Robert H. Tessier Senior Reimbursement Consultant HBP Services, Inc

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1 Robert H. Tessier Senior Reimbursement Consultant HBP Services, Inc CONSULTING SERVICES PROFESSIONAL FEES 11 Research Drive - Suite 2 Woodbridge, CT rtesssier@hbpworld.com

2 Robert H. Tessier - BIO Education Educated at Providence College with a degree in Political Science, Robert Tessier earned a Master of Public Health (MPH) with a concentration in Health Planning from the University of North Carolina in Experience At Professional Management Services, a Massachusetts firm with a focus on single specialty medical groups, he was Executive Vice President and Director of Consulting. In this capacity, primary duties included private practice feasibility studies, negotiations, and recruitment of Radiologists to Community and Academic Chairmanships. As Reimbursement Consultant to a number of state societies, he was able to obtain favorable financial arrangements. Clients included Radiology group s nationwide handling significant consulting assignments. He established the first fee-for-service Radiology practice in New York City at Columbia Presbyterian Hospital and formed HBP Services in Mr. Tessier began working with Pathology groups at Cornell and established the private practice arrangement at New York Hospital. This led to an engagement with Yale University, which resulted in their Pathology group becoming one of the first private practices in Connecticut. This required extensive third party negotiations leading to exceptional reimbursement from all payers. Over the years, Mr. Tessier has consulted with hospital based groups in many states. Most recently, consultations have been provided to hospitals and practices in Connecticut, New York, New Jersey, Rhode Island, Massachusetts, Michigan, Arizona, Nevada, Washington, Wisconsin, California and Hawaii. Expertise Specific skills include Practice Valuations for Buy In/Out Arrangements, Hospital Contracts for Part A Support, Joint Venture Arrangements, and Third Party Negotiations Mr. Tessier is knowledgeable in the areas of Cost Findings, Private/Academic Practice Plans, Compensation Models and Technical Revenue Maximization. 2

3 Robert H. Tessier - BIO Major Accomplishments Negotiations of Third Party allowances for the State of Connecticut that improved professional component reimbursements by millions of dollars per year. Negotiated Global Billing for referred services with a net improvement to the Practices of $.5M per year. Negotiation of hospital-based contracts that have resulted in favorable financial arrangements. Development of a Business Plan for a free standing Cytology Laboratory owned by six Hospitals and five Pathology Practices. This Lab processes 175,000 PAP Smears with excellent economy of scale. Mr. Tessier is currently the CEO of Pathology and Laboratory Services, LLC. Future Mr. Tessier is working on the development of regional alliances. This includes strategic planning for clients who have a 5+ year outlook. Joint ventures and complex hospital arrangements are other on-going assignments. Presentations The Dark Report Audio Conference Negotiating Pathology Part A Reimbursement with Hospitals: Why the Performance-Based Approach Opens the Door to Increased Value April 21, 2010 Connecticut Society of Pathologists Part A Reimbursement & Opportunities for Practices in Connecticut April 27, 2005 Dark Report Tenth Annual Executive War College Building Profitable Shared Pathology Technical Laboratories: The Connecticut Experience May 3,

4 Consulting Services Negotiation with Hospitals and Third Parties The most important items for negotiation are the payments for Part A services as well as other financial provisions in the hospital contract. HBP starts by preparing a Fact Book that can be presented to administration for documentation of the physicians s proposals. Existing groups find it necessary to evaluate all non-direct patient care functions and determine if these are being fairly compensated. We use an RCE methodology, with adjustments, as our starting point. Third parties have made dramatic cuts in historic payment levels. For those willing to mount an aggressive challenge there are options that require sophisticated guidance to determine the best proposal and response to any payer flexibility. Reimbursement Analysis While formal contracts often indicate the starting point for payment, many are not current. HBP believes that a detailed Credit Master should be prepared and maintained. This requires routine monitoring of payments and data extraction from the Pathology billing system. The distribution of codes by specific payer is especially important when negotiating selective fee increases. This approach is often more successful than across the board changes, even those that are a direct percentage of Medicare allowances. 4

