Written by Matthew Marconcini, CPA
Selling your company can be an exciting time, filled with potential opportunities for growth and new horizons. Whether your company is accrual based, following GAAP, or it reports on a cash basis, proper preparation for the sale of your company is extremely important. This journey often involves a complex web of financial transactions and negotiations, with numerous parties at the table. Among the critical elements in this process are financial due diligence and performing a quality of earnings (QOE) analysis. The QOE process is a critical aspect of financial reporting and analysis that helps stakeholders, like investors and creditors, assess the reliability and sustainability of a company’s reported earnings.
The QOE analysis can play a pivotal role in shaping the outcome of the sale and can significantly impact the perceived value of your business. Therefore, as management, it is essential to be well-prepared and proactive in assessing and evaluating the quality of your business’ earnings, as it influences the selling price and builds trust and confidence among potential investors and other stakeholders. We have outlined eight steps management can take to best prepare for the QOE process.
Management should have a clear understanding of what QOE means. It assesses the underlying economic substance of reported earnings, ensuring they are not distorted by accounting manipulations or one-time events.
Accurate financial record-keeping is fundamental to high-quality earnings. Management must ensure that financial statements are free from material misstatements and that all transactions are properly recorded.
Transparency is crucial. Ensure all material transactions, both positive and negative, are adequately disclosed in the financial statements and related footnotes.
Maintain consistency in financial reporting practices. Frequent changes in accounting policies can raise questions about the QOE. If policies do change, explain the rationale behind it and the financial impact of the change.
Recognize revenue in accordance with accounting standards only when it’s earned and realizable. Avoid prematurely recognizing revenue or engaging in overly aggressive practices. If your company reports on a cash basis, pulling together the proper data that will show revenue based on date of service rather than the collection date will be key.
Clearly distinguish between one-time or non-recurring events and ongoing operations in financial reporting. Disclose the nature and impact of such events to prevent misinterpretation.
Be prepared to provide a comprehensive and honest analysis of the company’s financial results. Explain the drivers of earnings, changes in accounting policies, and potential future risks and uncertainties. The more support you can provide related to both historical performance and future growth initiatives, the more accurate and comprehensive your analysis.
Take the time to review the various systems used to operate the business and start pulling data together. If certain systems are maintained by third parties, informing them of the situation and discussing what they need to do will create a smoother process. If certain reports don’t have the necessary inputs or data, be prepared to discuss that and what alternative information would be useful.
By considering these guidelines and implementing the underlying thought processes, management can best prepare for the QOE process, demonstrating a commitment to transparency, accuracy, and integrity in financial reporting. This, in turn, builds trust and credibility with investors and other stakeholders, creating a smooth transaction process for management.
Written by Christa Shephard and Maureen Regan, President Elect, NYSSPA
Physician assistants (PAs), soon to known as physician associates and advanced practice registered nurses (APRNs), like nurse practitioners (NPs), midwives, CRNAs, and clinical nurse specialists, have been around for decades. The first class of PAs graduated from Duke University in 1967, and in 1965, the first training program for NPs began at the University of Colorado. Since then, for many reasons, both professions have become integral to the quality delivery of healthcare. Although they have different education, training, and scope (PAs trained in medicine and APRNs in an advanced theory of nursing practice model) integrating these professionals into a practice can elevate the patient experience, as their access to the healthcare services they need will increase, and there could be an increase to the bottom-line financials of a practice as a result. Physicians experience greater job satisfaction, as PA and APRN integration helps to alleviate overburdened work schedules, including on-call obligations. Through these benefits, interprofessional integration leads to better patient retention, patient referrals, physician satisfaction, and stronger financial health for practices and health systems.
The Centers for Medicare & Medicaid Services (CMS) certainly plays a role in the practice and reimbursement environment of PAs and APRNs; however, most of the legislative and regulatory environment for practice is determined at the state level. Due to the evolution of each profession and the historical and ongoing shortage of physicians, it’s important for health systems and practices to stay abreast of primary source legislative and regulatory guidance changes regarding scope, documentation, and billing compliance. These factors are also important to ensure an employer is capturing maximum reimbursement for clinical work done by both professions while minimizing their risk of an audit and resulting penalties. Systems and practices must uphold an ongoing, longitudinal review of Medical Staff Bylaws, delineation of privileges, policies, and processes.
CMS recognizes qualified billing providers to render services independently and establishes billing and coding rules for PAs and APRNs to ensure accurate reimbursement and quality care delivery within the Medicare program. These rules outline the scope of practice and reimbursement guidelines for nurse practitioners, physician assistants, certified nurse-midwives, clinical nurse specialists, and certified registered nurse anesthetists who must adhere to specific documentation requirements, including maintaining accurate patient records and submitting claims using appropriate evaluation and management (E/M) codes, like physicians. Additionally, CMS provides guidance on incident-to billing, which allows certain services provided by PAs and APRNs to be billed under a supervising physician’s National Provider Identifier (NPI). Understanding and following CMS billing and coding rules are essential to navigate the complexities of reimbursement and ensure compliance with Medicare regulations.
Because CMS recognizes PAs and APRNs as qualified billing providers but not as physicians, they fall into a separate reimbursement category. When billing under their own NPI, the reimbursement level is less than what it would be if the physician were to bill for the same services. This reimbursement differential does not adversely impact a practice’s bottom line, as remuneration for a PA or APRN is less than a physician and malpractice cost is less.
Physicians may bill for a service that was rendered by a PA or APRN with incident-to services and with split/shared E/M services. VMG Health Managing Director and coding and compliance expert Pam D’Apuzzo says, “There’s two rules, which is where everybody gets themselves into trouble… Those two rules have specific guidelines, both from a documentation and a billing standpoint. The patient type, the service type—everything needs to be adhered to.”
To bill for incident-to and split/shared E/M services, practices must meet specific criteria outlined by Medicare. For incident-to services, the criteria include:
For split/shared E/M services, the criteria include:
These criteria ensure that incident-to and split/shared services are billed appropriately and in compliance with Medicare guidelines. Medicare also dictates that the “substantive portion” of a split or shared visit is more than half of the time a physician or non-physician practitioner spends performing the visit or a “substantive part” of the medical decision making. Practices must continually educate and train all medical staff so that they can successfully adhere to these criteria to avoid billing errors and potential audits. Additionally, practices must continuously monitor to ensure all documentation, billing, and coding processes are followed correctly.
