December 2015 Corporate Update

CORPORATE UPDATE

2015 Annual Meeting

The theme of this year’s annual meeting, “Taking Charge of Change”, is one that should resonate with all of us and be an anthem for our organization as together we face the disruptions occurring in healthcare.  While these disruptions are completely unmanageable for a small private practice group of physicians, with our size we have the ability to seize the incredible opportunities these changes provide.

By all measures the 2015 Annual Meeting was a great success. Highlights from the day’s sessions included an update on CAO initiatives led by Dr. Grosso, Dr. Levitt’s review of risk management through actual case studies, a speech by Dr. Jossan on our need to embrace entrepreneurship and an inspiring keynote address by Mike McCaslin, Principal of Somerset CPAs’ Health Care Team.  Somerset CPAs are the organizers of the OrthoForum, which will be discussed in more detail later in this update. For all those in attendance, Mike’s engaging speech highlighted the urgent need for CAO to start acting more as unified and powerful organization, one that can significantly impact the delivery of orthopaedic care.

The weekend also provided opportunities for conversations and camaraderie, with a golf outing on Friday and a Saturday evening cocktail reception and dinner featuring live entertainment from the Capitol Steps, D.C.’s hit comedy troupe.

Special thanks go to all the sponsors of the annual meeting, including Gold Sponsors; The Meltzer Group and Radnet. Their combined sponsorships completely covered the costs of the entire meeting.

Patient Experience

To move forward as an integrated group and to continue to drive efficiencies, The Centers needs to standardize processes across its divisions. One process we will begin to standardize in 2016 is the patient experience.  After vetting several patient experience vendors, CAO contracted with the SullivanLuallin Group, a leading provider of comprehensive services that transform the patient experience.  SullivanLuallin will begin their work by surveying our employees and physicians on a variety of engagement measures. They will also survey our patients to establish a benchmark against which we will judge future improvements in the patient experience. Then beginning in early 2016 they will train our front office staff in the “Centers” way of interacting with patients. The goal of all of their work will be to build a patient experience that is elite, consistent and unmatched.

I would like to thank Dr. Cook, Dr. Press, Dr. Johnston, Kellie Woodall, Penny Pollock, Amy Trinite and Lori Cohen for volunteering to participate on the SullivanLuallin Curriculum Committee. We are excited to announce that SullivanLuallin’s work is already underway. Please look for and respond to the engagement survey when you receive it.  

Human Resource Information System (HRIS)

Human Resource Information Systems (HRIS) are software solutions that help businesses more effectively plan, control, and manage human resources activities by facilitating greater communication and improved documentation and automating time-intensive manual HR activities. An HRIS system is a necessity for a company our size, so in 2016 the Board and the Leadership Team has tasked us to find an HRIS partner that can provide the following services:

• Management of employee information
• Reporting and analysis of employee information
• Housing of company-related documents such as employee handbooks and safety guidelines
• Benefits to administration including enrollment, status changes and personal information updating
• Complete integration with payroll and other company financial software and accounting systems
• Applicant tracking and resume management
• FMLA tracking
• ACA tracking

Divisional administrators will continue to be responsible for their division’s HR program and the HRIS system will be a resource that will assist them with this function.

In addition to an HRIS system, we are considering contracting with an HR advisory and training partner who can assist our divisions by being available to answer human resources questions as they arise.  My belief is that The Centers will find partners who can offer these services at minimal cost.

Compliance Update

Full Time Chief Compliance Officer – Renita Bean

After an extensive search and interview process, I am pleased to announce that The Centers will be hiring Renita Bean as our full time Chief Compliance Officer. Renita will start in this position on January 11, 2016. Renita is currently serving as the Compliance Director and Safety Officer at the Greater Baden Medical Services in Brandywine, MD. Susan Walberg, who has been serving as our Interim Chief Compliance Officer, will be assisting Renita in the transition. We are sure that Renita will be a great addition to the Corporate Office. Please welcome Renita to CAO.

