Revenue Cycle News Readmissions 2016Reducing Hospital Readmissions in 2016

Once patients are discharged from the hospital, they have no desire to return. Hospitals also would prefer patients not be readmitted due to medical issues associated with their hospital stay.

Patient readmissions are a major problem plaguing the U.S. healthcare system, and policymakers are taking steps to reduce them.  The efforts to reduce re-hospitalizations begin at the hospital and end with the transition of patients to their home and their community.  But while improving a patient’s transition from hospital to home is important, it is just one factor in preventing readmissions.

The typical cause of a readmission is often the swift deterioration in the patient’s condition, related to the patient’s primary diagnosis and/or comorbidities.  Readmissions can also be attributed to the disintegration and fragmentation of our healthcare system that begins when a patient meets their primary care-provider and continues after discharge.  Readmissions may result from inadequate treatment or sub-par care of the primary issue, or may be caused by poor coordination of services at the time of discharge and afterwards.

The hospital can affect treatments provided in-house; however, they have no control over the patient and how diligent they are following their treatment plan post-discharge.

Hospital readmissions have become a watershed issue for health providers because of the increasingly important impact they have on a hospital’s financial position.  Providers must be prepared to make the adjustments required to ascertain the root causes for readmissions and develop plans to reduce them. With a concentrated and proactive effort it is clear that readmissions can be significantly reduced.1

New tools are becoming available to hospitals to manage their readmissions. The Agency for Healthcare Research and Quality (AHRQ) has introduced a national database for hospital readmissions which will assist hospitals in measuring and benchmarking their results against similar hospitals or healthcare systems.

Readmission Measurements and Standards

Section 3025 of the Affordable Care Act added section 1886(q) to the Social Security Act2 which established the Hospital Readmissions Reduction Program. This requires Centers for Medicare and Medicaid Services (CMS) to reduce payments to Inpatient Prospective Payment Systems (IPPS) hospitals with excess readmissions, effective for discharges beginning October 1, 2012.  The regulations that implement this provision are in subpart I of 42 CFR part 412 (§412.150 through §412.154).

CMS recently released the Fiscal Year 2016 (IPPS) for Acute Care Hospitals and the Long Term Care Hospital (LTCH) Prospective Payment System Policy Changes for 2016.  CMS outlined the following policies with regard to the readmission measures under the Hospital Readmissions Reduction Program:

  • Readmission is defined as an admission to a subsection (d)3 hospital within 30 days of a discharge from the same or another subsection (d) hospital;
  • Adopted readmission measures for the applicable conditions of acute myocardial infarction (AMI), heart failure (HF), and pneumonia (PN).
  • Established a methodology to calculate the excess readmission ratio for each applicable condition, which is used, in part, to calculate the readmission payment adjustment. A hospital’s excess readmission ratio is a measure of a hospital’s readmission performance compared to the national average for the hospital’s set of patients with that applicable condition.
  • Established a policy of using the risk adjustment methodology endorsed by the National Quality Forum (NQF) for the readmissions measures to calculate the excess readmission ratios, which includes adjustment for factors that are clinically relevant including certain patient demographic characteristics, comorbidities, and patient frailty.
  • Established an applicable period of three years of discharge data and the use of a minimum of 25 cases to calculate a hospital’s excess readmission ratio for each applicable condition.

Readmission Trends for 2009-2013

Developing national data benchmarks for hospital readmissions helps to identify those patient segments with comparatively high readmission rates for targeted improvement efforts.  Monitoring variations in these benchmarks over time allows officials to track and report on advancements made toward reducing readmissions.

As of October 1, 2012, and under the Hospital Readmissions Reduction Program, CMS is required to reduce payments to IPPS hospitals with excess readmissions.  Monitoring readmission trending is more important today than ever.  While there are severe financial repercussions for increased readmissions, they are becoming a key factor in assessing the overarching performance of the entire healthcare system.

Hospitals have taken various measures to reduce hospital readmissions. For example, Partnership for Patients, a national initiative sponsored by the Department of Health and Human Services, is tracking changes in all-cause 30-day hospital readmissions.4  Reduction efforts range from re-engineering discharge practices and improving care transition to building community-wide partnerships for addressing health and social service needs.5

The most recently tracked readmission trends include:

  • Readmissions among all patients covered by Medicare declined from 18.1 per 100 admissions in 2011 to 17.3 per 100 in 2013.
  • Readmission rates among patients who were covered by private insurance or Medicaid did not change appreciably from 2011 to 2013.
  • The 30-day all-cause readmission rate was consistently highest among patients covered by Medicare.
  • Among uninsured individuals, both the number and rate of readmissions increased between 2009 and 2013 (10.6 percent increase in readmission count and 8.9 percent increase in readmission rate).
  • The readmission rate among nonmaternal patients aged 1– 20 years increased substantially between 2009 and 2013: 22 percent increase for uninsured patients, 15 percent increase for those with private insurance, and 8 percent increase for Medicaid patients.
  • The overall readmission rate for all expected payers combined did not change appreciably. From 2009 to 2013, the readmission rate for all payers combined stayed at about 14.0 per 100 admissions.
  • The average cost of a readmission was higher than the average cost of an index admission for all types of payers:
    • 5 percent higher for patients covered by Medicare;
    • 11 percent higher for uninsured patients; and
    • 30 percent higher for patients covered by Medicaid or private insurance.

The readmission trends outlined above provide a macro overview of the segments of the population that are affected by readmissions.  However, without actionable data, hospitals cannot improve readmissions if they don’t know the underlying cause of the problem.

Until now, hospitals did not have a database in which to evaluate their readmission statistics against similar hospitals.  In 2016, The Agency for Healthcare Research and Quality (AHRQ) introduced a national database tracking hospital readmissions. The data is available through 2013 and it comprises information on 97 percent of all U.S. hospital discharges.

The AHRQ National Readmission Database

The AHRQ Nationwide Readmissions Database (NRD) is the first all-payer database for monitoring hospital readmissions.  Hospital administrators, policymakers and clinicians are able to use the new database in their analyses and decision-making.

The NRD is part of the AHRQ-sponsored Healthcare Cost and Utilization Project (HCUP) and includes various administrative billing data drawn from the HCUP State Inpatient Databases.

The new database will be used to create estimates of national readmission rates for all payers and the uninsured.  The NRD was constructed from 21 states’ data with reliable and verified patient numbers.

The key features of the NRD include:

  • A large sample size, which provides sufficient data for analysis across hospital types and the study of readmissions for relatively uncommon disorders and procedures;
  • Discharge data from 21 geographically dispersed states, accounting for 49.3 percent of the total U.S. resident population and 49.1 percent of all U.S. hospitalizations;
  • Designed to be flexible to various types of analyses of readmissions in the U.S. for all types of payers and the uninsured;
  • Criteria to determine the relationship between multiple hospital admissions for an individual patient in a calendar year is left to the analyst using the NRD;
  • Outcomes of interest include national readmission rates, reasons for returning to the hospital for care, and the hospital costs for discharges with and without readmissions; and
  • The NRD is designed to support national readmission analyses and cannot be used for regional, state, or hospital-specific analyses.

Are Hospitals Prepared to Reduce Readmissions?

Hospitals now have the required data to evaluate readmissions, but are they prepared to act upon it?  According to an anonymous survey of 320 C-suite, senior-level and quality professionals from hospitals conducted by Q-Centrix,6 the percentage of hospitals penalized for readmissions has increased each year since CMS began imposing them, reaching a high of 78 percent in 2015.  The most recent survey results indicate that only 55 percent of those surveyed expected to be penalized in 2016.

