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  • A Respected Health Economist on the Future of Payment Reform
    ACOs bundled payment and other alternative models by 2020 Those are enormous steps says Cutler who is especially optimistic about the promise of bundled payment and ACOs Encouraging Bundled Payments While Cutler has no formal role in influencing federal policy his perspective is valued by policymakers A member of the Institute of Medicine and an advisor to several presidential candidates among his many honors Cutler currently serves on the Massachusetts Health Policy Commission which is working to reduce medical spending in that state One of his perspectives HHS should aggressively push bundled payments for acute care Cutler s research has documented that the 17 most expensive conditions among Medicare patients account for half of Medicare spending as described in a March 2012 study in the New England Journal of Medicine While many of the most expensive conditions are chronic diseases they are costly because of associated acute treatments For example the most expensive condition is osteoarthritis Cutler and his colleague found that most episodes of care for osteoarthritis involve elective joint replacements Medicare and private insurers have documented that bundled payment programs reduce costs Writing in a Journal of the American Medical Association blog post Cutler said the Center for Medicare and Medicaid Innovation s CMMI s Bundled Payment for Care Improvement demonstration program is a logical starting point to expand bundled payments One straightforward reform would be to extend the programs there into a mandatory nationwide program he wrote In an interview he suggested two ways this could work CMS could assign a target payment for a bundle of services and the various providers in an episode of care would have two sided risk for the bundle At the end of a performance period CMS would evaluate how many of the episodes of care cost less than target and how many cost more and adjust its payments to the provider group accordingly If the providers total costs during the performance period fell below the target they would divide the savings if their costs exceeded that amount they would share the loss A starker approach would be for CMS to set a flat payment for a bundle of services The other way would be for CMS to pay a single amount and have providers figure it out Cutler says That may be more rapid change than many providers are ready for Encouraging ACO Participation About 400 provider organizations are participating in the federal government s Medicare Shared Savings Program MSSP and Pioneer ACO initiatives with mixed results and enthusiasm Cutler says private insurers have demonstrated that the ACO model reduces spending while improving quality In his home state of Massachusetts one of the nation s first accountable care initiatives the Alternative Quality Contract introduced by Blue Cross Blue Shield of Massachusetts generated savings of nearly 10 percent by its fourth year of operation He believes more providers will participate in CMS s ACO programs if the incentives are right because history shows that the healthcare sector is extremely responsive to changes in incentives The introduction of diagnostic related groups DRGs the Balanced Budget Act of 1997 and the Hospital Readmissions Reduction Program are examples of public policies that prompted hospitals and health systems to change their operations in response to financial incentives Every time we look what we see is that the response to policies is far bigger than most people would have guessed Cutler says It happens time and again We re now talking about the healthcare spending slow down and it s not surprising that it s happening at the same time we put in incentives to be more efficient The uneven performance among MSSP participants and the decision by several Pioneer ACOs to drop out of the program may reflect that the right mix of financial incentives is not yet in place One thing that is important is the extent to which the groups get to share savings or realize losses Cutler says Those are things that can be adjusted particularly in the first couple of years Another type of incentive may come from the new legislation that ended the sustainable growth rate formula for physician pay The law approved by Congress in April provides a 5 percent bonus each year from 2019 to 2024 for clinicians who receive a significant share of their revenues through an alternative payment model that includes downside financial risk and quality measurement That is an opportunity to encourage more providers to move into the ACO program Cutler says Determining How to Do It But getting providers to the game is half the battle says Cutler The real issue is how do we make it work says Cutler What s amazing to me is how ready the provider system is for a new payment model Everywhere I look there is readiness for it combined with a sense of Please help to make this work well so that it s not just a complete free for all and we have no idea what to do Cutler recalls a meeting of hospital chief medical officers at which he posed the question Suppose you ve been ordered to save money How would you do it Meeting attendees said that in fact they had been ordered to save money I said How many of you feel like you have a good handle on how to do that and no one raised their hand he says I think the what to do is a little clearer than the how to do it He was pleased to see that CMMI announced the Transforming Clinical Practice Initiative which will support 150 000 clinician practices through a collaborative learning process during the next four years I will be very curious to see how that goes Cutler says Can it reach out to physician offices and clinics all across the country and say Here s how you can do it Because we re going to need that as much as we need to get the incentives right Lola Butcher is a freelance writer and editor based in Missouri Interviewed for this article David Cutler PhD is the Otto Eckstein professor of applied economics Department of Economics Harvard University and was named Harvard College Professor in 2014 Discussion Starters Forum members What do you think Please share your thoughts in the comments section below Are you confident in your organization s ability to improve the value of care If so what are your primary strategies What incentives are needed to make participation in the federal government s ACO programs attractive What is the most important lesson from your participation in bundled payment or ACO initiatives so far Publication Date Wednesday July 15 2015 BACK TO PAGINATION Health economist David Cutler thinks the government and private payers are moving in the right direction with payment reform including by promoting new models such as bundled payment and ACOs Payment reform is the right route to getting America s healthcare costs under control says economist David Cutler In January Sylvia Mathews Burwell secretary of the U S Department of Health and Human Services announced three important targets in the pay for value movement Thirty percent of Medicare payments will be tied to quality or value through alternative payment models such as accountable care organizations ACOs and bundled payment programs by the end of 2016 Fifty percent of Medicare payments will go through those alternative payment models by the end of 2018 Eighty five percent of Medicare fee for service payments will be tied to quality or value by the end of 2016 This a sample article from HFMA s CFO Forum Learn more and subscribe A few days later several of the nation s largest health systems and insurers coming together as the Health Care Transformation Task Force said they plan to shift 75 percent of their business to ACOs bundled payment and other alternative models by 2020 Those are enormous steps says Cutler who is especially optimistic about the promise of bundled payment and ACOs Encouraging Bundled Payments While Cutler has no formal role in influencing federal policy his perspective is valued by policymakers A member of the Institute of Medicine and an advisor to several presidential candidates among his many honors Cutler currently serves on the Massachusetts Health Policy Commission which is working to reduce medical spending in that state One of his perspectives HHS should aggressively push bundled payments for acute care Cutler s research has documented that the 17 most expensive conditions among Medicare patients account for half of Medicare spending as described in a March 2012 study in the New England Journal of Medicine While many of the most expensive conditions are chronic diseases they are costly because of associated acute treatments For example the most expensive condition is osteoarthritis Cutler and his colleague found that most episodes of care for osteoarthritis involve elective joint replacements Medicare and private insurers have documented that bundled payment programs reduce costs Writing in a Journal of the American Medical Association blog post Cutler said the Center for Medicare and Medicaid Innovation s CMMI s Bundled Payment for Care Improvement demonstration program is a logical starting point to expand bundled payments One straightforward reform would be to extend the programs there into a mandatory nationwide program he wrote In an interview he suggested two ways this could work CMS could assign a target payment for a bundle of services and the various providers in an episode of care would have two sided risk for the bundle At the end of a performance period CMS would evaluate how many of the episodes of care cost less than target and how many cost more and adjust its payments to the provider group accordingly If the providers total costs during the performance period fell below the target they would divide the savings if their costs exceeded that amount they would share the loss A starker approach would be for CMS to set a flat payment for a bundle of services The other way would be for