archive-org.com » ORG » H » HFMA.ORG

Total: 824

Choose link from "Titles, links and description words view":

Or switch to "Titles and links view".
  • Simple Steps for Meeting the ACA’s Price Transparency Requirements
    remind the appropriate staff member to revisit the charge list and check that it is up to date Seize the Opportunity While organizations must comply with the ACA s requirements they should not assume that just posting charges will clarify payment information for patients Publishing charges doesn t especially help consumers says Mulvany What organizations really should focus on is creating a mechanism for showing patients their out of pocket costs so they can budget accordingly and avoid surprises along the way Providers can help the insured population by working with health plans to ensure patient access to information on deductibles and copays Hospitals help for the uninsured population should include patient responsibility information which may lay the groundwork for needed interactive financial assistance conversations In some cases hospitals may need to help the patient identify insurance Medicaid Cobra for example setting up a payment plan giving discounts for prompt pay or assessing whether the patient qualifies for charity care A key step in making price transparency actionable is how it s communicated Access related HFMA resources HFMA Price Transparency Task Force Report HFMA Patient Financial Communications Best Practices Overall compliance with the ACA s price transparency requirements is not complex In addition to complying with the disclosure mandate organizations should seize the opportunity to move beyond sharing charges and provide out of pocket estimates which are far more useful for the patient Doing so supports a patient centered financial experience by offering meaningful data to patients about the cost of care that they are responsible for Kathleen B Vega is a freelance healthcare writer and editor who contributes regularly to HFMA Forums Interviewed for this article Chad Mulvany is the director of healthcare finance policy strategy and development for HFMA in Washington D C and member of HFMA s Virginia Washington DC Chapter Discussion Starters Forum members What do you think Please share your thoughts in the comments section below How is your organization complying with the ACA s transparency requirements Does your hospital have a price transparency policy and procedure that you can share with other Forum members Are you seeing any benefit from sharing your chargemaster Full Text of the Transparency Regulation 1 Overview Hospitals determine their charges for items and services provided to patients and are responsible for those charges While Medicare does not pay billed charges hospital reported charges are used in determining Medicare s national payment rates for example billed charges are adjusted to cost to determine how much to pay for one type of case relative to another Although the Medicare payment amount for a discharge under the IPPS or a service furnished under the OPPS is not based directly on the hospital s charges for the individual services provided we believe that hospital charges nevertheless remain an important component of our healthcare system For example hospital charges are often billed in full to uninsured patients who cannot benefit from discounts negotiated by insurance companies Hospital charges also vary significantly by hospital making it challenging for patients to compare the cost of similar services across hospitals In 2013 we released data that demonstrated significant variation across the country and within communities in what hospitals charge for a number of common inpatient and outpatient services These data also showed that hospital charges for services furnished in both the inpatient setting and the outpatient setting were in general significantly higher than the amount paid by Medicare under the IPPS or the OPPS The data that we released are posted on the Web site here Our intent in releasing these data was to enable the public to examine the relationship between the amounts charged by individual hospitals for comparable services and Medicare s payment for that inpatient or outpatient care We believe that providing charge data comparisons is introducing both transparency and accountability to hospital pricing and we are continuing to pursue opportunities to report on hospital charging practices 2 Transparency Requirement Under the Affordable Care Act The Affordable Care Act contains a provision that is consistent with our effort to improve the transparency of hospital charges As a result of the Affordable Care Act section 2718 e of the Public Health Service Act requires that e ach hospital operating within the United States shall for each year establish and update and make public in accordance with guidelines developed by the Secretary a list of the hospital s standard charges for items and services provided by the hospital including for diagnosis related groups established under section 1886 d 4 of the Social Security Act In the FY 2015 IPPS LTCH PPS proposed rule 79 FR 28169 we reminded hospitals of their obligation to comply with the provisions of section 2718 e of the Public Health Service Act We appreciate the widespread public support we received for including the reminder in the proposed rule We reiterate that our guidelines for implementing section 2718 e of the Public Health Service Act are that hospitals either make public a list of their standard charges whether that be the chargemaster itself or in another form of their choice or their policies for allowing the public to view a list of those charges in response to an inquiry MedPAC suggested that hospitals be required to post the list on the Internet and while we agree that this would be one approach that would satisfy the guidelines we believe hospitals are in the best position to determine the exact manner and method by which to make the list public in accordance with the guidelines We encourage hospitals to undertake efforts to engage in consumer friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain at the hospital and to enable patients to compare charges for similar services across hospitals We expect that hospitals will update the information at least annually or more often as appropriate to reflect current charges We are confident that hospital compliance with this statutory transparency requirement will improve the public accessibility of charge information As hospitals continue to make data publicly available in compliance with section 2718 e of the Public Health Service Act we also will continue to review and post relevant charge data in a consumer friendly way as we previously have done by posting on the CMS Web site the following hospital and physician charge information May and June 2013 hospital charge data releases 2013 physician data requests for information and the April 2014 physician data releases and data provided on geographic variation in payments and payments per beneficiary Source Reprinted from the 2015 Medicare inpatient prospective payment system final rule Publication Date Thursday November 20 2014 BACK TO PAGINATION Hospitals and health systems have flexibility in how they comply with the ACA s price transparency requirements and should look beyond just sharing charge information The Affordable Care Act ACA requires hospitals to publically issue a list of standard charges for frequently provided items and services including DRGs Commonly referred to as the ACA s price transparency requirements this regulation is described in the 2015 inpatient prospective payment system final rule but the Centers for Medicare Medicaid Services CMS stops short of offering specific implementation guidance Access related sidebar The Full Text of the Transparency Regulation Mechanically sharing charge and DRG information is not especially difficult However many hospitals have not done this before so there is some hesitancy in the field says HFMA s Chad Mulvany director of healthcare finance policy strategy and development That said if organizations take a thoughtful approach to meeting the spirit of the regulations making up to date charge information accessible and available they should have no trouble complying Mulvany points to several steps that providers can take to successfully meet the new requirements This is a sample article from HFMA s Payment Reimbursement Forum a networking and discussion community for healthcare finance leaders Learn more and subscribe at www hfma org forums Decide How to Share the Information Hospitals have some flexibility in how they choose to address the price transparency regulation because CMS is not prescriptive One way to comply is to create and implement a policy indicating that the hospital will make a list of charges possibly even the full chargemaster and common DRGs available to anyone who asks says Mulvany If an organization chooses this route it has to make sure that everyone in the organization who could receive a request is aware of how to handle it This gets tricky because a query could come from anywhere a patient asking a front line nurse a reporter asking the media department or an individual asking someone in the patient access or financial accounting area It may be hard to anticipate every possible situation in which someone calls for charge information and if a staff member receives a request and doesn t know how to respond he or she could inadvertently put the organization out of compliance An alternative to a request based policy is to post a list of charges and DRGs in the financial services section of the organization s website A lot of states already require organizations to post their chargemaster online and including DRGs along with the chargemaster would be fairly straightforward says Mulvany Even if an organization has not done this before it is a relatively clear cut way to meet the ACA regulations Access related tool Decision Tree Sharing Charges and DRGs Prepare for Scrutiny If an organization chooses to publish charges online it may receive some media questions once the data go live especially in states that do not mandate public access to hospital chargemasters To ensure staff are able to give well considered answers a hospital may want to think about what the organizational response to media questions will be before posting the list says Mulvany While this scrutiny will probably be similar to what organizations receive when CMS annually releases its list of Top 100 DRG and APC charges an organization should be prepared to address media questions about charges and the reasons behind them Build Staff Awareness Organizations also will need to ensure their staff are familiar with how to follow whatever price transparency approach the hospital selects As mentioned before if an organization decides to keep the list of charges internal and share it only on request the hospital should make sure the people who are going to get those queries understand what to do when they come in perhaps they will refer the requests to a specific individual for example says Mulvany Building staff awareness may involve training or giving staff some sort of prompt a sticker or a magnet that reminds them of the policy Organizations posting their chargemasters online have less of a need for specific training Just by putting the information online the organization makes it available says Mulvany That said an organization may want to inform its media relations staff where the list is on the website in case they receive a media request Keep the List Updated The ACA requires organizations to review their charge lists at least annually That requirement may necessitate that hospitals create a tickler file to remind the appropriate staff member to revisit the charge list and check that it is up to date Seize the Opportunity While organizations must comply with the ACA s requirements they should not assume that just posting charges will clarify payment information for patients Publishing charges doesn t especially help consumers says Mulvany What organizations really should focus on is creating a mechanism for showing patients their out of pocket costs so they can budget accordingly and avoid surprises along the way Providers can help the insured population by working with health plans to ensure patient access to information on deductibles and copays Hospitals help for the uninsured population should include patient responsibility information which may lay the groundwork for needed interactive financial assistance conversations In some cases hospitals may need to help the patient identify insurance Medicaid Cobra for example setting up a payment plan giving discounts for prompt pay or assessing whether the patient qualifies for charity care A key step in making price transparency actionable is how it s communicated Access related HFMA resources HFMA Price Transparency Task Force Report HFMA Patient Financial Communications Best Practices Overall compliance with the ACA s price transparency requirements is not complex In addition to complying with the disclosure mandate organizations should seize the opportunity to move beyond sharing charges and provide out of pocket estimates which are far more useful for the patient Doing so supports a patient centered financial experience by offering meaningful data to patients about the cost of care that they are responsible for Kathleen B Vega is a freelance healthcare writer and editor who contributes regularly to HFMA Forums Interviewed for this article Chad Mulvany is the director of healthcare finance policy strategy and development for HFMA in Washington D C and member of HFMA s Virginia Washington DC Chapter Discussion Starters Forum members What do you think Please share your thoughts in the comments section below How is your organization complying with the ACA s transparency requirements Does your hospital have a price transparency policy and procedure that you can share with other Forum members Are you seeing any benefit from sharing your chargemaster Full Text of the Transparency Regulation 1 Overview Hospitals determine their charges for items and services provided to patients and are responsible for those charges While Medicare does not pay billed charges hospital reported charges are used in determining Medicare s national payment rates for example billed charges are adjusted to cost to determine how much to pay for one type of case relative to another Although the Medicare payment amount for a discharge under the IPPS or a service furnished under the OPPS is not based directly on the hospital s charges for the individual services provided we believe that hospital charges nevertheless remain an important component of our healthcare system For example hospital charges are often billed in full to uninsured patients who cannot benefit from discounts negotiated by insurance companies Hospital charges also vary significantly by hospital making it challenging for patients to compare the cost of similar services across hospitals In 2013 we released data that demonstrated significant variation across the country and within communities in what hospitals charge for a number of common inpatient and outpatient services These data also showed that hospital charges for services furnished in both the inpatient setting and the outpatient setting were in general significantly higher than the amount paid by Medicare under the IPPS or the OPPS The data that we released are posted on the Web site here Our intent in releasing these data was to enable the public to examine the relationship between the amounts charged by individual hospitals for comparable services and Medicare s payment for that inpatient or outpatient care We believe that providing charge data comparisons is introducing both transparency and accountability to hospital pricing and we are continuing to pursue opportunities to report on hospital charging practices 2 Transparency Requirement Under the Affordable Care Act The Affordable Care Act contains a provision that is consistent with our effort to improve the transparency of hospital charges As a result of the Affordable Care Act section 2718 e of the Public Health Service Act requires that e ach hospital operating within the United States shall for each year establish and update and make public in accordance with guidelines developed by the Secretary a list of the hospital s standard charges for items and services provided by the hospital including for diagnosis related groups established under section 1886 d 4 of the Social Security Act In the FY 2015 IPPS LTCH PPS proposed rule 79 FR 28169 we reminded hospitals of their obligation to comply with the provisions of section 2718 e of the Public Health Service Act We appreciate the widespread public support we received for including the reminder in the proposed rule We reiterate that our guidelines for implementing section 2718 e of the Public Health Service Act are that hospitals either make public a list of their standard charges whether that be the chargemaster itself or in another form of their choice or their policies for allowing the public to view a list of those charges in response to an inquiry MedPAC suggested that hospitals be required to post the list on the Internet and while we agree that this would be one approach that would satisfy the guidelines we believe hospitals are in the best position to determine the exact manner and method by which to make the list public in accordance with the guidelines We encourage hospitals to undertake efforts to engage in consumer friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain at the hospital and to enable patients to compare charges for similar services across hospitals We expect that hospitals will update the information at least annually or more often as appropriate to reflect current charges We are confident that hospital compliance with this statutory transparency requirement will improve the public accessibility of charge information As hospitals continue to make data publicly available in compliance with section 2718 e of the Public Health Service Act we also will continue to review and post relevant charge data in a consumer friendly way as we previously have done by posting on the CMS Web site the following hospital and physician charge information May and June 2013 hospital charge data releases 2013 physician data requests for information and the April 2014 physician data releases and data provided on geographic variation in payments and payments per beneficiary Source Reprinted from the 2015 Medicare inpatient prospective payment system final rule Publication Date Thursday November 20 2014 Comments Please login to add your comments Add Comment Text Only 2000 character limit Advertisements HFMA Business Profiles McKesson Leveraging Predictive Analytics to Rein in Operating Costs

