king for a dayKing for a Day: Winning Strategies in               Post-Reform Healthcare 

Johnson, 4SightHealth CEO – Great leaders ask great questions. Banner Health’s CEO recently wrote and asked me, “If you were king for a day, what three strategies would you pursue to enable health systems to win in post-reform healthcare?”  With Peter’s permission, I’m sharing my response.

My three suggestions follow: 1. Make quality “job 1”; 2. Embrace shared decision-making and 3. Emphasize cost accounting as much as revenue cycle.

My list steals some of Peter’s thunder.  Fine publically declared that Banner was a “Clinical Quality Company” in 2009.  Banner’s results since have been stunning: significantly better treatment outcomes; significantly lower patient mortality; reduced treatment variation; lower costs and happier patients.

Here are my three full responses:

Make Clinical Outcomes “Job 1”

Trying to overcome a “planned obsolescence” managerial mindset and respond to voracious Japanese competition, Ford Motor Company launched its “Quality is Job 1” campaign in the early 1980s and turned the company around.

Banner’s strategic decision to be held publically accountable as a “Clinical Quality Company” mirrors Ford’s boldness.

It’s remarkable what organizations can accomplish when metrics and mission align.  Banner began measuring “lives saved” relative to APACHE predictive algorithms in 2007.  That year Banner saved 224 lives.

When Banner declared its self a clinical quality company in 2009, the number had increased to 527.  The big leap occurred in 2011 when saved lives skyrocketed to 1590.  Today Banner’s annual “lives saved” exceed 2,000.

Performance improvement is rarely linear.  Organizational learning takes time and commitment.  Banner’s 2011 breakout performance was years in the making.

By definition, there can only be one “Job 1”.  Organizations that don’t give quality primacy can never hit targeted quality, safety and outcomes metrics.  Left unopposed, the energy generated from optimizing revenues (Job 1 at most health systems) overwhelms well-meaning quality initiatives.

There is no wiggle room in pursuing quality.

Embrace Shared Decision-Making (SDM)

The Informed Medical Decision Foundation’s defines SDM as follows:

Shared Decision-Making is a collaborative process that allows patients and their providers to make health care decisions together, taking into account the best scientific evidence available, as well as the patient’s values and preferences. 155ec1cb-1823-48c3-8880-1fee965f49d2
Best-practice SDM incorporates video decision aids and guided conversations that enable patients to understand treatment alternatives and make better medical decisions.

SDM is a trifecta.  It results in happier customers; better outcomes and less invasive (and less costly) care.  Imagine the reduction in lower-back surgeries if patients were fully-informed regarding relative benefits and risks.  SDM has the additional advantage of positioning health systems for increasing consumerism by aligning care delivery with customer wants, needs and desires.

The August issue of Health Affairs reprints a 2012 article chronicling Seattle-based Group Health’s use of video decision aids with 9,515 joint replacement candidates.

As part of an observational study, Group Health physicians treated patients with and without Health Dialog video decision aids.  Patients working with the Health Dialog videos, on average, chose less intensive therapies and incurred lower care costs: 26% fewer hip replacements; 38% fewer knee replacements and 12%-21% lower costs.

The results demonstrate SDM’s power.  Informed patients are more engaged and appropriately aggressive in making medical decisions.  Moreover, giving informed patients the care they want is usually cost-effective.

Health companies that choose not to pursue shared medical decision-making risk alienating customers as meaningful second opinions become more prevalent and clinical outcome and customer quality scores become more transparent.

Beyond this, SDM is the right thing to do for patients/customers.

Emphasize Cost Accounting as Much as Revenue Cycle

9bab0557-36b4-42af-b123-508fb2a781acAll companies seek profits.  The means by which they pursue profit reflects economic incentives built into payment systems.

In most industries, companies maximize profitability by creating value for customers.  Companies strive for optimal relationships between price, cost and market demand.  Customer needs and perceptions are principal considerations.

Apple has become the world’s most profitable company by making desirable products that are affordable and accessible to consumers.  Apple also knows its product costs to the penny.

By contrast, health companies employ a regulatory mindset that seeks to maximize revenues (and profits) by finding optimal relationships between volume, payor mix and coding.  This managerial orientation has led to an explosion in revenue cycle investment and severe underinvestment in cost accounting.  Actual product and service costs are a mystery in many health systems.

Nothing prevents hospitals from tackling performance improvement with advanced cost accounting capabilities.  Hoag Orthopedic Institute (HOI) in Irvine, California participates in an Institute for Healthcare Improvement (IHI) and Harvard Business School (HBS) consortium to improve costs and outcomes for total joint replacement surgeries.

The global consortium includes thirty-two organizations.  As part of the process, HOI spent two months “mapping” joint replacement surgeries employing time-driven, activity-based costing (TD-ABC).  As Medicare rolls out bundled payments for orthopedic procedures, HOI is ready.  They’ve mapped, analyzed and benchmarked entire care episodes.

Living their truth, HOI relentlessly pursues constant process improvement and publishes its outcomes.  Dr. Robert Gorab, HOI’s Chief Medical Officer, believes that benchmarking and publishing performance data changes surgeons’ behaviors for the better.  It also makes for happy customers. HOI’s culture embodies an Apple-like market mindset and illustrates how winning companies differentiate in post-reform healthcare.

In a world where price matters (think “bundles”), having per-unit revenues align with per-unit costs is essential to success.  Developing advanced cost-accounting capabilities supports performance improvement, improves decision-making and enhances resource allocation.

Sunshine is the best disinfectant.  It’s time to give cost accounting its “day in the sun.”  Better performance will follow

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a global healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for improving financial performance, and commentary that challenge the status quo. 

