Category: Gastroenterology

22 May 2019

Loss of autonomy. Compromising patient care.  What do PE funds have to say about that?

I was curious how a PE fund would respond to concerns of losing autonomy and compromising patient care. Would they not work with certain kinds of  GI practices? So I just asked Paul Barrett.
Paul Barrett is the Managing Director of BelHealth Investment Partners, New York. BelHealth is a healthcare private equity firm focused on lower middle market companies. This interview is part of the book, Private Equity in Gastroenterology: Navigating the Next Wave.
When you take a 5-10 year horizon, how do you see the GI landscape change because of PE-fueled consolidation?
The practice of GI and patient care will remain the same, however, with PE investment will come additional opportunities in technology and innovation. There will be significant investment by PE firms in leading technology, equipment and systems in order to drive accelerated growth. The goal of PE groups is to create value by accelerating growth and creating scale so there likely will be more regional and national players vs. small and mid-size groups today. With the increased administrative and regulatory burden in GI, creating groups of scale makes a lot of sense.
What are the main concerns that PE funds have while considering investments in GI?
The main concerns in GI are similar to other physician specialties — ensuring and maintaining exceptional patient care and a compensation structure for physician partners post close that keeps all parties happy and incentivized to work hard. Our model at BelHealth differs somewhat from our peers in that we exclusively partner and back physicians and entrepreneurs. Our physician partners roll significant equity, remain Medical Directors of their practices, keep their local brand and maintain full clinical independence and autonomy. Our role is to support the group by building a best-in-class corporate back office and reduce the administrative burden at each individual clinic so the physicians and staff can focus on providing exceptional patient care.
“We do not partner with physician groups that have one outsized individual or ego that is not a team player.”
For what kind of GI practices would PE investments NOT be a fit? 
For us, it’s critical that the physicians be interested in a partnership model and be enthusiastic about becoming part of a family of practices. Also, it’s important that all of our partners be team players and open to building consensus around all major decisions. We do not partner with physician groups that have one outsized individual or ego that is not a team player.
Several practices are waiting and watching. What might be the pros/cons of joining a PE funded group at a later stage?
The pros of joining a group early on are that it allows you to shape the overall platform as you see fit and in your image. However, there may be a few more bumps in the road as the platform finds its footing. If you join later, it may be a more a seamless transition, however, many of the bigger platform decisions such as which EMR/PM systems are chosen, may have already been decided.
Some doctors are worried that PE involvement will mean greater use of physician extenders, losing autonomy, and even compromising patient care at the cost of financial goals. How would you respond to that? 
It’s a fair concern as some PE firms have not behaved responsibility in this regard. It’s incredibly important that you partner with a group that lives and breathes healthcare and that allows its physician partners to put its patients first and remain clinically autonomous and independent. From our perspective, putting short term profits ahead of best-in-class clinical care is short sighted and leads to a poor investment outcome in the end. With our dermatology platform, NavaDerm Partners, pro forma for our most recent partnership, we have 45 MDs and 3 PA’s and each of our seven founding physicians remain Medical Directors of their clinics.


By Praveen Suthrum, President & Co-Founder, NextServices.

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
09 May 2019

“If you are paid by Medicare, aren’t you already employed?”

“If you are paid by Medicare, aren’t you already employed?”
When I first heard someone suggest this, it struck me as odd. How can independent gastroenterologists be employed by Medicare? 
Well, let’s consider that question. I looked at Medicare contribution for six different types of GI practices in Q1 2019.
Practice A (group in east coast): 29%
Practice B (solo GI in east coast): 19%
Practice C (group in mid-west): 19%
Practice D (solo GI in northeast): 16%
Practice E (group in west coast): 16%
Practice F (solo GI in east coast): 27%
Yes, one could make that argument. Medicare is an employer of these practices at least 16-29% of the time. Because they are paying doctors and doctors are dependent on that payment.
Would this ’employer’ ever give you a raise?
To answer this question, I wanted to review Medicare ‘allowed amounts’ for colonoscopy. Because those procedures are still the bread-and-butter for GI practices.
During the last 10+ years, here’s how Medicare paid for colonoscopies (approximately).