    Original URL path: http://www.hfma.org/Content.aspx?id=26205 (2016-02-10)
    Open archived version from archive


  • Trinity Health Is Proactively Preparing for the Health Insurance Marketplaces
    player in the state insurance exchanges in each of its markets Gee identifies several keys to success for health systems Establish good relationships and alignment with marketplace oriented payers Develop the ability to provide consumer assistance and educational efforts Ensure consumer preference for the health system Confirm capacity to handle increased volume especially at the primary care level Be transparent about quality and costs Ensure ease of navigating the health system both virtually and in real life Develop a retail mindset among health system leaders Trinity Health started its preparations more than two years ago when leaders helped educate state leaders about the decisions they faced as they developed state exchanges The early work also involved studying how the introduction of the Massachusetts Health Connector exchange influenced the health insurance and health delivery markets in that state That review convinced Gee and his colleagues that the state exchanges present an opportunity not only to reduce uncompensated care and gain market share but also to get a jumpstart on the future of healthcare purchasing and delivery Gee and his colleagues educated Trinity Health s senior leaders about the magnitude of the situation Gee calls it a sea change and started communicating about the importance of preparing for the state marketplaces throughout the organization Trinity Health went on to develop a predictive model to understand how the exchanges are likely to affect the health system s patient volume and finances Trinity also created an organizational structure to develop and implement its health insurance marketplace strategy assigned accountability at each hospital and developed work plans and accountability milestones to stay on track with its goals Aligning with Payers Trinity Health s review of Massachusetts experience included this finding A health insurance marketplace serves as a store for health plans and health plans become the store for health systems So from our standpoint it is very important to have alignment with the right plans and not necessarily just one plan because there are going to be multiple plans in each market Gee says The goal is to identify the payers that are most likely to succeed in the health insurance marketplace in each of the 10 states in which Trinity Health operates and to be ready to offer the low cost high quality care that makes those payers want to partner with Trinity Health Gee and his colleagues evaluated payers in each Trinity Health market and prioritized them on several factors One is the historical rapport between Trinity and the payer Second is the payer s understanding of the insurance exchange market Gee wants health plans that recognize that exchanges represent a seismic shift in the insurance industry as opposed to viewing the exchange as a way for a few uninsured people to get coverage A third key factor is the payer s preparations to date The key thing for us is How seriously are they taking this effort he says What kind of resources are they committing to it How astute are their financial folks and their actuarial people in terms of really understanding this market Through conversations with leaders at each plan Trinity Health identified the payers that are most enthusiastic about succeeding in the state insurance market It is important to first determine who is going to be a player in the first round of the exchanges Gee says Secondly who is going to be a viable player in terms of pricing appropriately Because we learned from Massachusetts that pricing is very significant After identifying the payers that the health system wants to partner with Trinity Health started discussing how they can work effectively together In addition to the financial aspect of their relationship payers and providers need to share goals for capturing market share and delivering high value care that insurance marketplace shoppers will demand We want to approach this in tandem so that both of us are well positioned and we have a good understanding of how to approach this new group of individuals who will be coming into the insurance market Gee says Facilitating Enrollment Meanwhile Trinity Health is also making plans to engage in consumer education that will be necessary to make the health insurance marketplaces a success A provision of the ACA requires each state insurance marketplace to provide navigators who help consumers understand their options and enroll for coverage These navigators will work differently in different states for example some exchanges will contract with organizations to provide a certain number of navigators while other exchanges might employ navigators directly Trinity Health wants to see all eligible consumers gain coverage so it intends to be proactive in helping members of the public understand their state health insurance options such as whether they may qualify for subsidies to help pay for coverage and how to enroll In many states the navigators have not yet been identified When they are Trinity Health representatives will build relationships with navigators with the goal of enrolling as many eligible consumers as possible In addition the health system is creating its own educational materials to help consumers learn about the insurance marketplaces in their state and Trinity may offer to help consumers enroll While the ACA prohibits health systems from being paid as official navigators it does allow health systems and others to help consumers use the insurance marketplace website to enroll In Massachusetts Gee says consumers were confused about their insurance options even though the state had a big educational campaign For many who are newly eligible for insurance coverage basic terms like copay and deductible must be explained before they can begin to choose a plan Others who have traditionally had insurance through an employer will struggle to choose among a broad array of cost and coverage options some of which require a big out of pocket responsibility We are talking about a different dynamic with individual purchasers and a lot of upfront education and clarification is going to be very important Gee says Providers are going to realize that it s a different day Lola Butcher is a freelance writer and editor based in Missouri Interviewed for this article Preston Gee is senior vice president of strategic planning and marketing Trinity Health Livonia Mich Discussion Starters Forum members Please share your insights questions and comments about this article You can use the inshare button at the top of this web page or visit the Payment and Reimbursement Forum LinkedIn discussion board What is your health system s strategy for participating your state s health insurance exchange What volume increase do you expect to come from your state health insurance marketplace Or perhaps you have another discussion starter Publication Date Wednesday May 22 2013 BACK TO PAGINATION Health systems should develop payer partnerships now to be positioned for success when public health insurance marketplaces start on Jan 1 and for the coming sea change in the way coverage is selected and paid for Although some health systems are taking a wait and see approach to the advent of state health insurance marketplaces Trinity Health s Preston Gee thinks proactive even aggressive preparations are appropriate Trinity Health based in Livonia Mich recently combined with Catholic Health East to form the second largest not for profit health system in the nation The new organization has more than 87 000 employees 82 hospitals and 89 continuing care facilities with revenues of approximately 13 3 billion and facilities in 21 states Helping the new state health insurance marketplaces formerly known as exchanges accomplish the goal of expanding health coverage aligns with Trinity s mission We were very active in terms of lobbying for the Affordable Care Act because it s one of our core beliefs that everybody should have access to care and the insurance route is certainly better than having to rely on the emergency room says Gee who is senior vice president of strategic planning and marketing at Trinity Health On top of that Trinity executives believe state marketplaces which are supposed to start marketing Oct 1 for coverage that begins Jan 1 will be a tipping point in the way health coverage is purchased Gee thinks health systems must organize themselves to succeed financially in a consumer oriented retail environment in which many and eventually most people choose their coverage and shoulder an increasing amount of financial responsibility to pay for it This is where things are heading so providers need to be able to operate in this space he says To say We re not going to wade into those waters is somewhat precarious because I think this marks a significant shift Getting Started In the new environment consumers rather than employers will be making decisions and consumers will focus on cost and quality from an individual perspective which is very different from that of an employer which needs to balance the needs of an entire workforce There are huge implications on several levels and for us winning means successfully transitioning into that new wave of consumer patient interaction and retail orientation he says Trinity Health s goal is to encourage and facilitate consumer enrollment in the exchanges and to be a major player in the state insurance exchanges in each of its markets Gee identifies several keys to success for health systems Establish good relationships and alignment with marketplace oriented payers Develop the ability to provide consumer assistance and educational efforts Ensure consumer preference for the health system Confirm capacity to handle increased volume especially at the primary care level Be transparent about quality and costs Ensure ease of navigating the health system both virtually and in real life Develop a retail mindset among health system leaders Trinity Health started its preparations more than two years ago when leaders helped educate state leaders about the decisions they faced as they developed state exchanges The early work also involved studying how the introduction of the Massachusetts Health Connector exchange influenced the health insurance and health delivery markets in that state That review convinced Gee and his colleagues that the state exchanges present an opportunity not only to reduce uncompensated care and gain market share but also to get a jumpstart on the future of healthcare purchasing and delivery Gee and his colleagues educated Trinity Health s senior leaders about the magnitude of the situation Gee calls it a sea change and started communicating about the importance of preparing for the state marketplaces throughout the organization Trinity Health went on to develop a predictive model to understand how the exchanges are likely to affect the health system s patient volume and finances Trinity also created an organizational structure to develop and implement its health insurance marketplace strategy assigned accountability at each hospital and developed work plans and accountability milestones to stay on track with its goals Aligning with Payers Trinity Health s review of Massachusetts experience included this finding A health insurance marketplace serves as a store for health plans and health plans become the store for health systems So from our standpoint it is very important to have alignment with the right plans and not necessarily just one plan because there are going to be multiple plans in each market Gee says The goal is to identify the payers that are most likely to succeed in the health insurance marketplace in each of the 10 states in which Trinity Health operates and to be ready to offer the low cost high quality care that makes those payers want to partner with Trinity Health Gee and his colleagues evaluated payers in each Trinity Health market and prioritized them on several factors One is the historical rapport between Trinity and the payer Second is the payer s understanding of the insurance exchange market Gee wants health plans that recognize that exchanges represent a seismic shift in the insurance industry as opposed to viewing the exchange as a way for a few uninsured people to get coverage A third key factor is the payer s preparations to date The key thing for us is How seriously are they taking this effort he says What kind of resources are they committing to it How astute are their financial folks and their actuarial people in terms of really understanding this market Through conversations with leaders at each plan Trinity Health identified the payers that are most enthusiastic about succeeding in the state insurance market It is important to first determine who is going to be a player in the first round of the exchanges Gee says Secondly who is going to be a viable player in terms of pricing appropriately Because we learned from Massachusetts that pricing is very significant After identifying the payers that the health system wants to partner with Trinity Health started discussing how they can work effectively together In addition to the financial aspect of their relationship payers and providers need to share goals for capturing market share and delivering high value care that insurance marketplace shoppers will demand We want to approach this in tandem so that both of us are well positioned and we have a good understanding of how to approach this new group of individuals who will be coming into the insurance market Gee says Facilitating Enrollment Meanwhile Trinity Health is also making plans to engage in consumer education that will be necessary to make the health insurance marketplaces a success A provision of the ACA requires each state insurance marketplace to provide navigators who help consumers understand their options and enroll for coverage These navigators will work differently in different states for example some exchanges will contract with organizations to provide a certain number of navigators while other exchanges might employ navigators directly Trinity Health wants to see all eligible consumers gain coverage so it intends to be proactive in helping members of the public understand their state health insurance options such as whether they may qualify for subsidies to help pay for coverage and how to enroll In many states the navigators have not yet been identified When they are Trinity Health representatives will build relationships with navigators with the goal of enrolling as many eligible consumers as possible In addition the health system is creating its own educational materials to help consumers learn about the insurance marketplaces in their state and Trinity may offer to help consumers enroll While the ACA prohibits health systems from being paid as official navigators it does allow health systems and others to help consumers use the insurance marketplace website to enroll In Massachusetts Gee says consumers were confused about their insurance options even though the state had a big educational campaign For many who are newly eligible for insurance coverage basic terms like copay and deductible must be explained before they can begin to choose a plan Others who have traditionally had insurance through an employer will struggle to choose among a broad array of cost and coverage options some of which require a big out of pocket responsibility We are talking about a different dynamic with individual purchasers and a lot of upfront education and clarification is going to be very important Gee says Providers are going to realize that it s a different day Lola Butcher is a freelance writer and editor based in Missouri Interviewed for this article Preston Gee is senior vice president of strategic planning and marketing Trinity Health Livonia Mich Discussion Starters Forum members Please share your insights questions and comments about this article You can use the inshare button at the top of this web page or visit the Payment and Reimbursement Forum LinkedIn discussion board What is your health system s strategy for participating your state s health insurance exchange What volume increase do you expect to come from your state health insurance marketplace Or perhaps you have another discussion starter Publication Date Wednesday May 22 2013 Please login to add your comments Advertisements HFMA Business Profiles McKesson Leveraging Predictive Analytics to Rein in Operating Costs A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow HFMA RESOURCE LIBRARY 6 Patient Revenue Cycle Metrics You Should Be Tracking and How to Improve Your Results Patient financial engagement is more challenging than ever and more critical With patient responsibility as a percentage of revenue on the rise providers have seen their billing related costs and accounts receivable levels increase If increasing collection yield and reducing costs are a priority for your organization the metrics outlined in this presentation will provide the framework you need to understand what s working and what s not in order to guide your overall patient financial engagement initiatives and optimize results HFMA Business Profiles Accretive Health Partners with Providers to Excel in a Rapidly Transforming Revenue Cycle Environment Emad Rizk MD president and CEO of Accretive Health discusses the uncertainty facing hospitals and the transitions affecting revenue cycle management HFMA RESOURCE LIBRARY 10 Ways to Reduce Patient Statement Volume and Reduce Costs No two patients are the same Each has a very personal healthcare experience and each has distinct financial needs and preferences that have an impact on how when and if they chose to pay their healthcare bill It s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients The need to tailor financial conversations and payment options to individual needs and preferences is critical This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach but take control of rising collection costs HFMA Business Profiles Conifer Health Solutions Helping Providers and Employers Build a Foundation for Better Health Jim Bohnsack vice president solution corporate development for Conifer Health Solutions explains how the company helps healthcare providers leverage data to deliver better outcomes while optimizing reimbursement for all payment arrangements HFMA RESOURCE LIBRARY Reduce Patient Balances Sent to Collection Agencies Approaching New Problems with New Approaches This white paper written by Apex Vice

