Transparent billing for group practices with Jeremy Zug

Dan King: [0:00] Hello, everyone. It's Dan King here again, and I am very excited to be joined by Jeremy Zugg. He's a partner in Practice Solutions, and he is a billing genius and payer genius. So, Jeremy, welcome. Jeremy Zug: [0:13] Yeah, thanks for having me on, Dan. It's great to be here. Dan King: [0:15] So, tell me about Practice Solutions. Give me the basics. Jeremy Zug: [0:18] You know, if I could tell you a story, is that okay if I tell you a story? Dan King: [0:21] No, no. No story is ever allowed. Okay. Jeremy Zug: [0:24] So I answered an ad in high school, just like 14 or 15, to work at a community mental health center in Montana, in Kalispell, right outside of Glacier National Park. And they needed somebody part-time to make paper charts. And I needed gas money. So I thought, that seems like a good idea. So went and worked at a community mental health center, and it was an interdisciplinary clinic, psychiatrists, therapists, nurses, case management, the whole thing, right? Got to meet wonderful therapists, got to see what the community mental health world is all about. Fast forward a few years, did group billing for a practice in Chicago, Illinois, in downtown Chicago while I was going to school. got married and moved to Michigan to be closer to family. We got a job here. And my colleagues at the time had all left community mental health because of Medicaid cuts, etc. And so they reached out to me and said, would you consider doing our billing? We're doing claims with pen and paper at our offices. And it's really obnoxious. And we don't know what we're doing. And I had had a million business ideas that Catherine very judiciously shot down. One of the most notable of which was buying and selling jet planes was one of my early like, hey, let's do this. She's like, no, we don't know what we're doing. Jeremy Zug: [1:49] But I came home and I said, hey, my mom and some of the other therapists I knew need billing. What do you think? And she said, that's a great idea. And so we created practice solutions for my friends and family to do billing for them. And then we grew from there. So now we're a little under 50 billers. We're fully distributed. So we're nationwide. We have clients in every state. Jeremy Zug: [2:16] And it just grew because there's a huge need here because billing and revenue cycle management is obtuse, I think, to say the least. Yeah. And so you work on a national level, too, and you see a lot of how practices and payers work. And it's navigating bureaucracy and playing the game. Jeremy Zug: [2:36] So that's how we started and that's how we got here. Dan King: [2:40] It's always interesting when a business finds you. So you knew you wanted to run a business, but in this case, what was it about you that people noticed? I mean, you worked in an environment where billing was important. You did billing, yes. But beyond that, take me a little deeper into why it is do you think people wanted your help with that? They knew they needed help from someone. Why you? What did you really bring to the table? Jeremy Zug: [3:04] That's a great question, Dan. And I think Catherine and I bring a unique blend of skills. So we have the technical competency, which you need for a biller. But the dynamic that gives us an edge is that we are transparent about what we're doing. So we never hide what's going on with the billing. We want the practice owner and the clinicians to be involved. We want them to see the process of a claim and how money gets from office to bank. And that's really important for us because there's a lot of black magic that happens out there with billers. Even still, you know, I thought this model was extinct, but we recently ran into an example of this, a very teachable example of a biller doing the billing outside of the clinician's. Jeremy Zug: [3:54] Electronic health record system, and the clinician had no idea what was going on. So we used to refer to that as like the black magic model. And that is one thing we tried to do away with. We want transparency in the billing. The other dynamic at play that people really have come to us and enjoyed about working with us is our communication. We love to collaborate. We love to answer questions. We love to educate people. We love to tell people what we're seeing in the marketplace. And so that transparent collaboration seems to have struck a nerve with our clients and with the marketplace. And that combined with our competency really worked for us and gained a lot of traction. Dan King: [4:46] I'm curious to lean in a little bit more to the excitement you felt in that Dan King: [4:50] moment when people came to you and said, we want your help with this. Did it immediately what was the spiritual experience like because i know you're guided by spirituality i know it's important to you guys did it feel like a spiritual experience like this found you or or no yeah Jeremy Zug: [5:06] I would i would say that's a good that's a good question the spiritual experience of starting a business aligns very well with how we think and view the world, right? Somebody has a problem and they don't want to solve that problem or