Dean's Newsletter

Archive of previous newsletters

Faculty practice: A history of URMFG, recent developments, and the year ahead

February 10, 2006

No mission area more embodies the functional integration represented by our "under one roof" medical school and teaching hospitals than the clinical mission, last under review in this series. We have over 850 clinical faculty members of the medical school working with residents, medical students and hospital staff, in state-of-the-art facilities, to provide highly skilled, compassionate and sophisticated care to increasingly complex and acute inpatients. This single "roof" now figuratively extends from Strong Memorial Hospital to Highland Hospital, across which we have worked hard to ensure a single standard of care that takes advantage of best practices in the field, available evidence from the research literature, and old-fashioned clinical experience.

Why are hospitalized patients becoming more complex and acute? The answer lies in the striking shift of medical activity from an inpatient to outpatient environment. Over the past 3 years, for example, outpatient surgery at Strong Memorial Hospital has increased from 44% to 48% of all surgical cases. More strikingly, the number of 23-hour admissions has increased from 3,036 to 9,740 over this same period. Only the sickest patients remain in the hospital as inpatients.

Nowhere is this trend towards outpatient care more evident than in the office setting, where most of our clinical faculty work on a day-to-day basis. Outpatient visits by URMFG faculty, not counting hospital-based "resident clinics," has increased from 513,000 to 769,000 over the past three years.

In my opinion, much of our well-recognized success in the clinical enterprise has been due to an effective partnership between our clinical faculty and the hospitals' administration and staff. We have made major progress in highly visible services such as heart disease, orthopaedics, transplant surgery, neurosurgery, imaging sciences, obstetrics and gynecology, bariatric surgery, pediatrics and psychiatry (as well as many other individual clinical units), and in support services such as ED, ICU, imaging sciences, pathology and hospitalist services, due to the strength of this partnership.

Looked at in this way, it is difficult to separate faculty practice from hospital services. From another perspective, however, a focus on hospital-related services could neglect the many clinical services provided by our faculty who work in specialties and sub-specialties that are largely outpatient. Since I am writing this newsletter from the perspective of the medical school Dean, I will focus on the practice activities of our faculty, recognizing that the separation of these activities from hospital-based work may be artificial in some cases.

Our 867 specialist and primary care faculty work in 19 clinical departments of the medical school, according to a distributed model in which Department Chairs, Division Directors and/or Center Directors are responsible for the overall practice activities--clinical, administrative and financial. This confederation of individual primary care, specialty and sub-specialty practices are bound together by a central entity known as University of Rochester Medical Faculty Group (URMFG).

History of URMFG

Ray Mayewski, MD, Chief Medical Officer, Strong Memorial Hospital/Highland Hospital

Some historical backdrop for the creation of URMFG may be of interest. I am indebted to Ray Mayewski, MD, for his summary of events at UR SMD in the late 80s and early-to-mid 90s leading up to the birth of URMFG.

In the late 1980s, longstanding systems for physician payment, largely through commercial insurance plans, were under attack. Managed care through Health Maintenance Organizations (HMOs) and Independent Physician Organizations (IPAs--e.g., RIPA) were touted to be the vehicle to rein in rising costs and to align incentives. Instead of physicians generating more revenue for seeing more patients, it was argued, capitated payments to an HMO (i.e., a fixed payment per patient covered, independent of health care utilization) would encourage preventive care and discourage unnecessary visits and procedures. Everyone saw the handwriting on the wall (which, in retrospect, was gradually erased over time) and didn't want to be left behind. In response to the perceived vulnerability of medical school faculty practices to the evolving managed care environment, the AAMC formed the Group on Faculty Practice, whose membership quickly swelled.