CAO’s Code of Conduct

The Centers’ Board recently approved a code of conduct. Several copies of The Centers Code of Conduct were printed and bound and are being delivered to each division. A code of conduct is a set of rules that outlines the responsibilities of a company’s employees. When properly drafted and used, a code of conduct can protect a business by informing employees regarding a company's expectations. Each employee should be given a copy of the code of conduct to review and should then sign that they have received it and agree to its terms. The signed forms should be maintained in each employee’s personnel file.

ACA Reporting

One of the Affordable Care Act’s reporting requirements dictates that our organization document and report to the IRS the healthcare benefits we offer our employees. To adhere to this requirement our payroll processor, AmCheck, will be providing the information needed, and our benefits broker, The Meltzer Group, will oversee the reporting process. By reporting this information in a timely manner (by February 1, 2016), The Centers will eliminate the risk of a noncompliance penalty that would have cost us a significant amount of money.

Equal Employment Opportunity Commission (EEOC)

As part of the reporting requirements of the Equal Employment Opportunity Commission (EEOC), companies with more than 100 employees must report annually on the composition of its workforce. To ensure CAO complies with these measures, each division submitted the following information for all staff to AmCheck:

• Gender
• Race: Hispanic or Latino, white, black or African American, Native Hawaiian or other Pacific Islander, Asian, American Indian or Alaska native, two or more races
• Job Category: Executive/senior level manager, Mid-level manager, professionals, technicians, administrative support, service workers

AmCheck’s payroll system was designed to include fields to collect this data, so the information collection process was very straightforward.  AmCheck will handle the aggregation of the information and will complete the annual report for CAO.  

PQRS Update and Value Based Modifier

GPRO Reporting Background

The Centers for Medicare and Medicaid Services (CMS) developed the Physician Quality Reporting System (PQRS) which uses penalties and incentives to encourage eligible health care professionals (EPs) to report on specific quality measures. In 2013 The Centers’ Board voted to use the Group Practice Reporting Option (GPRO) to report our data to CMS.

2014 PQRS Reporting Update
With the help of SCG Health, our PQRS and quality consultant, we submitted our 2014 PQRS data to CMS. And in August of 2015 The Centers received confirmation from CMS that they had successfully received our 2014 data. By promptly submitting our 2014 data as a group under GPRO, all divisions in CAO have avoided a 2% penalty on all claims they will bill to CMS with dates of service in 2016. This represents a penalty avoidance of at least $500,000 across all divisions. We also reported sufficient additional data for 2014 to qualify for a 0.5% bonus in 2016.

2015 & 2016 PQRS Reporting Update
SCG Health is working with our divisions to collect the 2015 data for submission to CMS. While the data collection process is going well, we need to continually improve it because we are being measured against other practices who are also in the process of improving their data collection and submissions. The Quality Improvement Committee, led by Dr. Phil Schneider, recommended the data points that will be collected in 2016, which were approved at the November 18, 2015 meeting of the Board.

CMS Value-Based Payment Modifier
The CMS Value-Based Payment Modifier Program is a program that will adjust the amount of money paid to a group of physicians operating under the same Tax Identification Number based on the quality and cost of the care furnished to Medicare beneficiaries. The Centers received its quality and cost information for 2014 from CMS in October 2015 and our quality and cost fell well within the safe zone compared to other practices. However, SCG Health noted one issue in the data that we are addressing. Namely, when a Medicare or Medicaid patient isn’t being treated by a primary care provider, then the patient’s total costs for the year are attributed to the specialist who most often sees the patient. These patients are more likely to have disproportionately poor outcomes and require a higher level resources (costs). We are working with SCG Health to develop a plan that will allow us identify these patients early and direct them to a primary care provider.

BB&T Bank Update

Master Loan Agreement

As noted in a previous newsletter, we now have a Master Loan Agreement in place with BB&T Bank. This agreement allows each division to secure credit (e.g., loans, lines of credit, etc.) without burdening the corporate office or any other divisions with their debt obligations. While divisions can continue to use other banks to secure credit, we’ve found that the time and associated costs needed to explain The Centers’ operating agreement to other banks has typically been much higher than if a division were to use BB&T as their lender.  So, we are encouraging divisions to use BB&T.

