Why Do Doctors Need a Professional Third Party Business Valuation For Their Practice?

If you are considering selling your practice, you need a 3rd party valuation firm that specializes in valuing businesses to determine the selling price of your practice. Most other professionals such as business brokers, attorneys and CPA’s either don’t have experience with or access to nation-wide sold practices transaction data, the methodology used for asset based, income based and market based valuation calculations, or they are not in daily touch with the current lending market. The price and profitability of your practice must be an amount sufficient to support any acquisition debt service, a new owner’s compensation package and periodic additions to the working capital needs of the practice for growth.

A valuation identifies the total fair market value or selling price of your practice.  

You will receive separate values for the tangible and intangible assets of your practice. Since tangible assets are usually depreciated for tax proposes, the fair market value of all assets to be included in a sale is based upon today’s prices; not original purchase cost like accountants use. The intangible assets represent the “sweat equity” of the practice including goodwill, patient files and referral sources and the efficiency and profitability of your practice. The sum of tangible and intangible assets included in the sale equals the fair market value or selling price of your ‘practice.

A valuation helps you make an educated decision regarding the sale of your practice.

You may have a “hunch” about the selling price of your practice based upon speaking with colleagues and other professionals or reading about revenue/profitability multipliers but a “hunch” is not a reliable method for making the decision to sell or not to sell. You need a solid number concerning the amount of money for which your practice will sell in today’s market. Then you can make a fully informed decision to sell or not to sell your practice.

A valuation enables you to price your practice with confidence.

Once you know the selling price of your practice — you are in a very strong negotiating position. If you receive offers below your price, you can confidently stand your ground — knowing that the owner’s cash flow will support acquisition debt service and give the potential buyer a solid return on their investment, as compared to other investment opportunities the buyer may be evaluating.

Article contributed by Jeannette Engel, Business Broker at unionbaygroup.com, or (206) 783-1717.

5010 File Format Deadline Extended

As your billing personnel are well aware, CMS initially mandated a strict deadline of December 31, 2011, for sending Medicare claims and receiving remittances in 5010 format, after which claims would not be paid. The pressure by the Medicare carriers was intense, literally threatening the livelihood of all providers who did not comply.  But wait!

On November 17, 2011, CMS effectively extended the deadline for 5010 compliance until March 31, 2012.

So, how do you get ready for 5010? Among the options are:

1. Changing your billing software to allow creation of claims in 5010 file format, test with Medicare, and move to production. This option allows you to gain greater control of the process, but requires upgrading your billing software – which may be expensive.
2. Using a Clearinghouse which will convert your current 4010 file format to a 5010 file format. This option is cost effective since it does not require the purchase of new billing software, but will usually engender monthly Clearinghouse fees.
3. Using a Software Vendor which will convert your 4010 file format to a 5010 file format. This option is cost effective since it does not require the purchase of new billing software, does not require monthly fees, but only an annual service fee to the Software Vendor. In addition, some Software Vendors will allow free commercial claims to be sent.

Because the deadline has been extended, providers are in a better position to review all options, and make a sound business decision.

Contributed by Bruno Stillo, Physiatry Billing Specialists, (800)835-4482, physiatrybillman@aol.com

Billing Team Conferences

Team Conference Reimbursement:  To bill Team Conference time, you upcode the initial CPT code (from previously rounding that day) 1 level.  You state in your documentation

“____ minutes spent face to face and in the coordination of care for this patient.”   This is one of the times where time is a factor in coding.  So if you have a level 1 (99231) based on medical necessity and you spend an additional 10 minutes in Staffing, then you technically have a total of 25 minutes face to face and coordination of care with that patient, which qualifies for a level II (99232).

Contributed by Liz Lee

President, PRS, Inc.

817-284-9850

1-800-324-4777

817-284-3425 FAX

817-907-0370 Mobile

Website:  PRSinc.com

Billing Services

A physiatrist who is contemplating a position as an independent contractor asks me today about billing services.  I found out the following information.
1)  Bruno Stillo, Physiatry Billing Specialists, 800-835-4482, charges a percentage of collections depending on the level of service.  I said a 28 bed census and he said the receipts would be  $500K+.
He said at the outset you give him charges and an initial face sheet with the patient information.  He builds a data base.  You fax him the charges weekly.  He puts 1 week’s charges on a grid.  He takes care of doing the billing.  You get the receipts directly; you set up a PO box.  You send him by Fed Ex the deposits you make.  He posts the payments and goes after the unreceived claims payments.  Bruno will also help with any billing issues as needed.  He aims to keep his physiatry clients on a long-term basis.  Bruno will also get you on Medicare and whatever payor panels there are in the area.  He can also help you identify what your collections should approximate if you’re considering a new position and can give him the charges for the procedures.
2.  Liz Lee, PRS Inc, www.prsinc.com, She charges 7.5% – 8% of collections for inpatient services.   I didn’t ask her the process as I presume they’re similar.
I don’t endorse either of these entities as I haven’t used them but they specialize in physiatry so they should have a good handle on physiatry billing.