In the early 1990s, the Executive Consulting Group was engaged to develop a strategy for faculty practice at UR SMD. Dr. Mayewski was appointed as Chair of this faculty practice group, called URMFG from the beginning. There was a voluntary assessment of 0.4% of collections levied on clinical practices to start the group. At that time, many of the department- and division-based practices were constituted as outside corporations. These were brought into the University, not always without some kicking and screaming. Bylaws were written, and URMFG became recognized as the single authority that entered into contracts for clinical services provided by URMFG faculty. In 1996, a decision was made by the Senior Vice President for Health Affairs, Jay Stein, MD, to implement a single billing and business system. Dr. Richard Burton chaired a committee to investigate alternative systems and recommended IDX/GE as the vendor. An administrative unit, at first called the Central Business Office, later renamed the Shared Services Organization, was created to implement the IDX/GE system and create sound business practices for URMFG in general. Dr. Mayewski was the first director of URMFG.

From those beginnings, URMFG has grown substantially in size and functional weight. Today, URMFG is comprised of 867 specialist and primary care faculty. Some measure of growth is reflected in clinical revenues, which have increased from $88 million in FY98 to $235 million in FY05, averaging 15% growth per year. This increased revenue is due to several factors, including the expanding number of providers, negotiation of more favorable payer contract terms, improved charge capture, and efficiencies in accounts receivable management.

The URMFG team and its leadership

Kenneth DeHaven, MD, Senior Associate Dean for Clinical Affairs, and URMFG Medical Director

The URMFG team consists of a total of 8 administrative management staff, and is headed by Kenneth DeHaven, MD, Senior Associate Dean for Clinical Affairs, and URMFG Medical Director, Marty Haibach, Director of Finance and Administration, and Donna Robinson, Associate Director, Contract Management. Ken is a Professor of Orthopaedics and Director of the Division of Athletic Medicine. He brings to URMFG the perspective of a clinician and surgeon who has been in practice here since 1975 and who has had extensive administrative experience as Associate Chair of Orthopaedics, as well as past President of the Society of Sports Medicine, among a variety of national positions. Marty was Executive Director of the Medical Faculty Group at the University of South Florida prior to assuming his current position. He has 25 years of experience as a business manager for physicians' practices.

Ken provides overall medical leadership of URMFG. Important among these duties is to appoint, convene and Chair the URMFG Executive Committee, a critical committee of clinical department Chairs that we created in 2004. Obtaining Committee members' input and feedback on key issues affecting clinical faculty, Ken represents the UR SMD clinical faculty in discussions/negotiations with third party payers and with the various Independent Physicians' Associations about a variety of factors impacting them, including reimbursement schedules for professional services.

Marty provides day-to-day operational leadership for four Associate Directors who manage the following areas: Ellen Watkins, Shared Services Organization, Jill Hetterich, Financial Services, Donna Robinson, Contract Management, and Karen Crotinger, Physician Services and Credentialing. The associate director team provides essential operational, administrative and value added services. Ellen came on board URMFG in 1999, prior to which she held senior analyst positions in banking. Jill joined URMC in 1991 and has held positions in medicine, administration and finance, of which the last eight years have been in URMFG. Donna joined URMFG in 1999. Prior to that Donna held senior management positions in both payer and physician practice administration. Karen has been with URMC for 21 years. In fact, Karen was in part responsible for the creation of URMFG's Physician Services in 1997. The associate directors have an impressive combined 50 years experience with URMC!

The Shared Services Organization (SSO)

The SSO provides centralized services in support of URMFG's decentralized professional billing process. The primary goal is to assist clinical departments and centers in maximizing financial collections for clinical services rendered. With this goal in mind, the SSO strives to continually improve its operations, structured into four service teams: Decision Support/Financial Management, Information Systems, Operations & Systems Training, and Patient Inquiries and Collections.

Decision Support/Financial Management develops and maintains a reporting system called "Analyzer," and provides financial analyses, ad hoc reporting, reimbursement analyses and fee schedule maintenance. Information Systems develops electronic claim and remit transmissions, maintains 24/7 support, provides paper claim and form letter production, dictionary set up and maintenance, testing and installation of new applications, and system security maintenance. Operations and Systems Training supports daily office operations and IDX/GE application training, communication of best practice standards and development of enterprise policy and procedures, centralized management and oversight of payer issues. Patient Inquiry and Collections provides centralized customer service and self pay collections, payment posting, patient refunds, and collection agency management.

