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Reinventing Claims Management for the Value-Based Era

Posted on February 16, 2017 I Written By

Provider claims management as we once knew it is not enough to thrive in a value-based era. Here’s what you need to know about taking claims management to a higher level.

The following is a guest blog post by Carmen Deguzman Sessoms, FHFMA, AVP of Product Management at RelayAssurance Plus RelayHealth Financial.

Provider claims management as we know it can no longer exist as a silo. With the rapid transformation from fee-for-service to value-based models, denial rates remain high–nearly 1 in 5 claims–despite advances in technology and automation. The complexity of value-based payment models almost guarantees an increase in denials, simply because there’s so much to get wrong.

For provider CFOs and their organizations to be effective–and thrive–in this environment, the touchpoints across the revenue cycle continuum must be re-examined to see if there are opportunities for improvement that have not presented themselves in the fee-for-service era. One such area is claims management, which is ripe to be elevated into an integral part of a denials management strategy.

What are the implications for providers? Well, for perspective, consider the savings realized through electronic claims submission.  CAQH research reveals that submitting a claim manually costs $1.98, compared to just $0.44 per electronic transaction. Likewise, a manual claims status inquiry costs $7.20 versus $0.94 for processing electronically.

This paper outlines the features and benefits of a technology platform that is geared toward elevating traditional claims management into the realm of strategic denial prevention and management, along with some recommended denial management best practices.

From Claim Scrubbing to Strategic Denial Management

Simple claims management as we know it is becoming obsolete. By “simple” we mean a claims process with a basic set of capabilities: creating claims, making limited edits, and ensuring that procedures are medically necessary. Today, a new class of integrated claim and denials management solutions augment this traditional approach to include pre- and post-filing activities that help automate and streamline claim submission, proactively monitor status, and expedite the appeals process for those that are denied.

In its simplest form, denials management can be defined as a process that leads to cleaner submitted claims and fewer denials from payers. But there are a lot of interim steps and variables that lead to “clean” claims, and a growing number of factors that influence denials. With the shift to alternative payment models and increasing consumerism, it’s more important than ever for providers to process claims properly the first time and to keep staff intervention to a minimum.

A big part of denials management is to improve the quality of patient data at registration, the source of many errors that lead to denials. Nonetheless, integrated claim and denial management processes span the entire revenue cycle, and technology brings new opportunities to manage costs and improve efficiencies. For example, having the ability to manage claims within a unified platform that can share and integrate data with the organization’s EHR prevents the need to toggle back and forth between systems to determine the status of a patient encounter.

A comprehensive claims management platform that advances denials management efforts integrates the following capabilities:

  • Eligibility verification prior to claim submission. It sounds pretty basic, but eligibility and registration errors on claims continue to be the top reason for denials. Automating the real-time verification of eligibility data helps identify avoidable denials and alert staff to claims needing attention before submission.
  • Maintenance of and compliance with oftenchanging payer business rules and regulatory requirements, including Medicare and state-specific updates, so that claims go out as cleanly as possible on the front end. With multiple payers and a growing roster of alternative payment models, manual in-house maintenance of edits is becoming an overwhelming task.
  • Digitization of attachments for Medicare pre- and post-payment audits, commercial claims adjudication and integrity audits, and workers compensation billing support. Integrating digital data exchange into the claims management workflow can help providers better control administrative costs, ensure regulatory compliance, and help automate and streamline claims processing and reimbursement.
  • Visibility into claim status lifecycle, with guidance for proactive follow-up. This lets providers only focus on those potential “problem” claims, and address any issues, before they are denied or delayed.
  • Automation of repetitive and labor-intensive tasks such as checking payer portals or placing phone calls to determine the status of pended or denied claims. This helps drastically reduce the amount of staff time spent perusing payer sites, and sitting on the phone on hold when an answer can’t be found.
  • Predictive intelligence to determine timing of payer acknowledgements and requests for additional information, as well as when payment will be provided. Analytics-driven claims management provides insight into how long responses should take, alerting providers when follow-up is required.
  • Management of remittances from all sources. Automated management of transaction formats, adjudication information, remittance translation and posting can help reduce A/R days, boost staff productivity, and accelerate cash flow.
  • Denial management and data analysis to guide corrective action and prevent future denials. Revenue cycle analytics can monitor the number of claims per physician, payer, or facility, enabling the health system to be proactive in interventions.
  • Creation and tracking of appeals for denied claims, including pre-population and assembly of appropriate forms. This not only helps cut down on resource-intensive manual work and paper attachments, but streamlines the appeals process.

