guided by the core values of St. Vincent Health:

• The highest level of clinical care for patients across the lifespan • Excellence in education and training for interns, residents, and the community • Enhancement of patient care by generating and implementing innovative research • Using the latest research and technological advances in the practice of psychology and neuropsychology This ‘ departmental’’ mission could then be used to develop specific goals and objectives for each employee to guide the performance appraisal process and identify key elements of performance that promote the mission of the department, as well as the larger mission and vision of the hospital and ultimately, the hospital system. The idea behind this more local mission statement is to create a level of understanding and buy-in that results in individual employees understanding how their job and their performance directly relates to the larger mission. A great example of this is a service department such as housekeeping. What do you think housekeeping has to do with the vision and mission statements described above? Think about the number of infections that occur within a hospital setting. Think about the recent increases in methicillin-resistant Staphylococcus aureus (MRSA) infection in hospitals across the country. Now consider the role of housekeeping in minimizing the number of infections in a hospital setting. As another example, the perception of whether or not a hospital is ‘ clean’’ has a strong influence on a customer’s perception of the quality of a hospital. Combine these examples with basic customer service, timeliness, attitude, appearance, and other staff 20

The Business of Neuropsychology

behaviors within the housekeeping department and you can see how a single individual directly contributes to the overall vision, mission, and values described above. To summarize, strategic plans are essential to define the objectives across all levels of an organization from the largest hospital system to the individual employee within a department. They serve to not only guide the direction of an organization, but also define the manner in which objectives will be reached. They provide an underlying structure and purpose for daily activities and ultimately they serve to unify members of an organization. While the usefulness and advantages of strategic planning are often discussed in regards to large organizations, these activities are also useful for practitioners functioning within a small private practice setting regardless of its cooperate structures. Strategic plans help private practitioners define the purpose of their business, how they plan to achieve it, and the values/beliefs that will guide their professional behavior for both clinical and business-related activities. I discussed this with several private practitioners, and while this was certainly an unscientific/informal survey with a small sample size, it was very enlightening to discover that formal strategic planning was not a part of the inception of their businesses. However, all could see how re-approaching their business with such methods would be beneficial in defining not only their purposes, but also their journey in private practice. The hope is that this introductory chapter provides the reader with some basic information to help define a business, identify the structure where the business exists, and develop a strategic plan to define and achieve the vision of the business. The subsequent chapters focus on putting the strategic plan into action, beginning with setting up a business plan and understanding and applying related financial forecasting and reporting tools.

References, Resources, and Suggested Readings Barocci, T. A. (1980). Non-profit hospitals: Their structure, human resources, and economic importance. Dover, MA: Auburn House. Barton, P. L. (2006). Understanding the U.S. health services system, 3rd Ed. Chicago, IL: Health Administration Press. Begun, J., & Heatwole, K. B. (2004). Strategic cycling: Shaking complacency in healthcare strategic planning. In A. R. Kovner and D. Neuhauser (Eds.), Health services management: Readings, cases, and commentary. Chicago, IL: Health Administration Press. Basic Principles of Business

21

Burns, L.R. (2005). The business of healthcare innovation. New York: Cambridge University Press. Callahan, C. (2008). ‘‘Billing Reimbursement 2008 Update.’’ CE presentation made at the 10th Annual Rehabilitation Psychology Conference in Tuscon, AZ. Clousing, L. A. (1958). ‘‘Chronology of Early USAF Man-in-Space Activity, 1945-1958,’’ Memo from Lawrence A. Clousing to Dir., Ames Aeronautical Laboratory, ‘‘Working Conference for the Air Force ’Man-in-Space Soonest’ Program,’’ held March 10-11-12, 1958 at the Air Force Ballistic Missile Division Offices, Los Angeles, CA. Ginter, P. M., Swayne, L. E., and Duncan, W. J. (2002). Strategic management of health care organizations, 4th Ed. Malden, MA: Blackwell Business. Griffith, J. R. & White, K. R. (2006). The well-managed healthcare organization, 6th Ed. Chicago, IL: Health Administration Press. Griffin, D. (2006). Hospitals: What they are and how they work, 3rd Ed. Sudbury, MA: Jones & Bartlett Publishers. Kovnar, A. & Knickman, J. (2008). Health care delivery in the United States, 9th Ed. New York: Springer Publishing. Lesonsky, R. (2007). Start your own business, 4th Ed. Irvine, CA: Entrepreneur Press. Luecke, R. (2004). Entrepreneur’s toolkit: Tools and techniques to launch and grow your new business. Boston, MA: Harvard Business Publishers. National Aeronautics and Space Administration – Apollo Goals accessed online at: http://www-pao.ksc.nasa.gov/kscpao/history/apollo/apollo.htm National Aeronautics and Space Administration. (1965). ‘‘Chronology of Early Air Force Man-in-Space Activity, 1955-1960,’’ 41, 43 44; and ‘‘Chronology of Early USAF Man-in-Space Activity, 1945–1958,’’ 21–22. National Association of Public Hospitals and Health Systems Web site: http:// www.naph.org/ Pakroo, P. H. (2006). The small business start-up kit: A step-by-step legal guide, 4th Ed. B. K. Repa (Editor). Berkley, CA: Nolo. Pickett, J. P. et al. (Eds). (2004). The American heritage dictionary of the English language, 4th Ed. Boston, MA: Houghton Mifflin Company. Tyson, E. & Schell, J. (2008). Small business for dummies, 3rd Ed. New York: Wiley & Sons. Zuckerman, Alan (2005). Healthcare strategic planning, 2nd Ed. Chicago, IL: Health Administration Press. 22

The Business of Neuropsychology

2 &&& Business Planning and Financial Basics Once the strategic plan is set, subsequent efforts can focus on the meat and potatoes of business. Strategic planning describes what the business aims to do and what values will guide the process in a general sense. The business plan is designed to lay out the specifics of the plan. The purpose of the business plan is to identify the details of how things will come together as well as the overall feasibility of the idea. It is designed to provide the key elements of the business in a single document, including identification of the products or services that will be sold, the costs associated with the generation of goods or services, the number of ‘ sales’’ expected, and projected revenue associated with this process. The business plan is a tool to predict the future of a business and as Yogi Berra said, ‘ It is hard to make predictions – especially about the future.’’ These words may seem simple, but it is easy to lose sight of this fact as we dream about our future success. It has been said that the best predictor of future behavior is past behavior, but what do you use to predict the future when there is no past behavior? It is hard to make predictions without a history, and in those cases it is crucial to obtain the best possible information to make an informed forecast of future events. Therein lies the value of developing a good business plan. Two basic goals drive the development of a good business plan. First, a good plan describes the fundamentals of the business idea based upon the strategic plan. The specifics of the business and how goods and services will be generated, marketed, and passed on to consumers are outlined. Second, a business plan provides financial calculations and projections to show whether or not the endeavor will be profitable and to gauge the potential for success. The development of a business plan provides an opportunity to examine the costs and benefits of a business and to make changes as 23

necessary to maximize the potential for success. Additionally, a strong business plan improves the likelihood of success if there is a need to approach a lender or investor for start-up capital to start a business. Sometimes the development of the business plan may show that the potential benefit is not worth the cost and subsequently the business does not move forward and potential failure is avoided. There is no guarantee for success of any venture, but proceeding with an informed plan based on strong data improves the chances for success. Developing a business plan is not particularly difficult, but it does require patience, open-mindedness, flexibility, staunch realism, disciplined thinking, and dedication to the process. The process of creating one often brings up issues and potential problems that may not have been initially apparent and may result in a need to modify the plan in a variety of ways. A disciplined and realistic approach to developing the business plan is important when financial aspects are considered. Developing financial forecasts and projections oftentimes can be disheartening, but identifying the financial limitations prior to beginning a business allows the opportunity to make necessary changes to make the plan realistic and fiscally responsible. Numerous resources are available to direct the development or revision of a business plan, many of which include computerized templates that guide the description of the business and spreadsheets to ease the calculation of various financial documents (see references and resources at the end of this chapter). While helpful, these resources do not eliminate the need for good planning and research, disciplined reporting, realistic projections, and flexibility in the approach to setting up a business plan. It should be remembered that the output of these templated programs is only as good as the data that is entered. This chapter provides the basic elements of developing a business plan, including some nuances related specifically to the practice of neuropsychology, but the reader is encouraged to seek additional assistance as they embark on this endeavor. While numerous sources were reviewed for this text and information from a variety of references is included, the business plan development model presented here is based on information found in Nolo’s The Small Business Start-Up Kit by Pakroo (Table 2006). Where possible, information specific to the practice of neuropsychology is presented as it relates to the development of a business plan. The reader is also encouraged to read Edward Peck’s chapter on the business aspects of private practice in clinical neuropsychology found in Lamberty, Courtney, and Heilbronner’s text The Practice of Clinical Neuropsychology (2003). 24

The Business of Neuropsychology

Development of a Business Plan While there are various templates available to guide the development of a business plan, they are very similar and virtually all of them follow a model that includes two broad sections. The first section is used to describe the business idea, while the second provides financial information to demonstrate the projected fiscal success of the business. For neuropsychologists, writing a business plan can be approached similar to a research design. It should include a statement of the problem, development of a hypothesis for a possible solution based on research and investigation, collection of data to support or refute the hypothesis, and a conclusion of how well the intervention provides a solution to the problem. In fact, this objective scientific approach is useful in developing a solid business plan with reasonable projections. Section I – Describing the Business When completing the first section (describing the business idea), it is necessary to be detailed and to cover a broad array of information. First impressions go a long way and this is the best opportunity to produce a positive halo effect on the part of the reader. The goal is to have the reader understand the idea, the need for the good or service, and why it will be successful. Ultimately, a reader will be able to clearly see the positive nature of the business idea and the reason why it can be successful. To accomplish this, Pakroo (Table 2006) describes six content areas to be included in a solid business plan:

• • • • • •

Statement of the business purpose Detailed description of the business Market analysis Analysis of competition Marketing strategy Resume or CV outlining your expertise and business accomplishments

Each section does not need to be lengthy or complex, but should be comprehensive enough that the reader has very few additional questions to be answered. Also, the information should be presented in a concise and cohesive manner that is easy to read and understand. Business Planning and Financial Basics

25

Statement of Purpose To begin, there should be a clear and concise statement regarding the business’s purpose (usually consisting of multiple sentences rather than a ‘‘statement’’ per se). This includes the goods or services to be provided and why the targeted business area needs this product. This statement should be concise and it is best to state the obvious in a compelling way. It simply needs to answer the questions of what will the business do and why it is necessary. If the answers to these questions are vague or complex, more details may be necessary to effectively convey this information or possibly further research is needed to obtain better and more succinct descriptions. Description of the Business Process Once the need and product are successfully presented, the second step is to describe the how the business will operate. Information included in this section will vary depending on the nature of the business, as well as the nature of the identified marketplace. Still, as with the description of the business idea, information about how the business will operate should include specific details. The difference is in the depth of explanation of how the business activities will be accomplished. The ‘‘process’’ of the business must be laid out in a manner that shows consistency, predictability, and quality built into the business activities. Process control and quality evaluation are discussed in detail in Chapter 3, but for now realize that it is necessary to document how the goal of business will be accomplished from start to finish. As can be surmised, the best business plans are quite inclusive in terms of activities that are described. Pakroo (Table 2006) advises that the following specifics should be included in this section of the business plan:

• • • •

How the product or service will be provided How and where supplies will be obtained How customers will pay you How many employees are required and what are their specific roles and responsibilities • When the goods or services are available (hours of operation) • Where the business will be located and why In the practice of neuropsychology, a good business plan includes all activities from determining how referrals will be received to the ultimate filing of the chart when all services have been completed. This includes the 26

The Business of Neuropsychology

specifics of neuropsychological practice including, but certainly not limited to, scheduling activities, potential billing and coding services, identified insurance panels and other payors, precertification needs, administrative and clinical documentation procedures, charting activities, types of clinical services provided, identified referral sources, the clinical work itself, and HIPAA and other regulatory compliance procedures. These activities need to be detailed. Further discussion of setting up neuropsychological practice processes is presented in Chapter 4, but suffice it to say that it is easy to overlook necessary aspects of the provision of neuropsychological services without careful consideration and planning. It is amazing how something that may seem small and trivial in the initial planning stages can turn out to be quite significant as the business unfolds. Defining the Marketplace According to Pakroo, the third section of a business plan defines the proposed market. This consists of identifying who will use or buy the goods or services the business will provide and at what frequency. This section will require research, including identifying similar businesses that have been successful (or unsuccessful), reviewing marketing surveys or demographic reports that may or may not document a need for the product in the targeted area, and having conversations with potential consumers to gauge a need for the product. For neuropsychology, this may involve surveying potential referral sources to determine perceived need for neuropsychological services and to establish some estimates of the number of referrals this might entail. The trick here is to compile this information into a document that objectively shows a viable market for the product or service with documentation to support the need and desire for the business. In addition to describing the general aspects of the market, it is helpful to further define the identified consumer. In neuropsychology, this may include demographic information for the identified patient population such as age, diagnostic categories, and payment sources. Additionally, it is necessary to identify all targeted referral sources such as physicians, social workers, nurses, rehabilitation counselors, attorneys, worker’s compensation case managers, and others. It is important to not over-specialize during initial business planning. Exploration of a diverse range of possible services that extend beyond traditional neuropsychological evaluations might identify other patient populations and clinical services that would expand potential referrals (e.g., pre-surgical evaluations for spinal cord stimulator placement, organ Business Planning and Financial Basics

27

transplant or other surgeries; evaluation and treatment of chronic pain; etc.). Finally, if there will be unique populations or specialties served via the practice (e.g., epilepsy and Wada evaluations, worker’s compensation, specific patient populations, etc.) it is beneficial to outline these activities and related patient population and referral source information to gauge the potential need and frequency of such services as well as reimbursement trends. The better the market and customers are defined, the more confidence there will be that the business venture can be successful and the more confident a potential lender or investor will be in funding the idea. Analysis of Competitors Now that a marketplace and need have been identified, it is necessary to analyze the competition from other businesses in the targeted area. If the idea is so strong that it seems ripe for success, others may also have had similar ideas and may already be providing the identified goods or services. Additionally, others may be looking to start a similar venture in the targeted area, furthering a potential lopsided supply/demand equation. This section of the business plan is used to explain why the market is able to bear the addition of the proposed business and how it will be able to secure sufficient market share for success. Competitors’ strengths and weaknesses need to be detailed, and where possible it is necessary to identify how your business will differ in such a manner that you will be better able to meet the customers’ needs. This is best accomplished by imagining that you are a consumer comparing your business to the competitor’s and identifying the factors that are most important in deciding which business to patronize. Some aspects to consider include quality of services, access and convenience, reliability, customer service behaviors, and price. In neuropsychology, major factors that affect referral streams include, but are not limited to, timeliness for access, timeliness of report turn around, usefulness of reports, patient’s perception of the service after the fact, and acceptance of patients with a variety of payment sources. While as a profession, neuropsychologists may view prestige, board certification, and publications as markers for a qualified neuropsychologist, our consumers oftentimes do not understand or even care about these concepts and instead are looking for a provider that is recommended to them by physicians, friends, or family. As a result, customer service factors cannot be emphasized enough when you are looking at developing your business and comparing it to the competition. Think for a moment about the neuropsychology 28

The Business of Neuropsychology

practices in your area. How many have a strong customer service emphasis or track record? Two of the best questions regarding patient satisfaction and to identify a competitive edge are simply, ‘‘Would you recommend this product or service to a friend or family member?’’ and ‘‘How would you rate the overall quality of care?’’ How a patient or referral source answers these questions quickly determines your status in the marketplace, regardless of your status in the field of neuropsychology. It is necessary to make an objective analysis of the potential competition as they likely excel in at least some of the areas that bring customers to their doors. The key is to identify how your business will provide a level of service or quality above or unique to the competition. This is based on a combination of elements that the other businesses are not offering (e.g., ease of access, patient satisfaction with the services, rapid report turn around). Using price as a comparison point can be useful, but as a new business it is difficult to compete based on price alone. In neuropsychology, this is even less of a factor due to varying insurance coverage and established out-of-pocket expenses typically based on the patient’s payor source rather than your specified charges. It is far better to look for a better source of differentiation and competitive edge using some of the factors described above, but especially those that result in increased customer satisfaction on the part of the patient and the referral source. Marketing Strategies A marketing strategy is simply a plan of how a business lets the target customers know that it exists and how the business is able to provide goods and services in the best way for the consumer. The idea is to reach the largest number of targeted consumers with the least amount of cost. The focus needs to be on the identified consumer groups described in the marketplace section of the business plan, rather than a generalized marketing strategy that may waste time and resources. There is no perfect marketing strategy, but whatever methods are planned, they should be presented as a well thought out plan along with an explanation as to why they will be effective. Marketing strategies and business development specific to neuropsychology are discussed in greater detail in Chapter 9. Briefly, in developing the marketing section of a business plan for neuropsychology, remember that neuropsychology is defined as a specialty practice and marketing efforts should be targeted at identified patient populations. Since patients typically Business Planning and Financial Basics

29

come from physician referrals, marketing efforts will likely focus on this group, at least in the early stages of setting up a practice. It is important to note that while the physician writes the order for neuropsychological testing, it is typically a nurse, office manager, or other office staff member that actually sends the referral to a provider. As such, these individuals should be included in any marketing strategy. Business Knowledge and Accomplishments To close out the descriptive section of the business plan, develop a description of business knowledge and accomplishments. For neuropsychologists, there may not be extensive knowledge and history in this regard, but efforts should be made to demonstrate that the entrepreneur is embarking on this business with at least some basic knowledge of the nuances of starting and subsequently running a business. The reader needs to know that you are the right person to start this venture and that you have the knowledge base to see it through. This is especially relevant if you need a lender or investor to provide start-up capital. While a clinician may not have specific education and background in business administration, supervisory, managerial, and administrative roles can help demonstrate basic leadership skills and, in some cases, business and budgetary knowledge that will further support an ability to carry out this venture. Background training and clinical experience are included here to demonstrate that from a professional standpoint you are able to provide all of the products and services outlined in the description of the business. In this sense, clinical expertise, board certification, research and training history, and reputation are quite useful to instill confidence in the quality of services that will be provided. Section II – Financial Aspects of the Business Plan The financial portion of the business plan can be quite intimidating at first glance, but projecting finances and the potential for financial success is rather straightforward when there is a basic understanding of the steps involved. The calculations themselves are relatively basic, and as long as the established formulas are followed, successful accounting is relatively easy. As with any mathematical calculations, it is necessary to make sure that the numbers put into the formulas are as realistic as possible and based on solidly researched information. To calculate the projected financial aspects of a business there are some educated guesses that have to be made in terms of expenditures and revenues, but if they are based on the best information available it is easier to 30

The Business of Neuropsychology

confidently determine whether or not a business venture can be sufficiently profitable. Also, by completing the steps of a financial analysis, information becomes available to determine what changes need to be made in the business model in order to achieve financial success. It is important to realize that the financial worksheets are dynamic documents and that changes in one location have an impact on other areas. This allows for modifications of projections to determine how projected changes can alter the overall financial bottom line. While the numbers are not expected to be completely accurate, if realistic predictions of expenses and revenues are utilized, a great deal of information can be gleaned form the available numbers. In this section, four financial analyses are presented to guide the financial projections used in a business plan. These include a break-even analysis, a profit/loss forecast, a start-up cost estimate, and a cash flow projection. There are multiple software programs available to assist in these calculations, including those that simply require the input of basic projections in a stepby-step manner with all analyses and spreadsheets developed automatically. This allows for quick modification of various projections with immediate feedback on the results of those changes. During the early stages of financial assessment, this is very useful in determining how changes in particular expense or revenue projections will affect the fiscal bottom line. While these software programs allow for quick and accurate calculations, it is still beneficial to know how the numbers fall together in order to identify which changes will be most effective and to make rational decisions when alterations are made. Therefore, an overview of each of these documents is presented. Break-Even Analysis A break-even analysis identifies the point at which the income from a business just covers the anticipated expenses. It serves to provide a snapshot of the business’s potential for profitability. It allows for adjustments to be made on both sides of the equation in an attempt to improve the probability of a profitable venture, but any such changes should be rational and based on realistic information. ‘‘Fudging’’ the numbers to make the business look more profitable will result in inaccuracies across all subsequent predictions and only serve to mask underlying risk. Break-even analysis depends on the following variables: the fixed and variable production costs for a product, the product’s unit price, and the product’s expected or projected unit sales. It is a tool to calculate the point where sales volumes are sufficient so that the Business Planning and Financial Basics

31

variable and fixed costs of producing a product or service will be recovered. Another way to look at it is that the break-even point is the point at which providing the product or service stops costing money to produce and sell, and starts to generate a profit for the company. Before the steps of a break-even analysis can be discussed, the reader needs to be familiar with the following terms and definitions:

• Fixed Cost: The sum of all costs not directly tied to the

•

• • • • • •

• • • 32

product that is generated (e.g., rent, utilities, administrative services, most salaries). This amount does not vary as unit numbers increase or decrease. This is also known as ‘‘overhead.’’ Variable Cost: Costs that vary directly with the production of each unit of an item or service. These are also called product costs, costs of goods, or costs of sale. These include packaging, supplies, materials, and labor costs associated with each product unit. Theses costs vary directly according to the number of units produced. Expected Unit Sales: Number of units of the product or service projected to be sold over a specific period of time. Unit Price: The amount of money charged to the customer for each unit of a product or service. Total Variable Cost: The product of expected unit sales times variable unit cost. Total Cost: The sum of the fixed cost and total variable cost for any given level of production. Total Revenue: The product of expected unit sales times unit price. Gross Profit by Category: The monetary gain (or loss) resulting from revenues for an individual product after subtracting all associated costs to provide or generate each product or service. Average Gross Profit: The average profit for individual goods or services based on the total product line. Average Gross Profit Percentage: The average percentage of profit for all products and services generated. Gross Profit Percentage: The amount that each sales dollar exceeds the cost of the product or service. The Business of Neuropsychology

• Break Even Point: Number of units that must be sold in order to produce a profit of zero while recovering all associated costs. • Gross Profit (or Loss): The resultant monetary gain (or loss) from revenues after subtracting all costs (variable and fixed). As is demonstrated in the definitions above, the steps of completing a breakeven analysis are rather simple and straightforward, but they can be painstakingly detailed. Additionally, the process of estimating expenses and revenues can be quite daunting. Revenue predictions are especially problematic in the practice of neuropsychology where many different services are provided under different charge categories and different payor sources vary in how much (or how little) they reimburse for the individual services. These difficulties are addressed in the appropriate sections below. For the purposes of this discussion, completion of a break-even analysis will follow these steps as outlined by Pakroo (Table 2006): 1. 2. 3. 4. 5. 6. 7.

Define a schedule for estimating income and expenses Identify related expenses for each product or service Predict how much profit will be made on each sale Calculate the ‘‘gross profit percentage’’ Estimate the fixed costs of the business Calculate the break-even point Analyze potential profits/losses

Other templates are available and multiple resources and references are provided in the reference section of this chapter. Again, this book was developed to serve as a practical guide, but it is beneficial to consult an accounting professional for assistance. Given that much of the language used to describe the steps and formulas involved in a break-even analysis focuses on general business practices, attempts will be made to provide examples that apply to neuropsychological practice as a model for application as much as possible. Specifically, the steps will follow the examples provided in Tables 2.1 and 2.2 that provide simplified spreadsheets designed around a single provider practice. Where applicable, the financial numbers utilized are for ease of calculation and understanding and are not based on any particular reimbursement statistics. Business Planning and Financial Basics

33

Steps 1 & 2: Getting Started and Estimating Expenditures The first steps in setting the stage for a break-even analysis are defining the timeframe to be considered and identification of fixed versus variable costs. When making estimations for completing a break-even analysis, it is important to cover a sufficient amount of time to account for seasonal variations and related demand and staff availability influences. Using a weekly or monthly timeframe added together to make yearly predictions may prove more useful than trying to estimate yearly projections more generally. For initial estimations, a single year or possibly a two year model is usually sufficient to account for typical variations and potential growth, but to not be overly speculative as in a five year span. Projected business expenses will need to be itemized and documented in detail and should be divided into two categories – fixed costs and variable costs. To reiterate the definitions above, fixed costs include all regular expenses not directly related to the production of a good or service. This includes, but is certainly not limited to, rent, utility costs, accounting or bookkeeping services, postage, scheduled marketing costs, and most salaries. In neuropsychology, this also includes items such as malpractice insurance, billing services, testing equipment (but not protocols), etc. Variable costs are those expenses that are directly related to the provision/generation of goods or services. They go up or down depending on product volumes. These costs include materials, supplies, packaging, inventory, and labor. For neuropsychology this includes the cost of specific test protocols and/or single use items, stationary and paper supplies used for patient registration and documentation, pens and pencils, and in some cases, salaries. Salaries are difficult to categorize because they can fit into both the fixed and variable cost categories. Base salaries for clinicians, administrative assistants, psychometrists, bookkeeping/accounting professionals, and management staff that remain constant regardless of productivity or volumes would be considered fixed costs. However, in some settings, psychometrists, insurance coders/precertification professionals, and even clinical staff, may work on a per diem basis and be paid in relation to the number of patients seen or the time spent in patient-related activities. If this is the case, these could be considered variable costs as they directly relate to the individual unit provision of goods and services. Finally, clinician and psychometrist salaries can be divided into fixed and variable cost categories. If predetermined billing productivity expectations are built into the business plan, time (hourly salary) related to specific billable patient activities could be considered a variable cost 34

The Business of Neuropsychology

while the remaining non-billable time (hourly salary) is considered a fixed cost. While potentially adding a level of complexity to the overall calculations, this division of salary costs may provide better clarification of category and overall profit margins in future calculations described below. It is imperative that all potential costs be considered, to eliminate failure of a plan based on bad input. Even items that seem small or irrelevant (e.g.,various office supplies or postage) contribute to the cost of doing business and need to be included in estimations. This is a tedious undertaking and visualization and mental role playing of service delivery regarding all of the potential expenses needs to occur to minimize unexpected and unaccounted for expenses that could limit the projected profitability in the future. Peck (Table 2003) provides a good overview of detailed costs in neuropsychological practice including minute details that may easily be forgotten.

Step 3: Projecting Revenues Now that the expenses have been identified and categorized, the next step is to project financial revenues. Estimating revenues varies according to the type of business involved, the types and number of different goods and services provided, the various charges for the products, and finally the number of products or services provided. The idea of predicting what will be provided, how much revenue it will bring in and at what frequency, can be overwhelming. This is worsened when you consider that very few businesses generate and sell a single item, have a uniform price for all products, or have a uniform demand for the various products. As a result, these projections will never be 100% accurate. But by looking at realistic numbers, a basic idea of the revenues and volumes necessary to increase the chances that the business can be profitable is obtained. For service-based businesses, like healthcare and neuropsychology, revenue estimates are based on billed charges and this is related not only to the number of hours a service provider works, but their level of billable productivity during that time. It is a given that not all of the time a provider is present is equal to billable time. A realistic assessment of billable versus non-billable time will make the estimation as accurate as possible. It is also important to realize that whether or not the time is spent in billable activities, there is a fixed cost for each hour that provider is present. Realistic, but responsible, expectations should be developed. This will be discussed further in some of the examples. Business Planning and Financial Basics

35

The next step is to determine what goods or services will be provided and at what price. For neuropsychological practice the ‘‘products’’ or ‘‘services’’ are identified via the various American Medical Association CPT (Current Procedural Terminology; AMA, Table 2009) codes that identify the clinical services provided. A starting point for this section is to develop a table of the various CPT codes available to neuropsychologists that would be utilized along with expected charges for each service (see columns 1 & 2 of Table 2.1). Estimates then factor how many patients are seen on a weekly or monthly basis; what CPT codes are billed; how many units are billed for each contact; and the charges for each code. Peck (Table 2003) describes developing charges based on a single hourly rate regardless of services provided. Others vary charges based on the service provided. Either is acceptable and the determination of set charges will be discussed in future chapters. For the purposes of this chapter, how charges are set is essentially irrelevant, as calculations are based on predicted reimbursements. As such, additional calculations have to take place to estimate the expected actual revenue for each service based on charges, payor source, and authorization of service, remembering that sometimes payors will reduce or even deny payment for a variety of reasons. In this sense, it is important to predict the unpredictable. This is further complicated by the fact that different payors reimburse at different rates, making it difficult to identify a single projected reimbursement rate for each procedure code that is billed. Therefore, it is necessary to either identify an average or estimated rate of payment per projected service provided or project an expected payor mix and base reimbursement rates around that expectation. Table 2.1 provides a sample spreadsheet to show projections of reimbursement rates for various CPT codes. The first two columns provide the CPT billing numbers and associated text descriptors of common services provided by neuropsychologists. The ‘‘billed charge per unit’’ is simply a number based on a rough estimate of rounded CMS Medicare 2008 reimbursement rates for one geographic area multiplied by 2.5 as a starting point. Again, this number is irrelevant since it is not used in any of the calculations described in this section. For simplicity, the ‘‘estimated average received’’ numbers are based on rounded CMS Medicare 2008 reimbursement rates for one geographic area. Average variable costs were calculated based on the salary information provided for the professional and the technician, plus additional variable cost estimates. The numbers used are for demonstration purposes only and do not reflect actual identified reimbursement rates or true variable cost values. 36

The Business of Neuropsychology

Table 2.1 Break Even Analysis Worksheet – Single Provider Example

Step 4: Calculating Average Gross Profit Percentage After predictions are in place regarding projected revenues, attention is turned to calculating the difference between these revenues and what it costs to provide the products. Once the average gross profit percentage is calculated, it is easy to determine what revenues and volumes are necessary to cover business costs. The average gross profit is calculated in a step-by-step manner from micro to macro aspects of the business, including calculations of the following: 1. The average gross profit for each individual product category 2. The average gross profit for all products and services combined 3. The overall average gross profit divided by the average selling price Since neuropsychology services are billed at one price, but paid at multiple different rates, some set standard will be needed so that a uniform level of ‘‘payment’’ can be established prior to Step 1. This could consist of a predetermined projected contractual percentage of billed charges based on research on potential payor mix and typical payment rates or using a set projected reimbursement rate (possibly using the Medicare Physician Fee Schedule). Whatever decision is made, this adds error to the calculations so a conservative method is recommended. Gross profit is the amount of money that is made on each sale above what it costs to provide the good or service (sales price – variable costs). In the neuropsychology example, sales price is equal to the projected reimbursement for the service provided (gross profit = reimbursement – variable costs). When specific products are involved it is relatively easy to determine the variable costs as described in the previous section. With services, as in neuropsychology, this is sometimes more difficult, but good planning in the identification of these costs is beneficial at this point. In the previous cost determination section, there was discussion of dividing clinician salary costs into both fixed and variable cost categories. Here is where that may be beneficial. If the clinician’s salary is included in the determination of gross profit for each service provided, a more realistic gross profit figure is obtained rather than having large fixed costs erase what looked to be large profits for each service on the initial calculation. Non-billable time that is categorized as a fixed cost can be subtracted along with other fixed costs during later calculations to determine the break-even point of the business. 38

The Business of Neuropsychology

Given the broad array of available CPT procedures that make up neuropsychological practice, it is necessary to calculate a gross profit for each service unit. It is reasonable to combine various codes into categories with similar reimbursement rates and variable costs (e.g., health and behavior intervention codes, but not including group treatment because of the large difference in reimbursement rate and variable costs). Once the provided services are listed, the next step is to estimate the average selling price (reimbursement rate) and average variable cost for each service. This should be based on information obtained in previous sections. In the neuropsychology example shown in Table 2.1, these are shown in their respective columns identifying the procedures, projected revenues, projected variable costs, and the estimated gross profit for each service (simple calculation of revenues – costs). The gross profit percentage for each service can be found by dividing the item’s average gross profit figure by the average reimbursement rate (or by billed rate, but this profit percentage will be significantly deflated). Now that the average profits for individual services have been calculated, it is easy to determine the average gross profit for the business as a whole. To begin this process, estimates of the annual sales revenue (received reimbursements) for each of the items and categories are made. This is done by predicting the number of units of each service that will be completed for the year and multiplying that figure by the identified average reimbursement. This provides overall yearly sales revenues for that item. The next step is to multiply this yearly sales revenue by the gross profit percentage for that service or category. As an example using Table 2.1, the expected units of service for neuropsychological evaluation – professional (96118) for a clinician is 18 units per week for 48 weeks (accounting for vacations, holidays, sick leave, etc) for a total of 864 units per year, and it is expected to be reimbursed at $118 per unit. The gross profit percentage for that item is 38.64%. So to calculate the total gross profit for that item (CPT – 96118), the calculation would be as follows: Estimated sales revenue of 96118 :

$101; 952

X Gross Profit Percentage for 96118 :

38:64%

¼

Total Gross Dollars for 96118 :

$39; 398

The next step is to add all of the gross profit amounts for each category together to arrive at a total annual gross profit for the business and to add Business Planning and Financial Basics

39

the total estimated sales (reimbursement) revenues to arrive at a total annual sales figure. The average gross profit percentage for the business is found by dividing the total annual gross profit figure by the total annual sales. For our example, the results of these calculations are as follows: Total Annual Est: Gross Profit :

$110; 782

Total Annual Est: Gross Sales :

$255; 888

¼ Average Gross Profit Percentage :

43:29%

=

As practice patterns are examined, it is easy to see that some procedures provide higher reimbursement and higher gross profit percentages. As a result, clinicians may choose to alter their practice patterns to emphasize the more lucrative procedures to allow for improved financial saliency, but care should be taken in this regard. Projected practice patterns should reflect the information provided in the business strategic plan and activities described in the initial section of the business plan. Additionally, considerations need to include competitors practice patterns, desires of potential referral sources, potential patient preferences, and the need for a diverse referral base. It is sometimes best to maximize the higher revenue-producing services without completely eliminating valued services that may not provide equal revenues.

Step 5: Estimating Fixed Costs Compared to calculating the gross profit percentage, estimating fixed costs is quite simple. This step consists of identifying monthly fixed expenses, including salary and benefits, rent, utilities, office supplies and expenses, budgeted marketing costs, and any other regular expenses that will be incurred. It is likely that some expenses will be overlooked during this process, so it is important to include a 10% additional cost for miscellaneous expenses. Since most of these costs occur throughout the year, it is best to estimate them on a monthly basis and then total them for the year. The total estimated fixed expenses are subtracted from the gross profit obtained in the previous section. While it can be somewhat satisfying to see a profit margin while calculating the gross profit figures, this margin can diminish rapidly or even disappear when fixed costs are subtracted. As such, it is important to keep expenses as low as possible to minimize the impact on the profit margin of the business. This is especially true for new businesses where sales will initially be limited until the business is firmly established. Expenses can be 40

The Business of Neuropsychology

Table 2.2 Estimated Fixed Expenses – Single Provider Without Office Staff

increased as a business grows and the volumes and revenues grow sufficiently to support the added expenditures. Table 2.2 provides a sample fixed expense list for the single clinician practice noted in Table 2.1. It is worth noting that in this model, the practice consists of one full-time clinician making a yearly salary of $99,840 and one full-time technician making $24,960. An additional 30% of these salaries are budgeted to account for benefits and other payroll expenses. No additional staff is included, so these two individuals will be responsible for handling referral calls, registering patients, completing the precertification needs, billing and coding activities, and management of the clinical records. This may or may not be realistic for some individual practice settings. Additional figures are included based on information available to the writer, but are included for demonstration purposes only and are not necessarily consistent with true costs. Steps 6 & 7: Calculating the Break-Even Point and Analyzing the Results After some painstaking work, all of the numbers are available to determine whether or not the proposed business is projected to make or lose money. As the calculations have been completed, the answer has already been realized, but it is important to finish to formal calculations. To find the amount of revenue necessary to break even, you divide the estimated annual fixed costs by the gross profit percentage. The result is the amount of sales revenue that will be needed to exactly cover the costs of doing business. This may seem intuitively backward at first. Instead of determining your profit based on your projected sales, fixed costs are used to determine the necessary gross revenues Business Planning and Financial Basics

41

to break even. This allows you to see necessary volumes and changes that may be needed in either revenue projections or reduced costs. For our example, the annual fixed costs were $90,164 and the average gross profit percentage was 43.29%. Using this calculation (estimated fixed expenses/average gross profit percentage) it can be determined that the break-even point for gross revenues is $208,279. Estimated Fixed Expenses :

$90; 164

= Avg Gross Profit Percentage :

43:29%

¼ Break Even Point ðGross RevÞ :

$208; 279

On the surface, analyzing the obtained information from this point seems very simple. The business is either projected to be profitable or not. However, there are a few more calculations that must be made. The first is to subtract the estimated revenue from the break even point: Estimated gross revenue

$255; 888




Break Even Point

$208; 279

¼

Excess Net Revenues

$47; 609

This excess revenue figure is then multiplied by the previously obtained gross profit percentage of 43.29%, resulting in a projected net profit of $20,610. Another way to get at this figure is to subtract the annual estimated fixed costs from the total estimated gross profit. The noted differences reflect rounding error that occurs during the various calculations: Total Annual Est: Gross Profit :

$110; 782




Estimated Fixed Expenses :

$90; 164

¼

Excess Net Revenues

$20; 618

Either calculation is acceptable, but additional ‘‘qualitative’’ information is obtained by taking the additional steps described above, where calculations are based on actual receivables and profit percentages rather than a simple subtraction of net figures. Also, it is important to note that this reflects pre-tax net profit and is subject to applicable federal, state, and local taxes. The final profit is the net amount after taxes have been subtracted. 42

The Business of Neuropsychology

As can be seen in this example, this business venture is not demonstrating a great return, but it is projected to at least break even with a small profit margin even after reasonable salaries are paid. It is emphasized that this practice model does not include any administrative, scheduling, accounting, billing/coding, or other assistance, so these activities would have to be completed by the clinician and the psychometrist or calculated as additional costs in the model. Tables 2.1 and 2.2 are provided on the Web page associated with this book and the reader is encouraged to modify these to meet individual practice patterns, reimbursement rates, and volumes. Additionally, spreadsheets are provided that include practice models with additional providers, technicians, and office staff. Profit & Loss Forecast Completing the break-even analysis sets the stage for the remainder of the calculations in this section. Similar to the break-even analysis, the profit and loss forecast (P&L forecast) provides estimates for expected revenues and expenses. The difference is in the timing of the projections. While the break-even analysis projected yearly figures, the P&L forecast projects these values on a monthly basis. Given the manner in which the break-even analysis was completed for the neuropsychology example, this was already completed from a general standpoint. For our purposes, the P&L forecast breaks down the numbers into monthly increments. The steps for completing this process are relatively simple and a completed profit and loss forecast is provided in Table 2.3. First, the annual revenue estimates are broken down into monthly increments. For our example, the annual gross revenues were simply divided by 12 to account for each month, even though revenues were based on a 48-week period of billing. With additional information, monthly projections can account for seasonal fluctuations in terms of referral volume, staff leave time, or other factors that may influence the monthly figures. Once the monthly revenue projections are completed, the gross profit for each month is calculated by multiplying the projected monthly gross revenues by the previously calculated gross profit percentage. Next, monthly fixed expenses are added together to get a monthly total fixed expense figure. This was simplified for our example, and there is a need to build fluctuations into this model to account for monthly variation in a true business model. Finally, a simple subtraction of monthly expenses from revenues is completed to determine the net monthly profit. Business Planning and Financial Basics

43

Table 2.3 Example Yearly Profit & Loss Forecast for Single Provider Practice with No Staff

It is important to understand that the monthly P&L forecast does not include the entire financial picture of the business. It is based only on revenues and expenses that are directly related to the production of goods/services and revenue receipts. Income and costs from start-up loans, investment capital, transfers of personal money, and start-up expenses are not accounted for in the P&L forecast. These will be included in the upcoming projected cash flow analysis. The P&L forecast outlines the potential profitability on a monthto-month basis. When a business is beginning, there is some expectation that volumes will not reach target levels and this will need to be accounted for with some indication of how much time will pass before the business becomes profitable. The knowledge obtained from these early projections can also assist in determining the need for start-up capital to start and sustain the business during the early months of its existence. Estimating Start-Up Costs Looking at long-term projections can be encouraging when a business looks like it will be a profitable venture. However, give attention to initial expenses that must be paid before any revenue is generated. Careful consideration of these costs will help determine whether or not a start-up loan or investment capital is required before the business begins. These estimates can also guide the determination of where these dollars come from, be it a start-up loan from a bank, a government grant, or from other investors (including you). It is important to project how long external assistance will be needed. The amount and timeliness of the need can play a role in these decisions. If a business is slow to achieve small profits, start up costs must remain low to offset the slow growth toward profitability. It is important to be realistic in determining start-up costs and that a business plan includes purchasing only necessary items in a fiscally conservative manner. If an item is necessary to produce a product or service, it is a necessary expense. If it does not directly relate to the product or service, decisions need to be made regarding its necessity or possibly the quality of the item purchased. For the items that are needed, explore inexpensive options and consider the ‘‘value’’ of the items purchased. For example, a mahogany testing table with matching wing chairs from Ethan Allen can be quite beautiful, but is functionally no different than a basic open table with chairs that could be purchased at Ikea, Target, Wal-Mart, or similar retailer. This is of particular importance when purchasing items that will not be directly involved in the provision of the service. If a neuropsychologist sees Business Planning and Financial Basics

45

patients only in a testing/treatment room, the desk in his or her office can be basic and functional rather than appearance-driven. However, these ‘‘functional’’ purchases must be made with issues of patient and referral source perception of quality service and comfort with the services provided in mind, so some balance in this mindset should be included. This must also be considered in the location of the business. Rental costs will certainly be lower in less desirable areas, but it is less likely that a patient or referral source would be comfortable coming to such an area for care. To estimate the start-up costs, all items necessary to provide the service are listed along with other indirect costs that contribute to the business. This includes any cost that must be paid prior to opening the doors of the business, such as security deposits, licensing fees, insurance, initial rent, test equipment and protocols, office supplies, office equipment, and furnishings. These are itemized and the costs totaled to get an estimate of how much money will be needed prior to beginning a business. After completing this calculation, if it is determined that there is not enough cash on hand to start the venture, other financing options will have to be considered including a business loan, capital from another source, renting some items rather than purchasing, or a combination of options. If investment or loaned dollars are to be considered, the business plan will serve as the basis for justifying the investment of others. Table 2.4 provides a sample start-up cost spreadsheet. Notice that in addition to the start-up costs described above, the spreadsheet also includes expenses to account for slowed revenue projections for the first month of the practice. Specifically, 20 hours per week of salaries and benefits for the clinician and psychometrist are included since it is unlikely that the professional and technician will be billing at full capacity in the first month of business. It is important to think critically and creatively, as this spreadsheet is created to account for as many potential expenses as possible. Cash Flow Analysis The cash flow analysis helps a business to plan and manage the incoming and outgoing cash flow so that expenses can be predicted and covered as they come due. The profit and loss forecast is similar in that it projects whether or not the cash from sales will cover projected expenses, but it does not include non-product based costs and revenues and does not clearly demonstrate the time that revenues are received and bills are paid. The cash flow analysis is meant to show a ‘‘real time’’ picture of a business’s financial situation. It also allows for planning for slow periods so that loans or other investments are in 46

The Business of Neuropsychology

Table 2.4 Sample Business Start-Up Cost Itemized List

place to cover initial start-up costs and slow initial sales or where saving during high profit months allows for continued cash flow during leaner times. In either case, if cash flow needs are identified in advance, it is easier to plan for both the good and bad times. The development of a cash flow analysis will use many of the same figures and formulas developed earlier in the profit and loss forecast. The main difference is that the focus is now on how cash flows into and out of the business in real time instead of being based on projected sales revenues and expenses. Additionally, expenses and revenues are accounted for in the month where they occur rather than equally spread over a 12 month period. In most new businesses there will be some negative values (placed in parenthesis) early in the business that may be accounted for with planned start-up loans or other investments. As the business becomes profitable, tax payments will need to be included as well. This document will serve as a blueprint of the business’s financial health from month to month and will help highlight areas and timeframes where adjustments will need to be made. The steps of developing a cash flow analysis are relatively simple, but obtaining all of the information can be difficult. The process begins by starting with the available cash on hand. For a new business this will be a zero value. Cash-ins for the month are then calculated. This should include all sources of income for the business, including the projected revenues, but also start-up loans, investments, transfers of personal money, and any other money that comes into the business. Adding these together provides the incoming revenue for the month. The next step is to enter all of the projected payments out of the Business Planning and Financial Basics

47

Table 2.5 Sample Cash Flow Analysis

business, including the fixed and variable costs as well as any loan payments or other moneys that are being paid out. The total cash outs are then subtracted from all revenues for the month to determine the remaining financial balance. That number serves as the starting point for the next month and the process begins again. A particular problem encountered in developing a cash flow analysis in neuropsychological practice is the fact that revenues are not all received at the time the service is provided. Aside from fee-for-service payments directly from the patient or partial payments through patient co-pays, there is typically a delay in receiving payment for the services that are provided. As a result, the inflow of revenues typically runs two to three months behind, and possibly more depending on the payor source. As a result, early in the life of a neuropsychology practice expenditures arrive well before revenues, making it difficult to keep adequate cash flow to meet financial responsibilities. High patient and billed volumes are not useful when the revenues do not arrive in a timely manner. ‘‘The check is in the mail’’ will not cover the rent and other bills that have identified due dates, making delayed reimbursement a tremendous problem as a neuropsychological practice is starting. As a result, planning should include additional start-up funds to carry the business until the revenue cycle catches up to expenditure needs. This also highlights the need for timely billing and accurate documentation to minimize these delays as much as possible. This will be discussed further in future chapters. Table 2.5 uses the information derived previously from the sample neuropsychological practice to show an example of a cash flow analysis that attempts to account for some of the difficulties described above. These numbers are by no means exact, but serve to demonstrate the principles presented. As with the other tables, this is available on the Web site associated with this text to provide a starting point for readers who want to experiment with different numbers.

