The physician practice acquisition and optimization market continues in full force. Pain management practices are also in great demand and it’s important to understand the unique dynamics of this market. This is the first of a series of articles to discuss pain management. In this first article, Dr. Mandyam, an expert in pain management practice, discusses tips to optimize a pain management practice.
1. Know where to take your cases (posting in an office vs. ASC).
If you are partnered or have equity in an HOPD (Hospital Outpatient Department) or an ASC (Ambulatory Surgical Center), it is important to know where to schedule your cases. There can be a significant service differential in the fee schedule in an office based setting versus an ASC or HOPD. For example, in 2015, a two-level thoracic percutaneous kyphoplasty pays approximately $12,000 if done in an office-based setting. If this same procedure is done in a surgery center, your professional fee drops to about $735.00. Furthermore, reimbursement for multiple levels is bundled into a single payment for HOPDs and ASCs.
2. Negotiate your contracts with commercial payors
You do not simply have to accept the rates a commercial payor initially offers. Everything is negotiable. You may improve your odds of receiving better rates by enlisting in the services of a professional contract negotiator. Many of these professionals are former employees of commercial payers and have experience being on both sides of the table.
3. Focus on your return patient visits.
Although new patients are vital to practice growth, it is usually less expensive to retain an existing patient rather than seeing a new patient. If you calculate the cost of marketing, more overhead dollars are spent bringing in new patients rather than retaining existing ones. A healthy pain management practice should have a patient retention rate of above 75%. These patients may require monthly follow up visits especially if opioid medication management is offered. Use patient satisfaction surveys if needed to find out which areas of your practice are affecting patient retention and fix these issues ASAP. Please keep in mind return patient visits generate income for your ancillary services.
4. Don’t forget your existing referral sources.
When marketing in the community to secure new potential referral sources, do not forget to keep tabs on your existing referral base. Sometimes your referring physicians may want to provide you feedback from time to time, and the only way you will know is if you meet with them regularly. This also keeps your name fresh in their heads when they send out their pain management referral.
5. Establish a relationship with the local hospital system.
By taking a few of your procedures to the local hospital, you are effectively building your brand. The nurses and staff members who work with you will see for themselves the high level of care you provide your patients. The physician break room is also a great place to market your services to other referring physicians in between your cases. Many large hospital systems own primary care groups and can effectively “steer” their referrals to you based on how much revenue you generate for them in terms of facility charges for your cases and any incoming referrals for hospital ancillary services like imaging or labs. When starting a new practice, some hospital systems may offer you a physician support loan as well as free marketing services.
Sri Mandyam, M.D.