As you can see, Medicare pays less than what they did 10 years ago!
Here are the ‘allowed amounts’ from 2009 and 2019.
Diagnostic colonoscopy: $369 (2009), $331 (2019). -10.3%
Colonoscopy with biopsy: $442.90 (2009), $424.90 (2019). -4.06%
Lesion removal colonoscopy: $499.52 (2009), $446.16 (2019). -10.6%
Let me just say what you already know. It’s unlikely that you will ever get a meaningful raise from CMS.
In fact, Medicare will keep paying you less
Why? The simple answer is they won’t have money to pay.
Read: Medicare will run out of money in 2026, three years earlier than expected, government report says (Chicago Tribune)
We are looking at a pie that can’t keep up with its consumers anymore.
Look at this graph from Kaiser Foundation. Medicare Advantage enrollment has nearly doubled in the past decade. 6.9 million in 1999. 20.4 million in 2018.
There’s no stopping this trajectory.
People are living longer. By 2050, 83.7 million Americans will be over 65 years (double that of 2012 numbers).
Read: Why Medicare Advantage Is Marching Toward 70% Penetration (L.E.K. consulting)
There’s no stopping this trajectory.
Private insurance companies tend to model their payment strategy around Medicare. They will also pay less – especially for standard procedures like colonoscopies.
Airbnb for gastroenterology?
Many disrupting trends are quite clearly on the horizon. Declining Medicare reimbursements for colonoscopy is surely one. DNA testing is another.
As a business person, it’s easy for me to say cut your dependence on Medicare. But I know that it’s not an effortless path to navigate.
There is money in GI but not from traditional sources. Let me give you 10 IDEAS to consider.
1) Reduce your dependence on colonoscopy reimbursements by adding relevant procedures and ancillaries (e.g. is obesity a subspecialty of GI? Some of the largest GI groups make up to 50% of their money from ancillaries)
2) Diversify your patient volume and sources (e.g. a GI practice hired an Asian doctor to attract a new patient pool. Do you repeatedly see the same demographic?)
3) Outsource and reduce costs of basic operations (e.g. billing, accounting. What’s it costing you to hold onto these?)
4) Start clinical trials for upcoming biologics
5) Develop gastroenterology niches (e.g. infusion centers for Crohn’s. What’s different about your GI practice?)
6) Re-energize your hospital partnerships, establish new ones (How can you partner to help the hospitals succeed? Collaboration and negotiation vs competition)
7) Analyze your top and long-tail referral sources. Nurture new ones
8) Standardize and automate your workflow using technology (e.g. We use a variety of algorithms to bill certain claims, check status, check eligibility etc.)
9) Get asset-light to stay current with changes. Stop owning things (e.g. don’t buy servers). Start renting/subscribing (get on the cloud)
10) Build your brand. Make patient engagement as important an activity as seeing them. (Do your established patients hear from you other than the time of recalls?)
When Hilton needs more business, they go about building whole new properties. When Airbnb needs more business, they simply borrow your assets using a system that they’ve already built. At $31 billion, they are valued more than Hilton or American Airlines.
And here we are still talking about declining payments from Medicare. Even though, the same Medicare population (senior citizens) is Airbnb’s fastest growing demographic.
More on all this soon. But for now, it’s time to shape our mindset towards disruption. It’s time to think differently about gastroenterology.


By Praveen Suthrum, President & Co-Founder, NextServices.

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
16 Apr 2019

Cologuard = Google car?

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”






Cologuard = Google car?
I sat in a Google self-driving car back in 2012…when it was still a Toyota Prius. See the pic below. Neither I nor the car look this way anymore.

The big gadget on top of the car is the LiDAR sensor. That device fires rapid pulses of light all the time and all around to detect objects in the vicinity. It’s what self driving cars use to navigate.
Back then LiDARs cost $75,000. It wasn’t accurate enough to ensure people won’t get killed on the road. Google spent $200,000 to assemble each autonomous car. Most car companies called it an unreasonable but “cute, research project”.
Every 2 years after that, the LiDAR doubled up in accuracy and dropped by half in price. So did the Google’s self-driving car.

The 8% miss rate
Recently, the Digestive Health Physicians Association (DHPA) lobbied on behalf of gastroenterologists to make sure that Cologuard modifies its multi-million ad campaign. The campaign implied that Cologuard can be as good as screening colonoscopy. Of course, they can’t say that.
As you would already know, Cologuard’s stool DNA technology was approved by FDA in 2014. The product is included in major screening guidelines and quality measures. Medicare covers it.
On their website, they present themselves as a “sensitive screening strategy that improves patient compliance” for colorectal cancer screening. If you click on “How effective is Cologuard?”, an image loads up showing that Cologuard found 92% of colon cancers (per a study involving ~10,000 people).
That’s an 8% miss rate. The company is quick to say in multiple places that false positives and false negatives occur with their product.
At The GI Roundtable conference in April 2019, Jason Dominitz, MD, MHS, National Program Director for Gastroenterology in the Veterans Health Administration asked the audience this question. What risk are you willing to take for your patient?
The question might as well apply to Cologuard.
It’s not my place to comment on clinical aspects of Cologuard. I’m just the biller who knows how to get my clients paid correctly for various GI procedures.
But as a curious technologist, I can’t help but note that it cost $2.7 billion to fully sequence the human genome (in 2003). And today, it costs $200 to do so.
I learn that it’ll soon be a penny to sequence the whole genome. It’ll open new dimensions in digital biology, including editing genes.
I can’t help but think along the same lines with Cologuard.
Screening with a scope is linear – one doctor, one patient at a time. Screening via a test is non-linear or data-based. You can scale the test exponential with no dependency on humans.
With digital biology, we move from analog to digital, taking us into the realm of software engineering. We can now talk about data that can be read, analyzed and possibly programmed.
We are then moving from linear to exponential.


