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Medical Practice Operations - Business Fundamental ...
255193 - Video 9
255193 - Video 9
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Video Transcription
Hello, everybody, and welcome to AOA's presentation of Medical Practice Operations Business Fundamentals 101. I appreciate you joining me for Module 7 and hope that you have listened to the preceding modules to get a fairly broad overview of some of the basics and fundamentals in the business of health care. And so today, we're going to finish off with a module regarding coding and billing and do a little bit of legwork on what those entail in the ambulatory space. Now the hospital health system side, a little bit different, little different mechanics and different payment rates, specifically with regard to the public payers like Medicare and Medicaid. But again, this presentation, as with the other presentations, is not meant to be all-inclusive, but to be more informative, enlightening, and at least give you a topical macro look at some of the component pieces. So this is Module 7. It's the last module in the formal series, and we will do a modulate that's Q&A that happens in the spring. So I thank you for joining me for the next 30 to 45 minutes, and I hope you find Module 7 to be enlightening. I have nothing to disclose as per the norm in the other modules, and this presentation is not legal advice, should not be construed as such. Decisions involving legal aspects of health care should be vetted by qualified legal counsel. So that's contracts, it's non-competes, that's acquisition details with regard to acquiring a practice or being acquired, et cetera, et cetera. I can speak to many of those things, but I am not an attorney, and I don't dare get into the weeds of those. So I just wanted to pass that by to everybody. And then AOA's disclaimer is what it probably normally is on other presentations, so you can read that at your leisure. And then onward about me, a little bit about me and WIFLI. If this is your first module, and these, for the most part, stand alone, so this could be your first module, WIFLI is an accounting firm with roughly 105-year history in business. In accounting, audit, and tax, we service a variety of business verticals, health care, agribusiness, construction, et cetera. Within those verticals, we have consulting services. So while we do accounting, audit, and tax in the health care space, we also do cost reporting. We do operational work, which is my ballywick. We do revenue cycle improvement, things of that nature. So a little bit about me, if this is your first module. If not, this is probably painfully redundant, but I appreciate your tolerance and patience. I've been in health care for 33 years, roughly. I used to run private practices, and so if I bifurcate my career, roughly half of that career has been in the operations side of private practice. The other half has been in the advisory consulting side of the health care ledger. I do a lot of writing and speaking, writeforforbes.com. I speak nationally on the health care operations, in the health care operations space. My clients range in care delivery platform from academic medical centers to tribal work to skilled nursing facilities, FQs, rurals, private practices, clinical access hospitals, et cetera, et cetera. My largest client is 26, 2700 physicians on the West Coast, and the smallest client I've dealt with in my professional life was a three FTE group in the greater Atlanta area. So wide array of service platforms, of client sizes, and I'm specialty agnostic, so I've done work in most specialties and some very odd subspecialties that usually only happen in the academic space. So in any event, I will be leading you on this journey today in module seven regarding coding, and what we're going to do today is really get into how the codes are derived, what they mean in day-to-day practice for clinicians. I will caution you in that I can look at billing patterns and see if they are off. So in other words, if you're billing a bunch of level fives, which we'll talk about later, I can look at that and say, that seems weird to me. Maybe we want to review some charts and find out why you're having so many level fives, but I am not a coder. I am not a chart auditor. I cannot go through the charts, review your notes, review the patient workup, and comment either way as to whether or not you are billing accurately. I can just look at the numbers and what those tell me, and a lot of that's based on history and my knowledge of the space. So what would happen then if that kind of popped up? I would send that to someone who could perform education and internal audit to give you some piece or to give you some education. So as with the other modules, the goal with today's coding session is to offer you folks a simple understanding of coding and billing, and remember, we did have modules, I think it was 2 and 2A or 3 and 3A that were revenue cycles, sorry, 3 and 3A. And so these things are all interwoven. So discussing coding is really talking a little bit about red cycles, so we're going to talk about that component piece of the revenue cycle, but you'll get a finer, faster understanding of what the coding and billing looks like on a day-to-day basis. As with the other modules, this is not all-encompassing. It doesn't cover everything. It doesn't cover DRGs within a health system. It's purely CPT-driven basics, but it will also show you how revenue is generated on your day-to-day patient care. So here is my usual tried-and-true flow of the both revenue cycle and the practice