    Original URL path: http://www.hfma.org/Content.aspx?id=17209 (2016-02-10)
    Open archived version from archive

  • Avoiding Commercial Payer Recoupment
    visit the Payment and Reimbursement Forum LinkedIn discussion board Are you experiencing an uptick in the number of retrospective audits by commercial payers What situations seem to be prompting these audits What are you doing to limit the potential for these kinds of audits Publication Date Monday August 05 2013 BACK TO PAGINATION Retrospective audits by commercial payers are on the rise Enhancing documentation and fully justifying medical necessity can take the sting out of these reviews and preserve revenue The retrospective audit is becoming an increasingly attractive method for payers to determine overpayments and recoup money For example the American Hospital Association s RACTrac survey reveals that the number of RAC medical record requests increased by more than 50 percent from third quarter 2012 to first quarter 2013 and the total number of complex audit denials increased by 42 percent during the same period This is a sample article from HFMA s Payment Reimbursement Forum a networking and discussion community for managed care reimbursement and other healthcare finance leaders Learn more about the P R Forum Although less common than RAC audits retrospective audits by commercial payers are also increasing Commercial payer audits may occur separately from a RAC audit or dovetail with the federal government s efforts Recently for example several commercial payers piggybacked on a Medicare audit of a Kansas physician group seeking to recoup perceived secondary insurance overpayments associated with the Medicare audit before the physician group had a chance to appeal according to a Health Business Daily article In the following Q A Richard Quadrino founding partner of the New York law firm Quadrino Schwartz shares some insights on commercial recoupments as well as some ideas on how healthcare organizations can prevent retrospective audits Do commercial payers often seek recoupment from healthcare organizations Quadrino Although they don t happen as frequently as RAC audits I am seeing an increase in commercial audits and recoupments reflecting a national trend Commercial audits can target a variety of providers For example I recently represented a physician group in Tennessee A payer had decided to stop paying for an expensive test indicating the test was investigational and experimental In addition to ceasing future reimbursements the payer decided to recoup everything it had paid the physician group for the test in the past which was a significant dollar amount In addition the announcement came with no warning to the healthcare provider This was particularly troubling because the payer had regularly paid for the test in the past but suddenly reversed its decision without giving detailed information about how the decision came about Since most health insurance is an employer sponsored benefit most commercial payers are governed by the federal employee benefits law called ERISA ERISA s regulations require that any recoupment decision be clearly justified and explained Payers must share with the provider all the documentation supporting the decision and give the provider an opportunity to appeal The physician group began a lawsuit in federal court and the matter was settled with the insurer waiving all of its claims against the group for recoupment Access related sidebar When and How ERISA Can Protect a Medical Provider in an Audit Situation Are you seeing any trends in commercial payer audits Quadrino Similar to CMS commercial payers are starting to hire private vendors to review and analyze claims data to identify patterns and reveal potential outliers Commercial payers are then using retrospective audits to dig deeper into perceived payment anomalies and determine whether overpayment has occurred For example one of my cases involved a psychiatrist who practiced in an inter city area and focused on treating troubled youth Due to the unique patient population the frequency and intensity of the patient visits were above the norm for a typical psychiatric practice A commercial payer began investigating why the provider s claims were higher than average After looking into the issue the private insurer determined it had overpaid the provider and sought to recoup money associated with treatment Although the psychiatrist s claims were appropriate for the patient population the payer disagreed again not adequately justifying why it sought recoupment As of today this issue is still pending and not resolved Can healthcare organizations avoid this type of commercial payer audit Quadrino Detailed documentation is probably the best way to avoid any audit whether it be from a commercial payer or the federal government When documentation clearly reflects the care an organization provides and describes the reasons behind that care it leaves less chance for misunderstanding Taking time to review your documentation and ensure it accurately and comprehensively indicates the who what where when and why of patient care is key You don t want to leave any room for suspicion or cause the payer to jump to conclusions or make false assumptions As part of this review providers should also make sure that the services they provide are necessary and non duplicative If a payer believes that services are excessive it may open the provider up to greater scrutiny Taking time to bolster medical necessity justification can foster prompt and appropriate payment and prevent both federal and commercial audits at the same time While providers can engage in preventive efforts payers must also take some of the responsibility and reduce their reliance on retrospective audits Right now commercial payers often process large volumes of claims without thoroughly reviewing and analyzing them to ensure they are compliant with health plan benefit coverages and provider contractual agreements This increases the payer s reliance on using retrospective reviews often years after payments have been made as the primary means of verifying compliance If payers can proactively identify discrepancies between claims and benefit coverage contracts and provide more detail about their concerns to providers then the interaction between payers and providers can be more positive resulting in more consistent payment and less reliance on audits Not only is this the right thing to do but it is what the ERISA legislation and regulations require a clear