that problem is causing them to rethink the work that they're doing, particularly in a mental health practice. We want to help them. We want to come alongside them. And yes, there's an economic component to running a business, but bigger than that, we're very mission-driven. Empowering providers to focused on patient care instead of billing is really important to us. And so we have a lot of purpose in our work. We find a lot of meaning in what we do and we like it. So we don't really work, right? Because we really love what we're doing and we get to do it with people we really like. And so in that regard, our weeks go by really quick. But I do think there is something deeply meaningful about that combination of things? Dan King: [6:13] Every business involves economic transactions. It involves buying or selling widgets, whatever it may be. Some businesses are just that, and that's perfectly fine because they serve a need. But then there's other businesses that I feel are, to me, the sexier ones, the more interesting ones, are a distillation of the essence of the founders. They're what the founders are here on earth to do. It's like a perfect representation of that. And I think you know a business like that when you feel it. Jeremy Zug: [6:42] I would agree with that. It feels for us, and I don't know about you, I'd be curious to hear your experience with Fireside or the other companies you've run before or started. It feels as if we are being given something versus I think there are some people that it feels like they're wading through concrete trying to find the diamonds. In our case, it really felt like a gift, right? Like we were receiving clients, we were receiving information and we get to synthesize tools and resources and educational material for the people we work with. And so it feels like we get to give back to. And in that sense, it's very symbiotic. Dan King: [7:20] It's a beautiful way to put it. And I'm conscious of both experiences of having something gifted to you, but Dan King: [7:28] also wading through concrete. When I was younger, I definitely did that. And this can be an interesting segue into your mission in even more detail, because before we hit record, you were telling me about how you're very excited about your ability to take care of so much to then enable clinicians, both to pursue their own mission, but also to avoid burnout, to build a business. that serves them. Right. Can you say more about that? Jeremy Zug: [7:54] Yeah, I have another story for you. So we had a client come to us and this was somebody that I had been connected to through another family member, but big practice in Western Michigan and a Medicaid based practice. So their mission is we want to serve the underserved at scale. Jeremy Zug: [8:15] You and I both know that's a tough call. So there are 30 clinicians deep in network with every major government payer. And their biller, they had huge internal turnover in the billing department that left them, after Change Healthcare and after another biller turnover, left them in a really, really tight spot. And so they came to us with just under a million dollars of unpaid claims. They had upset clinicians. The owner was just emotional, spent, not seeing our kids very much. The practice manager was pretty spicy because there's complaints. Where's my pay? What's going on with the billing? And so we came together, we partnered, linked arms. Within a year, we had taken the aging from just under a million to now it sits at around 150,000. Jeremy Zug: [9:11] In aging claims, and their revenue more than doubled because they were able to relax, they retained more clinicians, and then they hired more clinicians as well. And that practice is well on their way to taking the billing in-house and growing their mission beyond what they're able to think or even imagine. And that's a great poster child for how we are able to do that with practices, Jeremy Zug: [9:37] particularly with groups. Because I don't know what your experience is with this, Dan, when you see this, but I feel like once groups get four or five clinicians, they really start to come off the pad. Have you seen that too? Dan King: [9:50] They're definitely inflection points, right? Where things just get more complex, Jeremy Zug: [9:54] More burdensome. Yeah. Or they just get like their reputation just explodes in the community and they start to gain clientele at scale. And so that's what we, that's what we love doing. So that story is one we tell a lot about our mission, right? Because that owner now is empowered to move on what she's trying to do. And billing should be like... Jeremy Zug: [10:17] A low they should not take up much of your week right it should just be like a machine that just functions and you know it's going to be there and it's reliable but when it starts becoming a failure point in your practice it it becomes a higher priority thing that takes so it detracts from what you're really trying to do like pour into your leadership team and and all the other items that you're trying to accomplish so billing should be a low priority issue that becomes high priority and we like to shove it back down on the priority list where it