Exponential growth of Cologuard
See these graphs. This one shows their impressive, consistent quarterly revenue growth.

This one shows the number of physicians who ordered the test for the first time. Observe the exponential spike in 2018.

With more tests, Exact Sciences (the maker of Cologuard) will have more data. With more data, the test will tend to get more and more accurate. As of end of 2018, Exact Sciences performed 1 million tests.
Surely, they’ll do more.
Beyond the TV ads, they are making all the right marketing moves within GI. They were the only gold sponsor at the AGA Tech Summit in San Francisco this April.
I wonder if more Cologuard screening resulted in new patients for GI doctors. Because now patients are probably more aware or concerned about colon cancer. I don’t know the answer to that.
What if Cologuard recruits a vast global community of bio-programmers to somehow reduce the miss rate? Or even catch the miss rate as it occurs?
It’s not unthinkable if you’ve ever used the Waze app – a GPS navigation software. Waze even lets you know where cop cars are standing based on what other drivers tell the app.
Catching the miss rate as it occurs is also not unimaginable. That’s how Facebook’s AI pulls down inappropriate live videos – even as they occur.


What I worry about… 
I worry…
• That referrals of screening colonoscopy, the bread-and-butter of severalGI doctors, will decline.
• That insurance reimbursements for traditional CRC screening will keep getting lower. To the point of no return.
• That the forces of DNA sequencing and AI (check ai4giclassifying polyps) will intersect at some point in the near future.
• That ancillary revenues from biopsies (from CRC) will also go away becausenow we will exactly know which polyps are cancerous.
• That GI doctors performing below quality benchmarks will be left behind
• That it’ll be too late when GI doctors realize that the world has changed


Guess the price of LiDAR today?
Today (7 years later), the Google car is called Waymo. They call it “the world’s most experienced driver” (would Cologuard at some point call itself the world’s most experienced CRC screener? 😱).
Waymo got cooler. See below. The little black thing on top is the LiDAR.

Making a car autonomous used to cost $200K/car. Then it dropped to $100K/car.
Then to $50K/car.
Now, it hovers around $1,000/car.
The LiDAR scanner costs $50. To remind you, the scanner cost more than 1,000x back then.
It’s expected to cost $10 and sneak into the gadgetry that occupies your smartphone.
Unlike the LiDAR scanner, Cologuard continues to be priced high. More than screening colonoscopy – at $649 because Medicare and others are willing to pay for it. That’s more than sequencing a whole genome! We are sadly so used to bloated healthcare. But even a broken system can’t stop an exponential curve.
Exponential changes don’t just happen because of one trend or technology. It’s because various trends collide and accelerate the doubling.
Should I say this or is it apparent? GI is in the middle of massive disruption. It just depends on which side of the disruption we choose to be.


All product and company names are trademarks or registered trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.


By Praveen Suthrum, President & Co-Founder, NextServices.