Since 2009, great strides have been made to reduce 30-day all-cause hospital readmission rates for heart failure, pneumonia and myocardial infarction.  This year, CMS penalties will extend to acute COPD and elective hip and knee replacements.  Given the historical trend and the three additional diagnoses recently added, the percentage of hospitals penalized will likely be much higher than 55%.

The senior-level executives that responded to the survey indicated that:

  • Nearly three-quarters of hospitals describe themselves as “somewhat” or “extremely” confident in their ability to reduce readmissions;
  • 15% of quality and compliance professionals are extremely confident they will reduce readmissions; and
  • 23% of C-suite executives are extremely confident they will reduce readmissions.

On average, the respondents are employing:

  • 5 different reduction strategies;
  • 92% are initiating a medication reconciliation process;
  • 87% are educating patients and patient caregivers with better pre-discharge instructions; and
  • 84% are conducting phone calls or other communication to patients post-discharge.

Unfortunately, 3% of the survey respondents have no formal strategy at all.

Readmissions Reduction Strategies

Readmissions are typically characterized as planned or unplanned events and related or unrelated to the initial admission within a 30-day period.  In order to assist with readmission reduction efforts, the American Hospital Association (ACA) developed a framework to help policymakers and providers consider the different types of readmissions.7   They are:

  • A planned readmission related to the initial admission;
  • A planned readmission unrelated to the initial admission;
  • An unplanned readmission unrelated to the initial admission; and
  • An unplanned readmission related to the initial admission.

The most viable scenario for reducing readmissions is the unplanned readmission related to the initial admission. That said, the ACA suggests that public policy efforts should be focused on this category of care to reduce readmissions.

Regardless of the care provided, re-hospitalizations for some patients are unavoidable.  Hospitals cannot influence the occurrence of unplanned, unrelated readmissions because they cannot be anticipated or prevented.  However, some readmissions may be prevented through proactive hospital practices, such as:

  • Readmissions clinically related to a prior admission are possibly preventable if one or more actions are taken;
  • Delivery of quality care in the initial hospitalization;
  • Adequate discharge planning;
  • Comprehensive post-discharge follow-up; and
  • Focused coordination from inpatient and outpatient providers.

What Can Patients Do to Avoid Readmissions?

No patient wants to be admitted into a hospital.  And they certainly want to recover from their illness as quickly as possible.  While the bulk of responsibility for care lies with the hospital or provider, patients can positively influence their own recovery and reduce the chances of being readmitted.  In April 2014, a Consumer Reports investigation titled How to Avoid Hospital Re-admissions outlined six steps patients can take to reduce the chance of being readmitted.  They are:

  1. See a discharge planner. The patient and/or their primary care giver should discuss the steps that should be taken when they are released from the hospital.
  2. Determine if you’re really ready to go home. Hospitals and insurance companies have strong financial incentives to discharge patients as soon as possible. A patient should discuss an extension of their stay with their doctor if they don’t feel ready to go home.  If the doctor isn’t able to extend the stay, patients must appeal to the discharge planner or a hospital patient advocate.
  1. Get a discharge summary. The patient should ask for a clear written statement of what they should do when they get home—for example, how to care for surgical wounds or a broken bone covered by a cast, how active they should be, and when they can shower, drive a car, return to work and resume a normal diet.
  2. Get a discharge list of medication. Patients should ask about medications that they should continue after returning home, including their purpose and side effects, and if they should resume or eliminate drugs taken before admission.
  1. Get late test results. Make sure the doctor releases test results to the patient while they are hospitalized, especially those administered 24 hours before leaving the hospital.
  1. Schedule a doctor’s appointment. Patients should proactively seek to make a follow-up appointment with their doctor to review their progress.

There are additional efforts patients can take to improve their chances of a rapid recovery and lessen the possibility of readmission. The most important post-discharge action a patient can take is to insure that they have open, clear and timely communication with their doctor. By doing so, it will greatly reduce the chance of a re-hospitalization or a trip to the emergency room.

Summary

Given the increasing governmental and public scrutiny to control healthcare costs, improve the quality of clinical outcomes and receive the largest financial incentives available, hospitals are acutely focused on readmission reduction strategies.  The effectiveness of reducing readmissions will depend on the integrity of the benchmarking data available, the validity of the methods used for analyzing the data and the steps taken by the hospital and the patient to lower readmission incidences.

Developing national benchmarks for hospital readmissions will help identify those patient populations with relatively high readmission rates for targeted improvement efforts.  Tracking the changes from benchmarking data over time will allow stakeholders to make the adjustments needed to reduce readmissions.

References

  1. Medicare Payment Advisory Commission (2007) Report to the Congress: promoting greater efficiency, http://arxiv.org/ftp/arxiv/papers/1402/1402.5991.pdf
  2. Section 3025 of the Affordable Care Act establishes the Readmission Reduction Program and adds paragraph (q) to Section 1886 of the Social Security Act https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8067.pdf
  3. Hospitals are eligible to participate in the Medicare EHR Incentive Programs: “Subsection (d) hospitals” in the 50 states or DC that are paid under the Inpatient Prospective Payment System (IPPS) Critical Access Hospitals (CAHs), https://www.cms.gov/regulations-and-guidance/legislation/ehrincentiveprograms/eligible_hospital_information.html
  4. S. Department of Health and Human Services, National Quality Strategy. 2013 Annual Progress Report to Congress: National Strategy for Quality Improvement in Health Care. July 2013, Updated July 2014. http://www.ahrq.gov/workingforquality/reports/annualreports/nqs2013annlrpt.htm#tab1. Accessed November 13, 2015.
  5. Agency for Healthcare Research and Quality. Hospital Guide to Reducing Medicaid Readmissions. August 2014. Rockville, MD: Agency for Healthcare Research and Quality. http://www.ahrq.gov/professionals/systems/hospital/medicaidreadmitguide/index.html. Accessed November 13, 2015.
  6. Higher Stakes, Troubling Trends and New Ways to Take Control – Readmission Reduction, http://www.q-centrix.com/readmission-reduction
  7. Examining the Drivers of Readmissions and Reducing Unnecessary Readmissions for Better Patient Care, TrendWatch, September 2011, http://www.aha.org/research/policy/2011.shtml

________________

Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business development and client engagement. Phil has over 25 years’ experience consulting on a broad range of healthcare initiatives for clinical and revenue cycle performance improvement.  He has worked with industry’s largest health systems developing executable strategies for revenue enhancement, expense reduction, and clinical transformation. He can be reached at philcsolomon@gmail.com

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IMPROVING THE PATIENT EXPERIENCE WILL DRIVE SUPERIOR PATIENT SATISFACTION           __________________________________________

The Colossal Shift from Fee-For-Service to Value-Based Reimbursement 

EpicAnyone who has followed the healthcare industry over the past few years understands the transition that is underway moving from the traditional fee-for-service (FFS) model of reimbursing providers for delivering care where physicians and organizations are incentivized to do more and provide more services.  Under this economic model, a provider can make more money by ordering more tests, see more patients and perform more procedures.

The behemoth change to value-based reimbursement (VBR) has turned the traditional reimbursement model on its head, creating a new paradigm for the how providers bill for the services they deliver.