operations within a clinic, within an ambulatory space. You can see all of the areas we had discussed these at length and how they have interplay in this ecosystem and how the ecosystem must be tweaked and then managed, monitored, examined, retweaked, managed, monitored. It is a kind of sort of a living, breathing operations ecosystem that needs tending and needs attention, and it's not static. You can't just make a change and then let the thing go, especially with regard to coding and documentation, which can change when the government decides to change CPT codes. CPT is an AMA construct, but when the government changes the reimbursement rates for certain codes or what work our views are, which we have discussed earlier, and I believe I touched on those again in this presentation. So without further ado, we're going to move a little bit forward, a little bit of a rev cycle refresher as we jump into coding. This is a broad overview, and it's to show simplified revenue drivers and provide you some ideas more than solutions about effectively billing and collecting revenue. It's generally specialty agnostic, generally. So there are specialty codes that arise for, you know, I tend to hearken back to cardiology. There are specialty codes with regard to cardiology imaging that you might find that we won't cover here. Your 90,000 series codes, your E&M codes, like 99201 through 205, which is new patient visit, 99211 to 99215, those are rechecks or established patient visits, and then you get into your 99241 through 245, which are consults. Those are pretty generic as you go specialty to specialty because an office visit, generally speaking, is an office visit. And the way those are recognized by Medicare and the commercial insurance companies are fairly similar. As we mentioned before, revenue cycle is not purely billing and collecting. Just go back and look at that ecosystem. It's all of those pieces which impact the revenue. So it's billing, collecting, and all of the nuance underneath that umbrella that impacts how the revenue flows into the system, whatever that system looks like. Clinician struggles and concerns. It's interesting, and I hear from time to time, and these are kind of paraphrasing, but the message is, our revenues are down, or I'm not getting paid what I deserve, or I work so hard, why am I not generating enough money? I charge so much for this, that, or the other thing, and the revenue's not flowing through. These things, getting back to my ecosystem model, these things don't happen in a vacuum. So your revenues could be down because no one's collecting on the front end or the back end, or you're not closing your charges, or the revenue cycle has not tended to. There's any number of things. I'm not getting paid what I deserve. Maybe the fee schedules are wrong. Maybe your compensation plan is wrong, which has driven off the work you do if you don't have a fixed employment contract. Again, I work so hard, where's the money? These are multivariate things that have multiple inputs that can answer these questions. So again, it can't just be one thing. It's a bunch of different things that will drive to that solution. And I specialize in looking at a lot of those things to help folks understand what their perception is and figure out, is that really the perception, and is the broken piece really what you think it is? You can go back to the last module where we had a little bit of a discussion about a rural clinic that was owned by a health system. They told me one of their doctors wasn't seeing enough patients. Well, it just can't be that simple. Why is he or she not seeing enough patients? And I did find out there were a lot of operational impediments that kept him from seeing the volume of patients that he probably should and could be seeing. So coding basics, as the saying goes, you start from the beginning. Clinicians generally bill insurance companies for their services performed. You will occasionally bill a patient self-pay. In fact, I went to see a physician last week, and what they were going to charge my insurance company would have landed on me because I have a high deductible plan. And so I said, well, what's your self-pay rate? And they told me, and I saved myself 80% by paying out of pocket instead of going through my insurance company and having to pay out of pocket anyway. So generally speaking, insurance companies are going to be the payers for the service. They're going to be the folks that reimburse clinicians for the services. Billing is based on current procedural terminology codes, which is developed by the American Medical Association, generally used by payers to reimburse clinicians for their services. And again, these are not diagnosis-related groups, which are kind of bundles, if you will, for lack of a better term. Those are bundles for payment rates in the hospital systems. CPT levels are substantiated by a diagnosis code, ICD-10, on the patient's chief complaint. The DX codes are from the International Classification of Diseases, which we skirted around a little bit. We kind of dipped our toe in that water in an earlier module. So payer contract with clinicians and their clinics or hospitals. Contracts stipulate how much you're going to receive, how much the clinic will receive, but if you're a physician in the clinic, that drives how much you are going to receive for services rendered based on CPD codes. We talked about comp plans and how the CPT codes, volumes, impact compensation for clinicians. And the CPT codes really are the drivers of top-line revenue in the outpatient space. I talked about this in the IT piece