Diversify Revenue Stream to Enhance Practice Survival

NEW ORLEANS – Like many other specialties – particularly cognitive specialties – neurology is under pressure to figure out how best to survive in an environment in which expenses are rising, but income is declining. So what are some strategies for staying in practice, choosing what type of practice is best, ensuring a steady income stream, and staying sane?

At the recent annual meeting of the American Academy of Neurology, several neurologists offered their personal take on preserving the pleasures of practice while maintaining revenues.

Dr. Laurence J. Kinsella, codirector of neurology for SSM Neurosciences Institute, St. Louis, noted that although median income for neurologists had risen fairly steadily since the mid-1990s, a neurologist’s value was very much dependent on what area of the country he or she practices in, whether it is urban or rural, and whether the practice is academic or private, or interventionist or cognitive.*

Choosing where to practice and the best type of practice is dependent on which options offer the best proximity to family or accommodation of a spouse’s needs, as well as the most professional growth, leadership potential, and collegiality, among other factors, said Dr. Kinsella, who is also vice chair of the AAN’s government affairs committee.

In the assessment of a group practice, for instance, be aware that survey data and published research have shown that the average turnover is 7% per year, and 60% of those who leave do so in the first 5 years. The biggest reasons for leaving include practice issues; compensation and location issues; and spousal concerns. Some questions to raise are whether the senior partners are advocates for equity for all partners, and whether the path to partnership is clearly stated, Dr. Kinsella said.

Before signing a contract with any group, it’s worthwhile to consult with an attorney who specializes in health care, he said. Keep in mind that everything is negotiable. Some key components to explore include salary and bonus; productivity scale; call schedule; pension and profit sharing; termination; and malpractice, health, and disability insurance.

"The most important thing is, you have to pay attention and be limber and adjust your models as things change."

Whether you take the academic, private, solo, or group path, the reimbursement challenges will be the same. The elimination of the Medicare consult codes in 2010 have led to a 6%-20% reduction in reimbursement, according to AAN survey data, Dr. Kinsella said.

There is a tool to assess the impact on a practice at www.mitsi.org/. One way to make up for lost revenue is to take a closer look at evaluation and management (E&M) codes, he added. At least 60% of neurologists’ billing is for E&M services. AAN provides templates for determining efficient and appropriate use of E&M codes. Dr. Kinsella said he advocated for the use of prolonged service codes such as 99354 (31-74 minutes) and 99355 (for each additional 30 minutes). "I’d encourage you to get comfortable with these. They are very good to use," he said.

Most neurologists also bill at level 4, then level 5 and level 3 for E&M, and they should be billing primarily level 5, Dr. Kinsella said. A level 5 consult requires more than just a single diagnosis.

Some 40% of neurology practice now comes from neurophysiology, such as sleep studies and electromyography/nerve conduction studies. These procedures pay better than E&M and thus are worth adding into a practice, he said.

Some other revenue-generating ideas include taking on a hospital directorship, such as stroke director; participating in clinical trials; giving botulinum toxin injections and nerve blocks for rotator cuff injuries, for instance; doing skin biopsies for small fiber neuropathy; and doing chart reviews for legal cases and interpretation of images.

Consider also moonlighting as a neurohospitalist. Dr. Kinsella’s practice offered 24/7 coverage to a hospital that suddenly lost a group of neurologists, which worked out well.

"The key is to leverage your scarcity," Dr. Kinsella said, noting that neurologists are in sparse supply and that many hospitals need coverage for call, stroke centers, and telemedicine.

Another avenue is to offer coverage for rural health clinics. Medicare has been assisting rural hospitals and clinics to recruit neurologists. With higher reimbursement in place to help these centers, working for a rural clinic can "cover your windshield cost" to make the drive and take the time away from practice, he said.

His suggestions for keeping practice fun? Get a clinical appointment to teach residents. Or have a different area of practice every day.

Dr. Elaine C. Jones, a colleague of Dr. Kinsella’s on the AAN government affairs committee, has taken a somewhat contrary path to getting satisfaction out of her practice by moving from an academic setting to set up her own solo practice.

She began practicing in the late 1990s at a large multispecialty group based at an academic hospital in Providence, R.I. By 2001, she was chief of neurology, but she felt as if the responsibility was not matched by an equal level of decision-making power. She decided that by going solo she could cut out the middleman on issues concerning staffing decisions, expenses, program development, and office renovations.