The SSO is integral in many information technology projects. Omega replacement, the largest such project for 2006, requires dedicated URMFG staff and resources from the SSO. The SSO will also implement the Payer Contract Management and Electronic Document Imaging (EDI) modules. The payer contract module will enable URMFG to compare its contract terms with actual payments to improve identification of incorrect payments. The EDI system will allow users to view remittances and other documents on-line and help reduce the amount of paper stored in billing offices. A common patient database across URMFG and the hospitals will have many benefits and will require ongoing collaboration with both ISD and hospital staff.

How have these operational components of the SSO helped URMFG faculty and their patients? For starters, the SSO has improved our systems such that patients receive one statement for all services rendered by URMFG faculty, and are able to call one phone number if they have a concern about their bill. This has generated measurably increased patient satisfaction. A common URMFG database maintained by the SSO allows each department to review its overall clinical throughput, efficiency and financial performance. Data can be analyzed at the level of the individual faculty member, at the department level, or across department for assessment of URMFG performance overall, utilizing consistent metrics and benchmarks. The SSO has also increased efficiency by establishing and overseeing a set of common policies and procedures relating to billing and accounts receivable management across the enterprise. Critical to department functioning is the classroom training provided by the SSO for the IDX/GE system. All users must demonstrate clear competencies prior to their receiving access. This common training allows the workforce to move to different departments without having to be retrained on a new system. In addition, the SSO provides central management and oversight of IT functions such as claim production, electronic remittances, EDI/HIPAA and system development.

Financial Services

URMFG Financial Services ensures that all financial responsibilities required by the University Board of Trustees are carried out in an accurate and timely manner, including: financial statement reporting, budgeting (operating and capital), accounting, tax return submission (76 partnership returns), monitoring of practice fiscal operations, planning, financial analyses, and all matters related to recruitment and salary. The Financial Services division is currently working to tighten controls to ensure compliance with annual audit requirements. Areas of focus for FY 2007 include: an accountability structure that ensures departments are completing detailed cash reconciliations, maintaining appropriate documentation, and following all polices and procedures. URMFG Financial Services has created the tools required to accomplish this centrally, trained departments, and will complete quarterly testing across all departments to verify compliance. Testing results will be evaluated and any lack of compliance or control deficiencies will be identified and corrected.

URMFG Financial Services is in year two of a three-year roll-out for departments to develop a 60 day cash reserve. It is assisting departments in developing this cash reserve which will allow them to invest in new faculty recruitments, provide a cushion for fluctuations in payer rates, allow departments to invest in unfunded missions, i.e. research and administration, and avoid crisis management.

Contract Management

Contract Management is the main liaison between URMFG and payers and IPAs. Contract Management staff negotiate and implement payer contracts and delegate credentialing agreements on behalf of URMFG, Highland Hospital Primary Care Physicians, and Strong Memorial and Highland Hospitals. Two Contract Management staff maintain over 40 URMFG payer agreements, 21 delegated credentialing contracts, and numerous rate agreements worth over $130 million in URMFG revenue. Contract Management works closely with department chairs and administrators, finance, office of counsel, patient accounting and billing to implement agreements.

Contract Management is also the lead for resolving issues related to contract operations. The department maintains a matrix of payer contract rates and terms for department administrators and billing managers. Contract Management negotiates with payers and IPAs to designate providers as "endangered" in the Rochester community and works towards finding solutions to retain physicians in that specialty within our community. Contract Management staff also prepare and coordinate URMFG responses to payer requests for specialty networks, allowing URMFG access to increased number of members. URMFG leadership along with the contract division has been able to leverage the faculty group to create substantial improvement in payer fees for a given professional service (i.e., visit or procedure), which are set as the product of the number of "relative value units" (RVUs) assigned to that service, and the "conversion factor." This has been clearly evident in the case of Excellus/RIPA, whose conversion factor had remained flat for several years, as well as with other major local payers, i.e., Preferred Care, Aetna, and United HealthCare. All of these efforts will have a significant positive effect on URMFG's bottom line, adding over $8 million in new revenue for 2006.