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GAO Report Identifies Vulnerabilities in CMS’s Enrollment Process

CMSTo enroll in Medicare, providers and suppliers must use the Provider Enrollment, Chain and Ownership System (PECOS). According to CMS, as of December 31, 2014, there were about 1.8 million healthcare providers and suppliers enrolled in PECOS and, in fiscal year 2014, Medicare paid $554 billion for healthcare and related services.1 Moreover, PECOS. Because of such high expenditures and potential for improper payments, the government is continuously looking closely at the program to minimize opportunities for fraud, waste and abuse. As such, it should come as no surprise that the Government Accountability Office’s (GAO) recent June 2015 report: Additional Actions Needed to Improve Eligibility Verification of Providers and Suppliers (http://www.gao.gov/products/GAO-15-448) (Report), has identified some areas of vulnerability in the CMS enrollment processes that could be contributing to the 10 percent of improper payments.

While CMS, and the state and federal governments in general, have a great deal of resources at their disposal for preventing and detecting fraud, abuse and waste, the Affordable Care Act (ACA) has further equipped CMS with more tools diminish and minimize such improper payments. Specifically, the ACA strengthened CMS’s enrollment standards and instilled screening procedures in the enrollment, and the ACA-developed revalidation processes to decrease the risk of enrolling providers and suppliers that defraud the federal healthcare programs.

Since implementing this new tool, various facets of the government, including the Office of Inspector General, have been looking at CMS to determine the effectiveness of its efforts in minimizing its exposure to improper payments at the enrollment stage. Most recently, the GAO’s Report assessed the extent to which CMS’s enrollment-screening procedures are designed to prevent and detect the enrollment of ineligible or potentially fraudulent Medicare providers, suppliers, and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers into PECOS and whether such procedures were implemented.2 The Report identified two weaknesses in CMS’s screening procedures: (1) the verification of practice location, and (2) the verification of licensure status.

Verification of Practice Location

The Report summarized the types of physical practice locations that applicants must have:
Specifically, providers and suppliers must be “operational” to furnish Medicare covered items or services. Federal regulations define “operational” as having a qualified physical practice locaiton, being open to the public for the purpose of providing health care-related services, being prepared to submit valid Medicare claims, and being properly staffed, equipped, and stocked to furnish these items or services. All providers and suppliers are required to list a physical practice location address in their application, regardless of provider or supplier type.3

In other words, P.O. boxes, commercial mail receiving agencies (CMRAs) (e.g., a UPS store), virtual offices and vacant or invalid addresses are not considered “operational” and, therefore, are ineligible. When providers and suppliers enroll with PECOS, they have a responsibility to report changes of practice locations within thirty (30) days.
In its Report, the GAO reviews 2013 enrollment data. Its findings are summarized in the below diagram:

The GAO estimated that 22 percent (23,400) of practice location addresses are potentially ineligible. Some of the ineligible practice locations the GAO identified, were practice locations listed as mailbox-rental locations, demolished sites and a fast-food franchise. The GAO determines there are two main causes for CMS’s failure to identify improper practice locations: (1) CMS’s Finalist software, which is intended to be a technique to validate practice locations, does not have the necessary flags to identify whether an address is a CMRA, vacant or invalid; and (2) the March 2014 revised screening procedures issued by CMS to its MACs require less verification of practice locations.

Verification of Licensure Status

To be eligible to participate in the Medicare program, a physician must have an active license in the state in which s/he plans to practice and bill Medicare. Moreover, the physician must self-report any final adverse actions.4 In 2014, CMS adopted the License Continuous Montoring (LCM) reports that identify the current provider’s license status; however, the LCM does not include adverse-action history. CMS requires MACs to verify adverse legal actions and licensure information directly with state medical boards using information available on those state medical board websites and also conduct additional research to ensure the physician still has an active license. According to the Report, “CMS does not require MACs to independently identify and verify an applicant’s license status in areas other than the state where the applicant is enrolling. Further, CMS only requires MACs to verify final adverse actions that the applicant self-reported on the application.”5

As a result, the GAO found that of the 1.3 million physicians that are listed as eligible to bill Medicare, 147 of them received a final adverse action from a state medical board for crimes against persons (e.g., battery, rape or assault), financial crimes (e.g., extortion, embezzlement, income-tax evasion or insurance fraud), and other types of felonies (e.g., substance abuse, healthcare fraud or patient abuse). These 147 individuals were not revoked from Medicare until months after the adverse action or were never removed. As a result, the GAO identified approximately $2.6 million paid between March 29, 2003, and March 29, 2013 by the Medicare program during the time CMS could have potentially barred them from the Medicare program.

Read the rest of the article published on MiraMed Global Service’s Blog

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a global healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for improving financial performance, and commentary that challenge the status quo. 

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High DeductablesThe High-Deductible Dilemma

Hospitals and physician groups are carefully watching the growing popularity of high-deductible health plans (HDHP) which result in patients taking on more of a financial responsibility for their healthcare. HDHPs and health savings accounts (HSA) are meant to incentivize consumers to manage the costs of their healthcare. For 2015, the Internal Revenue Service’s definition of high-deductible is $1,300 for an individual and $2,600 for a family. Maximum out-of-pocket expenditures are $6,450 and $12,900 for individuals and families, respectively. Many, but not all, HDHPs include preventive care such as annual physicals or immunizations, as a no-cost benefit.

According to the National Center for Health Statistics, in 2014, 36.9 percent of persons under age 65 with private health insurance were enrolled in an HDHP, and only one-third of those consumers were enrolled in plans linked to HSA. With the out-of-pocket costs for patients increasing due to the popularity of HDHPs, and with so few purchasers taking advantage of savings plans, the risk of bad debt and charity care increases for healthcare providers.