Tying these capabilities together within an exception-based workflow helps address the challenge by providing visibility into problem claims. At-a-glance access to claim status helps cut down on the back-and-forth between billing departments and payers, and allows staff to focus only on those claims that require attention.

Pulling it all Together

Once you’ve integrated these capabilities, what are some of the claims management best practices to improve denial management and prevention? Consider the following actions:

  • Embed denial management within the entire workflow–Strong edits lead to clean claims, whether they pertain to Medicare, commercial payers or state-specific regulations. Edits should be constantly refined and seamlessly implemented, and pushed out to providers as often as possible–at minimum on a twice-weekly basis.
  • Adopt analytics-driven claims management–Claims management systems and connectivity channels to payers (i.e. clearinghouse) produce a wealth of operational information, most importantly data evidencing the speed of the payment path and claim status. Analyzed and served up in meaningful formats, this data becomes targeted business intelligence that can help providers better see obstacles and identify the root cause of denials and payment slowdowns.
  • Resolve issues before they result in denials–Providers should know claims location and status at all times. For example, has the claim been released by the EHR system? Has it been received and approved by the payer—or does a problem need to be addressed? Has a problem been rectified? Has the claim been released to a clearinghouse? Historical trends establish guidelines for the timing of events (e.g., whether claim status or payment should have been received from a particular payer by a certain date).
  • Be ready to identify claims denials and submit appeals. Nationwide revenue cycle statistics show that 1 in 5 claims are denied / delayed and can be avoided with the right software and better business processes.  In addition 67% of these denied claims are recoverable Identifying denials and submitting appeals to supply information not included on the initial claim can recoup lost revenue. To help streamline the process, additional claims information, such as medical records or lab results, should be supported by structured electronic attachments rather than faxed paper records or uploaded files to payer portals.

An Ounce of Prevention = Big Returns

Reducing and managing denials will have a significant impact on any healthcare organization’s bottom line. First, it costs $25 to rework a claim, and success rates vary widely. Additionally, when denials must be written off, the drop in patient revenue may total several million dollars for a medium-sized hospital, according to Advisory Board estimates.

The new look and feel of claims management is moving quickly toward analytics-driven, exception-based processing. By implementing and leveraging these capabilities and best practices in a cloud environment, providers can look forward to accelerated cash flow, reduced denials, increased automation with less staff involvement, and lower IT overhead.

About Carmen Sessoms
With over 20 years of progressive strategic leadership and healthcare experience in product management, business development, strategic planning and consulting, Carmen Sessoms has worked with all organizational levels in the ambulatory and acute care markets for patient access and reimbursement.

Prior to joining RelayHealth, Carmen was the regional vice president of operations for an outsourcing firm, where she led the eligibility side of the business and was instrumental in many process improvements that brought efficiencies to the company, its provider customers and their patients. Additionally, she has 10 years’ previous experience with McKesson in Product Management roles in which she directed projects related to the design and development of revenue cycle solutions, including initiatives with internal and external partners.

Carmen is a past president of the Georgia HFMA chapter, a recipient of HFMA’s Medal of Honor, and holds the designations of CHFP (Certified Healthcare Financial Professional) and FHFMA (Fellow in HFMA).

Practice Management Market To Hit $17.6B Within Seven Years

Posted on February 1, 2017 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

A new research report has concluded that the global practice management systems market should hit $17.6 billion by 2024, fueled in part by the growth of value-adds like integration with other healthcare IT solutions.