CMS to pay a single amount and have providers figure it out Cutler says That may be more rapid change than many providers are ready for Encouraging ACO Participation About 400 provider organizations are participating in the federal government s Medicare Shared Savings Program MSSP and Pioneer ACO initiatives with mixed results and enthusiasm Cutler says private insurers have demonstrated that the ACO model reduces spending while improving quality In his home state of Massachusetts one of the nation s first accountable care initiatives the Alternative Quality Contract introduced by Blue Cross Blue Shield of Massachusetts generated savings of nearly 10 percent by its fourth year of operation He believes more providers will participate in CMS s ACO programs if the incentives are right because history shows that the healthcare sector is extremely responsive to changes in incentives The introduction of diagnostic related groups DRGs the Balanced Budget Act of 1997 and the Hospital Readmissions Reduction Program are examples of public policies that prompted hospitals and health systems to change their operations in response to financial incentives Every time we look what we see is that the response to policies is far bigger than most people would have guessed Cutler says It happens time and again We re now talking about the healthcare spending slow down and it s not surprising that it s happening at the same time we put in incentives to be more efficient The uneven performance among MSSP participants and the decision by several Pioneer ACOs to drop out of the program may reflect that the right mix of financial incentives is not yet in place One thing that is important is the extent to which the groups get to share savings or realize losses Cutler says Those are things that can be adjusted particularly in the first couple of years Another type of incentive may come from the new legislation that ended the sustainable growth rate formula for physician pay The law approved by Congress in April provides a 5 percent bonus each year from 2019 to 2024 for clinicians who receive a significant share of their revenues through an alternative payment model that includes downside financial risk and quality measurement That is an opportunity to encourage more providers to move into the ACO program Cutler says Determining How to Do It But getting providers to the game is half the battle says Cutler The real issue is how do we make it work says Cutler What s amazing to me is how ready the provider system is for a new payment model Everywhere I look there is readiness for it combined with a sense of Please help to make this work well so that it s not just a complete free for all and we have no idea what to do Cutler recalls a meeting of hospital chief medical officers at which he posed the question Suppose you ve been ordered to save money How would you do it Meeting attendees said that in fact they had been ordered to save money I said How many of you feel like you have a good handle on how to do that and no one raised their hand he says I think the what to do is a little clearer than the how to do it He was pleased to see that CMMI announced the Transforming Clinical Practice Initiative which will support 150 000 clinician practices through a collaborative learning process during the next four years I will be very curious to see how that goes Cutler says Can it reach out to physician offices and clinics all across the country and say Here s how you can do it Because we re going to need that as much as we need to get the incentives right Lola Butcher is a freelance writer and editor based in Missouri Interviewed for this article David Cutler PhD is the Otto Eckstein professor of applied economics Department of Economics Harvard University and was named Harvard College Professor in 2014 Discussion Starters Forum members What do you think Please share your thoughts in the comments section below Are you confident in your organization s ability to improve the value of care If so what are your primary strategies What incentives are needed to make participation in the federal government s ACO programs attractive What is the most important lesson from your participation in bundled payment or ACO initiatives so far Publication Date Wednesday July 15 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 Future of Online Patient Billing Portals This white paper written by Apex President Patrick Maurer discusses methods to increase patient adoption of online payments Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections This white paper shows why patient centric approaches to online payment portals are important complements to traditional provider centric approaches HFMA Business Profiles Optum Enabling Transformative Change Elena White vice president of risk quality and network solutions for Optum discusses how healthcare providers can leverage data and technology

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  • Bundled Payments: Building Cost and Quality Skills While Broadening the Patient Base
    of that opportunity Todd Fitz is a senior vice president Strategy Practice Kaufman Hall Associates Skokie Ill and a member of HFMA s First Illinois Chapter Dan Clarin is an assistant vice president Strategy Practice Kaufman Hall Associates This is a sample article from CFO Forum Learn more and subscribe Publication Date Thursday June 12 2014 BACK TO PAGINATION Insights from Forum Sponsor Kaufman Hall Associates Inc By agreeing to provide specific services at a set price and a predetermined level of care bundled payment arrangements allow organizations to build competencies for the new healthcare era Bundled payment arrangements are becoming increasingly prevalent as payers and employers seek to stem high healthcare costs and hospitals and health systems move toward a value based business model Such arrangements typically involve a payer or employer agreeing with a healthcare provider on a fixed price for a specific service including any hospital physician and ancillary services The agreed on price often also incorporates pre hospitalization and post hospitalization expenses In addition to a guaranteed price these arrangements require a defined level of service and quality as measured by quality metrics related to outcomes clinical performance patient satisfaction and other measures Bundled payment arrangements can be established at a local regional or super regional level and are typically focused on high cost elective procedures such as major joint replacements spinal procedures and bariatric surgery Employers and Providers Seek Benefits of Bundled Payments In an effort to reduce healthcare expenditures the Centers for Medicare and Medicaid Services has conducted pilot programs offering bundled payment opportunities through Medicare In addition a growing number of employers are pursuing contracts directly with providers in an effort to control rapidly rising health benefit expenditures WalMart for example has bundled payment arrangements with six leading U S hospitals and health systems to treat employees who need heart spine or transplant surgery The Cleveland Clinic also offers bundled payment arrangements for large employers for cardiac and spine procedures back pain care and orthopedic services Other employers who have established these types of agreements include General Electric Lowe s Pepsi and Kroger In some cases larger health systems are subcontracting with smaller local providers for bundled payment services When done appropriately bundled payment arrangements offer benefits to all parties For employers and payers the arrangements provide a guaranteed level of care quality and greater predictability of healthcare costs as well as lower prices for traditionally high cost services Patients who increasingly are bearing a greater share of their healthcare costs also benefit from the provision of high quality care at lower out of pocket cost For hospitals health systems physicians and other healthcare providers these arrangements provide the opportunity to build core competencies needed for value based care including the ability to manage patients and cost with a moderate level of financial risk Providers can improve their ability to consistently perform at a certain level of quality and service and to routinely track measure and analyze care cost and quality If they are successful organizations can attract more patients and build their programs When and How to Pursue Bundled Payment Arrangements In determining whether to enter into a bundled payment arrangement an organization must evaluate the following factors Its ability to excel on quality and cost Its strengths and weaknesses in areas such as market position surgical performance physician alignment and accessibility to patients Its ability to collaborate across functional areas to create a consistent product The willingness of employers and payers in the region to participate in the arrangement The willingness of employed and independent physicians including primary care surgeons and hospital based providers to participate under the terms of the contract Whether it is equipped to handle projected patient volume increases For arrangements in which patients may be traveling in from some distance for care healthcare leaders also should factor in the organization s proximity to major airports and hotels and other lodging options Organizations that decide to pursue bundled payment arrangements must evaluate their existing capabilities and competencies and build them where needed These may include implementing clinical protocols clinical intake processes pre and post discharge coordination and data and analytical competencies The biggest risk for organizations in implementing a bundled payment strategy is ensuring their ability to provide designated services at a consistent cost and quality level while still achieving a sustainable margin Understanding the allocation and variation of costs at a detailed level related to these procedures is critical A multidisciplinary team with representatives from finance care delivery clinical operations data analysis and quality performance should lead development of the organization s go to market strategy This process will include identifying the potential payers and employers who may be available as partners on a direct contracting basis through a bundled payment program The team also will need to project anticipated revenue and program costs The possibilities for individual organizations related to bundled payment arrangements vary based on several factors including geography proximity to major employers and the ability to execute While such contracts offer significant opportunity to expand a hospital s or health system s patient base only those entities with a well thought out program and market strategy will successfully capture meaningful portions of that opportunity Todd Fitz is a senior vice president Strategy Practice Kaufman Hall Associates Skokie Ill and a member of HFMA s First Illinois Chapter Dan Clarin is an assistant vice president Strategy Practice Kaufman Hall Associates This is a sample article from CFO Forum Learn more and subscribe Publication Date Thursday June 12 2014 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