belongs what. Dan King: [10:46] An incredible achievement for you to be proud of, helping her as much as you did. What did you do? Jeremy Zug: [10:51] The first thing we do is we get into a room with the practice manager and the owner. We lock a door and leave the clinicians banging on the outside because we can't focus on the billing if we're answering a lot of questions. And to dissect a strategy here, if there's a listener here who's experiencing the same issue, here's a general playbook. You sit down and you find out what every claim is doing, starting with the oldest and the largest amount of money that's outstanding, right? So if you have a payer that has $400,000 of aging past 120 days, we need to start there. That's the biggest elephant in the room, right? We need to know what's going on with each claim. So then for practice solutions, we take a team of billers. This is not a one biller fixes the issue. This is four or five billers are going to have to do a heavy lift here over the next year. And the time frame needs to look like that because you're not going to solve these large bureaucratic issues in 30 days. You're not going to solve them in 60 days. You're not going to solve them in 90 days. Jeremy Zug: [11:59] You're going to get them done in about seven to eight months. And then the other four months are going to be refining. But you get a team of billers, you look at the aging, and you immediately implement good patient registration processes. So eligibility and benefit checks, you make sure that you have the right patient data, and you have good communication between front office, back office. Jeremy Zug: [12:22] And you run that for the next several weeks. And then you see what the changes are in the revenue. And you see what the changes are in the aging report. Once you get a good rhythm established, then you can push on that flywheel in a way that allows the billers and the front office to pick up the tempo. So the front first couple weeks, very slow, very painful. And then after that, we start to really pick up the speed so that we can resolve claims quickly, get patients into the practice quickly, and get paid much more efficiently. The other piece of this that accelerates that process is we make sure that any electronic connectivity between the practice and the payer is enabled. So electronic remits, electronic claim submission, making sure everything flows through the tech stack smoothly. Because if it doesn't, you're just slowing yourself down. So that's a general look at how we would dissect that project. Dan King: [13:29] Really interesting there's so much to dig into there but i'll tell you the thing that jumped out at me most was when you were first describing her situation you said now that we've done the work that we've done they're on the way to moving billing in-house is that the goal it Jeremy Zug: [13:44] Depends on what the practice wants to do some practices some groups they don't want to touch it they don't want billing in-house they don't want a biller stirring up strife they just want to outsource it and They'll just margin in the cost. Some practices look at the invoice for outsourcing billing and they go, I could have three in-house staff for this number. And so it really depends on the objective of the practice owner. We will fit into whatever the goal is for the practice owner. If it's saving on cost, then we can advise you on going in-house. But most of the time, if you have a good internal structure, right, and you talk a lot about this. You find a value-aligns biller, right? Value-aligned biller. It's not a bad idea to hire that person, right? And then incentivize them to do the billing in-house. Dan King: [14:33] How long-term do your client relationships tend to be? There's always this possibility that they could insource it. Do you tend to work with clients for the long-term? Are you more commonly in sort of a crisis situation where you're needed for a while and then we transition in-house? Typically, how do things look? Jeremy Zug: [14:49] A lot of our clients stick around for four or more years. There are certain cases like with groups like that, that we have a short one year relationship with the intention on going in house. Some groups come to us and they just go, just do it, just do it. And we don't want to hear about it. Jeremy Zug: [15:08] Yeah. How have the practices that you've worked with handled those kinds of operational shifts? Have they always gone in-house or always outsourced or what are the metrics that they're looking at? Dan King: [15:18] I see quite a bit of both. And a lot, I think, comes down to the founder's intuitions. So some founders are systems builders by nature and they want everything in neat boxes. Other founders, and I would put myself more in this box, we tend to be a bit more ADHD, a bit more sporadic, right? Our energy sort of comes and goes. And so those founders are on average, probably less likely to outsource, would be my guess. But this is a very rough guess. I haven't thought about it a ton. Jeremy Zug: [15:51] Now, that's very interesting. I haven't really thought about the research or the data around our clientele that want to do one or the