She consulted with other physicians in private practice, read up on various publications from the American Medical Association, and relied on her boyfriend, who had banking experience and a law degree, all of which helped her to decide which business model to use. She hired attorneys to help file the necessary paperwork to set up the practice. The hardest decision was naming the practice; she decided on Southern New England Neurology, with an eye on expanding in the future.

In 2005, Dr. Jones opened the practice in Bristol, R.I., renting space in a primary care practice building. Reaching this point had taken $40,000 in personal savings, $50,000 from a home-equity credit line, and a $30,000 equipment loan. Within 6 months, she had covered her costs, and within 18 months she had paid off the loan and was paying down the equity line.

An important initial investment was an electronic health record system, Dr. Jones said.

She began by working just 4 days a week, which gave her time for personal pursuits. But 3 years in, she had outgrown the space and the increased patient volume was taxing her existing staff. Dr. Jones was afraid to leave the bosom of the primary care group and its built-in referrals, but it had no additional room, so she decided to buy a property. She purchased a duplex and invested in extensive renovations, which took about a year to complete.

She has found private practice to be very rewarding because it gives her control over her scheduling, hours, and staffing, and no one is standing behind her pushing for an increase in productivity. But it requires a lot of focus on managing expenses.

In 2010 and 2011, Dr. Jones had a decline in reimbursement, but her patient volume was increasing. There are only so many patients she can see on her own, so she looked for ways to cut expenses and increase income. Accounting, for instance, had gone up to 20% of her expenses. She dismissed her bookkeeper and now does her own books. The health plan cost had increased by 8%, so when the policy came up for renewal, she found state incentives for small businesses, which allowed her to reduce that expense.

Initially, she had an experienced nurse practitioner on staff who helped maintain or increase patient volume. But her salary was more than she could bring in independently, so Dr. Jones decided to let her go.

She’s found ways to bring in new revenue – for instance, by offering botulinum toxin injections for chronic migraines and punch skin biopsies. Dr. Jones said that participating in Medicare’s incentive programs for meaningful use and electronic prescribing have also boosted revenue. "It’s a lot of work, and it changes how you do things, but it is a revenue stream," she said.

With demand outstripping supply, neurologists will continue to be in demand, but the Affordable Care Act and other pressures will still make it hard to practice, Dr. Jones said. She’s considering taking on some coverage with some local hospitals, but added that she’s "not thrilled with working harder" or on more nights and weekends, although she is not ruling out this option.

Nor is she ruling out selling her practice and getting out of medicine all together.

"The most important thing is, you have to pay attention and be limber and adjust your models as things change," said Dr. Jones. But, she acknowledged, "I don’t know if I’ll still be in neurology in 5 years."

Dr. Kinsella disclosed that he owns stock in Rural Healthcare Logistics and is a subcontractor for Premier Service Network. Dr. Jones had no disclosures.

*Correction, 7/13/2012: An earlier version of this story misstated Dr. Kinsella's professional position.

NEW ORLEANS – Like many other specialties – particularly cognitive specialties – neurology is under pressure to figure out how best to survive in an environment in which expenses are rising, but income is declining. So what are some strategies for staying in practice, choosing what type of practice is best, ensuring a steady income stream, and staying sane?

At the recent annual meeting of the American Academy of Neurology, several neurologists offered their personal take on preserving the pleasures of practice while maintaining revenues.

Dr. Laurence J. Kinsella, codirector of neurology for SSM Neurosciences Institute, St. Louis, noted that although median income for neurologists had risen fairly steadily since the mid-1990s, a neurologist’s value was very much dependent on what area of the country he or she practices in, whether it is urban or rural, and whether the practice is academic or private, or interventionist or cognitive.*

Choosing where to practice and the best type of practice is dependent on which options offer the best proximity to family or accommodation of a spouse’s needs, as well as the most professional growth, leadership potential, and collegiality, among other factors, said Dr. Kinsella, who is also vice chair of the AAN’s government affairs committee.

In the assessment of a group practice, for instance, be aware that survey data and published research have shown that the average turnover is 7% per year, and 60% of those who leave do so in the first 5 years. The biggest reasons for leaving include practice issues; compensation and location issues; and spousal concerns. Some questions to raise are whether the senior partners are advocates for equity for all partners, and whether the path to partnership is clearly stated, Dr. Kinsella said.