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  • Addressing the Impact of New-Era Investments on Credit Ratings
    Aa A and Baa ratings among others Therese Wareham is CEO Kaufman Hall Associates Skokie Ill Lisa Goldstein is associate managing director Public Finance Group Moody s Investors Service Inc Kevin Holloran is senior director and U S public finance and analytical manager USPF Healthcare Group Standard Poor s James LeBuhn is senior director healthcare sector head Fitch Ratings Discussion Starters Forum members What do you think Please share your thoughts in the comments section below How is your hospital prioritizing investments during the current abyss period as termed by Wareham with declining revenues and disproportionately high expenditures What questions do you have for the rating agencies Publication Date Tuesday May 12 2015 BACK TO PAGINATION Clear communication and liquid cash reserves are key for organizations seeking to maintain the strength of their credit ratings while making investments in the transition to value based care rating agency experts say As they seek to restructure their operations and care delivery for the value based business model many hospital and health system leaders are making substantial investments for the long term such as those related to physician alignment risk sharing and care management The potential ramifications on an organization s credit rating and capital access must be considered since credit ratings which provide access to capital are assets to be managed Three rating agency representatives shared insights during a panel discussion about the credit implications of value based initiatives The session featured James LeBuhn of Fitch Ratings Kevin Holloran of Standard Poor s and Lisa Goldstein of Moody s Investors Service The session was moderated by Therese Wareham CEO of Kaufman Hall Associates Excerpts are offered here Wareham The movement away from volume based payment to a value based model is creating for hospitals and health systems an abyss period with declining revenues and disproportionately high operating expenses and capital expenditures How do you evaluate organizations that are making infrastructure investments and pursuing population health programs that in the short run may reduce revenue and increase cost LeBuhn Fitch believes that financial performance is a product of the qualitative and strategic factors pursued by the organization Expectations for future financial performance and ultimately the credit rating are informed by assessment of those factors As long as a borrower s underlying strategic position remains sound a certain amount of financial variability should not affect the rating We assess the soundness of the business strategy through an analysis of historical performance relative to projections We have the most confidence in organizations that consistently meet their projections and budgets Communication early and often is important We look at how proactive executives are in communicating potential operating performance variability and how much detail they provide on why there is variation and on the recovery action plan We ask management to articulate the benefits of the plan key risk factors timeline the guard rails and the key personnel and consultants involved We also ask what the risks are of not making those investments Providing detail about the income statement also is critical Certain expenses really are investments such as IT which has software and hardware costs but also employee training expenses Allowing us to understand expenses granularly will help preserve a credit rating Health care is a very fluid business To me it s more about how well an organization can pivot and what levers it can use to maintain or at least preserve profitability Wareham How are you starting to assess insurance risk strategies and the balance sheet in light of health care s new model Goldstein At Moody s we are working closely with our health insurance team that rates health insurance plans across the country to assess risk strategies and metrics We ask an organization s executives to answer all of the questions outlined earlier in my presentation see Winter 2015 Kaufman Hall Report p 7 We also are taking a deep dive into the liquidity and allocations of investments on the balance sheet For example if an organization is required by insurance regulations to set aside 10 million as an insurance reserve this sum likely will not be included in the organization s unrestricted cash position We want to know what the reserve requirements are and how the organization will effectively replenish that 10 million Wareham What are the credit implications for health systems that are not moving toward value based contracts Holloran We would want to know why an organization is not moving toward value arrangements with payers We do want to see some level of experimenting and practicing in population management For organizations that are investing a lot in population health management it s not going to have a huge impact on credit as long as the investments are measured and strategic We view this as positive and the right thing to do Wareham How long will you be patient about compression in profitability while an organization is investing for the new era Holloran We don t expect V shaped profitability rebounds U shaped rebounds are fine At some point those investments need to start producing There are going to be some pain points we get that but they can t go on forever The tolerance is probably about three years LeBuhn The more you can communicate how long you expect to see this compression the better However if you keep coming back and extending those projections that s where we re going to begin to run out of patience We tend to be a bit more patient with organizations that have solid cash positions Goldstein The changes happening in health care are not cyclical There will be a new normal The projections we see from the very forward looking systems that have been investing heavily in IT risk physician integration etc are sobering We likely will need to reset the compass over time as to what the median margins and metrics are for Aa A and Baa ratings among others Therese Wareham is CEO Kaufman Hall Associates Skokie Ill Lisa

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  • Montefiore’s Balanced Portfolio of Capital Investments
    us collaborate with other providers Through the RHIE which we developed with our provider partners we can now share medical information at the point of service throughout the Bronx It puts information into the hands of caregivers in the emergency departments where so many people are seen and helps to inform medical decisions and treatments Advancing the AMC Mission Montefiore has also invested heavily in vital specialty programs including transplant and a children s hospital We rebuilt a children s hospital when a lot of parties thought it would be impossible to develop a successful children s hospital in such a poor borough But children s health status in the Bronx is among the poorest in the region and in the country with disproportionately high levels of asthma obesity and other health problems So we felt an obligation to make that investment and it s really been a tremendous success story It has been a catalyst for fundraising bringing in tens of millions of dollars in philanthropy And in the last couple of years our children s hospital has gotten into the U S News and World Report s Best Hospitals rankings The children s hospital has also served as catalyst for attracting and retaining some of nation s best pediatric doctors Recruiting specialists and primary care physicians and keeping them very productive helped Montefiore achieve an annual compounded 4 percent increase in total hospital admissions between 1999 and 2009 in a region where the population is static or growing by less than 1 percent a year So it has helped us to utilize our capacity improve productivity and generate more top line revenue some of which stuck to our bottom line says Perlman However physician recruitment has required enormous support from the hospital says Perlman noting that top physicians tend to choose more socio economically advantaged communities to practice in than the Bronx We have had to make extraordinary investments in recruiting and supporting the practices of employed primary care and specialty physicians and compensating them in a market based manner But the investments in employed physicians has not only benefitted Montefiore but has greatly improved access to care for many thousands of people living in vulnerable communities throughout the Bronx Utilizing Assets Reducing Costs Perlman points to a number of other strategies that Montefiore has used Bed management