The report, by London-based Grand View Research, includes a list of what it regards as key players in this industry. These include Henry Schein MicroMD, Allscripts Healthcare Solutions, AdvantEdge Healthcare Solutions, athenahealth, MediTouch, GE Healthcare, Practice Fusion, Greenway Medical, McKesson Corp, Accumedic Computer Systems and NextGen Healthcare.

The report argues that as PM systems are integrated with external systems EMRs, CPOE and laboratory information systems, practice management tools will increase in popularity. It says that this is happening because the complexity of medical billing and payment has grown over the last several years.

This is particularly the case in North America, where fast economic development, plus the presence of advanced research centers, hospitals, universities and medical device manufacturers keep up the flow of new product development and commercialization, researchers suggest.

In addition, researchers concluded that while PM software has accounted for the larger share of the market a couple of years ago, that’s changing. They predict that the services side of the business should grow substantially as practices demand training, support and system upgrades.

The report also says that cloud-based delivery of PM technology should grow rapidly in coming years. As Grand View reminds us, most PM systems historically have been based on-premise, but the move to cloud-based solutions is the future. This trend took off in 2015, researchers said.

This report, while worthwhile, probably doesn’t tell the whole story. Along with growing demand for PM systems,I’d contend that vendor sales strategies are playing a role here. After all, integration of PM systems with EMRs is part of a successful effort by many vendors to capture this parallel market along with their initial sale.

This may or may not be good for providers. I don’t have any information on how the various integrated practice management systems compare, but my sense is that generally, they’re a bit underpowered compared with their standalone competitors.

Grand View doesn’t take a stand on the comparative benefits of these two models, but it does concede that emerging integrated practice management systems linking EMRs, e-prescribing, patient engagement and other software with billing are actually different than standalone systems, which focus solely on scheduling, billing and administration. That does leave room to consider the possibility that the two models aren’t equal.

Meanwhile, one thing the report doesn’t – and probably can’t – address is how these systems will evolve under value-based care in the US. While appointment scheduling and administration will probably be much the same, it’s not clear to me how billing will evolve in such models. But we’ll need to wait and see on that. The question of how PM systems will work under value-based care probably won’t be critically important for a few years yet.

(Side note:  You may want to check out John’s post from a few years ago on practice management systems trends. It seems that the industry goes back and forth as to whether independent PM systems serve groups better than integrated ones.)

Providers Often Choose Low-Tech Collection Solutions

Posted on October 6, 2016 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

As most providers know, it’s harder to collect money from the patient once they’ve walked out the door. This has always been an issue, but is particularly important today given that patients are being asked to bear an increasingly larger percentage of their healthcare bill.

In some cases, providers solve this problem by having their staff reach out directly via phone, rather than relying entirely on paper billing. Others address these issues with technology solutions such as offering payment options via a web portal. And of course, some providers do both.

But the question remains, which combination is most likely to boost collections efficiently without losing patients in the process? And it’s this question, which underlies all those other considerations, which a new study hopes to address. When reading the results, it’s good to bear in mind that the sponsor, BillingTree, is a payment technology firm and therefore has a bias, but the survey data was interesting nonetheless.

First, a look at providers’ collections challenges. Respondents told BillingTree that compliance and collecting payments once the patient has left the building were concerns, along with knowing the correct amount to bill after insurance and addressing the client’s ability to pay. Perhaps the biggest issues were a lack of payment channels – be they staffers, interactive voice response or website tech — and disputes over the amount billed.

According to BillingTree researchers, few respondents were using Web or automated phone payment collection technologies to bring in these missing dollars. While 93.9% accepted online and mail payments, and 86.7% said they accepted payments over the phone via a live agent, only 66.7% provided a web portal payment option, and just 6.7% offered the ability to pay via an interactive voice response system. Rather than add new technologies, respondents largely said that they intended to improve collections by adding staff members or outsourcing part of their collection operations.