Before signing a contract with any group, it’s worthwhile to consult with an attorney who specializes in health care, he said. Keep in mind that everything is negotiable. Some key components to explore include salary and bonus; productivity scale; call schedule; pension and profit sharing; termination; and malpractice, health, and disability insurance.

"The most important thing is, you have to pay attention and be limber and adjust your models as things change."

Whether you take the academic, private, solo, or group path, the reimbursement challenges will be the same. The elimination of the Medicare consult codes in 2010 have led to a 6%-20% reduction in reimbursement, according to AAN survey data, Dr. Kinsella said.

There is a tool to assess the impact on a practice at www.mitsi.org/. One way to make up for lost revenue is to take a closer look at evaluation and management (E&M) codes, he added. At least 60% of neurologists’ billing is for E&M services. AAN provides templates for determining efficient and appropriate use of E&M codes. Dr. Kinsella said he advocated for the use of prolonged service codes such as 99354 (31-74 minutes) and 99355 (for each additional 30 minutes). "I’d encourage you to get comfortable with these. They are very good to use," he said.

Most neurologists also bill at level 4, then level 5 and level 3 for E&M, and they should be billing primarily level 5, Dr. Kinsella said. A level 5 consult requires more than just a single diagnosis.

Some 40% of neurology practice now comes from neurophysiology, such as sleep studies and electromyography/nerve conduction studies. These procedures pay better than E&M and thus are worth adding into a practice, he said.

Some other revenue-generating ideas include taking on a hospital directorship, such as stroke director; participating in clinical trials; giving botulinum toxin injections and nerve blocks for rotator cuff injuries, for instance; doing skin biopsies for small fiber neuropathy; and doing chart reviews for legal cases and interpretation of images.

Consider also moonlighting as a neurohospitalist. Dr. Kinsella’s practice offered 24/7 coverage to a hospital that suddenly lost a group of neurologists, which worked out well.

"The key is to leverage your scarcity," Dr. Kinsella said, noting that neurologists are in sparse supply and that many hospitals need coverage for call, stroke centers, and telemedicine.

Another avenue is to offer coverage for rural health clinics. Medicare has been assisting rural hospitals and clinics to recruit neurologists. With higher reimbursement in place to help these centers, working for a rural clinic can "cover your windshield cost" to make the drive and take the time away from practice, he said.

His suggestions for keeping practice fun? Get a clinical appointment to teach residents. Or have a different area of practice every day.

Dr. Elaine C. Jones, a colleague of Dr. Kinsella’s on the AAN government affairs committee, has taken a somewhat contrary path to getting satisfaction out of her practice by moving from an academic setting to set up her own solo practice.

She began practicing in the late 1990s at a large multispecialty group based at an academic hospital in Providence, R.I. By 2001, she was chief of neurology, but she felt as if the responsibility was not matched by an equal level of decision-making power. She decided that by going solo she could cut out the middleman on issues concerning staffing decisions, expenses, program development, and office renovations.

She consulted with other physicians in private practice, read up on various publications from the American Medical Association, and relied on her boyfriend, who had banking experience and a law degree, all of which helped her to decide which business model to use. She hired attorneys to help file the necessary paperwork to set up the practice. The hardest decision was naming the practice; she decided on Southern New England Neurology, with an eye on expanding in the future.

In 2005, Dr. Jones opened the practice in Bristol, R.I., renting space in a primary care practice building. Reaching this point had taken $40,000 in personal savings, $50,000 from a home-equity credit line, and a $30,000 equipment loan. Within 6 months, she had covered her costs, and within 18 months she had paid off the loan and was paying down the equity line.

An important initial investment was an electronic health record system, Dr. Jones said.

She began by working just 4 days a week, which gave her time for personal pursuits. But 3 years in, she had outgrown the space and the increased patient volume was taxing her existing staff. Dr. Jones was afraid to leave the bosom of the primary care group and its built-in referrals, but it had no additional room, so she decided to buy a property. She purchased a duplex and invested in extensive renovations, which took about a year to complete.

She has found private practice to be very rewarding because it gives her control over her scheduling, hours, and staffing, and no one is standing behind her pushing for an increase in productivity. But it requires a lot of focus on managing expenses.

In 2010 and 2011, Dr. Jones had a decline in reimbursement, but her patient volume was increasing. There are only so many patients she can see on her own, so she looked for ways to cut expenses and increase income. Accounting, for instance, had gone up to 20% of her expenses. She dismissed her bookkeeper and now does her own books. The health plan cost had increased by 8%, so when the policy came up for renewal, she found state incentives for small businesses, which allowed her to reduce that expense.