and turnover We ve made very effective use of our physical assets says Perlman Our occupancy levels have hovered over 90 percent for many years now And it s difficult because there s an efficiency tipping point when you re operating at that level of capacity But our bed turnover has been very high over 60 per bed and that comes from managing throughput and length of stay using care plans and effective discharge planning We also have made very efficient use of our critical care beds and extended these services throughout the hospital through a model ICUs without walls says Perlman This has allowed us to spread fixed costs and overhead and make effective use of our capital assets and facilities Furthermore our bed management initiatives have allowed us to handle an enormous patient flow from the second busiest emergency department in the United States Supply chain We invested very heavily in automating our supply chain 15 years ago he says And that s produced we think very significant benefits to our organization in terms of controlling our unit costs and managing our resources more effectively Revenue cycle There s always an opportunity to do better in the revenue cycle to automate to establish more effective business rules and workflows and make the transactions more efficient and cost effective for the health plans as well for the providers says Perlman However we have always benchmarked very well on receivable management and cost to collect performance measures Recently working with a commercial technology company we have designed and implemented exciting new automation and workflow changes improving our O P collections and reducing operating costs Montefiore through a joint venture company Linxus is partnering with other hospitals and health plans in the New York region to automate and simplify business transactions and improving the workflow for both providers and health plans We re excited about where this work is taking us says Perlman Collaboration of providers and health plans is essential to automate and standardize eligibility claims remittance and other HIPAA transactions in ways that will reduce everyone s cost of doing business Be Willing to Take Risks Perlman advises finance leaders Embrace change including a willingness to take risks and pursue innovative payment arrangements and partnering which serve to better align payer and provider incentives Some mistakes will occur along the way however it is essential that finance executives champion initiatives within their organizations aimed at improving care achieving cost efficiency and accepting responsibility for our role as accountable care organizations The provider industry has to do its part to ensure that the quality and affordability of U S health care supports a strong economy and enhances our global competitiveness Joel Perlman is executive vice president finance and CFO Montefiore Medical Center New York City and a new member of HFMA s New York chapter jperlman montefiore org Before joining Montefiore in 1988 Joel was CFO at New Jersey s St Francis Medical Center in Trenton Before that he was involved in performing numerous audits and consulting engagements with Ernst Young When asked what he likes most about healthcare finance Joel says he enjoys the fact that he can meld his business and finance interests with the social and healing mission of health care and also that he has been able to spend over 20 years in his career working at an organization where five generations of his family have received their care Joel finds the biggest challenge in his position the obligation to try to fulfill both the mission and margin objectives of Montefiore given the extraordinary challenging characteristics in the Bronx market environment Discussion Starters Forum members Share your thoughts ideas and comments about this article on the CFO Forum Linked In discussion board What financial risks has your organization taken that have paid off in the long run Or perhaps you have another discussion starter Publication Date Thursday February 10 2011 BACK TO PAGINATION If you know your market if you re strategically driven you are best positioned to make appropriate investments says CFO Joel Perlman looking back on Montefiore s wise capital investment strategy over the last 20 years Compared with the margins of other large health systems Montefiore Medical Center s 1 to 2 percent operating margins are very modest acknowledges Joel Perlman executive vice president finance and CFO Montefiore Medical Center Yet few healthcare organizations serve communities like the Bronx New York the poorest urban county in the United States A major not for profit academic medical center Montefiore has an 80 percent government payer mix 40 percent Medicare and 40 percent Medicaid It also operates the second largest residency training program in the country We re practical about our margin potential says Perlman This is a sample article from HFMA s CFO Forum a subscription based discussion community that encourages networking and discussion among healthcare finance leaders Learn more or join the CFO Forum When asked how Montefiore has generated even a modest profit given its challenging market Perlman points to a number of daring strategies strategically driven community oriented investments that have made Montefiore a contender in the race toward accountable care organizations ACOs Developing a highly integrated care delivery system Launching a care management organization to handle capitated contracts and care coordination Making calculated investments in specific programs and specialties to increase admissions and market share Employing physicians Pursuing IT supply chain and revenue cycle performance improvement efficiencies It would have been easy for us to avoid or defer capital investments when our liquidity was very limited says Perlman Instead we borrowed and leveraged our balance sheet We concluded 20 years ago that to successfully execute our long term strategy we had to invest take the risks borrow the money and build but all the while being highly focused on choosing the right priorities to invest in Fortunately we have a sophisticated and knowledgeable Board which has supported management initiatives every step of the way Thanks to Montefiore s balanced portfolio of investments the health system s market share has doubled in the last 20 years Just as important overall mortality rates at Montefiore fell to 1 76 in 2008 from 3 5 percent in 1997 while inpatient length of stay also fell In addition Montefiore scores higher than average for New York State on most HCAHPS measures of patients experiences with care Building a Coordinated Delivery System Montefiore has spent the past two decades developing an integrated delivery system capability with significant investments in primary care and community based services as well traditional academic medical center investments Today it is well positioned as an ACO Twenty years ago it was all about growing admissions and hospital market share says Perlman Today it s about managing and delivering more effective care and offering an improved patient experience across the continuum of care Care management and capitated contracting In 1996 Montefiore established CMO The Care Management Company to manage risk for the medical center and the IPA Our CMO is very involved in medical management utilization review coordinating care and case management for all the patients in our full risk arrangements says Perlman About 30 percent of our customer base come to us through full risk capitation arrangements with Medicare Advantage Medicaid Manage Care and through contracts with commercial plans like United and Emblem says Perlman The medical center also has a number of partial risk arrangements with insurers Perlman believes capitated contracts are helping improve care for all Montefiore patients Once you re managing care for 150 000 people on a capitated basis it causes you to learn with trial and error what interventions and what processes of care work most effectively As physicians and the caregiving teams learn more effective ways to deliver care to our capitated population they extend these same improvements to all of our patients It hasn t been a straight line up admits Perlman There were years where we lost money in our managed care businesses In the past several years as we ve learned to manage care more effectively our capitated business performance has improved allowing it to contribute more value to the Montefiore health system A clinically integrated medical staff The majority of the physicians that practice at Montefiore today are employed by the medical center says Perlman That s by necessity he says given the Bronx s demographics and payer mix We ve had to employ physicians and align the incentives of our physician community with our hospitals in a way that ensures that physicians aren t financially punished for seeing patients whose payment rates are low he says adding that every employed physician in the Montefiore system over 1 500 strong is obligated to see Medicaid patients An EHR and HIE Since 1995 Montefiore has invested over 200 million in IT advances including a fully operational inpatient EHR and a nearly completed ambulatory EHR Montefiore also spearheaded efforts to create the Bronx Regional Health Information Exchange RHIE which launched last July We made these IT investments to automate our businesses and achieve efficiencies as well as improve overall quality says Perlman However our investments have also helped us collaborate with other providers Through the RHIE which we developed with our provider partners we can now share medical information at the point of service throughout the Bronx It puts information into the hands of caregivers in the emergency departments where so many people are seen and helps to inform medical decisions and treatments Advancing the AMC Mission Montefiore has also invested heavily in vital specialty programs including transplant and a children s hospital We