11 Apr 2019
GI Roundtable 2019

59 Takeaways from The GI Roundtable 2019

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
GI Roundtable 2019
If you aren’t already feeling the tremors of GI disruption, you soon will.
Regardless of whether you are a small, independent practice or a large group, you might not be so sure where the future of GI is going. You might be wondering what should you be doing now and not finding clear answers.
Just know that you are not alone.
This past weekend, we were at The GI Roundtable 2019 in Seattle. It was a congregation of GI leaders (both doctors and administrators) from various parts of the country. Discussions spanned from clinical to business.
There were plenty of insights.
There were at least 59 takeaways that caught my attention.
As Dr. Irving Pike (from John Muir Health) said during his keynote, we can take three approaches to these changes:
1. Digging our heads in the sand and ignoring them
2. Working harder and faster, faster, and even faster
3. Or a more thoughtful and planned approach.
The idea of sharing these insights is so that we choose option #3 as an industry.
Takeaways from Irving Pike, MD, Senior Vice President and CMO at John Muir Health. Instrumental in the development of GIQuIC quality registry.
1. Aging population = Greater proportion of CMS. You already know that CMS pays you less than commercial payors. This means decreased future compensation.
2. If screening colonoscopy declines, what alternative income streams do you have?
3. “Don’t think for a minute what’s impacting hospitals and health systems has nothing to do with your GI practice”
4. Get lean…get rid of waste and reduce your costs.
5. Medicare Advantage enrollment has grown from 6.9 million in 1999 to 20.4 million in 2018. It can reach 70% penetration (per L.E.K Consulting).
6. Increased Medicare means greatest pressure on provider payments. Out of $680 billion increase from 2018 to 2027 in Medicare expenditures, $269 billion is from providers.
7. GI doctors will need to develop ancillary revenues to survive what’s to follow.
8. Unprecedented mega-mergers. United-DaVita. Walmart-Humana. CVS-Aetna. Cigna-Express Scripts.
9. New interest from outsiders. Apple. Alphabet (Google). Lyft. Amazon.
10. New healthcare consumers – 74% of Millennials prefer virtual visits.
11. Direction of payments is moving from Treatment-based to Population-based. Fee for service ► Pay for performance ► Bundled payments ► Global payments for a population ► “Owning” lives.
12. Move from volume to value. Define clinical pathways and reduce variation. Use Quality indicators. Become more transparent with PCPs, insurers and health systems.
13. As of 2018, half of US GI doctors are now employed and the other half is independent. Someone said, if you are getting paid by Medicare, you are already employed.
14. Bring focus to patient engagement and brand building.
15. Use telehealth, advanced EHRs, diagnostic technology.
16. Location (metro or rural) will drive new practice models – from PE to large clinics.
17. Bigger is NOT better without a clear strategy. Bigger can be better because of economies of scale, single signature contracts, new infrastructure, sub-specialization.
18. Physician concerns about Private Equity. Autonomy, autonomy, autonomy. Not everyone will be treated equally. Operating agreement can be non-binding. Change in culture.
19. There will be multiple practice models existing at the same time depending on local circumstances.
Takeaways from Jason Dominitz, MD, MHS, National Program Director for Gastroenterology in the Veterans Health Administration
1. An estimated 145,600 adults in the United States diagnosed with colorectal cancer in 2018. Estimated mortality: 51,020.
2. Screening adherence is only 65%. For non-colonoscopy tests, abnormal results aren’t always followed up with colonoscopy. When colonoscopy is done, quality is often lacking.
3. We are doing too much screening colonoscopy. Low quality after screening is leading to additional testing (missed adenomas are common).
4. In a study, each 1% increase in ADR was associated with 3% decrease in risk of cancer (Corley NEJM 2014).
5. To increase ADR. Expose more colonic mucosa (complete insertion of scope, better bowel preparation, field view of screen, uncover “covered areas), increase recognition of pathology.
6. If you are not meeting benchmarks, there are techniques and tools to help.
7. New guidelines for screening colonoscopy are coming.
8. Colonoscopy can be like speeding on the highway…what risk are you willing to take for your patients?
Takeaways on business of gastroenterology – Reed Hogan, MD (GI Associates & Endoscopy Center, Jackson, MS), Joseph Cappa, MD (Connecticut GI, Bloomfield, CT), James Leavitt, MD (Gastro Health, Miami, FL), James Weber, MD (Texas Digestive Disease Consultants, Dallas, TX), Louis Wilson, MD (Wichita Falls Gastroenterology Associates, Wichita Falls, TX)
1. Reimbursements will drop. Diversify your portfolio and be prepared for changes in payment models. (Dr. Joe Cappa)
2. Strategic planning is not always about scale. It’s also about maintaining quality of life and focusing on doctor-patient relationships. (Dr. Louis Wilson)
3. Negotiating rates with payors is really about building relationships. Seek 1-3 year contracts and do it on a schedule. If they say no, come back to them 6 months later. (Dr. Louis Wilson)