The use of health insurance exchanges under the Affordable Care Act (ACA) is contributing to the rise in the use of HDHPs. Consumers using the exchanges are overwhelmingly selecting bronze and silver tier plans, which both have sizeable deductibles. The bronze deductible amount is set at $5,000 and the silver at $2,000. As a result they cover only about 60 to 70 percent, respectfully, of the patient’s total medical costs. Therefore, even though hospitals may be seeing more insured patients, many patients still have significant financial obligations to pay for their care.

http://www.medicoverage.com/health-insurance-blog/news/obamacare-exchange-plans-comparing-silver-bronze
The National Center for Health Statistics published a report in January 2014 that found one in four families experienced trouble paying medical bills in 2012. One in 10 had bills they were unable to pay. At the least, practices and hospitals can expect to see the length of time invoices spend in accounts receivable to grow. This is bad news for medical practices and hospitals because collecting from patients can be especially difficult. And when patients are faced with financial hardships, medical bills usually are not their first priority.

Many hospitals have already started to put in place new programs and processes to offset some of the effects of HDHPs by placing an increased focus on collecting for their services. New technology to verify eligibility and deductible status are rapidly coming online. Also, secure billing portals and online payment options are becoming a key component of the collection process. Point-of-service collections, requiring whole or partial payment at the time of the appointment, are becoming an increasingly popular way for hospitals to collect payments for procedures and visits. In addition, some providers are offering medical bill financing services, either directly or through partnerships with third-party banks and lenders.

These services allow consumers to make smaller payments over time to control the burden of upfront costs, often for negotiated total amounts with little-to-no interest. Many providers and hospitals are increasing patient communications to educate patients on the costs of their treatment. Patient advocates and counselors are increasingly meeting with patients prior to any elective surgical procedures.

While hospitals and larger provider groups are tackling these new processes, smaller doctor groups are struggling with the increased burden, especially when they have a relationship with the patient. The concern that patients may forego treatment due to having to pay more out-of-pocket is keeping some providers from being as transparent as they should be regarding the cost. This trend is forcing practices to think more like a business. A few years ago, a large portion of the medical bill was traditionally paid by commercial insurers, Medicare and other third-party payers. As a result, many practices simply are not equipped to efficiently collect deductibles and copayments from a greater number of patients. Surprisingly, some still do not accept credit cards or have an online payment system. Even worse, when the patient tells the practice that he or she will pay next time, practices are not following up to ensure that the patient actually does pay.

The Healthcare Financial Management Association (HFMA) Medical Debt Task Force has released a set of recommendations intended to improve the medical account resolution process for patients and doctors alike. The best practices provide guidance on resolving financial obligations before, during and after a patient visits a hospital or doctor’s office. HFMA partnered with ACA International (Association of Credit and Collection Professionals) and gathered a task force of stakeholders to develop these common-sense best practices.

Healthcare providers and their business partners using the best practices will be able to:
• Lay the groundwork for successful account resolution by educating patients and following best practices for communication prior to the time of service.
• Make bills and all communications clear, concise, correct and patient-friendly.
• Establish policies for account resolution and ensure that they are followed both internally and by business affiliates.
• Be consistent in key aspects of account resolution—from billing disputes to payment application.
• Coordinate account resolution activities with business affiliates to avoid duplicative patient contacts.
• Exercise good judgment about the best ways to communicate with patients about bills.
• Start the account resolution clock when the first statement is sent to the patient.
• Report back to credit bureaus when an account is resolved (in the event that an account is reported to a credit bureau).
• Track all consumer complaints.
• Use best practices, principles and guidelines to inform their organizational approach to medical account resolution.1

It is evident that a larger insured population does not necessarily mean decreased efforts on the part of healthcare providers in collecting payment for services rendered. Unfortunately, because many of the newly insured population participates in HDHPs, hospitals and physicians are sometimes faced with a greater burden of chasing patients for payment. As such, doctors and hospitals need to move quickly and take the necessary steps to reduce the negative effects HDHPs are having on their revenue.

http://www.hfma.org/Content.aspx?id=21231 1 – Published on MiraMed Global Service’s Blog

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a global healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for
improving financial performance, and commentary that challenges the status quo. 

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A few weeks ago, the healthcare industry, along with most Americans, was waiting for breaking news from the Supreme Court regarding the Affordable Care Act (ACA) and several other pending decisions.  Since then, the Centers for Medicare and Medicaid Services (CMS) has been rolling out press releases faster than ever.  Some of the breaking news like the recent compromise with the American Medical Association (AMA) on ICD-10 is final (or as final as CMS has ever been regarding anything dealing with ICD-10), whereas other announcements concern proposed rule changes.  CMS rolled out several significant test balloons in the 800-page Proposed 2016 Medicare Physician Payment and Fee Schedule Rule.  These include:

  • Changes to the Physician Quality Reporting System (PQRS);
  • Adjustments to Misvalued CPT Codes, including Lower Gastrointestinal Endoscopy Codes;
  • Medicare Payment for Advanced Care Planning CPT Codes Added by AMA in 2015; and
  • Modifications to the “Incident to” Payment Policy.

Before hitting the highlights of the Medicare 2016 proposed physician payment rule, let’s turn our attention to the latest news regarding the ICD-10 implementation.  In a joint CMS/AMA announcement aimed to help physicians better prepare for the October 1, 2015 ICD-10 effective date, flexibility for one year was granted in the claims auditing and quality reporting processes to allow the medical community to gain experience in using the new ICD-10 code set.  In the press release, AMA President, Steven J. Stack, MD, applauded CMS’ response “to physicians’ concerns that inadvertent coding errors or system glitches during the transition to ICD-10 may result in audits, claims denials, and penalties under various Medicare reporting programs.”

Accompanying the announcement is a guidance document that makes some industry experts question whether CMS’ compromise to a “grace period” is really going to be as welcomed by the physician community as the AMA is claiming.  In response to one question, CMS’ answer is, in standard bureaucratic fashion, as clear as mud.