Physician Services

Physician Services serves as a liaison to all physician faculty, providing services such as communication with referring doctors, maintaining primary care provider (PCP) accepting lists for new patients, sending reports to PCPs on demand, maintaining 24 hour clinical phones, updating web pages, implementing and maintaining transcription services, and maintaining list-servers, Omega physician database, and physician orientation and central credentialing services.

The orientation program covers everything from compliance and HIPAA training, organization charts, presentations by OCMC, admitting, lab, radiology, etc., tours, parking and ID badges, to loading Palm Pilots. Delegated credentialing means URMFG physicians do not need to complete payer applications and ongoing credentialing paperwork. To date there are 21 delegated credentialing contracts. All major commercial payers, with the exception of Excellus, have been delegated, and URMFG expects Excellus to be under contract in 2006. Delegation decreases the time required for physicians to come on panel with a payer, allowing for improved cash flow to the practice. Physician Services, which is currently NCQA certified, will undergo a re-audit in March 2006. Our plan is to gain Central Verification Office (CVO) status in 2008, allowing URMFG to take in outside credentialing business and thereby to generate income.

The medical staff offices of Highland Hospital, Strong Memorial Hospital and URMFG have merged into one location at Corporate Woods, creating one Medical Staff Office for the system. In time, there will be tremendous improvement in efficiency and reduction of paperwork. Medical Staff Office web-based software has been successfully installed, allowing for web-based credentialing. This has fostered an electronic application process and a paperless credentialing office. EDelineate, an electronic privileging program that allows the facilities to view physician privileges on line, was also implemented. On-line training for staff and on-line credentialing forms are now available.

Other URMFG Projects

As a beta partner, URMFG has worked closely with IDX/GE to develop Metrics Manager, IDX/GE's on-line business intelligence system. Metrics Manager contains approximately 30 key performance indicators, including collection ratios, bumped/canceled appointments, charge entry lag, charges, revenue, rejections, etc. Baseline data will be extracted and compared to benchmarks/targets. The program is being piloted in Medicine, Pediatrics, Neurosurgery, and Surgery with general roll-out expected in mid-2006.

For our clinical faculty, perhaps the centerpiece of recent projects is the Allscripts Electronic Health Record, which provides critical improvements in the delivery of ambulatory care at URMC. Allscripts TouchWorks provides electronic prescribing, workflow, documentation, order entry, charge capture, and complete database management of a paperless ambulatory office.

During the past year, the Allscripts project successfully proved its return on investment in a pilot initiative and has now been converted to a system-wide roll out. To date, over 60 providers and 200 support staff in 10 sites are using Allscripts TouchWorks for complete automation of their outpatient practices. Additionally, the Continuity of Care Record (CCR) technology in Allscripts has been implemented in 18 ambulatory areas to address a JCAHO initiative that mandates accurate and timely maintenance of the medication, problem, and allergy lists. Today these areas actively maintain a single patient-centric shared CCR for all of their patients. The Allscripts project team is enhancing their resources to accelerate implementation of TouchWorks across all clinical practices at URMC. There will be three separate implementation tracts, one for primary care, one for hospital based practices, and a third for ambulatory specialty areas.

The Year Ahead

Looking again, I will recapitulate the plans that Dr. DeHaven has developed in conjunction with the URMFG Executive Committee, and as reported by him in the Jan. 13th Dean's newsletter on New Year's Resolutions from the Dean's Office. Briefly summarized, these include: continuing to press for appropriate rates of reimbursement for clinical services; continuing the roll-out of Allscripts, and possibly accelerating it; creating a common data base across URMFG and Strong Memorial Hospital; insuring compliance with not-for-profit financial and accounting regulations; and, most important, fostering an environment that maximizes the quality of health care that our faculty can provide to patients in the Rochester region, Upstate New York, and beyond.

Meliora,

David S. Guzick, MD, PhD
Dean, School of Medicine and Dentistry