Completing the Business Plan The above sections provide an overview of the descriptive and financial aspects of a basic business plan. From this point it is necessary to put all of the information into a final package that meets the needs of the entrepreneur. This may be a document that is used to secure start-up funding through a bank or other investors or it may simply be a guide for a smaller scale business that has no outside involvement. The format of the final document(s) is based on whatever next steps are to be taken. Additionally, the spreadsheets that have Business Planning and Financial Basics

49

been developed can serve as useful guides for further budgeting and accounting activities as the business matures. Some Final Thoughts about Business Plans and Accounting Basics The utility of the worksheets included in the previous section is not limited to those who are planning to start or grow a private practice. The ability to understand the financial aspects of business and to project revenues and expenses will serve neuropsychologists well, regardless of work setting. As any business or department looks to embark on program development or expand into new areas or services, these worksheets can be used to project the potential value of a new service line. This information allows the neuropsychologist to present ideas to administration in a credible and fiscally responsible fashion and in a language that administrators will understand. It is not uncommon for neuropsychologists to dismiss or give up on program development ideas when managers ask for a business plan or financial projections for the new service to justify moving forward. The worksheets provided can be applied to these and many other situations and settings. Additionally, applying this knowledge through the development of financial statements and reports allows the neuropsychologist to communicate with stakeholders, be they investors in a private practice or managers or administrators in an institutional setting. Understanding the financial worksheets for the business plan also sets the stage for ongoing budgeting for a business or a department. The ability to understand and use budgets and budget-related information is crucial to the success and longevity of any business. The overview of the basic worksheets provided in this chapter should set the stage for improved budgeting over the long-term of a department or business. A budget is a plan for future financial activities for a specified period of time. It captures projections in terms of expenses as well as revenues and provides a measure of success relative to those projections. This is very similar to the steps that were taken in completing the break-even analysis and the profit and loss forecast above. Most budgets also include organizational plans for assets and liabilities (budget balance sheet) and time-based estimates for monetary receipts and payments (budgeted cash flow). These concepts are not new in relation to the information already covered in this chapter. The format is slightly different due to the fact that the projections are compared to actual figures on a regular basis and adjustments are made in real time with real data rather than in speculative fashion. 50

The Business of Neuropsychology

Future chapters relate to many of the principles presented in this chapter in direct application to neuropsychological practice. This includes examination of how payor mix can directly influence the fiscal bottom line of a department or business, discussion of contractual rates and managed care payment in private and institutional settings, how to maximize reimbursement, and creation of fiscal ‘‘dashboards’’ and other documents to communicate the fiscal status of a department or business, among other topics. A good understanding of the principles presented here will provide a strong foundation as practice financial affairs are further explored. Additionally, having a good understanding the financial aspects of a business allows for better decisionmaking and ‘‘smart growth’’ as a business or department matures.

References, Resources, and Suggested Readings Abrams, R. (2000). The successful business plan: Secrets and strategies, 4th Ed. Palo Alto, CA: Running ‘R’ Media. American Medical Association (2009). CPT 2009 professional edition. Chicago, IL: American Medical Association Press. American Psychological Association. (2002). Ethical principles of psychologists and code of conduct. American Psychologist, 57, 1060-1073. Brookson, S. (2000). Managing budgets. New York: Dorling Kindersley. Palo Alto Software (2009). Business Plan Pro. Palo Alto, CA: Palo Alto Software DeThomas, A., Derammelaere, S. (2001). Writing a convincing business plan, 3rd Ed. Hauppauge, NY: Barron’s Educational Series. Ernst & Young LLP, Siegel, E. S., Ford, B. R., & Bornstein, J. M. (1993). The Ernst & Young business plan guide, 2ndEd. New York: John Wiley & Sons. Lamberty, G. J., Courtney, J. C., & Heilbronner, R. L. (Eds.) (2003). The practice of clinical neuropsychology. Exton. PA: Swets & Zeitlinger. Lesonsky, R. (2007). Start your own business, 4th Ed. Irvine, CA: Entrepreneur Press. Nova Development US (2005). Nova Business Plan Writer Deluxe. Pakroo, P. H. (2006). The small business start-up kit: A step-by-step legal guide, 4th Ed. B. K. Repa (Editor). Berkley, CA: Nolo. Peck, E. A. (2003). Business aspects of private practice in clinical neuropsychology. In Lamberty, Courtney, & Heilbronner (Eds.), The Practice of Clinical Neuropsychology. Exton. PA: Swets & Zeitlinger. Business Planning and Financial Basics

51

Peterson, S. D., Jaret, P.E., & Schenck, B. F. (2005). Business plans kit for dummies. Hoboken, NJ: Wiley Publishing. Includes CD-ROM Rule, R. C. (2004). Rule’s book of business plans for startups: Create a winning plan that you can take to the bank, 2nd Ed. New York: Entrepreneur Press. Tyson, E. & Schell, J. (2008). Small business for dummies, 3rd Ed. New York: Wiley & Sons.

52

The Business of Neuropsychology

3 &&& Process, Quality, and Consistency Throughout educational programs, neuropsychologists are trained in scientific techniques, statistics, and research methodology. This may continue in our clinical training, where programs often subscribe to a scientist-practitioner or practitioner-scholar model in which research and science are presented as the basis for appropriate clinical practice. The 1949 Boulder Conference defined the doctoral clinical psychologist as a scientist–practitioner who was (a) a consumer of new research findings, (b) an evaluator of clinical interventions through empirical methods to increase accountability, and (c) a researcher who produced data from his or her own clinical ‘ laboratory’’ to inform the rest of the scientific community (Barlow, Hayes, & Nelson, 1984). The goal was to produce professionals who ‘ would combine clinical practice with an empiricism and a research methodology particularly suited for clinical work’’ (p. 10). Inherent to this formulation was the belief that the diagnosis and treatment of each individual case was to be regarded as a single and well-controlled experiment (Thorne, 1947). The practitioner-scholar model of training promotes the productive interaction of theory and practice in a primarily practicebased approach to inquiry (Hoshmand & Polinghorne, 1992). As such, psychologists are expected to conduct their clinical practice in a manner that is informed by psychological theory and current research. While these approaches certainly are valuable in terms of our clinical practice, psychologists are not taught the basics of process control, analysis, improvement, and outcome measurement. These areas traditionally have been reserved for business and management programs, specifically in courses looking at quality and process consistency. This chapter provides an overview of process, quality, and consistency from a business perspective, but with a 53

specific emphasis on healthcare process, quality, and outcome measurement. The application of these practices is presented in the context of neuropsychology practice in the following chapter, with an emphasis on setting up practice/departmental processes and procedures. What Is Process? According to the American Heritage Dictionary (Picket, et al, 2000), ‘‘process’’ refers to:

• A series of actions, changes, or functions bringing about a result • A series of operations performed in the making or treatment of a product • Progress or passage, as in the process of time or events now in process Process is not necessarily about the outcome, but instead refers to the activities that lead to the outcome. This is more clearly seen in the definition of process in business settings. Davenport (1993) defines a (business) process as a structured, measured set of activities designed to produce a specific output for a particular customer or market. Again, this implies a strong emphasis on ‘‘how’’ work is done within an organization in contrast to a product emphasis or an emphasis on ‘‘what’’ is produced. Process is a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs. In essence, processes are the structure by which an organization does what is necessary to produce value for its customers (Davenport, 1993). This sense of ‘‘value’’ in terms of process outcome is furthered by Hammer and Champy (1993) as they define process in business as a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. The outcome of a process is not necessarily tangible goods. Processes may also produce intangible services. In either case, the purpose of the process is to produce value for the customer. To make this idea more clear, Hammer and Champy describe ‘‘primary processes’’ as those that result in a product or service that is received by a customer, while ‘‘support processes’’ produce products that are invisible to the customer but essential to the effective management of the business. Rummler and Brache (1995) go further to state that most processes ‘‘are cross-functional, spanning 54

The Business of Neuropsychology

the ‘white space’ between the boxes on the organization chart.’’ This highlights the often times ‘‘unseen’’ nature of processes that produce outcome. When the gestalt of the business process is broken down into its individual elements, the following characteristics emerge as the basis for defining business process (Johansson, et al, 1993):

• Definability: Must have clearly defined boundaries, input and • • • • •

output Order: Consists of activities that are ordered according to their position in time and space Customer: There must be a recipient of the process outcome Value-adding: The transformation taking place within the process must add value to the recipient, either upstream or downstream Embeddedness: A process cannot exist in itself, it must be embedded in an organizational structure Cross-functionality: A process regularly can, but not necessarily must, span several functions

These factors can be recognized in virtually any process, whether it is the manufacturing of a specific product or the provision of a specific service or set of services. Process Control, Evaluation, and Quality As can be gleaned from the above discussion, processes in business are meant to be stable, consistent, and predictable. Again, the focus is not on the outcome (or the ‘‘what’’), but on the process (or the ‘‘how’’ it was achieved). With that in mind, process control, evaluation, and quality focus on evidence-based process steps that produce outcome and value, with an understanding that we have more control over processes than outcomes. In administrative or managerial settings, the effectiveness of a process is understood through measurement and auditing. The process control and evaluation literature indicates that ‘‘we manage what we measure’’ and that processes that are unmanaged move toward chaos (entropy). The American Heritage Dictionary (Picket, et al, 2000) defines ‘‘quality’’ as having a high degree of excellence such as the importance of quality healthcare. In a business or quality management sense, quality is the elimination or reduction of process and outcome variation. Some words used to describe Process, Quality, and Consistency

55

quality include consistent, predictable, stable, systematic, surprise-free, in control, compliant, 100% conformance, and zero defects. The practices of process control and quality center on the reduction of variance and the development of stable, consistent, and predictable activities in the provision of services or manufacturing of a product. In the realm of quality and process evaluation, certain terms are frequently encountered and will run throughout the literature in this area. The reader is encouraged to become familiar with the following terms:

• • • • •

Statistical Process Control (SPC) Six Sigma Quality Total Quality Management (TQM) Continuous Quality Improvement (CQI) The International Organization for Standardization - ISO 9000 family of standards for quality management systems • Constant Compliance Each of these terms refers to management and control of the process that produces the desired outcome. The goal is to reduce variance and subsequently improve quality. Albert Einstein has been given credit for the quote, ‘‘Insanity is doing the same thing over and over and expecting to get a different result.’’ Whether or not that truly came from Einstein, the basis of the statement certainly applies to process control and management. Similarly, in psychology, we often report that the best predictor of future behavior is past behavior. This was captured more formally by Shewart (1931, p. 6) in his discussion of process control: ‘‘A phenomenon will be said to be controlled when, through the use of past experience, we can predict, at least within limits, how that phenomenon will behave in the future.’’ This is the essence of statistical process control. Quality is achieved through the elimination or reduction of process and outcome variation. In order to measure and subsequently control process variation, there must first be an understanding of what process variation is. Every process or behavior has some level of variability. In process control, the goal is to distinguish common cause variation from special cause variation (Deming, 1986). A good example to demonstrate this concept is your signature. If you write your signature on a piece of paper five times in succession, there will be 56

The Business of Neuropsychology

subtle differences between each sample, but overall there will be agreement that all of the samples are in fact your signature. All processes exhibit this common cause variation where no two things are exactly alike or no two people perform the same process in exactly the same way. This variation is predictable, somewhat expected, random, and essentially a part of the process. This common cause variation is the ‘‘noise’’ in the system. To change things up, if you wrote your signature with your nondominant hand under the five signatures you previously wrote with your dominant hand, there would be a significant difference between this sample and the previous samples. Here, special cause variation is introduced into the process by utilizing the nondominant hand in the signature writing process. Special cause variation is unpredictable, unexpected, and not part of the normal process. Using the nondominant hand introduces a ‘‘signal’’ error in the process, indicating that something has influenced the process in a unique fashion. Hence, the goal of process evaluation and management is to distinguish ‘‘signal’’ from ‘‘noise’’ in the presenting system. Ideally, the goal is to recognize special cause variation in real time so it can be prevented, fixed, standardized, or ignored rationally based on data rather than hunches. It is also important to distinguish common cause from special cause variation to avoid tampering and chasing ghosts that really do not exist. To put this process evaluation in more traditional statistical terms, Callahan & Barisa (2005b) described process evaluation using Type I and Type II error as the premise. In process control, Type I error occurs when common cause variation is misinterpreted as special cause variation. In other words, it is normal variation that does not necessarily impact the process or subsequent outcome, but efforts are made to correct this variation. This misinterpretation leads to ‘‘chasing ghosts’’ in the system or tampering with a process that may actually be in control. This intervention without process knowledge may result in special cause variation that leads to problems with a process that was already under good control. Type II error results when special cause variation is misinterpreted as being common cause variation. In essence, this leads to doing nothing. In process control, sometimes it is better to do nothing than to tamper with the system. If this error is made and the variation was due to a special cause, it will likely happen again and the evaluation process will be provided additional data to better identify the special cause variable and to take steps to eliminate that process variation.

Process, Quality, and Consistency

57

Statistical Process Control and Process Management The measurement of process variation typically involves the utilization of statistical process control (SPC). Like any other statistical method, SPC is a tool to help identify and distinguish significant changes (special cause variation) from normal fluctuations (common cause variation). There are multiple books, chapters, articles, white papers, etc. on SPC, particularly in the business and management literature. In fact, it would be extremely rare to bring up SPC process evaluation methods to a manager or business school graduate and have him or her not understand the topic or methods. It is the language of process evaluation and quality improvement. A complete discussion of SPC techniques and statistics is beyond the scope of this text, but the reader should become familiar with some aspects of SPC to enhance discussions with management/business colleagues as well as develop the skills to use the concepts and ideas within their own departmental/practice structures. Callahan and Barisa (2005b) and Callahan & Griffin (2003) include a brief primer on SPC and its application to healthcare management and clinical settings. The following summary provides a brief overview of some SPC principles and techniques to allow the reader to gain some familiarity with this powerful tool. Further reading of the references provided above, as well as other readings in the reference section of this chapter, is recommended for those who want to gain a greater understanding of SPC. Statistical Process Control was developed by Walter Shewart and his colleagues at Bell Laboratories in the 1920s as a means to understand and reduce variability in the manufacturing process (Berwick, 1991). SPC gradually developed as a tool to provide real-time, analytically robust, graphic portrayal of process information that quickly and meaningfully identifies trends, problems, and issues. This information can then be used to correct problems or standardize variable processes in real time so that the process can become stable and predictable. SPC utilizes a ‘‘control chart’’ to display the independent variable (x axis – often a time variable) and the dependent variable (y axis – process to be measured) in a time series line graph. This is referred to as a ‘‘run chart’’ to reflect the multiple consecutive data points in a time series. Upper and lower ‘‘control limits’’ are defined at equal points above and below the mean, based on statistical analysis of the process data obtained from the individual data points. The control limits define the statisticallyderived confidence intervals representing normal variance within the measured process. This allows the examiner to distinguish common cause from

58

The Business of Neuropsychology

special cause variation. These control limits are calculated in such a manner that they always yield a confidence interval of three standard deviations around the distribution of the data (thus creating a six sigma range of total common variance). This covers 99.73% of the normal distribution, making the likelihood of an observation falling outside of these control limits only 0.27% or 3 of 1,000 observations (Plsek, 1992). Any such observation certainly would reflect the influence of special cause and would not be associated with common cause or chance variation. This shows the powerful nature of this statistic and the emphasis on recognizing special cause variance and minimizing the misidentification of common cause as being special cause. While multiple control charts can be developed using SPC, the power of SPC can be obtained from a few manageable concepts built around a single type of individual control chart called the average moving range (XmR). It has broad-based utility and has been referred to as the ‘‘Swiss army knife’’ of control charts. Using the XmR chart, very specific rules exist for examining the data and empirically identifying special cause variation. Three primary rules are employed as defined by the work of Shewart and his colleagues and often referred to as the ‘‘Western Electric Rules’’ (Carey & Lloyd, 1995; Hart & Hart, 2002; Shewart, 1931; Wheeler, 2000). The mnemonic ‘‘ones, runs, and trends’’ can be used to identify these three rules. As presented in Figure 3.1 from Barisa and Callahan (2005b), ‘‘ones’’ refer to any single point falling outside of the upper or lower control limits; ‘‘runs’’ refers to seven or more consecutive points all above or below the center line (mean); and ‘‘trends’’ refers to seven or more consecutive observations moving up or down bisecting the center line (mean). By using these rules, the examiner can use this simple charting tool to identify special cause variation and make empirically derived decisions. To summarize, process control and management improves the quality of outcomes by minimizing variance in the processes leading to outcome; reducing surprises; minimizing the intermittent problems that can lead to errors and mistakes; avoiding decision errors; and ultimately saving time, energy, and stress. The question arises, ‘‘when a special cause variation is identified, what do you do?’’ The key is to realize that errors and mistakes are more likely related to a process rather than a person. Berwick (1989) states, ‘‘defects in quality could only rarely be attributed to a lack of will, skill, or benign intention among the people involved in the process.’’ The ultimate goal is to identify the error/ variance in the process and make adjustments based on fact (data) rather than irrationally tampering with a system. Process, Quality, and Consistency

59

One

Any one point falls outside the control limits (i.e., above the UCL or below the LCL).

Run

3 1 2

Seven or more consecutive points all above or below the center line (the mean).

7

5 6 4

Trend

1

Seven or more consecutive points moving up or down bisecting the center line.

2 3 4

5

6

7

FIGURE 3.1 Determining Special Cause in SPC: ones, runs, and trends From Callahan, C.D., & Barisa, M.T. (2005). Statistical process control and rehabilitation outcome: The single-subject design reconsidered. Rehabilitation Psychology, 50, 24–33. Used with permission.

The Healthcare Process To better understand the concept of process management and its application, healthcare process will be used as an example due to its relevance to neuropsychological practice. Bente (2005) provides a model of healthcare processes that is based on the previous definitions (see Figure 3.2 from Bente, 2005). The model starts with inputs which could be the presenting complaints of the patient as he or she enters the healthcare system. These can be compared to the raw materials used in a manufacturing process. From the point of presentation, combinations of administrative and clinical functions are triggered by the presenting symptoms. This process reflects the interaction of people, equipment, policies, and procedures. Evaluation of this process could be quite variable as individual, group, and interactive elements of the process are evaluated in terms of consistency, competencies, equipment reliability and maintenance, clarity of policies and procedures, whether or not the clinical procedures are based on evidence based practice, etc. Once the symptoms (inputs) go through the healthcare process, they become an output. The output may well be an additional action taken by the individuals or organization, such as an admission order, a medication or procedural intervention, or 60

The Business of Neuropsychology

PEOPLE

EQUIPMENT

HEALTH CARE PROCESS

INPUT

PROCEDURES

OUTPUT

INPUT

PATIENT

OUTCOME

POLICIES

3.2 Health Care Process Model From Bente, J. (2005). Performance measurement, health care policy, and implications for rehabilitation services. Rehabilitation Psychology, 50, 87–93. Used with permission. FIGURE

other activity. At this point, the output becomes a new input that instead of going back through the healthcare process, goes back to the patient and ultimately results in an outcome. The outcome is based on how the patient reacts to his or her course of intervention, the nature of which can be quite variable. The result of the intervention may be favorable in that the patient is cured or the symptoms are relieved. Alternatively, the result may not be favorable as the patient may not receive relief or cure as a result of the interventions and may in fact die despite the care provided. Traditionally, outcome would be the measurement of the quality of care provided, whereas improvement in the presenting condition would be a successful outcome and a lack of improvement or worsening of the condition would equate to poor quality. However, patient outcome research has shown that the positive or negative outcome of healthcare is not necessarily reflective of the quality of care provided. We know that a patient can have a favorable or good outcome even in the absence of quality care and that, conversely, a patient can have a negative or poor outcome even in the context of quality care. Bente (2005), based on the work of Mark (1995), contends that there is a unidirectional relationship between the quality of care provided and the subsequent outcomes. In other words, if quality care exists, one can conclude that the outcomes will be more favorable. However, if the outcomes are favorable, one cannot automatically conclude that quality care was provided in the healthcare process. This is further highlighted in Bente’s healthcare control model (Figure 3.3 from Bente, 2005). This unidirectional relationship is presented with discussion of the degree of direct control healthcare providers have on either the process or the outcome. Those caring for the patient have little control over the Process, Quality, and Consistency

61

MAY HAVE LIMITED CONTROL

INPUT

HEALTH CARE PROCESS

PATIENT

OUTCOME

VIRTUALLY 100% CONTROL

FIGURE 3.3 Health Care Control Model From Bente, J. (2005). Performance measurement, health care policy, and implications for rehabilitation services. Rehabilitation Psychology, 50, 87–93. Used with permission.

actual outcome because this is influenced by multiple factors related directly to the patient, such as general health condition, treatment adherence, reactions to treatments, and other factors outside of the health professional’s control. However, within the healthcare process, these individuals have virtually 100% control of what happens in the process of the treatment. In other words, healthcare providers can control what happens to the patient within the process of service provision, but they have only limited control over the effectiveness (outcome) of that intervention. The interested reader is encouraged to read the work of Bente (2005) and Mark (1995) for more detailed discussion. This model of heathcare control and quality is seen in the shift from outcome indicators to process indicators by Centers for Medicare & Medicaid Services (CMS), the Joint Commission of Accreditation of Healthcare Organizations (JCAHO), the National Voluntary Hospital Reporting Initiative (NVHRI), and other organizations responsible for the accreditation, regulation, and ultimately, payment for healthcare. As an example, the NVHRI selected ten indicators under the three major conditions of heart failure, acute myocardial infarction, and community acquired pneumonia to evaluate performance (Centers for Medicare & Medicaid Services, 2004). All ten of the performance indicators were process variables controlled directly by the organization’s leadership or by the direct care providers. Similar to this, the JCAHO Core Measures have identified 21 indicators for the conditions of heart failure, acute myocardial infarction, community acquired pneumonia, and pregnancy-related conditions to evaluate performance in healthcare organizations (JCAHO & CMS, 2004, p. v). Although not all of the indicators are 62

The Business of Neuropsychology

process variables, the vast majority (81%) is under the control of the organization or caregivers. Performance on these indicators have a direct effect on the identified quality of an organization as well as on payment received via the new ‘‘pay for performance’’ model developed through CMS. This pay for performance model is discussed further in subsequent chapters, but suffice it to say that neuropsychological practice will not be immune from its effects. Outcome Measurement in Psychology and Neuropsychology Practice It is worthwhile to provide a discussion of the current state of outcome measurement in psychological practice. Despite our underpinnings in the scientist-practitioner and practitioner-scholar models of training and practice, there is little evidence to support that psychologists are using outcome measurement in their clinical practice. In a national survey of APA clinical psychologists, Hatfield & Ogles (2004) defined outcome measurement as ‘‘routinely collecting data regarding client progress.’’ Of the 874 participants (44% response rate), only 37% reported using outcome measurement in their practice. The reasons cited for conducting outcome measurement included track client progress, determine need to alter treatment, ethical practice, determine own strengths and weaknesses, required by payer, required by work setting, research publication, and business marketing. Reasons cited for not conducting outcome measurement included comments such as adds too much paperwork, takes too much time, extra burden on clients, feel it is not helpful, do not have enough resources, a simple measure distorts effects of treatment, do not know how to implement, concerns about confidentiality, feel that it will be misused by others, interferes with my autonomy as provider, do not know how to interpret scores, and client refusal. Callahan (presented as part of Callahan, Barisa, et al., 2005) summarized these reasons into four categories: 1) Too much trouble; 2) Risk of personal harm/loss; 3) Do not know how; and 4) Client burden. The first three, Callahan suggested, reflect avoidance on the part of the psychologist. Callahan adapted the Hatfield and Ogles methodology and surveyed APA Division 22 (Rehabilitation Psychology) members through a pilot survey in March of 2005. Of the 89 respondents, 42% reported using OM in their practice. Of those that use outcome measurement, 71% reported using some measurement at the beginning of treatment and 54% used measurement at the end of treatment. There is no good indication that psychologists and specialists in psychology are routinely using outcome or process measurement in their clinical practice. Process, Quality, and Consistency

63

While there is a reasonable belief that our ‘‘outcomes’’ are too complex to measure or that the efficacy of our evaluations and interventions are intuitively sound, that will hold little weight as our payors ask us to show our value before they will provide approval/payment for our services. There is a need to demonstrate consistency and quality processes in our clinical activities as we develop strategies to demonstrate that our services provide reliable functional benefits that are consistent with the goals of the person(s) served and exceed those achieved through passage of time, natural healing, and/or chance alone (Callahan & Barisa, 2005a). We should develop methods to measure things we can/should impact; intervene in ways shown to work (Seligman, 1994); measure with sensitive, quick, easy, repeatable metrics; and be able to present this information graphically for maximum meaning and impact. This could be completed by focusing on the areas of effectiveness (e.g., through objective measures of symptom presentation); efficiency (e.g., length of stay; cost per evaluation; time for report generation); usefulness (e.g., documented reduced need for further evaluation, decreased hospital stay, treatment recommendations that reduce symptom presentation or caregiver difficulties); outcome measurement for the larger organization (e.g., development, implementation, and analysis of broader outcome measurement tools), and customer satisfaction (Callahan, Barisa, et al, 2005). Given the time and expense involved in an average neuropsychological evaluation, the need for scientific documentation of the relative value of such services will be paramount for future authorization and payment. While these areas of ‘ outcome’’ are of great importance, there also is a need to demonstrate consistency, timeliness, and quality in how we deliver these services. The process factors affecting the administrative and ‘ practice’’ aspects of neuropsychology are discussed in detail in Chapter 4, but it is important to note that focusing on our own office and clinical processes is of great importance as we look to demonstrate these constructs. For a moment think, about your own clinical setting and how patients transition through the various aspects of your office process – from initial call for referral until the time the patient is discharged from care and the chart is filed. Is it stable, consistent, predictable, and of the highest quality at all levels? Does the report reflect information that is useful to the referral source and the patient? Was it completed in a timely manner? How would the patient as well as the referral source rate you and your department in terms of customer service? Most importantly, would they recommend your practice/services to a family member or friend? These questions are addressed as we look to set up the office process in the next chapter, but these 64

The Business of Neuropsychology

areas of quality and process play a large role in determining our future success and staying power as a practice/department.

References, Resources, and Suggested Readings Barlow, D.H., Hayes, S.C., & Nelson, R.O. (1984). The scientist-practitioner: Research and accountability in clinical and educational settings. Elmsford, NY: Pergamon Press. Bente, J. (2005). Performance measurement, health care policy, and implications for rehabilitation services. Rehabilitation Psychology, 50, 87–93. Berwick, D.M. (1989). Continuous improvement as an ideal in health care. New England Journal of Medicine, 320, 53–6. Berwick, D.M. (1991). Controlling variation in health care: A consultation from Walter Shewhart. Medical Care, 29, 1212–25. Callahan, C.D., & Barisa, M.T. (2005a). Introduction to the special issue on outcomes measurement. Rehabilitation Psychology, 50, 5. Callahan,C.D.,&Barisa,M.T.(2005b).Statisticalprocesscontrolandrehabilitation outcome:Thesingle-subjectdesignreconsidered.RehabilitationPsychology,50,24–33. Callahan, C.D., Barisa, M.T., Ware, J.E., Hunsley, J., & Boon, B.J. (August, 2005). The 6 P’s of outcome measurement. Symposium Co-Sponsored by Divisions 12 (Clinical) and 22 (Rehabilitation) at the 113th Annual Convention of the American Psychological Association, Washington, DC. Callahan, C.D. & Griffin, D. L. (2003). Advanced statistics: Applying statistical process control techniques to emergency medicine: A primer for providers. Academy of Emergency Medicine, 10 (7). 1–8. Carey R.G., & Lloyd, R.C. (1995). Measuring quality improvement in healthcare: A guide to statistical process control applications. New York: Quality Resources. Centers for Medicare & Medicaid Services. (2004). National voluntary hospital reporting initiative fact sheet. Retrieved from http://www.cms.hhs. gov/quality/hospital/NVHRIFactSheet.pdf Davenport, T. (1993). Process innovation: Reengineering work through information technology. Boston, MA: Harvard Business School Press. Deming, W.E. (1986). Out of the crisis. Cambridge, MA: MIT Press. Donabedian, A. (1966). Evaluating the quality of medical care. Milbank Memorial Fund Quarterly, 44, 166–203. Hammer, M. & Champy, J. (1993). Reengineering the corporation: A manifesto for business revolution. New York: Harper Business. Process, Quality, and Consistency

65

Hart, M.K. & Hart, R.F. (2002). Statistical process control for health care. Pacific Grove, CA: Duxbury. Hatfield, D.R., & Ogles, B.M. (2004). The use of outcome measures by psychologists in clinical practice. Professional psychology: Research and practice, 5, 485–491. Hoshmand, L.T., & Polinghorne, D.E. (1992). Redefining the science-practice relationship and professional training. American Psychologist, 47, 55–66. Johansson, H.J., McHugh, P., Pendlebury, A.J., & Wheeler, W.A. (1993). Business process reengineering: Breakpoint strategies for market dominance. New York: John Wiley & Sons. Joint Commission on Accreditation of Healthcare Organizations and the Centers for Medicare & Medicaid Services (2004). Specification manual for national hospital quality measures. Retrieved from www.jcaho.org/pms/care +measures/aligned_manual.htm Mark, B. (1995). The black box of patient outcomes research. Image: Journal of Nursing Scholarship, 217 (1), 42. Phelps, R., Eisman, E.J, & Kohout, J. (1998). Psychological practice and managed care: Results of the CAPP practitioner survey. Professional Psychology: Research and Practice, 29, 31–36. Pickett, J. P. et al. (Eds.). (2004). The American heritage dictionary of the English language, 4th Ed. Boston, MA: Houghton Mifflin Company. Pieper, S. K. (2004). Good to great in healthcare: How some organizations are elevating their performance. Healthcare Executive, May/June, 20–26. Plsek, P.E. (1992). Tutorial: Introduction to control charts. Quality Management Health Care, 1 (1), 65–74. Rummler, G.A. & Brache, A. P. (1995), Improving performance: How to manage the white space on the organizational chart, 2nd Ed. San Francisco, CA: Jossey-Bass, Inc. Seligman, M.E.P. (1994). What you can change and what you can’t. New York: Knopf/Random House. Shewhart, W.A. (1931) Economic control of quality of manufactured product. New York: Von Nostrand. Thorne, F.C. (1947). The clinical method in science. American Psychologist, 2, 161–166. Wheeler, D.J. (2000). Understanding variation: The key to managing chaos, 2nd Ed. Knoxville, TN: SPC Press.

66

The Business of Neuropsychology

PART TWO &&& &&&

BUSINESS PRINCIPLES APPLIED TO NEUROPSYCHOLOGY

This page intentionally left blank

4 &&& Setting Up the Office Process To revisit an idea from the previous chapter, quality was defined as the elimination or reduction of process and outcome variation. Some words used to describe process quality included consistent, predictable, stable, systematic, surprise-free, and zero defects. For a moment, think about the office ‘‘process’’ in your workplace and ask yourself the following questions:

• How stable and predictable are your scheduling, pre-certification • • • • • • • •

activities, charting, office flow, etc.? Are there ever errors? Are they repeated over and over? Are there ever surprises and crises that could have been avoided? How do your patients perceive the quality of your department? How do your referral sources perceive the quality of your department? When errors are made, who is responsible for correcting them? How much time is spent correcting mistakes or providing service recovery? How much billable time is lost due simply to variations/errors in the office process?

In a similar vein, Peck (2003) described two common questions he is asked regarding neuropsychological practice, with the first relating to how to monitor and manage insurance information for patients to determine precertification needs and the second relating to how to train office staff to collect 69

and mange the obtained information. The answers to all of these questions highlight the importance of a stable process within a neuropsychological practice or department. This chapter focuses on the office system or process and how to set up or alter the office processes with the goal of reducing variation and errors, while improving consistency and quality, and ultimately, increasing profitability. The office flow or system encompasses the entire process, from taking the initial call to filing the chart after the patient has been seen and payment has been received. In essence, the office process is made up of four major components: people, process, paperwork, and (clinical) practice. This chapter explores each of these areas with a focus on the development of a consistent and predictable office system.