Instead of provider compensation being calculated by the number of visits and tests they order (FFS), their revenue is now centered on value-based-care (VBC) and result-based payments.  Frequently, VBC is commonly referred to as “the value equation“: quality over cost over time.  This systemic adjustment has materially altered the relationship between the patient, provider, and the payer.  The health industry is now becoming more like a traditional customer-centric business.  The consumer (patient) and the change to healthcare consumerism is now king.  The voice of the consumer is becoming increasingly more important in the delivery of care.

Unlike at any time in our healthcare system’s history, healthcare providers focus on improving the patient experience (PE) through better care, improved clinical outcomes, open pricing for services, more sensitive patient engagement and overall better patient satisfaction.  For patients, this means safe, appropriate, and effective care with enduring results, at reasonable costs.

This overarching change is now focused on reducing overall healthcare costs, lowering consumers cost for care and improving quality and results.  The structural shift is driving innovation across the entire healthcare continuum.

Under this new system, providers are evaluated by the value and outcomes of care.  This process takes into consideration a wide variety of quality measures.  These new value-based models require that providers to demonstrate they are attaining the appropriate quality thresholds that benefit patients while also cutting the cost of care.  A lot of today’s value-based incentives—and penalties—rely on quality measures.  The transition to this new reimbursement model is easier said than done.  The transition from FFS to VBR is a complicated process and will transpire over many years.  There are no validated estimates of how long this transition will take.

For several years, providers have been required to submit quality measures to The Centers for Medicare & Medicaid Services (CMS) for programs such as Hospital Inpatient Quality Reporting (IQR), Hospital Outpatient Quality Reporting (OQR), and Physician Quality Reporting System (PQRS).  The measures providers have to comply with tie to penalties and incentives.  This is a new paradigm.  Providers now need robust analytics to quantify the financial and quality performance for each population of patients.  To achieve this, they require measuring performance on an ongoing basis.  If they are not meeting quality standards, they need to be able to quickly identify the cause and make changes to mitigate the issues.  For those providers and health systems that cannot achieve the required scores, the financial penalties and reduced reimbursements will create a significant financial burden.

The Role of the Affordable Care Act and Increased Consumerism

The Affordable Care Act (ACA) has been the catalyst for the transformation of the healthcare industry.  With the ACAs mandate for improving the quality of care, health organizations are expected to streamline the process of delivering care and improve its results.  Delivering the best service and outcomes and delighting the patient with an exceptional experience matters more now than ever before because there are significant reimbursements at stake.

“It has been almost a decade since the Institute of Medicine (now called the Health and Medicine Division) designated “patient-centeredness” as one of six goals for a 21st century health care system; the ACA has required the use of measures of the quality of care, public reporting, and performance payments that reflect this ambitious aim.”1

A paper from the Urban Institute’s Urban Quick Strike Series, on behalf of the Robert Wood Johnson Foundation said “The ACA repeatedly refers to patient-centeredness, patient satisfaction, patient experience of care, patient engagement, and shared decision-making in its provisions.  Even when the law only uses the more general term “quality measures,” patient-centered assessments are being required for specific programs such as with Medicare’s Value-Based Purchasing Program (VBP).”

Apparently, there is growing evidence from providers of benefits from better communication between providers and patients, and involving patients more closely in their care, including greater adherence to medical advice, fewer complaints, and improvement in patient health.  These observations demonstrate how the VBR and VBC programs create value for the patient.

A Good Patient Experience Equals Great Patient Satisfaction

The consumer is speaking, and the patient experience matters.2

The Beryl Institute’s 2015 Benchmarking Study highlights the growing trend committing resources to improving the patient experience as a new foundation for healthcare.  A cross section of over 1,500 individuals from various demographic populations participated in the study.  When asked to what extent is the patient experience important as a consumer of healthcare and how significant are those experiences when making healthcare decisions, the results were overwhelming.  Almost 90 percent responding said the patient experience was extremely important.  These results send a clear message that there is an increasing cognizance of the consumers’ role as an active participant in their care.

The Beryl Institute defines the patient experience as: “the sum of all interactions, shaped by an organizations culture, that influence patient perceptions across the continuum of care- organization’s shaped by an that influence patient across the of care.”  To develop the Institute’s definition of patient experience, they formed a work group of patient experience leaders from various healthcare organizations.  The group shared perspectives, insights, and backgrounds on what patient experience means to them and collaboratively created this definition.

Healthcare organizations are taking steps to improve the patient experience and are applying the methodology and definition of PE outlined by The Beryl Institute.  At Dimensions Healthcare System, Nicole L. Bailey, Director, of Patient & Guest Experience said “Our adoption of the definition has provided significant breakthroughs in all of our patient experience initiatives.  It provides a solid foundation as PE is woven into the fabric of our culture.”

Dimensions Healthcare System is not the only provider pursuing PE.  Paul Clarke, the Patient Experience Manager at NCH Healthcare System was quoted as saying “The definition of PE will allow me as a driver in improving the patient experience at our organization to include those key elements (interactions, current culture, perceptions, across the continuum of care) in our discussions to encourage a more integrated, quality experience that exceeds the expectations of each patient.”

Measuring Quality

Since the inception of VBP, the measurement of effective patient care delivery is critical to the success of health enterprises.  The move from FFS to VBR also means that reimbursements tie to the quality of care.  Hospitals that provide a higher quality of care than their peers will receive reimbursement incentives, and hospitals that provide a lower quality of care will experience severe penalties.  The quality of care measurement breaks down into two measurements: patient outcomes (70 percent) and patient satisfaction (30 percent).3

With patient satisfaction scores now having a critical bearing on reimbursement, managing patient satisfaction across the enterprise is the highest priority at healthcare organizations throughout the nation.  In fact, according to HealthLeaders Media’s 2013 Industry Survey data, 54 percent of healthcare executives say patient experience and satisfaction is a top priority.4

The Patient Protection and Affordable Care Act of 2010 (P.L. 111-148) includes Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey’s as an instrument and data collection methodology for measuring patients’ perceptions of their hospital experience.

CMS publishes participating hospitals’ HCAHPS results on the Hospital Compare website (www.hospitalcompare.hhs.gov) four times a year.  Based in part on these scores, hospitals could have lost or gained from up to 1.5 percent of their Medicare payments in fiscal year 2015 and will have two percent of their reimbursement dollars at risk by fiscal year 2017.

Another public quality measurement is The Consumer Assessment of Healthcare Providers and Systems (CAHPS) program.  It is a multi-year initiative of the Agency for Healthcare Research and Quality (AHRQ) to support and promote the assessment of consumers’ experiences with their healthcare.  The goals of the CAHPS program are twofold:

  • Develop standardized patient questionnaires that are used to compare results across sponsors and over time; and
  • Generate tools and resources that sponsors can use to produce understandable and usable comparative information for both consumers and health care providers.

AHRQ first launched the CAHPS program in October 1995 in response to concerns about the lack of good information about the quality of health plans from the enrollees’ perspective.  At that time, numerous public and private organizations collected information on enrollee and patient satisfaction, but the surveys varied from sponsor to sponsor and often changed from year-to-year.

Over time, the program has expanded beyond its original focus on health plans to address a range of health care services and meet the various needs of health care consumers, purchasers, health plans, providers, and policymakers.  The program is currently in its fourth stage, referred to today as CAHPS IV.

The Patient Becomes a Consumer – An Epic Shift

Patient satisfaction is an important gauge for determining the quality in healthcare.  The level of patient satisfaction is a very effective indicator to evaluate the quality of care providers provide their patients.  Previously, the financial model for healthcare transpired between a payer and provider.  That model mirrors a traditional business-to-business (B2B) transaction.  The ACA and the advent of the State Insurance Exchanges have driven the creation of high-deductible health plans which puts more financial onus on consumers to pay for their care.  This is shifting the economic responsibility to the consumer creating more of a business-to-consumer (B2C) model.