On the other hand, technology plays a somewhat bigger part in providers’ future plans for collections. Over the next 12 months, 20% said they planned to begin accepting payments via a web portal, and 13.3% intend to add an IVR system to accept payments. Meanwhile, the 26.7% of providers who are planning to outsource some or all of their collections are likely to benefit indirectly from these technologies, which are common among payment outsourcers, BillingTree noted.

Among those providers that did offer phone or web-based payment options, one-fifth chose to add a convenience fee to the transaction. BillingTree researchers noted that given the low adoption of such technologies, and concerns about regulatory compliance, such fees might be unwise. Nonetheless, the data suggest that collection of such fees increase over time.

All this being said, the BillingTree study doesn’t look at perhaps the most critical technology issue providers are struggling to address. As a recent American Medical Association survey recently concluded, providers are quite interested in tools that link to their EMR and help them improve their billing and reimbursement processes.

Focusing on revenue cycle management issues at the front end of the process makes sense. After all, while patients are being forced to take on larger shares of their medical costs, insurers are still more reliable sources of income. So while it makes sense for providers to track down patients who leave without having paid their share of costs, focusing the bulk of their technology dollars on improving the claims process seems like a good idea.

In The Trenches: Primary Care Practice Saves With EMR Transition

Posted on September 13, 2016 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

This is the first in an occasional series of stories I’m writing on how medical practices – particularly smaller groups – are handling their health IT challenges. If you have suggestions for future columns please feel free to write to me at anne@ziegerhealthcare.com.

It only took six months for Clem Surak to realize that his current EMR system wasn’t going to cut it. Surak, who bought Wilmington, NC-based primary care practice Health Partners in 2011 with his wife, didn’t originally come from the healthcare business, but he quickly saw that his IT platforms weren’t cost-effective.

The systems he inherited to run the practice, an Allscripts EHR sprawling across three servers and a companion practice management platform called Tiger, were “very proprietary” and tech support wasn’t easy to access. And they cost $20K per year to support two doctors.

Worse, the product wasn’t very current. “Meaningful Use had to be downloaded as a separate module,” said Surak.

Not surprisingly, Surak began looking for other options. After consulting with his local Regional Extension Center, he went with a new system from Amazing Charts (full disclosure: a former client of your editor). The new system, which went live in June 2012, offered some important benefits, including:

* Savings:  It cost Health Partners $5,400/year to license the integrated Amazing Charts EHR, a $14,600 savings over the Allscripts systems.

* Maintenance: Because the new solution is cloud-based, the practice doesn’t need to maintain the software or cope with technical breakdowns directly.

* Rollout: Implemented over the course of three months, with no slowdown or reduction in physician hours needed. “We kept our normal pace,” Surak says.

* Data transfer: To bring patient demographic data over from Allscripts to the new system, all the practice had to do was export Allscripts data into an Excel spreadsheet, then run an Amazing Charts wizard which imported it.

Of course, the practice faced some challenges as well, largely around adjusting workflow and phasing out the old system:

* Running in parallel:  For the first few years after the transition to Amazing Charts, Health Partners had to keep the Allscripts system running alongside the new system.

* Practice management lag:  Amazing Charts didn’t offer a practice management module at the time Health Partners acquired the EMR. Until mid-2015, when a practice management module became available, it had to keep doing patient scheduling and accounting in the Allscripts system.

Ultimately, despite some transitional hassles, Surak is glad he made the shift to a set of systems that work effectively in tandem. Putting a new EMR and practice management system in place hasn’t just saved money, it’s helped Surak keep efficiency high, running the practice with just a couple of support staffers.

“Most offices this size would have five to seven support staffers, but we don’t have to,” he says. “And keeping overhead down is the key to remaining independent.”

ICD-10 Deja Vu – End of Grace Period

Posted on June 8, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I recently came across this article by Aiden Spencer about the possibility that ICD-10 could still cause issues for healthcare organizations once the grace period ends. Here’s what he suggests:

The CMS grace period was a welcomed relief because it meant practices would still be reimbursed under Medicare Part B for claims that at least had a valid ICD-10 diagnosis code. This meant physicians and their staff could get up to speed without worrying about taking a huge hit to their revenue stream.