Overview of the Office System People Personnel are the most expensive and the most valuable aspect of any business. From top to bottom in any organization, people drive the process and having the right person for each job sets the stage for success. To begin setting up an office process there must be an understanding of types of activities and personnel involved in the system. These include what are traditionally thought of as front office and back office activities. Front office activities are those involving direct contact with patients and family members, referral sources, insurance providers, etc. The front office and associated personnel are the ‘‘face’’ of the office. Back office activities refer to the indirect work that promotes and supports the work of the clinician and the ‘‘flow’’ of the patient and chart through the office system. Pre-authorization, chart creation, mailing and receiving of registration materials, reminder contacts, faxing/mailing of reports, chart filing, and other activities reflect the behind the scenes work of the back office and related personnel. In neuropsychology and healthcare, clinicians and their related activities are also a part of the office process: seeing the patient; scheduling and carrying out technician activities; completing required documentation; and scheduling and seeing the patient for follow-up to discuss the test results as necessary. This highlights the fact that office systems involve multiple people with multiple responsibilities. Clinicians are not exempt from responsibility in maintaining the office process and structure. All too often clinicians view office staff as working ‘ for’’ them. In a successful system the idea is that the office staff and 70

The Business of Neuropsychology

the clinicians work ‘ with’’ each other. This promotes a culture based around mutual respect and appreciation for all activities that go into building a successful office process and providing excellent clinical care. The clinician’s primary role is to provide optimal patient care, but in reality other tasks related to the office process must be included in the daily activities of a clinician, be it completing documentation, completing accurate billing forms, clarifying referral questions, or assisting with preauthorization/precertification activities. There are multiple roles and responsibilities that need to be managed for an office process to be successful, and there are specific needs regarding office, as well as clinical, personnel. It is imperative to have the right people in the right places. Before setting up the office process, roles and responsibilities need to be assigned to specific individuals. The following descriptions of various personnel ‘ titles’’ are meant to highlight specific activities under a position description, but these activities may be carried out by one or more individuals with different identified position titles. Additionally, one individual may be designated to carry out the activities of more than one of the positions described below. The number of personnel needed is dependent upon the size and setting of the clinical practice and the unique strengths and weaknesses of personnel. Patient Liaison/Administrative Assistant The patient liaison is essentially the voice or face of the department at point of first contact. Often, this is the receptionist in terms of phone and in-person contacts with patients, as well as referral sources. This individual has many responsibilities and all need to be completed with an emphasis on customer service. Activities may include, but not be limited to:

• Obtaining all pertinent referral information including insurance information

• Scheduling all appointments • Mailing initial patient information forms for completion prior • • • • •

to the appointment Placing confirmation calls to patients at a designated time prior to the scheduled appointment Greeting and checking-in patients on the day of service Making copies of insurance card and patient identification Collecting appropriate co-pays Reviewing the HIPAA policy and other appropriate information with patients

Setting Up the Office Process

71

• Notifying providers when patients arrive • Checking patients out and scheduling follow-up appointments if necessary • Faxing or mailing follow-up letters, forms, and/or completed reports to the referral source or others As noted, these are just some examples of activities. Depending on the setting, this individual may also serve as a general administrative assistant with responsibilities that include typing dictation, obtaining medical records from other providers, or other secretarial/administrative roles. Pre-Certification Representative The Pre-Certification representative works to obtain the optimal financial reimbursement for the patient’s clinical services. To accomplish this, a variety of activities must take place. As such, this individual has multiple responsibilities, including the following:

• Verifying patient demographic and insurance information • Processing paperwork and documentation for pre-certification • Making phone contacts as necessary to clarify coverage and • • • • • • •

72

pre-certification needs Working with the clinicians to appeal decisions or to attempt to increase allowable services Explaining benefit coverage to patients and providers Developing and maintaining database of preauthorization/ precertification requirements and patterns for the most common payors for the practice/department Negotiating (or arguing) allowable services and approved times when coverage contracts indicate that an ordered service should be covered Working with the clinicians to obtain necessary information to assist in negotiations for reimbursed services When payment is denied after preauthorization, contacting the payor and arguing the claim in attempts to secure appropriate payment If the practice or department provides inpatient services, expediting authorizations or seeking approval for services after the fact may be necessary The Business of Neuropsychology

It is imperative that this individual be well-trained in the nuances of medical billing and coverage, including a very strong understanding of appropriate CPT codes and ICD-9 diagnostic information. Prior experience in this area can be very useful even if it was not in neuropsychological billing. As with the patient liaison position, there is a need for strong interpersonal skills and an emphasis on customer service. In contrast, this individual must also possess strong negotiating skills to manage resistance that may be encountered in the precertification process. Billing/Coding Representative While similar, the responsibilities of the Billing/Coding Representative are different from those of the Precertification Representative. In some offices it may well be the same individual, depending on the department/practice size and structure. The primary responsibility for this individual is to ensure a consistent financial flow for the department. A cooperative relationship with clinicians and payors is required as this person serves as a liaison between the clinician and subsequent payment. Activities include:

• Ensuring provider compliance with billing and coding policies • • • • •

established within the department/practice to meet requirements of the various reimbursement sources Reviewing the CPT codes and diagnoses submitted to ensure they are consistent with the preauthorized services Entering CPT codes, patient diagnosis codes (ICD-9), and billing charges into the charge system of the practice/ department Assisting in the resolution of billing and coding errors and questions Organizing and coordinating appeals for all denied payments including collaborating with clinicians to obtain supporting documentation Developing and maintaining reconciliation data to ensure that all services were provided and billed accordingly in a timely manner

It is imperative that appropriate training be provided for this individual to maximize performance in the areas above. Additionally, it is crucial that clinicians view this individual as a partner in the effort to receive appropriate Setting Up the Office Process

73

payment and not view them as a ‘‘critic’’ of their billing, coding, and documentation activities. If animosity develops between clinicians and precertification and billing/coding representatives, it will negatively impact office relationships and ultimately, department/practice reimbursement. Medical Records Officer The Medical Records Officer assists with and monitors medical record compliance. Activities focus on maintaining and securing appropriate records in terms of registration and administrative materials, clinical documentation, and completed test protocols according to departmental/practice policies and HIPAA and other regulatory requirements. Activities include:

• Duplicating and maintaining an adequate quantity of all • • • • • • • • •

patient forms Preparing and maintaining an adequate quantity of pre-assembled patient charts for easy front office access Assembling and labeling charts for all new patients Pulling charts for scheduled appointments, clinics, and specific clinical requests Filing all charts and patient information Ensuring department compliance with medical record policies Accurately filing patient information Managing release of information requests, ensuring that proper authorization was obtained before releasing records Performing spot-audits of patient charts for compliance verification Organizing and maintaining the chart room for ease of use

The Medical Records Officer works directly with all office staff and serves as the ‘‘expert’’ in regulatory requirements. Training, with regular updates, is necessary in departmental/organizational policies regarding chart development and management as well as compliance with HIPAA and other regulatory guidelines. This individual serves as a privacy monitor for all patient information and is responsible for knowing where each record and related information is located. Participation in the development and implementation of departmental/office policy and procedures regarding records is an additional role for the Medical Records Officer and this includes in-services for all office and clinical staff on a regular basis to 74

The Business of Neuropsychology

insure that all personnel understand the policies, procedures, and any changes in related regulations. Customer Service Representative The idea of an identified customer service representative as it relates to patient care may seem atypical in a clinical practice or department, but it is beneficial to have a designated person who is responsible for logging, triaging, tracking, and resolving patient concerns/complaints in accordance with an established service recovery plan. If clinician or managerial contact is required for resolution, this individual maintains involvement and follows up with staff members to document the resolution of the concern or complaint. By identifying a responsible person for customer service issues and building these responsibilities into the office process structure, an emphasis on customer satisfaction is clearly delineated. It is likely that these responsibilities will fall under the duties of a different position title, but should be clearly delineated in the roles and responsibilities of that position. Clinical Staff The roles and responsibilities of clinical staff will not be discussed in detail. Suffice it to say that it is expected that professional activities will be performed in an ethical and clinically appropriate fashion. The emphasis, for the purpose of this chapter, is that clinicians are aware that their activities occur within an office process or system and that they are not exempt from functioning within its parameters. To use a common phrase: ‘‘It’s not about you.’’ Collaboration and teamwork are essential for an office system to function smoothly and work-arounds and exceptions should be unacceptable to all — not just the office staff. It is the responsibility of professional staff to support decisions made by office staff that are in line with the office process even when they are inconvenient to the clinician. Finally, it is important that clinical staff be involved in the development and implementation of the office process so that there is mutual understanding and appreciation of how and why activities occur in the defined manner. Department/Practice Manager I’ve heard it said that the second happiest day in a person’s life is when they buy a boat — the happiest being the day that they sell it. Sometimes management positions can work this way as well. Many people want to be in charge, Setting Up the Office Process

75

until they are. The buck has to stop somewhere within a department or practice, so when it comes down to it, someone has to be the designated leader. The manager is the identified person responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary. Ideally, a manager is able to ‘‘oversee’’ the development, implementation, and modification of the office process, but ultimately problems arise and difficult decisions must be made. While as subordinates, we would like to think of the office system as a democracy, in reality that is not a very effective structure and essentially someone has to be in charge and serve as the primary decision maker. In terms of the designated manager, this individual does not necessarily need to be a clinician. In fact, a clinician may not be the best choice for this position. The manager should possess the necessary business knowledge, leadership attributes, and temperament to insure stability and success for the department or practice. Additionally, managerial prowess is a developmental process, so continued growth, development, and mentorship in this regard is necessary. Careful selection of the practice/department manager is essential for success. Such designation should not be taken lightly or for personal/individual gain or popularity. To be successful, the focus for this individual should be on the practice, the process, and the people. In larger institutions/departments, there may be an identified clinical coordinator who handles clinical practice issues, leaving the administrative responsibilities to a department/practice manager who may have little or no clinical background. This structure can be effective, provided appropriate two-way communication exists. To summarize, when it comes to departmental/practice personnel there are multiple people in multiple positions with multiple responsibilities. The number of office personnel needed is variable depending on several factors, including practice setting, departmental/institutional requirements, practice/department size, external support, patient volumes, billing arrangements, and efficiency of the office process. The goal in developing a systematic office process is to develop collaborative relationships among all of the personnel and to create a team approach to the process. Identifying specific roles and responsibilities and completing initial and ongoing training to maximize performance in those activities builds stability and consistency within the department and allows people to continually develop their skills in their identified areas. All personnel must buy in to the fact that it’s not about you, it’s about the process and patient care. The 76

The Business of Neuropsychology

office/department culture is dependent upon the people and their commitment and ownership of the process. Process While the specifics of office processes vary depending on the nature and setting of neuropsychology practice, the general process of the practice must be laid out in a manner that shows consistency, predictability, stability, and quality built into all activities. It is necessary to document how the patient moves through the office system from start to finish, including all activities from determining how referrals are received to the ultimate filing of the chart when all services are completed. This includes receiving the referral, scheduling activities, potential billing and coding services, identifying insurance panels and other payors, determining precertification needs, administrative and clinical documentation procedures, charting activities, types of clinical services provided, and the clinical work itself. Additionally, activities must be consistent with HIPAA and other regulatory compliance requirements. This is no small undertaking, but with appropriate planning and process development, a smooth, orderly, and predictable flow of seeing patients is achieved. Identifying the ‘‘Process’’ of Seeing Patients All successful journeys start with good planning. To develop a stable and consistent office process, the process itself must be defined. Peck (2003) offers several flowcharts about how patients are precertified and billing activities occur. This same approach can be used to develop a flowchart that includes all of the various aspects of the office system. Initially, this may be created by developing smaller flowcharts that outline various steps of the process, including how referrals will be received, precertification activities, registration activities, etc. The responsibility for the development of these flowcharts should not fall on a single individual, but should include multiple individuals who play various roles in the identified activities. Brainstorming with all department/practice employees is helpful so that no steps of the process are overlooked. At first, all steps are included, from the simple to the complex. As the process is better defined, some aspects can be combined or minimized if the process chart becomes overly specific. Once the steps are defined, responsible parties for each step are identified, including specific activities to be completed. Timeframe requirements and expectations are specified where applicable. At some level, built-in error checks and re-routes are recommended as a means to plan for the unexpected or atypical situations. Setting Up the Office Process

77

As the process is developed, it is important to map it out through a Visio chart or other flowchart mechanism. This allows for easy modification, as testing the process finds holes, errors, or unnecessary elements that can be altered or removed. Also, creating a text ‘‘flowsheet’’ that becomes a part of the non-clinical area of the patient chart is helpful during the early stages of office process development and implementation. Each step of the process can then be initialed and dated by the responsible party to insure accurate ‘‘flow’’ and timeliness of activities, to help audit the accuracy of the process, and to identify redundant or missing steps. Sample Visio flowcharts for varying office processes in a hospital department, based on varying payment sources, are available on the companion Web site to this text for further examples. Appendix A shows an example of this same information in a text-based checklist or flowsheet that can be used as a guide for developing the flowcharts or putting the process into an administrative portion of the chart to insure completion of the process.

Putting the Process to the Test Early in the development of the office process it is important to audit and revise the flowchart in a group format with all staff present to identify ‘‘holes’’ or redundancy in the system that may result in variance and error. Initially, audits of the process and discussions can be scheduled at specific time intervals, with meetings becoming less frequent as fewer needs for changes are identified and the process is deemed more stable and predictable. At that point, the process or system is defined and the office/department adopts the final version of the process flowchart. Once established, there will be a need to regularly audit the process at specified intervals. Further review or auditing of the process includes all personnel working together as a system where all players have an equal voice in process evaluation and improvement. By utilizing all staff in these audits, multiple perspectives are considered and the information is evaluated from multiple ‘‘directions.’’ After all the work that went into the development of a stable, consistent, and quality-minded office process or system, it would be a shame to allow it to slowly drift into disarray. As discussed in the previous chapter, unmanaged processes move toward chaos (entropy). Therefore, continued monitoring of the system is recommended, with adjustments made to the process as needed when real data indicate a need to modify the system. This reduces the likelihood of tampering with a process that is stable and predictable. The best 78

The Business of Neuropsychology

process is only as good as its implementation and it is important that all staff (clinical and support staff) buy into the system. When errors/variance occurs it is important that the process is reviewed more so than the personnel. It is a very rare occasion when someone comes to work with a plan to make an error. When an error occurs it should be recognized as a problem with the process and not the person. The process is either flawed or was not followed. Berwick (1989) again is cited: ‘‘defects in quality could only rarely be attributed to a lack of will, skill, or benign intention among the people involved in the process.’’ Removing perceived problem individuals based on process failures disrupts the department/practice and creates a culture of fear, demoralization, and reduced productivity as personnel focus more on self-preservation than quality work. A good manager evaluates the error (variance) for special cause and works with the staff member to identify solutions together rather than identify blame. In this way, the person has the opportunity to explore the process to find where the variance occurred and work with management to identify a ‘‘fix’’ or ‘‘patch’’ to the process to eliminate the need for a work-around or variation in how the activity is completed. In this manner the staff member becomes part of a solution rather than a problem and can be recognized as such. This improves office/department culture and ultimately can improve employee satisfaction and retention while improving the process. Paperwork It is important to store and file patient-related information in an organized way that promotes easy acquisition and auditing as necessary. Therefore, the record or chart should be thought of as a specific component of the office process and its structure should also be consistent and predictable. Depending on the practice setting, the structure of a chart is quite variable. However, for any given setting, chart development and management should be consistent across all patients and providers. Information should be well organized with a system that allows for easy location and access of necessary information. For the purposes of this chapter, three main components of the patient record will be presented: the administrative record, the medical documentation record, and supporting materials. For some hospital/institution-based practices, the administrative record and medical record documentation are part of the hospital medical record system (possibly through an electronic medial record) with a separate ‘‘soft chart’’ containing test protocols and other patient-related information specific to a neuropsychological evaluation. For Setting Up the Office Process

79

those in private practice, all information is kept through the practice record keeping system and is structured in a way to promote easy access while appropriately protecting confidentiality and security of patient records according to HIPAA and other regulatory guidelines. This next section incorporates the three sections described above and provides a suggested layout for a practice-based patient record. Maintaining records according to the various legal, regulatory, institutional, and ethical requirements will be discussed in greater detail in Chapters 5 and 6. The administrative portion of the record contains two types of information. The first is the patient-related financial and insurance information. Within this section, paperwork and the multiple forms included in the registration/ administrative aspects of seeing a patient are filed. These include, but are not limited to, registration/financial paperwork, precertification documents, copies of patient identification and insurance cards, consultation requests/ referral forms, informed consent forms, release of information documentation, and other administrative information. It is important that the various registration, consent, release of information, and other forms be consistent across patients and providers. They should be defensible in terms of following appropriate documentation requirements of regulatory agencies and reviewed by legal consultants as necessary. This section of the record may also include patient tracking information such as scheduling/rescheduling information, copies of correspondence, documentation of services provided and dates, time monitoring forms for services provided, and chart tracking forms (including the office process flowsheet described previously). No patient clinical service documentation is included in this section. Inclusively, this section becomes the administrative portion of the chart and is distinctly separate from the identified ‘‘medical record.’’ The Medical Record section of the chart includes only clinical documentation related to patient clinical contact. Documentation activities are discussed in Chapter 6. For the purpose of the patient chart, documentation of activities includes evaluation reports, any follow-up therapeutic or feedback notes, letters to patients or physicians describing clinical results, informational notes containing patient relevant information, and documentation of missed appointments. This may be divided into two sections, one for evaluation reports and one for intervention notes, but this section of the chart is distinct from the other areas to clearly identify it as the patient ‘‘medical record.’’ The final section of the patient chart includes supporting patient documentation or the ‘‘soft chart.’’ Information in this section includes completed 80

The Business of Neuropsychology

protocols and test-specific information, completed patient background questionnaires, interview forms, behavioral observation forms, clinician notes, and copies of obtained medical records. A time monitoring form may be included here as well to document the dates and actual start and stop times of clinical services to support billing documentation as needed. Again, this section is unique and distinct from the medical record and should be identified as such. An example of a chart layout using a 3-section/6-page clinical chart with identified documentation on each page and sample forms for the three sections described above is available on the supplemental Web page for this text. Computerized Medical Records Electronic medical records (EMR), or electronic health records (EHR), are increasingly becoming the norm in terms of storing and managing patient information as technology advances and new ‘‘all-inclusive’’ software packages become more readily available and less cost-prohibitive. It is important to realize that these systems are not simply a repository for patient clinic notes and registration materials, but have developed into very complex tools that perform a multitude of tasks. Some functions include registration; managing referral sources; scheduling, billing and coding activities; clinical documentation; order entry and medication prescribing; regulatory paperwork; and even report generation with a few clicks of a mouse. The move toward EHRs will certainly increase due to the demand for increased efficiency and quality in patient documentation. In fact, Medicare, some states (Minnesota for e-prescribing and New York for health information technology grants), and even the federal government are moving toward requiring EHRs for all providers. While EHRs are not mandatory at this time, preparation for the future is recommended. There are many options available in the marketplace, and there is no one product that will meet the needs for all practices. The American Academy of Neurology provides an overview of several available products in their 2006, 2007, and 2008 Electronic Health Record Vendor Reports. The strengths and weaknesses of various systems are presented to assist neurologists in identifying the best program for their practice. Additionally, the Certification Commission for Health Information Technology (CCHIT) regularly reviews products to determine the quality of various EHR systems. The stated aim of CCHIT is to encourage adoption of EHRs by establishing standards of functionality and rigorously evaluating which EHR products meet those standards. CCHIT reviews are designed to improve consumer confidence in certified Setting Up the Office Process

81

products so that medical practitioners will be more willing to invest in this technology. Besides functionality, the CCHIT has implemented standards of interoperability and security to minimize the need for buyers to research whether a certified product possesses these features. CCHIT certified products have a clear-cut market advantage, but there is no objective information as of yet that would substantiate whether the CCHIT has been successful in its mission. For neuropsychologists in healthcare centers or larger practice centers, an EHR may have been selected for the institution as a whole, making it necessary to learn a system that may not be set up for your specific practice needs. The VA Medical Centers have already adopted a national computerized medical record system across all facilities. For those in private practice settings, there are a few programs that are specifically equipped to manage the needs of psychological, psychiatric, and neuropsychological practices including ChartEvolve, TherAssist, and others. Several available products are listed in the References and Resources section of this chapter. Practice Process control ideas can be applied to neuropsychological clinical practice. Think about how neuropsychological tests are administered and scored. Clearly, neuropsychologists develop a certain (yet appropriate) level of ‘‘anal retentiveness’’ when it comes to standardized administration of neuropsychological measures. In a similar vein, this strict adherence to a process can be applied to all aspects of clinical practice including the patient flow described above, as well as how clinical services are provided and documented. Clinical documentation is discussed in detail in Chapter 6, but a consistent and redundant form of accurate charting ensures that documentation is appropriate and consistent with CMS requirements. Finally, a clinical practice based around a stable and predictable office process allows for greater focus on clinical care rather than managing variance or errors that occur in the day-today office system. In terms of clinical care, it is important to establish a process to maximize consistency and quality in the care provided to each patient. Think briefly about a hamburger from McDonald’s or any other major chain. No matter where you buy that hamburger you know exactly how it is supposed to look, smell, feel, and taste. That is consistency and quality. Whether you like the product or not you know exactly what you are going to get. That same consistency and quality focus can apply to clinical care and neuropsychological practice, so that no 82

The Business of Neuropsychology

matter who the patient is, how they make their payment for services, or how the evaluation will be used, the clinical service always meets the same standard and level of quality. This aids the overall office process by minimizing variance among different patients and making clinical practice stable and predictable.

Unique Issues Based on Setting The development and implementation of a stable office process is important regardless of setting. The following discussion provides some brief considerations related to the office process in private practice, institutional, and VA/ government-affiliated settings. In private practice settings, implementation of a stable office process is influenced by a variety of issues. First and foremost, there is a need to identify leadership and a ‘‘chain of command.’’ This includes identifying a practice manager as well as the general office structure. Some of these decisions may be influenced by the practice’s corporate structure, but again should be delineated appropriately. For a sole practitioner, the development of the office process often results from the realization that one person may not be able to complete all of the activities required in a complete, stable, and consistent office process and still find time to actually see patients. It is important to realize that all of the identified activities require time, but not all that time is billable. In developing an office system it is important to determine the associated costs related to the time and effort that go into the office process and system. For clinicians that consider joining an existing practice, it is worthwhile to examine the office processes within the practice before signing on, to determine the stability, consistency, and quality of the practice processes to make sure that your investment has the maximum return with the smallest amount of surprises and stress. Clinicians working in institution-based practice settings can use the process control techniques discussed above to develop a private practice model within an institution setting. This is dependent upon location of the department as well as the administrative ‘‘chain of command’’ and support structure. With appropriate modification, a stable and consistent process to seeing patients can be established. Hospital administration typically supports such quality improvement and may ultimately use the department as a guide for applying these techniques to other departments or systems. Improving and stabilizing departmental processes result in a more cost-effective approach to seeing patients and the private practice model may also improve reimbursement and overall fiscal responsibility. Setting Up the Office Process

83

In a similar sense, clinicians in government/VA based facilities can also use process control techniques to streamline office system processes even within what is typically thought of as a rigid and bureaucratic institution. It comes down to fitting a private practice model within a structured setting. The larger VA system already works to obtain third party reimbursement for services provided to veterans, but difficulties have occurred in this regard typically due to documentation variability, billing and coding problems, and limited precertification activities. It is important to note that any reimbursement obtained through the billing practices of individual VA hospitals stays within that hospital rather than flowing up to the central office. As a result, any efforts to increase the financial bottom line of a psychology service ultimately provide financial benefit for the hospital where the clinician works. As a result, VA administration would likely be supportive of efforts to improve the overall process of seeing patients within a VA system and improve third party reimbursement potential.

Closing Thoughts The previous discussion of setting up the office process is based on using process development and control applied to the practice setting. Review the opening questions of this chapter again and think about how an improved office process will result in better answers to these questions. Process control application can be seen across all aspects of a department or practice office flow. While it seems intuitively simple to develop and implement a stable and consistent office process, without appropriate buy-in and leadership it can quickly turn into an experience similar to herding cats. To be successful, a strong commitment to process development and control is necessary by all personnel involved in the department/practice.

References, Resources, and Suggested Readings American Academy of Neurology (July, 2008). 2008 Electronic health records vendor update. - http://www.aan.com/globals/axon/assets/4207.pdf American Academy of Neurology (August, 2007). 2007 Electronic health records vendor update. - http://www.aan.com/globals/axon/assets/3107.pdf American Academy of Neurology (September, 2006). Electronic health records vendor report. - http://www.aan.com/globals/axon/assets/2290.pdf Berwick, D.M. (1989). Continuous improvement as an ideal in health care. New England Journal of Medicine, 320, 53–56. 84

The Business of Neuropsychology

Certification Commission for Healthcare Information Technology (CCHIT) – http://www.cchit.org Lamberty, G. J., Courtney, J. C., & Heilbronner, R. L. (2003). The practice of neuropsychology. Exton, PA: Swets & Zeitlinger. McKesson Corporation (2007). EMR return on investment: Improving efficiency and quality with an electronic medical record. White paper published by McKesson Provider Technologies; Alpharetta, GA http://www.practicepartner. com/doc/EMR_Return_on_Investment.pdf National Institutes of Health National Center for Research Resources (April, 2006). Electronic health records overview. McLean, Virginia: MITRE Center for Enterprise Modernization – http://www.ncrr.nih.gov/publications/informatics/EHR.pdf Peck, E. A. (2003). Business aspects of private practice in clinical neuropsychology. In Lamberty, Courtney, & Heilbronner (Eds.) The Practice of Neuropsychology. Exton, PA: Swets & Zeitlinger. Electronic Medical Records Company and Related Web Sites Advantage EMR – http://www.advantageemr.com AdvancedMD – http://www.advancedmd.com ChartEvolve – http://www.thecimsgroup.com ChartLogic – http://www.Chartlogic.com TherAssist – http://www.therassist.com

Setting Up the Office Process

85

Appendix A: Flowsheet of Office Process PATIENT NAME: __________________

DOB: ___________

OUTPATIENT REFERRALS ~ Insurance & Medicare CONSULTATION TRACKING FORM ~ SAMPLE

ACTION

DATE

SIGNED

1. Call or fax received for patient referral 2. Consultation request form completed to obtain demographics & insurance info from referral source 3. Notes and necessary information from referral source requested 4. Patient contacted to verify information and scheduled for initial appointment 5. Technician time scheduled for initial visit if applicable 6. Patient scheduled for 2-week follow-up if applicable 7. Forms sent to patient 8. Prior authorization for services obtained 9. Patient chart assembled 10. Chart provided to clinician one week prior to visit 11. Confirmation call placed to patient two business days prior to visit 12. Patient checked in for initial appointment 13. Patient and chart ‘‘roomed;’’ clinician notified 14. Clinician performed initial clinical evaluation and planned testing activity 15. Clinician documented visit and completed time monitoring form 16. If testing was not ordered, clinician coded visit on encounter (billing) form and submitted to the front office for billing entry. (continued )

86

The Business of Neuropsychology

(Continued) 17. If testing was not ordered, clinician sent followup note to referral source 18. If indicated, technician performed and scored testing ordered by clinician 19. Technician documented testing (recorded activity for later coding by clinician) and completed time monitoring form 20. Technician returned chart to clinician the day of testing 21. Clinician completed quick summary report and sent to referral source within 24–48 hours of chart return from technician 22. Clinician prepared neuropsychology report within two weeks of testing 23. Clinician coded all clinician and technician work on encounter (billing) form and submitted to the front office for billing entry. 24. Patient checked out; received 2-week follow up appointment reminder if applicable 25. Front office entered encounter (billing) information into billing system 26. Clinician (or front office) sent neuropsychology report to referral source 27. Clinician returned chart to front office 28. Front office provided chart to clinician the day of the 2-week follow-up appointment, after the patient checked in 29. Clinician discussed report with patient at 2-week follow-up and planned further activity, if any 30. Patient checked out; received follow up appointment if applicable 31. Clinician documented clinician visit and coded visit on encounter (billing) form 32. Front office entered encounter (billing) information into billing system 33. Chart filed in medical records room when complete

Setting Up the Office Process

87

This page intentionally left blank

5 &&& Recordkeeping Guidelines and Regulations

Appropriate clinical documentation and maintenance of patient records is beneficial both to the neuropsychologist and the patient. Records provide a basis of communication between the neuropsychologist and referral source; ensure continuity of care amongst various care providers; provide a basis for billing and reimbursement; and protect the practitioner in the event of legal proceedings. In short, appropriate recordkeeping is crucial for a successful and ethical clinical practice. Patient records are subject to numerous legal, regulatory, institutional, and ethical requirements whether these records are used for administrative, research, or clinical purposes. These regulations apply not only to the information contained in the record, but also the use, storage, dissemination, retention, and protection of the information therein. This chapter provides an overview of ethical and regulatory requirements, including recordkeeping guidelines set forth by the American Psychological Association and legal requirements related to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The chapter will close with a brief introduction to the newer Red Flags Identity Theft Protection legislation. As a disclaimer, the information presented in this chapter is by no means exhaustive, but does provide a good synopsis to help guide recordkeeping activities. Neuropsychologists are encouraged to obtain current and detailed information regarding institutional, local, state, federal, and professional statutes, guidelines, and policies pertaining to medical record storage and protection of confidential information. 89

APA Ethics and Recordkeeping Guidelines Ethical recordkeeping starts with an understanding of the APA Ethical Principles and Code of Conduct (APA, 2002). While various portions of the Ethics Code apply to patient confidentiality, privacy issues, and appropriate recordkeeping, Standard 4 (Privacy and Confidentiality) and portions of Standard 6 (Record Keeping and Fees) are the most specific in regards to the development and maintenance of patient records. In particular, Standard 4 outlines the obligation to protect the confidentiality of patient information: 4.01 Maintaining Confidentiality Psychologists have a primary obligation and take reasonable precautions to protect confidential information obtained through or stored in any medium, recognizing that the extent and limits of confidentiality may be regulated by law or established by institutional rules or professional or scientific relationship. Additional sections within this standard highlight the relevance of these principles to specific activities and settings and demonstrate the wide applicability of this standard. Two sections of Standard 6 pertain to documentation and maintenance of patient records: 6.01 Documentation of Professional and Scientific Work and Maintenance of Records Psychologists create, and to the extent the records are under their control, maintain, disseminate, store, retain, and dispose of records and data relating to their professional and scientific work in order to (1) facilitate provision of services later by them or by other professionals, (2) allow for replication of research design and analyses, (3) meet institutional requirements, (4) ensure accuracy of billing and payments, and (5) ensure compliance with law. 6.02 Maintenance, Dissemination, and Disposal of Confidential Records of Professional and Scientific Work (a) Psychologists maintain confidentiality in creating, storing, accessing, transferring, and disposing of records under their control, whether these are written, automated, or in any other medium. (b) If confidential information concerning recipients of psychological services is entered into databases or systems of records

90

The Business of Neuropsychology

available to persons whose access has not been consented to by the recipient, psychologists use coding or other techniques to avoid the inclusion of personal identifiers. (c) Psychologists make plans in advance to facilitate the appropriate transfer and to protect the confidentiality of records and data in the event of psychologists’ withdrawal from positions or practice. These standards, along with other aspects of the APA Ethical Principles and Code of Conduct, set the stage for appropriate patient documentation and maintenance of records. This is a good starting point, but does not account for the various legal statutes and institutional policies that can provide more specific and, at times, conflicting responsibilities regarding patient records. The management of these discrepancies is well laid out in the ethics code and other statements put forth by the APA. In general, when there are conflicts between institutional policies and procedures and the Ethics Code, psychologists appropriately address these issues as outlined in the Ethics Code (Standard 1.03 – Conflicts Between Ethics and Organizational Demands), clarifying the nature of the conflict, making known their commitment to the Code, and, to the extent feasible, resolving the conflict in a way that permits adherence to the Code. In terms of patient records, specific state and federal laws and regulations govern psychological recordkeeping. In the event of a conflict between the Ethics Code and any state or federal law or regulation, the law or regulation in question typically supersedes the ethical principles and standards. APA Recordkeeping Guidelines (2007) To provide specific application of the APA Ethics Code to patient records, the APA Committee on Professional Practice and Standards developed ‘‘Record Keeping Guidelines,’’ first published in 1993 (APA, 1993). These guidelines were updated in 2007 and provide a framework for making decisions regarding professional recordkeeping with the understanding that the nature and extent of the records vary depending upon the purpose, setting, and context of the services provided. As Captain Barbossa said in Pirates of the Caribbean, ‘‘The code is more what you’d call guidelines than actual rules.’’ As such, the ‘‘guidelines’’ are just that – guidelines, and neuropsychologists should become familiar with the legal and regulatory requirements for recordkeeping in their specific professional contexts and jurisdictions. For the

Recordkeeping Guidelines and Regulations

91

purposes of this chapter, these guidelines will be presented in their published form, followed by a brief summary of the rationale and application where applicable. Across all of the guidelines, remember that in cases when there is conflict between these guidelines and state or federal law, the law supersedes these guidelines. Additionally, in accordance with Ethics Code Standard 2.05 (Delegation of Work to Others), the psychologist is responsible for ensuring that all parties handling patient records are appropriately trained and knowledgeable in terms of the ethical, legal, and institutional standards regarding the creation, maintenance, dissemination, and confidentiality of patient records. Guideline 1. Responsibility for Records Psychologists generally have responsibility for the maintenance and retention of their records. In accordance with Ethics Code Standard 6.01, psychologists have a professional and ethical responsibility to develop and maintain records. This provides information as to what activities were completed and why, as well as the pertinent outcome. Recording should be legible, accurate, completed in a timely fashion, and stored in an appropriate manner to ensure confidentiality and security. Guideline 2. Content of Records A psychologist strives to maintain accurate, current, and pertinent records of professional services as appropriate to the circumstances and as may be required by the psychologist’s jurisdiction. Records include information such as the nature, delivery, progress, and results of psychological services, and related fees. A neuropsychologist is responsible for the information put into the patient’s records, and as such should only include information relevant to the purpose of the service provided with an appropriate level of detail. Information included in the record may be influenced by the patient’s wishes, agency/setting policies, situational demands (e.g., emergency or disaster relief settings), legal/regulatory statutes, third party contracts, or other variables. Guideline 3. Confidentiality of Records The psychologist takes reasonable steps to establish and maintain the confidentiality of information arising from service delivery. 92

The Business of Neuropsychology

Confidentiality of records is mandated by law, regulation, and ethical standards. As such, neuropsychologists must maintain familiarity with the various ethical and regulatory standards (e.g., HIPAA, state laws, mandated reporting of abuse, etc.) and maintain records in accordance with these requirements. It is important to remember that ignorance of the law is no excuse when it comes to responsibility. Guideline 4. Disclosure of Record Keeping Procedures When appropriate, psychologists inform clients of the nature and extent of recordkeeping procedures. Obtaining informed consent for psychological services is an ethical obligation, and this may include disclosure of recordkeeping activities as they relate to patient privacy and confidentiality. This may be especially relevant in settings where recordkeeping procedures differ from the standard procedures (e.g., school settings, hospital computerized medical records with multiple points of access, forensic settings). Guideline 5. Maintenance of Records The psychologist strives to organize and maintain records to ensure their accuracy and to facilitate their use by the psychologist and others with legitimate access to them. As described in the Paperwork section of Chapter 4, it is important to store and file patient-related information in an organized way that promotes easy acquisition and auditing as necessary. Therefore, the record or chart should be thought of as a specific piece of the office process and its structure should be consistent and predictable. Additionally, the information contained in the records should be structured in such a way that retrieval of necessary information is efficient and consistent. This allows for easy access of patient records for purposes of dissemination as well as to monitor changes over time in terms of assessment and/or intervention. Guideline 6. Security The psychologist takes appropriate steps to protect records from unauthorized access, damage, and destruction. This guideline highlights two areas of application. The first is ‘ maintenance.’’ Patient records are to be stored in a secure manner that will safeguard against damage whether they are paper or electronic records. This means that paper records should be stored in a manner that protects them from physical damage/ Recordkeeping Guidelines and Regulations

93

destruction due to a variety of physical threats (e.g., fire, mold, insects, water). Electronic records must also be protected from sources of damage or loss (e.g., power surges or outages, hardware malfunctions, computer viruses). The second aspect of this guideline is ‘‘access.’’ Neuropsychologists must take steps to control access to patient records by storing them in a secure location, such as a double-locked system with a locked cabinet in a locked office. Electronic records must also be protected from unauthorized access via firewall protections, passwords, encryption, etc. Electronic records, the regular use of computerized word processing for report writing, and various portable memory devices (e.g., USB flash drives, CD ROMs, portable hard drives) have raised new challenges in terms of maintaining patient privacy and limiting access to patient records. As a result, some institutions have implemented policies that no longer allow portable memory devices to be used on facility computers. These policies, accompanied by the additional electronic medical record security systems, are implemented with the goal of limiting access to only those who are authorized to use patient information. Whatever methods used are subject to legal and regulatory requirements and ethical standards, including the HIPAA Privacy and Security rules described later in this chapter. Guideline 7. Retention of Records The psychologist strives to be aware of applicable laws and regulations and to retain records for the period required by legal, regulatory, institutional, and ethical requirements. Numerous listserv discussions arise regarding the length of time required to maintain patient records. This question often comes up due to the space constraints and various costs incurred in maintaining neuropsychology records in an appropriate fashion over an extended period of time. As noted in this guideline, it is important that neuropsychologists know the appropriate legal statutes for their state and/or institutional policies in this regard. There is significant variability between states regarding the length of time required for record retention, with some states having no documented requirements at all. In the absence of a superseding requirement set forth by state or federal statute, APA guidelines suggest retaining full records until seven years after the last date of service delivery for adults or until three years after a minor reaches the age of majority, whichever is later. In some circumstances, neuropsychologists may wish to keep records for a longer period, weighing the risks associated with obsolete/outdated information or privacy loss versus the 94

The Business of Neuropsychology

potential benefits associated with preserving the records. This is particularly common in institutions where large data sets are maintained for research purposes. Guideline 8. Preserving the Context of Records The psychologist strives to be attentive to the situational context in which records are created and how that context may influence the content of those records. The application of this guideline lies in the understanding that patient records often include information that is situation specific. For example, a geriatric patient seen for a neuropsychological evaluation to determine decision-making capacity had been under general anesthesia for a surgical procedure and was under the influence of several sedating medications at the time of testing. The results of that evaluation should include the situational context (i.e., sedation and confusion related to medications) to prevent misuse of the test results at a later date when the patient’s mental status may be markedly different. Guideline 9. Electronic Records Electronic records, like paper records, should be created and maintained in a way that is designed to protect their security, integrity, confidentiality, and appropriate access, as well as their compliance with applicable legal and ethical requirements. As already described under Guideline 6 (Security), maintenance and security of electronic records are subject to the same confidentiality and security protections as paper records. As noted, the increasing advances in technology make the maintenance of these records much easier, but the security issues remain and efforts to minimize threats to security are highlighted across all regulatory, legal, and ethical standards. Guideline 10. Record Keeping in Organizational Settings Psychologists working in organizational settings (e.g., hospitals, schools, community agencies, prisons) strive to follow the recordkeeping policies and procedures of the organization as well as the APA Ethics Code. Organizational/institutional recordkeeping policies and requirements may differ significantly from those noted in more traditional clinical settings. As a result, neuropsychologists working in some settings may encounter conflicts between the practices of the institution and established professional guidelines, ethical standards, or legal and regulatory requirements. Additionally, Recordkeeping Guidelines and Regulations

95

record ownership and responsibility is not always clearly defined. To increase the complexity, in some settings multiple service providers may access and contribute to the record. This can limit the degree to which the psychologist may have control of the record and its confidentiality. As noted previously in this chapter, when there are conflicts between institutional policies and procedures and the Ethics Code, psychologists appropriately address these issues as outlined in the Ethics Code (Standard 1.03 - Conflicts Between Ethics and Organizational Demands), clarifying the nature of the conflict, making known their commitment to the Code, and, to the extent feasible, resolving the conflict in a way that permits adherence to the Code. Guideline 11. Multiple Client Records The psychologist carefully considers documentation procedures when conducting couple, family, or group therapy in order to respect the privacy and confidentiality of all parties. When services are provided to more than one patient at a time (e.g., family therapy) recordkeeping is complicated by the fact that records include information about more than one person. As a result, disclosure of information related to one person may compromise the confidentiality of another. Records can be maintained either jointly or separately, depending upon need in terms of potential privacy/confidentiality concerns, practical concerns, ethical guidelines, and third-party reporting requirements. However, informed consent regarding the manner in which records will be kept should be provided to all parties involved. Additionally, when a release of information is requested for an individual in this setting, it will be necessary to release only the portions relevant to the party who is covered by the release. Guideline 12. Financial Records The psychologist strives to ensure accuracy of financial records. Accurate and complete financial recordkeeping is consistent with the APA Ethics Code (Standards 6.04 and 6.06). The accuracy of financial records is dependent upon the collection and maintenance of pertinent information for purposes of billing and reimbursement. Financial records may include, as appropriate, the type and duration of the service rendered, the name of the patient, fees paid for the service, and agreements concerning fees, along with date, amount, and source of payment received. This information is also subject to confidentiality and security regulations, and informed consent is provided for its collection, maintenance, and dissemination. 96

The Business of Neuropsychology

Guideline 13. Disposition of Records The psychologist plans for transfer of records to ensure continuity of treatment and appropriate access to records when the psychologist is no longer in direct control, and in planning for record disposal, the psychologist endeavors to employ methods that preserve confidentiality and prevent recovery. As described in the rationale of this guideline, client records are given special treatment in times of transition (e.g., separation from work, relocation, death). In accordance with the APA Ethics Code (Standard 6.02) and laws and regulations governing healthcare practice, a record transfer plan is necessary to provide continuity of treatment and preservation of confidentiality. Such a plan includes the identification of a qualified individual or agency to assume the control and management of the records. Various guides for this plan and subsequent transition are found in the reference section at the end of this chapter (specifically Halloway, 2003; Koocher, 2003; McGee, 2003). In addition to the plan for transition of records described above, this guideline includes the requirement that psychologists dispose of records in a manner that preserves confidentiality and limits recovery at a later date. For paper records this may include shredding and/or burning the documents. Disposal of electronic records poses unique challenges due to the technical expertise needed to fully delete or erase records from electronic storage devices. As such, consulting from technical experts or companies set up for this purpose is recommended to ensure the complete destruction of electronic records.

Health Insurance Portability and Accountability Act (HIPAA) There are numerous resources available that describe HIPAA rules and regulations along with strategies to implement them into your practice. For the purposes of this chapter, a general overview highlighting the applicability of HIPAA to neuropsychological practice is presented. More detailed information is available from the various references and resources provided at the end of this chapter. The following overview is based on information from a variety of sources, but most of the information provided came from the HIPPA Fact Sheet for Neuropsychologists developed by Division 40 of APA (2004), the ‘‘Getting Ready for HIPAA’’ document series developed through the APA Practice Organization, and numerous transmittals from the Department of Health and Human Services. As a result, no specific references are cited in the overview, as the information contained in this section was derived from a combination of these sources. Recordkeeping Guidelines and Regulations

97

Overview HIPAA refers to the Health Insurance Portability and Accountability Act of 1996 that established rules governing the use and disclosure of health information and the criminal and civil penalties for improper use and disclosure. The act was initially designed to protect individuals who were previously ill from losing their health insurance when they changed jobs or residences. Another major intent of the law was to streamline the healthcare system through the adoption of consistent standards for transmitting uniform electronic healthcare claims. As a means to this end, it was necessary to adopt standards for securing the storage of that information and for protecting an individual’s privacy. It was hoped that this would result in standardized procedures involved in the transmission of electronic claims with increased privacy and security protection for the electronic dissemination of healthcare information. While HIPAA’s primary privacy concern is health information transmitted by or maintained in electronic media, it also reaches to information transmitted or maintained in any other form or medium by covered entities, including paper records, fax documents, and all oral communications. To understand the applicability of HIPAA, there must first be an understanding of the types of information regulated under its auspices. HIPAA defines health information as any information (oral or recorded in any form or medium) that is: 1) created or received by a healthcare provider, health plan, public health authority, employer, life insurer, school or university, or healthcare clearinghouse; and 2) relates to the past, present, or future physical or mental health or condition of an individual; the provision of healthcare to an individual; or the past, present, or future payment for the provision of healthcare to an individual. Protected health information (PHI) under HIPAA refers to individually identifiable health information. Identifiable refers not only to information that is explicitly linked to a particular individual (i.e., identified information), but also includes health information with data that reasonably could be expected to allow individual identification. This results in wide applicability to not only electronic and written records, but also verbal communications, formal and informal. As with the information protected through HIPAA, the rules and regulations themselves are broad in terms of their coverage. The rules and regulations are divided into four components:

98

The Business of Neuropsychology

• Privacy Rule focuses on when and to whom confidential patient information can be disclosed • Security Rule seeks to assure the security of confidential electronic patient information • Electronic Transaction Rule (and Code Sets) addresses technical aspects of the electronic healthcare transaction process and requires the use of standardized formats whenever healthcare transactions, such as claims, are sent or received electronically • Employer Identifier Standards refers to the adoption of a system of unique identifiers for providers and payers Privacy Rule While HIPAA’s primary privacy concern is health information transmitted by or maintained in electronic media, the Privacy Rule reaches to data transmitted or maintained in any other form or medium by covered entities as well as oral communication. In short, the Privacy Rule focuses on when and to whom confidential patient information can be disclosed. It focuses on the application of effective policies, procedures, and business service agreements to control the access to and use of patient information. In contrast, the Security, Transaction, and Identifier rules only cover electronic information. For neuropsychologists, it is important to note that the Privacy Rule requires practitioners to:

• Provide information to patients about their privacy rights and how that information can be used.