The enterprises that understand how patient satisfaction creates value benefits in a number of ways.  They are:

  • Increased customer (patient) loyalty;
  • Improved patient retention;
  • Consistent profitability or financial viability;
  • Increased staff morale with reduced staff turnover; and
  • Increased personal and professional satisfaction for the provider and the patient.

At the most basic level, patients want to be treated professionally with care and understanding.  To drive excelled patient satisfaction, providers need to:

  • Understanding the patient and their needs;
  • Reduce the inconvenience of wait times;
  • Create a personable provider-patient interaction;
  • Provide clear instructions and educate the patient;
  • Demonstrate problem-solving abilities; and
  • Openly encourage and accept feedback.

The contemporary movement towards improving customer care creates a new millennium in healthcare.  Good clinical outcomes are no longer the only measurement of patient satisfaction.  Creating a positive patient experience is gaining momentum, as one of the most important initiatives hospital and health systems are pursuing.

Conclusion

Today’s provider must strive to achieve the highest level of patient satisfaction to remain competitive in the rapidly changing healthcare ecosystem.  Creating a great patient experience is no longer an outlying issue in healthcare.  It is an industry imperative.

Patient satisfaction is only an indirect determinate of the quality of a provider’s interaction or a hospital’s performance.  The delivery of patient-centric care requires more than just providing health services in a particular way.  Satisfactory patient interactions cannot happen now and then or frequently; they must happen with every patient every time.

Every health organization needs to engage their employees to create a greater PE with the goal of delivering the utmost in patient satisfaction.  If healthcare providers attain this important objective, the chances of success improve exponentially.

1 Robert Wood Foundation, Will the Affordable Care Act Move Patient-Centeredness to Center Stage?  http://www.rwjf.org/en/library/research/2012/03/will-the-affordable-care-act-move-patient-centeredness-to-center.html

2 A REPORT ON THE BERYL INSTITUTE BENCHMARKING STUDY – STATE OF PATIENT EXPERIENCE 2015 – A GLOBAL PERSPECTIVE ON THE PATIENT EXPERIENCE MOVEMENT, JASON A. WOLF, PH.D., PRESIDENT.   

3 Frequently Asked Questions  Hospital Value-Based Purchasing Program Last Updated March 9, 2012, https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/HVBP/HVBP-FAQs.pdf

4 HealthLeaders Media’s 2013 Industry Survey data  http://www.healthleadersmedia.com/report/intel/2013-industry-survey-strategic-imperatives-evolving-industry

Read this article and more at MiraMed Global Services

________________

Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business development and client engagement. Phil has over 25 years’ experience consulting on a broad range of healthcare initiatives for clinical and revenue cycle performance improvement.  He has worked with industry’s largest health systems developing executable strategies for revenue enhancement, expense reduction, and clinical transformation. He can be reached at philcsolomon@gmail.com

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A clear signal to increased enforcement where covered entities do not honor PHI requests for access as required by HIPAA

Revenue cycle newsThe U.S. Office for Civil Rights (OCR) has been actively releasing new information regarding the Health Insurance Portability and Accountability Act of 1996 (HIPAA) compliance, including releasing a frequently asked question (FAQ) aimed at clarifying the rules for fees charged to patients in need of access to medical records.

HIPAA requires covered entities to allow patients access to their records. If patients want a copy of their records, covered entities are permitted to charge a reasonable, cost-based fee to cover the cost of labor, supplies and postage. Until recently, there was very little official guidance on what constitutes reasonable. A recent FAQ was released that clarifies this issue.

Fees for Labor
According to the FAQ, the cost of labor should solely be for fees related to copying records. It includes reasonable costs for copying the PHI requested by the individual, in paper or electronic form and the cost to prepare an explanation or summary of the PHI. This is only if the person chooses to receive an explanation or summary in advance and agrees to the fees.

The cost of labor also includes labor for creating and delivering the electronic or paper copy if the form is requested by the individual. It is calculated from the time the PHI is identified, retrieved or collected and compiled or collated to when it is prepared to be copied. Examples include photocopying paper PHI, scanning paper PHI into an electronic format and converting electronic information in one format to the format requested by or agreed to by the individual.

According to the FAQ, there has been confusion about what constitutes a prohibited search and retrieval cost. In the past, charging a patient for labor costs related to search and retrieval was not allowed. However, the clarification ensures the fees charged are solely what the OCR considers “copying” for purposes of applying 45 CFR 164.524(c)(4)(i) while not interfering with a person’s ability to access a copy of their records.

Labor can be charged for the cost of preparing an explanation or summary of the PHI, in advance, if the individual chooses to receive an explanation or summary and agrees to the fee that may be charged. The fee for labor does not include the cost associated with reviewing the request for access or searching/retrieving the PHI. Importantly, the OCR points out that it expects labor costs to disappear or at least diminish in most cases. This is due to new technology and further automation of processes used to convert and transfer files.

Fees for Supplies and Postage
Supplies include the cost of creating the paper copy and providing the record on electronic media. Examples include the cost of paper toner, CD or USB drive, respectively. A covered entity may not require a person to buy portable media. Furthermore, the person has the right to have his/her protected health information emailed or mailed upon request. Care must be taken, in such instances, to ensure compliance with other HIPAA requirements to ensure the privacy and security of the information being sent. Moreover, postage may be charged when the individual requests the copy, or the summary or explanation, be mailed.

Fee Calculation
The OCR clarifies how to calculate a reasonable, cost-based fee. According to the FAQ, a covered entity may calculate the fee by determining the actual cost, average cost or using a flat fee for electronic medical records.
A covered entity may calculate actual labor costs to fulfill the request, as long as the labor included is only for copying (and/or creating a summary or explanation if the individual chooses to receive a summary or explanation) and the labor rates used are reasonable for such activity. These approximate costs must still be approved in advance by the individual.

Average cost is determined by creating a schedule of costs for labor based on the average labor costs to fulfill standard types of access requests as long as the types of labor costs included are the ones the Privacy Rule permits a fee for. The covered entity may add the cost of any applicable supply to that amount.

Finally, a flat fee can be charged for all standard requests for electronic copies of PHI that are maintained electronically. The fee cannot be more than $6.50, which includes the cost of labor, supplies and applicable postage.
Due to the varying costs of fees, a covered entity must inform the individual of the cost while the details are being arranged. This helps preserve the patient’s right to access, which is mandated by the Privacy Rule.

State Fees
The FAQ further explains that labor or other costs not permitted by the Privacy Rule cannot be charged to individuals even if authorized by state law. Plainly stated, “[t]he bottom line is that the costs authorized by the State must be those that are permitted by the HIPAA Privacy Rule and must be reasonable.” If the state permits an amount that exceeds the covered entity’s cost to provide the PHI, charging a patient that amount would be unreasonable and impermissible under the Privacy Rule.

However, the HIPAA requirements do not override state laws that require providers to provide one free copy of a medical record. This includes state laws that prohibit fees to be charged to provide individuals with copies of their PHI or allow only lesser fees than what the Privacy Rule would allow to be charged for copies.

Third-party Access
The OCR also addresses the release of PHI to a designated third party. According to the FAQ, PHI can be released to a third party if requested by an individual. The request must be in writing and signed by the individual or entity designated by that person. It must clearly identify the designated person or entity where to send the PHI. An electronically executed request is acceptable and must include an electronic signature, as well as a faxed or mailed copy of the signed request. The same requirements for providing the PHI to the individual, such as the timeliness requirements, fee limitations, prohibition on imposing unreasonable measures and form and format requirements, apply.