With only five months left until the grace period ends, industry experts are predicting that an ICD-10 crisis might still be coming for some providers. Will you be one of them? Are you currently implementing quality medical billing software, or will the system you’re using fail come October 1st?

This certainly feels like what we were talking about last October when ICD-10 went live. A bunch of fuss and very little impact on healthcare. Are we heading for another round of fear and anxiety over the end of the ICD-10 grace period?

My gut tells me that it won’t be a bit deal for most healthcare organizations. They’ve had a year to improve their ICD-10 coding and so it won’t likely be an issue for most. This is particularly true for organizations who have quality HIM staff that’s gone through and done audits of their ICD-10 coding practices to ensure that they were doing so accurately.

I saw one stat from KPMG that only 11 percent of healthcare organizations described the ICD-10 implementation as a “failure to operate in an ICD-10 environment” with 80% finding the move to ICD-10 to be smooth. I imagine we’ll have a similar breakout when the ICD-10 grace period ends. Just make sure you’re not part of the 11 percent.

Direct Primary Care Docs And EMRs

Posted on April 14, 2016 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

For those that haven’t stumbled upon it, direct primary care is an emerging model for changing the relationship between primary care docs and their patients. Under this model, patients pay primary care practices a flat fee per month which covers all services they use during that month. From what I’ve seen, fees are typically between $50 and $100 per month, depending on the patient’s age.

The key to this model — which borrows from but is emphatically not a concierge set-up — is taking insurance companies out of the relationship. And investors seem to be excited about this approach, with VC money flowing into DPC companies and startups like Turntable Health, which is backed by Zappos.com CEO Tony Hsieh.

I bring this up because I wanted to lay out a theory and see what you folks think. The theory doesn’t come from me; it was tossed out in a blog item by Twine Health, which makes a collaborative care platform. In the item, Twine blogger Chris Storer argues that the DPC movement is enabling doctors to junk their EMRs, which he suggests have been put in place to handle insurance documentation.

While the notion is self-serving, given that Twine seemingly wants to replace EMRs in the healthcare continuum, I thought it gave rise to an interesting thought experiment. Are EMRs mostly a tool to placate insurance companies? It’s worth considering. While Twine may or may not offer a solution, it’s hard to argue that existing EMRs “have empowered both physicians and patients in developing relationships that result in better healthcare outcomes.”

In the blog item, Storer argues that primary care practices largely use EMRs as a means of capturing data, and by doing so meeting insurance claims requirements. Though he offers no evidence to this effect, Storer suggests that DPC practices are dumping EMRs to focus better on patient care. There’s actually at least one direct-primary-care oriented EMR on the market (atlas.md, which is backed by a DPC practice in Wichita, KS), but that doesn’t prove the blogger wrong.

For Twine and its ilk, the question seems to be whether switching from EMRs to another care management model would actually improve the patient experience in and of itself. I’m sure that Twine (and others who consider themselves competitors) believe that it will.

As I see it, though, they’re talking around some key issues. no matter how user-friendly a platform is, No how laudable its goals are, I doubt that even a direct primary care practice unfettered by insurance requirements could seamlessly shift their practice to a platform such this. And no matter how good next-gen collaborative tools are — and I’m optimistic about them, as a category — the workflow issues which have alienated patients in the EMR age won’t go away entirely.

So while I’ll believe that DPC practices want to pitch their EMR, my guess is that the odds of their replacing it with an alternative platform are slim. Now, if collaborative care players catch practices when they’re being formed, that may be a different story. But for now my guess is that any practice that has an EMR in place is unlikely to dump it for the time being. The alternatives (including going back to paper charts) are unlikely to make sense.

Will Medical Billing Systems Fail Under ICD-10 Phase 2?