Initially, she had an experienced nurse practitioner on staff who helped maintain or increase patient volume. But her salary was more than she could bring in independently, so Dr. Jones decided to let her go.

She’s found ways to bring in new revenue – for instance, by offering botulinum toxin injections for chronic migraines and punch skin biopsies. Dr. Jones said that participating in Medicare’s incentive programs for meaningful use and electronic prescribing have also boosted revenue. "It’s a lot of work, and it changes how you do things, but it is a revenue stream," she said.

With demand outstripping supply, neurologists will continue to be in demand, but the Affordable Care Act and other pressures will still make it hard to practice, Dr. Jones said. She’s considering taking on some coverage with some local hospitals, but added that she’s "not thrilled with working harder" or on more nights and weekends, although she is not ruling out this option.

Nor is she ruling out selling her practice and getting out of medicine all together.

"The most important thing is, you have to pay attention and be limber and adjust your models as things change," said Dr. Jones. But, she acknowledged, "I don’t know if I’ll still be in neurology in 5 years."

Dr. Kinsella disclosed that he owns stock in Rural Healthcare Logistics and is a subcontractor for Premier Service Network. Dr. Jones had no disclosures.

*Correction, 7/13/2012: An earlier version of this story misstated Dr. Kinsella's professional position.

NEW ORLEANS – Like many other specialties – particularly cognitive specialties – neurology is under pressure to figure out how best to survive in an environment in which expenses are rising, but income is declining. So what are some strategies for staying in practice, choosing what type of practice is best, ensuring a steady income stream, and staying sane?

At the recent annual meeting of the American Academy of Neurology, several neurologists offered their personal take on preserving the pleasures of practice while maintaining revenues.

Dr. Laurence J. Kinsella, codirector of neurology for SSM Neurosciences Institute, St. Louis, noted that although median income for neurologists had risen fairly steadily since the mid-1990s, a neurologist’s value was very much dependent on what area of the country he or she practices in, whether it is urban or rural, and whether the practice is academic or private, or interventionist or cognitive.*

Choosing where to practice and the best type of practice is dependent on which options offer the best proximity to family or accommodation of a spouse’s needs, as well as the most professional growth, leadership potential, and collegiality, among other factors, said Dr. Kinsella, who is also vice chair of the AAN’s government affairs committee.

In the assessment of a group practice, for instance, be aware that survey data and published research have shown that the average turnover is 7% per year, and 60% of those who leave do so in the first 5 years. The biggest reasons for leaving include practice issues; compensation and location issues; and spousal concerns. Some questions to raise are whether the senior partners are advocates for equity for all partners, and whether the path to partnership is clearly stated, Dr. Kinsella said.

Before signing a contract with any group, it’s worthwhile to consult with an attorney who specializes in health care, he said. Keep in mind that everything is negotiable. Some key components to explore include salary and bonus; productivity scale; call schedule; pension and profit sharing; termination; and malpractice, health, and disability insurance.

"The most important thing is, you have to pay attention and be limber and adjust your models as things change."

Whether you take the academic, private, solo, or group path, the reimbursement challenges will be the same. The elimination of the Medicare consult codes in 2010 have led to a 6%-20% reduction in reimbursement, according to AAN survey data, Dr. Kinsella said.

There is a tool to assess the impact on a practice at www.mitsi.org/. One way to make up for lost revenue is to take a closer look at evaluation and management (E&M) codes, he added. At least 60% of neurologists’ billing is for E&M services. AAN provides templates for determining efficient and appropriate use of E&M codes. Dr. Kinsella said he advocated for the use of prolonged service codes such as 99354 (31-74 minutes) and 99355 (for each additional 30 minutes). "I’d encourage you to get comfortable with these. They are very good to use," he said.

Most neurologists also bill at level 4, then level 5 and level 3 for E&M, and they should be billing primarily level 5, Dr. Kinsella said. A level 5 consult requires more than just a single diagnosis.

Some 40% of neurology practice now comes from neurophysiology, such as sleep studies and electromyography/nerve conduction studies. These procedures pay better than E&M and thus are worth adding into a practice, he said.