There are tools and services that allow for easier monitoring. “We utilize a tool called Compliance Risk Analyzer, which provides us with statistical insight on coding practices,” D’Apuzzo says. “So, we can data mine ourselves and see what’s happening just based on our views. And this is what the payers, specifically, and the government does as well: They can see the [relative value units] RVUs are for a physician or off the chart, or that a physician has submitted claims for two distinct services at two different locations on the same day.”
This is more common than you might think.
“What’s normally happening in those interactions is that [a physician with two locations] realizes he can’t keep up with all of that patient flow in two places, so they hire a PA and put them at location number two,” D’Apuzzo says. “But now all that billing goes under the physician, so it flags for Medicare.”
With VMG Health’s Compliance Risk Analyzer (CRA), practices can see the same data mining and areas of risk, as the program would flag the RVUs as a potential audit risk. This gives practices the opportunity to self-audit and refine their processes to ensure they are billing and coding appropriately.
VMG Health offers multiple comprehensive services that help health systems and practices implement and follow new procedures and new provider utilization without issue, from honoring existing care models to ensuring provider compensation is fair, compliant, and reasonable.
Cordell Mack, VMG Health Managing Director, says, “We’ve spent a lot of time trying to make sure we get that right, both in terms of the underlying, practice-level agreements as well as the ways in which the compensation model works for both the physicians and the PAs and APRNs.”
In many practices, physicians struggle to handle their case load, which means their busy schedules can prevent them from seeing existing patients and from taking on new patients. Bringing PAs and APRNs into the fold allows physicians to create capacity in their schedules so that they can see new patients.
BSM Consulting (a division of VMG Health) Senior Consultant and subject matter expert Elizabeth Monroe provides an excellent example: “Let’s say we have an orthopedic surgeon who really wants to spend most of their time in surgery. We would want to have that physician in surgery because that’s what their skill set, and licensure permits. With a nurse practitioner or physician assistant providing follow-up, post-operative care, that oftentimes is a much better model. It allows the physician to do the surgical cases only they can do, but it also eases patient access to care.”
This realignment of a physician’s schedule creates an opportunity to provide more patient services, which easily translates to improved patient satisfaction when, without this, they would likely be unable to see their provider when they felt they needed to be seen. While PA and APRN–rendered Medicare services are reimbursed at 85% instead of 100%, our experts say that the 15% differential shouldn’t dissuade practices and health systems from leveraging the integration.
“It’s a very short-sighted approach to just think about, ‘But we could be making 100% instead of 85% if we bill under the doctor,’ because ultimately, we are never able to do that 100% of the time, and it’s a higher risk than it is reward,” says D’Apuzzo.
Additionally, physicians with packed schedules and no other scheduling options may inadvertently rush through appointments to see each patient scheduled for that day. Patients who feel rushed may leave an appointment feeling unheard and like their problem is unresolved. Additionally, when a patient calls and asks for services but can’t be seen for multiple weeks or months, they may never make an appointment and instead turn to another provider for help.
All of this culminates in poor patient retention, which equals a loss of revenue for the practice. Dissatisfied patients will seek treatment elsewhere. However, when practices and health systems embrace an interprofessional team, patients are more likely to be able to schedule appointments when they feel they need to be seen, feel heard in an appointment and even spend less time in the office overall as they are not impacted by OR cases running late, and so on.
“Practices are better able to meet patient demand, and they’re able to really allow physician assistants, nurses… to add a tremendous value for the patients, offering them outstanding care,” Monroe says.
With both patient demand and physician scarcity placing the U.S. health system in crisis, many practices and health systems know they need to integrate PAs and APRNs into their workflows, but they don’t know how. VMG Health offers strategic advisory services that can guide this implementation to ensure practices are educated, compliant, and working within the care model they prefer.
“Our team would want to spend time really trying to identify the underlying care model that practices are trying to, you know, work inside of,” says Mack.
One approach is to assess patient needs and practice capabilities to determine the most effective roles for PAs and APRNS, such as providing primary care, specialty care, or supporting services like telemedicine. Implementing policies and workflows can ensure efficient PA and APRN utilization while maintaining quality and safety standards.
Finally, ongoing training, quality monitoring are essential to ensure their interprofessional integration into the practice or health system effectively meets patient needs, and care provided by PAs and NPs should be included into physician quality and compliance review processes.
“It starts with getting your appropriate documentation in place… [with] supervisory responsibilities and collaborating physician agreements,” says Mack. “It migrates to, ‘What’s the operational agreement among the team?’ and how cases are presented, or how the physician is consulted. So, it’s getting an underlying clinical service agreement among those professionals.”
Optimal PA and APRN utilization shows up in the numbers. When practices increase patient access to care without overburdening physicians, they can accommodate more patients, leading to increased revenue generation. Moreover, because PAs and APRNs often bill at a lower rate than physicians, integrating them efficiently can improve cost-effectiveness, thereby enhancing the overall financial performance of the practice.
“It should realize an ROI, and that ROI should be something more in terms of duties and tasks that other teammates can’t do,” says Mack. “Meaning, it would be unfortunate if a qualified healthcare professional is working at such a capacity whereby duties some of the day-to-day responsibilities should probably be done by teammates working at a higher level of their own individual license.”
Changing existing workflows can be difficult, but the rewards heavily outweigh the risks. Physicians must support interprofessional integration to successfully navigate the transition. Physicians are typically the leaders and decision-makers within medical practices, and their support is essential for implementing any significant changes in workflow or care delivery models, which includes having front office staff, medical assistants, nursing and administrative staff rely and respect the roles of PAs and APRNs. Without physician buy-in, resistance to change may arise, hindering smooth integration and retention.
Physicians play a vital role in collaborating and ensuring a seamless care model is implemented and sustained. By endorsing and supporting the integration of PAs and APRNS, physicians can foster a culture of teamwork and mutual respect within the practice. This collaborative approach promotes a cohesive care team to provide high-quality patient care.
It’s important for physicians to trust and communicate that PAs and NPs are qualified and capable of providing excellent patient care. Allowing them to care for an established patient does not sever the relationship between the physician and the patient; it can actually enhance the patient’s experience and trust in the practice.