Posted on April 6, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

The people at CureMD sent out this tweet and image with a pretty powerful assertion about the future of medical billing systems.
Medical Billing Systems Fail Under ICD-10

I’d like to know where CureMD got the stat in their tweet. That’s a pretty strong assertion about medical billing systems. Based on my knowledge and experience, I’m not sure I agree with them. If they’d have said that ICD-10 in general would cause 50% of medical billing systems to fail, I would have thought it was high but possible. It’s not clear to me how phase 2 of ICD-10 will be so much worse for medical billing systems. Maybe they’ll share in the webinar.

I have seen a bunch of medical billing systems that were running on fumes heading into ICD-10. There was no one really actively developing these systems and they weren’t worrying about ICD-10. They were just sucking whatever revenue they could out of their existing clients and they were going to end of life the product once they ran out of clients. They’re like medical billing system zombies.

Turns out that there are a lot more of these types of systems in healthcare than you probably realized. In fact, I’m surprised we haven’t heard more about their demise after ICD-10’s implementation last year. Whenever I’d talk to doctors, they’d often tell me which EHR they had or which EHR they were considering. Then, I’d ask them which PM system they used and they’d tell me about some software I’d never heard of before. They knew it. They liked it. Many of them would happily say that “you could pull it from their cold dead hands.”

It’s interesting to see CureMD predict that it may be time for us to start doing just that. What are you seeing? Are medical billing systems going to have trouble with the 2nd phase of ICD-10? Will we see a bunch of them finally close up shop? What do you see?

What’s Ahead with Alternative Payment Models

Posted on March 24, 2016 I Written By

The following is a guest blog post by Matt Waltrich, Vice President of Payer Solutions at RemitDATA.
Matt Waltrich
As the market continues to evaluate alternative pricing models, bundled pricing shows great promise

Imagine this: Your car needs new brakes and your auto shop tells you the cost is in the range of $150 to $3,000.   They tell you to pay $500 now since that’s the amount you have on hand.  The next day, the service is done and you pick up your car.  Thirty days later, you receive a $700 bill for ‘rotor installation time and materials’.   When you call, they explain that the staff mechanic was off that day and they had to bring in an expert to fill in.   A few days later you get another bill for $350 for additional work that was needed on your calipers.     When you call the auto shop again, they tell you they don’t control ‘third party costs.’  You were never told up front about these costs, and you are now on the hook for $1,050 in extra fees.  Time to find a new auto shop.

Sadly, in the world of healthcare, this is not an uncommon scenario, where $1,050 could just as easily be a financially crushing $105,000 unexpected medical bill.

Although healthcare pricing models have traditionally been designed around fee for service, payer/provider contract rates are often complex, with little transparency and consistency for the patient.  In May 2013 the Centers for Medicare & Medicaid Services (CMS) reported huge discrepancies in the prices that hospitals charge for common in-patient procedures.  This echoes the perception that pricing set by providers is often arbitrary, such that only the uninsured are charged the list rates.  In some cases, pricing even seems to be disconnected from the actual cost of care, with inflated rates offsetting negotiated discounts.

In an effort to address this, provisions within the Affordable Care Act (ACA) are targeting how healthcare is organized, delivered, and paid for. For example, the Bundled Payments for Care Improvement (BPCI) initiative was created by the ACA to increase fee for service reimbursements for Medicare based on alternative payment models (APM) and to increase the percentage of reimbursements linked to quality and value.  Reimbursements are aligned with four broadly defined models.  These models bundle payments for multiple services under individual episodes of care. With BPCI organizations enter into payment arrangements that include financial and performance accountability for these episodes of care. The goal is higher quality and more coordinated care at a lower cost to Medicare.

The industry will watch models like this closely.  Applied more broadly, pricing models like BPCI can give payers a new approach to deliver greater value to providers and patients.  Bundled pricing makes it easier for patients to compare medical costs and understand how procedures are valued, including the cost of the facility and providers. This approach empowers patients to price compare, and seek out low cost, high quality care.