  1. What happens if I use the wrong ICD-10 code, will my claim be denied?
  2. While diagnosis coding to the correct level of specificity is the goal for all claims, for 12 months after ICD-10 implementation, Medicare review contractors will not deny physician or other practitioner claims billed under the Part B physician fee schedule through either automated medical review or complex medical record review based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family.  However, a valid ICD-10 code will be required on all claims starting on October 1, 2015.  It is possible a claim could be chosen for review for reasons other than the specificity of the ICD-10 code and the claim would continue to be reviewed for these reasons.  This policy will be adopted by the Medicare Administrative Contractors, the Recovery Audit Contractors, the Zone Program Integrity Contractors, and the Supplemental Medical Review Contractor.

Non-coders and optimistic revenue specialists take the “will not deny” and “solely on the specificity of the ICD-10 diagnosis code” as a horseshoe victory:  close enough is good enough when it comes to ICD-10.  Certified ICD-10 coders and pessimistic billing experts know that what CMS says isn’t what the Medicare Administrative Contractors (MACs) necessarily heard.  Not to mention what are non-governmental payers going to do?  A few specific terms in the CMS answer is instigating the cynicism.

For example, CMS’ answer refers to the “need to report a valid (ICD-10) code from the right family on all claims starting on October 1, 2015.”  Unfortunately, in ICD diagnosis coding language, “family” has no meaning.  When addressing specificity in ICD, the guidelines use terms such as “category” or “subcategory.”  A family of codes is a term that is associated with AMA CPT codes.  Since the AMA controls CPT codes, CMS might have released a more precise answer if they consulted with the cooperating ICD code set parties as defined by the HIPAA legislation.  They are:  the American Health Information Management Association (AHIMA), National Center for Health Statistics, American Hospital Association (AHA) and CMS.  For non-coders, the structure of ICD-10, per the official guidelines, is as follows:

  • All categories are three characters;
  • A subcategories is either four or five characters;
  • Codes may be three, four, five, six or seven characters; and
  • Codes that have an applicable seventh character are considered invalid without the seventh character.

So, what is going to happen if a seven character code is invalid without the seventh character and the physician reports the three character category (assuming it is what CMS meant by family)?  Is the ICD-10 code going to be denied because it is invalid or will it be accepted as being “close enough”?

Perhaps CMS saw no reason to confer with the AHA on the announcement since it appears the “grace period” will only apply to Part B Medicare services.  The press release is geared entirely to the physician community.  What issues will arise from having different guidance within the same large health system?  What issues are going to arise with coding and billing personnel responding to management’s productivity, account receivable pressures, and turnaround time concerns to drop three character ICD-10 codes rather than take the time to code it accurately based on their training and certification?  Are coders expected to maintain their knowledge level regarding specificity when close enough is adequate to get paid?  Will coders need refresher training a year from now?

There is another ambiguous sentence in CMS’ answer stating that, “[i]t is possible a claim could be chosen for review for reasons other than the specificity of the ICD-10 code and the claim would continue to be reviewed for these reasons.”  In short, the local MACs will still be applying medical necessity guidelines, correct coding guidelines and frequency of services parameters.  That can add up to a lot of denials even with some give on the specificity level of the diagnosis code reported.

CMS is promising a to-be-named ombudsman to triage and answer questions.  They have also scheduled an August 27 National Provider Call to discuss the details of the “grace” period.  We can only hope CMS confers with industry experts beyond AMA to hash out these important details.

Highlights of the 2016 Proposed Medicare Physician Fee Schedule and Payment Rules

PQRS

Under the proposed rule, the basic requirements for PQRS participation will stay the same—a provider will report nine measures, including one cross-cutting measure, across three national quality strategy domains.  However, Medicare intends to delete 12 individual measures and add 45 individual measures including four cross-cutting measures.  Medicare also intends to shift reporting methods and national quality domains for another 18 new measures.  You’ll also see three new measures groups if Medicare’s proposed rule remains unchanged.

Misvalued CPT Codes

In the 2015 CPT Codebook, the lower gastrointestinal endoscopy code set was revised.  Last year, CMS considered using these new codes and considered the value for them.  CMS is now proposing to implement the revised set of codes, including the revised values.  Additionally, CMS is proposing to identify anesthesia procedure codes 00740 and 00810 (relating to anesthesia for gastrointestinal procedures) as potentially misvalued.  Similar adjustments are being proposed for radiation therapy codes that were also introduced in 2015.

New Payment for Advanced Care Planning

Providers could receive payment for providing end-of-life planning using two CPT codes introduced in the AMA 2015 CPT book.  However, CMS is very vague on the relative value units and coding guidelines.  The CPT codes are:

99497 (Advance care planning including the explanation and discussion of advance directives such as standard forms [with completion of such forms, when performed], by the physician or other qualified health professional; first 30 minutes, face-to-face with the patient, family member[s] and/or surrogate).

99498 (Advance care planning including the explanation and discussion of advance directives such as standard forms [with completion of such forms, when performed], by the physician or other qualified health professional; each additional 30 minutes [List separately in addition to code for primary procedure]).

Modification to “Incident-To” Payment Policy

For 2016, CMS is proposing to clarify that the billing physician or practitioner for “incident-to” services must also be the supervising physician or practitioner.  The doctor who initiates a patient’s care will have to be in the office when her patients are being seen by non-physician practitioners (NPP), if the practice wants to bill incident-to services.  Currently, the physician supervising the incident to service does not need to be the same one who originally saw the patient.  CMS seeks to remove a sentence in the regulation that allows that and replace it with the new policy.  This change could mean more NPPs would bill directly to Medicare to receive 85 percent reimbursement as opposed to the 100 percent reimbursement a practice receives billing incident-to services.

CMS is also proposing to strengthen the requirement that all “incident-to” services and supplies must be furnished in accordance with applicable state law by revising the definition of “auxiliary personnel”.  The revision clarifies that the individual furnishing “incident-to” services must meet any applicable requirements to provide such services, including licensure, imposed by the state in which the services are furnished.