“We want patients who have had a long-standing relationship with an MD to be able to see that doctor, and then we want to help the doctor know and understand how to appropriately transfer care over to an APRN within their system or within their practice,” says Monroe. “So, that provider can be still linked to the doctor, and the doctor can still be linked to the patient.”
Furthermore, physician buy-in is essential for maintaining continuity of care and ensuring patients feel confident in receiving treatment from both physicians and PAs and NPs. When physicians actively endorse interprofessional integration and communicate the benefits of team-based care to their patients, it builds trust and acceptance of the practice model. It also fosters billing transparency if a patient gets an EOB with the name of someone other than the physician as the rendering provider.
Physician engagement is critical for the long-term success and sustainability of integration initiatives. When physicians recognize the value that PAs and APRNs bring to the practice, including increased efficiency, expanded access to care, and improved patient outcomes, they are more likely to champion these initiatives and advocate for their continued support and development.
The integration of PAs and APRNs into medical practices and health systems presents a strategic opportunity to optimize patient care delivery and operational efficiency. By expanding access to healthcare services and alleviating the workload of overburdened physicians, integration improves patient and employee satisfaction, and enhances patient retention. However, successful integration requires careful attention to regulatory compliance, billing, and coding practices. VMG Health offers comprehensive billing, coding, and strategy advisory services to support practices in navigating the complexities of integration, ensuring compliance with Medicare regulations, and maximizing reimbursement while minimizing audit risk.
Optimal PA and APRN utilization yields tangible benefits, including increased patient access to care, improved patient satisfaction, and enhanced financial performance. By understanding their education, training, and scope, and by leveraging their unique skill sets, practices can accommodate more patients, reduce wait times, and deliver high-quality care cost effectively. Physician engagement is essential for the successful implementation of integration initiatives, as physicians play a pivotal role in endorsing and supporting interprofessional responsibilities within the care team. Through collaborative leadership and effective communication, physicians can foster a culture of teamwork and mutual respect, driving the long-term success and sustainability of integration efforts.
In summary, strategic integration presents a transformative opportunity for medical practices and health systems to meet evolving patient needs, enhance operational efficiency, and achieve sustainable growth. By partnering with VMG Health for expert guidance and support, practices can navigate the complexities of interprofessional integration with confidence, realizing the full potential of this innovative care delivery model.
Maureen C. Regan, MBA, PA-C, FACHE, DFAAPA, is the President-Elect and Past President of the New York State Society of Physician Assistants (NYSSPA) and a Delegate for the American Academy of Physician Associates (AAPA). She is recognized as a Fellow of the American College of Healthcare Executives (FACHE) and a Distinguished Fellow of the American Academy of Physician Associates (DFAAPA). The views expressed in this article are her opinion and do not represent the opinions of any organization or association she is affiliated with.
American Academy of Physician Associates. (n.d.). History of AAPA. Retrieved from https://www.aapa.org/about/history/
American Medical Association. (2022). AMA president sounds alarm on national physician shortage. Retrieved from https://www.ama-assn.org/press-center/press-releases/ama-president-sounds-alarm-national-physician-shortage
Centers for Medicare & Medicaid Services. (2023). Advanced practice nonphysician practitioners. Medicare Physician Fee Schedule. https://www.cms.gov/medicare/payment/fee-schedules/physician-fee-schedule/advanced-practice-nonphysician-practitioners
Centers for Medicare & Medicaid Services. (2023). Advanced Practice Registered Nurses (APRNs) and Physician Assistants (PAs) in the Medicare Program. Retrieved from https://www.cms.gov/medicare/payment/fee-schedules/physician-fee-schedule/advanced-practice-nonphysician-practitioners
Centers for Medicare & Medicaid Services. (2023). Incident-to billing. Medicare. https://www.cms.gov/medicare/payment/fee-schedules/physician-fee-schedule/advanced-practice-nonphysician-practitioners
Centers for Medicare & Medicaid Services. (2023). Medicare Physician Fee Schedule final rule summary for calendar year 2024. https://www.cms.gov/files/document/mm13452-medicare-physician-fee-schedule-final-rule-summary-cy-2024.pdf
Mujica-Mota, M. A., Nguyen, L. H., & Stanley, K. (2017). The use of advance care planning in terminal cancer: A systematic review. Palliative & Supportive Care, 15(4), 495-513. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5594520/
Written by Christa Shephard
In April, Progressive Surgical Solutions, a division of VMG Health, hosted its fourth annual Ambulatory Surgery Center (ASC) Nurse Leadership Conference. This conference aims to empower nurses to transform ASC culture through leadership development, education, inspiration, community, and networking. ASC nurse managers and administrators are not just clinical staff; they are essential business managers who ensure the efficiency and profitability of the center.
Clinical staff, particularly registered nurses, are indispensable in ASCs. Regulations require a registered nurse clinical director for Medicare-certified ASCs. Beyond regulatory requirements, nurses play a vital role in patient advocacy, ensuring patient safety and compliance with health standards during surgical procedures. Their presence allows surgeons to focus on their specialized tasks, knowing that patient care is in expert hands.
The nurse leader’s responsibilities extend beyond clinical duties, as they often manage the operating schedule, optimize collections, and control inventory costs. These tasks directly impact the ASC’s bottom line. By understanding and efficiently managing these areas, nurse leaders maximize revenue and reduce expenses, driving the ASC’s financial success.
It is crucial for ASC owners and physician owners to recognize the extensive responsibilities that nurse leaders carry. These leaders are the backbone of the ASC, playing a pivotal role in every aspect of its operations. Their duties span from clinical management, ensuring the highest standards of patient care and safety, to financial oversight, where they optimize costs and enhance revenue streams. Nurse leaders are deeply involved in human resources, managing staff schedules, training, and addressing personnel issues. Recognizing the breadth of their responsibility and viewing nurse leaders as strategic partners fosters a more supportive and effective working environment.
When nurse leaders are treated as partners within the ASC, operational efficiency and staff morale and retention improve, ultimately leading to better patient outcomes and a more profitable practice. By investing in the development and empowerment of nurse leaders, ASC owners can ensure their facilities run smoothly and effectively, positioning themselves for long-term success in a competitive healthcare landscape.