5 Consulting Services Strategic Planning (5 year plan) We start by evaluating the history and relationship with medical staff and administration. Interviews with practice members and interface with referring MDs also provide a point of reference for future planning. Successful initiatives may require HBP as an intermediary for regional programs or a negotiator to achieve financial control of histology functions in the hospital setting. Changes in the compensation arrangements, fringe benefits and retirement plans may be required to recruit new sub-specialists. A Practice Retreat is an important format to bring MD leadership together with advisors and address the challenges confronting the Practice over the next 5-10 years. Business Development Initiative Evaluating Strengths, Weakness, Opportunities and Threats (SWOT) lead to our preparation of a detailed business strategy. Our discovery process provides an objective assessment of the problems that need to be corrected. This results in a competitive analysis leading to a clear path for maximizing potential. Business Plan Creation/Implementation The need for a Business Plan is most often the result of interest in starting a new venture. HBP recognizes the importance of financial projections with accrual forecasting over a three to five year period. We identify the cash requirements associated with the buildup of accounts receivable and start up costs. Many banks require new ventures to partially self-fund. HBP will also address minimizing payments to the physicians during the period of tight cash flow and the tax implications of equipment leases and loan guarantees. 5

6 Consulting Services Development of Practice Plans HBP is expert in designing compensation and benefit arrangements for community and academic practices that recognize patient care, Part A and practice functions. Services of general benefit such as interface with advisors, trustee duties for retirement plans and management of billing system and financial functions are also valued. It is important to determine expenses that are above the line paid by the practice and those charged back to each shareholder. This offers flexibility and tax advantages. Billing System Selection: Prepare Request for Proposal, (RFP) Evaluate Billing System Options and Negotiate Financial and Performance Terms of the Contract HBP can evaluate a wide variety of options including in-house billing systems, retaining a billing vendor or in-house staff with remote systems support. HBP visits vendor sites and conducts in-depth interviews with other Practices who use their services. The billing contract needs to include performance terms; not simply a fee as a percentage of collections. Provisions for termination need to be tied to performance. Billing System Audits Practices that outsource billing need to have their remote operation reviewed at least every two years. This should be considered a principal requirement of the Practice Compliance Plan. HBP evaluates all the components of charge control, coding accuracy, timely posting of payments, allowances tied to written payer contracts and effective accounts receivable management. In addition, there are many opportunities for enhanced reporting as billing companies continue to improve their data mining capability. As a Management Company, working with a wide variety of billing systems, HBP uniquely qualified to provide a comprehensive and objective evaluation. is 6

7 Consulting Services Collection Agency Selection and Monitoring Most collection agencies charge a comparable fee but not all provide the same service. A collection service dealing with an aggressive medical group that takes patients to court and submits credit reporting is not in keeping with the traditional expectation of hospital-based groups. A two agency test is most often indicated. Liquidation performance, net of their fee, is the best selection technique. All companies need to function with a minimum of patient and referring MD complaints to the practice or hospital. Other Services/Expertise Available (partial list) o Practice Valuation - Buy In/Out of Stockholders - Sale/Merger o Compliance Plans, Development and Monitoring o Strategic Alliances/Regional Initiatives o Joint Ventures/Partnerships 7

8 Professional Fees Offering flexible fee arrangements Traditional Fee for Service (Hourly Rates) HBP rates are significantly below national consulting firms and less than regional management companies. Fixed Monthly Fees HBP offers a comprehensive list of functions from which clients may create a customized menu of services. A fixed monthly fee can be established based on defined needs. These services and fees are reviewed annually. Incentive for Consulting or Management Performance When results exceed an agreed goal, a performance bonus may be mutually determined. Contingency Programs HBP also offers a management fee structure based solely on improvements. 8