Comments are open on the Proposed 2016 Medicare Physician Fee Schedule and Payment Rule until September 8, 2015.  The final rule is slated for release on November 1, 2015

Published on MiraMed’s Blog

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a global healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for
improving financial performance, and commentary that challenges the status quo. 

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The Great Compromise 2015

Does it seem that the government comes out with major decisions that we in healthcare may not perceive as wise either on a Friday after 5 PM or as in the recent compromise over a holiday? I can’t help but think of another great compromise that took place on July 16th, 1887 which provided a dual system of congressional representation. CMS did indicate that “a valid ICD-10 code will be required on all claims starting Oct. 1, 2015.” At least the dual coding (as suggested by some members of Congress) has been averted thus far.

This past week the United States of America celebrated another Independence Day attributed to its tenacity of following thru in achieving liberty and never compromising on principal. Yet, on July 6th CMS caved into the AMA and issued that it will not deny claims for a period of 12 months under the Part B physician fee schedule based on ICD-10 wrongly coded claims (as long as a valid code from the right family is used), a decision supported by ICD-10 opponent the American Medical Association.

This policy will also be adopted by the Medicare Administrative Contractors (MACs), the Recovery Audit Contractors (RACs), the Zone Program Integrity Contractors (ZPICs), and the Supplemental Medical Review Contractor (SMRC).

The AMA and CMS issued that they have teamed up to make the transition easier for providers. Both CMS and the AMA plan to conduct a nationwide outreach effort to educate providers through webinars, on-site training, educational articles and calls to help physicians and other providers get up to speed before the Oct. 1 deadline.

Also available thru the CMS website “Road to 10”, which contains a countdown clock and primers for clinical documentation, clinical scenarios, and other specialty-specific resources to help with implementation. An AMA spokesperson said the change is “a culmination of a vigorous effort by medicine to ask the CMS for a transition period to avoid expected disruptions during this time of tremendous change in the healthcare landscape.

This agreement with the CMS is in the best interest of patients and physicians, and in line with the policy set by the nation’s physicians.” In the announced the AMA conceded that the implementation deadline would not be changing, a step in the right direction.

CMS said it will also make sure ICD-10 errors don’t trigger penalties (quality reporting completed for program year 2015) for the Physician Quality Reporting System (PQRS), Value Based Modifier (VBM) or Meaningful Use (MU), which tied certain clinical outcomes and processes, like coding, to incentives or penalties. If the change causes issues for CMS that slows down payment, the federal agency will offer advanced payments to providers.

Facilities would receive an advanced partial payment that they would have to return. CMS also revealed the hiring of an ICD-10 ombudsman “to help receive and triage physician and provider issues. The Ombudsman will work closely with representatives in CMS’s regional offices to address physicians’ concerns.

As we get closer to October 1, 2015, compliance date, CMS will issue guidance about how to submit issues to the Ombudsman.”

https://www.cms.gov/

I have been touting for the past 3 years the benefits of ICD10 based on:

 Better reflection of advances in medicine and technology
 Better understanding and tracking of healthcare outcomes
 Prevention and detecting of fraud and abuse
 Measure the quality, safety, and efficacy of care
 Lead effective resource utilization to ensure accurate payment and
 Improve clinical, financial and administrative performance

On 7/8/2015 CMS released the first proposed update to the physician payment schedule since the repeal of the Sustainable Growth Rate through the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The proposal includes some provisions focused on person-centered care and continued the transformation of the Medicare program to a system based on quality and healthy outcomes. So, my question, if CMS is allowing for flawed data to be collected for a 12-month period, how will any of the above be accurately measured?

The author is Denise Nash, M.D. who is currently the Vice President of Compliance and Training for MiraMed

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a global healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for
improving financial performance, and commentary that challenges the status quo. 

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Two Significant Healthcare Laws Celebrate Anniversaries Despite                                   Their Initial and Ongoing Adversaries

Healthcare lawOn July 30, 1965, President Lyndon B. Johnson signed into law legislation that established the Medicare and Medicaid programs. For 50 years, these two programs have been protecting the health and well-being of millions of American families. Enacted under Title VIII of the Social Security Act, Congress created Medicare for Americans beginning at age 65. Medicare also authorized coverage for Americans who became disabled. The Affordable Care Act (ACA) commonly known as Obamacare, is a United States (U.S.) federal statute signed into law by President Barack Obama on March 23, 2010. The law provides health insurance to any U.S. citizen through newly formed State agencies called insurance exchanges. According to the White House, over 10 million Americans have signed up for coverage under the ACA statute. Both laws were not passed without brisk debates from adversaries lead by politicians, providers of care, and the populist.

Before Medicare was law, many uninsured seniors lived under the fear of bankruptcy if they became ill and needed expensive medical service. When the Medicare bill was being debated, the usual conservative pundits argued that Medicare would ruin our “wonderful medical service.” A future President and strong conservative, Ronald Reagan lent his voice to an 11-minute record album called “Ronald Reagan Speaks out against Socialized Medicine.” It delivered a strong warning against the dangers of government involvement in health care. “One of the traditional methods of imposing statism or socialism on a people has been by way of medicine,” Reagan says. “It’s very easy to disguise a medical program as a humanitarian project.” He calls on those listening to his record to contact their Congressman and oppose the legislation.1 Some swore that Medicare would be the end of good patient care. Today, the nation’s seniors, most politicians, and even providers praise Medicare coverage. Seniors hope for expanded services to cover other medical and dental needs. They are aware of the low administrative costs and excellent care that they receive under Medicare.

The story of enacting Medicare is one of persistent political struggle. There was growing recognition in the late 1950s and early 1960s of the need for federal action to help meet the high cost of healthcare for the Nation’s elderly. But there were sharply different views about how to provide medical coverage. One must also realize that as with any point in time, politics and policy, do not happen in a vacuum. In the early 1960s, the tension between states’ rights versus direct federal provisions for citizen protections was playing out on a separate track in the debate over civil rights. That debate culminated with enactment of the Civil Rights Act of 1964. Title VI of that act provided that “no person in the United States shall, on the grounds of race, color or national origin, be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving federal assistance.” 2 By providing federal funds for healthcare to the elderly on the heels of the Civil Rights Act, Medicare played a major role in desegregating every hospital in the U.S.