• Adopt clear privacy procedures for their practices. • Train employees so that they understand the privacy procedures. • Designate an individual to be responsible for seeing that privacy procedures are adopted and followed. • Secure patient records. Complying with these requirements can appear to be a daunting task, but the Privacy Rule was developed with the understanding that the rules apply to a large variety of healthcare providers and settings, ranging from large multihospital systems to individual solo practitioners. As a result, the administrative

Recordkeeping Guidelines and Regulations

99

and procedural requirements are designed around the notion of ‘‘scalable compliance.’’ This means that the administrative requirements of the Privacy Rule are ‘‘scalable,’’ in that a covered entity takes ‘‘reasonable’’ steps to meet the requirements according to the size and scope of the organization. In other words, the administrative burden on a neuropsychologist who is in a solo practice will be less intensive relative to that imposed on a larger practice or hospital system. Security Rule While the Privacy Rule outlined to whom and under what circumstances PHI can be disclosed, the Security Rule addresses the provider/organization’s physical infrastructure and outlines the steps that are taken to protect confidential information from unintended disclosure through breaches of security. The Security Rule applies only to protected health information stored electronically, including any reasonably anticipated threats or hazards, such as a computer virus, and/or any inappropriate uses and disclosures of electronic confidential information (e.g., confidential patient information e-mailed or faxed to the wrong person due to human or technical error). In short, the Security Rule requires that steps be taken to ensure the confidentiality, integrity, and availability of electronically stored PHI. The following standard electronic transactions are specified by the Security Rule and trigger the need to be HIPAA-compliant:

• • • • • • • • •

Healthcare claims Healthcare payment and remittance advice Coordination of benefits Healthcare claim status, enrollment or disenrollment in a health plan Eligibility for a health plan Health plan premium payments Referral certification and authorization First report of injury Health claims attachments

The covered modes of electronic transmission are quite broad and essentially include all electronic means of communication/dissemination of information, networking systems, and electronic storage devices. To ensure compliance with the Security Rule, providers need to complete a risk analysis. 100

The Business of Neuropsychology

The risk analysis is a careful and thorough documented evaluation of whether the organization’s administrative activities, physical environment, and computer systems are secure, and whether electronic PHI is accessible only to appropriate and authorized individuals. The risk analysis helps identify and document any security threats or vulnerabilities by comparing current organizational activities with the administrative, physical, and technological requirements of the Security Rule. As part of the risk analysis process, it is necessary to assess the likelihood and impact of identified threats and vulnerabilities and take necessary preventive and corrective action to bring the organization into compliance in the event of a security breach. Information regarding the steps to complete a risk analysis is available via the resources and references provided at the end of this chapter. The Transaction Rule and Code Sets The Transaction Rule and Code Sets rule addresses technical aspects of the electronic healthcare transaction process and requires the use of standardized formats whenever healthcare transactions, such as claims, are sent or received electronically. The stated purpose of this rule is to simplify the processes involved in submitting electronic claims and to decrease the costs associated with paying for healthcare services. There is no provider obligation to engage in electronic claims submission, but for those who choose to transmit claims electronically, practice management software or an outside party such as a healthcare clearinghouse will be needed to handle the conversion of data to meet the requirements. Specifically, the Rule establishes standards for eight types of electronic transactions and for specific ‘‘code sets’’ to be used in those transactions. The transactions cover a broad array of communications, not all of which are applicable to the practice of neuropsychology:

• • • • • • • •

Healthcare claims or equivalent encounter information Eligibility for a health plan Referral certification and authorization Healthcare claim status Enrollment or disenrollment in a health plan Healthcare payment and remittance advice Health plan premium payments Coordination of benefits

Recordkeeping Guidelines and Regulations

101

The ‘‘code set’’ is defined as any set of codes used to encode data elements, such as medical diagnostic codes or medical procedure codes. The two identified code sets for HIPAA are not new to neuropsychologists. The standard diagnostic code set for health related problems is the International Classification of Diseases, 9th edition, Clinical Modification (ICD-9). Those who use DSM codes will need to ensure that the codes are converted into the ICD-9 standard code set if they file claims electronically. The standard procedural code set, required as part of the transaction standards, is the Current Procedural Terminology (CPT-4). Employer Identifier Standard The Employer Identifier Standard was put in place to adopt a system of unique identifiers for providers and payers for certain electronic transactions. Initially, the HIPAA statute proposed four national and unique identifiers to be used in the healthcare system: providers, employers, health plans, and individuals. Over time, only three were adopted with the ‘ individual’’ number being placed on hold for now, due to privacy concerns. The three adopted identifiers include:

• National Provider Identifier (NPI): the identifier assigned to an individual health care provider • National Employer Identifier (NEI): the identifier assigned to the employer/organization. • National Health Plan Identifier: It is expected that a 9-digit number will be assigned to all health plans. The national identifier for individuals was initially proposed in the early 1990s as part of comprehensive healthcare reforms that would have supplied a universal healthcare credit card for individuals to use. The implications of national individual identifiers, especially in light of the Privacy Rule provisions and the concern of privacy advocates over the idea of assigning identity numbers to individuals, became controversial and as a result, the development of the individual identifier was subsequently placed on indefinite hold pending further review. Applicability and Action Neuropsychologists are typically required to follow HIPAA regulations as a ‘‘covered entity’’ in their clinical and research practice, whether they are in private practice or employed by an agency. Under Section 1172 (a), covered 102

The Business of Neuropsychology

entities include but are not limited to Healthcare Providers, Healthcare Plans, and Healthcare Clearinghouses. To put this in more practical terms, a neuropsychologist would become a covered entity if he or she is a healthcare provider who: 1) furnishes, bills, or receives payment for healthcare; 2) conducts one of the eight covered transactions discussed previously; and 3) conducts any of those eight transactions electronically. Neuropsychologists are a covered entity only if all three of these requirements are met. However, if these are not met, but the neuropsychologist interacts with other covered entities, he or she still must comply with the Privacy Rule to properly provide treatment while protecting PHI. As a point of exclusion, if a neuropsychologist engages exclusively in forensic private practice where no electronic transmission of client information is conducted, then that neuropsychologist would not be considered a covered entity. Given the nature of their work, most neuropsychologists are subject to the HIPAA rules and regulations and as such must take action to comply with the Privacy and Security Rules. The ‘‘Fact Sheet’’ developed by Division 40 of the APA (2004) is an excellent resource for specifics in this regard. First and foremost, under the Privacy Rule, neuropsychologists must provide information to patients about their privacy rights and how that information can be used. This cannot be accomplished unless the practitioner or organization has established policies and procedures in place. Some simple steps to meet this requirement are to adopt clear privacy policies and procedures, train employees and supervisees so that they understand privacy procedures, designate an individual responsible for addressing HIPAA privacy questions and complaints, and secure patient records (e.g., test reports, raw data, clinical interview notes). The policies and procedures can be documented in either written or electronic form, but must be tangible and available. Additionally, providers are required to have a plan to mitigate any known harmful effects in the unauthorized use or disclosure of patient health information and this should be documented as well. Finally, neuropsychologists with a direct treatment relationship with a patient are required to use reasonable efforts to obtain a written acknowledgment from the patient of receipt of the provider’s notice of privacy practices. In that notice, direct providers are required to describe in specific detail the uses and disclosures of health information that will be made. Under the Security Rule, there are a series of administrative, technical, and physical security procedures outlined to assure the confidentiality of electronic protected health information. The standards are delineated into either Recordkeeping Guidelines and Regulations

103

required or addressable implementation specifications. As with the Privacy Rule, neuropsychologists need to develop clear written policies and procedures to establish physical safeguards and technical security services to guard data integrity, confidentiality, and availability; and establish technical security mechanisms to guard against unauthorized access to data that is transmitted over a communications network. In line with the ‘‘scalable compliance’’ notion described previously, providers are given some discretion in deciding the feasibility of implementations beyond those that will be required and take reasonable steps given the nature, size, and scope of their practice. Access and Disclosure The HIPAA Privacy Rule, in general, grants patients (or their representatives) broader access to their PHI than was afforded to them prior to HIPAA. This includes access to their entire record, including neuropsychological reports, test responses, and raw data. What is troubling to some is that, according to HIPAA, this access is granted regardless of the referral party (e.g., IME, worker’s compensation) or reason for referral, unless state law allows for more stringent access limitations in these cases. There are some limited defined instances for denying such access within the HIPAA Privacy Rule and neuropsychologists are encouraged to seek out additional information and guidance from applicable state laws and the APA Ethics Code (2003) in this regard. It is important to note that when HIPAA rules are in conflict with other applicable rules, laws, standards, statutes, etc., the more stringent rule typically takes precedence with regards to safeguarding PHI. Only under a few well-defined circumstances can a healthcare provider deny a patient request for access, and even then, in some of these cases, the denial can be reviewable by a third party. Important to neuropsychologists, HIPAA specifically excludes ‘‘psychotherapy notes’’ from the rules governing patients’ access to their records. However, psychotherapy notes are narrowly defined in the Privacy Rule as personal interpretive notes of discussions during therapy sessions that are kept separate from the medical record. Information about session start/stop times, and summary of diagnosis, treatment plans, progress with treatment, results of clinical tests, symptoms, functional status, and prognosis are not considered psychotherapy notes. Additionally, any notes placed in the patient’s record, regardless of content, are no longer considered psychotherapy notes and are available to be accessed by the patient. It is important to note that test reports and raw test data do not fall under the provisions pertaining to ‘‘psychotherapy notes.’’ 104

The Business of Neuropsychology

In addition to increased access to medical records, under the Privacy Rule an individual has the right to request an accounting of certain disclosures of PHI made by a covered entity. This accounting must include disclosures of PHI that occurred during the six years prior to the individual’s request, and must include specified information regarding each disclosure. Disclosures made pursuant to an individual authorization or disclosures of a limited data set under a data use agreement are exempt from this accounting requirement. In short, the individual has a right to know the type of information that has been sent, for what purpose, and who received it. Consent and Authorization In general, consent is a general document that gives healthcare providers permission to use and disclose all PHI for treatment, payment, and healthcare operations. It must include patient’s right to revoke consent in writing, and is separate from informed consent for treatment or testing. While HIPAA allows providers to communicate PHI to other healthcare entities without authorization, they may choose to obtain consent prior to using PHI to carry out treatment, payment, and healthcare operations. Additionally, some aspects of the APA Ethics Code and many states may have a consent requirement. Consent is not time-limited and does not need to specify the particular information used or disclosed, nor the recipients of the information. Authorization refers to the use of PHI for purposes other than treatment, payment, or health care operations, and written patient authorization to release the information is required. In other words, authorization is permission above and beyond the general consent that permits further use for specified purposes. It is required by the Privacy Rule for use and disclosure of PHI for marketing or research, disclosure of psychotherapy notes, and any other uses/disclosures that are not for treatment, payment or healthcare operations. HIPAA in Research Settings The Privacy Rule defines research as ‘‘a systematic investigation, including research development, testing, and evaluation, designed to develop or contribute to generalizable knowledge.’’ It is expected that in the course of this work that a researcher may obtain, create, use, and/or disclose PHI. Under the Privacy Rule, covered entities are permitted to use and disclose PHI for research with individual authorization, or without individual authorization under limited circumstances set forth in the Privacy Rule. Under HIPAA, use and disclosure may occur without patient authorization if the information has Recordkeeping Guidelines and Regulations

105

been de-identified by someone not involved in the research, there is an approved waiver from an institutional review board (IRB), the information is being used only as a preparatory form of research, or the PHI being used is that of deceased individuals. In other cases, PHI may be used in research when a research participant authorizes use of his or her PHI, providing the authorization satisfies certain specified requirements. Final Caveats Regarding HIPAA The HIPAA privacy rule establishes a minimum level of privacy protection. The weight of HIPAA relative to state law is not entirely clear. Numerous sources imply that it only takes precedence over state laws that provide less privacy protection or that provide patients with less access to and control over their health information. In that sense, state laws that provide better protection from the consumer’s vantage point are not pre-empted by HIPAA. In those situations, psychologists should follow state law in an effort to provide better protection for patients. This also implies an expectation that healthcare providers must be aware of all state laws where they practice that pertain to the privacy of healthcare information. Work on better understanding the varying weights and jurisdiction, as well as further analysis of the state preemption options, continues to be conducted by the APA and other organizations. It is important that neuropsychologists know the various aspects of HIPAA and how the provisions apply to their specific practice and setting. There are posted fines and penalties that can be quite substantial for failure to comply with HIPAA rules. As noted above, there is scalable compliance expectation based on setting and type of practice. Similarly, there are scalable penalties, with consideration for reasonable effort to comply. Nonetheless, the best defense against such penalties is to avoid them altogether by understanding HIPAA and its application relative to a provider’s given setting.

Red Flags Rule The Red Flags Rule is a new statute that requires businesses and organizations, including many doctors’ offices, hospitals, and other health care providers, to implement a written Identity Theft Prevention Program designed to detect the warning signs (i.e., ‘‘red flags’’) of identity theft in their day-to-day operations. This rule will be enforced by the Federal Trade Commission and is different from HIPAA in terms of information to be protected. Whereas HIPAA protected the privacy of individuals by limiting release of PHI, the Red Flags Rule is designed to limit the release of information that could result in identity theft 106

The Business of Neuropsychology

for patients as well as employees. The implementation of this law has been delayed on three occasions to give additional time for organizations to develop and implement written identity theft prevention programs. The most recent implementation date is set for November 1, 2009. Toporoff (2009) provides a good overview of this rule and its application to healthcare providers. This source was a primary resource for this section, along with the final Red Flags Rule published through the Federal Trade Commission Web site. Application of this law is based on whether or not the practice or organization’s activities fall within the law’s definition of two key terms: ‘‘creditor’’ and ‘‘covered account.’’ The law defines ‘‘creditor’’ as any entity that regularly defers payments for goods or services or arranges for the extension of credit. For example, if a practitioner, practice, or organization bills patients after services have been completed, allows patients to set up payment plans for services, or assists the patient in getting credit from other sources, they would be considered ‘‘creditors.’’ If a provider requires payment before or at the time of service, they are not creditors under this rule. Additionally, if the provider/ practice accepts only direct payment from a third party organization where the patient is not responsible for any additional payment (i.e., Medicaid) they are not a creditor. A ‘‘covered account’’ is defined as a consumer account that allows multiple payments or transactions or any other account with a reasonably foreseeable risk of identity theft. The accounts that are opened and maintained for patients are considered ‘‘covered accounts’’ under the law. As such, if your organization or practice meets either of these definitions, you must create a written Identity Theft Prevention Program to identify and address the red flags that could indicate identity theft in those accounts. There is flexibility regarding the implementation of an Identity Theft Prevention Program provided that it conforms to the Rule requirements. In fact, many organizations already have a fraud prevention or security program in place that can be used as a starting point. To be compliant, the program must: 1. Identify the kinds of red flags that are relevant to the practice 2. Explain the process for detecting them 3. Describe how the organization will respond to red flags to prevent and mitigate identity theft 4. Spell out how the program will be kept up-to-date Specific warning signs and threats to identity theft are available in Supplement A to the Red Flags Rule available at ftc.gov/redflagsrule. Recordkeeping Guidelines and Regulations

107

Once developed, some auditing/hypothetical testing of the program should be conducted to assess its usefulness and integrity. The final program is to be approved by the Board of Directors of the organization or a senior employee, whichever is most applicable for the setting, and implementation, auditing, and adjustments to the program are managed accordingly. While there are no criminal penalties for failing to comply with the Rule, violators may be subject to financial penalties. It is expected that additional information regarding the Red Flags Rule and its application to healthcare and psychology will be more readily available in the future. In the meantime, customizable Red Flag Identity Theft policy and attendant forms can be downloaded from: www.physicianspractice.com/ index/fuseaction/tools.main.htm. Additional information can be obtained from the references and resources provided at the end of this chapter.

Final Thoughts While this chapter was exhausting, it is certainly not exhaustive. As can be determined from the information provided in this chapter, recordkeeping activities can be quite detailed and cumbersome when it comes to compliance with the numerous statutory, regulatory, and ethical provisions and guidelines that govern the development, maintenance, and dissemination of patient records. For better or worse, we have moved far away from the days when a patient’s record was simply a folder with progress notes housed in a file drawer. As such it is imperative that neuropsychologists stay up-to-date in their knowledge regarding the various regulatory and legal requirements for recordkeeping.

References, Resources, and Suggested Readings American Psychological Association. (2002). Ethical principles of psychologists and code of conduct. American Psychologist, 57, 1060–1073. American Psychological Association, Board of Professional Affairs Committee on Professional Practice and Standards (2007). Record keeping guidelines. American Psychologist, 62, 993–1004. American Psychological Association, Committee on Professional Practice and Standards. (1993). Record keeping guidelines. American Psychologist, 48, 984–986. American Psychological Association Legal and Regulatory Affairs Staff (2005). A Matter of Law: Patient Record Keeping. Retrieved July 1, 2009, from http:// www.apapractice.org/apo/insider/practice/pracmanage/legal/record.html#. 108

The Business of Neuropsychology

American Psychological Association Practice Organization. (2002). Getting ready for the HIPAA privacy rule: A primer for psychologists. Retrieved July 1, 2009, from http://www.apapractice.org/content/apo/hipaa/apapractice.GenericArticle. Single.articleLink.GenericArticle.Single.file.tmp/Getting_Ready_for_the_ HIPAA_ Privacy_Rule:_A_Primer_for%20Psychologists.pdf. American Psychological Association Practice Organization. (2003). Getting ready for HIPAA: What you need to know now: A psychologist’s guide to the Transaction Rule. Retrieved July 1, 2009, from http://www.apapractice.org/ apo/hipaa/trans.html#. American Psychological Association Practice Organization. (2005). The HIPAA Security Rule primer. Retrieved July 1, 2009, from http://www. apapractice.org/apo/hipaa/hipaa_security_rule.html#. American Psychological Association Practice Organization, & American Psychological Association Insurance Trust. (2002). Getting ready for HIPAA: What you need to know now: A primer for psychologists. Retrieved July 1, 2009, from http://www.apapractice.org/apo/hipaa/apapractice.html#. Benefield, H., Ashkanazi, G., & Rozensky, R. H. (2006). Communication and records: HIPAA issues when working in health care settings. Professional Psychology: Research and Practice, 37, 273–277. Division 40 of the American Psychological Association (2004). Health insurance portability and accountability act (HIPPA): Fact sheet for neuropsychologists. Division of Clinical Neuropsychology Newsletter 40, 22 pp 12–19. Available online at http://www.div40.org/Announcement/ HIPAA_Fact_Sheet_Final.pdf. Federal Trade Commission (2009). Fighting fraud with the Red Flags Rule: A how-to guide for business. Published on the website of the Federal Trade Commission. Retrieved July 9, 2009 from http://www.ftc.gov/bcp/edu/ microsites/redflagsrule/index.shtml. Halloway, J. D. (2003). Professional will: A responsible thing to do. APA Monitor, 34, 34–35. Knapp, S. J., & VandeCreek, L. D. (2006). Confidentiality, privileged communications, and record keeping. In Practical Ethics For Psychologists: A Positive Approach (pp. 111–128). Washington, DC: American Psychological Association. Koocher, G. P. (2003). Ethical and legal issues in professional practice transitions. Professional Psychology: Research and Practice, 34, 383–387. Luepker, E. T. (2003). Record keeping in psychotherapy and counseling: Protecting confidentiality and the professional relationship. New York: Brunner-Routledge. Recordkeeping Guidelines and Regulations

109

McGee, T. F. (2003). Observations on the retirement of professional psychologists. Professional Psychology: Research and Practice, 34, 388–395. Toporoff, S. (May, 2009). The ‘‘Red Flags’’ Rule: What health care providers need to know about complying with new requirements for fighting identity theft. Published on the Federal Trade Commission’s website. Retrieved July 9.2009 from http://www.ftc.gov/bcp/edu/pubs/articles/art11.shtm. U.S. Department of Health and Human Services (1996). Health Insurance Portability and Accountability Act of 1996, Pub. L. No.104-191, 110 Stat. 1936. Retrieved July 1, 2009, from U.S. Department of Health and Human Services, Office for Civil Rights Web site: http://www.hhs.gov/ocr/hipaa. U.S. Department of Health and Human Services (2003). Health Insurance Reform: Security Standards; Final Rule, 45 C.F.R. Parts 160, 162, and 164. Retrieved July 1, 2009, from http://www.cms.hhs.gov/SecurityStandard/ Downloads/securityfinalrule.pdf. For additional information: HIPAA www.APApractice.org www.div40.org/Announcement/HIPAA_Fact_Sheet_Final.pdf www.cms/hhs.gov/hipaa/hipaa2/regulations/transactions/finalrule/txfinal.pdf www.hhs.gov/ocr/combinedregtext.pdf cms.hhs.gov/hipaa/hipaa2/support/tools/decisionsupport/default.asp Red Flags Rule www.ftc.gov/bcp/edu/microsites/redflagsrule/index.shtml http://ftc.gov/opa/2009/07/redflag.shtm www.ftc.gov/bcp/edu/microsites/redflagsrule/index.shtml www.physicianspractice.com/index/fuseaction/tools.main.htm

110

The Business of Neuropsychology

6 &&& Billing, Coding, and Documentation Billing, coding, and documentation issues are often overlooked in clinical training settings, but are necessary evils that must be mastered, or at least understood, for successful (i.e., financially responsible and beneficial) clinical practice. There are stacks of CMS, private insurance, and other third party documents that ‘‘outline’’ appropriate billing, coding, and documentation policies, procedures, and requirements. At times these include inconsistent or unclear information that can change rapidly and without notice. Additionally, these ‘‘standardized’’ policies are subject to interpretation from local and regional organizations that manage payments to providers. This results in additional inconsistencies and disagreements regarding appropriate activities. Finally, there is a wide array of folklore and mythology available on various professional e-mail listservs and through informal conversations, as neuropsychologists attempt to discern the best way to manage this aspect of their practice. As a result, there is prominent variability in how neuropsychologists conduct billing and coding activities and document their clinical service. In an effort to avoid getting bogged down with the minutiae regarding the rules and regulations associated with CMS, private insurance, and other third party payors, this chapter presents billing, coding, and documentation information in a relatively conservative fashion, focusing on what we know and alluding to assumptions and concerns where limited or unclear information is available. Since Current Procedural Terminology (CPT) procedure codes and International Statistical Classification of Diseases and Related Health Problems (ICD) diagnostic codes are the basis of billing and coding activities, these will be presented through general and specific descriptions to better understand 111

their application to neuropsychological practice. Billing submission activities will then be presented, including some of the more challenging areas. Finally, clinical documentation do’s and don’ts will be presented along with some suggestions for templates for appropriate documentation. Chapter 7 addresses reimbursement issues and exploring the financial impact of billing, coding, and documentation activities. As a disclaimer, the information provided in this chapter is based on a variety of sources and resources including documents and transmittals from CMS; several books, articles, and white papers covering billing and coding in healthcare; various documents from regional Medicare carriers and insurance companies; and workshops provided by Antonio E. Puente and Charles Callahan (see references and recommended readings at the end of the chapter for detailed citations). It is impossible to provide complete coverage of these activities and related issues in a single book chapter. The following is not meant to be exhaustive, but instead provides an overview to stimulate thought and further reading and research in this area. Given the rapid rate of change in this area, continuous monitoring of this information is recommended as it is likely that some of the information presented here is already outdated since its publication.

Current Procedural Terminology (CPT) Current Procedural Terminology (CPT) describes medical or psychiatric procedures performed by physicians and other health providers. A history of the CPT is available through many documents and Internet sites, including a description of how codes are developed (see references). The American Medical Association (AMA) first developed and published CPT in 1966. The first edition contained primarily surgical procedures, with limited sections on medicine, radiology, and laboratory procedures. The second edition, published in 1970, presented an expanded system of terms and codes to designate diagnostic and therapeutic procedures in surgery, medicine, and the specialties. The third and fourth editions were introduced in the 1970s with various updates made over the years. In 1983, CPT was adopted as part of the CMS Healthcare Common Procedure Coding System (HCPCS) and was mandatory in reporting services for Part B of the Medicare program. In 1986, this requirement was extended to state Medicaid agencies in the Medicaid Management Information System. The use of these codes for this purpose has since expanded to most managed care and other insurance companies. CPT codes have evolved over the years under the direction of the AMA, but continue to be used to describe the medical, surgical, and diagnostic services 112

The Business of Neuropsychology

provided and to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes. The fourth edition is the most current, but CPT-5 is coming very soon. Two versions are published: the first is the most common – CPT Physician’s Current Procedural Terminology. The second publication is the CPT Physician’s Current Procedural Terminology Specially Annotated for Hospitals. This version contains all of the information in the original version with the addition of special CMS guidelines and notations for identifying criteria applicable to outpatient hospital billing (discussed further in the next chapter). Additionally, the AMA offers numerous publications for sale related to CPT and related coding activities as well as a personal, non-commercial search of current CPT CMS values on its Web site.

CPT for Neuropsychological Practice While the above information is useful from a historical perspective, for neuropsychologists it is important to know what specific codes are available for use on a more specific level. There are a total of over 7,500 CPT codes; about 50 of which are possible codes for psychologists and neuropsychologists. For the purposes of this chapter, the more common codes are presented along with a few less common codes that may be useful in neuropsychological practice settings. The presented codes fall into two categories: assessment and intervention. Where appropriate, the codes will be presented as written in the CPT manual (2009) with additional information provided where applicable. In particular, codes are presented in terms of their congruence with medical versus mental health conditions. This will be discussed further as actual coding and documentation issues are presented. Assessment Codes For neuropsychologists, the most commonly used assessment CPT codes are those associated with neuropsychological and psychological testing. These are described in ‘‘sets’’ due to the fact that in 2006 the CPT codes for these activities were further specified to differentiate the work of professionals from that of technicians and computer administration. The testing codes are as follows: 96118: Neuropsychological Testing by Professional Neuropsychological testing (eg., Halstead-Reitan Neuropsychological Battery, Wechsler Memory Scales, and Wisconsin Card Sorting Test), per hour of the psychologist’s or physician’s time, Billing, Coding, and Documentation

113

both face-to-face time with patient and time interpreting test results and preparing report. (96118 is also used in those circumstances when additional time is necessary to integrate other sources of clinical data, including previously completed and reported technician- and computer-administered tests) 96119: Neuropsychological Testing Administered by Technician Neuropsychological testing (eg., Halstead-Reitan Neuropsychological Battery, Wechsler Memory Scales, and Wisconsin Card Sorting Test), with qualified healthcare professional interpretation and report, administered by technician, billed per hour of technician time, face-to-face 96120: Neuropsychological Testing Administered by Computer Neuropsychological testing (e.g., Wisconsin Card Sorting Test), administered by computer, with qualified healthcare professional interpretation and report. 96101: Psychological Testing by Professional Psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality and psychopathology, e.g., MMPI, Rorschach, WAIS), per hour of the psychologist’s or physician’s time, both face-to-face time administering tests to the patient and time interpreting test results and preparing report. (96101 is also used in those circumstances when additional time is necessary to integrate other sources of clinical data, including previously completed and reported technician- and computer-administered tests) 96102: Psychological Testing Administered by Technician Psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality and psychopathology, e.g., MMPI, Rorschach, WAIS) with qualified healthcare professional interpretation and report, administered by technician, per hour of technician time, face-to-face 96103: Psychological Testing Administered by Computer Psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality, and psychopathology, e.g., MMPI), administered by a computer, with qualified healthcare professional interpretation and report Since these codes were adopted in 2006, they have been a source of confusion and frustration for neuropsychologists as CMS and many other payors do not reimburse combinations of these codes for the same patient 114

The Business of Neuropsychology

on the same day unless the codes clearly represent different tests or services. To allow for the simultaneous use of professional and technician/computer codes some use a -59 modifier to identify the multiple codes as being distinct and separate services. When professional codes and technician/computer codes are used simultaneously, the modifier is used with the non-professional code (e.g., 96119 & 96120 or 96102 & 96103). This practice was recommended and outlined by the APA Practice Organization through an Information Alert in October of 2006 (APA, 2006). The acceptance of this practice has been inconsistent and variable by region and provider. In 2008, the AMA CPT manual included revised language, stating that the professional codes were ‘ also used in those circumstances when additional time is necessary to integrate other sources of clinical data, including previously completed and reported technician- and computer-administered tests.’’ However, Transmittal 85 published by CMS in February of 2008 continued to state the professional codes should not be paid when billed for the same tests or services performed under technician or computer test codes. So again, there remained inconsistencies and confusion regarding the simultaneous use of these codes. In June of 2008, CMS approved a series of responses to frequently asked questions that provided clarification regarding the billing of both professional and technician codes for the same patient on the same or alternative days. To summarize, the new language implies that technician codes account for the testing and interpretation of individual tests, while professional codes account for the time spent integrating the various tests and other clinical data and developing an integrated summary and impressions. There is still room for variable interpretations, but one way to think about the new language is that test results are similar to lab test results. They can be included in the report, but there is no additional billing (payment) for ‘ listing’’ the test results in the report. The professional billing is for the time spent completing the integrative portion of the report. The full text of these FAQs and related answers can be found at the Web site listed in the reference section (specifically FAQ #’s 9180, 9181, & 9182). Despite this ‘‘clarification,’’ payment decisions are still determined by local carriers, and their interpretations can be far more rigid than the national policy. As a result, at least for now, difficulty remains in maximizing reimbursement for the psychological and neuropsychological testing codes. An additional source of difficulty in the use of neuropsychological evaluation codes is the expected amount of time spent for the evaluation. Most of the CMS documentation in this regard indicates that a neuropsychological evaluation typically requires a total of five to seven hours to perform. If testing time is Billing, Coding, and Documentation

115

greater than eight hours, the report should document the medical necessity for the extended testing period. There is understanding that an evaluation and subsequent report may occur across more than one day. If testing and report are completed over several days, CMS and other guidelines suggest that the clinician combine testing and report time together with all billing submitted on the last date of service. There is no documentation to support estimating total time and submitting charges prior to the completion of the report. Another ‘‘assessment’’ code commonly used by neuropsychologists is the Neurobehavioral Status Examination (CPT – 96116). This code is described as: 96116: Neurobehavioral Status Examination Neurobehavioral status exam (clinical assessment of thinking, reasoning and judgment, e.g., acquired knowledge, attention, language, memory, planning and problem-solving, and visualspatial abilities), per hour of the psychologist’s or physician’s time, both face-to-face with patient and time interpreting test results and preparing report. Activities involved in this service can include an interview by the professional; testing by the professional, technician, and/or computer; and interpretation and report writing by the professional. Regardless of the activities, the time is billed together under the professional code, assuming that different services are provided (no double billing) and a comprehensive/integrative report is generated. Some use 96116 as a neurocognitive ‘‘screening’’ prior to discharge from inpatient or rehabilitation units or as an admission assessment for outpatient rehabilitative programs, thus preserving the neuropsychological testing codes for later comprehensive follow-up evaluation. If this is the case, it is important to note the language that is used in the report. CMS typically does not reimburse for ‘‘screening’’ exams, so the better terminology would be ‘‘abbreviated neurocognitive assessment’’ or similar verbiage. Finally, 96116 is also used as a non-psychiatric (i.e., medical) interview to determine the need for further testing and what tests would be given rather than a testing code. In this sense, 96116 is sometimes used in conjunction with the neuropsychological evaluation test codes (96118–96120). If this is the case, distinct documentation for each code is necessary to differentiate the services. The psychological testing, neuropsychological testing, and neurobehavioral status exam codes are administered once per illness condition or when a significant change in behavior and/or medical/health condition 116

The Business of Neuropsychology

necessitates re-evaluation. If a repeat evaluation is to be attempted for the same condition, documentation should indicate why the service is medically reasonable and necessary (AMA CPT Assistant, November, 2006). As such, a re-evaluation should only occur when there is a potential change in diagnosis or the nature and/or severity of symptoms. Medical necessity is discussed in greater detail later in this chapter. While the codes described above are the most frequently used in neuropsychology, there are some additional assessment codes that warrant discussion. The first set of codes presented is most common in pediatric settings. CPT codes are available for developmental tests (limited or extended) to address childhood developmental diagnoses or specific difficulties. The available codes are as follows: 96110: Developmental testing; limited Developmental testing; limited (e.g., Developmental Screening Test II, Early Language Milestone Screen), with interpretation and report 96111: Developmental testing; extended Developmental testing; extended (includes assessment of motor, language, social, adaptive and/or cognitive functioning by standardized developmental instruments) with interpretation and report The use of developmental screening instruments of a limited nature is reported using CPT code 96110. This code is often reported when performed in the context of preventive medicine services and is commonly performed with other evaluation and management (E/M) services, such as acute illness or follow-up physician office visits. An office nurse or other trained non-physician staff member typically performs this service, and, as a result, the relative value of these codes is very low as it reflects only the practice expense of the office staff and nurses, the cost of the materials, and professional liability, with no physician work value published on the Medicare physician fee schedule. Extended developmental testing (CPT – 96111) using standardized instruments may be reported independently or in conjunction with another code describing a separate patient encounter provided on the same day as the testing, such as an evaluation and management code for outpatient consultation. A physician, psychologist, or other trained professional typically performs this testing service. As of January, 2004, there are physician work RVUs published on the Medicare physician fee schedule for this code. Billing, Coding, and Documentation

117

However, in 2005 the CPT code descriptor of 96111 was revised to reflect the deletion of test examples as well as the "per hour" designation. The service is now reported without regard to time. The typical testing session, including the time to perform the interpretation and report, was determined to be slightly over an hour based on a survey conducted by the American Academy of Pediatrics (AAP). This places a significant limitation on possible reimbursement for neuropsychologists using this code. The final code presented here is likely the newest code available to neuropsychologists. It is a code used for functional brain mapping (CPT – 96020); it was adopted for use in 2007 and is described as follows: 96020: Functional Brain Mapping Neurofunctional testing selection and administration during noninvasive imaging functional brain mapping, with test administered entirely by a physician or psychologist, with review of test results and report. Busis (2007) provides a very good overview of this code and its potential use. The codes were established to report neurofunctional mapping of blood flow changes in the brain by magnetic resonance imaging in response to tests administered by physicians and psychologists correlating to specific brain functions. This code includes time for selection and administration of testing of language, memory, cognition, movement, sensation, and other neurologic functions when conducted in association with functional neuroimaging; monitoring of performance of this testing; and determination of validity of neurofunctional testing relative to separately interpreted functional magnetic resonance images. These activities are independent and are not reported in conjunction with the psychological or neuropsychological testing codes (96101–96103, 96116–96120). This evaluation is most commonly performed pre-operatively for patients with brain tumors, arteriovenous malformations, intractable epilepsy, and other brain lesions that may require invasive (e.g., surgical excision) or focal treatment (e.g., irradiation). The information derived from functional brain mapping is utilized to predict the potential for neurologic deficits that may arise from tumor growths and surgical interventions, thus making it possible for the physician and patient to make informed decisions concerning the feasibility and risk of intervention, determine the extent of surgical intervention (e.g., subtotal vs. total resection) and identify expendable and nonexpendable cortical regions.The testing component is performed during the 118

The Business of Neuropsychology

imaging procedure, and communication between the patient and the administrator of the test is essential to assure or monitor whether the patient is correctly performing the required activities. This testing entails the professional’s understanding of expected function of the involved or adjacent cortex, and the patient’s ability to perform cognitive tasks. There is a direct interaction between the examiner and the patient. The testing professional summarizes the patient’s performance on the neurological tasks and the behavioral/cognitive components in a written report. While it seems that this code could also be used by neuropsychologists for WADA testing (typically CPT – 95958: Wada activation test for hemispheric function, including electroencephalographic (EEG) monitoring), this has not been established due to the ‘‘noninvasive imaging’’ language used in 96020. Neuropsychologists who wish to explore this option should do so with their local carriers before assuming that this is applicable. As a final discussion of the assessment codes, it is important to discuss the range of professionals that are deemed ‘ qualified’’ to use the previously described CPT codes. In addition to physicians and psychologists, the above codes are also available for use by nurse practitioners, clinical nurse specialists, and physician assistants ‘ to the extent authorized under State scope of practice.’’ Additionally, physical therapists (PTs), occupational therapists (OTs), and speech language pathologists (SLPs) are authorized to bill three test codes as ‘ sometimes therapy’’ codes. Specifically, CPT codes 96105 (assessment of aphasia), 96110, and 96111 may be performed by these therapists. However, when PTs, OTs and SLPs perform these procedures, it must be done under the general supervision of a physician or a psychologist. According to the American Speech and Hearing Association’s Web site (www.asha.org), their Health Care Economics Committee is currently pursuing language that would allow for SLPs to use the neurobehavioral status exam code (96116) when performing evaluations that are primarily cognitive-communicative in nature. When the code was revised in 2006 (eliminating the old 96115 code and adding 96116) the phrase, ‘ per hour of the psychologist’s or physician’s time’’ was added, limiting the code’s availability to SLPs. Intervention Codes While extensive detail was provided in the earlier descriptions of CPT codes used for assessment activities, the discussion of intervention codes will be briefer, as the codes, their descriptions, and their acceptance are somewhat more straightforward. This is not to suggest that they are without controversy and inconsistency in terms Billing, Coding, and Documentation

119

of use and acceptance. This is particularly noted for the newer Health and Behavior codes that were adopted for use in 2002 and are presented here in greater detail than the traditional psychotherapy codes. This is also the basis for using the word ‘ intervention’’ to describe this section rather than ‘ therapy.’’ Traditional Mental Health Psychotherapy Codes The AMA CPT Manual (2009) states, ‘‘psychotherapy is the treatment for mental illness and behavior disturbances in which the physician establishes a professional contract with the patient and through definitive therapeutic communication, attempts to alleviate the emotional disturbances, reverse or change maladaptive patterns of behavior and encourage personality growth and development.’’ There are a variety of codes used for the initial assessment and treatment of mental health problems. Two diagnostic interview codes are available to initiate mental health services for a patient and they are as follows: 90801: Psychiatric diagnostic interview examination This procedure is described as the elicitation of a complete history, establishment of tentative diagnosis, and an evaluation of the patient’s ability and willingness to work to solve the patient’s mental problem 90802: Interactive Psychiatric Diagnostic Interview Examination using play equipment, physical devices, language interpreter, or other mechanisms of communication Includes the same components as the psychiatric diagnosis interview examination which includes history, mental status, disposition, and other components as indicated These are not time-based codes. They are billed as a single unit regardless of time spent (valued at approximately one and a half hours). Additionally, they can be used one time per illness, incident, or bout. The evaluation involves a comprehensive analysis of records, observations, structured and/or unstructured clinical interview, and may include communication with family or other sources and the ordering and medical interpretation of laboratory or other medical diagnostic studies. This evaluation also includes a complete mental status examination. Documentation includes history, presenting complaints, mental status examination, impression, and disposition. The interactive diagnostic interview code (90802) may be applied to the initial evaluation of children, or in some cases adult patients with organic mental deficits or who 120

The Business of Neuropsychology

are catatonic or mute. The medical record and documentation must indicate that the person being evaluated does not have the ability to interact through normal verbal communicative channels. Mental health intervention (psychotherapy) codes are described as being ‘‘insight oriented, behavior modifying and/or supportive’’ and differentiated primarily based on face-to-face time and location of service (inpatient versus outpatient). Inpatient is defined as being in an inpatient hospital, partial hospital, or residential care setting. Interactive psychotherapy again requires documentation indicating that the person being treated does not have the ability to interact through normal verbal communicative channels. The individual psychotherapy codes are as follows: Inpatient/Outpatient 90816/90804 – Individual Psychotherapy (20–30 minutes) 90818/90806 – Individual Psychotherapy (45–50 minutes) 90821/90808 – Individual Psychotherapy (75–80 minutes) 90817/90810 – Individual Psychotherapy, interactive, (20–30 minutes) 90819/90812 – Individual Psychotherapy, interactive, (45–50 minutes) 90822/90814 – Individual Psychotherapy, interactive, (75–80 minutes) Family therapy codes are described as reflecting ‘‘psychotherapy directed toward an individual and family to address emotional, behavioral or cognitive problems, which may be causative/exacerbating of the primary mental disorder or have been triggered by the stress related to coping with mental and physical illness, alcohol and drug abuse, and psychosocial dysfunction.’’ There is also a code for a multiple family group, described as ‘‘therapy sessions for multiple families when similar dynamics are occurring due to a commonality of problems.’’ This code is rarely reimbursed, but is available for use under appropriate conditions. The group psychotherapy code is available for individuals being treated in a group session where ‘‘personal and group dynamics are discussed and explored in a therapeutic setting when similar dynamics are occurring due to a commonality of group problems.’’ Family and group psychotherapy codes do not have a time or location component. They are billed in 15 minute units. Family psychotherapy codes are differentiated based on whether or not the patient is present. Keep in mind that Medicare typically

Billing, Coding, and Documentation

121

does not reimburse for services provided without the patient present. The family and group CPT codes are as follows: 90846 – Family Psychotherapy without patient present 90847 – Family Psychotherapy with patient present 90849 – Multi-Family Group Psychotherapy 90853 – Group Psychotherapy 90857 – Group Psychotherapy – interactive To close out this section, the following additional codes are presented despite being less commonly used. Medicare and other payors may or may not recognize these as reimbursable codes, but they may serve for documentation for private pay, forensic, or other settings. In institutional settings these codes may be useful in documenting productive time despite reimbursement limitations. 90875 & 90876 – Psychophysiological Therapy including Biofeedback 90880 – Hypnotherapy 90882 – Environmental intervention for medical management purposes on a psychiatric patient’s behalf with agencies, employers, or institutions 90887 – Interpretation or explanation of results of psychiatric, other medical examinations and procedures, or other accumulated data to family or other responsible persons, or advising them how to assist patient (no patient present) 90889 – Preparation of report of patient’s psychiatric status, history, treatment, or progress (other than for legal or consultative purposes) for other physicians, agencies, or insurance carriers 90899 – Unlisted psychiatric service or procedure 99366 – Medical team conference with interdisciplinary team of healthcare professionals, face-to-face with patient and/or family, 30 minutes or more, participation by nonphysician qualified healthcare professional – newly added in 2008 99368 – Same as 99366 except that the patient is not present Health and Behavior Assessment and Intervention Codes The focus of the intervention codes described thus far has been on patients with mental health (psychiatric) diagnoses. In 2002, new CPT codes were added that focus on acute or chronic medical illness rather than mental health 122

The Business of Neuropsychology

disorders. This matches the biopsychosocial understanding of health and allows psychologists to provide services for medical patients without having to make a psychiatric diagnosis. The purpose of the codes is to assess and manage medical issues such as adherence to medical treatment, symptom management, promotion of health-enhancing behaviors, reducing healthrelated risk taking behaviors, and coping and adjustment to physical illness or injury. The rationale for these new codes was to reflect a more accurate, refined way of billing for services provided to patients with a physical health diagnosis. The purpose of treatment for a health and behavior code is the alleviation or mitigation of a medical condition. It is not for prevention, personal growth, or in response to a legal question. It is not uncommon for a medical patient to have a co-morbid psychiatric condition, and if the patient is being treated for a psychiatric problem and a medical problem at the same time, the psychiatric code (90801–90899) and health and behavior code cannot be used on the same patient for the same date of service. If both psychiatric services and health and behavior services are required on the same date, report the principle service being provided as determined by the primary reason the patient is being seen. Table 6.1, adapted from Casciani (2004) simplifies the distinction between health and behavior interventions and traditional psychotherapy and can be used as a guide to determine the appropriate CPT code to use. The health and behavior codes include both assessment and intervention services. It is important to remember that unlike the psychotherapy codes, they do not have specific time parameters associated with each code. Instead,

Table 6.1 Differentiating Health and Behavior and Psychotherapy Codes PSYCHOTHERAPY Diagnosis

Mental illness (use DSM-IV)

Primary Focus Goal

Insight and/or behavior change Alleviate emotional pain or maladaptive behavior Emphasis on privacy & confidentiality

Context

H&B Physical illness/injury (use ICD-9) Education and/or behavior change Improve health & well being Emphasize collaboration with medical team & family

Adapted from Casciani (2004).