    Original URL path: http://www.hfma.org/Content.aspx?id=18618 (2016-02-10)
    Open archived version from archive

  • Successfully Negotiating Managed Care Contracts
    can use the inshare button at the top of this web page or visit the Payment and Reimbursement Forum LinkedIn discussion board What are some of your strategies for managed care negotiations What benefits are you seeing from well developed managed care contracts BACK TO PAGINATION Negotiating effective contracts requires careful planning and a willingness to collaborate For many organizations managed care contracts are an essential part of a sound financial strategy Managed care dollars can represent a significant percentage of a healthcare organization s revenue and successfully negotiated contracts can not only preserve revenue but yield additional dollars through new insurance products and models Strong managed care contracts can also enhance patient satisfaction because they facilitate patient access to comprehensive treatment and services Reaching an agreement with a payer about managed care requires preparation collaboration and compromise The more an organization solidifies its own expectations for contract negotiation and appreciates the needs of the payer the more likely it is to reach an acceptable agreement says Paula Dillon director of managed care for Rockford Health System Set Goals for the Relationship When preparing to negotiate organizations should think about the kind of payer provider relationship they want Is this a one time negotiation or the beginning of a long term partnership says Dillon When trying to establish or foster a partnership your focus will be different than with a short term agreement For example you may be more interested in new products payer employer affiliations or risk sharing models Keep in mind the role that managed care plays in your organization Approximately 30 percent percent of our revenue comes from managed care so it is very important we establish positive working relationships with our managed care payers comments Dillon Look Beyond Rates A primary goal for any managed care negotiation is to receive fair compensation for services However that should not be an organization s sole objective Getting a good rate is important but there are other things to consider says Dillon For example we look at the impact the payer will have on our workflow items such as how responsive the payer is to problems with claims implementation of new policies and procedures and whether the payer allows delegated credentialing where it turns over the responsibility for credentialing to us provided we follow its guidelines for verifying competency Delegated credentialing streamlines patient access to new physicians by getting physicians up and practicing faster Another thing we look at is the breadth of products the payer offers says Dillon If a payer is pursuing a variety of offerings such as value based care tiered networks Medicaid or Medicare managed care that can be a way in which to diversify the level of participation with a specific payer Access related tools Checklist for Managed Care Contracts Address More than Just the Hospital For integrated healthcare systems with multiple service lines managed care negotiations can be complex While payers often focus on negotiating with the hospital an integrated system needs to think about the bigger picture says Dillon For example increased rates in certain settings can offset decreased rates in others By looking at the net changes across the organization you can negotiate more effectively and realize a robust agreement for the entire organization That includes incorporating other entities such as ancillary providers and physicians in the negotiations Develop a Payer Profile Before sitting down to the negotiating table organizations should work to create a comprehensive payer profile A panoramic view can offer insight into what the payer hopes to gain from the negotiation and what it brings to the table says Dillon The old adage know your audience applies here the more detailed the payer profile the better prepared you will be for negotiations There are several ways to generate a complete payer profile Reach out to your contracting counterpart The payer is a good source of information says Dillon By engaging in a dialogue with your contracting peer on the payer side you can gather key information such as what the payer goals are for the negotiation and what new products they plan to promote You can also get a sense of how the payer s operations are structured and whether it outsources particular functions such as approvals for imaging services or physical therapy Too much outsourcing can lead to fragmented communications something to avoid if at all possible offers Dillon Mine internal claims data When preparing to negotiate with an existing payer review a year or two of claims history Investigate how much revenue the payer brings to your organization and how that breaks down by inpatient care outpatient care and various service lines including the NICU surgery maternity and diagnostic imaging says Dillon If a payer represents 30 percent of reimbursement dollars for the NICU for example that is an important piece of information to know because negotiations could impact that service line dramatically Scrutinize denials This effort can reveal recurring negative patterns that the payer should address The negotiation is a good time to get any denial issues on the table says Dillon The more transparent communications are between the provider and payer the more likely you are to foster a profitable partnership Survey operational staff Reaching out to your revenue cycle staff and asking about current payer issues can also uncover useful information We connect with about 70 key operations staff before a payer negotiation and ask about what s working and what s not says Dillon This generates feedback about certain intangibles such as payer responsiveness rep knowledge willingness to problem solve and so on Specific staff to survey could include insurance verification registration billing case management medical records and denials management staff Keep Your Options Open Although preparation and due diligence lay the groundwork for effective contract negotiations healthcare organizations must also enter the conversations with the right attitude By keeping an open mind payers and providers can reach an agreement in which all parties win Both providers and payers should be prepared

    Original URL path: http://www.hfma.org/Content.aspx?id=16658 (2016-02-10)
    Open archived version from archive