Some health plans have already implemented their own alternative payment models, for example:

  • In 2008, Blue Cross Blue Shield of Massachusetts developed its Alternative Quality Contract (AQC) which gives provider groups an annual budget for meeting all the healthcare needs of their patients while still hitting quality targets.
  • In 2011, CaroMont Health and Blue Cross and Blue Shield of North Carolina (BCBSNC), implemented a bundled payment arrangement for an entire knee replacement.

As payers begin to invest in implementing more bundled payment initiatives, the application of comparative analytics can help guide payers toward identifying the greatest opportunities to impact cost of care.   By examining historical claims data, payers can identify their highest volume and cost procedures (grouped by episodes of care) to establish actual prices. By applying these pricing methodologies, payers can reduce costs with a consumer-driven model that focuses on value-based choices.

Several factors should be considered in determining the success of these models:

  • Provider willingness to embrace risk/reward models
  • The ability for providers to collaborate amongst themselves and effectively manage payment distribution for episodes of care in a coordinated fashion.
  • The alignment of plan benefit designs that encourage members to use providers in bundled payment arrangements.

With proper development and application, bundled pricing models have the potential to drive significant change in the industry by lowering cost of care, improving outcomes, and giving health care consumers better transparency around true costs.  With the broad adoption of alternative payment models throughout the healthcare industry, surprise bills and unanticipated fees may become a thing of the past.

Another Quality Initiative Ahead of Its Time, From California

Posted on March 21, 2016 I Written By

Andy Oram is an editor at O'Reilly Media, a highly respected book publisher and technology information provider. An employee of the company since 1992, Andy currently specializes in open source, software engineering, and health IT, but his editorial output has ranged from a legal guide covering intellectual property to a graphic novel about teenage hackers. His articles have appeared often on EMR & EHR and other blogs in the health IT space. Andy also writes often for O'Reilly's Radar site (http://oreilly.com/) and other publications on policy issues related to the Internet and on trends affecting technical innovation and its effects on society. Print publications where his work has appeared include The Economist, Communications of the ACM, Copyright World, the Journal of Information Technology & Politics, Vanguardia Dossier, and Internet Law and Business. Conferences where he has presented talks include O'Reilly's Open Source Convention, FISL (Brazil), FOSDEM, and DebConf.

When people go to get health care–or any other activity–we evaluate it for both cost and quality. But health care regulators have to recognize when the ingredients for quality assessment are missing. Otherwise, assessing quality becomes like the drunk who famously looked for his key under the lamplight instead of where the key actually lay. And sadly, as I read a March 4 draft of a California initiative to rate health care insurance, I find that once again the foundations for assessing quality are not in place, and we are chasing lamplights rather than the keys that will unlock better care.

The initiative I’ll discuss in this article comes out of Covered California, one of the Unites States’ 13 state-based marketplaces for health insurance mandated by the ACA. (All the other states use a federal marketplace or some hybrid solution.) As the country’s biggest state–and one known for progressive experiments–California is worth following to see how adept they are at promoting the universally acknowledged Triple Aim of health care.

An overview of health care quality

There’s no dearth of quality measurement efforts in health care–I gave a partial overview in another article. The Covered California draft cites many of these efforts and advises insurers to hook up with them.

Alas–there are problems with all the quality control efforts:

  • Problems with gathering accurate data (and as we’ll see in California’s case, problems with the overhead and bureaucracy created by this gathering)

  • Problems finding measures that reflect actual improvements in outcomes

  • Problems separating things doctors can control (such as follow-up phone calls) with things they can’t (lack of social supports or means of getting treatment)

  • Problems turning insights into programs that improve care.

But the biggest problem in health care quality, I believe, is the intractable variety of patients. How can you say that a particular patient with a particular combination of congestive heart failure, high blood pressure, and diabetes should improve by a certain amount over a certain period of time? How can you guess how many office visits it will take to achieve a change, how many pills, how many hospitalizations? How much should an insurer pay for this treatment?