At the conference, there was a significant focus on empowering nurse leaders to understand and influence their ASCs’ financial health. Recognizing the pivotal role nurse leaders play in the financial success of ASCs, sessions were tailored to equip them with essential financial literacy and management skills. Nurses learned to build basic financial dashboards and interpret key performance indicators and metrics, enabling them to make data-driven decisions that positively impact the ASC’s bottom line.
Beyond that, attendees learned to develop compensation and bonus plans intricately tied to specific financial metrics, such as revenue growth, expense reduction, and operational efficiency. Empowering nurse leaders with financial acumen enables ASC owners and physician leaders to foster a culture of financial accountability and transparency, driving operational excellence and sustainable growth.
Nurse burnout is a significant issue in the healthcare industry, and ASCs are no exception. Despite more favorable working conditions compared to traditional hospital settings, ASC nurses still face stress and burnout. The demands of providing high-quality patient care in a fast-paced environment, coupled with administrative responsibilities and the constant pressure to optimize efficiency, can take a toll on their well-being.
Adding to the stress of these demands is the crisis-level nursing shortage across the industry at large. Leaders are exhausted by constant staff turnover. Often, there simply aren’t enough people within the ASC to meet its needs, forcing nurses to juggle the workloads of multiple team members. This critical nursing shortage drives individual burnout and overall staffing churn, perpetuating the cycle. In fact, it is the No. 1 reason nurse leaders who want to attend the conference do not: They can’t leave their ASC because they don’t have enough staff.
Recognizing the urgent need to address nurse burnout, the ASC Nurse Leadership Conference prioritizes providing ASC nurses with a supportive and nurturing environment. Through a comprehensive program of educational sessions, interactive workshops, and networking opportunities, the conference offers participants a valuable opportunity to recharge, refocus, and reenergize. Through knowledge-sharing and peer-to-peer discussions, nurses can gain fresh insights, strategies, and perspectives for addressing common challenges and enhancing their resilience.
The ASC Nurse Leadership Conference is more than just a gathering of healthcare professionals—it’s a transformative experience designed to support and uplift ASC nurses, equipping them with the tools, resources, and support they need to thrive in their roles. By fostering a culture of well-being and resilience, ASCs can cultivate a workforce that is more engaged and motivated, and better equipped to deliver exceptional patient care in the face of evolving challenges. As these empowered nurse leaders take on greater responsibility and leadership roles within their ASCs, they become catalysts for positive change, driving innovation and driving the ASC industry toward a financially sustainable future.
Interested in attending the annual ASC Nurse Leadership Conference? Explore last year’s pictures, program, and testimonials, and save the date for next year’s conference.
Written by Joel Gomez, ASA
Before you begin the process of selling your medical practice, it is always in your best interest to ensure your practice’s value is accurately represented. Most buyers of medical practices, including healthcare systems and hospitals, begin the transaction process with a fair market value analysis of the business revenues to determine the purchase price. Unfortunately, many practices in the position of selling are in a break-even or negative cash–flow scenario. In these instances, the value of the practice may be most accurately represented by the fair market value of personal property and real property.
Some buyers opt to have personal property valued on a “desktop” scope of work, relying on data in the form of a depreciation schedule or practice inventory as the basis of the fair market value analysis. While acceptable for fair market value purposes, this approach may not capture all owned personal property.
The first approach for identifying personal property through accounting documents is the use of a depreciation schedule or fixed asset listing (FAL). While real property is easily identifiable (the space is either owned or rented), personal property listings are often less maintained, reliant on an accountant’s tracking of capitalized assets, and may not fully reflect what is owned. When preparing a valuation, an appraiser is always subject to the quality of available data. FALs maintained by an accountant only display equipment that meets the predetermined capitalization cost threshold determined by that accountant. Additionally, some capitalized assets are removed from the FAL once it has fully depreciated according to accounting standards. Providing an equipment appraiser, a FAL as the basis of their appraisal could mean valuable practice assets are not captured.
An on-site inspection and asset inventory by an appraiser allows them to capture all assets on a room-by-room basis, regardless of original purchase cost or visibility on the FAL.
Another alternative to an appraiser performing an on-site inspection is to have a practice employee create the inventory. While this may sound like a good approach initially, information captured by someone other than an appraisal expert tends to be inconsistent. Items captured in one room are missed in the next, and inconsistent asset descriptions will lead to follow-up information requests, requiring the selling practice to invest more work hours.
Hiring an appraisal expert to complete an on-site inventory and inspection of the practice’s tangible personal property ensures personal property listings are maintained, fully reflect what is owned, and include consistent asset descriptions from room to room. VMG Health reviewed a sampling of projects over the past 18 months, across several practice specialties, and noted that when completing a site visit as part of our valuation process, the fair market value conclusion of exam rooms was roughly 60%–70% higher on a per-room basis compared to relying on practice data/inventories.
VMG Health’s qualified equipment appraisers have the knowledge and experience to complete a discrete and comprehensive inventory, gathering all necessary data during the visit and minimizing interruptions to the practice operations and patient flow.
VMG Health’s team of equipment appraisers has over 55 years of experience in the equipment appraisal field across all sectors of the healthcare industry and includes three accredited senior appraisers with the American Society of Appraisers. Since 1995, VMG Health has earned the trust of our clients with extensive expertise in navigating the dynamic factors that influence value. If you are in the process of valuing your practice, use VMG Health’s equipment appraisers to complete an on-site inspection, inventory, and valuation of your personal property.
Written by Christa Shephard
Even in today’s ever-evolving world of leadership, there remains a belief that admitting vulnerability is a sign of weakness. However, in the latest episode of Coachify Over Coffee, Laura Baldwin and Savory Turman, leadership development coaches, challenge this misconception head on by diving into and emphasizing the importance of authenticity and its transformative power in leadership.
The fourth episode of Coachify Over Coffee, It’s OK Not to Be OK, addresses a common misconception among leaders in healthcare and across all industries: the fear that admitting they’re not okay diminishes their credibility. Our coaches discuss how authenticity breeds trust and connection, strengthening teams and organizations. They highlight lying about one’s well-being can undermine trust far quicker than acknowledging vulnerabilities.
It’s important to define what “fine” really means in different contexts. Rather than accepting superficial answers, Baldwin and Turman encourage leaders to dig deeper. When leaders ask probing questions and foster genuine conversations, they uncover the truth behind their team’s well-being. Recognizing signs of burnout early on can help leaders and teams address stress before it escalates, preventing the negative impacts of prolonged stress.