Change in Account Management

To improve the level of customer service provided by BB&T and to better reflect the importance of our account to them, I asked Jeff Rubery, Market President at BB&T, to act as our account manager. I will work closely with Jeff in this transition. We have already heard positive feedback regarding the improved responsiveness and thoroughness of BB&T’s interactions. If you have any banking needs, please reach out to Jeff at 202-835-9350 or by email at jrubery@bbandt.com.

 Marketing Update

 We continue to receive strong media coverage, due to the combined efforts of Brian Communications, our doctors and administrators, including a recent feature story in the Wall Street Journal on the topic of bilateral knee replacements, which was also included in the AAOS newsletter. In addition, Dr. Damian Roussel has been quoted in both USA Today and The Washington Post on Peyton Manning’s torn plantar fascia and its impact on his career. And, even more recently, Dr. Steve Bleckner was featured in an extensive Q&A on the popular Baltimore Ravens blog, Russell Street Report.

More than 25 of our CAO physicians have worked with media to increase the visibility of The Centers and improve their exposure. I encourage more of you to reach out to Bill Tierney at bill@briancom.com or 610.724.2204 to get involved.

For 2016, and as part of CAO’s overall plan to become a more unified group, the Marketing Committee will soon be formulating a comprehensive marketing and branding campaign, one in which The Centers’ brand will be more prominently recognizable, both internally and externally.

CAO’s Ranking as a Top Private Company

In 2015 The Centers earned a spot at no. 70 on Washington Business Journal’s prestigious “Top Private Companies” list. With our anticipated growth in 2016, we believe that CAO will jump ten spots to no. 60 – an impressive feat for an organization as young as ours.

Intranet

To create an efficient and much-needed tool for encouraging greater communication and collaboration, we have hired Piszko Design (the group that developed The Centers’ website) to develop a custom intranet for CAO. The intranet will allow for secure sharing of information such as human resources updates, job postings and employee news, and improve the ability to refer patients to other physicians within CAO’s network. A dynamic and interactive physician directory will be a core feature of this new platform, which will be easily accessible via desktops and mobile devices.

Common CFAORTHO.com Domains for Email Addresses

Following along with the theme of becoming a more unified group, in 2016 The Centers will establish emails with the domain of “cfaortho.com” for all of CAO physicians and employees.  Having a common domain name with a consistent email naming convention will allow for greater ease of communication and improved control of our business related emails. A common domain is important because it will allow us to continue to brand The Centers’ name. Having common domain and email system will allow our emails to be quickly and easily recognized as being from The Centers.

OrthoForum

As I mentioned earlier, our Annual Meeting keynote speaker, Mike McCaslin, was instrumental in founding the OrthoForum, a national physician organization that includes nearly 2,700 orthopaedic physicians across 85 companies in 32 states. With its mission of maintaining the independent practice of delivering orthopaedic care, OrthoForum represents $3.5 billion in physician practice revenue and has a waiting list of more than 25 orthopaedic groups.

Given our size and stature, we would make an important addition to the Forum’s roster of groups. We are excited to announce that The Centers is very close to joining the OrthoForum. We expect the notification of our selection to be announced by the Forum in the first quarter of 2016.  As a result of joining the OrthoForum, The Canters will be able to work with our medical peers to share best practices, utilize their comprehensive data benchmarking system to identify performance objectives, reduce costs through a group purchasing alliance and push advocacy for healthcare causes important to CAO’s future.

GROWTH

New Groups Joining CAO

As our reputation continues to grow, and as The Centers’ unique model becomes better understood by independent orthopaedic practices in our region, we are being approached by several orthopaedic groups who are looking for ways to stay competitive in private practice. We added four new groups this year and will continue to consider strategic growth opportunities. The aim is not to get big for bragging rights, but rather, to reinforce and strengthen our position.