rebuilt a children s hospital when a lot of parties thought it would be impossible to develop a successful children s hospital in such a poor borough But children s health status in the Bronx is among the poorest in the region and in the country with disproportionately high levels of asthma obesity and other health problems So we felt an obligation to make that investment and it s really been a tremendous success story It has been a catalyst for fundraising bringing in tens of millions of dollars in philanthropy And in the last couple of years our children s hospital has gotten into the U S News and World Report s Best Hospitals rankings The children s hospital has also served as catalyst for attracting and retaining some of nation s best pediatric doctors Recruiting specialists and primary care physicians and keeping them very productive helped Montefiore achieve an annual compounded 4 percent increase in total hospital admissions between 1999 and 2009 in a region where the population is static or growing by less than 1 percent a year So it has helped us to utilize our capacity improve productivity and generate more top line revenue some of which stuck to our bottom line says Perlman However physician recruitment has required enormous support from the hospital says Perlman noting that top physicians tend to choose more socio economically advantaged communities to practice in than the Bronx We have had to make extraordinary investments in recruiting and supporting the practices of employed primary care and specialty physicians and compensating them in a market based manner But the investments in employed physicians has not only benefitted Montefiore but has greatly improved access to care for many thousands of people living in vulnerable communities throughout the Bronx Utilizing Assets Reducing Costs Perlman points to a number of other strategies that Montefiore has used Bed management and turnover We ve made very effective use of our physical assets says Perlman Our occupancy levels have hovered over 90 percent for many years now And it s difficult because there s an efficiency tipping point when you re operating at that level of capacity But our bed turnover has been very high over 60 per bed and that comes from managing throughput and length of stay using care plans and effective discharge planning We also have made very efficient use of our critical care beds and extended these services throughout the hospital through a model ICUs without walls says Perlman This has allowed us to spread fixed costs and overhead and make effective use of our capital assets and facilities Furthermore our bed management initiatives have allowed us to handle an enormous patient flow from the second busiest emergency department in the United States Supply chain We invested very heavily in automating our supply chain 15 years ago he says And that s produced we think very significant benefits to our organization in terms of controlling our unit costs and managing our resources more effectively Revenue cycle There s always an opportunity to do better in the revenue cycle to automate to establish more effective business rules and workflows and make the transactions more efficient and cost effective for the health plans as well for the providers says Perlman However we have always benchmarked very well on receivable management and cost to collect performance measures Recently working with a commercial technology company we have designed and implemented exciting new automation and workflow changes improving our O P collections and reducing operating costs Montefiore through a joint venture company Linxus is partnering with other hospitals and health plans in the New York region to automate and simplify business transactions and improving the workflow for both providers and health plans We re excited about where this work is taking us says Perlman Collaboration of providers and health plans is essential to automate and standardize eligibility claims remittance and other HIPAA transactions in ways that will reduce everyone s cost of doing business Be Willing to Take Risks Perlman advises finance leaders Embrace change including a willingness to take risks and pursue innovative payment arrangements and partnering which serve to better align payer and provider incentives Some mistakes will occur along the way however it is essential that finance executives champion initiatives within their organizations aimed at improving care achieving cost efficiency and accepting responsibility for our role as accountable care organizations The provider industry has to do its part to ensure that the quality and affordability of U S health care supports a strong economy and enhances our global competitiveness Joel Perlman is executive vice president finance and CFO Montefiore Medical Center New York City and a new member of HFMA s New York chapter jperlman montefiore org Before joining Montefiore in 1988 Joel was CFO at New Jersey s St Francis Medical Center in Trenton Before that he was involved in performing numerous audits and consulting engagements with Ernst Young When asked what he likes most about healthcare finance Joel says he enjoys the fact that he can meld his business and finance interests with the social and healing mission of health care and also that he has been able to spend over 20 years in his career working at an organization where five generations of his family have received their care Joel finds the biggest challenge in his position the obligation to try to fulfill both the mission and margin objectives of Montefiore given the extraordinary challenging characteristics in the Bronx market environment Discussion Starters Forum members Share your thoughts ideas and comments about this article on the CFO Forum Linked In discussion board What financial risks has your organization taken that have paid off in the long run Or perhaps you have another discussion starter Publication Date Thursday February 10 2011 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

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  • Learnings from the Front Lines: Physician Co-Management at Columbus Regional Health
    into account the value or volume of referrals Auditing the outcomes to assess if CRH achieved the clinical goals set forth under the co management agreement In CRH s agreement physicians agreed to meet certain clinical quality metrics and develop care pathways protocols for specific surgical procedures see the exhibit below An agreed on dollar amount 60 percent of the total co management compensation available to the physician s limited liability company LLC as determined by fair market value will be paid out to the physician LLC based on the percentage compliance with the established metrics and goals Physician compensation is primarily based on the time required to provide the services plus a potential share of cost savings The costs savings are determined based on the cost at a specific hospital e g CRH versus the cost to provide the same care at comparable hospitals Comparable hospitals e g local hospitals with similar operating structures may be defined based on acuity of cases academic status cost of living quality ratings and other metrics A secondary method of assessing fair market compensation is a comparison to other clinical co management agreements However the comparison must include a complete understanding of the services provided and the potential for improvement at the hospitals in which these arrangements are in place Sharing Savings with Surgical Employees Around the same time as CRH rolled out the co management initiative it also introduced a gainsharing program for all surgical employees e g nurses and technicians CRH leaders recognized the importance of employee gainsharing to the success of the co management initiative since nurses technicians and other surgical employees greatly impact OR start times patient satisfaction and many other metrics that dictate physician performance The gainsharing program for surgical department nurses techs and other employees allows for 40 percent of the surgery department s margin net revenue direct expenses to become eligible for distribution to the surgical employees See the tool below for further description of the program Access related tool Calculations for Employee Gainsharing The actual gainsharing amount paid out to the surgical employees is based on the percentage of compliance tiered with the established clinical performance metrics and protocols For example as follows 70 percent of incentive pay is paid out for 70 percent to 80 percent compliance 90 percent is paid out for 80 percent to 90 percent compliance 100 percent is paid out for 90 percent compliance Achieving Results The co management agreement was signed in July 2012 Within the first year the co management agreement has already generated very positive results The co management agreement has been great for the physicians and Columbus Regional Health says Kurt Ellis vice president of health system operations The physicians have begun to create a new culture in the surgery department develop a positive environment for the staff and themselves play a part in controlling their own destiny and operate in a physician driven culture that enables them to police themselves Ellis also stressed that the benefits to CRH and patient care have also been positive Specifically the co management agreement generated the following results within the first year On time surgery starts have increased from 47 percent to 62 percent Surgical quality and safety standards have been maintained in a more efficient environment with100 percent of all clinical outcome and patient safety metrics meeting or exceeding the highest assigned performance thresholds A 250 000 annual savings on surgical costs has been achieved through a physician led vendor management process The timely documentation of patient histories and physicals has improved by 6 percent Employee and surgeon objectives are now aligned through the adoption