Some other revenue-generating ideas include taking on a hospital directorship, such as stroke director; participating in clinical trials; giving botulinum toxin injections and nerve blocks for rotator cuff injuries, for instance; doing skin biopsies for small fiber neuropathy; and doing chart reviews for legal cases and interpretation of images.

Consider also moonlighting as a neurohospitalist. Dr. Kinsella’s practice offered 24/7 coverage to a hospital that suddenly lost a group of neurologists, which worked out well.

"The key is to leverage your scarcity," Dr. Kinsella said, noting that neurologists are in sparse supply and that many hospitals need coverage for call, stroke centers, and telemedicine.

Another avenue is to offer coverage for rural health clinics. Medicare has been assisting rural hospitals and clinics to recruit neurologists. With higher reimbursement in place to help these centers, working for a rural clinic can "cover your windshield cost" to make the drive and take the time away from practice, he said.

His suggestions for keeping practice fun? Get a clinical appointment to teach residents. Or have a different area of practice every day.

Dr. Elaine C. Jones, a colleague of Dr. Kinsella’s on the AAN government affairs committee, has taken a somewhat contrary path to getting satisfaction out of her practice by moving from an academic setting to set up her own solo practice.

She began practicing in the late 1990s at a large multispecialty group based at an academic hospital in Providence, R.I. By 2001, she was chief of neurology, but she felt as if the responsibility was not matched by an equal level of decision-making power. She decided that by going solo she could cut out the middleman on issues concerning staffing decisions, expenses, program development, and office renovations.

She consulted with other physicians in private practice, read up on various publications from the American Medical Association, and relied on her boyfriend, who had banking experience and a law degree, all of which helped her to decide which business model to use. She hired attorneys to help file the necessary paperwork to set up the practice. The hardest decision was naming the practice; she decided on Southern New England Neurology, with an eye on expanding in the future.

In 2005, Dr. Jones opened the practice in Bristol, R.I., renting space in a primary care practice building. Reaching this point had taken $40,000 in personal savings, $50,000 from a home-equity credit line, and a $30,000 equipment loan. Within 6 months, she had covered her costs, and within 18 months she had paid off the loan and was paying down the equity line.

An important initial investment was an electronic health record system, Dr. Jones said.

She began by working just 4 days a week, which gave her time for personal pursuits. But 3 years in, she had outgrown the space and the increased patient volume was taxing her existing staff. Dr. Jones was afraid to leave the bosom of the primary care group and its built-in referrals, but it had no additional room, so she decided to buy a property. She purchased a duplex and invested in extensive renovations, which took about a year to complete.

She has found private practice to be very rewarding because it gives her control over her scheduling, hours, and staffing, and no one is standing behind her pushing for an increase in productivity. But it requires a lot of focus on managing expenses.

In 2010 and 2011, Dr. Jones had a decline in reimbursement, but her patient volume was increasing. There are only so many patients she can see on her own, so she looked for ways to cut expenses and increase income. Accounting, for instance, had gone up to 20% of her expenses. She dismissed her bookkeeper and now does her own books. The health plan cost had increased by 8%, so when the policy came up for renewal, she found state incentives for small businesses, which allowed her to reduce that expense.

Initially, she had an experienced nurse practitioner on staff who helped maintain or increase patient volume. But her salary was more than she could bring in independently, so Dr. Jones decided to let her go.

She’s found ways to bring in new revenue – for instance, by offering botulinum toxin injections for chronic migraines and punch skin biopsies. Dr. Jones said that participating in Medicare’s incentive programs for meaningful use and electronic prescribing have also boosted revenue. "It’s a lot of work, and it changes how you do things, but it is a revenue stream," she said.

With demand outstripping supply, neurologists will continue to be in demand, but the Affordable Care Act and other pressures will still make it hard to practice, Dr. Jones said. She’s considering taking on some coverage with some local hospitals, but added that she’s "not thrilled with working harder" or on more nights and weekends, although she is not ruling out this option.

Nor is she ruling out selling her practice and getting out of medicine all together.

"The most important thing is, you have to pay attention and be limber and adjust your models as things change," said Dr. Jones. But, she acknowledged, "I don’t know if I’ll still be in neurology in 5 years."

Dr. Kinsella disclosed that he owns stock in Rural Healthcare Logistics and is a subcontractor for Premier Service Network. Dr. Jones had no disclosures.

*Correction, 7/13/2012: An earlier version of this story misstated Dr. Kinsella's professional position.