4. Patient satisfaction, ADR, outpatient use of endoscopies all roll into developing relationships with your key payors. (Dr. Joe Cappa)
5. If you are a solo practice, you need to be outsourcing. Use consultants. Take advantage of the structures that someone else has built. (Dr. Louis Wilson)
6. In large cities like Dallas, San Antonio, solo practices are dying. They’ll be busy but they’ll get paid 70% of Medicare to do their work. It’s unfair. They are getting squeezed out. We get 200% of Medicare rates. (Dr. Jim Weber)
7. Rural areas, sub-urban areas you can survive as a small or solo practice. May be because things are less complex. (Dr. Jim Leavitt)
8. As gastroenterologists, you must view the site-of-service differential as an opportunity to align yourself with them (hospitals) – they are going to need you. The repercussions are going to hit us in unpredictable ways – not what you think. (Dr. Louis Wilson)
9. In partnering with hospitals, control the patient and ancillaries. More than 50% of physician income streams come from ancillaries for us. (Dr. Jim Weber)
10. Hospitals view GI as a cost center. But if we have them on our payroll, they can achieve what they want on the inpatient side. (Dr. Joe Cappa)
11. One advantage of being large is you can provide a range of services that hospitals need. (Dr. Jim Leavitt)
12. Even if you break-even on ancillaries, you must have them. It’s great for the practice and the patient.
13. Patients are willing to pay cash for dietitians, for higher quality of care.
14. Simple things like imaging bring great satisfaction. I don’t send them to the ER, they walk across the hall to get their CT, walk to the pharmacy…then they refer their family for screening colonoscopy. (Dr. Jim Leavitt)
15. Infusion centers are great for the practice, great for patients. With larger volumes, your profit margin goes up.
16. Think of payors as customers.
Takeaways on EHR, your staff, patients and you – Daniel O’Connell, PhD, clinical psychologist
1. Have a 5 min huddle before your morning schedule and after your afternoon schedule with your MA.
2. Key things to know before you see the patient – name, date last seen in clinic, who they saw, name of the referring provider, reason for referral. “A doctor should know what’s knowable.”
3. Patients don’t have a problem with a computer. Convey that it’s a “tool for us”. Set up the room in such a way that the doctor, patient and computer are in a triangle.
4. Take 90 seconds and finish up 2/3rd of your note when the patient’s there or right after. Go home for dinner.
5. Take the first 60 seconds to set an agenda and say, let’s make a list of things you want to go over with me today.
6. Magic is when patients leave thinking they are making an informed decision.
7. A good scribe can have more impact than an MA. A scribe (e.g. pre-med student) can start becoming an extension of the care team.
8. Empathy: seeing from their perspective without judging. Cognitive empathy: Demonstrate you understand their thinking. Emotional empathy: Demonstrate you recognize and respect their emotions.
Takeaways on Private Equity in Gastroenterology – Joe Cappa, MD, Jim Leavitt, MD, Jim Weber, MD, Louis Wilson, MD
1. We are in the process of evaluating and understanding this (private equity) a little bit better. What does it mean for younger physician? It also depends on the geography, environment around you, trends of medicine. (Dr. Joe Cappa)
2. There are some risks you can’t predict. Deal team issues. We have 4 out of 7 doctors who have 30+ year window. They are entirely asymmetric. (Dr. Louis Wilson)
3. Alignment is critical.
4. We did our private equity deal to ensure we would remain independent. Anyone who’s tried to consolidate with other groups knows it’s very hard work. PE is a catalyst for consolidation. (Dr. Jim Leavitt)
5. The business of medicine is different from the practice of medicine. Most doctors are happy to give up control of the business of medicine. (Dr. Jim Weber)
6. Nobody wants to be a doctor except the doctor. Payors, hospitals, PE companies don’t want to take the meat out of someone’s esophagus on Friday night. (Dr. Louis Wilson)
7. If you are going to have autonomy, you need to have skin in the game. (Dr. Jim Weber)
8. It’s hard as hell to be a platform. (Dr. Jim Weber)
9. If you want to do PE, go buy a blue blazer because they all wear them. And be prepared to answer the question, what keeps you up at night because everyone will ask you that. (Dr. Jim Weber)
10. Wear your empirical skeptic hat. Keep your options open. Future of GI is still very bright. (Dr. Louis Wilson)
11. There are at least 10 deals underway across the country, including acquisitions by practice management companies.
12. In April 2019, Gastro Health made its first out-of-state acquisition in Alabama.
Yes, there’s too much happening too fast. The future of GI entails forgetting what we know more than learning something new. I’m reminded of these lines from Yuval Noah Harari’s new book, 21 lessons for the 21st Century.
“To survive and flourish in such a world, you will need a lot of mental flexibility and great reserves of emotional balance. You will have to repeatedly let go of some of what you know best, and learn to feel at home with the unknown.”