of the surgery center s employee gainsharing program Employee satisfaction scores have improved which has resulted in a 3 percent increase in employee retention within surgical services Given the success of the surgical co management arrangement the health system is evaluating expanding the agreement to the emergency department and positioning the organization to take on risk based contracts through the development of a clinically integrated network Creating a Path for Success Ellis outlined the following imperatives for hospitals and physicians who desire to create a successful co management agreement to ensure positive results Commitment of strong physician leadership Without the leadership and bravery of Michael Dorenbusch MD Larry Olson MD and Kendall Hadler MD the effort would have failed says Ellis Because of the commitment of these physicians to create a surgical environment that promoted high quality cost effective and optimal patient care we were able to get to where we are today The involvement of people who have gone down this path before Outside professional advisory firms helped CRH work through the strategic valuation and legal issues which helped ensure an arrangement that fit the local dynamics and was compliant with legal and regulatory guidelines Several conversations were also held with other health systems that had surgical co management agreements in place to learn what worked and what didn t Effective communication among physicians health system leaders and staff Effective communication to all stakeholders is key to not only gaining buy in but to getting valuable insights Looking to the Future The CRH leadership team recognizes that each market will move from volume to value at its own pace However the leadership team knew that it could take incremental steps over time to more effectively chart its own course by thoughtfully focusing on quality and efficiency projects within the current fee for service model No one knows exactly with the future of healthcare brings but innovative organizations like CRH are embracing the complexity to drive transformation in care delivery Dennis Butts is a director Navigant Consulting Inc s Provider Strategy Practice Curtis Bernstein is a managing director Altegra Health s Valuation and Transaction Practice Denver CO Discussion Starters What questions do you have for CRH about its co management agreement or employee gainsharing program Has your organization rolled out any co management agreements What are some lessons learned that you can share with other healthcare CFOs Please share your insights and questions in the comments section below which will be open for comments through Oct 11 Alternatively use the inshare button at the top of this web page to share this article and your comments on the CFO Forum s LinkedIn board Publication Date Friday September 13 2013 BACK TO PAGINATION Just one year after rolling out a co management agreement physician leaders have helped save an Indiana hospital about 250 000 in surgical expenses while boosting OR start times and employee satisfaction At the same time the hospital is aligning employee and physician objectives with an employee gainsharing program Several years ago the stand alone Columbus Regional Health CRH in Columbus Ind faced an interesting dilemma after a flood caused the hospital to close for several months The leadership team had to choose whether to permanently close the hospital partner with a larger health system or look for strategic ways to solidify and grow the hospital s market presence so as to sustain independence CRH s strong and determined leaders rallied around the last option ultimately rolling out a physician co management approach They saw co management as a key strategy to the organization s future success The agreement not only increased alignment with critical physicians but provided a solid foundation for aligning financial and clinical interests between the health system and its physicians producing a higher value for patients and payers To help ensure that physicians meet performance objectives CRH also launched a gainsharing program for surgical employees including nurses and technicians Physicians are not included in this gainsharing program but they benefit from it Surgical employees are now more motivated to help physicians meet co management performance goals such as ensuring OR start times This is a sample HFMA Forum article Learn more about the Forums and subscribe Developing the Co Management Plan After several initial planning exercises the CRH team realized that other health systems were interested in entering CRH s market via physician acquisitions To respond to this market threat CRH pursued a surgical co management agreement with Genesis Physician Group LLC a group of 35 independent surgeons proceduralists and anesthesiologists To ensure the desired systematic impact the co management agreement had to be led by physicians and professionally managed It also needed to span the full continuum of the surgical experience To accomplish these goals CRH took advantage of an ambulatory surgery center joint venture that it had formed in the 1990s with Genesis The two partners had 50 50 ownership in the Columbus Surgery Center CHR purchased the remaining 50 percent ownership interest in the Columbus Surgery Center from Genesis to become the full owner of the surgery center Then after completing the purchase CRH entered into the surgical co management agreement with Genesis The physicians now manage the full spectrum of inpatient and outpatient surgery and endoscopy services at the hospital and ambulatory surgery center The physician co managers also oversee the clinical staff within the hospital department A steering committee was created with majority physician participation and representatives from the health system s senior leadership team This steering committee worked together to structure the agreement and build the cultural pillars of the organization to ensure a sustainable partnership Jim Bickel CRH president and CEO and Michael Dorenbusch MD chairman of Genesis Physician Group LLC were instrumental in pulling the steering committee together Their sponsorship enabled the committee to work through the big challenges and not allow potential barriers to prevent progress Compensating Physicians for Services The key to making the co management program a success was to align the incentives for the physicians with the goals of CRH Accordingly CRH set goals around clinical outcomes patient safety satisfaction and operational effectiveness Under the Stark and anti kickback laws any compensation paid for achieving these goals are required to be set at fair market value In addition as a not for profit hospital CRH has other restrictions imposed by the Internal Revenue Service To meet these requirements CRH engaged the help of outside legal counsel familiar with the implementation of these types of arrangements in not for profit hospital settings and an independent consultant to assess fair market value for the services Some of the safeguards implemented include Verifying that compensation i e hourly compensation for services and profit distributions is not set in a manner that takes into account the value or volume of referrals Auditing the outcomes to assess if CRH achieved the clinical goals set forth under the co management agreement In CRH s agreement physicians agreed to meet certain clinical quality metrics and develop care pathways protocols for specific surgical procedures see the exhibit below An agreed on dollar amount 60 percent of the total co management compensation available to the physician s limited liability company LLC as determined by fair market value will be paid out to the physician LLC based on the percentage compliance with the established metrics and goals Physician compensation is primarily based on the time required to provide the services plus a potential share of cost savings The costs savings are determined based on the cost at a specific hospital e g CRH versus the cost to provide the same care at comparable hospitals Comparable hospitals e g local hospitals with similar operating structures may be defined based on acuity of cases academic status cost of living quality ratings and other metrics A secondary method of assessing fair market compensation is a comparison to other clinical co management agreements However the comparison must include a complete understanding of the services provided and the potential for improvement at the hospitals in which these arrangements are in place Sharing Savings with Surgical Employees Around the same time as CRH rolled out the co management initiative it also introduced a gainsharing program for all surgical employees e g nurses and technicians CRH leaders recognized the importance of employee gainsharing to the success of the co management initiative since nurses technicians and other surgical employees greatly impact OR start times patient satisfaction and many other metrics that dictate physician performance The gainsharing program for surgical department nurses techs and other employees allows for 40 percent of the surgery department s margin net revenue direct expenses to become eligible for distribution to the surgical employees See the tool below for further description of the program Access related tool Calculations for Employee Gainsharing The actual gainsharing amount paid out to the surgical employees is based on the percentage of compliance tiered with the established clinical performance metrics and protocols For example as follows 70 percent of incentive pay is paid out for 70 percent to 80 percent compliance 90 percent is paid out for 80 percent to 90 percent compliance 100 percent is paid out for 90 percent compliance Achieving Results The co management agreement was signed in July 2012 Within the first year the co management agreement has already generated very positive results The co management agreement has been great for the physicians and Columbus Regional Health says