  • Using MSPB as a Starting Point for Strategic Financial Discussions
    s rank among other hospitals i e achievement score The second score is based on a hospital s improvement over its baseline score from two years earlier Each organization gets to keep the higher of the two scores as its final MSPB score When is MSPB measured The VBP metrics have baseline and performance measurement periods The performance period is a designated time span used to capture data that shows how well a hospital is performing CMS compares data collected during the performance period to data collected during the baseline period Different VBP domains have different performance and baseline periods which are published in the Federal Register The exhibit below illustrates the MSPB performance and baseline periods MSPB Performance and Baseline Periods How does MSPB impact reimbursement To determine the reimbursement impact you first need to know the amount of Medicare reimbursement at risk for all VBP domains which is rising from the current 1 5 percent of a hospital s inpatient DRG reimbursement to 2 0 percent in federal FY17 Reimbursement Impact for Federal FY15 FY17 The exact reimbursement tied to MSPB is a percentage of the total VBP amount In the current federal FY15 the MSPB efficiency domain accounts for 20 percent of the total VBP score But this will go up to 25 percent in FY16 which begins on October 1 2015 VBP bonuses are awarded to hospitals that perform comparatively higher than the U S average on the four VBP domains related to clinical care safety outcomes efficiency and patient experience How might all of this translate for a specific hospital Let s use the example of a 250 bed hospital with 50 million in Medicare inpatient revenues during the federal FY15 see the exhibit below This hospital risks losing up to 150 000 on the MSPB 50 million x 1 5 percent x 20 percent for federal FY15 Hospital Case Dollar Value for VBP and MSPB FY15 The maximum bonus available in 2015 under these rules can be calculated by multiplying the amount the hospital risks losing 150 000 by 2 57914 which is the Medicare multiplier based on the final performance of all hospitals In this example the maximum bonus amount is significant 386 871 The multiplier has increased in each of the past three years and applies equally across all domains for that VBP year The multiplier was 2 096237 for 2014 and 1 837359 for 2013 As can been seen this creates a significant upside opportunity for the hospital with an operational and financial plan to structure operations to earn the maximum bonus Your Potential Risk Bonus You can determine your own hospital s risk and bonus opportunity using the following calculation guidelines 2015 risk bonus Start with your inpatient Medicare reimbursement which can be found on the most recent Medicare cost report Worksheet E Part A Line 1 Multiply this by 1 5 percent to get the total VBP amount at risk for 2015 Multiply this by 20 percent and that is the amount at risk for MSPB for 2015 For the 2015 bonus the multiplier was 2 57914 Therefore when you multiply the amount at risk for MSPB by this multiplier the product is the maximum bonus available 2017 risk bonus This calculation is very similar except the total amount at risk for VBP is 2 percent and the MSPB domain is worth 25 percent The multiplier for the bonus has not yet been announced Because the release date for the 2017 multiplier is yet to be announced using a multiplier of 2 0 is not unreasonable for planning purposes Opportunities in MSPB Data Hospitals have a wealth of information available to them related to their spend and the MSPB metric Medicare provides hospital specific reports through QualityNet These detailed reports contain a tremendous amount of actionable information that can help finance and clinical leaders pinpoint where a hospital s spend exceeds the national average i e by DRG by provider This data is important to advance critical conversations between operations and finance to improve scores for the upcoming performance year This process should start with a review of the two high level reports available on QualityNet to document the magnitude of the opportunity penalty for your hospital MSPB by site of service type of provider sorted by time of service i e three days prior to admission during the index admission or 30 days post discharge compared to national average MSPB by major diagnostic category MDC compared to state and national averages The next level of analysis lies in the detailed reports that Medicare provides These detailed Excel reports have patient level information of every discharged Medicare beneficiary including Claims for all services rendered during the spend timeframe Claims information for up to five locations for each post acute care category post discharge if within 30 days of discharge Given the information available in these MSPB reports hospital leaders can use them to Look at discharge trends by DRG by physician by post acute provider etc Analyze which providers e g post acute physician have the highest or lowest spend in the 30 day post discharge timeframe and how their performance impacts the MSPB score Identify which physicians and post acute providers are readmitting back to the hospital These are just the beginning of some of the key questions that can be answered using these detailed files These reports are also useful to hospitals considering a bundled payment or shared savings arrangement Additionally the spend data in these files might be advantageous in conversations between hospitals and potential payer or employer partners Drilling down into these reports takes time but the effort is well worth it Ideally hospitals should assign dedicated analytical staff to this project and provide them with clinical input and support in terms of what data to drill into etc Forming a dedicated operations financial task force is a critical first step Access related tool Action Steps that Can Help Hospitals Improve Their MSPB Scores The Strategic Value The underlying data behind the MSPB metric offer a wealth of actionable information that can help hospitals reduce their MSPB scores as well as assist leaders with numerous strategic initiatives Melinda Hancock is partner healthcare at Dixon Hughes Goodman LLP in Glen Allen Va and voluntary Chair Elect of HFMA Related content Improving Efficiency Scores While Maintaining Quality Discussion Starters Forum members What do you think Please share your thoughts in the comments section below How is your organization using the MSPB data to guide performance improvement discussions Please share What questions do you have about the MSPB metric or Medicare s VBP program Publication Date Thursday April 23 2015 BACK TO PAGINATION The dollar impact of Medicare s new MSPB efficiency metric is increasing Now is the time to act and protect your inpatient reimbursement and potentially earn a bonus During the program s first two years Medicare s value based purchasing VBP focused primarily on measuring hospital performance using metrics related to clinical care mortality and patient experience But that changed last October 1 2014 when Medicare also added efficiency as a domain using a single Medicare spend per beneficiary MSPB metric Value Based Purchasing Domains by Federal Fiscal Year MSPB is an indicator of whether Medicare spends more less or about the same on a particular episode of care for a patient treated in a specific hospital compared to a national average The dollar impact of this metric should not be dismissed Based on how efficiently your organization is coordinating patient care a full half of one percent of your hospital s federal FY17 Medicare revenues could be at risk Alternatively if your hospital is more efficient than the average U S hospital your hospital stands to earn a bonus This is a sample article from HFMA s Payment Reimbursement Forum Learn more about HFMA Forums The MSPB measure is gaining importance from a programmatic perspective The episodic nature of this measure is complementary to the Medicare Shared Savings Program and the Bundled Payment for Care Improvement Program and therefore indicative of the direction a provider should be planning for the future These changes accelerate the need for operations and finance to work together with a heightened focus on efficient high quality delivery of care that incorporates planning related to readmissions and care provided by post acute care entities The differentiation between spend reimbursement and cost expenses will be key to managing MSPB Fortuitously the hospital specific MSPB reports that Medicare releases contain significant and detailed data that finance leaders can use as the basis for discussions with clinicians and post acute care providers A MSPB Refresher The following section provides background on the MSPB metric If you are already familiar with this metric skip ahead to the next section on calculating your hospital s financial penalty bonus What are the specific measurement criteria MSPB is the total Medicare spend related to a beneficiary episode of care Specifically it covers the following time period The three days prior to admission The index admission itself 30 days post discharge The post discharge time frame includes all claims initiated within that 30 days so the total days of care to be covered can actually stretch longer than just 30 days For example if a patient is admitted into a skilled nursing facility for 30 days on day 15 post discharge the full 30 days of claims are included in the MSPB metric To determine a hospital s MSPB score the Centers for Medicare Medicaid Services CMS accumulates the spend or reimbursement for all Medicare beneficiaries for the time period described above and applies several adjustments to account for patient acuity wage differences across hospitals and other factors Then CMS indexes the hospital s spend against every other participating U S hospital In federal FY14 the national MSPB average was 1 0 The average declined in federal FY15 which began Oct 1 2014 to 0 98 with top decile hospitals performing at 0 83 You can obtain your hospital s MSPB 2015 scores by reviewing the QualityNet reports that came out on August 1 2014 If you don t have access to CMS s QualityNet reach out to the individual or department e g performance improvement that does Current hospital specific and national MSPB scores are also published on Hospital Compare under the Payment and Value of Care tab Like other VBP elements a hospital achieves two efficiency scores The first is the hospital s rank among other hospitals i e achievement score The second score is based on a hospital s improvement over its baseline score from two years earlier Each organization gets to keep the higher of the two scores as its final MSPB score When is MSPB measured The VBP metrics have baseline and performance measurement periods The performance period is a designated time span used to capture data that shows how well a hospital is performing CMS compares data collected during the performance period to data collected during the baseline period Different VBP domains have different performance and baseline periods which are published in the Federal Register The exhibit below illustrates the MSPB performance and baseline periods MSPB Performance and Baseline Periods How does MSPB impact reimbursement To determine the reimbursement impact you first need to know the amount of Medicare reimbursement at risk for all VBP domains which is rising from the current 1 5 percent of a hospital s inpatient DRG reimbursement to 2 0 percent in federal FY17 Reimbursement Impact for Federal FY15 FY17 The exact reimbursement tied to MSPB is a percentage of the total VBP amount In the current federal FY15 the MSPB efficiency domain accounts for 20 percent of the total VBP score But this will go up to 25 percent in FY16 which begins on October 1 2015 VBP bonuses are awarded to hospitals that perform comparatively higher than the U S average on the four VBP domains related to clinical care safety outcomes efficiency and patient experience How might all of this translate for a specific hospital Let s use the example of a 250 bed hospital with 50 million in Medicare inpatient revenues during the federal FY15 see the exhibit below This hospital risks losing up to 150 000 on the MSPB 50 million x 1 5 percent x 20 percent for federal FY15 Hospital Case Dollar Value for VBP and MSPB FY15 The maximum bonus available in 2015 under these rules can be calculated by multiplying the amount the hospital risks losing 150 000 by 2 57914 which is the Medicare multiplier based on the final performance of all hospitals In this example the maximum bonus amount is significant 386 871 The multiplier has increased in each of the past three years and applies equally across all domains for that VBP year The multiplier was 2 096237 for 2014 and 1 837359 for 2013 As can been seen this creates a significant upside opportunity for the hospital with an operational and financial plan to structure operations to earn the maximum bonus Your Potential Risk Bonus You can determine your own hospital s risk and bonus opportunity using the following calculation guidelines 2015 risk bonus Start with your inpatient Medicare reimbursement which can be found on the most recent Medicare cost report Worksheet E Part A Line 1 Multiply this by 1 5 percent to get the total VBP amount at risk for 2015 Multiply this by 20 percent and that is the amount at risk for MSPB for 2015 For the 2015 bonus the multiplier was 2 57914 Therefore when you multiply the amount at risk for MSPB by this multiplier the product is the maximum bonus available 2017 risk bonus This calculation is very similar except the total amount at risk for VBP is 2 percent and the MSPB domain is worth 25 percent The multiplier for the bonus has not yet been announced Because the release date for the 2017 multiplier is yet to be announced using a multiplier of 2 0 is not unreasonable for planning purposes Opportunities in MSPB Data Hospitals have a wealth of information available to them related to their spend and the MSPB metric Medicare provides hospital specific reports through QualityNet These detailed reports contain a tremendous amount of actionable information that can help finance and clinical leaders pinpoint where a hospital s spend exceeds the national average i e by DRG by provider This data is important to advance critical conversations between operations and finance to improve scores for the upcoming performance year This process should start with a review of the two high level reports available on QualityNet to document the magnitude of the opportunity penalty for your hospital MSPB by site of service type of provider sorted by time of service i e three days prior to admission during the index admission or 30 days post discharge compared to national average MSPB by major diagnostic category MDC compared to state and national averages The next level of analysis lies in the detailed reports that Medicare provides These detailed Excel reports have patient level information of every discharged Medicare beneficiary including Claims for all services rendered during the spend timeframe Claims information for up to five locations for each post acute care category post discharge if within 30 days of discharge Given the information available in these MSPB reports hospital leaders can use them to Look at discharge trends by DRG by physician by post acute provider etc Analyze which providers e g post acute physician have the highest or lowest spend in the 30 day post discharge timeframe and how their performance impacts the MSPB score Identify which physicians and post acute providers are readmitting back to the hospital These are just the beginning of some of the key questions that can be answered using these detailed files These reports are also useful to hospitals considering a bundled payment or shared savings arrangement Additionally the spend data in these files might be advantageous in conversations between hospitals and potential payer or employer partners Drilling down into these reports takes time but the effort is well worth it Ideally hospitals should assign dedicated analytical staff to this project and provide them with clinical input and support in terms of what data to drill into etc Forming a dedicated operations financial task force is a critical first step Access related tool Action Steps that Can Help Hospitals Improve Their MSPB Scores The Strategic Value The underlying data behind the MSPB metric offer a wealth of actionable information that can help hospitals reduce their MSPB scores as well as assist leaders with numerous strategic initiatives Melinda Hancock is partner healthcare at Dixon Hughes Goodman LLP in Glen Allen Va and voluntary Chair Elect of HFMA Related content Improving Efficiency Scores While Maintaining Quality Discussion Starters Forum members What do you think Please share your thoughts in the comments section below How is your organization using the MSPB data to guide performance improvement discussions Please share What questions do you have about the MSPB metric or Medicare s VBP program Publication Date Thursday April 23 2015 Comments Please login to add your comments Add Comment Text Only 2000 character limit Advertisements HFMA Business Profiles McKesson Leveraging Predictive Analytics to Rein in Operating Costs A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow HFMA RESOURCE LIBRARY 6 Patient Revenue Cycle Metrics You Should Be Tracking and How to Improve Your Results Patient financial engagement is more challenging than ever and more critical With patient responsibility as a percentage of revenue on the rise providers have seen their billing related costs and accounts receivable levels increase If increasing collection yield and reducing costs are a priority for your organization the metrics outlined in this presentation will provide the framework you need to understand what s working and what s not in order to guide

    Original URL path: http://www.hfma.org/Content.aspx?id=30207 (2016-02-10)
    Open archived version from archive