By Praveen Suthrum, President & Co-Founder, NextServices.

13 Dec 2018

Private equity in gastroenterology: A train that’s left the station

Well, they are calling it the golden age of rectums! The trends are simple and straightforward.

First, baby boomers and beyond are aging and staying alive longer. The gut, a hidden culprit in many ailments, requires continuous maintenance. Colonoscopies. EGDs. Things that require services of gastroenterologists who are always in short supply (14,000 in the US).

Second, gastroenterology (GI) practices are fragmented like hotels were before Hilton. Regulatory, technological, insurance complexities are weighing GI doctors down. Frustrated with the burden of running practices, many doctors join hospitals. And discover that it’s difficult to survive under the thumbs of demanding hospital administrators.

Third, there’s plenty of new money in private equity ($453 billion in 2017). Healthcare, one of the biggest problems of our times, is attracting PE interest, albeit quietly. Unlike earlier decades when IPOs were the main forms of exits, PE companies can now find exits by selling rolled up portfolios to larger PE firms. Plus, PE firms follow each other around.

Fourth, specialties such as gastroenterology can indeed improve revenues by streamlining billing, negotiating insurance contracts, adding ancillary services, and building a strong management team. All of these are possible with consolidation and investments. Given that physician partners don’t usually align, a third-party facilitator such as PE firm would find it easy to disrupt and consolidate.

The question really isn’t about whether PE involvement would be right for gastroenterology or medicine as a whole.

It’s too late in the day to ask that question. The train has already left the station.

Consider these announcements.

  1. In 2016, Audax Group made major investments in both Urology and Gastroenterology.
  2. In 2017, KKR bought Covenant Surgical Partners from DFW Capital
  3. In 2017, Warbus Pincus bought CityMD, an urgent care chain
  4. In 2017, Harvest Partners bought Katzen Eye Group from Varsity Health Partners
  5. In 2016, ABRY Partners invested in US Dermatology Partners
  6. In 2017, Varsity invested in The Orthopedic Institute
  7. In 2016, Sverica Capital acquired RMS Healthcare Management, a primary care provider
  8. In 2017, New Mainstream Capital acquired Cordental Group, a dental chain

The article lists more deals in behavioral health, hospice, women’s health, ER and so on.


Given my company’s business, I’m particularly plugged into gastroenterology. At a recent GI conference, we noticed that one of the newly consolidated super groups even had a booth. I met physician-owners who were exhibiting at the conference so that they could court other doctors and eventually buy them out.

What was more interesting is that they were looking for sophisticated technology solutions. And were considering experimenting with computer vision to detect polyps (finding polyps is something that GI doctors routinely do via colonoscopy).

Read: Artificial Intelligence-Assisted Polyp Detection for Colonoscopy: Initial Experience

Naturally, I wondered what it’s like for a doctor to work in a PE-run organization versus a hospital. Like with any large organization, the super groups were run by small boards and a CEO. Firm decisions were made by the board. A larger (“rubber stamp”) board passed the rules further down. These decisions were rolled out to the army of doctors across the organization.

Someone I chatted with said, “The pros were that they had better insurance contracts.” And cons, I asked quickly? He shrugged, “Well, they will eventually get their way!”

Plenty of mid-sized GI groups I spoke to were still wondering what to do. Expand by merging with other groups? Sell-out to a hospital? Be found by a PE firm that’s eager to consolidate? Wait and watch?

I found examples under all models.

A group we work with has been consolidating regionally by acquiring solo and other mid-sized GI groups. A potential client whom we never got around to working with sold out to the local hospital that wanted to create a “state of the art” gastroenterology department. Some others entertained PE conversations across several GI groups only to discover in the end that all talks collapsed. Because the partners wouldn’t see eye to eye. Many others were watching from the side lines.

If you amplify these signals, you’ll surely hear the songs of consolidation.

It’s warming up. The ice is melting. A little quickly now. New rules are forming. No one knows what exactly those rules are. But they are forming anyways. And when they form, the lake will start freezing. Again. To stay frozen for a long time.


1) Provident Perspectives: Private Equity Investment in Gastroenterology

2) How to look at private equity investment in physician groups: Gastroenterology

3) Hot physician specialties for private equity investment

4) Physician and Private Equity Partnership: Goal is to Create Larger, More Robust Platform for Delivery of Care

5) Where Health and Investment Collide: Health Care Private Equity Trends to Watch in 2018

6) Medical practices have become a hot investment — are profits being put ahead of patients?


Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

27 Sep 2018

NextServices to Showcase The Gastro Suite at the American College of Gastroenterology 2018

The Gastro Suite is an all-in-one software and services platform for gastroenterologists. It combines gastroenterology billing, coding, EHR, endoscopy report writer and MACRA consulting.
– Ann Arbor, MICH. (PRWEB) September 26, 2018

NextServices will be showcasing The Gastro Suite at the American College of Gastroenterology (ACG) 2018. The Gastro Suite is a state-of-the-art platform that comprehensively addresses administrative, technological and compliance challenges of gastroenterology groups.

“Unpredictable income. Old software. Endless mandates. Rising costs. Gastroenterologists are running faster than ever to stay in the same place. It’s time to think differently,” said Praveen Suthrum, President and Cofounder, NextServices. He added, “Through a unified software and services platform, The Gastro Suite makes these problems go away.”

The Gastro Suite integrates:

GI billing/revenue cycle management: Improve efficiency and revenues through end-to-end revenue cycle management. Services includes credentialing, authorizations, payor setups, surgery center, practice and hospital claims submission, denial management, insurance and AR management. Cloud-based practice management software included as needed.