other. A lot of them are just trying to avoid some kind of pain. They're like, I've had turnover, this biller stole from me. I don't want to touch that again. Right. So they're trying to avoid something or they're just trying to eliminate the noise. Right. So just outsource this. I won't think about it. And then I'll do other things. And that seems to work quite well. Dan King: [16:17] So let's say there's the crisis situation. Your team comes in and resolves it. What are some longer term value propositions that you guys offer? You fix the crisis, but what comes next? Jeremy Zug: [16:29] Yeah, what comes next is a revenue cycle that you don't think about. You're just, you get paid on a regular rhythm. You have a biller you can talk to on a regular basis. There's a team of people that when a denial pops up, sort of like whack-a-mole, it's like a denial pops up and it's immediately handled. And you know that it's being handled because you can see it in the EHR, right? You can see it in the tech stack. You can see us resolving it and we have regular meetings and updates. And the other benefit to that, a long-term benefit, is that we're not taking up an office, right? If you have an empty office in a therapy practice, or maybe let's say you have two or three, right? Some of the practices you work with, Dan, are quite large and they're gonna require a billing team. You can convert those offices to therapy offices for sure. And those are now revenue generating offices and that ends up taking care of the expense. Dan King: [17:18] Right, right. If you can reduce rent, which for a brick and mortar practice is always gonna be, it's gonna usually be the second biggest line item, right after clinician cost you can reduce your rent that's super and yet use your space wisely super Jeremy Zug: [17:33] Important yeah i mean real estate in the therapy world has seemed to be so in flux right we've seen practices by offices when they're too small, Jeremy Zug: [17:43] not buy when they're too big, right? It seems to be a chronic issue for sure. Dan King: [17:50] Tell me about payer relationships. I know this is a key part of the work you do. So we want to create, after we've solved the crisis, we come up with a more seamless approach to revenue cycle management. How about optimizing payer relationships for the long term? Are you involved in billing negotiations? Are you involved in the bigger picture strategy of which payers should we deepen our relationship with? Which should we get rid of? Jeremy Zug: [18:12] Yeah, we get those questions a lot, which is very, very useful. So we like to step back with our clients when they ask us about which payer should I be in network with? And we ask the clinician, what are you trying to do here? Are you trying to focus on a clinical population that you want to work with? Are you trying to just grow a business? Are you trying to meet the needs of like paying your clinicians more, right? Making their lives very comfortable. Those are the questions that guide the payer conversation. What we've seen a lot of and what we adopt a lot of in some of our clients is they became in network with every payer they possibly could because it was available and And that's how they thought they were going to grow the practice. That's not a good strategy. Jeremy Zug: [19:09] It's not a great one. Because, and I think if I could maybe draw like a word picture, if you can imagine a grid that, and you have 10 clinicians but one insurance payer, you have to deal with 10 individual relationships with that payer from like a claim perspective. As you add payers on the top part of that grid, your work exponentially increases. So let's say you had 10 payers across the top and 10 clinicians. Well, now you're managing a hundred different touch points, failure points within your practice. That is not sustainable from an administrative perspective, particularly in a low reimbursing state. So you don't want to do that. What you want to do is you want to say, what is the major payer in my state? Who has the most volume from a client perspective? Who meets my clinical objectives? Jeremy Zug: [20:11] And is the combination of those two going to butter my bread, right? Are these going to pay the bills? And you need to do the math on that. And I know that math and behavioral health practices are like we're trying to shoehorn something that's not difficult in the worldview of a practice owner, but you've got to do the math on that. And once you find in that, like that Venn diagram, that nice and middle, that's who you should chase. But also make sure you find a good partner. Like there's one payer in Michigan, I'm not going to mention who it is, but they deny like one out of every three claims and they're working on one out of every two. That's not a good partner. It's like that doesn't make any sense to partner with somebody that's going to deny 30% of your claims. So, because you're going to have to rework all of those or deal with administrative headache. Work with better partners for sure. Dan King: [21:04] At a certain point, they don't even become a payer anymore, right? They're denying that percentage of claims. Dan King: [21:12] How do I know if