and the rev cycle piece. A lot of clinics, generally speaking, and a lot is not really measurable, but there are a fair number of clinics who struggle with their contracts and fee schedules. And the fee schedules, when you say that, is what are you going to charge, which we call the charge master, and what are you going to be paid, which are the allowables. So differentiate when you have conversations. Charge master is the charge for the service. The allowable is what you are going to be paid for the service. And there is a big difference. So when people talk about our contracts, the contracts are going to tell you what you will be allowed for the service. You can charge whatever you want. And what we talked about before, and I believe I get into this later, your charges have very little impact, generally speaking, on the revenue you are going to generate. We talked about accounts receivable can be challenging because it's derived from co-insurance and co-pays, the patient responsibility and denials. Those can be problematic. So if you bill, if your allowable for a procedure is $100, let's call for a level 3, a 99203 new patient. Your allowable with the insurance company is $100. The patient pays 80, or excuse me, the insurance company pays 80, and the patient is on a kind of a historic, basic, old school 80-20 plan. They owe you 20. Well, you should collect that 20 on the front end because you should know that going into the service. But if that service is denied, you then have to appeal the claim and get the money from the insurance company and get the money that the patient owes if you didn't collect on the front end. These are pieces we've talked about in the RevCycle presentations that are essential to be aware of, to understand, and to ensure that your management staff is paying heed to those and paying attention. So the process for collecting the patient receivables, generally, is through sending statements. There are a lot of groups I've dealt with that really have matured in how they do this. There's also the maturation in pre-visit text messaging or phone calls to ensure the patient will show up. My internal medicine doctor does a really good job of this. I get a text from them, and then I get a phone call the day before. So they really work hard to ensure all of those slots, the patient slots in the schedule, are filled. Physicians can lose a significant amount of receivables because the collection processes are ineffective. And billers, physician billers, expect to lose money on uncollected receivables. That's kind of sort of not, I got to say, I took that from one of our other presentations. I don't know that I agree with the expectation of losing money, but truly it's been proven statistically and objectively that the longer your AR sits, the less chance you have of collecting the dollars that are outstanding. So this just speaks to the idea of collecting on the front end, making sure you're managing the processes to collect every penny that is due. So we talked a little bit about WorkRVUs, and these are going to know, we're going to talk a little bit about the difference in the work piece, in the reimbursement piece, at least from Medicare perspective. We alluded to that the AMA developed the CPT codes, Dr. Chow in Harvard was a leader in putting together the modeling here that you see in this formula below. And we did touch base on this, but what this gives you is a sense of, so 99213, that's your CPT code, obviously, for a new patient visit of moderate complexity. And what this exercise shows you is in Atlanta versus Iowa, what a level three office visit pays based on, we talked about the gypsies before, based on how much it costs to deliver care in Atlanta versus anywhere in Iowa. So as we walked through these gypsies before, you can see that the gypsies, the blue columns, are higher in Atlanta than they are in Iowa. And so interestingly enough, Iowa does not have subsections under Medicare in terms of payment. So you would make $105 if you were in Dubuque or Des Moines for this office visit. Atlanta, because of the metro area, has two payment systems under Medicare. They have basically the greater Atlanta area, metro Atlanta, and then all other Georgia. So if I'm in Valdosta, Georgia, near the Florida state line, theoretically, the cost to practice healthcare in Valdosta is less than the cost to practice healthcare in Atlanta. You might see that reimbursement rate of $113 drop down to maybe $108 in Valdosta, Georgia. So that's where those gypsies that we talked about before really come into play and how they build the reimbursement. And then we talked about, we'll go back to this slide for a minute. And I don't know if I touched base on this later. We talked about the contracting and what that means, understanding your quote unquote percent of Medicare and the aggregate for your payers. So for all your payers, but also for each payer individually to understand both how robust the reimbursement rates are and how valuable or having payers that don't have value. Excuse my mincing words. They don't bring value to the table for you and you don't get good reimbursements. That becomes a data analytics piece, which we discussed a little bit in the healthcare IT presentation. You've all seen this ad nauseum and I'm gonna skip it, but it is the rev cycle piece. And you see on the far right hand side where coding and documentation falls. And then we'll walk through the rev cycle. We touch base and I've used this slide before. The rev cycle begins before the visit as you know. We've got Susie coming in, her current balance from her last visit that