  • Narrow-Network Pioneers Share Tips on Payer-Provider Relationships
    incentivizes patients to seek care from Kaleida and the Optimum Physician Alliance Data sharing that allows the hospital and physicians to identify gaps in care and wasteful care The plan launched in January 2013 when Kaleida and BCBS both of which are self insured began offering it to their own employees Later last year the Blues began marketing it as a fully insured plan to the commercial market It is sold on New York s public insurance exchange and will be offered on private exchanges in the future In the first months of early enrollment on the New York exchange about 40 percent of purchasers chose Align A New Mindset Developing an effective payer provider relationship starts by identifying like minded organizations in your market Boyd says This is motivated by people coming together who believe that we have a responsibility to our community to build something that is going to be sustainable for the future he says If you have that as a guiding principle it s amazing what people can do in collaboration With that perspective payers and providers must stop arm wrestling over unit costs and reimbursement rates and work together to improve value says Swift This is a fundamental mind shift in terms of the way we all are thinking about the business We all must be focused on a collaborative win win mindset as opposed to a win lose Believing that up to 30 percent of healthcare dollars are currently wasted the partners are focused on eliminating unnecessary utilization which would typically mean lower revenues for most specialists and health systems However Kaleida and the Optimum Physician Alliance expect to make up revenues with additional patients gained through the narrow network plan which is attracting members with a lower premium and the promise of high value providers see the exhibit below The partnership moves reimbursement away from fee for service to pay for performance with financial incentives based on physicians patterns of specialty referrals and generic prescriptions their patients use of urgent care and the emergency department and other metrics Physician performance is evaluated each year to determine the provider network Kaleida and BCBS negotiated specific reimbursements for the Align plan All profits created by the joint venture are shared equally by the two parties Boyd and Swift shared these tips on negotiating details of a narrow network health plan Start with the end in mind For Kaleida and BCBS the goals were A health plan that could be offered at 6 percent to 10 percent below other plans in the market A clinically integrated provider network A sustainable business relationship for all stakeholders Recruit the right physicians Kaleida and BCBS first recruited 15 independent physicians whom they knew to be value minded to form a Physician Leadership Board Forming this board was important because we wanted to hear from physicians who were independent and had choices in the marketplace Boyd says A lot of these conversations started with What are the challenges you re facing What ideas do you have about changing it The Physician Leadership Board is key to Align s success because it identified the performance metrics needed to align physician incentives with those of the health system and the insurer The Leadership Board was responsible for identifying 500 physicians 250 primary care and 250 specialists to be in the Optimum Physician Alliance and it is the entity that drives clinical integration We give them the authority and the responsibility to fulfill the set of objectives that we ve established Swift says Those objectives are Improving clinical outcomes and operational efficiencies Coordinating better care and reducing errors and redundancies Lowering healthcare costs Collaborate This was a very collaborative iterative process whereby we met as a triumvirate of the physicians the health plans and the health systems to describe the different levers that we believed we could influence to deliver value to the community Boyd says And we worked to understand quantitatively and qualitatively how we would implement strategies that use those levers to deliver improved quality and reduced cost Kaleida offered up the financial and quality data related to the services provided in its system BCBS provided claims data that show duplicated and potentially unnecessary tests and procedures as well as gaps in care e g failure to perform foot exams on patients with diabetes that may lead to higher costs down the road Physicians shared information about their financial operational and clinical performance We met and worked regularly team to team for nine months Boyd says The executive committee comprised of C level leaders met every two weeks for two hours In addition payer provider teams were assigned to develop specific aspects of the relationship including clinical integration legal and governance issues the physician network and data analytics The teams shared information about each other s operations and took part in new kinds of decisions For example the providers helped develop the benefit design of the new health plan Historically we would talk to customers and maybe to our broker partners to try to develop offerings that would meet their needs Swift says The thing that was really new about this is the fact that we had very explicit input from the delivery system A New Model Based on early data from the health plan s performance Boyd is optimistic that the partnership is working as envisioned The partners have agreed that if any of the stakeholders are threatened financially by the arrangement adjustments to the financial model will be made There has to be an open mindedness and willingness to try things because this is breaking new ground Swift says The recipe hasn t been made so there s going to be some trial and error We are going into this with that understanding Lola Butcher is a freelance writer and editor based in Missouri Interviewed for this article Donald Boyd is senior vice president for network development and operations Kaleida Health Buffalo N Y Stephen Swift is executive vice president and CFO HealthNow New York Inc the parent of BlueCross BlueShield of Western New York Buffalo BlueCross BlueShield of Western New York a division of HealthNow New York Inc is an independent licensee of the BlueCross BlueShield Association Discussion Starters Either comment below or use the inshare button at the top of this web page to share this article and your comments on the Payment Reimbursement Forum s LinkedIn board Are narrow network health plans being offered in your market Is your system a participating provider What data are insurers providing to your system to help improve the quality and cost of care delivery Publication Date Tuesday January 28 2014 BACK TO PAGINATION With the goal of lowering costs by at least 6 percent in the first year Kaleida Health and BlueCross BlueShield of Western New York developed Align the first clinically integrated narrow network health plan in their market Kaleida Health the largest healthcare provider in the Western New York market and BlueCross BlueShield of Western New York BCBS the region s largest health plan are blazing a trail that others will be expected to follow They are lowering healthcare costs through a payer provider partnership We went into this knowing we have to find real absolute cost reductions and they need to be sustainable says Steve Swift BCBS s executive vice president and CFO This is a sample article from HFMA s Payment Reimbursement Forum which is a networking and discussion community for healthcare finance leaders interested in reimbursement managed care and payment issues Learn more and subscribe Kaleida and BCBS formed a joint venture partnership called Kaleida HealthNow Inc that owns the new joint venture called Align The health system and payer then recruited 500 physicians to form the Optimum Physician Alliance an independent physician association that operates as a subsidiary of Kaleida HealthNow One of the principles that we adopted at the outset is that this relationship has to be a four way win a win for the physicians a win for the health system a win for the health plan and a win for the employers and insured members says Donald Boyd senior vice president of network development and operations at Kaleida Otherwise this will not be sustainable long term That is the lens through which we do all of our work Success factors include Clinical integration between Kaleida and the independent physicians A care delivery model that lowers costs so that the health plan premium can be 6 percent to 10 percent below other plans offered in the market A tiered benefit design that incentivizes patients to seek care from Kaleida and the Optimum Physician Alliance Data sharing that allows the hospital and physicians to identify gaps in care and wasteful care The plan launched in January 2013 when Kaleida and BCBS both of which are self insured began offering it to their own employees Later last year the Blues began marketing it as a fully insured plan to the commercial market It is sold on New York s public insurance exchange and will be offered on private exchanges in the future In the first months of early enrollment on the New York exchange about 40 percent of purchasers chose Align A New Mindset Developing an effective payer provider relationship starts by identifying like minded organizations in your market Boyd says This is motivated by people coming together who believe that we have a responsibility to our community to build something that is going to be sustainable for the future he says If you have that as a guiding principle it s amazing what people can do in collaboration With that perspective payers and providers must stop arm wrestling over unit costs and reimbursement rates and work together to improve value says Swift This is a fundamental mind shift in terms of the way we all are thinking about the business We all must be focused on a collaborative win win mindset as opposed to a win lose Believing that up to 30 percent of healthcare dollars are currently wasted the partners are focused on eliminating unnecessary utilization which would typically mean lower revenues for most specialists and health systems However Kaleida and the Optimum Physician Alliance expect to make up revenues with additional patients gained through the narrow network plan which is attracting members with a lower premium and the promise of high value providers see the exhibit below The partnership moves reimbursement away from fee for service to pay for performance with financial incentives based on physicians patterns of specialty referrals and generic prescriptions their patients use of urgent care and the emergency department and other metrics Physician performance is evaluated each year to determine the provider network Kaleida and BCBS negotiated specific reimbursements for the Align plan All profits created by the joint venture are shared equally by the two parties Boyd and Swift shared these tips on negotiating details of a narrow network health plan Start with the end in mind For Kaleida and BCBS the goals were A health plan that could be offered at 6 percent to 10 percent below other plans in the market A clinically integrated provider network A sustainable business relationship for all stakeholders Recruit the right physicians Kaleida and BCBS first recruited 15 independent physicians whom they knew to be value minded to form a Physician Leadership Board Forming this board was important because we wanted to hear from physicians who were independent and had choices in the marketplace Boyd says A lot of these conversations started with What are the challenges you re facing What ideas do you have about changing it The Physician Leadership Board is key to Align s success because it identified the performance metrics needed to align physician incentives with those of the health system and the insurer The Leadership Board was responsible for identifying 500 physicians 250 primary care and 250 specialists to be in the Optimum Physician Alliance and it is the entity that drives clinical integration We give them the authority and the responsibility to fulfill the set of objectives that we ve established Swift says Those objectives are Improving clinical outcomes and operational efficiencies Coordinating better care and reducing errors and redundancies Lowering healthcare costs Collaborate This was a very collaborative iterative process whereby we met as a triumvirate of the physicians the health plans and the health systems to describe the different levers that we believed we could influence to deliver value to the community Boyd says And we worked to understand quantitatively and qualitatively how we would implement strategies that use those levers to deliver improved quality and reduced cost Kaleida offered up the financial and quality data related to the services provided in its system BCBS provided claims data that show duplicated and potentially unnecessary tests and procedures as well as gaps in care e g failure to perform foot exams on patients with diabetes that may lead to higher costs down the road Physicians shared information about their financial operational and clinical performance We met and worked regularly team to team for nine months Boyd says The executive committee comprised of C level leaders met every two weeks for two hours In addition payer provider teams were assigned to develop specific aspects of the relationship including clinical integration legal and governance issues the physician network and data analytics The teams shared information about each other s operations and took part in new kinds of decisions For example the providers helped develop the benefit design of the new health plan Historically we would talk to customers and maybe to our broker partners to try to develop offerings that would meet their needs Swift says The thing that was really new about this is the fact that we had very explicit input from the delivery system A New Model Based on early data from the health plan s performance Boyd is optimistic that the partnership is working as envisioned The partners have agreed that if any of the stakeholders are threatened financially by the arrangement adjustments to the financial model will be made There has to be an open mindedness and willingness to try things because this is breaking new ground Swift says The recipe hasn t been made so there s going to be some trial and error We are going into this with that understanding Lola Butcher is a freelance writer and editor based in Missouri Interviewed for this article Donald Boyd is senior vice president for network development and operations Kaleida Health Buffalo N Y Stephen Swift is executive vice president and CFO HealthNow New York Inc the parent of BlueCross BlueShield of Western New York Buffalo BlueCross BlueShield of Western New York a division of HealthNow New York Inc is an independent licensee of the BlueCross BlueShield Association Discussion Starters Either comment below or use the inshare button at the top of this web page to share this article and your comments on the Payment Reimbursement Forum s LinkedIn board Are narrow network health plans being offered in your market Is your system a participating provider What data are insurers providing to your system to help improve the quality and cost of care delivery Publication Date Tuesday January 28 2014 Comments Please login to add your comments Add Comment Text Only 2000 character limit Advertisements HFMA Business Profiles McKesson Leveraging Predictive Analytics to Rein in Operating Costs A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow HFMA RESOURCE LIBRARY 6 Patient Revenue Cycle Metrics You Should Be Tracking and How to Improve Your Results Patient financial engagement is more challenging than ever and more critical With patient responsibility as a percentage of revenue on the rise providers have seen their billing related costs and accounts receivable levels increase If increasing collection yield and reducing costs are a priority for your organization the metrics outlined in this presentation will provide the framework you need to understand what s working and what s not in order to guide your overall patient financial engagement initiatives and optimize results HFMA Business Profiles Accretive Health Partners with Providers to Excel in a Rapidly Transforming Revenue Cycle Environment Emad Rizk MD president and CEO of Accretive Health discusses the uncertainty facing hospitals and the transitions affecting revenue cycle management HFMA RESOURCE LIBRARY 10 Ways to Reduce Patient Statement Volume and Reduce Costs No two patients are the same Each has a very personal healthcare experience and each has distinct financial needs and preferences that have an impact on how when and if they chose to pay their healthcare bill It s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients The need to tailor financial conversations and payment options to individual needs and preferences is critical This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach but take control of rising collection costs HFMA Business Profiles Conifer Health Solutions Helping Providers and Employers Build a Foundation for Better Health Jim Bohnsack vice president solution corporate development for Conifer Health Solutions explains how the company helps healthcare providers leverage data to deliver better outcomes while optimizing reimbursement for all payment arrangements HFMA RESOURCE LIBRARY Reduce Patient Balances Sent to Collection Agencies Approaching New Problems with New Approaches This white paper written by Apex Vice President of Solutions and Services Carrie Romandine discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs but it will maximize the amount collected before sending to collections Further targeted messaging should be applied across all points of patient interaction i e point of service customer service patient statements and analyzed regularly for maximized results HFMA Business Profiles