Billing, Coding, and Documentation

123

health and behavior services are billed in 15 minute increments of face-to-face time for all of the available codes. The health and behavior CPT codes descriptions are as follows: Assessment 96150: Initial Health and Behavior Assessment The initial assessment of the patient to determine the biological, psychological, and social factors affecting the patient’s physical health and any treatment problems. 96151: Health and Behavior Re-Assessment A re-assessment of the patient to evaluate the patient’s condition and determine the need for further treatment. A re-assessment may be performed by a clinician other than the one who conducted the patient’s initial assessment. Intervention 96152: Individual Health and Behavior Intervention The intervention service provided to an individual to modify the psychological, behavioral, cognitive, and social factors affecting the patient’s physical health and well being. Examples include increasing the patient’s awareness about his or her disease and using cognitive and behavioral approaches to initiate physicianprescribed diet and exercise regimens. 96153: Group Health and Behavior Intervention The intervention service provided to a group. An example is a smoking cessation program that includes educational information, cognitive-behavioral treatment and social support. Group sessions typically last for 90 minutes and involve 8 to 10 patients. 96154: Family Health and Behavior Intervention with Patient Present The intervention service provided to a family with the patient present. A psychologist could use relaxation techniques with both a diabetic child and his or her parents to reduce the child’s fear of receiving injections and the parents’ tension when administering them. 96155: Family Health and Behavior Intervention without Patient Present The intervention service provided to a family without the patient. An example would be working with parents and siblings to shape the diabetic child’s behavior, such as praising successful diabetes management behaviors and ignoring disruptive tactics.

124

The Business of Neuropsychology

While the health and behavior codes have been a useful addition for psychologists and neuropsychologists working in medical settings, they are not without their problems. Over the years, there have been and continue to be some difficulties with payor misunderstanding of the codes and denying or requesting a mental health diagnosis since service is performed by a psychologist. Despite the efforts of the APA Practice Directorate, NAN PAIO, and other professional organizations, this has not yet been totally resolved. Additionally, intermediaries/carriers may interpret the language differentiating health and behavior from psychiatric codes as meaning that a professional cannot bill the health and behavior code if the patient has a current or any previous psychiatric diagnosis. Finally, there has been some clinician misunderstanding that the codes are billed in 15 minute increments of face-to-face time only and there is no allowance for additional information gathering and report writing. As with the other codes, the health and behavior codes are not for the exclusive use of psychologists. These codes are also open to nurse practitioners, clinical nurse specialists, licensed social workers, and some other clinicians. They are not for use by masters level counselors. Physicians do not use these codes because they typically would submit services under the medical evaluation and management codes.

Putting It All Together – CPT Procedures and ICD Diagnoses To submit ‘‘charges’’ for any of the CPT codes described above, the procedures are linked to a diagnosis. CMS and virtually all other payors use the International Classification of Diseases, Clinical Modification (ICD-9-CM) diagnostic coding system to classify diseases and a wide variety of signs, symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or disease. These conditions include medical as well as psychiatric diagnoses. The key for neuropsychologists is to make sure that they link the appropriate diagnostic codes with the CPT codes submitted for reimbursement. Simply put, medical procedures require medical diagnoses and mental health interventions require mental health diagnoses. However, things are not always as easy as they appear. Neuropsychology/Medical/Rehabilitation psychology assessment and intervention services typically involve patients with medical diagnoses. A variety of CPT codes are available for use to document these services, some of which are clearly for use with patients with medical diagnoses and some are clearly for use

Billing, Coding, and Documentation

125

with patients with psychiatric diagnoses. For example, the health and behavior codes are to be used exclusively for medical conditions and psychiatric intakes and psychotherapy codes are to be used exclusively for mental health conditions. Some codes are available for use with patients with either medical or psychiatric diagnoses. These codes fall in the 96xxx series, including the psychological testing and neuropsychological evaluation codes. As of 2006, these codes could be used for the assessment of medical patients without there being a diagnostic code mismatch. This is an important (and potentially valuable) distinction that allows for use of the psychological testing codes for presurgical evaluations for bariatric surgery, spinal cord stimulator placements, or organ transplants; initial evaluations for chronic pain conditions; or other medical referrals. In determining the proper CPT and diagnostic code to use, it is important to consider the services provided as well as the condition being treated. As noted previously, it is possible that a patient will have both medical and psychiatric diagnoses and the professional will need to identify the principal service being provided and the associated diagnostic group to determine the appropriate codes to assign. Using multiple diagnoses can be useful, but understand that the ‘‘first diagnosis listed’’ has taken the place of ‘‘primary diagnosis.’’ For most payors this first diagnosis will serve as the basis for CPT/ diagnosis determinations. Also, in some circumstances, adding a psychiatric diagnosis as a secondary to a medical condition may result in mismatch issues for some CPT codes and may result in a charge being transferred to a behavioral health carve-out rather than paid through medical benefits. This can result in a reduction in reimbursement or a denial depending on the service and the payor. Finally, it is important to note that CMS and third party payors typically have limited accepted diagnostic codes for given procedures and knowing their diagnostic ‘‘formulary’’ can save time, energy, stress, and money as appropriate reimbursement is sought.

Documentation Once the CPT and diagnostic code groupings are mastered, the real work begins. According to the Office of the Inspector General investigating Medicare fraud, two of the primary problems encountered during audits are inappropriate/incomplete documentation and failure to document medical necessity. It is possible to address both of these issues simultaneously by developing a clinical documentation system that automatically and consistently incorporates appropriate documentation for the various CPT codes and 126

The Business of Neuropsychology

related medical necessity. Several computerized documentation systems are available and while helpful, a provider does not have to use such programs to have appropriate and consistent documentation. The key is to develop a consistent structure for all documentation that includes the required information. Templated notes can be developed for the CPT codes that are typical for any given practice or department, and once finalized this will result in more accurate as well as efficient documentation. Information and guidelines for appropriate documentation are available through a variety of sources including Web sites of local carriers and third party payors. In particular, local carriers list many of their documentation requirements under the ‘‘audit’’ sections of their Web sites. Antonio Puente provides an excellent general overview of documentation guidelines every year as part of his Billing and Coding Update presentations at the National Academy of Neuropsychology annual meeting (Puente, 2008). The information presented in this chapter includes some of his summations for ease of reading, consistency, and completeness. For his detailed presentation, the reader is encouraged to download his most recent presentation from the NAN website. Additionally, it is important to remember that these are general guidelines and local carriers and other payors may have some variations that will need to be explored. Before good clinical documentation can be achieved, there must first be a broader understanding of the reason services are documented. While discussions focus on the need to submit claims and receive payment, there are other reasons for documentation. These follow a logical progression, including determining medical necessity for services; maintaining records of a patient’s evaluation results, plan of care, and progress in treatment; and documenting the outcome of the services provided. When the bigger picture of documentation is considered, good documentation may not seem so tedious. Still, there is a need to consider claims review and reimbursement in terms of how documentation is completed and what information is included. There are some general principles that apply to all documentation, including the rationale for service, the procedure provided, the results or progress since previous contact, an impression and/or diagnosis, a plan of care or case disposition, and time (if applicable). One of the most important pieces to the documentation puzzle is the ‘‘rationale for service,’’ which includes documentation of medical necessity. According to various CMS documents, medical necessity is defined as ‘‘services which are reasonable and necessary for the diagnosis and treatment of illness Billing, Coding, and Documentation

127

or injury or to improve the functioning of a malformed body member.’’ Services or supplies are considered medically necessary if they:

• Are proper and needed for the diagnosis or treatment of the patient’s medical condition; • Are furnished for the diagnosis, direct care, and treatment of the patient’s medical condition; • Meet the standards of good medical practice; and • Are not mainly for the convenience of the patient, provider, or supplier. Keeping these guidelines in mind as you document the reason a patient is receiving services and when documenting outcomes, sets the stage for quality documentation. Additionally, it is important to note that for every service billed, the specific sign, symptom, or complaint necessitating the service must be listed. The structure, layout, and style of a professional’s documentation are not as important as the content of the information. Some basic information is required across all codes whether they are assessment or intervention-based. These include:

• Identifying Information • Date(s) of Service • Time, if applicable (total time or actual time - to be discussed • • • • • • •

further) Identity of Observer (professional, technician, or other provider) Reason for Service (including medical necessity) Status Procedure(s) Results/Findings Impression/Diagnosis Plan for Care/Disposition

This structure serves as the basis for all notes regardless of the CPT code being used. The patient’s primary complaints as they relate to the presenting illness are documented in terms of description of the symptoms present, the frequency and intensity, context of the complaints, modifying variables, and 128

The Business of Neuropsychology

other associated signs. It is best to present these in the context of medical necessity for services. Across contacts it is important to document any changes in the illness/condition as well as adherence to treatment recommendations. For assessment/evaluation documentation, the same parameters are used with some additional specifics. The following is a guide for assessment documentation:

• • • • • • • • •

Identifying Information Reason for Service (including medical necessity) Date(s) of Service Time (amount of service time - total versus actual time) Identity of Tester (professional, technician, other) Tests and Protocols (include names and editions) Narrative of Results Impression(s) or Diagnosis(es) Disposition or Plan of Care

With the change in psychological and neuropsychological testing codes some additional aspects of documentation need to be considered. If more than one CPT code is used for an evaluation, each code should generate a separate report or at least a separate section that is appropriately and clearly labeled. For the technician component (96119; 96102), the technician’s name is included along with the tests administered and the time for the face-to-face testing time. For the professional component (96118; 96101; 96116), appropriate labels should be used for the various sections including obtained history (record review, interview, etc.), behavioral observations and mental status exam, tests completed by the professional, integration of findings, interpretation, and impressions/diagnosis. Again time is included based on the total time for the professional’s activities. Documentation for interventions is somewhat clearer as there is typically a single code for a single service. Still, appropriate documentation is necessary. Intervention documentation typically includes:

• • • •

Identifying Information Reason for Service (including medical necessity) Date of Service Time (typically face-to-face time; again total versus actual discussed later)

Billing, Coding, and Documentation

129

• • • • •

Status of Patient/Changes Since Previous Intervention Intervention Performed Results Obtained Impression(s) or Diagnosis(es) Disposition/Plan of Care

If a computerized template is used for intervention documentation, it is easy to pull the most recent therapy note and use it as a basis for the current note. This allows a clinician to easily see the patient’s previous status in comparison to the current status and make appropriate documentation easier and more time efficient. Briefly, the issue of time is increasingly becoming a topic of conversation in discussions of documentation activities. Generally speaking, time is measured by face-to-face contact for purposes of intervention (and health and behavior assessment/re-assessment) and most intervention codes are time pre-determined or billed in 15 increments of actual face-to-face time. For assessment purposes, time is less well-defined. While the technician codes are specific in terms of time being the actual face-to-face time with the patient, the professional codes can include time spent before, during, and after the actual face-to-face assessment. As a result, it is helpful to develop a time-monitoring form to document the provider, date(s) of service, service provided, and the start and stop times of each activity. This will allow for more accurate reporting of actual time and will provide supporting documentation if questions arise. There will likely be an increased emphasis on the documentation of time in the future, which could possibly mean the final report will include exact start and stop times of all activities, as well as a date and time for the signature on the final documentation. Complete and appropriate documentation does not have to be lengthy or cumbersome; concise documentation can be achieved using this information as a guide. Consider using a multi-level system as previously described in Chapter 4 where there are routing sheets for monitoring time (including dates and start/stop times) of technicians and professional services, separate chart areas for test protocols and time tracking information, and a distinct area for the final report (medical record). Additionally, specific templates for each CPT code ensures consistency in terms of the ‘‘types’’ of information included. These can be designed in a manner that allows for individual differences amongst clinicians within a practice or department while maintaining consistent documentation. Using a secured system or network drive allows for a word processing version of a back-up computerized medical 130

The Business of Neuropsychology

record with this type of documentation. Similar documents can be created that can be completed via handwritten entries, but typed documentation is preferred by most payors. Finally, these documents can be formatted in such a way as to also serve as marketing tools, with departmental/practice logos and contact information included as a letterhead. Once the documentation process is established, departmental audits can be completed through peer review to insure that appropriate documentation is maintained. Examples of templated documentation, time monitoring forms, and billing encounter forms are available on the Web site associated with this text.

References, Resources, and Suggested Readings American Medical Association (2008). CPT 2009: Standard edition. Chicago, IL: American Medical Association. American Medical Association (2008). CPT assistant. Chicago, IL: American Medical Association. American Medical Association (2008). CPT handbook for office-based coding: AMA and CMS perspectives. Chicago, IL: American Medical Association. American Medical Association. CPT process: How a code becomes a code. Chicago, IL: American Medical Association. Available online at www.amaassn.org/ama/pub/category/3882.html. American Psychological Association Practice Directorate (2009). Do these coding book changes for 2008 affect your practice? Washington, DC: American Psychological Association. Available online at www.apa.org/about/division/ dialogue/nd07practice.html. American Psychological Association (2007). Record keeping guidelines. American Psychologist, 62, 993-1004. Available online at www.apa.org/ practice/recordkeeping.pdf. American Psychological Association Practice Organization (October, 2006). New Medicare billing rules for testing services: Information alert. Washington, DC: American Psychological Association. Available online at www.apapractice. org/apo/in_the_news/new_medicare_billing.GenericArticle.Single. articleLink.GenericArticle.Single.file.tmp/New%20Medicare%20Rules% 20for%20Testing%20Services%202006.pdf. American Psychological Association (2000). Medicare handbook: A guide for psychologists. Washington, D.C: APA Available online at www.apa.org/ practice/medtoc.html. Billing, Coding, and Documentation

131

Barnett, J. (1999). Documentation: Can you have too much of a good thing? (Or too little?) Psychotherapy Bulletin, 34, 19–21. Blount, L. L. & Udell, C. J. (1998). Mastering the reimbursement process. Chicago, IL: American Medical Association. Busis, N. A. (Spring, 2007). CPT coding of procedures including new and changed codes for 2007. In The Official Newsletter of the Clinical Neurophysiology Section, 13, American Academy of Neurology. Available online at www.aan.com/globals/axon/assets/2847.pdf Casciani, J. M. (October, 2004). How health and behavior services differ from traditional psychotherapy. Monitor on Psychology, 35, p. 59. Centers for Disease Control and Prevention (2005). ICD-9-CM official guidelines for coding and reporting. Available online at www.cdc.gov/nchs/data/ icd9/icdguide.pdf. Centers for Medicare & Medicaid Services. (February, 2008). CMS Manual System Transmittal 85. Subject: Psychological and Neuropsychological Tests. Available online at www.cms.hhs.gov/Transmittals/downloads/ R85BP.pdf. Centers for Medicare & Medicaid Services. (October, 2008). Medicare physician guide: A resource for residents, practicing physicians, and other health care professionals. Available online at www.cms.hhs.gov/MLNProducts/ downloads/physicianguide.pdf. Centers for Medicare & Medicaid Services. (2008). CMS Frequently asked questions numbers 9176–9183 (FAQ for Neuropsychological and Psychological Testing Codes. Available online at https://questions.cms.hhs. gov/cgi-bin/cmshhs.cfg/php/enduser/print_alp.php? faq_array=9177,9179,9176,9180,9181,9182,9183,9178. Fulero, S. M., & Wilbert, J. R. (1988). Record-keeping practices of clinical and counseling psychologists: A survey of practitioners. Professional Psychology: Research & Practice, 19, 658–660. Harrington P. S. (1997), What you need to know about 1997 Medicare payment changes. Medical Economics February 10, pp 69–72. Kessler, R. (2008). Integration of care is about money too: The health and behavior codes as an element of a new financial paradigm. Families, Systems, & Health, 27, 207–216. Kessler, R. & Stafford, D. (2008). Collaborative medicine case studies: Evidence in practice. New York: Springer.

132

The Business of Neuropsychology

Mirkin, D. P., Piacentini, K. K., & Pyenson, B. (2000). Getting paid in the managed care workplace: The basics of physician compensation. Hospital Physician, 69–79. Moline, M. E., Williams, G. T., & Austin, K. M. (1998). Documenting psychotherapy: Essentials for mental health practitioners. Thousand Oaks, CA: Sage. Peek, C. J. (2008). Planning care in the clinical, operational, and financial worlds. In Kessler & Stafford (Eds.) Collaborative Medicine Case Studies: Evidence in Practice. New York: Springer. Puente, A. E. (2008). Coding, documenting & billing clinical psychological services. Presented at the Division of Independent Professional Practice North Carolina Psychological Association. Available online through the NAN PAOI webpage – www.nanonline.org/paio. Soisson, E. L., VandeCreek, L., & Knapp, S. (1987). Thorough record keeping: A good defense in a litigious era. Professional Psychology: Research and Practice, 18, 498–502. Additional Resources Consult the Federal Register for ongoing updates – www.gpoaccess.gov/fr/ Regular review of regional Medicare carrier/intermediary websites National Correct Coding Initiative – www.cms.hhs.gov/NationalCorrectCodInitEd. The Medicare Learning Network (MLN) is the brand name for official CMS educational products and information for Medicare fee-for-service providers. For additional information visit the Medicare Learning Network’s on the CMS website at www.cms.hhs.gov/MLNGenInfo. Searchable CPT manual available free of charge on line from AMA at https:// catalog.ama-assn.org/Catalog/cpt/cpt_search.jsp.

Billing, Coding, and Documentation

133

This page intentionally left blank

7 &&& Show Me the Money! ‘‘Money matters are treated by civilized people in the same way as sexual matters – with the same inconsistency, prudishness and hypocrisy.’’ Freud (1913/1958, p. 131) Even the most altruistic clinician who became a psychologist or neuropsychologist to ‘‘help people’’ reaches a point where he or she realizes that in order to keep the doors open to help those in need, there must be some financial inflow. Peek (2008) describes the clinical, operational, and financial facets of healthcare as being in collaboration to create a successful healthcare system. He states that for long-term success, healthcare organizations must succeed in all three of these areas. Great outcomes for a particular patient require not only clinical quality, but also operational excellence and good resource stewardship. The previous chapters of this text outlined the system/organization aspects of neuropsychological practice with an emphasis on setting up a stable, consistent, and predictable office system that guides the entire process of seeing patients and results in appropriate billing and coding activities. The aim of the current chapter is to translate these activities into payment and to look at the financial repercussions of neuropsychological practice. As much as we may enjoy providing beneficial clinical services to patients, there is a need to charge for these activities and receive payment for the services rendered. Of course, there is a need to cover the cost of providing the service, but also there is a goal to make a profit and stay in business. There are other reasons to be financially successful in the practice of neuropsychology, including allowance for improvements in the quality of care; 135

reducing the risks inherent in clinical practice; establishing a value in the marketplace for the service; meeting an institutions definition of value for a department; and ultimately, survival of the department or practice.

Medicare as a Model for Reimbursement For the purposes of this chapter, reimbursement issues are discussed using Medicare as the model for payment. While neuropsychologists interact with a variety of payment sources, Medicare is the best model for a general discussion of billing and reimbursement for a variety of reasons. Medicare essentially functions as the standard for universal healthcare. Most payors follow the same system of coding and valuation developed through Medicare as their basis for payment. As noted in the previous chapter, Medicare provides guidelines for documentation and auditing of services for medical necessity and appropriateness. As a result, Medicare policies and procedures reflect the general trends in billing and reimbursement for most payors within the healthcare system, as well as workers compensation, forensic applications, contractually based healthcare, and even private pay. To further demonstrate the basis of Medicare in setting healthcare policy and payment procedures, The Henry J. Kaiser Family Foundation (2007) reported that in 2006, Medicare benefit payments totaled $374 billion, accounting for 13 percent of federal spending. According to the Congressional Budget Office, that figure is projected to increase to $564 billion by 2012. It is estimated that by 2015, Medicare will represent approximately 50% of all healthcare payments in the United States. As can be noted in current political promises and news coverage, it does appear that at some point in the not-so-distant future, some form of a national health insurance system will be established in the United States. A precursor to this is seen in the expansion of the State Childrens Health Insurance Program (SCHIP) through the passage of the Childrens Health Insurance Reauthorization Act of 2009, expanding the provision of healthcare for children (and others). As healthcare costs and demands continue to rise, steps will be taken to maximize coverage while reducing costs as much as possible. Ultimately, Medicare, or some other federal healthcare program, will come to be an even more predominate force in setting the standard for all of healthcare. It is increasingly important to develop and maintain a good understanding of Medicare policies and procedures, including those related to billing and reimbursement. 136

The Business of Neuropsychology

For a detailed description of Medicare services, the reader is encouraged to download and read Medicare Physician Guide: A Resource for Residents, Practicing Physicians, and Other Health Care Professionals, available online from CMS. This publication provides a detailed overview of the Medicare system, including how to become a provider, eligibility requirements for benefits, how to become a Medicare provider, Medicares approach to payment, documentation guidelines, an overview of the Medicare trust fund, and how overpays and appeals are managed. This publication serves as the primary source of the information provided in this chapter with additional information obtained from the various CMS postings and publications and other resources listed in the reference section of this chapter.

Medicare’s Benefit Structure Medicare benefits are divided into four areas, or ‘‘parts,’’ that vary in terms of coverage and qualifications for beneficiaries: Parts A, B, C, and D. Medicare Part A is described as ‘‘hospital insurance.’’ This benefit helps pay for medically necessary inpatient hospital care, inpatient skilled nursing care following a covered hospital stay, some home healthcare, and hospice care. This benefit is funded by payroll taxes through the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act, as well as through the Railroad Retirement Act. The federal government contracts with private insurance companies called ‘‘intermediaries’’ to administer the Medicare Part A program. Medicare Part B is medical insurance for Medicare beneficiaries. This helps pay for medically necessary physician/non-physician services, ambulance services, durable medical equipment, clinical labs and other diagnostic services, and services furnished by non-physician practitioners with limited licensing. These benefits are funded by monthly premiums paid by beneficiaries (typically deducted from beneficiaries monthly Social Security checks), contributions from general federal government revenues, and interest earned on the Medicare Trust Fund. The federal government contracts with private insurance companies called ‘‘carriers’’ to administer the Part B program. Medicare Part C, also called Medicare Advantage (MA), is a program in which organizations that contract with CMS provide, or arrange for the provision of, healthcare services to Medicare beneficiaries entitled to Part A and enrolled in Part B, permanently reside in the service area of the MA Plan, and elect to enroll in an MA Plan. Medicare Advantage beneficiaries choose to enroll in an HMO or PPO option for management of their healthcare services. Show Me the Money!

137

Medicare pays a fixed capitated rate to the HMO provider and in turn, the MA organization then reimburses providers and suppliers who participate in the MA Plan(s) offered by the MA organization for services furnished within the terms of the agreement/plan. For providers, services are not billed through Medicare directly. Arrangements are made through the MA organization and payment rates are determined through contracts with these organizations. Medicare Part D refers to the prescription drug benefit plan within Medicare and will not be covered here due to its lack of applicability to neuropsychology practice. As previously mentioned, Medicare Part A and Part B benefits are managed through local area ‘‘intermediaries’’ and ‘‘carriers,’’ respectively. The Medicare Advantage (Part C) benefits are managed through the contracted HMO or PPO organization. There are over 40 provider service areas and multiple organizations are involved in the management of these benefits. As a result, policies, procedures, and interpretations are quite variable across the different regional and local areas. The local organizations interpret and refine the national Medicare policy and set policies relative to their regional or local direction. These interpretations and decisions set the precedent for payment and other activities within that region. They tend to be more restrictive than the national policy and actually over-ride the national policy. Changes are made frequently, oftentimes without warning, notification, or publicity. The guidelines and updates for the regional organizations are available on their respective Web sites, and it is important to become familiar with the nuances the regional intermediaries and carriers.

Provider-Based Status Facilities and organizations operated by a hospital, including remote locations and satellite facilities, operate under provider-based status. This means that they are a part of the hospital and are eligible to bill facility fees under Medicare Part A. For inpatient services, this is bundled into the Diagnosis-Related Group (DRG) payment. For outpatient services, payments are paid through the Outpatient Prospective Payment System (OPPS) and are essentially payments to the hospital for use of the facility for these services. The provider-based billing and payments serve as a safety net for hospitals, allowing them to maintain services that are necessary for the public, but are not revenue-producing (e.g., ER, OB/GYN, charity care, etc). It also allows for payment to the facilities themselves in outpatient settings where the professional billing alone does not capture all of the ‘ services’’ provided (e.g., outpatient surgery, radiological 138

The Business of Neuropsychology

procedures, laboratory services). This OPPS can have an impact on the viability of a neuropsychology service within a hospital setting. As described in Chapter 1, neuropsychologists can work in hospital-based settings under one of three models:

• Hospital-employed psychologist • Consultant to hospital – an independent practitioner through a private practice or as a member of a physicians group directly or indirectly linked to the hospital/facility, but seeing patients in the hospital facilities • Independent psychologist – distinct from the hospital/facility The hospital-employed psychologist is considered provider-based, as he or she is a direct employee of the hospital. As such, the psychologist bills for a professional component for clinical services to Medicare Part B (using the psychologists Medicare provider number) on a CMS 1500 form. The hospital subsequently can bill a technical/facility component for the services to Medicare Part A using the UB-92 or the new UB-04 form. Similarly, the neuropsychologist working as a consultant to hospital bills the professional component to Medicare Part B using his or her Medicare provider number and billing through their external practice group (separate tax ID number). For outpatient services, the hospital can bill for the technical/facility component to Medicare Part A provided that the hospital provides room, staff, and/or materials. This is similar to how services are billed for outpatient surgery or radiological exams. If the neuropsychologist is renting space from the hospital, the hospital is not eligible to receive facility payments since the services are not technically occurring under the hospitals geographic location. Neuropsychologists practicing independently, providing their own office space, staff, materials, etc., bill both the professional and technical component (‘‘global’’ or ‘ bundled’’) at non-provider based rates on CMS 1500. These differential rates are presented later in this chapter.

Medicare’s Approach to Payment Medicare payments are determined by the assigned Relative Value Unit (RVU) for the service. The RVU is made up of three components of professional resource cost:

• Professional Work: Mental effort/judgment, technical skill, physical effort, psychological stress (52% of the RVU) Show Me the Money!

139

• Practice/Overhead Expense: Staff salaries, supplies, equipment, rent (44% of the RVU) • Malpractice Expense: Cost of liability insurance per service (4% of the RVU) Added together, the components comprise the total RVU for the service. Within 5-10 years, another major component will be added based on performance, where a component of payment will be based on outcome, not just the service provided. The RVU is not just used for Medicare reimbursement, but also serves as the basis for Medicaid, private payors, managed care, and other third party payors. To provide some perspective, the average work RVU is 1.00. Prior to 2005, psychological testing and neuropsychological testing had a work RVU of 0.00 or no work value. RVUs were re-calculated for 2005 and the work value for codes used in psychology and neuropsychology were significantly increased. The current (2008) outpatient RVUs for psychological testing (96101) and neuropsychological testing (96118) are 2.56 and 3.43 respectively. This is important because the RVU is a primary value in the payment formula used by Medicare. While increased, these values still fall well below many physicianbased services. Table 7.1 provides RVUs for select CPT codes commonly used in neuropsychology. Translation to Payment Medicare-allowed payment amounts are found in the Medicare Physician Fee Schedule (MPFS) that is updated annually based on a specified formula. The formula consists of multiplying the service RVU by a geographic cost index (adjustment factor based on geographic location) and the RVU conversion factor (a dollar amount set by Congress annually to convert RVUs to payment amounts). The product of these values provides the level of payment. However, since 2007 this final figure is ‘‘modified’’ by a Budget Neutrality Adjustor to adjust payments to meet budget requirements. Current MPFS values for individual CPT codes by region are available at https://catalog.amaassn.org/Catalog/cpt/cpt_search.jsp. The calculation of provider-based facility fees is slightly more complex. Under Medicares hospital outpatient prospective payment system (OPPS), facility fee reimbursement to hospitals for outpatient services are paid through Ambulatory Payment Classifications (APC). The APC reimbursement formula has three components: geographic adjustment, adjustment 140

The Business of Neuropsychology

Table 7.1 RVUs for Select CPT Codes Commonly Used in Neuropsychology WORK PRAC/ PRACTICE/ MALPRACTICE NONPB PB PB TOTAL NONPB TOTAL RVU RVU

96101 PT-Psych.

1.86

.50

.48

.05

.50

.88

.13

.01

1.86

1.11

.48

.18

3.15

2.52

96119 NP-Tech

.55

1.27

.14

.18

2.00

.87

96120 NP-Comp

.51

1.21

.13

.02

1.27

.66

96116 1.86 Neurobehav Status

.68

.52

.18

2.72

2.56

90801 Psychiatric Interview

2.80

1.33

.76

.06

4.19

3.62

96150 Initial

.50

.14

.13

.01

.65

.64

96152 Individual

.46

.13

.12

.01

.60

.59

90806 45-50 Opt

1.86

.61

.46

.04

2.51

2.36

90847 Fam w pt

2.21

.78

.63

.05

3.04

2.89

96102 PT-Tech 96118 NP-Psych.

2.41 1.39

2.39 .64

for complexity of service, and policy adjustments for qualifying hospitals. Typically, only the first two components are needed for the calculation since the third applies to rural or other qualifying adjustments. These components are then calculated using the national APC conversion factor (CF – a dollar amount set by Congress annually) for outpatient facility Show Me the Money!

141

reimbursement. The formula for calculating associated facility payments is as follows: ½ðCF  60%Þ  Geo Wage Index þ ðCF  40%Þ  Relative Weight for each CPT ¼ Wage adjusted APC Payment For demonstration purposes, Table 7.2 provides MPFS-allowable amounts for select CPT codes commonly used in neuropsychology, including provider and non-provider based values and associated facility payments. The values presented are estimates for 2008 for the Boston Metropolitan area along with non-geographic corrected provider based facility fees. It is important to note that Medicare has an Outpatient Mental Health Limitation where mental health services provided in outpatient settings are subject to a 62.5% limitation. This applies to claims for professional mental health treatment (not diagnostic) services by physicians, clinical psychologists, social workers, and other providers. This can be avoided by using the health and behavior intervention codes where appropriate as these codes are specifically for use with medical diagnoses and are not subject to this reduction in payment.

To Be or Not To Be Provider-Based On the surface, the values presented in Table 7.2 indicate that it is a relative nobrainer to bill both professional and facility charges when this is possible. Under the provider-based designation, hospitals have the ability to supplement professional fee reimbursement with facility fees. Provider-based professional fees are discounted by Medicare because it is recognized that the hospital is carrying practice expenses which are typically borne by individual providers in an officebased setting. The reduction in professional fees is commonly referred to as a site-of-service differential. In a provider-based environment, the hospital can bill a facility fee to offset costs attributable to services performed in the hospitals outpatient department. Typically, the aggregate reimbursement amount improves under a provider-based model because the reduction in professional fees is more than offset by the additional reimbursement associated with facility fees. The reimbursement advantage is shown in Table 7.2. However, the answer is not as simple as the numbers indicate. Essentially, two bills are generated for the service that is provided. The professional fees represent payment for the neuropsychologists professional time and effort. The facility fees represent payment to the hospital for the use of the institutions resources. It is 142

The Business of Neuropsychology

Table 7.2 MPFS Allowable Payments for Select CPT Codes Commonly Used in Neuropsychology

96101 PT-Psych. 96102 PT-Tech 96118 NP-Psych. 96119 NP-Tech 96120 NP-Comp 96116 Neurobehav Status 90801 Psychiatric Interview 96150 Initial 96152 Individual 90806 45-50 Opt 90847 Fam w pt

MEDICARE NPB PRO FEE

MEDICARE PB PRO FEE

MEDICARE TECHNICAL FEE

MEDICARE TOTAL NPB PYMT

MEDICARE TOTAL PB PYMT

$90.74 $61.48 $125.09 $87.62 $78.65 $103.62

$89.74 $24.04 $93.64 $31.20 $24.73 $95.63

$166.68 $166.68 $166.68 $166.68 $79.29 $166.68

$90.74 $61.48 $125.09 $87.62 $78.65 $103.62

$256.42 $190.72 $260.32 $197.88 $104.02 $262.31

$165.00

$136.55

$102.19

$165.00

$238.74

$24.53 $22.86 $95.93 $116.87

$24.04 $22.36 $88.44 $109.38

$19.92 $19.92 $102.19 $150.42

$24.53 $22.86 $95.93 $116.87

$43.96 $42.28 $190.63 $259.80

Values presented are estimates for 2008 for the Boston Metropolitan area along with non-geographic corrected provider based facility fees.

important to note that while the professional fees will be shown as revenue generation for the department, the facility fees may or may not be linked to the departmental budget because these are fees paid to the hospital, not to the provider. Not every hospital bills the facility fees associated with neuropsychological services, for a variety of reasons. Billing and departmental geographies must comply with requirements and this may mean a loss in hospital revenue for previously paid rent for space and an increase in utilization of hospital billing/ coding resources. This can be problematic given the increased billing complexity as two bills are generated for each service and the separate billing can be difficult to integrate. Provider-based billing also results in increased patient financial responsibility as the two bills generated for the service can lead to an increase in co-payments (co-pay for both the professional and technical component of the bill). This may result in patient dissatisfaction and a negative perception that the hospital is double-billing for services. Additionally, some payors do not pay the facility fee portion of the bill, further adding to the financial burden on the patient. As a result, providers and hospitals must explore this option carefully before adopting a provider-based billing model. However, when these charges are not billed, Medicare dollars are left on the table and given the tight budgets in most departments and hospitals, the additional dollars can significantly enhance the fiscal value of a department or service.

Putting the Financials Together Developing a Charge System The dollar values presented in Table 7.2 are based solely on Medicares ‘ reported’’ or ‘ allowable’’ reimbursement rates. This payment is quite variable across other payors, and can even be variable within the Medicare system when denials and reductions are factored in. Having an established RVU (or even precertification) does not guarantee reimbursement by Medicare or other insurance carriers. It is important to regularly review carrier Web sites to stay up to date on reimbursement policies. Suffice it to say, there is a difference between what you charge and what you receive. The question remains – where do you set the charge? There are some basic rules to follow when developing a charge system. First and foremost, one charge amount is assigned for each procedure. The established charges for a given procedure cannot vary among payors. Some payors will pay more than the established Medicare rates, but only if you charge more. Reimbursement levels are variable dependent upon payor (e.g., commercial insurance, managed care, workers compensation, forensic cases, independent 144

The Business of Neuropsychology

medical examinations), so the charge system should reflect the expected payor sources. It is important to note that providers cannot impose a limitation on a Medicare or Medicaid patient that is not imposed on other patients. However, noncovered services can be charged directly to the patient if the patient knows and agrees ahead of time. Providers can and should set charges at somewhat higher levels than Medicare so that appropriate reimbursement is received across payment sources. Charges should reflect the market value unless you can demonstrate expertise above and beyond your competitors (e.g., board certification, specialty experience, etc.). If you are only charging at Medicare rates, you are leaving legitimate dollars on the table. There are various formulas that are used in setting charges, but the common practice seems to be 1.5 to 3 times the Medicare MPFS allowable charges for each CPT, depending on geographic location and level of specialty. These rates may be higher on the coasts or in large metropolitan areas where costs are generally higher. Peck (2003) presents a model of a set hourly charge regardless of service provided. This figure is based on identifying the average hourly cost of doing business and adding an appropriate dollar amount to maintain a profit. Either method of setting charges is appropriate. It is important to note that fee schedules need to be updated annually in response to RVU changes, business costs, and market changes. Providers working in practices with a set ‘‘fee-for-service’’ system in place lack the noted variability described previously, but other factors are considered in setting charges. The idea behind the fee-for-service model is that you do not have to expend the time and resources filing insurance paperwork and chasing reimbursement. In this way the practice overhead is decreased. Additionally, the delay in payment is substantially reduced, making your financial books much easier to maintain, again reducing time and resource utilization. In essence, less time, energy, stress, and expense are encountered. This is a great benefit, but every benefit has a cost. Not all patients have the financial resources to pay out of pocket for services provided. While weekly psychotherapy costs can be relatively low, the cost of a comprehensive neuropsychological evaluation may be more than a patient is able to bear. Providers in a fee-for-service model may charge lower rates to maintain high enough volumes to make ends meet. Also, there may be a need to consider sliding scales in order to make the services available for patients who cannot afford the full cost of service. Finally, if a patient has some form of health insurance and they are doing their own filing, they are essentially increasing their own overhead cost and will expect some lower rates as a result. Show Me the Money!

145

In a hospital system, charges are typically set by the institution, but it is important to know how your services are being charged. These rates are not set in stone and with appropriate discussion and debate can be changed to better serve the departments fiscal needs. Additionally, reimbursement rates are often influenced by contracts between some payors and the institution. This can be a percentage of the set charges or may be specific to a CPT code or type of service. In some cases, neuropsychology services are included in the psychiatry or behavioral health contracts, resulting in decreased reimbursement and mental health carve-out issues for some carriers. It is important to know how these contracts and the set charges affect the department. Receivables and Financials Whether you set charges specific to each CPT code or use a flat hourly rate, net revenue is dependent on your charge structure and relative adjustments based on payor mix, negotiated rates, and the department/practice billing and coding efficiency. Reimbursement percentages are quite variable, but it is important to know your average reimbursement percentage to forecast future performance and for basic budgeting. Typically, an average reimbursement rate of 60% or higher is ideal, while 50% or less means trouble for the department/practice. Examining data will allow you to predict receivables and remain aware and in control of budget parameters. This may require increased communication with fiscal departments, accountants, or other players involved in the billing and receiving aspects of your department or practice. A variety of data is needed to predict revenues accurately, but these can be simplified to the parameters that are most influential. The key is to focus on variables where there is some level of control (managed care contracts are not likely to be under departmental control). Variables to be followed most closely are dependent on the practice and respective need. Some data points for consideration include:

• • • • • • • 146

Gross charges Net receivable per charge Number of visits CPT codes charged Units of service per CPT Units of service per visit Average charge per unit of service The Business of Neuropsychology

• Date of service to billing time • Lag days for accounts receivable  Including 30, 60, 90, and 120+ day periods

• Cancellation/No-Show rates This information is typically found on a variety of financial spreadsheets developed by departmental accounting staff or department/practice management in cooperation with accounting professionals. For providers who do not have assistance in the development of such spreadsheets, various accounting software packages are available, and for the Excel-savvy individuals, spreadsheets can easily be developed to calculate and track the data points listed above. Common financial tracking spreadsheets include departmental budget spreadsheets, profit and loss statements, cash flow spreadsheets, and financial projection plans. Perhaps the most useful and complete is the department/ practice dashboard. This document includes a summary of multiple data points for consideration and review that show the status of the practice for the specified period of time. Appendix A includes an example of a department dashboard. Additional sample financial spreadsheets are available on the Web site associated with this text. Influences to the Bottom Line Payor Mix One of the biggest influences to the financial security of a neuropsychology practice or department is the payor mix. The payor mix is simply the percentage of services provided based on the payor source. Ideally, a practice wants the highest percentage of patients seen to be associated with the payor source that has the highest reimbursement rates, but this is not always the case. Reimbursement amounts are quite variable and the financial bottom line will be heavily dependent upon the percentage of patients across the various payors. Knowing and controlling the payor mix where possible is essential in a successful practice. For more information about variability in reimbursement across payors, the reader is encouraged to review Moores (2006) article in Physicians Practice ranking the top payers in healthcare. It is a sobering, but necessary review of payments based on each companys financial performance, administrative performance, and medical policy compliance. Of note, according to this article, Medicare is now a better reimbursement source than some commercial payers. This is further demonstrated through Show Me the Money!