GI coding: Protect from audit risks, bill more accurately and save coding expenses. Certified coders streamline E&M and procedure coding on an ongoing basis.

enki EHR: Certified, cloud-based gastroenterology EHR that is refreshing and remarkably easy to use.

enki Endoscopy Report Writer: GIQuIC certified, cloud-based endoscopy report writer that saves time and money. Includes free future upgrades.

All enki software products come with a 60-day money back guarantee.

MACRA consulting: MACRA/MIPS advisory services that include compliance training, tracking, unlimited support and data submission to registries to avoid negative payment adjustments.

“We’ve seen the gastroenterology landscape change over the last 14 years. Reimbursements have dropped. Costs have risen. And there’s increased regulation to deal with,” said Satish Malnaik, CEO and Cofounder, NextServices. He added, “Partner with us to not just navigate but thrive in this uncertain environment.”

Attendees can learn more about The Gastro Suite at ACG 2018 during October 7-9th, 2018 in Philadelphia, PA. NextServices will be exhibiting at booth #511.


About NextServices

NextServices provides cloud based billing and software platform that gastroenterology practices need to thrive in an environment of tougher reimbursements, high operating costs and increased regulation. Our solutions include – billing and coding services, enki EHR platform, enki Endoscopy Report Writer and MACRA/MIPS consulting. For more information contact (734) 677 7730 or visit the company’s website at

About American College of Gastroenterology (ACG)

The American College of Gastroenterology (ACG) is a recognized leader in educating GI professionals and the general public about digestive disorders. Our mission is to advance world-class care for patients with gastrointestinal disorders through excellence, innovation and advocacy in the areas of scientific investigation, education, prevention, and treatment. To learn more about ACG, visit


02 May 2017

Fecal microbiota transplant: Procedure and coding guidelines

Fecal Transplant - Procedure and coding guidelines1

Fecal transplantation is a procedure performed for patients suffering from recurrent infections by a type of bacteria called Clostridium difficile. The infection is spread through contact with surfaces contaminated by spores of the bacterium. The range of symptoms include diarrhea, pseudomembranous colitis, fever, nausea and abdominal pain.

In recent times, there has been an increased antibiotic resistance for C. difficile. Fecal bacteriotherapy or stool transplant is an emerging technique for treating patients suffering from such antibiotic resistance.

The procedure
Fecal microbiota transplant (FMT) involves transplantation of fecal microbiota collected from a healthy individual into the gut of patient. The donor’s stool sample is carefully screened and selected for transplant.

A close relative may prove to be suitable donor however, non relatives stool samples may also be effective.

Fresh stools are often used for preparation of an infusion. Once ready, the infusion is administered by means of enema using a colonoscope or through a nasogastric tube.

Indications for the therapy
• Clostridium difficile infection

Coding guidelines

For Medicare:
CPT code to be reported – G0455 – Preparation with instillation of fecal microbiota by any method, including assessment of donor specimen

(Medicare does not pay a separate fee for the installation of the microbiota by oro-nasogastric tube, enema, or by upper or lower endoscopy)

ICD-10 codes that can be reported:

Z20.9 – Contact with and (suspected) exposure to unspecified communicable disease

Z22.1 – Carrier of other intestinal infectious diseases

Z11.59 – Encounter for screening for other viral diseases

Z11.3 – Encounter for screening for infections with a predominantly sexual mode of transmission

Z11.2 – Encounter for screening for other bacterial diseases

Z11.0 – Encounter for screening for intestinal infectious diseases

Z11.8 – Encounter for screening for other infectious and parasitic diseases

Z11.9 – Encounter for screening for infectious and parasitic diseases, unspecified

For commercial payors:
44705 – Preparation of fecal microbiota for instillation, including assessment of donor specimen
44799 – Fecal instillation by oro-nasogastric tube or enema (This CPT code is used to indicate  instillation).

Do not report 44705 in conjunction with 74283 (Therapeutic enema, contrast or air, for reduction of intussusception or other intraluminal obstruction (e.g., meconium ileus)

Have a coding question? Let me know in the comments below.

The information is presented for educational use only. It is not meant to be used to diagnose or treat any medical condition. We have made all reasonable efforts to ensure the information provided in this guide is accurate at the time of inclusion, however, please resort to clinical documentation and your experience to make decisions while coding and billing for procedures.

By Sandeep Paranjape, NextServices

07 Mar 2017



Remembering codes with so many permutations and combinations can be really overwhelming. To help you understand and code better, we have created this reference guide which you can refer to code and bill accurately for your next case. Guide includes CPT Codes for Colonoscopy, Esophagoscopy, EGD, Enteroscopy, ERC and Sigmoidoscopy.