The conversation extends beyond individual leadership and acknowledges organizational culture. Baldwin and Turman share how fostering authenticity can positively impact employee morale and organizational trust. According to a recent survey by the Society of Human Resource Management, a significant percentage of organizations may claim to prioritize employee mental health, but many fail to implement meaningful strategies. Missing substantive opportunities to support employee mental health only reinforces the need for genuine, actionable steps toward creating supportive work environments.
Baldwin and Turman leave listeners and leaders with practical advice: Regularly self-assess and reflect, asking ourselves, “What do I need in this moment?” Though it may seem like a simple question, its answers may be complicated, which can inspire deep self-discovery and a more balanced approach to leadership. When leaders own and address their personal struggles, they both enhance their own credibility and create environments where others feel empowered to do the same.
If you’re looking to improve your leadership effectiveness and have a greater impact on your practice, Coachify Over Coffee offers valuable insights and actionable strategies. Learn to shift your mindset, view daily problems through a different lens, and apply a new approach to your leadership with the help of Laura Baldwin and Savory Turman, two certified coaches dedicated to sharing their expertise with listeners like you.
Written by Christa Shephard
As new tools come to the forefront of healthcare delivery, staying compliant with updated billing and coding policies is crucial. VMG Health’s Compliance Risk Analyzer (CRA) is designed to help health systems and practices navigate the shifting healthcare landscape with ease, ensuring they remain compliant and avoid small mistakes that can lead to big consequences, like audits. Additionally, the financial returns from the undercoding of E&M codes and the potential FTE savings through improved efficiency, resource reduction, and cost-effectiveness underscore the value of implementing CRA.
Analytics are increasingly driving healthcare and its delivery. Government agencies and private payors use advanced statistical models to identify improper claims and target providers for audits. To balance the scales, healthcare managers need a fundamental understanding of these statistical practices. A manager does not need to be an expert statistician, but a foundational understanding of statistics is critical to properly coding, billing, and understanding common mistakes. A fundamental understanding of trending analysis, time series, confidence intervals, and other factors empowers providers and managers to maximize the benefits of CRA’s data analytics.
Health systems and practices should closely monitor their billing and coding processes. It is crucial to efficiently perform internal, risk-based audits that produce accurate results that mimic how the government audits. Catching and addressing mistakes early is key.
CRA employs artificial intelligence to simplify the compliance process. Instead of requiring managers to become statisticians, CRA handles the heavy lifting. Through its sophisticated algorithms, CRA automates the complicated task of data analysis, allowing healthcare providers to conduct risk-based audits as efficiently and accurately as possible. It also employs predictive analytics to identify which claims or services will be most likely to be audited, allowing providers to take proactive, preventive measures, saving time and money.
Typically, organizations use about 1.3 full-time employees (FTEs) per 1,000 providers just to start identifying audit targets. CRA completely eliminates this step, saving much of the upfront work and boosting the accuracy of risk prediction by reviewing 100% of claims. Creating and implementing an audit plan usually takes 0.8 FTEs per 1,000 providers; CRA handles it in seconds with just one click. Finally, practices usually spend about 20% of their resources just digging through claims within the EHR to choose which claims to audit. CRA automates this process, picking claims based on statistically valid, random samples or non-probability convenience samples. This data-driven, proactive technology allows healthcare organizations to address potential issues before they escalate.
Ultimately, CRA is about empowerment. Understanding the basics of statistics and data analytics is vital to fully capitalizing on its services. CRA is designed to help healthcare providers protect themselves from unwarranted audits and compliance issues. By integrating advanced analytics into everyday operations, health systems practices can enhance their compliance strategies and focus on delivering exceptional patient care.
Stay tuned for more insights on how CRA and other VMG Health solutions are transforming healthcare compliance.
Written by Glenn Morley
The aesthetics industry has grown significantly over the past few years, driven mainly by investor-backed consolidation of practices. Whether large or small, buy- or sell-focused, organizations focused on growth should explore acquisition and de novo development strategies. Aligning the right and best growth strategy with your organizational vision is critical and requires an examination of the strategic advantages both options can offer.
Aesthetics practice consolidation typically refers to the trend of medical aesthetics practices and medical spas merging or being acquired by investor-backed organizations. Consolidation in medical aesthetics has gained momentum over the past five years for several reasons:
The de novo strategy is the process of opening a new practice or medical spa or expanding to a new location from scratch. When choosing the de novo path, it is crucial to understand your business model. You need to identify the target market that offers the most significant probability of success in your area. Key population factors to consider include age and financial bands, and the competitive landscape. Consider launching a target market analysis to focus on your ideal region and region and entail customers. You can also evaluate the demographic data in your practice management system, complete focus group research, or hire experts to ensure there will be demand when you build.
A de novo growth strategy can offer compelling advantages, including control over branding, culture development, service offerings, and management. This also allows you to initiate your build with the retail mantra: location, location, location. A de novo strategy may also require a lower initial investment than an acquisition. However, this strategy can be challenging and time-consuming due to factors such as building a patient base, recruiting providers, and a team willing and able to build from scratch. A less arduous approach to de novo location growth is securing an anchor practice poised for expansion, a target geographic location, or an organization with expertise building de novo in other sectors.
An acquisition growth strategy involves purchasing established medical aesthetics practices and integrating them into an existing organization. While this approach offers immediate access to an established patient base and can provide a steady revenue stream, it comes with its challenges and risks. When a business is acquired, careful due diligence is required to ensure the revenue streams, operations, and systems are reliable and scalable. It will also require integrating many components, starting with culture, HR/personnel, marketing, and operational and financial systems.
Owners looking to expand to multiple locations should carefully evaluate the pros and cons of both de novo and acquisition strategies. Furthermore, it is critical to align these strategies with long-term goals, your current organization’s ability to scale, risk tolerance, and existing market opportunities.
Many growth-minded medical aesthetics organizations seek expert guidance in this process. Engaging industry professionals, including financial advisors like VMG Health and BSM Consulting, can offer invaluable insights and steer you toward informed decisions that align with your strategic expansion goals. Once you have a plan, creating a model of your new acquisition or de novo location is essential for a thoughtful approach to growth.