she didn't pay is 150 bucks. Her copay is 25. We're gonna collect $175 from her at the front desk. She doesn't have her checkbook today that she doesn't have 175 in cash. Oh, that's okay. We have a credit card reader here or square or something. And we'd be happy to take that payment right now. Then where the rubber meets the road is if she says, well, I can't pay you today, then you have to talk and have that hard conversation. Do you have a policy in place where you ask her to reschedule her visit? And that again, that's where healthcare management, which we talked about, where healthcare management and clinical care mash against each other and are really mutually exclusive. That is to say, are you gonna turn her away if she's got a chronic condition? Probably not. But you have to have a long, hard conversation about her or with her about how she's gonna pay her bills moving forward. So she sees Dr. Schmo and Dr. Schmo documents all of the issues. And we did use this example earlier. She's got acute rheumatidic pericarditis, non-traumatic subarachnoid hemorrhage, which probably one has nothing to do with the other. So you know, I'm not a clinician. It's a recheck visit. So Dr. Schmo bills a 99214. We covered this. Dr. Schmo documents her visit, DXCPT codes. And then Dr. Schmo has Susie Q, she says bye-bye, and she gets her schedule for her next follow-up because she's got a chronic something with her, with her, I don't know. In any event, Medicare, Medicaid, we've talked about this. They have set dollars that they reimburse, i.e. if this was a straight up level three, new patient visit, she would have gotten $113 for her pain. Now, if you think about that relative to the profit and loss statement or the income statement we've talked about historically or previously in other modules, if it costs you, if you don't manage your care and it costs you $120 to deliver a level three office visit, you're not gonna get rich on running a lot of patients through the office, right? You're gonna, it's like the old adage. You can't make a chair for $10, sell it for eight and make it up on volume. And that holds true in that mathematics on the P&L. We discussed in the revenue cycle, commercial insurers, the leverage you can have in your groups. This is a little bit redundant, forgive me, but for folks who may or may not have watched the prior modules to this point, really this just goes to show you how cumbersome it can be managing multiple insurance companies. And as I said before, most of them have different insurance products, which will have different reimbursement rates. So understanding your leverage or your group's leverage to negotiate if you're multi-specialty or a large single specialty group or a large specialty organization. Again, my example of a specialty group would be cardiology with multiple different subspecialties, electrophysiology, might have just someone who does congestive heart. You might have someone who just does stenting. So understanding, and when you're looking for a job, understanding what that dynamic looks like vis-a-vis the financial health of the practice. We talked about this percent of Medicare. It's a measure to understand how your commercial contracts stack up next to Medicare's rates. And what we talked about earlier is, the 140% of Medicare may look really good here, but 117% for some of their higher reimbursing codes, maybe not so much. And your aggregate here is 120% of Medicare. Depending on where you are in the country, is that good or bad? There are some places that's awesome. There are others where that's horribly bad. It's just a matter of understanding your demographics. Healthcare is local, and we've addressed that previously. That is very true in the financial piece, reimbursement piece with insurance companies. So billing and reimbursement analysis, review written procedures to understand the contracts very clearly, understand the language. Make sure whoever manages these, if you're in a big group and it's a manager or a director of revenue cycle, that the contracts are managed by date so they can understand when they come up for renewal. Start your negotiations well ahead of time of renewal, because if you get into a dispute with an insurance company, they might play hardball and just say they're not reimbursing you until you resolve the dispute. Then you have to say to all your patients, under that insurance carrier, let's just say hypothetically it's Blue Cross Blue Shield. You have to say to all your Blue Cross Blue Shield patients, we're no longer under contract, you have to pay out of network rates. And I'm sure wherever you live and wherever you're listening to me from, you have heard stories in your local news about large health systems who haven't reached an agreement with a large insurance company, because both the insurance companies and the health systems like to play hardball in the media to try to curry favor with the public. So use the parent contract, document the details of reimbursement terms, which we've talked about. Those need to be entered into the practice management system so that the folks who are working the claims understand what the reimbursement rates are. I did take this slide from an internal discussion. I don't necessarily agree with it. The normal, they used to have this thing called usual and customary charge. And candidly, your charges, as I said before, don't really matter. But if your normal and customary charge is like 100 bucks, and lo and behold, Blue Cross Blue Shield would have paid you 120, and they're paying you 100 for this code, then you understand very clearly you are