A covered entity may not deny an individual’s access request to send PHI to a third party for other purposes. Disagreement with the individual about the worthiness of the third party as a recipient of PHI, or even concerns about what the third party might do with the PHI (except for the express reasons listed in the Privacy Rule, such as in cases where life or physical safety is threatened), are not acceptable reasons to deny the request.

Denial of Access
A covered entity may deny an individual access to all or a portion of the requested PHI in only very limited circumstances. For example, a covered entity may deny a request if a licensed health care professional determines, in the exercise of professional judgment, that the request is reasonably likely to endanger the life or physical safety of the individual or another person.

Although the Privacy Rule allows for the fees, the OCR encourages covered entities to not charge fees for the records, as patient access to Protected Health Information is a necessary component of delivering and paying for healthcare. The OCR will continue to monitor the fees being charged to individuals and determine whether those costs are creating barriers to the access and will enforcement action where necessary.

To read the full version of the recently released FAQ, click here.

You can also view this post on MiraMed’s blog.

________________

Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business development and client engagement. Phil has over 25 years’ experience consulting on a broad range of healthcare initiatives for clinical and revenue cycle performance improvement.  He has worked with industry’s largest health systems developing executable strategies for revenue enhancement, expense reduction, and clinical transformation. He can be reached at philcsolomon@gmail.com

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Changes Proposed to Medicare Appeals Process

July 13, 2016

Current Process Description – Every year, Medicare Administrative Contractors process an estimated 1.2 billion fee-for-service claims on behalf of the Centers for Medicare & Medicaid Services (CMS) for more than 33.9 million Medicare beneficiaries.  When beneficiaries or providers disagree with a coverage or payment decision made by Medicare, they have the right to appeal and the Social Security Act established five levels to the Medicare appeals process:

  1. Redetermination by a Medicare Administrative Contractor
  • No minimum amount in controversy to appeal
  • 60-day target to complete the process
  1. Reconsideration by a Qualified Independent Contractor (QIC)
  • No minimum amount in controversy to appeal
  • Filing deadline 180 days from issuance of a MAC redetermination
  • 60-day target to complete the process
  1. Hearing Before an Administrative Law Judge at the Office of Medicare Hearings and Appeals (OMHA)
  • Minimum amount in controversy required for a hearing is adjusted annually based on a formula prescribed by the statute; currently $150
  • Filing deadline 60 days from date of receipt of QIC determination
  • 90-day target to complete the process
  1. Medicare Appeals Council Review
  • Minimum amount in controversy required for a hearing is adjusted annually based on a formula prescribed by the statute; currently $150
  • Filing deadline 60 days from date of receipt of OMHA determination
  • 90-day target to complete the process
  1. Judicial Review in U.S. District Court
  • Minimum amount in controversy required for a hearing is adjusted annually based on a formula prescribed by the statute; currently $1,500
  • Filing deadline 60 days from date of receipt of Medicare Appeals Council determination; or a party may request judicial review by the federal court is the Council does not render an action within 90 days of when the appeal is filed with them

Of the 1.2 billion claims filed in 2015, 123 million or about 10 percent, were denied, and 3.7 million of those (about three percent of total claims) were appealed.

Current Backlog

At Levels 1 and 2, CMS is currently meeting its statutory timeframes to process appeals and is not experiencing a backlog.

At Level 3, the OMHA is currently receiving more than a year’s worth of appeals every 18 weeks.  At the end of 2015, the pending workload exceeded 880,000 appeals while annual adjudication capacity with current level of resources was approximately 75,000 appeals.

At Level 4, the Council is currently receiving more than a year’s worth of appeals every 11 weeks.  At the end of 2015, the pending workload exceeded 14,000 appeals while annual adjudication capacity with current level of resources was approximately 2,300 appeals.

HHS has identified four primary drivers of the increase in volume:

  1. Increases in the number of beneficiaries;
  2. Updates and changes to Medicare and Medicaid coverage and payment rules;
  3. Growth in appeals from State Medicaid Agencies; and
  4. National implementation of the Medicare Fee-for Service Recovery Audit Program.

Action Taken

In a report issued on June 9, 2016, the Government Accountability Office (GAO) stated that U.S. Department of Health and Human Services (HHS) should take more steps to improve its oversight of the Medicare fee-for-service appeals process and to reduce the volume of appeals.

On June 28th, the HHS issued a Notice of Proposed Rulemaking (NPRM) proposing changes to the Medicare claims appeal process, and has recently released a Primer on the Medicare Appeals Process that describes its three-pronged strategy to improve the Medicare Appeals process:

  1. Invest new resources at all levels of appeal to increase adjudication capacity and implement new strategies to alleviate the current backlog.
  2. Take administrative actions to reduce the number of pending appeals and encourage resolution of cases earlier in the process.
  3. Propose legislative reforms that provide additional funding and new authorities to address the appeals volume.

The proposed regulatory changes that appear in the NPRM are the latest in a series of administrative actions designed to reduce the number of pending appeals and encourage resolution of cases earlier in the Medicare appeals process.  In the NPRM, HHS is proposing additional administrative action to: expand the pool of available OMHA adjudicators; increase decision making consistency among the levels of appeal; and improve efficiency by streamlining the appeals process so less time is spent by adjudicators and parties on repetitive issues and procedural matters.

In addition to these administrative actions, the FY 2017 President’s Budget requests additional funding to bring capacity for processing and resolving appeals in line with current appeal volume.  The budget request also includes a comprehensive legislative package aimed at both helping HHS process a greater number of appeals and encouraging resolution of appeals earlier in the process before they reach the OMHA and the Medicare Appeals Council.

If the administrative authorities set forth in the NPRM are implemented in conjunction with the proposed funding increases and legislative actions outlined in the FY 2017 President’s Budget, HHS estimates that the backlog of appeals could be eliminated by FY 2021.

The proposed changes will be posted on the Federal Register website and open to comments through August 29th.

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Article is a 4-minute read

CMS Becomes Arch Nemesis of Hospitals with Plans for Site-neutral Rates in Outpatient Payment Rule

CMS Witch of the WestTo hospitals, the Centers for Medicaid & Medicare Services (CMS) is acting like the terrible Wicked Witch of the West from the movie the Wizard of Oz because of their proposed plans for site-neutral rate reductions.  The 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System (CMS-1656-P) proposal changes were submitted on July 6, 2016.  The law provides for payment system policy changes, quality reporting provisions, and reduced pay rates that many hospitals would prefer to douse with water and have them disappear like the Wicked Witch rather than have payments reduced at their off-campus facilities.

CMS is proposing a number of policies they believe will improve the quality of care Medicare patients receive.  A key piece of the 2017 proposed legislation is the implementation of Section 603 of the Bipartisan Budget Act of 2015. This law affects how Medicare pays for certain items and services furnished by certain off-campus outpatient departments.  Also, CMS is proposing to remove the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey for purposes of the Hospital Value-Based Purchasing Program (VBP).

The OPPS and ASC proposed rule is one of several slated for 2017 that reflect a broader administration-wide strategy to create a healthcare system that results in better care, smarter spending, and healthier people.