147

information available from www.athenapayerview.com, where the reimbursement rates and other indices of some of the top payers are compared. To combat the negative impact of payor mix on the financial bottom line, some providers have adjusted their schedules to limit the number of appointments available in a given week or month for patients with some of the lower reimbursement payers. For example, they may have blocked available appointments for Medicaid or charity patients only twice monthly. This may result in a longer wait list for these slots, but it allows the provider to continue to see these patients without putting the financial stability of the department or practice in jeopardy. Pre-Certification Process The precertification process is an important step in securing appropriate reimbursement from many payors. This process is not necessarily complicated, but the steps required for each organization must be followed as there really are no shortcuts to make the process any easier. Keeping notes about the steps and nuances of each organization can be useful in streamlining the process as much as possible and regular training of precertification staff is essential. While the specific steps for each organization can be quite varied, several factors can make the process easier, more time efficient, and in general more successful and consistent. First, it is important to make sure that preauthorization paperwork is completed in a timely manner and that the patient is seen within the required time parameters. Second, it is important that the obtained authorization reflects the service to be provided (CPT code) and the appropriate allowable amounts (units of service). If these are not correct, it is necessary to re-file or appeal the decision to obtain the correct authorization. It is almost a guarantee that if the preauthorization is incorrect, the payment will reflect only what is authorized. For neuropsychology services, it is also important to make sure that services are authorized under the medical component of the policy to maximize reimbursement potential. In some cases, negotiations will be required to keep the authorization on the medical side of the insurance. Some additional questions may need to be answered during the precertification process. First, it is important to know whether an initial interview/ neurobehavioral exam is required prior to the authorization process. If this is the case, the patient should be notified in advance so they do not expect all services to be completed on the initial date of service. Additionally, it is important that this initial contact be documented, as soon as possible, in a manner that fully demonstrates the medical necessity of the service in order to 148

The Business of Neuropsychology

expedite the approval process for the full evaluation. Second, it is important to learn any possible charge limits and patient co-pay obligations so that the patient can be notified in advance of any expected financial obligations. Additional information regarding the successful navigation of the precertification process is presented in Chapter 8. Collection of Co-Pays Co-pays are an obligation and part of the agreement between the insurance company and the beneficiary. In the same sense, providers are contractually required to bill for co-pays. Most patients with Medicare or insurance coverage have a primary care and a specialist co-pay amount. In medicine, primary care physicians typically require co-payment at the time of service and have this information posted in clear view in their waiting rooms. Specialists either collect co-payments at the time of service or may bill the patient later. This is due to the fact that some specialty care services often require only one copayment that covers the entire service, even if multiple contacts are required. Psychologists and neuropsychologists have a history of being reluctant to collect co-pays and co-insurance payments. It is important to remember that copays are not optional. It is the patients responsibility to pay their portion of the medical bill. Typically, co-payment amounts are listed on the patients insurance card, but if it is not printed there this information can be easily obtained by a phone call to the insurance company or via a visit to the carriers Web site. During the pre-authorization process for benefits you can easily obtain specialist co-pay information. It is a good practice to inform the patient of expected copays when the initial appointment is scheduled (particularly if this is done through a written scheduling letter) and during reminder calls. In this way the patient is well aware of the co-payment and is prepared to pay such at the time of service. The $25 co-pay may not seem much at the time of service, but for a small practice that serves up to ten patients a week, collecting the $25 co-pay every week will result in an additional $12,500.00 annually. Edward A. ‘‘Ted’’ Peck III (2009) provided a useful approach to managing the co-pay issue. This is summarized and modified to fit the purposes of this book as follows:

• Maintain a 3-ring binder, spreadsheet, or other list of the main patient referral insurance plans and variable contract lines (e. g., Aetna, Anthem, etc.) and know what the contractual co-pay is for each of these plans. Show Me the Money!

149

• Check each referral in advance of the appointment date by a

• •

•

•

designated office staff person so that (1) the insurance shows as valid for the patient and (2) it shows whether they have/have not met their deductible for the year. Inform each patient what their payment is to be at the time they are called to confirm the appointment. If they are not willing to pay the co-pay or deductible due then, the appointment is cancelled. Understand that most non-Medicare, non-forensic cases require two appointments in some offices. The first is for the interview and the second is the actual testing. Typically, a specific insurance preauthorization for the testing appointment is obtained between the 1st and 2nd appointments. If the patient does not pay the co-pay at the time of service, the patient may be seen for the first appointment service (e.g., the interview) and a bill is provided for that service that must be paid in advance before the second appointment is scheduled (e.g., testing appointment). If the test appointment date is scheduled and pending, but the co-pay is not received, the upcoming appointment is confirmed via a telephone contact and it is explained that the co-pay has not been received, per the a priori agreement, and the appointment will be postponed until this matter is cleared up. If the patient arrives and claims that they do not have a check/ credit card/debit card/cash to pay the co-pay, despite all of the prior notifications, they are given the option to call a family member or someone else to get the necessary credit card information. If this cannot be acquired, they are rescheduled.

Medicare also provides benefits under a co-pay/co-insurance agreement. Medicare pays 80% of the allowable fee for the initial diagnostic interview, psychological and neuropsychological testing, and health and behavior interventions. The provider is required to attempt to collect the remaining 20% from the patient, except in the case of indigent patients who are covered under statefunded Medicaid. In some instances, the patient has a private co-insurance policy that frequently covers the remaining costs. This is not recovered if it is not billed correctly. In addition, Medicare now allows the patient to be billed (not Medicare) for lost time/no shows. It is important to make certain that the Medicare announcement for this (as well as co-pays) is posted in the office. 150

The Business of Neuropsychology

No Pays/Zero-Pays There will be occasions when a claim receives either a denial or a ‘ zero payment.’’ The reasons for this reflect some level of ‘ shared liability’’ on the part of the provider and the insurance company. Denials often occur due to a lack of documentation of medical necessity or inappropriate billing/coding on the part of the clinician. However, patient denial rates also occur due to errors or interpretation problems on the part of the carrier. Martirosov (2006) and Delinsky (2006) provide rates of patient denials and zero payments. It is important to note that many of these denials and zero payments are appealable, but appropriate processes for appeal must be followed. The more information you have regarding the reasons for denial or reduced payment and its discrepancy with actual services/coding the better chance for payment resolution. Charity Care and Write-Offs If a patient is unable to pay charges, be it deductible, coinsurance, copayment, or fee-for-service full payment, a waiver that explains the financial hardship must be signed. If the waiver is not assigned, the medical/administrative record should reflect normal and reasonable attempts to collect the charges before they are written off. The same attempts to collect charges must be applied to both Medicare beneficiaries and non-Medicare beneficiaries. Consistently waiving deductibles, coinsurance, and co-payments may be interpreted as program abuse. On unassigned (non-waivered) claims, the beneficiary is responsible for unmet deductibles; applicable coinsurance and copayments; and charges for services and supplies that are not covered by Medicare. Administration Factors As threats to reimbursement are considered, it is easy to overlook the decisions made by administrators/managers regarding the billing/coding activities and reimbursement of a department or practice. It is important to be aware of who is actually doing the coding/submission and how accurately it reflects the services and diagnosis provided by the clinician. Claims may be submitted by the provider, a billing service or consultant, a hospital-based coding department, or other entity on behalf of the provider. No matter who is actually submitting the claim, the provider is responsible for any payments generated by these claims so it is important to ensure accuracy and consistency with clinical records. It is important to know how your claims are being filed and it is appropriate to ask questions about that persons knowledge base for nuances of psychological and neuropsychological billing. It is also important to know Show Me the Money!

151

how denials are handled. Some hospital-based providers are shocked to learn that some hospitals do not pursue payment on unpaid or denied claims below a certain dollar amount (e.g., $1,500 or $2,000). This is based on a costbenefit ratio regarding the cost to pursue versus what is ultimately received. Many neuropsychology claims fall under this set amount, thereby limiting pursuit of available dollars. Over the course of a year this ‘‘bad debt’’ can be detrimental to a department budget so it is important to know the policies surrounding claim denials and no-pays. Additional administrative threats to the bottom line involve managed care contracts and mental health carve-outs. Managed care contracts that are negotiated within a large system (hospital or similar organization) are negotiated for the greater good of the facility. The emphasis in these negotiations is on the larger payment items (e.g., surgery, maternity, etc.) with less discussion regarding smaller departments or service lines. As a result, psychology and neuropsychology portions of these contracts tend to be low priority during negotiations and thus may be simply signed off as part of the larger process. As such, neuropsychology services often get included in the general psychiatry/ behavioral health portion of the contracts, putting these providers at a significant disadvantage when it comes to maximizing reimbursement. This may include agreement that claims will be managed through a separate mental health benefit organization or ‘‘carve-out.’’ Many managed care or other private insurers (even Medicaid in some states) have mental health carve-outs or separate organizations that manage the claims of patients with mental health diagnoses. Neuropsychology claims are often automatically placed into these organizations due to the ‘‘psychologist’’ label. For some select carriers it is difficult, if not impossible, for psychologists to be paneled on the medical side of the insurance policy. Instead, separate ‘‘behavioral health plans’’ are used for management of all mental health or perceived mental health claims. When payments are made through the behavioral health component of a patients insurance, the ultimate reimbursement tends to be lower and the financial responsibility of the patient can be significantly higher. As a result, efforts to manage neuropsychological services through the medical side of the insurance organization provide better reimbursement and improved patient satisfaction. The key to managing the administrative/departmental threats to the bottom line is communication. It is vitally important to have open lines of communication with management and administration and to be aware of how the policies and procedures of the larger organization affect the individual department or 152

The Business of Neuropsychology

practice. Knowledge of departmental budget information, trends, forecasts, etc. found in the spreadsheets discussed previously allows for better communication based on facts and figures rather than impressions or emotions. Clinician Factors It is imperative that clinicians understand appropriate billing and coding processes and how they influence the financial bottom line of the department or practice. In the same manner that billing and coding activities need to reflect the correct code, time, and diagnosis, clinician documentation must also be accurate and in accordance with Medicare requirements. Documentation of time is critical to ensure that the service provided is fully captured and is consistent with the submitted claims. If the activity is billable it should be documented and the bill should be dropped. This should be built into department/practice policy and the office staff should not accept a bill without documentation or documentation without a bill. Regular training in billing, coding, and documentation activities for clinicians is recommended, especially when updates/changes in policies have occurred. This may also include reviewing quarterly financial reports so that clinicians see how their activities affect the overall financial numbers. Finally, scheduled audits for billing, coding, and documentation are recommended with a culture or expectation of ‘ constant compliance.’’ Use of Trainees and Students Contrary to the beliefs and practices of many practitioners in psychology and neuropsychology, including some with large training programs, Medicare has never reimbursed clinical services provided by students in training in any health discipline. This is documented in several CMS manual sections, but was documented specifically in the context of psychology services in Transmittal 85 (February, 2008), ‘‘Under the physician fee schedule, there is no payment for services performed by students or trainees. Accordingly, Medicare does not pay for services represented by CPT codes 96102 and 96119 when performed by a student or a trainee.’’ The basis for this is that CMS dollars are provided for Graduate Medical Education (GME) and additional reimbursement for services provided by trainees would be considered ‘‘double-dipping.’’ Psychology training programs have traditionally not received GME dollars, but in recent years some programs have applied for and received CMS reimbursement through the Allied Health training programs. The reader is encouraged to read the article by Stuckey, et al (2008) outlining steps to secure CMS funding for postdoctoral training in psychology. Show Me the Money!

153

For the purposes of CMS billing activities, a ‘‘trainee’’ is any provider in training at any level – practicum student, intern, post-doctoral resident, or even a licensed provider completing a re-specialization residency. This provision applies to Medicare billing and does not necessarily apply to other payors, but further investigation in this regard might be helpful to avoid difficulties. This does not preclude billing for a graduate student hired as a psychometrist, provided that he or she is not receiving training and the activity is not considered part of an educational program. Managing Threats to the Bottom Line While many threats to the financial security of a department/practice were presented, most of these are at least partly manageable through consistent and stable departmental processes or through improved communication. To summarize the recommendations embedded in the previous sections the following reminders are offered:

• Pre-certify whenever possible and do so with accurate • • • • • • • • • • •

information Collect all co-pays, co-insurance, and deductibles at the time of service Know your payor mix and control it as much as possible Get involved in managed care negotiations if possible Make friends with your finance, billing/coding, managed care players Be aware of how your billing is being coded/submitted Ask about denial rates and levels of reimbursement Ask to review the cost center documentation for errors Minimize clinician billing and documentation errors Document, Document, Document – in a timely manner Constant compliance – minimize variance Audits to insure accurate and consistent billing, coding, and documentation

Medicare Fraud and Audits Increasingly, Medicare is working to seek out and eliminate fraud and abuse regarding payments for healthcare services. While the brevity of this text limits a detailed discussion, it warrants mentioning, as psychology is identified as one of the problematic areas. Errors resulting in fraudulence are quite variable, 154

The Business of Neuropsychology

but areas that were noted to be ‘‘particularly problematic’’ in psychology by the Office of the Inspector General (OIG) included services that were:

• • • •

Medically unnecessary (23%) Billed incorrectly (41%) Rendered by unqualified providers (11%) Undocumented or poorly documented (65%)

The, processes laid out in this text should be helpful to avoid errors and risk of future audits. Additionally, it is helpful to become familiar with the updated information provided by Medicare and the OIG regarding fraud and abuse at the Web site listed in the reference section. Briefly, Medicare and the OIG provide the following suggestions to increase the probability of successful audits:

• • • • • • • • • •

Establish formal internal auditing system Engage in informal internal peer review Consider periodic external peer review Keep abreast of carrier changes Understanding of medical necessity Match procedure codes Match diagnostic & procedure codes Document properly If audited, comply (thoroughly & quickly) If trial, appreciate & appraise situation

Final Thoughts – Why Should You Care? Revenues are based on reimbursement, not on billed charges. Even the most productive clinician that is billing 40 hours per week with high charges or the department/practice that has a steady flow of patients coming through the door may be making little-to-nothing when it comes to reimbursement if the billing, coding, and documentation activities are not properly completed. Ultimately, reimbursement, not charges, determines the ‘ income’’ of a department or practice and its profitability. If it is profitable enough, there is greater room for increased salaries for employees and departmental/practice growth. If it is not profitable, then cutbacks or closure are necessary. Maximizing reimbursement potential is a key element in job/practice security and stability and increasing bargaining power in salary and other negotiations. So the simple answer to the question ‘ Why should you care?’’ is that your business, your job, and your salary depend on it. Show Me the Money!

155

Appendix 7.A – Department Financial Dashboard Example Indicator

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

FINANCIAL Charges P a y me n t s Contractuals Write offs Bad Debt Held in Edits

126,090 58,994 81,130 -2,536 7,735 16,875

191,715 52,563 75,014 9,491 6,726 13,661

138,330 54 , 4 0 6 90 , 8 3 3 2,155 6,322 3,744

178,518 63,788 98,482 10,988 8,787 7,709

189,744 56,581 109,931 25,068 8,474 9,451

157.02

147.47

142.90

158.68

167.47

600 203 0 0

700 600 0 0

550 418 0 0

715 405 0 5

65 0 440 0 43

Units of Service (CPT Code)

803

1,300

968

1,125

1,133

BILLING AND A/R Average Lag Days Date of Service to Entry Physician Office Hospital (I/P and O/P) Date of Service to Billing Physician Office Hospital (I/P and O/P)

20.0 12.5

51.5 7.4

23.8 5.1

13.3 7.1

26.3 7.2

18.5 17.0

55.3 9.0

26.2 6.0

17.2 8.3

27.9 13.8

109,175 70,524 117,988 30,409 26,286 354,382

171,918 40,936 61,058 85,962 42,810 402,684

1 33 , 1 1 3 75, 007 31 , 2 4 2 46,152 104,066 389,581

140,125 57,012 56,037 23,406 110,127 386,707

149,804 54,574 41,606 39,356 91,403 376,743

47.4

76.8

77.8

69.9

68.1

21.1% 29.1 % 22.7% 22.4% 2.1% 2. 6% 0.0%

15.2% 23.7% 28.0% 25.6% 3.6% 3.9% 0.1%

13.7% 21.6% 29.3% 25.0% 6.2% 3.0% 1.2%

18.5% 24.3% 19.5% 33 . 9 % 2.3% 1. 5 % 0.0%

13.8% 26.0% 27.0% 28.9% 0.8% 2. 4% 1.1%

Average Charge per Unit of Service ACTIVITY Volume Office Visits Inpatient Visits Procedures O t h er

Accounts Receivable Current Greater than 30 Days Greater than 60 Days Greater than 90 Days Greater than 120 Days Total AR Days in A/R Payor Mix (% of Gross Charges) Medic aid Medic are Managed Care Anthem Commercial Self Pay Other

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

F Y 2008

168,622 57,867 88,168 4,038 5,331 196

13 3 , 5 5 8 50,215 72,909 1,910 5,458 0

119,601 45,102 77,809 5,449 5,019 2,253

129,871 45,946 78,334 32,632 5,573 6,225

1 7 1 , 4 07 52 , 7 0 6 93,281 1,247 2,163 3,479

15 5 , 13 1 49 , 1 4 0 81,506 7,430 7,039 2, 05 6

1,702,587.00 587,307.69 947,395.13 97,873.03 68,625.75

161.67

157.87

185.14

170.43

189.19

1 81 . 8 7

163.95

550 493 0 0

40 0 446 0 0

346 300 0 0

400 362 0 0

500 406 0 0

300 553 0 0

5,711.00 4,626.00 0.00 48.00

1,043

84 6

646

762

906

853

10,385.00

6.8 21.3

12.1 5.5

31.5 18.0

14.3 4.9

12.5 7.4

16.0 5.2

21.6 4.6

12.2 5. 9

30.1 18.9

15.7 6.2

13.1 7. 3

15.9 6.3

129,446 63,035 47,375 36,974 113,169 389,998

11 8 , 1 5 8 58,574 47,518 38,101 132,770 395,121

98,926 53,126 41,762 36,475 153,657 383,946

100,773 45,686 40,747 32,406 132,296 351,909

13 9 , 11 7 42,913 36,723 27,993 1 2 7 , 59 3 374,339

1 3 2 , 40 5 63 , 9 6 2 31,340 29 , 9 4 3 12 7 , 9 6 9 3 8 5, 6 1 9

66.9

73.9

82.4

83.6

80.1

77.7

14.5% 21.1% 35.7% 22.9% 2.5% 3.2% 0.0%

11.6% 15.4% 27.1% 36.6% 4.3% 5.0% 0.0%

11.5% 27.0% 30.4% 16.9% 10.8% 3. 4% 0.0%

9.0% 27.7% 23.7% 30.8% 3.9% 4 . 9% 0.0%

9.3% 30.0% 22.2% 29.7% 4.9% 3.9% 0.0%

12.0% 26.6% 22.1% 28.0% 6.6% 3.9% 0.8%

Note 1 34.34% 16.59% 8.13% 7.76% 33.19%

13.7% 24.8% 26.1% 27.6% 4. 1 % 3. 4% 0.3%

References, Resources, and Suggested Readings American Medical Association (current). Searchable CPT manual with allowable Medicare payments according to the current MPFS available free of charge on line from AMA at https://catalog.ama-assn.org/Catalog/cpt/ cpt_search.jsp. Athena Health (2009). Payerview: Healthcare payer performance overview. Available online at www.athenapayerview.com. Borger, C., Smith, S., Truffer, C., Keehan, S., Sisko, A., Poisal, J. & Clemens, M. K. (2006). Health spending projections through 2015: Changes on the horizon. Health Affairs, 25, w61-w73. Published online 22 February 2006 available at http://content.healthaffairs.org/cgi/content/full/25/2/w61 Callahan, C. (2008). Billing reimbursement 2008 update. CE presentation made at the 10th Annual Rehabilitation Psychology Conference in Tucson, AZ. Centers for Medicare & Medicaid Services. (February, 2008). CMS Manual System Transmittal 85. Subject: Psychological and Neuropsychological Tests. Available online at www.cms.hhs.gov/Transmittals/downloads/R85BP.pdf. Centers for Medicare & Medicaid Services. (October, 2008). Medicare physician guide: A resource for residents, practicing physicians, and other health care professionals. Available online at www.cms.hhs.gov/MLNProducts/ downloads/physicianguide.pdf. Delinsky, J. (2006). Practice management lab: You call that a payment? Physicians Practice, Available online at www.physicianspractice.com/index/ fuseaction/articles.details/articleID/843.htm. Department of Health and Human Services Office of the Inspector General (current) – OIG Compliance Program Web site is available at www.oig.hhs. gov/fraud/complianceguidance.html. Department of Health and Human Services Office of Inspector General (2005). State Medicaid Fraud Control Units Annual Report: Fiscal years 2004 and 2005. Published online at http://oig.hhs.gov/publications/docs/mfcu/ MFCU%202004-5.pdf. Freud S. (1913). On beginning the treatment. In The Standard Edition of the Complete Psychological Works of Sigmund Freud, Vol 12, translated and edited by Strachey J. London, Hogarth Press, 1958, pp 123–144. The Henry J. Kaiser Family Foundation (March, 2007). Medicare: A primer. Published by the Henry J. Kaiser Foundation and available online at: http:// www.kff.org/medicare/upload/7615.pdf. 158

The Business of Neuropsychology

Martirosov, J. (2006). Verifying eligibility: How predetermining patient coverage can save you money and hassle. Physicians Practice, page 49-52. Available online at www.physicianspractice.com/index/fuseaction/articles. details/articleID/808.htm. MedPac (October, 2008). Outpatient hospital services payment system. Available online at http://www.medpac.gov/documents/ MedPAC_Payment_Basics_08_OPD.pdf. MedPac (October, 2008). Hospital acute inpatient services payment system. Available online at http://www.medpac.gov/documents/ MedPAC_Payment_Basics_08_hospital.pdf. Mirkin, D. P., Piacentini, K. K., & Pyenson, B. (2000). Getting paid in the managed care workplace: The basics of physician compensation. Hospital Physician, 69–79. Moore, P. (2006). The 2006 fee schedule survey: Power to the payers. Physicians Practice, available online at www.physicianspractice.com/index/ fuseaction/articles.details/articleID/933/page/1.htm. Peck, E. A. Business Aspects of Private Practice in Clinical Neuropsychology for 2009. Workshop Presented At AACN Meeting, San Diego, California, June 18, 2009. Peck, E. A. (2003). Business aspects of private practice in clinical neuropsychology. In Lamberty, Courtney, & Heilbronner (Eds.) The Practice of Neuropsychology. Exton, PA: Swets & Zeitlinger. Peek, C. J. (2008). Planning care in the clinical, operational, and financial worlds. In Kessler & Stafford (Eds.) Collaborative Medicine Case Studies: Evidence in Practice. New York: Springer. Stucky, K., Buterakos, J., Crystal, T., & Hanks, R. (2008). Acquiring CMS funding for an APA accredited postdoctoral Psychology Fellowship program. Training and Education in Professional Psychology, 2, 165–175.

Show Me the Money!

159

This page intentionally left blank

8 &&& The Playground of Healthcare Reimbursement ‘‘Play the Game Tonight’’ Kansas (Ehart, et al., 1982) At some point in our lives we have all encountered the schoolyard rule maker: the kid that makes all of the rules for the games, and then frequently changes the rules as needed to make sure that he or she wins the game. These rule changes are impulsive, spontaneous, inconsistent, and at times completely contradictory to a previous rule change. They come without notice and are presented in such a way that no one can understand them well enough to ask questions that might challenge their legitimacy. Additionally, the new rule is stated with such confidence and in such a demeaning way that it seems that you are the only person in the world who did not know that this is how the game is played. Welcome to the world of healthcare preauthorization and reimbursement! However, there is more on the line than playground bragging rights, and it is not financially responsible to simply pick up your toys and find a new playground (the same thing would happen there anyway). It would be well beyond the confines of this text to fully explain this process (i.e., game) as it applies to the multiple carriers, regional coverage areas, and individual insurance representatives that exist. The topic of billing and reimbursement (and navigation of the insurance company rules and regulations) would in and of itself warrant more detailed discussion in a book of its own. Instead, this brief chapter highlights some of the preauthorization and denial activities found in the game of neuropsychological billing and receiving, along with some suggestions to help you win the game every now and then. The

161

information presented here is based on personal experience with additional assistance and input from Edward ‘‘Ted’’ Peck III.

Preauthorization and Rejection Scenarios Peck (2009) outlines various scenarios that may result in a valid insurance claim being rejected (with no real chance of being reversed on appeal) by the insurer, even after multiple hours of clinician service have been provided. He points out that most major insurance companies (e.g., Aetna, Wellpoint, Cigna) may have as many as 10 different carve-out plans (or contractual subsidiaries), and that each of these carve out plans may have a different set of requirements for the preauthorization process. Finding the pathway through this process is both intimidating and fraught with incorrect/misleading information provided by the very insurance companies from whom you are seeking to collect fees. These different requirements may be as follows:

• No preauthorization process is needed, but you have an upper limit for the number of billable units which will be paid. • A telephone based peer-to-peer review process may need to be completed between the clinician and the insurance company psychologist. • Specific preauthorization forms may need to be completed and submitted by the clinician and approved by the insurance company prior to the actual date of testing. This leads to a multi-step process where the office/hospital employee (or neuropsychologist) must first determine that the patient’s insurance is current and that the policy actually covers the planned testing service. He or she must then accurately determine which sub-plan is in effect for the individual patient and/or service. Finally, the clinician must be provided the correct information so that he or she can complete the right form or contact the right person at the insurance company and so on. Peck likens this to a game of Simon Says. If you did not get the right phrase before the command to ‘‘sit down’’ and you sit down anyway – you are out of the game; you lose! This could also be compared to Twister where you have to contort you body in a myriad of ways that are physically impossible, only to clumsily fall and, you guessed it, you lose! To complicate things further, the information relating to benefits, carveouts, precertification procedures, etc. (the rules of the game) are not consistent among or even within insurance companies, and this information is not always 162

The Business of Neuropsychology

readily available. For example, a Wellpoint insurance plan may use their own in-house mental health plan for neuropsychological evaluations, or may use a company called Value Options or any of several other companies for the management of benefits. This information may not be conveyed on the patient’s insurance card, so it is necessary to do further investigation regarding the coverage plan and possible carve-outs. Some plans provide information on their Web sites regarding benefits, preauthorization procedures, and related carve-out or subsidiary plans for various services, while others do not. Even when provided it may be incomplete or may not be up-to-date. As such, a call to their provider line may be necessary to check for benefits and this call in and of itself may take substantial time to complete. Earlier chapters in this book stressed the need to bill neuropsychological services under the medical plan to reflect the actual service provided and to achieve the best (and more accurate) reimbursement rates. However, some insurance plans demand that the neuropsychological evaluation be covered under mental health benefits, regardless of the medical issues at hand, while others require that the neuropsychological evaluation be covered under medical benefits. Still others require that a peer-to-peer appraisal or specific form completion process be completed and submitted to the mental health plan prior to preauthorization. If the mental health plan accepts the preauthorization request, then it is subject to their particular requirements, which may be different from those offered under the medical health insurance plan. However, the mental health plan may issue an ‘‘administrative denial’’ which effectively says that the request for service does not fit under their benefit plan and that you should apply to the medical benefit plan for the preauthorization. At this point, of course, the game starts over, and there is no guarantee that the medical side of the plan will issue the preauthorization either. In some cases, this turns into a game of ping-pong where you are referred back and forth as you try to get approval.

Playing By the Rules Peck (2009) provided what he called ‘‘The Facts of Managed Care’’ in his recent presentation at the annual meeting of the AACN in San Diego. They are presented here more as the ‘‘rules’’ of managed care: 1. Always follow the rules 2. Always check for the requirement of precertification 3. Always collect the co-pay; it may be illegal not to do so The Playground of Healthcare Reimbursement

163

4. Always communicate your plan of care to both the patient and the insurance company 5. Always explain to the patient what you have asked for and what you have been authorized to do 6. Always follow your own preauthorization plan; if you need to modify the plan, then get a new precertification 7. Always remember that there are no rules The problem in following the rules of precertification/preauthorization in neuropsychological practice (or in any practice for that matter) is that the rules are not consistent across payers and the rules can change quickly, often times without notice. As a result, it is important to develop a system or process for precertification activities within a neuropsychology practice or department. This harkens back to Chapter 4 where the need for consistent processes within the departmental activities was stressed. The same is true here. The steps of insurance verification, clarification, and precertification requirements and activities should be outlined in detail, including identified responsible parties along the way. At first, a general template or flowchart can be developed, including the ‘‘standard’’ activities that are consistent across payer plans. From there, more individualized flowcharts may need to be developed to capture the specific requirements of various plans, including any additional documentation/justification that might be required. When completed, these should be filed in a three-ring binder or other easily accessible medium to be used by staff every time that a patient is scheduled for an evaluation. This way the system is continuously audited and necessary changes can be made in real time to minimize errors/delays in the future. Peck provides flowcharts and templates for precertification activities in his recent presentation and in his book chapter in Lamberty, Courtney, and Heilbronner (Eds.), The Practice of Neuropsychology. Readers are encouraged to consult these sources to guide them as they develop precertification processes for their own practice.

Closing Thoughts Given the variability built into the precertification process in managed care, no system or process will be perfect and guarantee precertification and authorization every time. Even when authorization is provided, we have all dealt with the reality that ‘‘prior authorization is not a guarantee of payment.’’ However, having no system or process will certainly lead to greater difficulties, delays, and frustrations in getting authorization and ultimately will raise the risk of 164

The Business of Neuropsychology

reductions or denials in terms of reimbursement. Whether it is finding directions to a local restaurant or navigating a sea in the dark of night, the driver or captain must use appropriate maps or charts to find their way. Navigating the stormy seas of insurance precertification and rejection management is no different; it requires a ‘‘map’’ and the knowledge and patience to follow it. Unlike the husband who refuses to ask for directions when he is ‘‘not lost,’’ a precertification representative or neuropsychologist must have a guide to follow to find their way to the reimbursement harbor. Set the plan, map the path, and learn the rules and maybe, just maybe, you can win the game some of the time.

References, Resources, and Suggested Readings Ehart, P, Flower, D., Frazier, R., Livgren, K., & Williams, R. (1982). Play the game tonight. From the album Vinyl Confessions. New York: Kirshner Legacy/ Epic Records. Peck, E. A. Business Aspects of Private Practice in Clinical Neuropsychology for 2009. Workshop Presented At AACN Meeting, San Diego, California, June 18, 2009. Peck, E. A. (2003). Business aspects of private practice in clinical neuropsychology. In Lamberty, Courtney, & Heilbronner (Eds.) The Practice of Neuropsychology. Exton, PA: Swets & Zeitlinger.

The Playground of Healthcare Reimbursement

165

This page intentionally left blank

9 &&& Business Development and Marketing

Thus far, this text has focused on setting up a consistent and predictable process for the business of neuropsychology. Once the basics are established and have proven successful from a process and fiscal standpoint, attention can be turned to further growth and business development. This chapter provides an outline for business development in neuropsychology with an emphasis on smart growth based on the original strategic plan, while looking toward the future. Early in the development of a neuropsychological practice it is important not to over-specialize, as volume is necessary to maintain a consistent cash flow. This idea continues as a practice develops, but may be tempered by real-life data related to reimbursement levels, payor mix of select patient populations and diagnostic groups, personal and professional interest in a specific area, referral source demand, staffing expertise and availability, and other factors. There is the reality that the best investment strategies include appropriate diversification of a portfolio, but care is taken to ensure that all investments have some reasonable expectation of return. The same applies to a neuropsychology practice. Exploration of a diverse range of possible services extending beyond traditional neuropsychological evaluations can identify other patient populations and clinical services to expand the pool of potential referrals, in order to ensure consistent patient volume and reimbursement despite fluctuations in referral streams. Additionally, there are unique settings, populations, specialties, or collaborations that may prove beneficial in increasing visibility, expanding marketshare, delineating clinical expertise, or simply accessing a source of high reimbursement relative to 167

traditional payors. With so many opportunities available, decisions regarding program development require a return to strategic planning activities, but with a focus now on the growth of a practice rather than its inception.

Re-Defining the Scope of Practice To plan for the future it is beneficial to look at the past. Strategic planning was outlined in Chapter 1, and at this point it is worth revisiting. To review, Ginter, Swayne, and Duncan (2002, p. 14) define strategic planning as ‘‘the set of organizational processes for identifying the desired future of the organization and developing decision guidelines. The result of the strategic planning process is a plan or strategy.’’ As such, the vision, mission, and values initially developed for a practice continue to serve as a guide for future program development. A review of these statements and principles provides a basis for determining what next steps will bring the practice closer to meeting the mission and vision. Reviewing the strategic plan, while looking to the future, provides an opportunity to outline the established areas of specialty as well as additional areas of competence that may not have been included in the original business plan. This may mean stepping away from traditional neuropsychology and getting back to clinical psychology roots as additional service lines are considered. This process encourages examination of the current business/ practice processes and systems to identify strengths and weaknesses that may impact future program development. To formalize examination of the practice/department, a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis is useful to determine desired/achievable future opportunities. SWOT Analysis A SWOT analysis is a strategic planning method initially developed by Albert Humphrey of Stanford University in the 1960s-1970s and revised over the years by writers in business marketing and organizational development (Ansoff, 1987; Koch, 2000; Panagiotou, 2003; Turner, 2002; Valentin, 2001). A SWOT analysis is a basic, straightforward model that assesses what an organization can and cannot do, as well as identifies potential barriers. The method of SWOT is to identify various aspects of an organization and separate them into internal (strengths and weaknesses) and external issues (opportunities and threats): 168

The Business of Neuropsychology

• Strengths: Internal aspects of the organization helpful in achieving the objective. These reflect what the organization is doing well. • Weaknesses: Internal aspects of the organization harmful to achieving the objective. These reflect the problems/limitations within the organization. • Opportunities: External aspects helpful in achieving the objective or advancing the business. • Threats: External aspects that could do limit the achievement of the objective or be potentially damaging to future goals. As a group, department/practice staff members develop a list in each of these areas to identify what may assist the business in accomplishing its current and future objectives and what obstacles must be overcome or minimized to achieve desired results. Additionally, individual clinicians can complete a personal SWOT analysis, applying the same principles to their own personal and professional goals and aspirations. These can be compared to the larger organizational SWOT to analyze the level of congruence and consistency in goals or possibly other alternatives not considered at the larger group level. The SWOT analysis sets the stage for identifying the best areas for future program development based on the identified business assets and limitations. Examining Current and Possible Future Activities The SWOT analysis, coupled with current practice patterns and reimbursement information, provides a starting point to plan for changes within a practice/department. In looking to the future it is important to first look at current financial information to determine what activities have proven to be the most successful in terms of payor mix, reimbursement rate, consistency of volumes, and overall ‘‘fit’’ with the mission and vision of the practice/department. Some ‘‘high return’’ and consistent service lines already in place may be enhanced by adding staff, altering schedules, or identifying new referral streams for these services. ‘‘Low return’’ service lines may need to be minimized or limited through scheduling restrictions, alternative clinical activities (to decrease time and resource utilization), or external referral relationships. Decreasing the time spent on these lower return services increases the time available for higher return or new service lines. Before service lines are reduced or eliminated, care should be taken to weigh the potential non-revenue ‘‘value’’ of these services to referral sources, the department/practice, the Business Development and Marketing

169

larger institution, and the community. Some clinical services may have a non-revenue value that does not show up on a balance sheet, but is demonstrated in other ways. Value-added services are discussed in detail in Chapter 10, including mechanisms to make these non-revenue values visible to administrators or others stakeholders. Once the current clinical service lines are examined and adjusted accordingly, attention can be turned to the development of potential new service lines and revenue streams. A good place to start is to consider services that have been requested by referral sources in the past or obvious areas where services have been needed in the past, but unavailable due to time or staffing limitations. Additionally, reviewing the organizational and personal SWOT analyses may uncover specific areas of interest for the practice or individual clinicians. Finally, it is vital to look to the future for new opportunities that may emerge. The following questions serve as a guide for consideration of program development:

• What new referral sources could benefit from current clinical • • • • •

activities? What additional services would benefit our current referral sources? What new services might be needed in the geographic area in the future? What new professionals or specialty clinics are moving to the area and how can we best serve them? What ‘‘non-neuropsychology’’ clinical activities might enhance our overall clinical offerings? What political/social changes are on the horizon that may influence healthcare needs?

Answers to these and other questions contribute to brainstorming activities focused on general future clinical service lines. From there, a few specific possibilities can be identified that fit the mission and vision of the department/practice, match the interests of the clinicians involved, reflect diversification without over-extending the boundaries of the practice, and are realistic relative to available personnel. For lack of a better phrase, it is important to think ‘‘outside of the box’’ in terms of potential new clinical activities and services. This means extending beyond traditional neuropsychology practice to include more general clinical, clinical health, or 170

The Business of Neuropsychology

rehabilitation psychology services. The following list provides some clinical areas of consideration that have been incorporated into some ‘‘neuropsychology’’ practice groups or departments:

• • • • • • • •

Pre-spinal cord stimulator placement evaluations Pre/post surgical evaluations for transplants, bariatric surgery, etc. Headache clinic evaluations Vocational rehabilitation contracts Worker’s compensation & occupational medicine Forensic consultation School/university contracts Fee-for-service performance enhancement evaluations for business executives (executive coaching with a neuropsychology focus)

This highlights some services that have been provided in some practices as a means to expand their services. It is important to brainstorm and identify ideas that fit the practice/department and identified parameters via the SWOT analysis. Evaluating Potential New Service Lines After an initial list is generated, each idea is examined and evaluated on the basis of the business basics described in previous chapters, including financial forecasting. To begin, four basic questions must be asked of each potential new service line to evaluate the potential for success:

• Who? – What is the patient population and where do they come from?

