During the month of August, baytechIT puts the focus on practice consolidation, courtesy of our sister company, akiro. As one of the healthcare industry’s more unique and innovative M&A transaction consultants, akiro specializes exclusively in medical practice transactions by bringing decades of negotiation experience together under one roof.
This blog, “CMS Publishes New ICD 10 Billing Codes. Don’t Ignore the Flashing Lights!” is the first of three pieces they’ve curated putting the spotlight on healthcare M&A best practices.
Coding changes have implications beyond just billing.
Every time the Center for Medicare and Medicaid Services (CMS) updates ICD 10 billing codes, the implications for physicians and physician practices can be far-ranging. Think of it as the check engine light on your car. It needs attention. Immediate attention.
You’ll undoubtedly update your software and billing systems with the new codes. But if you’re smart (and have a car in the garage), that new coding work should trigger a reminder of the potential to realize greater revenue and thus higher valuations for your practice if you look to affiliate with a larger practice or a health care institution down the road.
A change in code, which causes a change in reimbursement, can affect physician compensation when paid on a wRVU basis. Physician payments by health care providers must be at fair market value (FMV) to avoid Stark Law, anti-kickback violations and False Claims Act issues.
Most larger physician practices and health care providers obtain an FMV opinion when acquiring physician practices or entering into PSAs with physicians. Best practices should also include periodic (annual) updates to ensure that these physician arrangements remain at fair market value throughout the life of the relationship.
Keeping coding properly up-to-date will enhance the value of a practice prior to acquisition and provide enhanced revenue opportunities.
The CMS, OIG, and DOJ can, and will, review periodic fair market valuations to determine whether a physician is being paid above-market rates regardless of when the relationship began. Fair market value can change and be affected by new coding, changes in reimbursement rates, changes in the physician’s work duties and requirements and changes to market rates for “similar” physicians. Annual reviews should be conducted by outside independent evaluators so that providers can demonstrate a good faith effort to maintain compliance with various health care laws and validate transaction values (a practice that should continue throughout the life of the relationship).
Don’t ignore the check engine light. Keep your coding properly updated!
akiro can provide health care providers with ongoing fair market value services to ensure updated compliance with regulatory and legal requirements. akiro is a sister company of BaytechIT. If you have any questions about post-transaction valuations or the services provided by akiro, please contact David Audibert at email@example.com.