The American Hospital Association (AHA), a not-for-profit association that advocates for provider organizations that include nearly 5,000 hospitals, healthcare systems, networks, other providers of care and 43,000 individual members, disagrees with CMS.  Tom Nickels, the Executive Vice President, Government Relations and Public Policy for the AHA issued a statement on July 6, 2016, expressing its disappointment with CMS’ “short-sighted” proposal.

“Hospitals and health systems and more than half of the House and the Senate requested that CMS provide reasonable flexibility when implementing Section 603 of the Balanced Budget Act of 2015 in order to ensure that patients have continued access to hospital care,” Nickels, with the AHA, said.  “Instead, the agency is proposing to provide no funding support for outpatient departments for the services they provide to patients.  This does not reflect the reality of how hospitals strive to serve the needs of their communities.  Also, CMS’ refusal to continue current reimbursement to hospitals that need to relocate or rebuild their outpatient facilities to provide needed updates and ensure patient access is unreasonable and troubling.”

The AHA is not the only industry group that disagrees with CMS.  America’s Essential Hospitals (AEH), a trade group that represents safety-net providers, said that CMS “appeared to ignore Congress’ intent” to use a different payment system for new hospital-owned outpatient facilities.  “Hospital systems that otherwise would seek to enhance access by establishing new clinics in underserved areas will not do so, as this damaging payment policy makes new outpatient centers economically unsustainable,” the organization said in a statement.  Based on comments to date from providers it appears that CMS will have its work cut out for them as they sift through the public’s feedback.  They will accept comments on the proposed rule until September 6, 2016, and will respond to comments in a final rule.  The rule is available in the Federal Register and can be downloaded at https://www.federalregister.gov/public-inspection.

The fundamental changes in the OPPS, and ASC payment system proposed rule include:

  1. Site-neutral payment provisions for emergency departments
    Under the proposed rule, services provided in a dedicated emergency department would continue to be paid under the OPPS and CMS proposed certain restrictions on off-campus provider-based departments that began billing under the OPPS before November 2, 2015.
  2. Payment update
    CMS has proposed updating the OPPS rates by 1.55 percent in 2017.  CMS arrived at its proposed rate increase through the following updates: a positive 2.8 percent market basket update, a negative 0.5 percent update for a productivity adjustment and a negative 0.75 percent update for cuts under the Affordable Care Act.  After considering all other policy changes included in the proposed rule, CMS estimates OPPS payments would increase by 1.6 percent and ASC payments would increase by 1.2 percent in 2017.
  3. Hospital Value-Based Purchasing Program
    Beginning with the fiscal 2018 program year, CMS has proposed removing the pain management dimension of the HCAHPS survey of the VBP.  It is their belief that leaving the section in the rule puts pressure on hospital staff to prescribe more opioids and that is ill advised.
  4. Electronic Health Record Incentive Program
    To offer greater flexibility in the meaningful use of the Electronic Health Record Incentive Program (EHR), CMS has proposed a 90-day EHR reporting period in 2016 for all eligible professionals and hospitals.  The reporting period would be any continuous period of 90 days between January 1, 2016, and December 31, 2016.   Also, CMS noted that it is not feasible for physicians and hospitals that have not demonstrated meaningful use in a prior year to attest to the Stage 3 objectives and measures in 2017.  Under the proposed rule, these new participants would be required to attest to Modified Stage 2 by October 1, 2017.
  5. Hospital Outpatient Quality Reporting Program
    CMS offers hospitals a financial incentive to report the quality of their services.  The hospital reporting program provides CMS with data to help consumers make more informed decisions about their healthcare.  For 2017, CMS has proposed adding seven measures to the Outpatient Hospital Quality Reporting Program for the 2020 payment determination and subsequent years.  Some of the hospital quality of care information gathered through the program is available to consumers on the Hospital Compare website at: www.hospitalcompare.hhs.gov.

In addition to the changes proposed for site-neutral rates in OPPS and ASC, the 764-page draft rule proposes adjustments to the following:

  • Proposed Comprehensive Ambulatory Payment Classifications (C-APCs) for 2017;
  • Proposed Packaged Services Policy Refinements;
  • Device-Intensive Procedure Policies;
  • Device Pass-Through Applications;
  • Inpatient Only List Paid Under The IPPS;
  • ASC Payment Update;
  • Partial Hospitalization Program (PHP) Rate Setting;
  • Hospital Value-Based Purchasing Program;
  • Organ Transplant Enforcement;
  • EHR Incentive Program; and
  • Ambulatory Surgical Center Quality Reporting Program.

Conclusion

CMS is expecting numerous comments on their rule changing proposals.  I’m sure many stakeholders who are vying to change the proposed OPPS and ASC wished they had the all-knowing Wizard of Oz on their side to help them build a compelling case in their favor.

Based on AHA and AEH’s comments, you would think CMS has become an arch-nemesis flying around on a broomstick trying to do harm to their members.  It is the job of the AHA and AEH to protect its members, so it is no surprise they are stepping up to guard their interests.

Does the proposed rule change make sense?  The law seems to discourage organizations from expanding or duplicating services and this may play a part in reducing healthcare costs.  Perhaps encouraging providers to consolidate services into one location would offer some benefits.  Combining specialties into one place would improve parking and access for the sick and elderly population who otherwise have to navigate their way around large campuses.  Consolidation of services impacts workflow, timeliness, and efficiency and would reduce maintenance and other building costs, and eliminate duplicate staffing.

Unfortunately, many facilities have limited land for contiguous expansion.  They will be forced to build upward to avoid the negative financial repercussions the new law will pose.  Since CMS is actively seeking comments on a number of their proposals; there is a good chance that many items inside of the rule will change.  Will CMS’ site-neutral payments rule save Medicare about $500 million in 2017 as they projected?  Only time will tell.

_________________________

Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a revenue cycle outsourcing company.  Phil has over 25 years experience consulting on a broad range of healthcare initiatives for revenue cycle optimization, where he has developed executable strategies for revenue enhancement, expense reduction, and clinical transformation. Previously, he was the CEO of a Fast-Tech 50 healthcare firm, a principal at an INC Magazine’s top 500 Company and he has held various senior leadership positions with national and global business process outsourcing firms. He is an active member of the HFMA Georgia Chapter, has published over 250 articles about revenue cycle optimization and healthcare reform and is a featured speaker at industry educational events. You can reach him at philcsolomon@gmail.com, 404-849-8065 or on Twitter @philcsolomon.

Photo credit: http://www.flickr.com/photos/12836528@N00/8235255566

 

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Free Webinar: Uber-Up Your Patient Payment Liability Strategies

When: July 14, 2016 – 2:00 PM to 3 PM EDT

Register: https://attendee.gotowebinar.com/register/1796784893242454788

Sponsored by: The Georgia Chapter of HFMA
__________________

Why Use ThGirl Megaphone Orangee Uber Analogy to Reference Patient Payment Liability Strategies?

Uber is an on-demand transportation service which has revolutionized the transportation industry. Uber’s new strategy reimagined the old taxi model into a $50 billion dollar company.

This free webinar will help you “Think Like Uber” by adjusting the way you pursue collecting rising patient liabilities.  

In this webinar, you will learn about the latest trends and techniques to mitigate the risks of the emerging trend of patient payment liability growth and the strategies required to collect more from patients while maintaining patient advocacy and satisfaction. Leaders who deliver high-performing revenue cycle results have one thing in common… they are continually on the lookout for new cutting edge methods to improve their financial position and bottom line.
Discover new strategies that will help you reduce your risk of the industry’s estimated $200 billion in bad debt write-offs in 2016.