• How many? – How many patients are likely to be seen? • How much? – What is the expected reimbursement? • How often? – At what frequency will these services be provided? There is certainly more information necessary, but these questions provide a starting point for future discussions and are the basis of forecasting and an abbreviated business plan for each of the new areas. It is also necessary to outline the expected resources and costs associated with the service. Business Development and Marketing

171

While exploring program development opportunities some basic economic principles are considered – cost, value, and opportunity cost. Cost is the amount of dollars or resources needed to provide the service. Value is the perceived ‘‘worth’’ of a resource. From a department or practice perspective, worth refers to how the new service, as an asset, is expected to produce over its useful life (i.e., what is the potential revenue), as well as its potential to maximize its value while reducing or maintaining systemic cost. This valuation examines how much resource utilization is required, the reimbursement in return, and the frequency and consistency of the return. In other words, is the squeeze worth the juice? To a consumer, worth refers to the resources he or she would be willing to expend to acquire the service. This ‘‘expense’’ is not always measured in dollars. Consumer resources also include the time spent; physical, mental, and emotional energy required; ease of obtaining the service; and other factors. Opportunity cost examines what else could have been done with those same resources. In other words, what is the value of alternative uses of the time, money, and effort relative to the new service? The goal is to achieve a return that justifies the risk/effort of providing the service or expending the resources. All of these concepts are bi-directional in that both the producer (i.e., clinician) and the consumer (i. e., patient) weigh the costs and benefits of the activity to determine whether or not the service is to be provided. An abbreviated business plan for the potential new services can be helpful to explore these concepts and the feasibility of the ideas. As an example, consider a neuropsychologist being asked to join an epilepsy clinic. While this is certainly a good opportunity to develop a new referral stream and increase the visibility and notoriety of the neuropsychologist and the practice/department, the time demands associated with this clinic can be high, with a great deal of non-billable time spent in committee meetings, case conferences regarding localization of lesion and potential need for further testing, team conferences to determine appropriateness and mechanism of surgery, and post-surgical follow up meetings regarding disposition. There may also be time demands related to research activities. However, reimbursement is based on neuropsychological testing and Wada procedures with patients who may have limited reimbursement options (e.g., Medicaid, Medicare, and charity) due to their limited ability to maintain employment as a consequence of the intractable nature of their seizure disorder. More recently, there are increasing numbers of movement disorder clinics that enjoy collaboration with neuropsychology 172

The Business of Neuropsychology

in similar fashion. Again, the development and maintenance of these collaborations can be quite time-consuming with a limited reimbursement rate due to payor source make-up (i.e., primarily Medicare). As a result, the answers to the new service evaluation questions previously asked do not paint a very good picture for fiscal success for neuropsychologists in these ventures, especially when the resource/time costs are factored in. So, why are there so many of these clinics being set up? Simply put, they are true moneymakers for neurosurgeons and hospitals through the associated professional and hospital facility payments for the surgeries and related medical procedures. For neuropsychologists working in these areas, it is beneficial to be affiliated with the institution so that the ‘‘value-added’’ nature of their services are captured through some form of an institutional cost offset or other mechanism of value to account for the non-billable or reduced reimbursement activities provided. Alternatively, some programs secure external funding through research grants, foundation donations, or other mechanisms to provide the financial support for clinical activities allowing for neuropsychologists’ work to be adequately reimbursed or offset. For those in private practice, participation in these programs may need to include some established parameters regarding attendance in meetings/conferences to minimize non-billable time. Alternatively, contractual agreements with the institution might be possible to provide some additional financial support for the reduced reimbursement or to account for the non-billable time that is valued by the surgical team. In contrast, other new service lines have cleaner answers to the previous questions. As an example, many insurance companies now require a psychological evaluation prior to approval for spinal cord stimulator placement, bariatric surgery, organ transplant, or other surgical procedures. The very basis for these referrals (i.e., insurance requirement for procedure approval) sets the stage for a strong payor mix, relative ease in precertification, few arguments regarding medical versus mental health approval, reasonable reimbursement rates, and good patient compliance with scheduled appointments. These evaluations may not provide the notoriety or professional involvement that comes with epilepsy and movement disorder clinics, but the fiscal benefits and ease of the overall service line offset the decreased prestige value. Additionally, these more streamlined and financially stable service lines serve to underwrite the costs of some of the more prestigious clinical services that have lower reimbursement. Business Development and Marketing

173

Balancing the Service Lines The development of new service lines takes additional time and resources, negatively impacting existing service lines. Therefore, once the new ideas have been evaluated and selected, department practice patterns need to be adjusted to provide a reasonable balance of the old and new service lines in terms of workloads, volumes, revenues, and scheduling. The idea behind program development is to grow the practice or department, but initially this increases the stress and strain for all involved. This highlights the need for controlled growth and continued process development and control to implement the changes necessary to accommodate the new service lines. Adding service lines means increased demand on time and resources, including administrative, clinical, and management staff. Additional personnel may be needed, and this should be considered in program development discussions. Workloads, time utilization, and process/system variables need to be examined to determine actual needs versus desired staffing levels. Clinician productivity and utilization numbers are certainly a source of tension and discomfort in small or large departments. Establishing equitable workloads can be very difficult when clinicians provide a broad range of clinical services with varying time/resource demands and reimbursement rates. Still, some established utilization/productivity expectations are necessary and typically serve as at least a portion of performance appraisal. Identified productivity targets should include efforts to balance work volumes, revenues, and quality. Problems develop when these three variables are out of balance. While maximizing volumes and revenues intuitively seems the best approach, this typically results in a decline in quality of service as clinicians tend to hurry through services to get to the next case. Additionally, when volumes get too high, attention to the system process decreases and errors are more likely to occur. Conversely, focusing on just revenues and quality (spending more billable time per patient and providing excellent quality) results in decreased patient volumes and diversity of services due to the increased amount of time required for each case and limited opportunity for program development. This also causes increased waiting lists resulting in decreased referral source and patient satisfaction in terms of service availability. Finally, maximizing quality care and volume results in the provision of non-billable services and excessive time utilization, reducing overall revenues. In setting workload and productivity targets, a balance of the three variables is best so that volumes, reimbursement, and quality remain at high levels without sacrificing one for another.

174

The Business of Neuropsychology

To manage the appropriate balance of new and old service lines, as well as high and low reimbursement services, controlled scheduling is a useful tool. Scheduling is ‘‘controlled’’ when clinician schedules are developed with available services assigned to specific days/times to account for resource demands and balance in terms of the types of services provided across the work week. For example, a clinician may have full evaluations scheduled on Mondays and Fridays, headache clinic evaluations on Tuesday mornings, shorter evaluations scheduled on Tuesday afternoons and two on Wednesday (for dementia, Parkinson’s, etc), and presurgical evaluations scheduled for Thursday (morning and afternoon slots). Feedback, initial interview, and/or intervention appointments can be scheduled during the technician testing times on Monday and Friday. This is a rather full schedule (and not necessarily realistic), but by assigning times in this manner, productivity/utilization numbers for the clinician as well as technician and office staff can be estimated. In large practices where technician and administrative support staff are shared, this ensures that a technician and other supports are available at the specified times. This is a sample schedule for an outpatient setting and is meant for demonstration only. Other schedules may include conference times, meetings, inpatient consultation, report writing time, etc. What is on the schedule is based upon the services provided and the level of flexibility will vary according to practice settings. Development and management of a controlled schedule requires an understanding of the department/practice referral patterns and volumes. This makes it difficult to establish for a new and developing practice, but as it matures this can be accomplished on a more limited basis. Whatever scheduling format is used, developing a standard and controlled schedule follows the process control and consistency ideas described in the earlier chapters and helps eliminate variance and surprises. Also, it ensures that there is ‘‘room’’ for the new service lines within clinicians’ schedules without sacrificing established services.

Marketing as Program Development Tool As noted in Chapter 2, a marketing strategy is simply a plan of how a business lets the target customers know that it exists and how the business is able to provide the goods and services in the best way for the consumer. The idea is to reach the largest number of targeted consumers with the least amount of cost. The focus is on the identified patient groups served rather than a generalized marketing strategy that may waste time and resources. There is no perfect

Business Development and Marketing

175

marketing strategy, but whatever methods are used, they should be carried out as part of well thought-out plan. Porter (1985) describes two basic types of competitive advantage: cost leadership and differentiation. In neuropsychology, cost is not much of a factor due to the fact that most reimbursement is paid by third party payors at relatively fixed rates. Therefore, marketing efforts need to focus more on distinguishing the department/practice from the competition through differentiation and customer service. Marketing strategies in neuropsychological practice are subject to the APA Ethical Guidelines and Principles (American Psychological Association, 2002) and any marketing strategy should be developed in accordance with these principles. Neuropsychology is defined as a specialty practice and marketing efforts should be targeting related patient populations. Since patients typically come from physician referrals, marketing efforts will likely focus on this group, at least in the early stages of setting up a practice. It is important to note that while the physician writes the order for neuropsychological testing, it is typically a nurse, office manager, or other office staff member that actually sends the referral to a provider. As such, these individuals should be included in any marketing strategy. This may include preprinted referral forms with contact information that could easily be called in or faxed directly to the practitioner, making a referral to the practice/ department as easy as possible. While most efforts will focus on obtaining referrals from physicians that work specifically with patients in the identified targeted patient population (e.g., neurologists, neurosurgeons, psychiatrists, pediatricians, geriatric specialists) efforts should also extend to physicians in other areas, as well as social workers, counselors, vocational rehabilitation professionals, case managers, attorneys, and others that may prove to be valuable sources of patient referrals. Additionally, it is not uncommon for a referral to ‘‘pass through’’ a physician on referral from an allied health provider such as a rehabilitation therapist or social worker. Marketing efforts can be quite varied. Some choose newspaper, television, or radio advertisements; informational mailings; personal letters to potential customers; press releases; door-to-door visits; testimonials; etc. Whatever strategy is used, a good analysis of who, what, where, when, and why regarding the medium and targeted audience will help in determining the course that will have the most beneficial and cost effective outcome. Similar to pharmaceutical representatives, neuropsychologists may choose to schedule personal meetings with targeted physician groups, rehabilitation professionals, worker’s compensation professionals, or other groups that may have 176

The Business of Neuropsychology

a need for the services. Brief in-services and informational cards describing the provider’s training, experience, and credentials are helpful during initial contacts, along with the more traditional business cards. Also, as mentioned above, preprinted referral forms that can be called in or faxed directly to the practitioner allow for easy referrals as well as regular awareness of the practice even when you are not directly in their office. Image is everything, so it is important that any marketing/branding efforts maintain a high degree of professionalism in terms of content and appearance. While this includes mailings, business cards, and other informational materials, branding and marketing efforts can be included in all aspects of clinical practice. Designing a unique business logo and letterhead is quite useful and can then be incorporated into all documents associated with the practice, including registration materials, internal documentation, preprinted referral forms, and the final report that is sent to the referral source. As described in Chapter 4, creating forms for all aspects of the practice with the identified letterhead or branding serves to further market the practice while developing consistency in the way that a patient is processed through the department. There is no substitute for word-of-mouth recognition. This typically cannot be achieved prior to the beginning of a practice, but early contacts with potential referral sources, especially if there is a prior working relationship, is very beneficial in spreading the word about a new practice and the quality of services provided. Having the opportunity to introduce the clinicians and the practice to physician or other professional groups may heighten awareness and ‘‘chatter,’’ especially if the services provided are unique or meet some specific needs. While APA ethical principles limit using patients for testimonials, this does not apply to physicians who may be willing to provide endorsements regarding clinical practice skills, knowledge base, and quality of service. Also, these established referral sources may assist in setting up meetings with other physicians and other referral networks in the area through group meetings or individual contacts. It is important to capitalize on these resources and have a plan in place regarding how the practice will be presented so that this can occur in a professional, well-organized, and timely manner. As a final note in marketing, it is important to remember that it is better to under-promise and over-perform than to over-promise but underperform. While marketing efforts certainly will include clinician background training and experience, board certification, and research/publications to differentiate the department/practice from other practices on the basis of Business Development and Marketing

177

qualifications and expertise, patients and referral sources do not necessarily place the same value on these factors as other neuropsychologists. Instead, they are looking for a provider that is recommended to them by physicians, friends, or family. As a result, customer service and service recovery activities can be some of the most important marketing tools available to a practice/ department. Physicians will listen to their patients when they return for follow-up appointments with either very good or very bad things to say about the neuropsychologist who provided the evaluation as well as the related office staff. Subsequently, their referral patterns will reflect the feedback they receive from their patients. As mentioned in Chapter 2, two of the best questions regarding patient satisfaction are ‘‘Would you recommend this product or service to a friend or family member?’’ and ‘‘How would you rate the overall quality of care?’’ How a patient or referral source answers these questions quickly determines your competitive advantage in the marketplace regardless of your status in the field of neuropsychology.

Final Thoughts While growth in a business sense is typically a good thing, it is important to manage the growth in such a manner that it is planned, predictable, and profitable. Expansion for the sake of expansion can be problematic and may result in commitments that can be detrimental to the financial bottom line or a situation where the practice is unable to live up to the promises that were made. Smart growth that reflects the initial mission and vision of the practice, accounts for available resources, and includes reasonable profitability forecasting allows for greater potential for success, stability, and longevity. This takes additional time and effort, but in the long run it is worth the investment.

References, Resources, and Suggested Readings American Psychological Association. (2002). Ethical principles of psychologists and code of conduct. American Psychologist, 57, 1060 –1073. Ansoff, H.I. (1987). Corporate Strategy, revised edition, Penguin Books. Ginter, P. M., Swayne, L. E., and Duncan, W. J. (2002). Strategic management of health care organizations, 4th Ed. Malden, MA: Blackwell Business. Koch, A.J. (2000). SWOT does not need to be recalled: It needs to be enhanced. Available online at http://www.westga.edu/bquest/2001/swot2.htm. 178

The Business of Neuropsychology

Panagiotou, G. (2003) Bringing SWOT into Focus. Business Strategy Review, Vol 14, Issue 2, 8–10. Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. New York: The Free Press. Turner, S. (2002). Tools for success: A manager’s guide. London: McGraw-Hill. Valentin, E.K. (2001). SWOT analysis from a resource-based view. Journal of Marketing Theory and Practice, 9(2): 54–68.

Business Development and Marketing

179

This page intentionally left blank

PART THREE &&& &&&

PROFESSIONAL DEVELOPMENT

This page intentionally left blank

10 &&& Where Did the Time Go? Time is a unique and precious resource that is necessary to do your work, accomplish your goals, spend time with family and friends, participate in favorite activities, and enjoy everything that life has to offer. It is a precious commodity that is available in limited amounts and cannot be restocked, refilled, or re-ordered when the supply is low. It is the one resource that if given away or wasted, it cannot be made up on another day. Think of all of the security systems people purchase to protect their money and belongings that typically are insured or, for the most part, can be replaced. It is just as important to secure and protect the one asset that cannot be replaced – time. This chapter explores aspects of neuropsychological practice that can drain available time with no identified or tangible benefit. The idea is not to eliminate all of these activities, as many of these truly have value. Instead, the goal is to be selective, rational, and prudent in how and where time is spent and to find ways to demonstrate the value of this time when it does not reach a financial balance sheet.

Non-Billable Time In Chapter 9, an example of a controlled schedule was presented that allotted specific times for full evaluations, abbreviated evaluations, headache clinic, and pre-surgical evaluations, with feedback appointments, initial interviews, and intervention appointments to be scheduled during technician testing times. This is an unrealistic schedule, but was described to demonstrate a schedule that would maximize billable time. What was missing from this schedule? Think for a moment about your week in clinical practice and 183

develop a list of all of the scheduled or unscheduled activities that are nonbillable. The list includes at least some of the following and possibly more:

• • • • • • • • • • •

Team meetings Case/care conferences Patient rounds with the team or physician Scheduled in-service training Informal consultations with physicians or treatment teams Grand rounds or other didactic opportunities Family conferences without the patient present Marketing/meet-and-greet activities Department business meetings Institutional committee/administrative meetings and obligations Institutional joint commission computer-based or group training sessions • Fixing scheduling/process errors • Service recovery activities for the department/practice or the institution This is not an all-inclusive list by any means, but it is lengthy. When you factor in a time component to each of these activities, time slips away very quickly. This highlights the importance of managing a controlled schedule. When these activities occur, they should be included in a schedule to document utilization of time and resources. When all activities are put into a schedule, it is easier to see what can and cannot be done within a work week, and when it is time to say ‘ no.’’ This strain on the schedule and reduced billable time is not necessarily a bad thing. The activities listed above have meaning and value and can be beneficial to patient care and even to the hospital in terms of overall reimbursement levels. The key is to identify and document how the non-billed time brings value-added service as well as indirect income to the institution. These are presented as distinct concepts with value-added services consisting of activities that do not necessarily generate revenue directly or indirectly, and indirect benefit services consisting of activities that promote revenue generation with little or no direct billing. Value-Added Services For the purpose of this text, value-added service (VAS) is a term used to describe non-billable services that promote the main business of healthcare. In psychology, a VAS is an activity that adds ‘‘worth’’ to the overall clinical service 184

The Business of Neuropsychology

or institution by optimizing cost-effective care, streamlining necessary services, enhancing overall treatment outcomes, shortening a length of stay, bringing notoriety and prestige to the institution, and improving overall customer (i.e., patient, family, physician, treatment teams) satisfaction. Review the previous list of activities again and think of how this construct applies. How often in your clinical work (billable and non-billable) do you take part in activities that could be considered a VAS? VAS can be demonstrated in a variety of ways including membership in leadership committees, providing input through team meetings or informal consultation, providing educational in-services to staff, and serving as a face or contact for a department or practice to enhance marketing and publicity. These typically are scheduled activities and it is relatively easy to document this utilization of time. Clinically, neuropsychologists are often called upon to handle crisis situations, angry or upset families, and other situations, with a general goal of service recovery and improved patient satisfaction. These activities also result in fewer disruptions of rehabilitation interventions; improved management of challenging behavioral difficulties; and ultimately, improved treatment outcomes on a more general level. These activities also decrease the burden, time, and expense of other staff and may also be a source of support and education for other disciplines. These activities, while useful on a variety of levels, are not always billable, thus limiting their value from a financial perspective. Additionally, they are rarely planned, and therefore, are not always documented from a scheduling and utilization of service standpoint. Psychologists provide other VAS through their scientist-practitioner mindset to assist a larger institution in a variety of ways. This scientific basis of training allows for easier understanding of the methodology and statistical concepts often utilized in institutional care monitoring, evaluation of quality standards, and outcome-based research. When this skill is utilized, psychologists can prove to be very knowledgeable partners with the administration to analyze, document, and present the volumes of ‘ data’’ collected through the healthcare system at multiple levels. Additionally, when supported, psychologists can bring notoriety and prestige to an institution through national presentations and publications related to institutional or practice-based research. Indirect Benefit Activities Indirect benefit (IB) activities in neuropsychology are those services that may or may not be billable, but where the activities contribute to increased reimbursement in other areas, institutional cost savings, and/or better Where Did the Time Go?

185

outcomes on the basis of the service being provided. In Chapter 9, the difficulties, from a reimbursement perspective, were presented relative to the epilepsy and movement disorder clinic examples. Performing low reimbursement clinical services due to the payor mix typically associated with these populations, coupled with the potential for additional non-billable time related to care conferences and neurosurgery team meetings, on the surface can seem counter-intuitive to a larger institution. However, when the total ‘‘package’’ of services is considered, including professional and hospital facility charges associated with the neurosurgical, neuroradiological, and other medical procedures, the financial benefits for the larger institution are easily seen. As such, neuropsychological services in these clinics provide IB to the hospital by helping to pave the way for the other high revenue procedures (e.g., neurosurgery) to occur more readily. Other IB services provide benefit by reducing the overall costs to provide services. A good example of this is seen in rehabilitation environments that manage patients with traumatic brain injuries that require one-to-one supervision, safety beds, cancelled therapy interventions, and/or increased staff utilization due to neurobehavioral and neuropsychiatric syndromes including agitation, combativeness, refusals, wandering, elopement concerns, or other behavioral difficulties. Neuropsychologists are often called upon to set up a behavior plan, work with the physician to initiate and monitor medication management, and educate staff members on how best to manage the patient. These services are not always billable, but if successful, significant cost savings can occur by minimizing staff and resource utilization, improving participation in therapies, decreasing the overall length of stay, and improving outcomes. Identify and Document Value Added Contributions A perusal of the literature regarding VAS and healthcare yields multiple articles regarding information technology; billing, marketing, and human resources services; temporary employment consultants; and other administrative applications of the concept. However, there were no articles/references/Web sites found applying this concept to clinical professionals and professional activities in the healthcare system. At some level this is new ground, but there is a definite need for further research and exploration in the area of quantifying the financial value of non-billable VAS and IB services to further support these activities in an ever-shrinking healthcare financial system. 186

The Business of Neuropsychology

For practitioners in institutional settings, demonstrating value through both revenue and non-revenue-based activities solidifies their role in the system and increases administrative appreciation and support. Therefore, developing methods of communicating non-revenue producing services that include some quantitative, fact-based data is of utmost importance when identified roles and responsibilities include many of these activities. This means identifying non-billed time that brings value-added service, as well as income, to the institution. The keys are to identify activities that produce substantial cost-savings or bring prestige or positive attention to the organization; show the value added for these activities in a quantifiable, meaningful, and persuasive manner; and make you and your department indispensable.

Training Programs and Research Activities Thus far, exploration of time factors has focused on activities that add value or indirect benefit to a department or institution in the context of clinical service. Other activities commonly associated with neuropsychological practice, while valuable, can also require substantial investment of time, energy, and resources. Two of these areas include training programs and research. There is no argument that these programs are valuable, but there is also little argument that they can be quite time intensive to manage. Clinical Training Programs In review of Lamberty, Courtney, and Heilbronner’s The Practice of Clinical Neuropsychology (2003), it was noted that the incorporation of clinical training programs was specifically discussed in 7 of the 11 chapters in the section entitled ‘‘A Survey of Settings and Practices in Clinical Neuropsychology.’’ As expected, these included chapters describing neuropsychology practice in university-affiliated and Veterans Administration (VA) medical centers, but chapters describing practices based in non-academic general medical centers and medical rehabilitation facilities also specifically described clinical training activities. Interestingly, chapters describing independent practice, private practice with a physician partner, and forensic neuropsychology, did not specifically address clinical training activities. This does not mean that such activities do not occur in such settings, but does demonstrate that it may not be a primary area of ‘‘inclusion’’ in discussing practice activities. This is consistent with survey data provided by Sweet, Moberg, & Suchy (2000) showing that 86% of clinical neuropsychologists working in institution-based settings were involved in some form of research and teaching compared to 66% of clinical Where Did the Time Go?

187

neuropsychologists in private practice settings. Additionally, those in institutional settings reported spending an average of four hours per week providing supervision compared to two hours per week for those in private practice. One way to identify the basic time involved in training activities is to look at the APA Committee on Accreditation Guidelines and Principles for Accreditation of Programs in Professional Psychology (2008). At both the predoctoral internship and postdoctoral residency level, supervision is to be regularly scheduled, assuring a minimum of four hours of supervision per week, at least two hours of which will include individual, face-to-face supervision. This is further reinforced by the Houston Conference Guidelines (Hannay, et al 1998) recommending APA accreditation for internship and appropriate supervisory activities by a board-certified clinical neuropsychologist. Additionally, these guidelines state that it is expected that residents will spend significant percentages of time in research and educational activities as well as clinical service. There is at least a small percentage of lost billable time based on the supervision requirements alone. This does not include the time required to complete the paperwork to apply for and maintain accreditation; prepare and present formal didactic programs; complete evaluation and other training-related documentation; participate in the recruitment, interview, and selection of interns and residents; etc. Needless to say, establishing and maintaining a clinical training program is quite time-consuming and in the business sense, time lost is money lost. Without going into significant detail, maintaining a training program does not come without monetary expenses above and beyond lost revenues due to lost clinician billing. The administrative financial support for stipends, materials, clerical support, space needs, and educational activities must be secured along with the basic fees for maintaining accreditation, recruitment activities, and selection/matching service fees. While there is a hope that the clinical activities performed by the trainees will provide some offset for these expenses, it is again important to note that services provided by trainees are not reimbursable by Medicare and potentially some other providers. As such, the institution payor mix will have a significant impact on how well these costs can be at least partially recouped. The information presented here is not meant to discourage the development and maintenance of clinical training programs. Those who know me well can attest to my commitment to the training process. The goal is to make sure that clinical training programs are developed for the good of the profession and to bring respect and notoriety to the institution, rather than as a cost-effective way to add clinical staff. Also, this discussion is meant to encourage 188

The Business of Neuropsychology

neuropsychologists to become more active in professional organizations working to improve options for Graduate Medical Education (GME) and other funding mechanisms to promote psychology and neuropsychology training programs. Research Activities Using the Lamberty, et al. (2003) text again as a resource, research activities occur in a wide variety of practice settings. As expected, those in academic medical centers described the general ease and expectation of ongoing research projects. Torres and Pliskin (2003) describe the open opportunities to participate in clinical research as part of their work in such an environment. The direct access to clinical populations, opportunities for collaboration with multiple disciplines, and the ability to capitalize on resources available within the medical academic institution are cited as how research is facilitated in this environment. Additional descriptions highlight the institutional support as well as the enhanced opportunities to participate in individual and medical center grants due to the academic affiliation and collaborations. McCrea (2003) also highlights the benefits of multiple opportunities for collaborative research in a general hospital setting, but differs in terms of his description by citing the ‘ balance’’ the department was able to create to manage the difficulty in securing time dedicated to research in the context of clinical demands. While some of the same benefits of hospital affiliation were described in available patient populations and collaborative relationships, his chapter focused more on securing external funding and using research and publication activities to benefit the department by increasing clinical referral streams. Greiffenstein (2003) provides practical guidelines for designing and completing research studies in a private practice setting. The nuances of developing a research program utilizing available resources, including time, are laid out nicely in this article. The common thread across these three very different settings, explicit or implicit in the content of the information provided, is that additional time is expended to participate in research activities. More importantly, all three of these authors provide methods to manage this dilemma and manage the time parameters as much as possible. McCrea cites several factors that are ‘ key’’ in finding time to mix research and clinical responsibilities in a medical center environment, including contacts with other staff with research interests, collaboration with biostatistics staff, utilization of research assistants, securing outside grant funding, and gaining support from department and hospital administration. These ‘ keys’’ were already cited in the Torres and Pliskin chapter highlighting the ease of availability in the academic affiliated institution. Where Did the Time Go?

189

Throughout the Greiffenstein chapter, he implicitly describes process variables that allow a database to be developed automatically when patients are seen using newer powerful databases that allow for easy data entry. Additionally, he maximizes the use of other technological advances including electronic versions of journals, scientific literature search programs, and software packages to minimize time required for statistical analysis and manuscript preparation. Perhaps most importantly, research activities are broken down into concrete steps that are rooted in a strong scientist/practitioner knowledge base allowing for research activities to occur in an efficient fashion with minimal wasted time. Regardless of setting, neuropsychologists can learn from all of the previously cited authors a variety of ways to streamline their approach, secure institutional/departmental support, and minimize the time needed to perform quality research. Efforts can then be directed toward securing external funding that would allow for time to be carved out of a clinical work week without losing financial resources necessary to maintain the department or practice.

Improved Time Management Time management is defined as managing the use of daily schedules for the purpose of achieving maximum productivity; maximum time utilization; and not wasting time (Friedman, 2000). As discussed, time is a precious commodity and the better time is managed, the more there is to use for the things we enjoy most. While a comprehensive overview of time management is well beyond the scope of this chapter and this text, a brief overview of one time management tool is offered to stimulate thinking and future exploration in this area. Covey (1989, 1994) presents a time organizing process that helps categorize tasks in such a way to emphasize what is important, not merely what is urgent. In the busy world of neuropsychology and healthcare such a skill is useful as practitioners work to balance the demands for their time. Covey divides tasks into four quadrants: i. Important and Urgent (crises, deadline-driven projects) ii. Important, Not Urgent (preparation, prevention, planning, relationships) iii. Urgent, Not Important (interruptions, many pressing matters) iv. Not Urgent, Not Important (trivial, time wasters) Most people spend the majority of their time in quadrants I and III, while quadrant II is where the best work happens. The key is to recognize where the 190

The Business of Neuropsychology

various tasks that make up your day belong and manage your time accordingly, focusing on the important more than the urgent. This is a brief overview of a single strategy, but the reader is encouraged to explore this and other time management tools listed in the reference section of this chapter to find the right fit. Many valuable rewards await those willing to develop good time-management practices, including the research and training activities described previously, program development, and even non-professional activities like flying kites with your children. The premise of this text has been to apply process/system control and consistency to neuropsychological practice and it is this process control that can set the stage for better time management at the individual level as well.

References, Resources, and Suggested Readings American Psychological Association Committee on Accreditation (2008). Guidelines and principles for accreditation of programs in professional psychology. Washington, DC: American Psychological Association. Covey S.R. (1989). The 7 habits of highly effective people. New York: Fireside. Covey, S. R., Merril, A. R. & R. R. (1994). First things first. New York: Simon & Schuster. Friedman, J. (Editor). (2000). Time management. Dictionary of Business Terms, Hauppauge, NY: Barron’s Educational Series, Inc. Greiffenstein, M. F. (2003). Neuropsychology research in a private practice setting. In Lamberty, Courtney, & Heilbronner (Eds.) The Practice of Neuropsychology. Exton, PA: Swets & Zeitlinger. Hannay, H. J., Bieliauskas, L. A., Crosson, B. A., Hammeke, T. A., Hamsher, K. deS., & Koffler, S. P. (1998). Proceedings: The Houston Conference on Specialty Education and Training in Clinical Neuropsychology. Archives of Clinical Neuropsychology, 13, 157–250. Lamberty, G. J., Courtney, J. C., & Heilbronner, R. L. (2003). The practice of neuropsychology. Exton, PA: Swets & Zeitlinger. Mayer, Jeffrey J. (1995). Time Management for Dummies. Foster City, CA: IDG Books. McCrea, M. (2003). The practice of clinical neuropsychology in a general hospital setting. In Lamberty, Courtney, & Heilbronner (Eds.) The Practice of Neuropsychology. Exton, PA: Swets & Zeitlinger. Where Did the Time Go?

191

Reynolds, Helen, and Tramel, Mary E. (1979). Executive Time Management. Englewood Cliffs, NJ: Prentice-Hall. Sweet, J., Moberg, P. & Suchy, Y. (2000). Ten-year follow-up survey of clinical neuropsychologists: Part II. Private practice and economics. The Clinical Neuropsychologist, 14, 479–495. Torres, I. J. & Pliskin, N. H. (2003). Adult practice in a university-affiliated medical center. In Lamberty, Courtney, & Heilbronner (Eds.) The Practice of Neuropsychology. Exton, PA: Swets & Zeitlinger.

192

The Business of Neuropsychology

11 &&& Survival Guide for the New Professional

Early career psychologists entering the field of neuropsychology are faced with many new responsibilities, challenges, and opportunities. They also face what seems to be a never ending stream of additional hoops to go through to finally acquire and settle into their first job. For some the process seems to be an easy transition, but it is safe to say that most new professionals bump into their share of obstacles on their way to some sense of stability. This chapter is designed to increase awareness of some of these difficulties and to provide strategies to navigate the obstacle course as smoothly as possible. This topic could fill a small text of its own in discussions of internship and postdoctoral residency selection, licensure and certification issues, job searching activities, vita preparation, interviewing skills, negotiation strategies, networking and professional development, financial planning, and other issues. Perhaps an early career neuropsychologist reading this chapter will take the challenge to complete such a text. However, the brevity of this chapter allows for only a brief overview of select professional issues salient to early career psychologists and specifically neuropsychologists as they complete their training and embark on their journey into professional neuropsychology.

Securing the First Job Belar (1998) and Johnson (2001) report that the time required to complete education and training requirements has significantly increased since the Boulder model was established, with students now taking an average of nearly seven years to complete their graduate education in clinical psychology as opposed to the four year average noted previously. This, coupled with the 193

increased practicum experiences, specialized nature of predoctoral internships, the typical two year postdoctoral residency for those in neuropsychology, and the emphasis on research during training activities means that new entries to the job market are coming into the field with significantly heftier vitae than those of us who came into the field just a decade earlier. This does not mean that there are employers just waiting to snatch up every new professional that is graduating from postdoctoral residency. Quite the contrary, employers have the opportunity to be selective, as there are many quality applicants for a select few positions. As a result, as with any marketing activity, there is a need to project a competitive advantage over the competition (your peers) in trying to secure that first position.

Job Searches There are a variety of ways to learn about open positions in neuropsychology. One of the most useful Internet job search engines for psychology is the PsycCareers link on the APA Web site: http://psyccareers.apa.org/. This Web site provides opportunities to search positions that are listed in the APA Monitor on Psychology as well as other positions posted specifically to this page. This site allows for searches by location, keywords, and/or job category. Additionally, this is a good resource for a variety of other job search activities and job search tools. Additional online neuropsychology job postings are found on the Web sites of professional organizations, including the International Neuropsychological Society, Divisions 22 (Rehabilitation Psychology) and 40 (Clinical Neuropsychology) of the APA, and others. The USAJOBS Web site is a useful search engine allowing for searches based on keyword, location, and/or category for posted positions in federal government agencies (e.g., VA Medical Centers, military hospitals). These positions are oftentimes not posted in other locations so it is important to check this site frequently if there is an interest in working in government facilities. Mainstream job search engines such as Monster, HotJobs, etc. are not as useful in neuropsychology, but can occasionally locate open positions on institution/hospital Web sites that may or may not be posted on the neuropsychology-related search engines. In addition to these search engines and others, job announcements are frequently posted on the various neuropsychology and rehabilitation psychology e-mail listserves. Participation in these listserves can be a great resource to discover early position announcements prior to their posting on the more formal search engines. Networking with current and former 194

The Business of Neuropsychology

supervisors is another great way to learn about current or future position openings. The keys to any good job search are to use a variety of resources for broad coverage and overlap, make frequent checks for updates/changes, have flexibility in geography and facility type, and starting the process as early as possible. Curriculum Vita and Cover Letters Despite what can seem like a lean job market, job searches will identify opportunities that warrant further inquiry and exploration. Most position announcements include a minimum request for a curriculum vita (CV) and cover letter. These two documents serve as the first impression of the applicant to those hiring for the position. In fact, for some positions decisions about the applicant will be made regarding possible fit after reviewing these materials for only a few minutes. It is possible that a quality applicant will be rejected simply because the CV and cover letter were poorly prepared or did not make a good impression. Therefore, it is important that these documents result in a solid first impression that at the very least keeps the applicant under consideration. There is no defined algorithm or format for producing a successful CV and cover letter. There are many guides that can be used, but pre-packaged resume builders are typically not designed for medical or academic based settings and may steer you in the wrong direction. Consulting with supervisors or trusted mentors is usually a good starting point in the development of a quality CV. Most are willing to share their own CVs (some have old CVs from their early career period) that can be used as a formatting guide. Because of their limited background thus far, early career professionals need to describe the activities of their internships, residencies, and first positions in sufficient detail to allow the reader to get a good grasp of training, experience, work settings, and competencies. Over time, these descriptions become less important (and less lengthy) as the professional’s activities become more apparent through work history, research and presentations, and other activities. While community activities are nice, professional activities will attract more attention. It is nice that an applicant coaches youth sports or is involved in the community theater, but these activities may not belong on a professional CV. The focus should be on what identifies the background, training, and professional abilities that highlight the qualifications for the position being sought. While CVs present a general picture of a candidate’s background education, training, work history, and professional activities, the cover letter Survival Guide for the New Professional

195

provides an opportunity to introduce the applicant to the reviewer and describe specifically what makes him or her the right person for the position. It does not need to be lengthy, but it should consist of more than a simple paragraph stating that he or she is applying for the position and has attached a CV. It should convey why the applicant is applying for that specific position and why he or she is the right person for the job. That means that the applicant should know something about the position above and beyond the position description provided in the announcement. This may require a phone call to the contact person to learn more before applying. The cover letter should also convey an openness to discuss qualifications and overall fit for the position. While peers are helpful in reviewing materials for misspellings, grammar, etc., it is more important to have the materials reviewed by a supervisor or mentor, specifically one who has been in the position of hiring. It may be important to ask that the reviewer provide feedback consistent with how he or she would rate the materials of an unknown candidate. More critical reviews result in a better outcome for the overall product. Licensure and Board Certification In my years of hiring for open positions, it always amazes me when applicants quickly point out that they are ‘‘board eligible.’’ While completing neuropsychology training consistent with the guidelines set out by the Houston Conference (Hannay, et al., 1998) is impressive, it holds little value if the applicant is not ‘‘license eligible.’’ There is a saying that ABD (i.e., All But Dissertation) also means All But Desirable in the job market. The same is true for an applicant who has completed their degree plus a two-year residency, but has not yet started the licensure process (ABL – All But Licensed). Many facilities cannot even bring an applicant in for an interview unless they have, at a minimum, taken and passed the Examination for Professional Practice in Psychology (EPPP). Having completed, or at least started, the licensure process prior to applying for positions provides a competitive advantage in the early career job market. As described earlier, the average time required to complete a graduate program in psychology has increased. Additionally, graduates must also complete an additional year of supervised postdoctoral experience in most states to be license eligible. This is typically a non-issue for new neuropsychology professionals who are completing a postdoctoral residency. Efforts are in place to advocate for licensure at the receipt of the doctoral degree, eliminating the need for the additional year of 196

The Business of Neuropsychology

postdoctoral supervision. At their February 2006 meeting, the APA Council of Representatives voted to adopt a statement as APA policy that affirms the doctorate as the minimum educational requirement for entry into professional practice as a psychologist. This paves the way for advocating a removal of the requirement of an additional year of postdoctoral training for licensure. This does not change the expectation for postdoctoral training in neuropsychology, but does allow for licensure to be completed prior to the end of residency. Licensure requirements in most states consist of the following:

• Completion of a doctoral degree in clinical, counseling, or school psychology – typically from an institution that is accredited by APA or the Canadian Psychological Association (CPA).  If your program is not accredited, there typically are additional questions to be answered or supporting documentation required to show that the degree requirements meet the Association of State and Provincial Psychology Boards (ASPPB) or National Register definition of a doctoral degree.

• Completion of a specified number of hours of supervised

• • • •

predoctoral professional experience – typically from an APA or CPA accredited pre-doctoral internship. Again, if the internship is not accredited, additional questions and documentation may be required. Demonstration of an additional year of supervised professional experience – not necessarily a formal postdoctoral experience. Obtaining a passing score on the EPPP. Obtaining a passing score on the state’s jurisprudence exam (where applicable). Passing an oral examination from licensed peers (where applicable).

These requirements are relatively standard across states, but some significant differences remain. Still, it is beneficial to have this process completed, or at least underway, prior to applying for open positions. Obtaining licensure is not automatic, and by no means is it expedient. De Vaney, Olvey, Hogg, & Counts (2002) highlight the difficulties in meeting Survival Guide for the New Professional

197

licensure requirements and the variability across states. The process was felt to be sufficiently taxing that they asked the question, ‘ Have we raised the bar too far?’’ While individual states differ in their requirements, some difficulties seem to remain relatively common across states, highlighting the need to start early:

• It takes longer than licensing boards indicate and longer than • • • • • • •

you expect. Some items mailed to the board office will not be received. Some items received by the board will be lost. Your program requirements may not match the board’s interpretation of appropriate requirements. The EPPP is harder than you think (Why else would there be so many study guides, seminars, preparation courses, etc.). Some jurisprudence and/or oral examinations are only given a limited number of times per year, possibly delaying the completion of licensure. A state board will sometimes cancel its monthly meeting, delaying final review of materials. Even with reciprocity and having an ABPP diploma, completing the licensure process takes a significant amount of time, effort, diligence, planning, and patience.

There have been increasing efforts to encourage new professionals to start the board certification process early in their careers. In fact, the American Board of Professional Psychology (ABPP) currently has an early entry program offering a discounted application rate for unlicensed postdoctoral residents to start the general application prior to the completion of their residency. This should not be mistaken for an effort to delay the licensure process, but instead as encouragement to apply for licensure and board certification simultaneously. The board certification process is more demanding and more time consuming, so starting the process early, as with licensure, keeps the momentum going in an early career psychologist’s professional development. There are several certifying boards in neuropsychology available for consideration and opinions about which board is best are not hard to find. Making a determination of which board is the right board is not the purpose of this text. However, early career professionals should take care when considering which board certification to pursue and make the decision based on stability, credibility, and legitimacy. There are many ‘‘vanity’’ boards available that are 198

The Business of Neuropsychology

happy to provide a credential with little more than payment required as a qualification. Before putting the time and energy into any specific board it is best to get the facts and consult with trusted colleagues. As a point of reference, the American Board of Professional Psychology (ABPP), incorporated in 1947 with the support of the American Psychological Association, provides oversight certifying psychologists competent to deliver high quality services in various specialty areas of psychology. The mission of the ABPP is ‘‘to increase consumer protection through the examination and certification of psychologists who demonstrate competence in approved specialty areas in professional psychology.’’ Currently, the ABPP serves as a unitary governing body of 13 separately incorporated specialty examining boards that assure the establishment, implementation, and maintenance of specialty standards and examinations by its member boards. Further information regarding the ABPP is available on their Web site at www.abpp.org. The American Board of Clinical Neuropsychology (ABCN) is the specialty board within ABPP that oversees an examination process for board-certification in clinical neuropsychology. It is, in fact, the fastest growing and most successful ABPP specialty board, with a greater proportion of the potential pool of specialists becoming board certified than any of the other twelve ABPP specialty examination boards. ABCN board preparation workshops are offered annually at several national conferences, including the annual meetings of the American Academy of Clinical Neuropsychology (AACN), International Neuropsychological Society, and the National Academy of Neuropsychology. These workshops provide an excellent opportunity to learn more about the boards as well as the credentialing process. For those considering the application process, a well-rounded paperback text has been developed (Armstrong, Beebe, Hilsabeck, & Kirkwood, 2008), and a well-organized group of volunteers has devised numerous resources under the auspices of AACN, known as Be Ready for ABPP in Neuropsychology (BRAIN). Information regarding the supportive and mentoring resources, including listserv and study materials, of BRAIN is available online at http:// www.cincinnatichildrens.org/svc/alpha/n/neurobehavioral/brain/. For additional information regarding board certification through ABCN, visit their Web site at www.theabcn.org.

Managing the Job Offer Hopefully, all of the time and effort put into the job search will result in one or more job offers. Identifying the right position for the applicant can be as difficult as identifying the right applicant for the position. There is rarely a Survival Guide for the New Professional

199

‘‘perfect position’’ that has all of an applicant’s wants and desires in terms of salary, roles and responsibilities, setting, hours, support services, geographic location, etc. In choosing the right position to accept there will need to be some give and take and weighing of pros and cons. It is vital to get as much information as possible about the opportunity, including short and long term expectations. It is also important to look at the promises made and the feasibility that they can be fulfilled. The first factor thought of in job negotiations is the salary range. It can be fun to look at salary surveys for neuropsychology and dream of large homes and fast cars. The reality is that the initial return on the education investment dollars in neuropsychology is not as good as one would hope. Salary ranges are large and vary by geographic region, setting, position type, and other considerations. Surveys, such as the AACN/TCN salary survey by Sweet et al. (2006) and the APA Center for Workforce Studies (Li, Wicherski, & Kohout, 2008) demonstrate the wide range of variability in salaries dependent upon multiple factors. The Federal Pay Scale (use by VA Medical Centers and other federal institutions) has less extreme variability, although geographic adjustments are made. The current Federal Pay Scale tables with geographic regions are available online. This is a good reference source in salary negotiations due to its ease of use and geographic corrections. As a point of reference, a newly licensed clinical psychologist is eligible for a General Scale (GS) level of GS 13-1 (grade 13; step 1). Despite the wide variance seen in the various salary surveys and pay schedules, individual facilities will have a much more stable (and restrictive) salary structure. Salaries are typically determined by Human Resources surveys of similar facilities in their area and a salary range or ‘‘band’’ for the position title is created and divided into quartiles. Salary offers will be based on this range, typically allowing for annual raises within the band over the coming years. As a result, negotiations in salaries are not as open-ended as many applicants may hope. There are set restrictions on how high a salary can go and still allow for merit pay increases in upcoming years. It is important to recognize the full compensation package taking into account paid time off, sick leave, various health insurances, disability, retirement contributions, etc. This can be referred to as the ‘‘hidden paycheck.’’ Typically, an additional 30% of the salary can be added for the cost of benefits and these added to the actual salary make up the total compensation package. Despite the ‘‘ceiling’’ effect of hospital-based salaries, this doesn’t paint the entire picture. There still are a few areas of negotiation that are beneficial to 200

The Business of Neuropsychology

both the psychologist and the facility. Hospitals and private practices tend to request or require non-compete contracts. Sometimes these are as negotiable as salary, but sometimes they are not. If the expectation is that an individual will never sign a non-compete contract, at some point he or she may have a job offer rescinded as a result. It is best to negotiate around the non-compete by way of distance from the institution/practice, time parameters, clearly identifying what activities are included, etc. Some other areas of negotiation include added incentive for high productivity, allowance or sharing of medico-legal practice reimbursement and deposition fees, grant sharing, continuing education dollars, professional dues allowance, and others. It is best to ask about these options rather than demand them. If you don’t ask they may not tell. As a final note, if an employer actually pays employees what they are ‘‘worth,’’ they will not be in business for very long. As with any commodity, it is necessary to generate more revenue for any good or service than what it costs to produce – no margin, no mission.