undercharging. If they pay you your full asking rate, there may be a little bit of an issue in what you're charging. You might need to revisit your charge faster. You can reverse engineer your reimbursements rate, reimbursement rate, and compare fee schedules. This is not something that you all wanna do as clinicians, but it is something to be privy to. There are ways, and I've shown you some of those to kind of back into what does it look like in your network, in your area, your part of the country? What are your rates relative to Medicare? That, again, is not for you to do, but for you to understand how it can be done, and to really query your leadership to understand how they are doing that if you're academically interested, or you're in a private practice where that cash flow, those contracts will impact you. Interestingly enough, and I did take this slide as well, and this one I agree with. It's interesting, when I was running practices a thousand years ago, I would get my reimbursement rates for all the CPT codes that I bill. And sometimes what happens is, when you ask for your reimbursements, or your allowables, as we discussed, some insurance companies will come back and say, give us the 10 codes that you want. And my response to that would be, I want every code that I bill. Here are the codes, and I want you to tell me what I'm getting paid for them. To my way of thinking, that's just a way of the insurance company kind of playing fast and loose with your relationship, and hoping, A, you don't ask for those, and B, they can slow the trickle of information. I don't know that it happens a lot anymore, but it certainly, I have seen in the last four or five years people where I said, get your allowables, let's get these out there. And they tell me, well, the insurance company said they're gonna give me 10 of them. Oh, no. So anyway, I do totally agree with this. And we talked about this in terms of understandings, focus on your CPT codes and the frequency. We went through this. Who's paying you what relative to your CPT codes and your outpatient billing? And then looking at your outliers to understand what's going on. Why are you not getting reimbursements? Someone should aggressively manage those and understand. The denials, bundling of services. So if you've unbundled something that's bundled, and just an error by the payer where they don't have their code in their system set up appropriately. These are things you've got to watch for, unfortunately. And then having in place bad debt write-offs and then irregularities in the cashflow within the medical practice. So this is an internal thing where you're making sure, you should never have one person managing all the cash. It may be the person you trust the most. They may be someone who is an awesome employee and you don't mean to offend them, but you certainly should not let them be handling all the cash alone. And it gives them protection too. I, you know, when I ran clinics, I would not want to be the cash person. And I had checks and balances in place. So there were multiple people and we could have a very defined flow of data and revenue. So we understood very clearly who was doing what at any given time. Definitely reduces fraud and things of that nature. CCI edits are correct coding. Again, it's kind of like unbundling. A CCI edit is just an edit to say you're not coding appropriately. We talked about the benchmarks, provides an opportunity to examine the components that drive the P&L, displays changes and measures, and empowers leadership to understand annual seasonal changes in data. Talked about the charges, gross collections, net collections piece. These are benchmarks that you can get externally, but you could also do internally to see, A, where you fall relative to what goes on nationally or regionally, and B, what goes on relative to where you want to be. So if there's outliers, for instance, these places in the red, and by the way, I talked about this in the last slide, I just have never, or last presentation, I just have never corrected this. This actually is, should not be red. But in any event, where are you within the practice? Where do you want to be? Okay, and we actually covered this, I apologize, because I thought this deck had a lot more in terms of the coding, but this is a revenue piece. So it's the physicians not signing off on their charts over coding, which we talked about. Here's an example of 19 patients. Let's just say this is kind of the normal coding curve of where they should be, and this is where we are, and you can see that's 39% more revenue than where you probably should be with accurate coding. I mentioned this earlier. Doctors undercoding is actually technically considered fraud if you're doing it intentionally, but I've never seen or heard a story in 33 years where Medicare goes after a clinician for undercoding, but I do hear a lot of physicians undercode because they don't want Medicare to look at them. And candidly, if you're doing the work and you're billing all level fours and that's the right level of service, that is okay. Medicare comes knocking. You just have to prove to them that that level four, maybe you have a very sick demographic and maybe that level four is the right code. So if it's right, bill it. If you're over coding and you know it, obviously that's a problem. So that is it for the conversation today. I did go a little more quickly through this presentation. Some of it was redundant and I would ask your forgiveness on that. We did though cover the salient points, which are the billing and coding pieces of this. And you can get more detail on