Whether you build a practice from the ground up or acquire an existing one, you must complete thorough due diligence, including examining financial health through day-to-day operations. Early phase due diligence will reward you with greater prosperity and less disruption.
Acquisition or de novo growth strategies offer excellent business owner opportunities; the choice should align with your practice’s risk tolerance and growth goals. Regardless of your chosen strategic growth plan, stay abreast of the changing landscape and dynamics in the expanding medical aesthetics marketplace.
Written by Holden Godat, CVA; Taylor Harville; and Trent Fritzsche
In the traditional sense, call coverage was a mutual obligation for physicians in addition to their clinical duties. Many physicians would provide uncompensated call coverage to a hospital to secure hospital privileges, build their own practices, and ensure proper patient care with specialized services when needed. Due to the passage of the Emergency Medical Treatment and Labor Act of 1986 (EMTALA), which requires Medicare-participating hospitals to provide sufficient levels of physician coverage to their emergency departments, hospitals are facing difficult task of determining the appropriate level of physician coverage. Several factors—including physician work-life balance, growing uninsured patient populations, increasing professional liability insurance costs, and a declining supply of physicians—have contributed to a decline in uncompensated call coverage and a significant increase in compensated call coverage stipends.
The healthcare sector has seen an increasingly high demand for physicians over the past decade, and projections show that there is a shortfall in supply that does not appear to be going away any time soon. According to The Complexities of Physician Supply and Demand: Projections From 2019 to 2034, a report released by the Association of American Medical Colleges (AAMC), “the U.S. faces a projected shortage of between 37,800 and 124,000 physicians within 12 years.” Such a significant shortage of physicians has left health systems and hospitals with few options to remedy the potential lapse in patient care. To combat this problem, many care organizations have turned to concurrent call coverage arrangements as a potential, efficient solution. As these arrangements become more common, it is important to ensure organizations are compliant from a fair market value perspective.
Concurrent call coverage is an arrangement whereby a physician may provide on-call coverage services to multiple locations and/or to multiple specialty panels simultaneously. These arrangements seek to provide an even distribution of work and ensure patients receive a sufficient level of care. Although concurrent call arrangements help to provide an efficient continuum of care, there are a few important considerations to weigh with each arrangement. Setting fair market value physician compensation for any concurrent call coverage arrangement brings forth a new set of difficulties and regulatory scrutiny that must be properly addressed.
In determining appropriate compensation for a call coverage shift, it is important to establish the actual burden of being on call. Factors impacting call burden include:
When determining appropriate compensation in a concurrent call coverage arrangement, it is important to consider the combined burden of call.
An important value driver for any call coverage arrangement is understanding the required specialty needed to perform the coverage. Typically, concurrent call arrangements are required due to the need for one group of specialized physicians to provide coverage for two or more unique, call coverage panels. Due to the nature of these arrangements, the physicians providing the concurrent services must be able to effectively provide both panels of coverage. Select the appropriate specialty for the subject services to ensure the physician can adequately cover multiple panels and to ensure the physician is appropriately compensated for the services being provided.
In a typical call coverage arrangement, the ultimate compensation rate contemplates the unrestricted availability of a physician for a given amount of time. When stacking panels or facilities to be covered in a concurrent setting, be aware of this availability and ensure the overall compensation does not account for the same time twice. Since physician availability is already being covered by an initial panel, stacking compensation related to additional panels could create overpayment concerns. Furthermore, concurrent arrangements often create additional efficiencies for an emergency department that should be reflected in the ultimate compensation. To ensure providers are appropriately compensated for the time they are providing coverage, it is common to use a discounted coverage rate on top of the existing stipend to account for the incremental coverage of additional panels or facilities.
To illustrate this point, consider a hypothetical Panel A and Panel B. Independently, Panel A and Panel B may be worth $500 per 24-hour shift and $600 per 24-hour shift, respectively. That does not necessarily mean that the concurrent coverage of Panel A and Panel B equals $1,100 per 24-hour shift. Each panel independently contemplates 24 hours of availability. When combined, there must be assurances that the availability of the physician is not compensated twice.
One of the last and most critical pieces of setting up any concurrent call coverage arrangement is to fully understand the compensation terms for the services. While these do not drive value for the services in the way other factors might, the specific terms relating to the compensation are critical to understand in providing an appropriate valuation. Factors like whether the physician is employed or an independent contractor, understanding who retains the rights for billing and collection under each individual arrangement, and a thorough review of whether providers receive production credit toward outside employment agreements are all vital pieces of structure to consider when evaluating a concurrent call coverage arrangement.
The many unique considerations of concurrent call arrangements, such as establishing the appropriate burden of call, determining the correct specialty for services being provided, contemplating physician availability in a shift, and sources of compensation, often make these arrangements tricky to structure in a compliant manner. Although it may seem as simple as adding two shifts together, this is a major misconception. Increased scrutiny from regulators and the tricky healthcare landscape has made it more important than ever to obtain third-party fair market value guidance to ensure you meet a compliant call compensation system.
Association of American Medical Colleges. (2021). The Complexities of Physician Supply and Demand: Projections from 2019 to 2034. Retrieved from https://www.aamc.org/media/54681/download ssociation of American Medical Colleges. (2021). The Complexities of Physician Supply and Demand: Projections from 2019 to 2034. Retrieved from https://www.aamc.org/media/54681/download
Written by Ashleigh Surgeon and Caroline Dean, CVA
In recent years, the anesthesiology market has seen many changes in compensation trends and practice models. With continued provider shortages and a growing demand for anesthesia services, providers in this specialty are becoming increasingly valuable. Specifically, certified registered nurse anesthetists (CRNAs) have become some of the most sought-after advanced practice providers in the industry, leading to significant increases in compensation for these providers. In addition, hospitals and health systems are shifting to expanded CRNA utilization as opposed to physicians due to the ongoing push for cost-effective treatment options. Understanding the factors impacting CRNA compensation trends is crucial to anticipating and addressing potential challenges in the pursuit of CRNA arrangements.
According to Becker’s ASC Review, the anesthesiology market is facing a projected shortage of 12,500 providers by 2033. As basic economic principle rules, a decrease in supply of any healthcare provider drives demand upward, forcing costs of anesthesia services and provider compensation upward as well. In 2023, median compensation for CRNAs in the United States was reported at $221,300, an increase in total cash compensation of 11.3% from 2022.