First Job Issues When a new neuropsychologist takes a first non-training job there is a risk of developing an imposter syndrome – that feeling that maybe I am really not ready for this and someone will figure that out and blow the whistle. Those feelings are not reserved for the new professional. As neuropsychologists advance in their careers those feelings may come and go as new challenges present themselves. The key is to identify the roles and responsibilities associated with a position as well as the identified performance expectations. If there are no clear expectations documented, it is appropriate to request them to know the standards by which performance will be measured. Additionally, reasonable personal expectations and targets should be established to guide not only work performance, but professional development as well. It is worth noting that as an early career professional gets settled into a position, the negatives of the job, setting, and possibly geographic location can come to the forefront as other position announcements are seen that would be ‘‘perfect.’’ As stated previously, there is no perfect position and the grass is not always greener in someone else’s yard. Before jumping, consider how well the current yard has been fertilized, watered, and groomed. Has it had time to grow, fill in, and mature? What about the current position can be improved to better suit wants, desires, and expectations? It is also important to notice the can of green spray paint hidden behind the shed in the other yard. Survival Guide for the New Professional

201

Other Early Career Issues Networking/Mentoring The American Psychological Association Committee on Early Career Psychologists (APA-ECP) developed a brochure entitled Building Bridges: Opportunities for Learning, Networking, and Leadership (2006). This publication outlines not only the benefits of networking and mentoring, but also specific ways to become a part of the professional community. Networking activities allow new professionals to develop and foster relationships with other professionals that share interests, goals, and passions for specific areas within the profession of psychology and neuropsychology. It is these relationships that lead to action through participation in organizations, committees, conference activities, and eventually leadership activities within the organization. Additionally, networking allows you to meet individuals that may provide mentorship through advice, consultation, and feedback based on their own professional experience, as well as other professionals for research, clinical, or other forms of collaboration. Professional Development Once quality networks are established, professional development and involvement happens in a very natural fashion. These relationships spawn increased activities within organizations and ultimately some early leadership opportunities. As described in the APA-ECP brochure, most professional associations have a hierarchical governance structure run by an executive committee that oversees the administrative activities of the organization as well as a variety of boards, committees, and other leadership groups. For new neuropsychologists, it is best to identify opportunities that build on your strengths and expertise while serving the organization. There are many committees in every organization that are always looking for individuals to step up and take an active role. Find a committee that fits your interests and volunteer to serve. Taking an active role in the committee strengthens networking and professional relationships and creates an identity with a new set of professional peers. For some, increased interest in the activities develops and informal leadership qualities emerge. Ultimately, it is very possible that they end up as a chair of the committee. From there, the professional growth continues, possibly including elected positions within the organization. It all started with joining a committee and getting involved. 202

The Business of Neuropsychology

Loan Repayment, Early Career Research Awards, and Financial Planning With so many new graduates facing mounting debt due to student loans that can rise into six figures, alternative ways of paying down this debt are often sought. Hawley (2005) outlines the National Health Service Corps (NHSC) loan repayment programs and the application process. NHSC is a federal loan repayment program that assists health professionals in reducing their debt by working in underserved health professional shortage areas. For new professionals looking for such an opportunity, the Hawley article is a great resource. Additional information can be obtained directly from the NHSC Web site. Another way to acquire loan repayment assistance or increase their financial bottom line is through early career research awards. The National Institute of Health (NIH) gives Career Development Awards for early career professional through the NIH Pathway to Independence (PI) Award (K99/R00) and through the Loan Repayment Program (L30). Additional information can be obtained from the Web sites provided in the reference section of this chapter. As unbelievable as it may seem as early career neuropsychologists embark on a new career, most are already behind their peers in retirement planning. Think for a moment about your high school graduating class and your peers that did not obtain the higher degree requirements that your path did. Neuropsychologists typically enter the work force in their late 20’s or early 30’s. This leaves them five or more years behind similar aged peers in terms of retirement savings, not to mention the possibility of accumulating a significant amount of debt in the process. Suffice it to say, as early career neuropsychologists there is some catching up to do, and as presented above, the salaries are not necessarily helpful in closing the gap. Early financial planning activities are very useful in establishing good habits on the front end that will pay large dividends over time. The APA-ECP developed a booklet entitled Financial Planning for Early Career Psychologists: From Repaying Student Loans to Successful Retirement that provides some initial insights into how to plan for the future. Additionally, professional financial planners are useful to map out a plan for investment and retirement security while paying down the education-related debt in the most expeditious fashion.

References, Resources, and Suggested Readings American Psychological Association Committee on Early Career Psychologists. (2008). Financial planning for early career psychologists: From repaying student loans to successful retirement. Washington, DC: American Psychological Association. Survival Guide for the New Professional

203

American Psychological Association Committee on Early Career Psychologists. (2006). Building bridges: Opportunities for learning, networking, and leadership. Washington, DC: American Psychological Association. Armstrong, K. E., Beebe, D. W., Hilsabeck, R. C. & Kirkwood, M. W. (2008). Board certification in clinical neuropsychology: A guide to becoming ABPP/ABCN certified without sacrificing your sanity. New York: Oxford University Press. Belar, C. (1998). Graduate education in clinical psychology: ‘‘We’re not in Kansas anymore.’’ American Psychologist, 53, 456–464. De Vaney, C., Hogg, A., & Counts, W. (2002). Licensure requirements: Have we raised the bar too far? Professional Psychology: Research and Practice, 33, 323–329. Hall, J. E., Wexelbaum, S. F. & Boucher, A. P. (2007). Doctoral student awareness of licensure, credentialing, and professional organizations in psychology: The 2005 National Register International Survey. Training and Education in Professional Psychology, 1, 38–48. Hawley, G. (2005). Got loans? Understanding the National Health Service Corps Loan Repayment Program. The Kansas Psychologist, 31(3). Johnson, N. (2001). Is our education system ready for the next generation? APA Monitor, 32(2), 5. Li, X., Wicherski, M., & Kohout, J. L. – American Psychological Association Center for Workforce Studies (October, 2008). Salaries in psychology 2007: Report of the 2007 APA salary survey. Washington, DC: American Psychological Association. Hannay, H. J., Bieliauskas, L. A., Crosson, B. A., Hammeke, T. A., Hamsher, K. deS., & Koffler, S. P. (1998). Proceedings: The Houston Conference on Specialty Education and Training in Clinical Neuropsychology. Archives of Clinical Neuropsychology, 13, 157–250. Sweet, J. J., Nelson, N. W., & Moberg, P. J. (2006). The TCN/AACN 2005 ‘‘salary survey’’: Professional practices, beliefs, and incomes of U. S. neuropsychologists. The Clinical Neuropsychologist, 20, 325–364. Vaughn, T. J. (Ed.). (2006). Psychology licensure and certification: What students need to know. Washington, DC: American Psychological Association. Resources for Early Career Neuropsychologists

• APA Committee on Early Career Psychologists CECP - The CECP Web site (www.apa.org/earlycareer/) has very useful information on resources, careers, activities, Listservs, and other topics.

204

The Business of Neuropsychology

• Be Ready for ABPP in Neuropsychology (BRAIN) http://www. cincinnatichildrens.org/svc/alpha/n/neurobehavioral/brain/ • National Health Service Corps (Information on the NHSC Loan Prepayment Program) – http://nhsc.bhpr.hrsa.gov/ • The National Institutes of Health Career Development Awards  NIH Pathway to Independence (PI) Award (K99/R00) http:// grants.nih.gov/grants/guide/pa-files/PA-06-133.html%00  Loan Repayment Program (L30) http://www.lrp.nih.gov/ about/lrp-clinical.htm

• National Register – www.nationalregister.org • PsycCareers: APA’s Online Career Center – http://psyccareers. apa.org/ • U. S. Government Federal Pay Scale – http://www.opm.gov/oca/ 08tables/indexGS.asp

Survival Guide for the New Professional

205

This page intentionally left blank

12 &&& Professional Development for the ‘‘Seasoned’’ Professional ‘‘It’s not old, just older.’’ Bon Jovi (Billy Falcon & Jon Bon Jovi, 2000) Neuropsychologists reaching the middle to late stages of their careers do so with their own histories, hopes, and aspirations. While early career neuropsychologists focus on securing their first jobs, creating professional identities, and looking for ways to advance professionally, more mature neuropsychologists have the opportunity to take stock in their current situations and decide where they want to focus their energies in the future. There are those who hope to continue to progress in terms of professional development, notoriety, prestige, and purpose, while others prefer less time in the limelight and more time with non-professional activities. Neither path is right or wrong. They just lead different places with different rewards. Also, neither path is permanent. Life brings changes with many twists and turns with variations in professional roles and responsibilities; ever-changing family dynamic, activities and responsibilities; new opportunities for community involvement; and even opportunities for professional advancement through promotion or job changes. Eventually, future planning focuses more on end of career issues such as decreasing professional involvement, transferring responsibilities to others, closing or selling a practice, and/or retirement. As with any developmental process, career/professional development has a beginning, middle, and end. While previous chapters presented material in a ‘‘practical’’ manner with descriptions or ideas communicated in more of a ‘‘how to’’ fashion, the current chapter is designed more to stimulate thinking for the more middle and late 207

career neuropsychologist and to explore some opportunities for consideration rather than offering direct information. Practical resources are offered where applicable, but this chapter is intended to be more open-ended in its format.

Where Am I Now and Where Am I Going? As described in Chapter 9, the SWOT analysis is a good way to gain perspective about the status of an organization and to plan for future program development. This can also be used for individuals that are looking at their own professional status and looking at future professional development. For neuropsychologists who have been working in the field for a number of years, a personal SWOT analysis is useful in determining their current status and outlining goals and plans for the future. To review, the SWOT analysis is used to outline Strengths, Weaknesses, Opportunities, and Threats. For the individual neuropsychologist, this allows exploration of the ‘‘internal’’ strengths and weaknesses or what he or she is bringing to the table, along with the ‘‘external’’ opportunities and threats related to their current professional environment as well as other areas. A personal SWOT should not completely focus on professional activities, but should also include personal aspects such as family, community, and personal activities and interests outside of the work place. Ultimately, the goal is to use the SWOT analysis to asses the ‘‘total’’ current situation and to identify opportunities for development and improvement in a balanced fashion. Future development can then proceed in a rational fashion whether it is to focus on increasing financial status and security, enhance current vocational/professional opportunities, embark on new professional journeys, increase professional stature, or satisfy internal development and goals.

Increasing the Financial Bottom Line As noted in the early career neuropsychologist chapter, salary surveys by Sweet et al. (2006) and the APA Center for Workforce Studies (Li, Wicherski, & Kohout, 2008) demonstrate the wide range of variability in salaries for psychologists and neuropsychologists. Two of the factors that influenced salaries most prominently in these surveys were work setting and years since completing training. It is sometimes difficult to significantly change an individual’s salary beyond yearly cost of living or merit pay increases without a change in position title (promotion) or position location (change of institution or department). Salary negotiations typically occur at the time of hire rather than during a professional’s tenure within a job. There is 208

The Business of Neuropsychology

the option of looking for greener (i.e., more lucrative) options elsewhere. This may result in increased salary as other institutions provide encouragement to leave one location for another. Additionally, this may lead to a renegotiated salary opportunity from a current employer as part of a retention package to keep a neuropsychologist from leaving. Still, this increased salary may come at a cost of decreased perceived commitment to the current facility or a general sense of instability. It can be difficult to raise this issue when there is no desire to change locations. For those secure and happy in their current positions who are simply looking to increase their financial security and happiness within the present setting, the focus is on changing the identified expectations, roles, and responsibilities (i.e., position title). This could be accomplished through an advancement of job title to increase the salary band (e.g., ‘‘Senior’’ Neuropsychologist) or possibly promotion to a position with greater leadership responsibilities (e.g., Coordinator, Director, Manager, etc.). With this title change and increased performance expectations comes a change in salary. Another avenue to increase financial standing within an organization is to diversify activities to increase revenue generation or status within the organization. Program development activities in new service areas can be beneficial in both aspects, especially if more lucrative referral streams are identified. For the middle to late career neuropsychologist whose reputation in the community has developed in prominence, this may mean increasing medico-legal referrals that are known to be more financially lucrative. Negotiations regarding salary increase, revenue sharing, and deposition dollars are common with an increase in this referral stream. Securing grant funding for research or program development can be another way to increase a neuropsychologist’s financial value within an institution. The key is to explore the opportunities within the present organization and identify avenues to improve both the institution’s and your own bottom line (SWOT analysis). The challenge is to present these ideas in a rational and collaborative, yet persuasive, manner based on facts and figures rather than emotions. For those in private practice, increases to the financial bottom line are based on increasing revenues and/or reducing costs. Increasing revenues requires improving the payor mix by re-evaluating current referral streams and adding more lucrative sources if possible. Again, as a neuropsychologist becomes more experienced, this typically comes with increased notoriety and prestige. This may mean increased referral opportunities and as a result an opportunity to be selective in which streams will be the focus of the practice. Professional Development for the ‘‘Seasoned’’ Professional

209

For stability and security purposes there remains a need for diversification in referral sources, but consideration of payor mix can now also be considered. This may mean expanding the practice to include entry-level providers to manage the volumes in the lower payment services (e.g., Medicare), allowing the more experienced professional to grow more lucrative services (e.g., Medico-Legal). In short, if the practice has been in existence for a number of years it is likely time to revisit and revise the business plan for future growth and possible change in the business/corporate structure if needed.

Enhancing Professional Status and Intellectual Stimulation Satisfaction in work is dependent upon more than just financial security. As neuropsychologists approach the middle to late career stages of their career they also look to improve their satisfaction in their professional endeavors as a whole. All work and no play makes Johnny a dull boy and all clinical work and no other interesting professional activities makes a neuropsychologist stagnant. To avoid the mid-career doldrums, diversification of professional activities stimulates continued interest and engagement in the profession of neuropsychology. There are many opportunities for more experienced neuropsychologists to share their knowledge and experience for the good of the profession. While adding research activities is certainly an appropriate way to diversify professional activities, it is not uncommon for middle to late career neuropsychologists to already have years of experience in various research projects or possibly a single line of research. A new avenue might be to expand the presentation of this material through a written collaborative article, chapter, or book or possibly a workshop at a national meeting or other venue. This allows them to continue in their areas of interest, while developing new skills and expertise in disseminating the information. This also provides additional opportunities to extend their notoriety and prestige in the neuropsychology community. In a similar vein, having the additional years of experience and expertise provides the opportunity to gain increased knowledge and perspective within the field of neuropsychology. Presenting this knowledge through more theoretical/practice based writings can be very useful in stimulating thinking within the field of neuropsychology. Some great examples of this include writings such as Paul Meehl’s (1973) ‘‘Why I Do Not Attend Case Conferences,’’ Carl Dodrill’s (1997) ‘‘Myths of Neuropsychology,’’ or Prigatano’s (1989) ‘‘Work, Love, and Play After Brain Injury.’’ These articles 210

The Business of Neuropsychology

have become classics in the field and have served to stimulate thinking for many years. To cite the work of Meehl (1973), he mentions that as a chairman of the Psychology Department he ‘‘had a policy of not hiring faculty to teach courses in the clinical and personality area unless they were practitioners and either had the ABPP diploma or intended to get it’’ (p. 226). This demonstrates his belief that to teach in these areas the psychologists needed appropriate background and experience. As such, experienced neuropsychologists are well suited to pass their knowledge and experience in classroom environments. This does not necessarily mean a change in jobs. Adjunct teaching opportunities are commonly available and universities would welcome the chance to have an experienced practitioner in their classrooms. Additionally, passing this knowledge through practicum, internship, and residency activities can be just as stimulating as possible work in educational settings. Teaching and training activities come with both pain and joy, but overall this way of giving back to the profession and ensuring its health for the future can be rewarding in many ways. Finally, there are vast numbers of professional organizations at local, regional, national, and international levels that promote the advancement of psychology and neuropsychology. As discussed in the early career chapter, these organizations are always looking for professionals to become more involved. This is especially the case for more advanced practitioners who have more to offer in terms of experience, perspective, leadership, and mentoring. Increasing involvement in these organizations, especially in leadership and mentoring roles, provides an opportunity to ‘‘give back’’ while investing in the future of neuropsychology.

Continued Professional Development and Advancement Despite the years of experience and the continuous learning that occurs over the years working in neuropsychology, there is always room for continued learning and professional development. As can be seen in just the past two decades, the field of neuropsychology is rapidly changing with advancements in neuroradiological methods, the neuropsychological measures used, the time allotted for evaluation, education and training methods, billing and coding activities, reimbursement patterns, etc. It is imperative that experienced neuropsychologists maintain awareness of these trends and contribute to the continued growth of the specialty. It is also important to keep up with the professional changes regarding credentialing. Board certification is moving Professional Development for the ‘‘Seasoned’’ Professional

211

toward the expectation, rather than the exception. Most job announcements now include ‘‘board certification or eligibility’’ as a requirement for consideration. Armstrong et al. (2008) in their guide to becoming board certified in clinical neuropsychology highlight the advantages of board certification including the following ‘‘top ten’’ reasons: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Higher Income Job Satisfaction Job Security Credibility License and Practice Mobility Streamlined Credentialing Increased Knowledge Base Reduced Public Confusion Personal Validation and Satisfaction Quality Assurance

Some of these reasons may not apply to every individual neuropsychologist, but this list does provide basis for pursuing board certification, even later in a neuropsychologist’s career. In addition to board certification, there may be opportunities for advancement through further training and education to prepare for administrative roles or positions. Callahan (2005), in his article entitled ‘ Rehabilitation Psychologist as Health Care Executive: A Platform for Professional Diversification,’’ outlines the rationale as to why psychologists are suited for administrative positions. He describes the rapid turnover and changes facing U.S. hospitals and the growing need for leadership in healthcare administration. While recruitment efforts have typically focused on non-healthcare professionals (e.g., MBAs or finance professionals) who lack the traditional patient-centered values, Callahan suggests that this need for new leadership reflects an opportunity for psychologists to utilize their unique skills to move into healthcare leadership positions. He presents a rationale for psychologists to move into healthcare leadership based on five core competencies:

• Clinical – Psychologists have an understanding of healthcare delivery from a provider perspective.

• Relational – Psychologists have core interpersonal skills that could translate to improved personnel management. 212

The Business of Neuropsychology

• Analytical – Psychologists training in psychometric/statistical knowledge and their ability to understand and integrate data is valued in this setting. • Methodological – Psychologists bring a hypothesis testing mindset that can be applied to strategic planning and follow through with objective evaluation. • Ethical – Psychologists have established ethical standards of practice that are rarely addressed in MBA programs. The sixth area he describes is ‘‘financial’’ and this is presented as a ‘‘give and take proposition.’’ Psychologists typically come to administrative roles with little experience in the business world, little or no education in business as a part of their doctoral curriculum, limited understanding of the language of business, and little or no training in financial analysis. For psychologists that make up for these limitations through additional educational activities (e.g., earning an MBA, MHA, or MPH), there is significant reward waiting on the other side. Specifically, psychologists who can move into administrative positions typically have improved long-term earning potential and increased power, prestige, and influence in their institutions. For the discipline as a whole, psychologists in these positions are provided a seat at the administrative table, affording them the opportunity to keep psychology as a discipline from becoming irrelevant and to promote positive changes from within (potentially from the top). Administrative roles are not meant for everyone, but for those who have an interest in this area, the payoffs can be rewarding personally, professionally, and financially. It is a not an automatic transition and is most effective when it occurs in a natural developmental progression. Psychologists are rarely hired directly into administrative positions. Typically, the leadership and knowledge base they demonstrate in clinical settings target them for advancement into supervisory or management activities. Administration looks for future leaders that have an ability to motivate and influence others without demanding or setting a negative tone. This behavior may be seen in psychologists/neuropsychologists working in team environments or within a departmental or training program structure. As psychologists move into leadership/administrative roles it is important to learn the language of business and learn as much as possible along the way. Additional education and training may be useful for those with administrative aspirations to avoid the Peter Principle – getting promoted to a level of incompetence Professional Development for the ‘‘Seasoned’’ Professional

213

Slowing Down or Fading into the Sunset Despite all of the discussion in this chapter about professional development, diversification, and advancement, for some the choice is to gradually decrease professional activities and focus time and energy in non-professional directions. This may or may not mean ending their professional career completely, but does mean altering their professional activities in a significant way. Retiring to Full Time I have had several colleagues later in their careers describe themselves as being ‘‘retired’’ into a full time position after spending many frenetic years dedicated to their clinical activities, research, teaching and training, and professional organizations. This partial retirement allowed them to spend more time with family or on other areas of interest that did not involve neuropsychology. Reaching the point where it is okay to say ‘‘no thanks’’ when an opportunity presents itself is a sign of not only maturity, but also humility. Still, it takes planning and preparation to make this transition successfully. Priorities and values change over time and making a decision to walk away from some responsibilities is not easy. For some this means a change in job due to the high profile/high productivity expectations of current positions. Without changing the setting, the hours and expectations would not change. This means seeking new employment and being clear about expectations for a new position. A new employer may have the same high expectations as the prior employer if clear intentions are not laid out beforehand. The positive of this is that searching for a new position with the plan of slowing down allows the professional to look more at location and entry-level expectations rather than salary and career advancement opportunities. Some late career professionals choose to slow down or reduce responsibilities by mentoring a junior colleague to take the reins and carry the department/ practice forward. This is a process that typically is a natural progression over several years, but still involves planning and open communication. This passing the mantle does not come without stress and tension, as experienced neuropsychologists must now withhold judgment and opinion when the newly identified leader takes things in a different direction or does things in a different way. This requires redefining roles and living up to the change in status. On the more positive side, the late career neuropsychologist has the opportunity to observe 214

The Business of Neuropsychology

and appreciate the growth and development of a junior colleague and continue to provide support and mentoring as needed. Retirement Issues and Closing a Practice Ending a career in any profession requires advance planning and preparation on multiple levels. In neuropsychology it is impossible to simply close the doors or walk away. There are many clinical, ethical, legal, and business obligations that must be managed. Due to the extent of these obligations, it is recommended that neuropsychologists consult with accounting and legal professionals as they embark on this endeavor. The American Psychological Association has a Checklist for Closing a Practice developed by their Corporate Relations and Business Strategy Staff (2005) that is applicable not only to those in private practice, but also those transitioning out of clinical practice in other settings. This checklist includes activities related to planning for the retirement/closure (Getting Started); informing current and past clients and appropriately managing their records (Clients and Their Records); closing out financial records and exploring options to sell the practice (Finances); transitioning the business aspects to partners or buyers, ending business relationships, and dispensing of business related assets and equipment (Business Issues); and personal and professional liability concerns (Take Care of Yourself). Due to the wide variation among business structures, settings, and organizational activities, it is not possible to address all of these issues in a single chapter. It is important to realize that this can be a lengthy and tedious process and legal and accounting professionals will likely be needed to assist in this transition. For those not in private practice settings, there is still a need to make appropriate plans for retirement and ending a clinical practice. Many of the items in the checklist described above are still applicable. There is a need to make appropriate referrals to current, and possibly some previous, clients to avoid abandonment and to maintain a continuum of care. Additionally, there is a need to identify a custodian of records so that patient information is stored in a manner that is compliant with HIPAA and other regulations. It is important to contact professional referral sources to inform them of your plans and potentially to provide alternative referral options. Depending on the nature and setting of the practice, other issues may warrant attention as well, including any planned ongoing consultative relationships, notification of professional organizations, notification of licensing boards, etc. Professional Development for the ‘‘Seasoned’’ Professional

215

References, Resources, and Suggested Readings American Psychological Association Corporate Relations and Business Strategy Staff (2005). Checklist for Closing Your Practice. Washnington, DC: American Psychological Association. Available online at http://www. apapractice.org/apo/insider/practice/pracmanage/business_strategies/ closing.html#. Armstrong, K. E., Beebe, D. W., Hilsabeck, R. C. & Kirkwood, M. W. (2008). Board certification in clinical neuropsychology: A guide to becoming ABPP/ABCN certified without sacrificing your sanity. New York: Oxford University Press. Falcon, B. & Bon Jovi, J. (2000). Just older. From the album Crush. New York: The Island Def Jam Music Group. Callahan, C. (2005). Rehabilitation psychologist as health care executive: A platform for professional diversification. Rehabilitation Psychology, 50, 177–182. Dodrill, C. B. (1997). Myths of neuropsychology. The Clinical Neuropsychologist, 11, 1–17. Li, X., Wicherski, M., & Kohout, J. L. – American Psychological Association Center for Workforce Studies (October, 2008). Salaries in psychology 2007: Report of the 2007 APA salary survey. Washington, DC: American Psychological Association. Meehl, P. E. (1973). Why I do not attend case conferences. In P. E. Meehl, Psychodiagnosis: Selected Papers, (pp. 225–302, Chapter 13). Minneapolis: University of Minnesota Press. Prigatano, G. P. (1989). Work, love, and play after brain injury. Bulletin of the Menninger Clinic, 53, 414–31. Sweet, J. J., Nelson, N. W., & Moberg, P. J. (2006). The TCN/AACN 2005 ‘‘salary survey’’: Professional practices, beliefs, and incomes of U. S. neuropsychologists. The Clinical Neuropsychologist, 20, 325–364.

216

The Business of Neuropsychology

Index

Note: Page numbers followed by f and t indicate figures and tables, respectively. Accounting basics, 50–51 Administration factors, and bottom line, 151–53 Ambulatory Payment Classifications (APC), 140–41 American Academy of Clinical Neuropsychology (AACN), 199 American Board of Professional Psychology (ABPP), 198 APA Center for Workforce Studies, 200 APA Ethical Principles and Code of Conduct, 90, 91 Documentation of Professional and Scientific Work and Maintenance of Records, 90 Maintaining Confidentiality, 90 Maintenance, Dissemination, and Disposal of Confidential Records of Professional and Scientific Work, 90–91 APA Recordkeeping Guidelines, 91–92 Confidentiality of Records, 92–93 Content of Records, 92 Disclosure of Record Keeping Procedures, 93 Disposition of Records, 97 Electronic Records, 95 Financial Records, 96

Maintenance of Records, 93 Multiple Client Records, 96 Preserving the Context of Records, 95 Record Keeping in Organizational Settings, 95–96 Responsibility for Records, 92 Retention of Records, 94–95 Security, 93–94 Assessment code 96101: Psychological Testing by Professional, 113 96102: Psychological Testing Administered by Technician, 113–14 96103: Psychological Testing Administered by Computer, 114 96116: Neurobehavioral Status Examination, 116 96118: Neuropsychological Testing by Professional, 113–14 96119: Neuropsychological Testing Administered by Technician, 113 96120: Neuropsychological Testing Administered by Computer, 113 96150: Initial Health and Behavior Assessment, 124 217

Assessment code (Continued ) 96151: Health and Behavior Re-Assessment, 124 Assessment documentation, 129 Association of State and Provincial Psychology Boards (ASPPB), 197 Average gross profit, 32 Average gross profit percentage, 32 calculation, 38–40 Average moving range (XmR), 59 Baylor Health Care System, 19 Be Ready for ABPP in Neuropsychology (BRAIN), 199. See also American Academy of Clinical Neuropsychology (AACN) Billing, 12–13, 111 Billing/Coding Representative, 73–74 Board certification, 196–99 advantages of, 212 Board eligible, licensure, 196 Bottom line administration factors, 151–53 charity care and write-offs, 151 clinician factors, 153 co-pays collection, 149–50 increment of, 208–10 managing threats, 154 no pays/zero-pays, 151 payor mix, 147–48 pre-certification process, 148–49 use of trainees and students, 153–54 Break-even analysis, 31–43 average gross profit percentage calculation, 38–40 break-even point, 33, 41–42 fixed cost estimation, 40–41, 41t income and expenditure estimation, 34–35 218

result analysis, 41–43 revenue prediction, 35–37 timeframe, defining, 34 worksheet, 37t Building Bridges: Opportunities for Learning, Networking, and Leadership, 202 Business definition of, 3 structure, 4–8 cooperative, 4, 7–8 corporation, 4, 6–7 partnership, 4, 5–6 sole proprietorship, 4–5 of hospitals. See Hospital-based business structures Business and strategic planning, purpose of, 13–14 Business description business knowledge and accomplishments, 30 business process, 26–27 competitors analysis, 28–29 content areas, 25 marketing strategies, 29–30 marketplace, defining, 27–28 purpose, 26 Business partnership, 4, 5–6 Business plan, 23 break-even analysis, 31–33 average gross profit percentage calculation, 38–40 break-even point, 33, 41–42 fixed cost estimation, 40–41, 41t income and expenditure estimation, 34–35 result analysis, 41–43 revenue prediction, 35–37 timeframe, defining, 34 worksheet, 37t cash flow analysis, 46–49 Index

completion of, 49–50 accounting basics, 50–51 development of, 25 business description, 25–30 financial aspects of, 30–49 financial aspects of, 30–31 goals, 23–24 profit and loss (P&L) forecast, 43–45 start-up costs estimation, 45–46, 47t Business process, 54 Canadian Psychological Association (CPA), 197 Cash flow analysis, 46–49 Centers for Medicare and Medicaid Services (CMS), 13, 36, 62, 63, 82, 111 Charge system, developing, 144–46 Charity care and write-offs, 151 Childhood developmental diagnoses codes 96110: Developmental Testing; limited, 117 96111: Developmental Testing; extended, 117 Children’s Health Insurance Reauthorization Act of 2009, 136 Clinical staff, 75 Clinical training programs, 187–89 Clinician factors, and bottom line, 153 Closing a practice, checklist for, 215 Code sets, 101–2 Coding. See Current Procedural Terminology (CPT) Competitive advantage, 176 Computerized medical records, 81–82 Constant compliance, 56 Index

Continued professional development, 211–13 Continuous quality improvement (CQI), 56 Control chart, 58–59 Cooperative business, 4, 7–8 Co-pays collection, 149–50 Corporation, 4, 6–7 Cover letters, for job search, 195–96 Cross-functionality, business process, 55 Current and possible future analysis, 169–71 Current Procedural Terminology (CPT), 111, 112–13 and ICD diagnoses, 125–26 documentation, 126–31 for neurological practice, 113–14 assessment codes, 114–19 intervention codes, 119–25 Curriculum vita (CV), 195–96 Customer, business process element, 55 Customer service representative, 75 Development/practice manager, 75–77 Diagnosis-Related Group (DRG) payment, 139 Diagnostic interview codes 90801: Psychiatric Diagnostic Interview Examination, 120 90802: Interactive Psychiatric Diagnostic Interview Examination, 120 Differentiation, competitive advantage, 176 Doctoral clinical psychologist, definition, 53 Documentation, 126–28 assessment documentation, 129 219

Documentation (Continued ) intervention documentation, 129–30 professional documentation, 128 Early career, issues in. See also First job financial planning, 203 loan repayment, 203 networking and mentoring, 202 professional management, 202 research awards, 203 Early career research awards, 203 Electronic health and medical records (EHR), 81 Embeddness, business process, 55 Employer Identifier Standard, 102 Entrepreneur’s Toolkit (Harvard Business Essential), 4 Evaluation, business process element, 55–57 Examination for Professional Practice in Psychology (EPPP), 196 Expected unit sales, 32 Facility fees. See Fees The Facts of Managed Care, 163 Federal Pay Scale, 200 Fee structures facility fees eligibility for, 11, 12, 13 provider-based, 140–142 professional fees provider-based, 142–144 Financial status, and business structure, 8 Financial bottom line. See Bottom line Financial dashboard example, 156t Financial planning, career issues, 203 220

First job identifying right position, 199–201 issues in, 201. See also Early career, issues in job searches, 194–95 securing, 193–94 Fixed cost, 32 calculation, 40–41 Full-time retirement, 214–15 Functional brain mapping code 96020: Functional Brain Mapping, 118 Goals of business financial requirement, 23–24 fundamentals of business, 23, 24 characteristics, 16 Graduate Medical Education (GME), 153 Gross profit, 32–33 Health and Behavior Assessment and Intervention Codes, 122–25 Health and behavior codes 96150: Initial Health and Behavior Assessment, 124 96151: Health and Behavior Re-Assessment, 124 96152: Individual Health and Behavior Intervention, 124 96153: Group Health and Behavior Intervention, 124 96154: Family Health and Behavior Intervention with Patient Present, 124 96155: Family Health and Behavior Intervention Index

without Patient Present, 124 and psychotherapy codes, differentiation, 123t Healthcare leadership, 212 Healthcare process, 60–63 healthcare control model, 61–62, 62f healthcare process model, 60–61, 61f outcome measurements, in psychology and neuropsychology practice, 63–65 Healthcare reimbursement, 161–65 Health Insurance Portability and Accountability Act (HIPAA), 97 access and disclosure, 104–5 applicability and action, 102–4 consent and authorization, 105 Employer Identifier Standard, 102 final caveats, 106 in research settings, 105–6 overview, 98 Privacy Rule, 99–100 Security Rule, 100–101 Transaction Rule and Code Sets, 101–2 Hospital-based business structures, 8–10 for-profit hospitals, 8, 9–10 not-for-profit hospitals, 8, 9 Hospital settings, psychology practice in, 10 consultants, 12–13 departments, 11 hospital-based psychologists, 10–12 independent practitioners, 13

Index

Improved time management, 190–91 Indirect benefit (IB), 185–86 Intellectual stimulation, 210–11 International Neuropsychological Society, 199 International Organization for Standardization ISO 9000 family of standards, 56 International Statistical Classification of Diseases and Related Health Problems (ICD), 111 Intervention documentation, 129–30 Job searches. See First job License eligible, licensure, 196 Licensure, 196–99 Licensure requirements, 197 Limited liability company (LLC), 5–6 Limited liability partnership (LLP), 5–6 Loan repayment, career issues, 203 Managed care, rules of, 163–64 Managing threats, 154 Marketing efforts, 176–78 Marketplace, defining, 27–28 Market sector, 3 Medical records officer, 74–75 Medicare, 145, 149, 150, 151, 153 approach to payment, 139–40 translation to payment, 140–42 benefit structure, 137–38 Part A, 137 Part B, 137 Part C, 137–138 Part D, 138 fraud and audits, 154–55

221

Medicare (Continued ) model for reimbursement, 136–37 provider-based status, 138–39 choosing, 142–44 Medicare Advantage (MA), 137–38 Medicare Fraud and Audits, 154–55 Medicare Physician Fee Schedule (MPFS), 140 Medicare Trust Fund, 137 Mission, of organization, 15–16. See also Goals MPFS allowable payments for select CPT codes, 143t National Academy of Neuropsychology, 199 National Employer Identifier (NEI), 102 National Health Plan Identifier, 102 National Provider Identifier (NPI), 102 Networking and mentoring, career issues, 202 Neuropsychological testing, reimbursement procedures, 172 Neuropsychology, definition of, 176 Non-billable time, 183–84 IB activities, 185–86 value-added contributions, 186–87 value-added services, 184–85 No pays/zero-pays, 151 Office of the Inspector General (OIG), 155 Office process, 69, 77 auditing, 78–79 computerized medical records, 81–82 flowsheet, 86–87 identifying, 77–78 222

paperwork, 79–81 people, 70–71 billing/coding representative, 73–74 clinical staff, 75 customer service representative, 75 development/practice manager, 75–77 medical records officer, 74–75 patient liaison/administrative assistant, 71–72 pre-certification representative, 72–73 practice, 82–83 setting, and issues, 83–84 Opportunities, SWOT, 168–169 Ordered activities, business process element, 55 Outcome measurement, in psychology and neuropsychology practice, 63–65 Outpatient Prospective Payment System (OPPS), 138–39 Paperwork, 79–81 Partnerships, 4, 5–6 Patient liaison/administrative assistant, 71–72 ‘‘Pay for performance’’ model, 63 Payor mix, 147–48 Personal liability of owners, 8 The Practice of Clinical Neuropsychology, 24 Preauthorization and rejection scenarios, 162–63 managed care rules, 163–64 Pre-certification process, 148–49 Pre-certification representative, 72–73 Primary processes, 54 Privacy Rule, HIPAA, 99–100 Index

Process definition, 54 of office. See Office process Process control, business process, 55–57 Process management, 58–60 Products, 36 Professional development and advancement, 211–13 Professional documentation, 128 Professional management, career issues, 202 Professional status, enhancing of, 210–11 Program developing tool, marketing, 175–78 Project Apollo, vision of, 17 Provider-based status, 138–39 choosing, 142–44 Professional fees. See Fees Quality business process, 55–57 definition of, 55–56 Receivables and financials, 146–47 Recordkeeping, 89 APA Recordkeeping Guidelines, 91–92 Confidentiality of Records, 92–93 Content of Records, 92 Disclosure of Record Keeping Procedures, 93 Disposition of Records, 97 Electronic Records, 95 Financial Records, 96 Maintenance of Records, 93 Multiple Client Records, 96 Preserving the Context of Records, 95 Index

Record Keeping in Organizational Settings, 95–96 Responsibility for Records, 92 Retention of Records, 94–95 Security, 93–94 Health Insurance Portability and Accountability Act (HIPAA), 97 access and disclosure, 104–5 applicability and action, 102–4 consent and authorization, 105 Employer Identifier Standard, 102 final caveats, 106 overview, 98 Privacy Rule, 99–100 in research settings, 105–6 Security Rule, 100–101 Transaction Rule and Code Sets, 101–2 Red Flags Rule, 106–8 Relative Value Unit (RVU), 139–40 for select CPT codes, 141t Reimbursement, 11, 161–65 Medicare model, 136–37 procedure for neuropsychological testing, 172 Research activities, 189–90 Research awards, career issues, 203 Retirement issues, and closing a practice, 215 St. Vincent Health in Indianapolis core values, 18–19 health mission statement, 18 of Neuropsychology Department, 20 vision statement, 18 Scope of practice, re-defining, 168 SWOT analysis, 168–69 S corporation, 5–6 Security Rule, HIPAA, 100–101 223

Select CPT codes MPFS allowable payments for, 143t RVUs for, 141t Service lines, 171–173 balancing of, 174–75 business-based evaluation and examination, 171–173 Services, identification of, 36 Six Sigma Quality, 56 Small Business For Dummies, 4 The Small Business Start-Up Kit: A Step-by-Step Legal Guide (Nolo), 4, 24 Sole proprietorship, 4–5 Start Your Own Business, 4 State Children’s Health Insurance Program (SCHIP), 136 Statistics process control (SPC), 58–60, 60f Strategic planning definition of, 14–15 goals and objectives, 16–17 in healthcare, 17–19 mission, 15–16 values, 15, 16 vision, 15 Strengths, SWOT, 169 Strengths, Weaknesses, Opportunities, and Threats analysis. See SWOT analysis Suppliers, of goods and services, 3 Support processes, 54 SWOT analysis, 168–69, 208 Templates, computerized, 24 Testing codes 96101: Psychological Testing by Professional, 113 96102: Psychological Testing Administered by Technician, 113–14 224

96103: Psychological Testing Administered by Computer, 114 96118: Neuropsychological Testing by Professional, 113–14 96119: Neuropsychological Testing Administered by Technician, 113 96120: Neuropsychological Testing Administered by Computer, 113 Threats, SWOT, 169 Time, 183 management of, 190–191 non-billable time, 183–84 indirect benefit activities, 185–86 value-added contributions, identifying and documenting, 186–87 value-added services, 184–85 training programs and research activities, 187 clinical training programs, 187–89 research activities, 189–90 Time wasters, 190 Total cost, 32 Total quality management (TQM), 56 Total revenue, 32 Total variable cost, 32 Traditional Mental Health Psychotherapy Codes, 120–22 Trainees and students, 153–54 Transaction Rule, HIPAA, 101–2 Type I error, in process evaluation, 57–58 Type II error, in process evaluation, 57–58 Index

Unit price, 32 Urgent and not important tasks, 190 User-benefited principle, 7 User-controlled principle, 7 User-owned principle, 7 Value(s), 15, 16, 54 Value-added services, 12, 55, 170, 184–85

Index

Variable cost, 32 Veterans Administration (VA), 187 Vision, of organization, 15, 16 Wada procedures, 172 Weaknesses, SWOT, 169 Western Electric Rules, 59 Word-to-mouth recognition, 177 Zero-pays, 151

225