Medicare, Medicaid and the ACA were game changers for health law, politics, and policy because they brought the federal government—which means not only Congress but the federal courts and the executive branch—squarely into the health care arena for the first time. The ACA, acclaimed by many to be the most significant health care legislation since the passage of Medicare, brought intense debate and finally a decision to implement the law by the U.S. Supreme Court.

By affirming in a 6-3 vote, the Supreme Court ruled in favor of the U.S. government in King v. Burwell in a June 25 opinion that “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”
The law, which requires nearly all citizens of the United States to be covered by health insurance, gives subsidies to citizens earning under a certain amount of money in the form of tax breaks via exchanges, which are created by the states or, in the absence of a state exchange, by the federal government. Plaintiffs had argued that a short passage in one section of the law regarding the application of federal subsidies as tax breaks – “exchange established by the state” – made clear that the subsidies for federally created exchanges should be stopped – which many observers predicted would throw Obamacare into chaos.

The Obama administration argued that the rest of the 19,000-plus-page law made clear by context that the federal exchanges were intended to fill in when the states did not make their own. “Petitioners’ arguments about the plain meaning of [ACA’s] Section 36B are strong,” says Chief Justice Roberts’ in the majority opinion. “But while the meaning of the phrase ‘an exchange established by the state under [42 U. S. C. §18031]’ may seem plain ‘when viewed in isolation,’ such a reading turns out to be ‘untenable in light of [the statute] as a whole.'”
In his dissent, Justice Antonin Scalia stated that the question raised by the plaintiff is “so obvious there would hardly be a need for the Supreme Court to hear a case about it” and goes on to claim that the majority has engaged in “somersaults of statutory interpretation.” Scalia grumbled in closing that his colleagues “had concluded that this limitation would prevent the rest of the Act from working as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare.” 3
President Obama in his comments to the public addressing the Supreme Court decision pronounced “that the ACA is here to stay.” 4

The Centers for Medicare and Medicaid Services (CMS) plan to mark the golden anniversary of the Medicare and Medicaid programs by recognizing the ways in which these programs have transformed the nation’s health care system over the past five decades. Hopefully, in another 45 years they will be recognizing the same type of transformation with the ACA.

1 https://www.nasi.org/discuss/2015/02/covered-docs-labor-escalate-fight-over-health-plan-elderly
2 https://www.nasi.org/sites/default/files/research/med_report_reflections.pdf
3 http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf

4 https://www.whitehouse.gov/healthreform

View this article and others at Miramedgs.com

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a global healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for
improving financial performance, and commentary that challenges the status quo. 

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Who Will Throw up The White Flag First?

ICD-10 white flagIt has been going on longer than the Twenty-Year War that began in 1475. The World Health Organization (WHO) released in 1993 the International Classification of Diseases, Tenth Edition (ICD-10). Shortly thereafter, the Healthcare Financing Administration (now the Centers for Medicare and Medicaid Services (CMS)) began moving forward to prepare for its implementation it in the United States (U.S.). Like the Twenty-Year War and many others bravely fought throughout history, the ICD-10 conflict has really consisted of a lot of little battles, which are, or will be, subsumed as one in the archives.

A year ago the healthcare industry was reeling from the unexpected delay to the implementation of ICD-10. The surprise attack, which brought on the last minute change in the implementation date, was slipped into legislation to provide a temporary patch to the sustainable growth rate (SGR) and passed within a few days, without ample time for the other side to rally their troops. While this hurdle was difficult for advocates of ICD-10 to deal with, it had followed many previous small battles to permanently disarm the change to ICD-10.

The significant backlash from physicians’ groups and organized medicine had successfully challenged, the Health and Human Services (HHS) October 1, 2011 proposed an implementation date to replace ICD-9-CM with ICD-10-CM and ICD-10 PCS. The transition dealine was first pushed back to an October 1, 2013 deadline for adoption. By 2012, the well-funded opposition again forced the deadline to be moved, from October 1, 2013 to October 1, 2014. That battle was followed by The Protecting Access to Medicare Act of 2014, the last minute emergency legislation to provide relief from the SGR. This bill, which contained a provision prohibiting the HHS Secretary from adopting the ICD-10 code prior to October 1, 2015.

Politicians and Presidents from the Oval office to the boardroom of every healthcare organization in the U.S., including the American Medical Association (AMA), the American Hospital Association (AHA), the Medical Group Management Association (MGMA) and the American Health Information Management Association (AHIMA) have remained entrenched to protect, or attack, the October 1, 2015 implementation deadline. In short, the ICD-10’s implementation has been a long, dramatic timeline and one that is, unfortunately, still being contested on the Congressional battlefield.

Despite the “firmness” asserted by CMS of the October 1, 2015 date, the road to the implementation deadline has not been unscathed in 2015. On June 9th, the House of Representatives introduced a bill to allow a two-year ICD-10 “grace period” to help physicians and healthcare providers more effortlessly transition from ICD-9 into ICD-10. Representative Gary Palmer in proposing the bill—Protecting Patients and Physicians Against Coding Act of 2015, H.R. 2652—indicated the intention was to smooth out the code submission process for ICD-10-CM/PCS. The bill calls upon the Secretary of HHS to provide for a two-year grace period during which physicians and other health care providers submitting claims and other documents using ICD-10 to Medicare and Medicaid are not penalized for errors, mistakes, and malfunctions relating to the transition to such a code set.