Source: Sullivan, Cotter and Associates, Inc. 2019-2023 Physician Compensation and Productivity Survey and 2019-2023 Advanced Practice Provider Compensation and Productivity Survey
This is a significant rise as compared to general physician assistants and nurse practitioners, who saw only a 5% increase on average from 2022 to 2023. This level of compensation is mostly accredited to the additional education and training required for the certification, as well as the increased risk and level of independence associated with their standard practice.
To receive certification from the National Board of Certification and Recertification for Nurse Anesthetists (NBCRNA), a candidate must first complete registered nurse training and the appropriate clinical experience. Then CRNAs complete a Nurse Anesthesia program, which grants the candidate a master’s degree. Program length varies from two to four years and includes a clinical experience requirement in addition to coursework. In total, the process of becoming a certified nurse anesthetist takes at least seven years to complete, surpassing a standard registered nurse by an average of three years in education and experience. As with any advanced degree, CRNAs often receive increased compensation due to a higher level of education and training than a standard practicing registered nurse.
Because of their advanced training, CRNAs have an increased level of independence in a clinical setting. Though anesthesiologists may manage high-acuity surgeries, CRNAs in many states and facilities may be responsible for primary patient care, including informing the patient, completing examinations, developing pain management plans, prescribing medications, administering and monitoring medications, and responding to adverse reactions or emergencies. A CRNA’s involvement in responsibility for patient care puts the provider in higher-risk scenarios when compared to other registered nurse professions. In 23 states, CRNAs may operate independently without the supervision of a medical doctorate. CRNAs are also typically the sole anesthesia provider in many plastic surgery centers, eye surgery centers, dental surgery centers, and gastrointestinal surgery centers. Additionally, in the U.S., many facilities in rural areas with limited healthcare providers use CRNAs for routine surgical services in the specialties of general surgery, obstetrics, and pain management. According to the American Association of Nurse Anesthesiology, CRNAs comprise over 80% of anesthesia providers in rural areas.
Though CRNAs’ level of autonomy may vary depending on location, state government regulations and a facility’s scope of services, the importance of CRNAs is often constant across markets. With their ability to operate nearly identically to an anesthesiologist in most general cases, CRNAs also incur the same level of risk as physicians and the increased costs associated with such risk. Increased utilization, higher malpractice insurance expenses, and reimbursement difficulties play a large role in these higher costs for CRNAs, which create a competitive environment amongst healthcare systems when considering compensation in recruitment efforts.
Historically, anesthesiology services have been provided by a mix of physicians and CRNAs together. However, with continued physician shortages and health systems and facilities seeking more profitable provider options, CRNA-heavy care team models have risen to the forefront. In a care team model, one physician typically supervises between one and four CRNAs, allowing the facilities to rely on CRNAs as opposed to more expensive physician coverage. As CRNA utilization grows, so grows CRNA compensation as facilities are forced to offer more lucrative recruitment packages, inclusive of commencement bonuses and higher-dollar salaries to retain top CRNA talent and stay competitive. In addition, as many U.S. lawmakers are pushing to expand the scope of CRNA independent practice, it is likely CRNA utilization will continue to increase.
Additionally, according to the Centers of Medicare and Medicaid Services (CMS), average CRNA malpractice insurance in 2024 is $5,968—nearly 50% higher than the average for all other midlevel providers. This is most likely attributed to the large number of CRNAs practicing independently, and therefore solely liable for any case complications. The most common malpractice claims involving CRNAs include subpar performance during procedures, poor patient monitoring and improper positioning. All three of these claims are extremely serious and can result in recovery complications, severe injury, and even death. As a result, CRNAs face higher medical malpractice premiums than providers not solely responsible for a patient’s care. Health systems and facilities must consider this expense when employing CRNAs’ services, whether they reimburse, subsidize, or include the expense in compensation.
Lastly, anesthesia has seen a downward trend in reimbursement based on the CMS Medicare Physician Fee Schedules as Anesthesia Base Units (ASAs) reimbursement have decreased from $22.27 per unit in 2019 to $20.44 in 2024. In the states where CRNAs can practice independently, CMS will reimburse services provided by CRNAs at these rates. This reduction in reimbursement can impact a provider’s ability to collect sufficient revenue based on professional services alone, often requiring additional compensation or subsidization from a facility to sustain operational costs. This issue is commonly present for providers in a community highly comprised of governmental payors. Public payor rates, such as Medicare and Medicaid, reimburse medical services at a significantly lower rate than private insurance, less than 28% of median commercial rates in 2022. As such, facilities serving a population with a significant amount of governmental insured patients must offer providers a compensation plan not only to offset the practice’s operational costs, but also as an alluring salary serving as incentive to relocate to the market. With a CRNA shortage looming, these underserved areas must stay competitive in compensation offers to recruit and retain the essential services CRNAs provide to the community. This level of competition contributes largely to the upward drive of average CRNA compensation, as majority of the CRNAs are operating in the U.S. in lower-income markets.
In summary, the CRNA compensation market will continue to evolve in the coming years, and health systems and facilities must understand and address these changes to capitalize on the benefits associated with CRNA utilization. VMG Health is frequently engaged to provide fair market value and consultative services to ensure CRNA compensation packages are both competitive and compliant with government regulations. Utilizing in-depth analyses of revenue, market data, costs and recruitment expenditures, and expert experience in similar arrangements, VMG Health can assist in navigating the increasingly important CRNA market.