The more sophisticated payers stratify patients, classifying them by the seriousness of their conditions. And of course, doctors have learned how to game that system. A cleverly designed study by the prestigious National Bureau of Economic Research has uncovered upcoding in the U.S.’s largest quality-based reimbursement program, Medicare Advantage. They demonstrate that doctors are gaming the system in two ways. First, as the use of Medicare Advantage goes up, so do the diagnosed risk levels of patients. Second, patients who transition from private insurance into Medicare Advantage show higher risk not seen in fee-for-service Medicare.

I don’t see any fixes in the Covered California draft to the problem of upcoding. Probably, like most government reimbursement programs, California will slap on some weighting factor that rewards hospitals with higher numbers of poor and underprivileged patients. But this is a crude measure and is often suspected of underestimating the extra costs these patients bring.

A look at the Covered California draft

Covered California certainly understands what the health care field needs, and one has to be impressed with the sheer reach and comprehensiveness of their quality plan. Among other things, they take on:

  • Patient involvement and access to records (how the providers hated that in the federal Meaningful Use requirements!)

  • Racial, ethnic, and gender disparities

  • Electronic record interoperability

  • Preventive health and wellness services

  • Mental and behavioral health

  • Pharmaceutical costs

  • Telemedicine

If there are any pet initiatives of healthcare reformers that didn’t make it into the Covered California plan, I certainly am having trouble finding them.

Being so extensive, the plan suffers from two more burdens. First, the reporting requirements are enormous–I would imagine that insurers and providers would balk simply at that. The requirements are burdensome partly because Covered California doesn’t seem to trust that the major thrust of health reform–paying for outcomes instead of for individual services–will provide an incentive for providers to do other good things. They haven’t forgotten value-based reimbursement (it’s in section 8.02, page 33), but they also insist on detailed reporting about patient engagement, identifying high-risk patients, and reducing overuse through choosing treatments wisely. All those things should happen on their own if insurers and clinicians adopt payments for outcomes.

Second, many of the mandates are vague. It’s not always clear what Covered California is looking for–let alone how the reporting requirements will contribute to positive change. For instance, how will insurers be evaluated in their use of behavioral health, and how will that use be mapped to meeting the goals of the Triple Aim?

Is rescue on the horizon?

According to a news report, the Covered California plan is “drawing heavy fire from medical providers and insurers.” I’m not surprised, given all the weaknesses I found, but I’m disappointed that their objections (as stated in the article) come from the worst possible motivation: they don’t like its call for transparent pricing. Hiding the padding of costs by major hospitals, the cozy payer/provider deals, and the widespread disparities unrelated to quality doesn’t put providers and insurers on the moral high ground.

To me, the true problem is that the health care field has not learned yet how to measure quality and cost effectiveness. There’s hope, though, with the Precision Medicine initiative that recently celebrated its first anniversary. Although analytical firms seem to be focusing on processing genomic information from patients–a high-tech and lucrative undertaking, but one that offers small gains–the real benefit would come if we “correlate activity, physiological measures and environmental exposures with health outcomes.” Those sources of patient variation account for most of the variability in care and in outcomes. Capture that, and quality will be measurable.

15 Questions to Self Assess Your Medical Billing

Posted on December 10, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Care360 has put out a great little whitepaper that looks at outsourcing your medical billing. In the whitepaper, they talk about various aspects of doing your medical billing in house or outsourced including: control, communication, cost, performance, and management style.

This is all great, but I find that many practices are still trying to figure out whether they should spend time considering outsourced medical billing or not. So, the best part of the whitepaper for me was these 15 questions that provide a good self assessment of a practice’s medical billing:

Medical Billing Self Assessment

Remember that answering yes doesn’t mean you should outsource your billing. For example, if on question #13 you say you are looking to expand your practice, then that might be a reason not to outsource your billing. From my experience medical billing generally benefits from scale. So, if you’re planning to grow your practice large enough, it might make since to keep your billing staff in house if you can grow it large enough to enjoy the benefits of scale.

There are a lot more details on outsourced medical billing in the whitepaper. I’m seeing more and more organizations outsourcing their billing as it’s become more complex. These questions provide a good framework for you to consider your current approach and how you could benefit or suffer if you outsourced your billing.