Kurt Ellis vice president of health system operations The physicians have begun to create a new culture in the surgery department develop a positive environment for the staff and themselves play a part in controlling their own destiny and operate in a physician driven culture that enables them to police themselves Ellis also stressed that the benefits to CRH and patient care have also been positive Specifically the co management agreement generated the following results within the first year On time surgery starts have increased from 47 percent to 62 percent Surgical quality and safety standards have been maintained in a more efficient environment with100 percent of all clinical outcome and patient safety metrics meeting or exceeding the highest assigned performance thresholds A 250 000 annual savings on surgical costs has been achieved through a physician led vendor management process The timely documentation of patient histories and physicals has improved by 6 percent Employee and surgeon objectives are now aligned through the adoption of the surgery center s employee gainsharing program Employee satisfaction scores have improved which has resulted in a 3 percent increase in employee retention within surgical services Given the success of the surgical co management arrangement the health system is evaluating expanding the agreement to the emergency department and positioning the organization to take on risk based contracts through the development of a clinically integrated network Creating a Path for Success Ellis outlined the following imperatives for hospitals and physicians who desire to create a successful co management agreement to ensure positive results Commitment of strong physician leadership Without the leadership and bravery of Michael Dorenbusch MD Larry Olson MD and Kendall Hadler MD the effort would have failed says Ellis Because of the commitment of these physicians to create a surgical environment that promoted high quality cost effective and optimal patient care we were able to get to where we are today The involvement of people who have gone down this path before Outside professional advisory firms helped CRH work through the strategic valuation and legal issues which helped ensure an arrangement that fit the local dynamics and was compliant with legal and regulatory guidelines Several conversations were also held with other health systems that had surgical co management agreements in place to learn what worked and what didn t Effective communication among physicians health system leaders and staff Effective communication to all stakeholders is key to not only gaining buy in but to getting valuable insights Looking to the Future The CRH leadership team recognizes that each market will move from volume to value at its own pace However the leadership team knew that it could take incremental steps over time to more effectively chart its own course by thoughtfully focusing on quality and efficiency projects within the current fee for service model No one knows exactly with the future of healthcare brings but innovative organizations like CRH are embracing the complexity to drive transformation in care delivery Dennis Butts is a director Navigant Consulting Inc s Provider Strategy Practice Curtis Bernstein is a managing director Altegra Health s Valuation and Transaction Practice Denver CO Discussion Starters What questions do you have for CRH about its co management agreement or employee gainsharing program Has your organization rolled out any co management agreements What are some lessons learned that you can share with other healthcare CFOs Please share your insights and questions in the comments section below which will be open for comments through Oct 11 Alternatively use the inshare button at the top of this web page to share this article and your comments on the CFO Forum s LinkedIn board Publication Date Friday September 13 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

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  • Forum Poll: Revenue Cycle Problems and Exchange Plans
    percent covered by exchange plans However two respondents reported greater numbers That said many respondents also said it was too early i e in February and March to determine how many patients were enrolled Revenue Cycle Issues Forty five of the 56 respondents said that some patients with exchange plans caused revenue cycle problems The most common issues relate to the patient s knowledge of the plan The article is based on an informal Forum polls conducted in February and March 2014 HFMA thanks all the Forum members who took part in this informal poll Learn more about HFMA Forum and join Publication Date Wednesday April 16 2014 BACK TO PAGINATION While the launch of the commercial insurance exchanges has made big headlines the impact on healthcare providers was fairly minimal as of late March according to an informal HFMA Forum poll Fifty six Forum members shared details on their organization s experience with the commercial exchange plans through an informal poll conducted in February and March While the sample was small the anecdotal results identify some common revenue cycle problems that healthcare providers are having related to the exchange plans including a lack of knowledge among patients of the plans benefit designs Percentage of Patients with Exchange Plans The majority of respondents reported having only a small percentage of patients less than 5 percent covered by exchange plans However two respondents reported greater numbers That said many respondents also said it was too early i e in February and March to determine how many patients were enrolled Revenue Cycle Issues Forty five of the 56 respondents said that some patients with exchange plans caused revenue cycle problems The most common issues relate to the patient s knowledge of the plan The article is based on an informal Forum polls conducted in February and March 2014 HFMA thanks all the Forum members who took part in this informal poll Learn more about HFMA Forum and join Publication Date Wednesday April 16 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 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 Future of Online Patient Billing Portals This white paper written by Apex President Patrick Maurer discusses methods to increase patient adoption of online payments Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections This white paper shows why patient centric approaches to online payment portals are important complements to traditional provider centric approaches HFMA Business Profiles Optum Enabling Transformative Change Elena White vice president of risk quality and network solutions for Optum discusses how healthcare providers can leverage data and technology as they enable risk in their organization HFMA RESOURCE LIBRARY Payment Portals Can Improve Self Pay Collections and Support Meaningful Use Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs This article written by Apex Founder and CEO Brian Kueppers explores a number of strategies to create synergy between patient billing online payment portals and electronic health record EHR software to realize a high ROI in speed to payment patient

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  • What the Navigator Rule Means for Providers
    the exchange and overseen by organizations that protect personally identifiable information CMS plans to make the training material for the certified application counselor program publicly available once it is developed Anyone will be able to access that training material regardless of whether you intend to become certified Chad Mulvany is director healthcare finance policy strategy and development HFMA This summary was based in part on a special members only bulletin from the American Hospital Association and a recent Health Affairs blog piece by Timothy Jost This is a sample article from HFMA s CFO Forum which is a networking and discussion community for senior healthcare finance leaders Learn more about the CFO Forum BACK TO PAGINATION CMS s final navigator rule opens the door for hospitals and health systems to play a role in educating patients about the health insurance marketplaces either by offering assistance services themselves or by referring patients to appropriate services Here s what you need to know On July 12 the Centers for Medicare Medicaid Services CMS issued its final rule for the various types of assisters that will help consumers enroll in the health insurance marketplaces beginning this October Below are some key take aways from the final rule What s the difference between navigators non navigator assistance personnel and a certified application counselor CAC The final rule spells out three main distinctions among these three types of consumer assisters Funding Navigators and non navigator assistance personnel can be funded with grants either federal or state grants depending on what type of exchange is running in your state The Department of Health Human Services fact sheet includes a table that lays out this funding information CACs are not eligible to receive funding grants through the federal or state exchanges Training outreach Both navigators and non navigators will be required to take 30 hours of training to be certified and both will be responsible for the whole range of exchange enrollment activities from public outreach and education to helping individuals enroll and sign up for premium subsidies By contrast the CACs will have to take some training which will be left to the discretion of the states but CMS insinuates through the final rule that the amount of training could be less than what is required of navigators and non navigators CACs are only required to provide assistance with activities related to enrollment however they are not precluded from conducting community outreach Conflicts of interest reporting Navigators and non navigators may not be health insurers or stop loss insurers subsidiaries of insurers or associations that represent insurers nor can