October 1st, 2016 marked the end of the grace period allotted by CMS and AMA to facilitate smooth ICD-10
implementation. During the grace period, insurances processed claims even if they were wrongly coded, just as
long as the codes belonged to the broader family of correct codes. However, such claims will not be paid after
the grace period. It now becomes crucial for medical practices to strictly adhere to ICD-10 coding guidelines to
avoid payment disruptions.

Guide includes ICD-10 Coding guidelines for screening and surveillance colonoscopy.



Disclaimer – The information is presented for educational use only. It is not meant to be used to diagnose or treat any medical condition. We have made all reasonable efforts to ensure the information provided in these guides are accurate at the time of inclusion, however, please resort to clinical documentation and your experience to make decisions while coding and billing for procedures.

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”


18 Feb 2017

How to code for ulcers according to ICD-10 guidelines

With ICD-10, reporting for type, occurrence site, and complication has dramatically increased coding complexity. There are codes ranging from problems in relationship with in-laws (Z63.1) to being pecked by a chicken (W61.33) to being bitten by a sea lion (W56.11)!

Ulcer is one of the most frequently reported diagnosis codes in gastroenterology. However, with the advent of ICD-10, coding for the simple diagnosis has become complicated for even the most experienced doctors.

To make your life a little easier, we compiled a list of accurate coding guidelines for ulcers that you could refer to for your next case.

Ulcers are broadly classified based on the organ they are present.

1) Gastric ulcer (K25)

2) Duodenal ulcer (K26)

3) Peptic ulcer (K27)

4) Gastrojejunal ulcer (K28)

Each type of ulcer is further classified into acute or chronic. If the nature of ulcer cannot be determined, an “unspecified” code may be used.

Coding now goes up to the 4th level (or the fourth digit of ICD-10 code) of specificity. Each type of ulcer is coded with reference to the complications associated with it. For example, the code used for Acute gastric ulcer with hemorrhage would be K25.0

The ICD-10 CM manual also instructs the use additional codes if the patient is diagnosed with alcohol abuse and dependence.

F10 is the ICD-10 code for alcohol related disorders which is classified further into alcohol abuse (F10.1), alcohol dependence (F10.2), alcohol use, unspecified (F10.9). The F10 code can be further specified by the use additional codes. For example, blood alcohol level measurement is Y90.

Let’s understand this using a patient scenario:

Joan, age 36 years, presented with abdominal pain, nausea, vomiting and melena. She was scheduled for EGD after unsatisfactory PPI treatment. EGD revealed acute duodenal ulcer which was bleeding along with perforations. She consumes alcohol every day and shows withdrawal delirium. Her blood alcohol levels were 72 mg/100ml.

The coding for this scenario would be as follows:

Primary code: K26.2 (because the type of ulcer is duodenal and it is acute with hemorrhage and perforation)
Secondary code: F10.231 (because she exhibits alcohol dependence with withdrawal delirium)
Tertiary code: Y90.3 (because of the range of her blood alcohol level is 60-79 mg/100 ml)

This is how you think in an ICD-10 world. More specifically.

Below are coding guidelines in a tabulated format:

How to use this table:

The (*) mark specifies the nature of the condition.

For example, if an ulcer is duodenal, is acute and hemorrhage is present – the code to use would be K26.0

Another example, if an ulcer is peptic, is chronic/unspecified and hemorrhage is present – the code to use would be K26.4

Correct coding practices are the backbone for clean claims. Submitting clean claims with high first-pass ratio bring predictability in reimbursements. Pay attention to the levels of specificity that ICD-10 demands.

Have you come across any unique coding scenarios? Let me know in the comments below.


By Sandeep Paranjape, NextServices


[FREE GUIDE] How to bill accurate codes for endoscopy procedures

Adhere to ICD-10 coding guidelines now [avoid payment disruptions]


20 Dec 2016

Product and Feature Launches in 2016

Major enki features and products launched in 2016.



enki Telemedicine
enki Telemedicine module lets you seamlessly connect to your patients wherever they are. Enable remote healthcare delivery in a secure and simple way using video and messaging based consults.



enki Patient Portal

The new and improved version of enki Patient Portal allows patients a convenient access to their medical records 24×7. The patient portal also integrates enki Telemedicine modules for virtual consults. Patients can interact with you, request appointments and medication refills directly through secure messaging modules.


enki EndoWriter helps you capture endoscopy images and document your procedures effortlessly. Cloud based technology frees you up from expensive hardware and provides access to your notes from anywhere. One platform integration with enki EHR greatly improves your efficiency.




ICD-10 integration

enki EHR demonstrates complete ICD-10 integration across all clinical documentation modules. The simplified ICD-10 code selection interface guides you to the accurate diagnosis code for documenting your cases in a structured and compliant way.





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