In January of 2014, CAO launched with 128 physicians and about 1,200 employees. Today, our numbers have grown to 145 doctors (with 23 physicians at various points in the onboarding process) and we now have over 1,400 employees. When we include the physical therapists, Physician Assistants, nurses and others, CAO has nearly 300 care providers, and over 50 locations spread across 5 states and 25 zip codes (33 of our locations offer Physical Therapy services).

PT Services

We recently signed an agreement with Paul Gleichauf, a health care consulting professional who has broad experience in strategic planning and project management. Paul was previously a senior vice president for planning and marketing at Howard County General Hospital. And more recently Paul oversaw a staff of 400 and an annual operating budget of $37 million as President of Baltimore Medical System.

Paul’s first project will be to review our physical therapy service line and, with the assistance of a newly established PT Task Force, provide recommendations to me, the Leadership Team and the Board on how we can standardize service, keep more referrals in our system, and improve profitability.  We look forward to working with Paul and introducing him to you. We believe that Paul’s addition to the CAO team will result in both growth of our PT services and performance improvements for The Centers.

Technology

Data Mining

Healthjump, a data mining and aggregation company, continues to roll out its technology to all of our divisions and is currently connected to 18 different CAO databases across 13 divisions. Healthjump recently hit a significant milestone with acceptance into Athena’s marketplace. The Mid-Maryland Musculoskeletal Institute Division will be the first division to test this integration. Once complete, Healthjump will look to quickly roll out the interface to the remaining Athena divisions.

In addition, Healthjump’s HIPAA-compliant mobile app for communication has been submitted to the Apple store with approval expected in mid-December. This is an important initiative that will allow both CAO staff and physicians to securely send text messages, pictures, and voice and file messages including patient information, to other physicians and staff. Dr. Cook is leading the beta testing group and we look forward to deploying this solution across the entire company in 2016.

Data Analytics

While Healthjump is in the process of aggregating our data, we are beginning to look for innovative data analytic tools that can help us to organize and understand the vast quantities of information we will soon have in our hands. Using the right data analytics tool, we will be able to prove that CAO provides the highest quality care at the lowest cost. This data will be very useful to us as we begin contract renewal negotiations with payors. We will also be adding a data analyst in the 2016 corporate budget. If you listened to Mike McCaslin’s keynote speech at our 2015 Annual Meeting, you heard him say that this position will be critical to CAO’s successful review of our data.

Cyber Insurance

We have all heard the news about data breaches including the theft of nearly 80 million records containing patient information from Anthem in early 2015. Anthem, the second-largest health insurer in the U.S., estimates that the total cost of the cyberattackthat exposed the names, addresses, Social Security numbers, dates of birth, and employment histories could exceed $100 million.

A robust cyber insurance policy can help businesses weather the storm more effectively when a data breach or network security failure occurs. Cyber coverage can mean different things, but it is most commonly a combination of four components: Errors and omissions, media liability, network security and privacy.  In order to protect The Centers from potential data breaches, we will be purchasing Cyber Insurance in 2016.  

Value-based Healthcare and Surgical Outcomes

The delivery of health care is rapidly changing from fee-for-service to a value-based model.  As a result, CAO will soon need to provide payors with outcomes information. In order to do this we have begun vetting two potential partners Arthrex and Ortech. Both companies can help us track patients during and after surgery and report on the outcomes. By using this information to learn best practices from each other, our Quality Improvement Committee, led by Dr. Phil Schneider, will be able to improve the quality of care while reducing costs.

Malpractice Insurance Update

As most of you know, effective with our policy renewal on November 30th, 100% of CAO’s divisions will be participating in the CAO/ProAssurance malpractice plan. We also reported to the board that for a third year, despite less than favorable claims to premium ratios, ProAssurance has agreed to hold our rates flat.

Our divisions continue to be “audited” by ProAssurance and are making improvements as a result of these audits. The Risk Management Committee, spearheaded by Dr. Levitt, Dr. Bauk, Dr. Gilbert, Dr. Rozmaryn and Dr. Schneider, is now holding quarterly meetings with ProAssurance to review, case by case, how our procedures can be improved to positively impact patient outcomes and reduce risk.