they receive consideration from health insurers in connection with the enrollment of individuals in qualified health plans Navigators and non navigators must attest that they have no existing conflict of interests will provide information to consumers on the full range of qualified health plans and insurance affordability programs and provide a written plan to remain free of conflicts Some potential conflicts of interest do not preclude an individual or organization from being either a navigator or non navigator however they must be disclosed to both the health insurance marketplace and consumers These include the sale of lines of insurance other than health or stop loss for agents who are navigators employment relationships with insurers stop loss insurers or their subsidiaries within the previous five years or employment relationships between an insurer stop loss insurer or subsidiary and the navigator or staff member s spouse or domestic partner Organizations with conflicted interests like insurers or their agents and brokers are explicitly not prohibited from serving as CACs However CACs must disclose any conflicts of interest to consumers they serve and to the exchanges that certify them or if they are individuals certified by an organization to the organization For navigators non navigators and CACs only the employees or volunteers acting in an assister capacity need to be free of conflicts of interest What roles can hospitals and provider organizations play It appears that hospitals and other provider organizations can serve as any type of exchange assister The section of the final rule discussing CACs explicitly states healthcare providers when listing types of organizations that would qualify The navigator non navigator is less explicit however page 42832 of the final rule discusses whether or not a healthcare provider s contract with a payer to provide medical services to members would constitute a conflict of interest It clarifies that while the provider may have to disclose the relationship it would not serve as a bar This seems to suggest that providers can be navigators non navigators Can providers who have insurance plans under their corporate umbrella act as navigators non navigators or CACs Yes as long as the individuals performing the assister function don t have any existing conflicts of interest and have no reporting relationships with the entity that sells insurance Do provider organizations have to be certified to provide assistance enrolling individuals in exchange products No Only individuals who represent themselves to the public as certified application counselors need to be certified As detailed on page 42843 of the final rule individuals and entities providing application and enrollment assistance related are not required to be certified application counselors whether by the exchange state Medicaid or CHIP agencies Nor are they required to be organizations designated by the exchange in order to continue providing those services or communicating with consumers The certified application counselor program is not designed to limit existing or potential application assistance programs Rather the certification of an individual as a certified application counselor provides an assurance to consumers that they are receiving assistance from persons trained by the exchange and overseen by organizations that protect personally identifiable information CMS plans to make the training material for the certified application counselor program publicly available once it is developed Anyone will be able to access that training material regardless of whether you intend to become certified Chad Mulvany is director healthcare finance policy strategy and development HFMA

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  • One CFO’s View on How Patient Satisfaction Improves the Bottom Line
    need to give them tools so they can be more comfortable being uncomfortable Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff Ill Interviewed for this article Roger Mattke FHFMA senior vice president and CFO Lafayette General Health Lafayette La and a member of HFMA s Louisiana Chapter This article is based on an interview and a presentation at the HFMA s Capital Conference in Chicago in April 2014 Discussion Starters What have been your biggest challenges in raising patient satisfaction What strategies do you use to improve employee engagement What role can finance leaders play in improving patient satisfaction and employee engagement Publication Date Tuesday October 14 2014 BACK TO PAGINATION CFO Roger Mattke explains how Lafayette General Health significantly improved its operating margin by increasing patient satisfaction and employee engagement Lafayette General Health LGH Lafayette La more than doubled its net revenue from less than 200 million in the health system s FY08 to an estimated 500 million in FY14 During the same timeframe the health system s operating margin jumped from a slight loss to an estimated 5 5 percent Roger Mattke FHFMA senior vice president and CFO attributes this financial turnaround to several strategies that have significantly improved patient satisfaction and employee engagement Here he discusses some of these initiatives at the healthcare system which serves a 10 parish area in south central Louisiana LGH owns or manages two major teaching hospitals and three community hospitals and has several affiliations with other facilities in the region This is a sample article from HFMA s CFO Forum a discussion and networking community for healthcare finance leaders Learn more and subscribe at www hfma org forums On improving patient satisfaction During the past five years LGH raised its Press Ganey patient satisfaction scores from the 38th percentile to the 97th percentile or higher Key to this success was the development of service standards that employees must agree to follow Led by an occupational therapist a multidisciplinary team of front line staff created approximately 30 service standards that cover areas such as respect integrity and etiquette It s our code of conduct and we hold each other accountable to make sure we are living up to those standards of behavior Mattke says Access related tool LGH s Employee Service Standards of Behavior Five years ago the health system also established a defined process to help employees alleviate patient anxiety in the hospital An employee such as a technologist will introduce herself describe how long she has been doing a test and try to put the patient s mind at ease Then she will explain how long the process will take what the experience will be like and then thank the patient for choosing us for her health care Mattke says New employees receive training on how to use this process which is designed to improve patient and family satisfaction The health system also conducts follow up calls to all discharged patients to make sure they understand their care instructions and to close the inpatient visit in a positive way On increasing employee engagement At the same time LGH improved its patient satisfaction the health system also raised employee engagement from the 38th percentile to the 87th percentile Mattke believes the connection makes perfect sense An engaged employee is critical to excellence in service delivery LGH strives to increase staff engagement and create a culture of transparency by hosting regular employee forums The leadership team also publishes the health system s core clinical and financial measures on bulletin boards and in employee communications We share our financial measures like operating margin salary costs supply costs length of stay and revenue so we can keep everyone informed on the direction we are going Mattke says Managers at LGH also conduct employee rounding similar to the concept of patient rounding at least once a quarter to stay abreast of issues that matter to employees During these informal meetings managers also try to identify other staff members who have helped coach or mentor the individual in his or her role C suite leaders and middle managers routinely provide handwritten thank you notes to employees that help others succeed on the job Mattke believes that holding managers accountable for their work has helped improve employee engagement by promoting trust throughout the organization To build accountability LGH tracks managers monthly progress toward their annual goals such as reduced LOS turnover or other core measures using a proprietary software application Every leader has between four and eight goals and each month they upload their results in relation to patient satisfaction operating margins or other metrics Mattke says This serves as their evaluation and will factor into any merit increase the leader may receive Additionally LGH keeps employees engaged by letting them know what happens to their suggestions to management The health system regularly publishes stoplight reports that give employees a status update on ideas they have proposed If there is something that an employee has suggested that we can t do right now they need to know why Mattke says On how other finance leaders can help their organizations improve patient satisfaction and employee engagement The key to change is consistent application of any tactic deployed which is often very difficult Mattke says To help build this consistency LGH provides all managers with eight days of leadership development each year It s a way for us to ensure that everyone is getting the same message at the same time and provide the training that leaders need to help them deploy their tactics he says We know not all leaders are comfortable with change so we need to give them tools so they can be more comfortable being uncomfortable Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff Ill Interviewed for this article Roger Mattke FHFMA senior vice president and CFO Lafayette General Health Lafayette La and a member of HFMA s Louisiana Chapter This article is based on

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  •