This is the third ICD-10 related bill introduced into the House within the past five weeks. Early in May, the House proposed a new bill, H.R. 2126, the Cutting Costly Codes Act of 2015, aimed at freezing ICD-10 CM/PCS implementation. The bill, strongly supported by the AMA, intends to prohibit Sylvia M. Burwell, Secretary of HHS, from substituting the currently implemented ICD-9 diagnostic code set with ICD-10. H.R. 2126 additionally mandates the Government Accountability Office (GAO) to execute research on how to best alleviate the financial burden of this decision on healthcare providers. AMA President, Steven J. Stack responding to last year’s implementation delay said, “While the AMA appreciates that physicians have additional time to comply with ICD-10, we continue to have fundamental concerns about ICD-10 and its implementation, which will not be resolved by the extra time. The AMA has long considered ICD-10 to be a massive unfunded mandate that comes at a time when physicians are trying to meet several other federal technology requirements and risk penalties if they fail to do so.”1 A 2014 update of a widely referenced 2008 report by Nachimson Advisors to the AMA estimated the cost for a small practice to implement ICD-10 was in the range of $22,560 to $105,506.2

In direct opposition to the 2014 “controversial” delay and any additional delays in 2015, the AHIMA blasted the AMA cost estimates of ICD-10 implementation. Coming in with a substantially lower cost, the AHIMA research shows a price tag of $1,960 to $5,900 for small practices. Accordingly, AHIMA found that the current evidence suggests that the AMA estimates of the costs and effort associated with ICD-10 implementation for physician offices has been overestimated and that vendors, health plans and physicians have made considerable progress with fewer resources than had been previously estimated.3

It also follows the House’s proposal of the Increasing Clarity for Doctors by Transitioning Effectively Now Act (ICD-10 bill), H.R.2247 intended to mandate Sylvia M. Burwell, Secretary of the Department of Health and Human Services, to implement additional transparent testing opportunities. The bill sponsored by Representative Black, requires the Secretary to conduct and make available to all participating service providers and suppliers, a comprehensive, end-to-end testing process to assess whether the Medicare fee-for-service claims processing system based on the ICD-10 standard is fully functioning. The Secretary must subsequently certify to Congress whether or not the Medicare fee-for-service claims processing system based on the ICD-10 standard is fully functioning, including additional steps a not-fully-functioning system will take to achieve certification as well as the anticipated time frame for achieving it.4

It has been 16 years since the U.S. version of ICD-10 was completed and five years since publication of the ICD-10 final rule. Every implementation delay has caused providers disruptions, confusion and for many, a lack of trust with CMS and Congress. None of the aforementioned congressional actions address the significant cost the industry has absorbed due to numerous delays of ICD-10. CMS has estimated that the 2014 delay, enacted on April 1 through a legislative act of Congress, has cost the healthcare industry approximately $6.8 billion in lost investments, not including the cost associated with missed opportunities for better health data to improve quality of care and patient safety.

It is difficult to estimate the overall costs incurred by the U.S. Government, payers, providers and vendors throughout the past decade. It’s likely to have exceeded $50 billion, however no one really knows for sure.

As of press time, we are still on track for ICD-10 implementation in October. The transition from ICD-9 to ICD-10 has been fraught with frustrations. Those that seek to delay or permanently kill off the ICD-10 implementation have not yet waved a white flag. Both sides have their armies of advocates and sponsors ready to be heard on Capitol Hill.

To that end, on June 18th the nation’s four largest state medical societies, collectively, the California Medical Association, Florida Medical Association, Medical Society of the State of New York, and Texas Medical Association have written to Andy Slavitt, the Acting Administrator Centers for Medicare & Medicaid Services to ask for help in modifying the ICD-10 transition to reflect the following changes:

– A two-year period during which physicians will not be penalized for errors, mistakes, and/or
malfunctions of the system;
– A two-year period in which physicians will not be subject to RAC audits related to ICD-10
coding mistakes;
– A two-year period during which physician payments will not be reduced or withheld based
on ICD-10 coding mistakes; and
– Advance payments in the event that claims are delayed.

Whether you see yourself or your organization as a champion or a conqueror regarding ICD-10, it is likely both sides will need to “bend the knee” to the reality of a whole new world of healthcare challenges; many far more serious and potentially expensive than the twenty-plus years required to resolve one small piece of the U.S. healthcare industry.

1http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/hipaahealth-insurance-portability-accountability-act/transaction-code-set-standards/icd10-code-set.page
2 Ibid.
3http://journal.ahima.org/2014/11/12/cost-of-converting-small-physician-practices-to-icd-10-much-lower-than-reported/
4https://www.congress.gov/bill/114th-congress/house-bill/2247

View this article and others at Miramedgs.com

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a global healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for improving financial performance, and commentary that challenges the status quo. 

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Health Care Transparency Should Be About Strategy, Not Marketing

Health care organizations need to re-think their concept of strategy to thrive in a marketplace driven by competition on value – how well they improve patient outcomes and cut costs. That re-thinking begins with clarifying what the organizations are truly trying to accomplish, and for what “customers,” and how they are going to distinguish themselves from competitors and offer a unique value proposition. Make no mistake – improving value for patients is hard. But as Michael Porter and I write in our recent Perspective article in The New England Journal of Medicine, “Why Strategy Matters Now,” providers are unlikely to succeed if they cannot focus on this goal.

This critical question of organizational goal applies to how providers think about transparency – the growing trend to make their performance data public. What are they trying to accomplish when, for example, they publicize surgical success rates or patient experience data and comments? Are they focused mostly on marketing (aka “reputation management”), or are they trying to improve their actual performance by engaging patients and caregivers with complete and objective data?

The answer is important because the transparency movement will be a game changer. For years, most provider organizations were skeptical about whether “quality” could really be measured, and many resisted public reporting of any performance data or tried to focus their data collection on process measures that they could control. (I make these comments with appropriate humility, having at times pushed as a clinician and health care executive for “translucency” more than transparency in the past.)