I'm a group practice founder and maybe I can do some grunt work and find the reimbursement rates for 90837 and 90834? How do I know that a payer has this reputation, has this tendency to deny a third, right? How do I know that? How do I do that due diligence? Jeremy Zug: [21:34] Some of that is public knowledge. So if they are a government contractor, the claim data is hosted on the cms.gov website. Now, again, you're going to have to do some data mining, but there are some websites like the Kaiser Foundation, kff.org. That one will run the numbers for popular payers and publish the results. So that's a good resource to go to to learn a little bit more about denial rates. The other thing I would recommend, the other action from a tactical perspective is ask your friends. Ask your friends. I'm considering taking this pay or are you in network with them? What's it like? Is it easy to get somebody on the phone? Do they resolve denials? When I ask for a rate increase... What's the general response? Are you finding that you can get good clients from this particular payer? What are the clients like? So I think you can ask a lot of experiential questions from your friends and then do a little bit of Googling around about denial rates and shenanigans like that for sure. Dan King: [22:38] Shenanigans for payers? Never. I don't know what you're talking about. Jeremy Zug: [22:43] Yeah. And I know that there are several that are very popular in the news that people love to hate on, but they're not all bad for sure. I mean, do you have some, I mean, what do you look for when you're looking at a practice, Dan? Are you looking for a payer that, yeah, what are you looking for? Dan King: [22:59] I want to see that they have a thoughtful payer strategy, right? I want to have a sense that they've been deliberate, like you suggested. Instead of being in network and having this sort of chaotic relationship to being in network with everyone, I would rather see that there's some evidence of deliberation here. And if I ask them what their payer strategy is, what is the answer, right? Right. Jeremy Zug: [23:22] Yeah, there's there's a good there are good answers and less optimal answers. And one of the things that we always talk to our clients about is if you took a let's say there was a payer that had seven or eight clients right in a big group practice. that's not very many. Seven or eight clients with a payer that you're in network with that gives you a hard time, not a good partner. What if you were to get out of network with that payer and convert the time into a payer that is a good partner with your practice, right? Decent reimbursement rates, but you converted the hour into a better hour, right? There's bad hours and there are good hours. You want to think through what that economic and quality of life perspective looks like for your clinicians, especially if you have a compensation structure that rewards the clinician based on what you receive in terms of payment, right? With the practice I mentioned earlier, you don't really want your clinicians in your office complaining about their pay. That's not a great place to be. It's very stressful. Jeremy Zug: [24:23] And so make sure that you're aligning those objectives as well. Dan King: [24:28] On that note... Any advice for founders in general at group practices on clinician compensation structure? Jeremy Zug: [24:36] Oh, yeah, this is a good question. Yeah, I'll drift a little bit outside of my world a little bit based on what I see and hear from clinicians. So there are practices that spend an inordinate amount of time and resource trying to explain compensation to commission-based therapists, right? So much time that it makes me wonder, is this worth it to you to spend 10 hours a week trying to explain how the compensation all worked out and what was received and what wasn't? In a practice, the revenue shifts. There are takebacks. That happens. Jeremy Zug: [25:15] Patients don't pay their bills. Payers are slow or slower than you expect. So with commission-based practices, we see a lot more time spent there. With salary W-2 based practices, we see almost none of that because they know what their pay should be. They know the expectation and they spend their time on other things, more mission oriented items, and it allows them to grow a lot faster. So, you know, I think you can look at that and say which one is better. I always try to solve for time, right? Even in practice solutions, I try to solve for time, right? Like what's sucking up time that's not my thing or what I should not be looking at? And I think private practices, the force multiplier you would get on your effort if you were to limit the amount of time spent dealing with that stuff would be quite high. Dan King: [26:09] Couldn't agree more. And it's interesting to remember the conference where you and I met, there was a talk on the big differences between W-2 and 1099 in the mental health space. My experience is, tell me if this is yours, there's a spiritual difference where we could talk about compensation structure. If I'm a W-2 versus a 1099, I'm thinking about work so differently. My being at work is almost different, right? And