the revenue cycle piece in earlier modules, which really dig down into benchmarking, KPIs, you know, the sense of lag days, denials and what happens. So a little bit of this was redundant. This turned into a little over a 30 minute discussion, but I would ask you if you did not feel you got your time's worth out of this, do touch back in on the revenue cycle modules. They are very detailed and that's why there are two of those because it was such a big voluminous thing we wanted to really pay heed to it because of how much it matters in the cash flow, not only in private practice settings, but also for health systems. I'd also like to remind you that this is our last formal module in this practice management series. It's actually really 10 modules, but we did break down two of them into 2A and 2, and 3 and 3A. So when all is said and done May 10th, we're gonna have really done produced for you 10 modules. I hope that you have found this to be a great investment of your time. I can't with very much acuity drill into the details of every situation. Healthcare is local. Your questions are individual. Everything that you do matters to you and what you're gonna do in your careers. So it's really hard to, again, I would consider this a shotgun approach or to use a fishing analogy. I'm just throwing a big net out there. We're gonna catch as many fish as we can. But what I do hope is that you learned some things, got some nuggets of wisdom, and this series got you in a position, placed you in a position to be able to really ask some good questions and to really go into an employment setting or continue an employment setting with knowledge and forethought about what you wanna look for and what you wanna see happen. Because I know in the academic setting in part of healthcare training, you don't get a lot of the pluses and minuses of practice management. So to kind of brief on that, my hope is you did get some pearls of wisdom and that you managed to listen to all of these modules. Humbly, I would suggest to you, they all have some value. But if you managed to listen to them and you're able to join us May 10th, we are going to have a live WebEx on May 10th at 7 p.m. Eastern time. That will be our module eight, our final module. If you are on the West Coast and can't break free at 4 p.m., the presentation will be recorded and you will be able to at a later date in time to download and listen to the Q&A session. But I'd invite you to attend because I think the beauty of this is sort of on the fly getting questions answered and being able to have that a little bit of candidly free consulting and free Q&A from someone who's been in the business for 33 years. So if you can send your questions ahead of time, that'd be great. Because if there's something I need to do a little more digging on to give you more subject matter expert input on, I would be able to do that and get that ready for our presentation on the 10th. Send your questions to the fine folks at AOA via physicianservicesatosteopathic.org. And please send those, I don't know what the heading needs to be, but maybe something that alludes to module eight questions or something like that, practice management questions. Again, we will be live on the 10th. I intend on having a deck built out with preloaded questions, but we will also have time allotted where we just shoot the breeze and just have this dynamic where we're moving on the fly and answering questions as we go. So with that, I will thank you. I hope that you've listened to the preceding modules. Again, if you pulled away three or four really good nuggets and got value out of this, I'm delighted by that fact. I thank the AOA and AOIA for allowing me to present and for their partnership in this work, in this effort. It's been delightful. And again, thank you for your time. I know it's valuable. Take care and be well.
Video Summary
The AOA's presentation module discusses medical practice operations, focusing on coding and billing within outpatient care. It provides a broad overview for healthcare professionals, emphasizing the importance of understanding CPT codes, insurance payers, and revenue cycles. The speaker highlights distinct challenges in dealing with public payers, like Medicare and Medicaid, and the differences between hospital systems and ambulatory practices.<br /><br />The session outlines the necessity of integrating knowledge of revenue operations, front-end collections, and the impact of payer contracts on overall practice viability. These aspects of practice management can deeply influence financial health due to diverse reimbursement rates and operational efficiencies. Mismanaged coding practices can lead to revenue loss or legal issues, making understanding these processes crucial.<br /><br />Further discussed are the variable factors that influence patient billing and insurance collections, including nuanced payer contracts and the work RVU formula. Practices must navigate these intricacies to optimize their financial sustainability. The need for proactive management strategies to handle AR, denials, and inefficiencies in billing is emphasized.<br /><br />Overall, the session aims to educate clinicians to better understand business fundamentals, enabling them to ask informed questions, improve practice operations, and ensure financial viability in healthcare settings. A follow-up session for Q&A is planned for further exploration of these topics.
Keywords
medical practice operations
coding and billing
CPT codes
revenue cycles
payer contracts
financial sustainability
practice management
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