    Original URL path: http://www.hfma.org/Content.aspx?id=21412 (2016-02-10)
    Open archived version from archive

  • How the Allina vs. HHS Case Could Increase Your DSH Payments
    two different acute care hospitals with different payer mixes located in urban areas This article was adapted from materials provided by David A Williams CPA MPH FHFMA partner at Horne LLP Ridgeland Miss and a member of HFMA s Mississippi Chapter david williams horne llp com Publication Date Monday January 28 2013 BACK TO PAGINATION Coming soon A change in the Medicare DSH formula related to how Medicare Advantage patients are included Understanding the court case behind the change may help hospitals identify increased reimbursement opportunities The U S District Court recently ruled that the formula for calculating Medicare disproportionate share hospital DSH payments is flawed Below is a brief summary of the court case its history and how it could affect hospitals This is a sample article from HFMA s Payment Reimbursement Forum a discussion and networking community for managed care reimbursement and finance leaders in hospitals and health systems Learn more about the Payment Reimbursement Forum Case Topic The legality of including Medicare Advantage days in the Medicare DSH formula Background Medicare Advantage also known as Medicare Part C was established by Congress as part of the Balanced Budget Act of 1997 For a Medicare beneficiary to enroll in Medicare Advantage he or she must be entitled to benefits under Part A and enrolled in Part B Once the beneficiary elects Medicare Advantage that beneficiary s benefits are no longer administered under Part A In 2003 in a notice of proposed rulemaking the Secretary of the Department of Health and Human Services HHS stated that once a beneficiary elects Medicare Part C those patient days attributable to the beneficiary should not be included in the Medicare fraction of the DSH patient percentage These patient days should be included in the count of total patient days in the Medicaid fraction the denominator and the patient s days for the Medicare Advantage beneficiary who is also eligible for Medicaid would be included in the numerator of the Medicaid fraction However in the 2004 final rule the Secretary reversed course and announced that Medicare Advantage beneficiaries should not be included in the Medicaid fraction but instead in the Medicare fraction The Secretary codified the change in FY07 In 2009 Allina Health and 26 other hospitals filed suit with the U S District Court asking that the final rule as codified in 2007 be vacated Current Status On November 15 2012 the U S District Court issued a summary judgment on behalf of the 27 hospitals requiring that the Secretary s final rule of 2004 codified in 2007 and further modified in 2010 be vacated and the case remanded back to the Secretary for further action The court found that the reasoning for the change was brief and unconvincing and held that the rulemaking was arbitrary and capricious In early January 2013 the U S District Court ordered HHS to recalculate certain Medicare DSH payments for more than 100 hospitals and pay interest on any additional amounts owed Impact to Hospitals It is anticipated there will be a rule change clarification issued related to the inclusion of Medicare Advantage in the Medicaid fraction and the reversal of the inclusion in the Medicare fraction It is possible that the lower Supplemental Security Income SSI percentages released in FY12 were in part related to the inclusion of the Medicare Advantage days in the Medicare fraction Organizations can expect the HHS Secretary to republish the SSI percentages removing the Medicare Advantage from the calculation and in turn pushing up the eventual SSI percentages for FY07 FY10 Hospitals especially urban hospitals that received Medicare DSH payments from FY07 forward and were not subject to a capped DSH percentage of 12 percent may want to evaluate the significance of identifying dual eligible Medicare Advantage days to be included in the Medicaid fraction The following tool which includes two case examples can help hospitals with this evaluation Access tool Recalculating DSH Payments to Account for Medicare Advantage Change In the two case examples see the two spreadsheets you can see what the impact might be to two different acute care hospitals with different payer mixes located in urban areas This article was adapted from materials provided by David A Williams CPA MPH FHFMA partner at Horne LLP Ridgeland Miss and a member of HFMA s Mississippi Chapter david williams horne llp com Publication Date Monday January 28 2013 Please login to add your comments Advertisements HFMA Business Profiles McKesson Leveraging Predictive Analytics to Rein in Operating Costs A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow HFMA RESOURCE LIBRARY 6 Patient Revenue Cycle Metrics You Should Be Tracking and How to Improve Your Results Patient financial engagement is more challenging than ever and more critical With patient responsibility as a percentage of revenue on the rise providers have seen their billing related costs and accounts receivable levels increase If increasing collection yield and reducing costs are a priority for your organization the metrics outlined in this presentation will provide the framework you need to understand what s working and what s not in order to guide your overall patient financial engagement initiatives and optimize results HFMA Business Profiles Accretive Health Partners with Providers to Excel in a Rapidly Transforming Revenue Cycle Environment Emad Rizk MD president and CEO of Accretive Health discusses the uncertainty facing hospitals and the transitions affecting revenue cycle management HFMA RESOURCE LIBRARY 10 Ways to Reduce Patient Statement Volume and Reduce Costs No two patients are the same Each has a very personal healthcare experience and each has distinct financial needs and preferences that have an impact on how when and if they chose to pay their healthcare bill It s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients The need to tailor financial conversations and payment options to individual needs and preferences is critical This presentation provides

    Original URL path: http://www.hfma.org/Content.aspx?id=15610 (2016-02-10)
    Open archived version from archive