Presenter: Phil C. Solomon – Vice President of Global Services at MiraMed

Phil serves as the Vice President of Global Services for MiraMed, a revenue cycle outsourcing company and is the publisher of Revenue Cycle News. He has over 25 years of experience consulting on a broad range of healthcare initiatives for revenue cycle performance improvement by developing executable strategies for revenue enhancement, expense reduction, and clinical transformation.

Learning Objectives:
▪ Current trends in healthcare
▪ Improve scheduling pre-registration/registration processes to collect more cash
▪ Develop POS strategies that include new payment channels and mobile strategies
▪ Understand the scope and trends of patient payment liability
▪ Improve patient collection response rate by leveraging billing statement psychology
▪ Improve collection recovery while maintaining patient satisfaction
▪ Increase bad debt recovery and improve patient advocacy
▪ Learn about the new strategies for debt purchasing

Register today! Uber-Up Your Patient Payment Liability – July 14, 2016 – 2:00 PM to 3 PM EDT 

Register now! Just click this link to sign up!

________________________________

Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business opportunities and client engagement. Phil has over 25 years experience consulting on a broad range of healthcare initiatives for revenue cycle optimization, where he has developed executable strategies for revenue enhancement, expense reduction, and clinical transformation.

Previously, he was the CEO of a Fast-Tech 50 healthcare technology firm, a principal executive at an INC Magazine’s top 500 Fastest Growing Private Companies in the U.S. and he has held various senior leadership positions with national and global business process outsourcing firms. He is an active member of the HFMA Georgia Chapter, has published over 250 articles about revenue cycle optimization and healthcare reform and is a featured speaker at industry educational events. You can reach him at philcsolomon@gmail.com, 404-849-8065 or on Twitter @philcsolomon.

 

 

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Risk Adjustment and the Hierarchical Condition Categories Methodology

Money DrugsRisk Adjustment (RA) and Hierarchical Condition Category (HCC) coding is a payment model mandated by the Balanced Budget Act of 1997 (BBA) and implemented by the Centers for Medicare and Medicaid Services (CMS). The RA program allows CMS to pay plans for the risk of the beneficiaries they enroll, instead of an average amount for Medicare beneficiaries. By risk adjusting plan payments, CMS can make appropriate and accurate payments for enrollees with differences in expected costs. RA is used to make payments based on the health status and demographic characteristics of an enrollee. Risk scores measure individual beneficiaries’ relative risk, and they are used to adjust payments for each beneficiary’s expected expenditures. By risk adjusting plan bids, CMS can use standardized bids as base payments to plans.

Initiating the Affordable Care Act Risk Adjustment Program

Starting with coverage beginning in 2014, the Affordable Care Act (ACA) established a lasting RA program to minimize the negative effects of serving sick patients and help level the playing field between insurance companies where they are rewarded for providing high-quality, affordable coverage, not for offering plans designed to attract the healthy and avoid the sick.  The RA program is intended to achieve this goal by mitigating the effect of risk selection on premiums by transferring premium revenue from plans with below-average actuarial risk to plans with above-average actuarial risk. Such a transfer mechanism is an essential component of the insurance market reforms implemented by the ACA. These market reforms include:

– Guaranteed issue/renewal. All non-grandfathered insurance coverage offered by health insurance issuers must be offered on a guaranteed issue basis. Health insurance issuers may not refuse to issue or renew coverage to any individual on the basis of their health status or prior use of health services.
– Adjusted community rating. A health insurance issuer may not charge an individual more for non-grandfathered individual or small group market coverage based on that individual’s health status or prior use of health services.
– Single risk pool. The single risk pool requirement directs an issuer to develop its market index rates for non-grandfathered insurance plans in the individual and small group markets based on the pooled essential health benefits claims experience of all of its enrollees in all non-grandfathered health plans in the applicable market in a State.

These three provisions mean that a health plan that enrolls individuals in poor health would not be able to charge higher premiums than one with healthier individuals. Without an RA mechanism, a health plan would gain a competitive advantage if it enrolled the healthy and avoided the sick. This could create an incentive for issuers to avoid offering plan designs that are particularly valuable to sicker individuals, thereby reducing the variety and quality of the coverage consumers have to choose from. The goal of the Affordable Care Act market reforms, and the goal of its risk adjustment

The goal of the Affordable Care Act market reforms and the goal of its risk adjustment program is to create a stable market in which health plan premiums will reflect the value of the coverage offered, including product features such as effective care delivery, and not risk selection.

Health Systems today need to find ways to accurately document and report patient’s entire disease burden. There are negative financial consequences for a lack of accurately tracking a patient’s medical history. When a provider under-reports that means the provider won’t get paid for the full cost it takes to keep patient’s healthy. Therefore, the medical data must tell the entire story of the patient’s encounter.

Under the RA program, providers are required to provide a face-to-face visit with each patient, each year, to identify the patient’s conditions thoroughly and link those to what the provider did to manage, evaluate, assess and/or treat each condition. In order to qualify for HCC reimbursement, the diagnosis must be directly monitored, evaluated, assessed and/or treated by the provider.

Staff Requirements for the Risk Adjustment Program

Most health system staff don’t fully understand the HCC methodology for RA. Traditional Diagnosis-Related Group (DRG) focused documentation programs may not always emphasize the entire disease burden, so physicians, coders, and clinical document improvement personnel may need additional training and updated policies to follow. It is also important to understand the two types of HCCs. They are CMS-HCC and the United States Department of Health and Human Services (HHS) HCCs. The guidelines that differentiate each other are:

the United States Department of Health and Human Services (HHS) HCCs. The guidelines that differentiate each other are:

CMS HCC HHS HCC (Commercial HCC)
§  Developed by CMS for risk adjustment of the Medicare Advantage Program (Medicare Part C) §  Developed by the Department of Health and Human Services (HHS)
§  CMS also developed a CMS RX HCC model for risk adjustment of Medicare Part D population §  Designed for the commercial payer population
§  Based on aged population (over 65) §  HHS-HCCs predict the sum of medical and drug spending
§  Current year data predictive of future year risk §  Includes all ages

 

Under both types of HCCs (CMS and HHS), HCCs are used with the following programs:
Medicare Advantage Plans;
• Medicare Shared Savings ACO (expected cost);
• Value-Based Purchasing (expected cost/efficiency);
• Some Commercial ACOs/Shared Risk arrangements;
• Health Insurance Exchange Plans;
• States Where Medicare/Medicaid Dual Eligible are Managed Care; and
• Population Health/Risk Stratification/Cost Prediction.

The complexity of RA creates confusion for providers. Since approximately 80 percent of patient care occurs in the physician practice, they often have limited documentation of improvement practices as compared to a hospital’s inpatient setting. Doctor’s disparate systems and processes create difficulty for identifying a longitudinal care record that ultimately affects reimbursement.

Health Systems are continually seeking ways to accurately predict operating costs. The provider-sponsored health plans and/or providers with risk-based agreements need to predict costs to remain financially solvent. These providers are looking to risk stratify patient populations to help control costs and maximize reimbursements. This is why the RA scores are so important. The RA score is calculated using an actuarial tool that has been developed to predict the cost of healthcare for covered beneficiaries and enrollees. An RA score is determined by using a combination of demographic information such as the age and gender of the patient and whether it is community-based or institution based and if there is Medicaid disability and with disease information such as the HCC category, based on diagnoses reported, the interaction between certain disease categories and the disability status.