To read the rest of the article, go to Harvard Business Review Site

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a worldwide healthcare Business Processing Outsourcing services company. Phil has 25 years of experience in healthcare as an industry thought leader, strategist, solution provider, author and featured speaker. In this blog, you will read about important industry updates, strategies for improving financial performance, and commentary that challenges the status quo. 

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icd-10There are so many uncertainties surrounding the ICD-10 transition, it’s helpful when CMS offers information and feedback to help providers understand what they are getting into. If you haven’t seen this yet, I hope it helps to clarify the facts. You’ll find more information at cms.gov – PCS

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Five Facts about ICD-10

To help dispel some of the myths surrounding ICD-10, the Centers for Medicare & Medicaid Services (CMS) recently talked with providers to identify common misperceptions about the transition to ICD-10. These five facts address some of the common questions and concerns CMS has heard about ICD-10:

1. The ICD-10 transition date is October 1, 2015.
The government, payers, and large providers alike have made a substantial investment in ICD-10. This cost will rise if the transition is delayed, and further ICD-10 delays will lead to an unnecessary rise in health care costs. Get ready now for ICD-10.

2. You don’t have to use 68,000 codes.
Your practice does not use all 13,000 diagnosis codes available in ICD-9. Nor will it be required to use the 68,000 codes that ICD-10 offers. As you do now, your practice will use a very small subset of the codes.

3. You will use a similar process to look up ICD-10 codes that you use with ICD-9. Increasing the number of diagnosis codes does not necessarily make ICD-10 harder to use. As with ICD-9, an alphabetic index and electronic tools are available to help you with code selection.

4. Outpatient and office procedure codes aren’t changing.
The transition to ICD-10 for diagnosis coding and inpatient procedure coding does not affect the use of CPT for outpatient and office coding. Your practice will continue to use CPT.

5. All Medicare fee-for-service providers have the opportunity to conduct testing with CMS before the ICD-10 transition.

Your practice or clearinghouse can conduct acknowledgement testing at any time with your Medicare Administrative Contractor (MAC). Testing will ensure you can submit claims with ICD-10 codes. During a special “acknowledgement testing” week to be held in June 2015, you will have access to real-time help desk support. Contact your MAC for details about testing plans and opportunities.

Keep Up to Date on ICD-10 – Visit the CMS ICD-10 website for the latest news and resources to help you prepare.

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a worldwide healthcare BPO company. MiraMed provides solutions to leading hospitals, health systems, large physician groups and industry partners providing services in the areas of revenue cycle optimization, medical coding, clinical improvement documentation and technology integrations.Phil has 25 years of experience as an industry thought leader, strategist, solution provider, author and featured speaker. He has worked closely with some of the industry’s best and brightest leaders in healthcare finance and revenue cycle operations.

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Money paid

The Association of Healthcare Access Management (NAHAM) promotes best practices, standards and subject matter expertise to their members to influence and promote high quality delivery of Patient Access Services and POS collections.  In early January 2015,

In early January 2015, NAHAM released 22 standard patient access key performance indicators (KPIs) called the NAHAM AccessKeys®.  The AccessKeys are available to NAHAM members and provide a better way to track and measure the performance of patient access.  AccessKeys were created for six key areas: Collections, Conversions, Patient Experience, Process Failure and Resolution, Productivity and Quality.  Prior to the establishment of the NAHAM’s recognized standards, it was difficult to produce an accurate comparative benchmark because patient access departments lacked a level of standardization in terms of definitions and measurements in use at their facility.  The

The NAHAM AccessKeys definitions of what is or isn’t included in certain processes will further assist patient access departments in determining how well various functions are being performed in comparison to other hospitals.

For the past three years, AccuReg has conducted an annual benchmark survey for patient access.  The 2014 Registration Benchmark Survey was just released and it covers patient access topics such as current practices and trends in pre-registration, point-of-service (POS) collections, scheduling, patient portals and registration accuracy.  Based on the survey results, more facilities are pre-registering their patients.  The survey found that 38 percent were now meeting the industry standard goal for hospitals of pre-registering 90 percent or more of scheduled patients.  This was a 15 percent increase from the 2013 results.  The survey results also found that the majority of hospitals pre-register their patients on average three days before the service.

According to AccuReg, two of the most significant differences between the 2013 and 2014 answers are the following:

  • The number of respondents screening and obtaining authorizations rose from 51 percent in 2013 to 65 percent in 2014.
  • The number of respondents that estimate the patient liability and screen for financial assistance increased 12 percent.  In 2013 only 47 percent estimated liability and 2014 showed 59 percent now do that during pre-registration.

With almost half of the respondents now screening for financial assistance in pre-registration, the survey results show that hospitals have geared up to deal with specific aspects of the Affordable Care Act (ACA) regarding high-end deductibles and potential enrollment of patients in Medicaid or another insurance products.

POS collections have now become universally in place at all hospitals; however, most are still struggling with how best to determine the amount to collect.  A variety of tools are in place from third-party vendors insurance verification products to financial estimates of patient’s liability.  By providing the patient with an estimate of what their likely liability is, the patient is more vested in the process and is better informed prior to the service.  As a result of the improvements in pre-registration, verification and POS estimates hospitals have significantly improved their POS collections in the past two years to 40 percent of total collections occurring at POS collections.

With the adoption of NAHAM AccessKeys performance indications, hospitals will have a better means to realign their POS departments and standardize processes.  As a result, performance can only continue to increase.

Article authored by MiraMed, a BPO Outsourcing Services Company

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog. He serves as the Vice President of Global Services for MiraMed, a worldwide healthcare BPO company. MiraMed provides solutions to leading hospitals, health systems, large physician groups and industry partners providing services in the areas of revenue cycle optimization, medical coding, clinical improvement documentation and technology integrations. Phil has 25 years of experience as an industry thought leader, strategist, solution provider, author and featured speaker. He has worked closely with some of the industry’s best and brightest leaders in healthcare finance and revenue cycle operations.

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