that simplicity of, hey, I'm paid $50 an hour, right? There's something beautiful and just so easy about that simplicity. Jeremy Zug: [26:43] Well, that's right. Well, there's something about, there's a parable somewhere in the New Testament that talks about don't muzzle the ox while it's plowing, right? And so it's like feed your folks what they're doing, like pay the laborer their wages. That's a great principle, you know? And I know that a commission-based schedule feels less risky. That's not how we've seen it play out. I'm sure there are practices out there that do it beautifully. What I'm saying is that it's rare. I have not seen that as much. But yeah, if you have clinicians that are not worried about compensation, they're not worried about money, they're going to do better work. And that's, I think, the spiritual component that you're talking about. It just smooths out everything a little bit more. Dan King: [27:25] They're going to do better work. And by the way, they're less thinking about starting their own practice. They are committed to build something with you. Jeremy Zug: [27:33] That's right. Yeah, because they're not looking at the percentage going, well, if I hung a shingle, I would get 40% more, whatever the percentage breakdowns are, right? I mean, and of course, you would be constantly looking at that, because that's what the practice values in terms of compensation. So, and it seems like it's one of those leadership principles that you will get in result what you reward or punish, right? So if, for example, our billers are incentivized to make sure that aging stays down, that we resolve claims, that old claims don't just get written off the aging report, but convert to cash. And so we incentivize on that basis. And that's one of the reasons you get the results that we get is we reward the result that we want to see and we punish the result or the consequence that we don't want to see. And it's no different than behavioral health practices, I don't think. Dan King: [28:28] Makes a ton of sense. And maybe there's some interesting ideas for founders to think through. Dan King: [28:35] Tell me, as we come towards the end of our time together, and this has been a very rich conversation with all kinds of insights that practice owners can leverage, but turning back to the human, turning back to you, when you're not working on billing challenges, when you're not improving or strategizing about pair relationships, what do you do for fun? Jeremy Zug: [28:54] So I have a goal this year to try to run a 20 minute 5K. That's very challenging for me anyway. There are some people out there that that's not so challenging for, but I love to fly fish. So being from Montana, it's sort of like what you do, but I love fly fishing as much as I can get out. I do. And I have two kids that I love dearly. So I have a four year old, a one year old, and we have one on the way. so congratulations thank you so we have a very full house and uh i love watching them grow and develop and like we had some friends over that had a two two-year-old that uh they live in a rural part of michigan and they don't see a lot of airplanes fly overhead but we're pretty close to the airport and he saw a plane for the first time and i swear danny looked like he saw like a ghost like he was like slapping every adult pointing in the air like what in the world is that thing and we we all looked right because we're like this kid is pretty worked up it was just a plane right but it's pretty fun to watch kids develop but yeah those are some things so running fly fishing uh we live in detroit so sports sports teams lines games tigers games we we kind of run the whole gamut well. Dan King: [30:10] That's a beautifully human note to end on and so i think your your hobbies of fishing and running speak to your thoughtfulness that i i so get from you every time we connect, Jeremy. So thank you so much for coming on. You know, folks who want to take a look at Jeremy's work can go to his company's website, www.practicesol.com. And you've also got a podcast. Do you want to plug that a little bit? Anything else you want the audience to know that we can put in the show notes? Jeremy Zug: [30:39] Yeah, so the podcast is launching this August. It's the Claim Game podcast where we talk about everything revenue cycle management. And we call it the claim game because we're analogizing working with insurance companies as a game, right? There are rules to the game. There are ways to play the game. And you and I talk about, you know, navigating within bureaucracy, right? Jeremy Zug: [31:02] And that's all it is. But using the game language makes it a little bit simpler. But, yeah, so that's coming out this August. And we have a learning hub where if you have an internal billing team and they need more support or education, that's also launching this August. And you can find both of those things on our website. Dan King: [31:18] Jeremy, thank you again for coming on. Always, always such a pleasure. And I really, really encourage folks who are struggling with the billing process to take a look at practice solutions. They know what they're doing. Jeremy Zug: [31:29] Amazing. Thanks, Dan.