  • Discerning the Impact of Lesser-Than and Greater-Than Provisions in Payer Contracts
    involved in the encounter including any lab work X rays imaging and anesthesia If the healthcare organization s charges are less than the payer s agreed on payment the insurer will pay the lower price says Cleverley For instance if the payer contracts to pay 5 000 for a specific outpatient surgery but the charges for a particular patient s encounter are 4 000 then the payer would pay 4 000 Greater than provisions You can t talk about lesser than provisions without discussing greater than provisions as well continues Cleverley This is where an insurer agrees to pay a provider more than the contracted price if the provider s charges are multiple levels beyond the previously set payment Sometimes referred to as outlier payments these provisos kick in when a healthcare organization treats a patient who substantially surpasses the expected care In this situation the payer may agree to pay a certain percentage of charges While there are both line item and claim level greater than provisions the line item caveats are not very common high cost drugs and implants may fall into this category Far more frequent are claim level greater thans which may include inpatient cases outpatient surgery and some ED claims The primary purpose of these stipulations is to provide risk avoidance for the healthcare organization says Cleverley Let s say a patient is admitted for an inpatient stay and remains in the hospital for 250 days This care episode may be considered an outlier and most likely the hospital will receive a greater than payment Why Are These Provisions Important Until a few years ago lesser than provisions had little bearing on a healthcare organization s revenue because most organizations set prices well above payers fee schedules comments Cleverley However as organizations consider dropping prices in response to increasing competition these provisos are coming into play In certain markets for example free standing providers i e imaging centers or lab facilities are lowering their prices on commodity products and services such as lab work imaging services and basic outpatient procedures endoscopies mole removal where patients don t perceive a meaningful difference between suppliers To remain competitive healthcare organizations are also starting to lower their prices for these items says Cleverley However without careful examination this action could have wide ranging consequences For instance if an organization drops its prices for particular procedures below existing line item lesser than provisions then the organization stands to lose revenue In addition if the price drop causes the claim level lesser thans to dip below established payments there could be additional financial impact For example a hospital may have competition from an ambulatory surgery center for endoscopies and the hospital may decide to lower it s pricing to 1 200 If a commercial payer has an outpatient fee schedule that pays 1 900 for a colonoscopy the hospital would experience a 700 payment reduction for each colonoscopy performed for that payer s patients One further area organizations often forget is the effect on outlier payments says Cleverley By dropping your line item pricing your claim level outlier may dip below the threshold and become a standard reimbursement causing you to lose further money For example assume a commercial payer has a fixed payment of 24 000 for MS DRG 470 lower joint replacement The plan also has an outlier threshold of 100 000 with payment at 60 percent of billed charges Given a hospital s current prices a MS DRG 470 patient has a total charge of 101 000 and the hospital is paid 60 600 However if the hospital reduces its imaging prices it may lower the total charges to 99 500 at which point the hospital would be paid 24 000 This represents a reduction in payment of 76 600 from a very small change in charges Cleverley explains If the hospital is a tertiary facility that deals with a large number of outlier patients then any loss could add up quickly Revenue and Pricing Implications While organizations contemplating price decreases should definitely examine all lesser and greater than provisions this is also a helpful exercise for those facilities that want to optimize revenue To fully appreciate the consequences of these stipulations healthcare organizations should review payer contracts identify any provisions assess current prices in relation to those caveats calculate the potential loss and examine areas where they could lift or reduce charges says Cleverley Basically you want to model the different scenarios to see what effect raising or lowering certain prices would have keeping in mind line and claim level lesser thans as well as claim level greater thans Access related tool Checklist for Reviewing Lesser Than Provisions in Payer Contracts After this investigation should you decide to raise your prices in particular areas make sure there are no negative consequences to your competitive position comments Cleverley Consider the organization that discovers it has an ED procedure that is well below the line level threshold and moderately below the claim level threshold In order to surpass these marks the organization must raise its prices by 300 to 400 percent This would put the organization in a bad place competitively as well as from a PR perspective So in this instance raising the price might not be a good choice Organizations must look at the whole picture when doing these analyses Getting a few dollars back may not be worth the risk A Prudent Endeavor Ensuring your organization is holding prices at appropriate levels while encouraging market share growth can be tricky In some cases working with a third party that has experience modeling this kind of exercise can be beneficial These organizations can even make recommendations on alternate pricing scenarios that increase revenue while maintaining competitive position While it may seem like examining lesser than and greater than provisions is just one more task on the growing to do list taking time for this work can be valuable especially as the healthcare marketplace becomes increasingly competitive and organizations scramble for every inch of the bottom line Kathleen B Vega is a freelance healthcare writer and editor who contributes regularly to HFMA Forums Interviewed for this article William O Cleverley Ph D is chairman and founder of Cleverley Associates Worthington Ohio and a member of HFMA s Central Ohio Chapter Related article Pricing Commodity Outpatient Procedures Assessing the Impact for subscribers to HFMA s Strategic Financial Planning Discussion Starters Forum members What do you think Please share your thoughts in the comments section below How often do you review lesser than and greater than provisions What impact do these have on your pricing decisions Publication Date Monday July 20 2015 BACK TO PAGINATION By quantifying the effect of the lesser than and greater than provisions in payer contracts healthcare organizations can preserve revenue and avoid serious financial ramifications when restructuring prices says William O Cleverley Almost all commercial and government payer contracts contain lesser than and greater than provisions Sometimes overlooked these caveats can affect a healthcare organization s revenue especially if the organization is looking to alter its prices Without taking these provisions into account a seemingly small price adjustment could result in a significant revenue hit says William O Cleverley chairman and founder of Cleverley Associates in Worthington Ohio This is a sample article from HFMA s Payment Reimbursement Forum Learn more and become a member What Are Lesser Than and Greater Than Provisions In short these provisions protect payers and providers from payment situations that fall outside the norm According to Cleverley there are three kinds to be aware of Line item lesser than provisions These state that an insurer will pay an established amount for a certain test or service unless the organization charges less than the predetermined price in which case the payer will reimburse the lesser than amount For instance if a payer contracts to pay 1 200 for CT scans but the organization only charges 1 000 for a patient s scan then the insurer will pay 1 000 Imaging procedures CT scans and MRIs for example laboratory work and some emergency department ED charges fit into this group Claim level lesser than provisions These provisions state that an insurer will pay an established amount for a category of charges such as an inpatient case payment based on MS DRG The compensation would cover all charges involved in the encounter including any lab work X rays imaging and anesthesia If the healthcare organization s charges are less than the payer s agreed on payment the insurer will pay the lower price says Cleverley For instance if the payer contracts to pay 5 000 for a specific outpatient surgery but the charges for a particular patient s encounter are 4 000 then the payer would pay 4 000 Greater than provisions You can t talk about lesser than provisions without discussing greater than provisions as well continues Cleverley This is where an insurer agrees to pay a provider more than the contracted price if the provider s charges are multiple levels beyond the previously set payment Sometimes referred to as outlier payments these provisos kick in when a healthcare organization treats a patient who substantially surpasses the expected care In this situation the payer may agree to pay a certain percentage of charges While there are both line item and claim level greater than provisions the line item caveats are not very common high cost drugs and implants may fall into this category Far more frequent are claim level greater thans which may include inpatient cases outpatient surgery and some ED claims The primary purpose of these stipulations is to provide risk avoidance for the healthcare organization says Cleverley Let s say a patient is admitted for an inpatient stay and remains in the hospital for 250 days This care episode may be considered an outlier and most likely the hospital will receive a greater than payment Why Are These Provisions Important Until a few years ago lesser than provisions had little bearing on a healthcare organization s revenue because most organizations set prices well above payers fee schedules comments Cleverley However as organizations consider dropping prices in response to increasing competition these provisos are coming into play In certain markets for example free standing providers i e imaging centers or lab facilities are lowering their prices on commodity products and services such as lab work imaging services and basic outpatient procedures endoscopies mole removal where patients don t perceive a meaningful difference between suppliers To remain competitive healthcare organizations are also starting to lower their prices for these items says Cleverley However without careful examination this action could have wide ranging consequences For instance if an organization drops its prices for particular procedures below existing line item lesser than provisions then the organization stands to lose revenue In addition if the price drop causes the claim level lesser thans to dip below established payments there could be additional financial impact For example a hospital may have competition from an ambulatory surgery center for endoscopies and the hospital may decide to lower it s pricing to 1 200 If a commercial payer has an outpatient fee schedule that pays 1 900 for a colonoscopy the hospital would experience a 700 payment reduction for each colonoscopy performed for that payer s patients One further area organizations often forget is the effect on outlier payments says Cleverley By dropping your line item pricing your claim level outlier may dip below the threshold and become a standard reimbursement causing you to lose further money For example assume a commercial payer has a fixed payment of 24 000 for MS DRG 470 lower joint replacement The plan also has an outlier threshold of 100 000 with payment at 60 percent of billed charges Given a hospital s current prices a MS DRG 470 patient has a total charge of 101 000 and the hospital is paid 60 600 However if the hospital reduces its imaging prices it may lower the total charges to 99 500 at which point the hospital would be paid 24 000 This represents a reduction in payment of 76 600 from a very small change in charges Cleverley explains If the hospital is a tertiary facility that deals with a large number of outlier patients then any loss could add up quickly Revenue and Pricing Implications While organizations contemplating price decreases should definitely examine all lesser and greater than provisions this is also a helpful exercise for those facilities that want to optimize revenue To fully appreciate the consequences of these stipulations healthcare organizations should review payer contracts identify any provisions assess current prices in relation to those caveats calculate the potential loss and examine areas where they could lift or reduce charges says Cleverley Basically you want to model the different scenarios to see what effect raising or lowering certain prices would have keeping in mind line and claim level lesser thans as well as claim level greater thans Access related tool Checklist for Reviewing Lesser Than Provisions in Payer Contracts After this investigation should you decide to raise your prices in particular areas make sure there are no negative consequences to your competitive position comments Cleverley Consider the organization that discovers it has an ED procedure that is well below the line level threshold and moderately below the claim level threshold In order to surpass these marks the organization must raise its prices by 300 to 400 percent This would put the organization in a bad place competitively as well as from a PR perspective So in this instance raising the price might not be a good choice Organizations must look at the whole picture when doing these analyses Getting a few dollars back may not be worth the risk A Prudent Endeavor Ensuring your organization is holding prices at appropriate levels while encouraging market share growth can be tricky In some cases working with a third party that has experience modeling this kind of exercise can be beneficial These organizations can even make recommendations on alternate pricing scenarios that increase revenue while maintaining competitive position While it may seem like examining lesser than and greater than provisions is just one more task on the growing to do list taking time for this work can be valuable especially as the healthcare marketplace becomes increasingly competitive and organizations scramble for every inch of the bottom line Kathleen B Vega is a freelance healthcare writer and editor who contributes regularly to HFMA Forums Interviewed for this article William O Cleverley Ph D is chairman and founder of Cleverley Associates Worthington Ohio and a member of HFMA s Central Ohio Chapter Related article Pricing Commodity Outpatient Procedures Assessing the Impact for subscribers to HFMA s Strategic Financial Planning Discussion Starters Forum members What do you think Please share your thoughts in the comments section below How often do you review lesser than and greater than provisions What impact do these have on your pricing decisions Publication Date Monday July 20 2015 Comments Please login to add your comments Add Comment Text Only 2000 character limit Advertisements HFMA Business Profiles McKesson Leveraging Predictive Analytics to Rein in Operating Costs A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow HFMA RESOURCE LIBRARY 6 Patient Revenue Cycle Metrics You Should Be Tracking and How to Improve Your Results Patient financial engagement is more challenging than ever and more critical With patient responsibility as a percentage of revenue on the rise providers have seen their billing related costs and accounts receivable levels increase If increasing collection yield and reducing costs are a priority for your organization the metrics outlined in this presentation will provide the framework you need to understand what s working and what s not in order to guide your overall patient financial engagement initiatives and optimize results HFMA Business Profiles Accretive Health Partners with Providers to Excel in a Rapidly Transforming Revenue Cycle Environment Emad Rizk MD president and CEO of Accretive Health discusses the uncertainty facing hospitals and the transitions affecting revenue cycle management HFMA RESOURCE LIBRARY 10 Ways to Reduce Patient Statement Volume and Reduce Costs No two patients are the same Each has a very personal healthcare experience and each has distinct financial needs and preferences that have an impact on how when and if they chose to pay their healthcare bill It s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients The need to tailor financial conversations and payment options to individual needs and preferences is critical This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach but take control of rising collection costs HFMA Business Profiles Conifer Health Solutions Helping Providers and Employers Build a Foundation for Better Health Jim Bohnsack vice president solution corporate development for Conifer Health Solutions explains how the company helps healthcare providers leverage data to deliver better outcomes while optimizing reimbursement for all payment arrangements HFMA RESOURCE LIBRARY Reduce Patient Balances Sent to Collection Agencies Approaching New Problems with New Approaches This white paper written by Apex Vice President of Solutions and Services Carrie Romandine discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs but it will maximize the amount collected before sending to collections Further targeted messaging should be applied across all points of patient interaction i e point of service customer service patient statements and analyzed regularly for maximized results HFMA Business Profiles Ontario Systems Optimizing Accounts Receivable in a Rapidly Changing Environment Steve Scibetta senior director of channel sales for Ontario Systems healthcare product line shares insights into effectively managing receivables HFMA RESOURCE LIBRARY The

    Original URL path: http://www.hfma.org/Content.aspx?id=32201 (2016-02-10)
    Open archived version from archive



  •