Becker’s ASC Review. (June 28, 2022). Weathering the storm in Anesthesiology: making the business case and demonstrating the value of Anesthesiology. https://www.beckersasc.com/asc-news/weathering-the-storm-in-anesthesiology-making-the-business-case-and-demonstrating-the-value-of-anesthesiology.html
Sullivan Cotter. 2019-2023 Physician Compensation and Productivity Survey and 2019-2023 Advanced Practice Provider Compensation and Productivity Survey
O’Brien, E. Health eCareers. (January 23, 2023). How Long is CRNA School? https://www.healthecareers.com/career-resources/nurse-credentialing-and-education/how-long-is-crna-school
Munday, R. Nurse Journal. (November 16, 2023). CRNA Supervision Requirements by State. https://nursejournal.org/nurse-anesthetist/crna-supervision-requirements/
AMN Healthcare. (June 23, 2023). CRNAs Practice Updates and Trends. https://www.amnhealthcare.com/blog/physician/locums/crnas-practice-updates-and-trends/
Centers for Medicare & Medicaid Services. 2019-2024 Anesthesia Conversion Factors. https://www.cms.gov/medicare/payment/fee-schedules/physician/anesthesiologists-center
Baxter Pro. (May 6, 2022). The 3 Most Common CRNA Malpractice Claims. https://baxterpro.com/the-3-most-common-crna-malpractice-claims/#:~:text=Do%20CRNAs%20Get%20Sued%20More,the%20benefits%20of%20the%20job
American Society of Anesthesiologists. (December 2022). Anesthesia Payment Basics Series: #3 Payment, Conversion Factors, Modifiers. https://www.asahq.org/quality-and-practice-management/managing-your-practice/timely-topics-in-payment-and-practice-management/anesthesia-payment-basics-series-3-payment-conversion-factors-modifiers#:~:text=In%202022%2C%20the%20Medicare%20anesthesia,conversion%20factor%20survey%20was%20%2478.00.&text=Overall%2C%20Medicare%20was%20paying%20less,commercial%20rates%20in%20that%20year
Liao. C, et. all. Semantic Scholar (2015). Geographical Imbalance of Anesthesia Providers and its Impact on the Uninsured and Vulnerable Populations. https://www.semanticscholar.org/paper/Geographical-Imbalance-of-Anesthesia-Providers-and-Liao-Quraishi/77112f1f7ca09a86142b4f5e7c065ae9a073dec2
Written by Grayson Terrell, CPA
The following article was published by Becker’s Hospital Review.
In today’s complex healthcare environment, mergers and acquisitions (M&A) are proving to be more challenging than ever, with heightened governmental regulations impacting both the operation of an entity and the purchase and sale of an entity.
To successfully navigate a transaction in the healthcare sector, it is paramount that buyers and sellers make informed decisions through all of the tools made available to them. For sellers, this can come in the form of understanding how their business operates, understanding inefficiencies and growth opportunities, and even understanding what their business is worth. For buyers, informed decision making relies heavily upon understanding the markets in which they are investing, including governmental regulations in some states that may impact their ability to invest and operate; understanding the key operating metrics of similar companies in similar industries; and ensuring that they are paying an appropriate amount for the business. This is especially important because, in healthcare transactions, the capital used to purchase is often provided by investors who are counting on timely positive returns.
Financial due diligence (FDD) is pivotal to the success of any healthcare transaction, as it requires detailed investigation and analysis of a company’s financial information and is used to validate a company’s true run-rate operating potential. With most healthcare M&A transactions, purchase price is based on a multiple of a company’s salable earnings before interest, taxes, depreciation, and amortization (EBITDA). As such, the buyer and seller must perform the appropriate financial due diligence procedures prior to executing a transaction. Below are five vital aspects of the financial due diligence process.
The Quality of Earnings (QofE) process consists of making adjustments to the entity’s reported financial statements to normalize EBITDA. The bulk of these adjustments involve adjusting or removing impacts of non-recurring and one-time items from earnings to arrive at an adjusted EBITDA figure that represents a more accurate view of the entity’s true cashflows. This process also gives the FDD team the opportunity to pose pointed questions related to the entity’s operations, finances, and accounting functions, highlighting key information that could negatively or positively impact adjusted earnings. Specific to healthcare transactions, some of the relevant areas of interest with respect to potential EBITDA adjustments are:
The Quality of Revenue (QofR) analysis may be the most important part of the FDD process when it comes to healthcare-related transactions, given the unique characteristics and nuances of healthcare revenue. During this process in many middle-market healthcare deals, the conversion of revenue from cash basis to accrual basis is a fundamental exercise with respect to the QofE analysis. The cash waterfall approach is the gold standard and therefore the most common method for accomplishing the cash-to-accrual conversion. With this method, detailed billing data is obtained from the entity’s revenue cycle management (RCM) system, which includes charges by date of service and payments by date of service and by date of payment. In this analysis, payments are adjusted back to their specific date of service (accrual basis), and outstanding collections on charges billed during the period under analysis are estimated based on historical collection patterns cut by payor, CPT code, or various other means.
Pro forma adjustments are forward-looking projections on certain aspects of the business, which are layered back in across the historical financial statements. These assumptions can help buyers understand potential areas of future direction and growth opportunities for the company; however, these adjustments should be thoroughly scrutinized during buy-side FDD procedures to ensure the adjusted EBITDA and purchase price are not over- or understated. These estimations tend to lean more in favor of the seller and are often a primary area of focus by the opposing buy-side FDD team. As such, a seller should understand all aspects of the business, especially as they relate to these forward-looking projections, and should be able to support the key inputs utilized to derive these pro forma adjustments. If properly supported, these adjustments often increase the sale price of the business enough to cover the cost of FDD procedures incurred by the seller, if not many times over. Some examples of commonly observed pro forma adjustments in healthcare related QofE reports include:
Another common analysis in FDD procedures is a Net Working Capital analysis, which is used to determine the working capital (current assets less current liabilities, excluding cash and debt) required to operate a business in the post-transaction environment. This subsection of FDD typically involves substantial negotiation between buyers and sellers when approaching the close of a deal, as both parties will view various inputs differently, often striving to set a working capital peg that is more favorable for themselves. As a miscalculation of this peg can cost a seller on a dollar-for-dollar basis if the agreed-upon level of net working capital is not met, it is imperative that management and their advisors are involved and knowledgeable on this calculation.
Most of the time, healthcare transactions occur on a cash-free, debt-free basis. Standard with any cash-basis business, many debt and debt-like items have the potential to be inaccurately reflected within a company’s balance sheet. As such, a Debt and Debt-Like Items analysis can assist buyers and sellers in understanding a company’s debts and liabilities as of the date of sale. These items can include potential tax-related exposures, outstanding litigation and legal settlements, deferred compensation, notes payable, and others.
In closing, FDD is a necessary step in ensuring that sellers have the keys to sell their businesses at the best possible price, and buyers can protect the money of their companies, firms, or investors by making a sound investment in the target company. This proactive approach creates trust between all parties and leads to more lucrative transactions for all.
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