Executive Protection Insurance

In 2016 CAO will be securing Directors and Officers, Employment Practices and Fiduciary Liability insurance.  The coverage will include full prior acts (it will be retroactive to the inception of CAO) and include:

Directors & Officers

• Allegations of a “wrongful act”, including misrepresentation, anti-trust, conflicts of interest and breach of fiduciary duty.
• Claimants include competitors, shareholders, business partners, clients and regulators.
• Includes coverage for anyone who sits on an outside not-for-profit board, if done with the specific request of the organization.

Employment Practices Liability

• Allegations of a “wrongful employment practice”, including discrimination, sexual harassment, hostile work environment and retaliation.
• Claimants can include employees (past and present), independent contractors, employees of a third party and volunteers.

Fiduciary Liability

• Allegations of a “wrongful act”, including breach of fiduciary duty with regard to an employee benefit plan, and errors or omissions in the administration of such plans.
• Employee Benefit Plan includes any welfare, pension, or group insurance plan which is sponsored by CAO, including an HSA plan.      

The cost of this coverage to The Centers is minimal and, given our size and complexity, it is essential that we are insured against the risk that these types of wrongful acts could occur.

Everseat

As I mentioned in the last Corporate Update, we have implemented an incentive program to encourage staff to utilize the Everseat platform for posting open appointments. So far, the incentive program has been embraced by several divisions who are actively using the technology and 73 gift cards have been awarded for posting seats, earning “favorites” from patients, and booking appointments via the app.

Data shows that 71 percent of millennials want their healthcare provider to use mobile apps to book appointments. This is a trend that will only continue to grow and due to our size and willingness to embrace innovation, we will be pioneers in offering our patients the most convenient way to book appointments. In 2016, Everseat will roll out a B-to-B product that will allow our referring doctors to book appointments for their patients. This is probably the most important additions to their service from a specialist’s point of view. We hope that this product will be installed at our referring physicians’ offices and will be used by them to easily and efficiently schedule appointments directly with us, eliminating the need to place a call to your scheduler.

Binary Fountain

As part of our multi-faceted approach to providing the best patient experience, I’m happy to report we have made great strides in our active surveying of patients with all but one division now participating. We are also in the process of onboarding our two newest divisions – Chestertown Orthopaedics and Bay Orthopaedic Associates. We greatly appreciate your support of this patient focused initiative and the data gleaned from it will be invaluable as we look to refine and improve our processes. The insights learned will help us show payors that we provide the best patient/customer service, while also helping to improve our physicians’ online reputations.

The consumerism of healthcare is sweeping our industry. A recent PricewaterhouseCoopers study found the winners in this changing healthcare landscape will be those that differentiate themselves from the competition through three main factors – patient choice, patient engagement and patience experience. Thankfully, The Centers is well-positioned to excel at all three of these key indicators.

Binary Stars

In parallel to our ongoing patient survey program, in mid-December we will be rolling out another service from Binary Fountain called Binary Stars. Binary Stars leverages the same patient reviews submitted through the surveys to post comments to the physician profiles on our website CFAOrtho.com. This will help our corporate site rank first when one of our doctor’s names is searched.  For divisions that have already gone through the reskinning process, these same Star Ratings and comments will be seamlessly populated on your divisional website. The goal is to make CAO’s website the first place patients see when vetting a physician. For additional information, here’s a useful article published by Harvard Business Review that discusses best practices and why healthcare providers should publish their ratings.

Healthcare TV

We have vetted several technology vendors who specialize in waiting room patient engagement and have worked diligently over more than 15 months to negotiate a best in the industry proposal with Healthcare TV. The overarching goal is to provide a consistent patient experience in each of our waiting rooms. Healthcare TV offers customized content to educate patients on our brand values, new initiatives and our doctors’ expertise, while also providing a platform to drive profits by running advertisements. The Leadership Team is currently reviewing the company’s latest proposal with the goal of implementing a 10 location pilot program in 2016. Please find samples of their content here.

Return to Newsletter