The RA score is calculated using an actuarial tool that has been developed to predict the cost of healthcare for covered beneficiaries and enrollees. An RA score is determined by using a combination of demographic information such as the age and gender of the patient and whether it is community-based or institution based and if there is Medicaid disability and with disease information such as the HCC category, based on diagnoses reported, the interaction between certain disease categories and the disability status.

The approved sources of data used to calculate the RA score diagnoses are from a valid provider (physicians, nurse practitioners and certified registered nurse anesthetist) with proper data collection methods. The data that makes up the HCC Classification System comes from 79 CMS-HCC categories.

Validating the Data Through Risk Adjustment Processing System (RAPS)

In order to evaluate a provider’s data, a risk adjustment model is run to calculate risk scores for all beneficiaries with available qualified data. In order for data to be included in the model run, organizations must meet three submission deadlines each year:

1. Once For Initial Risk Score – First Friday In September
2. Once For The Mid-Year Update – First Friday In March
3. Once For Final Reconciliation – January 31 After The Payment Year

It is important for plans to recognize the connection between the model runs and the dates of service. Plans should keep in mind that the model run timetable includes not only diagnosis information, but all statuses that affect risk adjustment. The Medicare risk adjustment model is prospective, which means that diagnoses reported in the prior year along with the demographic information will “predict” future costs and adjust payments accordingly.

Risk Adjustment Data Flow Process from Submission to Payment

Risk scores measure individual beneficiaries’ relative risk and are used to adjust payments for each beneficiary’s expected expenditures. In order to calculate individual risk scores, plans must submit data to RAPS based on beneficiary diagnoses. Accurate risk-adjusted payments rely on the diagnosis coding derived from the member’s medical record. This is why it is so important to capture the events of the entire patient encounter. The RA process flow is as follows:

• A physician documents a patient’s visit in their medical record;
• The physician’s office or hospital codes the claim from the medical record and submits the data to the payer;
• The payer converts and sends the diagnosis clusters in RAPS format or via direct data entry (DDE) to the Front-End Risk Adjustment System (FERAS) at least quarterly;
• The data goes to FERAS for processing where the file-level data, batch-level data, and first and last detail records are checked; and
• If any data are rejected, then data are reported on the FERAS Response Report.

The final submission of RA data is reconciled and is used to complete the implementation of payments, with CMS calculating final risk adjustment factors and beneficiary status based on complete data. CMS continues to allow a period (approximately 13 months after the data collection year) for submitting final RAPS data for the appropriate data collection period. Data not received or submitted by the initial submission deadline for a data collection period can be submitted by the final submission deadline (reconciliation). In addition to incorporating new RAPS and fee-for-service diagnoses, reconciliation takes into account necessary adjustments to institutional status and demographic data for enrollees.

Note: CMS reconciles risk-adjusted payments for a calendar year only one time. When submitting risk adjustment data for reconciliation, plans may submit corrected data that was previously submitted.

Summary

Providers should continually strive to improve their RA and HCC program processes by developing strategies to mitigate issues affecting accurate reporting. Reporting challenges exist because:

• The majority of patients are only seen in a physician office setting;
• Physician office notes are limited and specificity is not always identified;
• Physicians have to report what is treated, evaluated and monitored and might not be aware of what falls into each category;
• The physician’s report on a 1500 claim form which has space only for four diagnoses–electronically more can be reported; and
• Unspecified and symptom diagnoses are not considered as HCCs.

RA has become a lightning rod topic for ACOs and other providers despite not being a completely new subject. There is plenty of confusion about how RA and HCCs work and providers will uncover many opinions about how best to approach implementing the program. In any case, most data capture solutions that providers are pursuing today still have caveats. To best prepare for increased scrutiny, consider a multi-prong approach while being mindful of acceptable trade-offs. Utilizing a single source bolt-on technology by itself will not offer an overarching solution. The best technology tools will also use claims data rather than relying on electronic medical record data alone. One fact is indisputable: inaction will likely have negative operational and financial consequences for provider organizations.

________________________________

Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business opportunities and client engagement. Phil has over 25 years experience consulting on a broad range of healthcare initiatives for revenue cycle optimization, where he has developed executable strategies for revenue enhancement, expense reduction, and clinical transformation.

Previously, he was the CEO of a Fast-Tech 50 healthcare technology firm, a principal executive at an INC Magazine’s top 500 Fastest Growing Private Companies in the U.S. and he has held various senior leadership positions with national and global business process outsourcing firms. He is an active member of the HFMA Georgia Chapter, has published over 250 articles about revenue cycle optimization and healthcare reform and is a featured speaker at industry educational events. You can reach him at philcsolomon@gmail.com, 404-849-8065 or on Twitter @philcsolomon.

Also, view on MiraMed Global Service’s website.  

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Stop civil rights

OCR Signals its Concern with Business Associates – BAAs

The U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) has lately been broadcasting its increased attention to, and concern about, HIPAA business associates on a monthly basis.

In March, the OCR announced a $1.55 million settlement with North Memorial Health Care of Minnesota that was partially based on a key finding that the hospital failed to enter into a business associate agreement (BAA) with a major contractor. Then in April, OCR began its Phase 2 HIPAA Audit Program which was expanded to include business associates as well as covered entities, and entered into another BAA-related settlement (as discussed here).

Continuing with the recent theme, in May the OCR published a cyber-awareness update entitled “Is Your Business Associate Prepared for a Security Incident?” in which it essentially answered “no.” Thus, now is the time for covered entities and business associates to ensure that they have signed BAAs in place that adequately address security assessment of the business associate, breach notification and breach response.

Date: May 25, 2016
For more information contact:
By: Susan R. Huntington, Attorney at Law | Attorney Bio
Day Pitney, LLC
___________________
Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business opportunities and client engagement. Phil has over 25 years experience consulting on a broad range of healthcare initiatives for revenue cycle optimization, where he has developed executable strategies for revenue enhancement, expense reduction, and clinical transformation. Previously, he was the CEO of a Fast-Tech 50 healthcare technology firm, a principal executive at an INC Magazine’s top 500 Fastest Growing Private Companies in the U.S. and he has held various senior leadership positions with national and global business process outsourcing firms. He is an active member of the HFMA Georgia Chapter, has published over 250 articles about revenue cycle optimization and healthcare reform and is a featured speaker at industry educational events. You can reach him atphilcsolomon@gmail.com, 404-849-8065 or on Twitter @philcsolomon.

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Free Webinar: Demystifying Revenue Cycle Best Practices

To register: Demystifying Revenue Cycle Best Practices – May 12, 2016 11:00am to 12pm EDT https://attendee.gotowebinar.com/register/3489263138740164353

PresenGirl Megaphone Orangeters:

Lyman G. Sornberger – Chief Healthcare Strategy Officer Capio Partners

Presenters:

Lyman Sornberger joined Capio Partners in 2008 as their Chief Healthcare Strategy Officer. Prior to joining Capio and forming LGS
Health Care (2013), Mr. Sornberger was the Executive Director of Revenue Cycle Management at Cleveland Clinic Health Systems.  Mr. Sornberger was also employed at the University of Pittsburgh Medical Center (UPMC) for 22 years in leadership roles for their revenue cycle management groups.

Phil C. Solomon – Vice President of Global Services at MiraMed

Phil is the publisher of Revenue Cycle News and serves as the Vice President of Global Services for MiraMed, a revenue cycle outsourcing company. He has over 25 years’ experience consulting on a broad range of healthcare initiatives for revenue cycle performance improvement by developing executable strategies for revenue enhancement, expense reduction, and clinical transformation.

Learning Objectives:

§  Improve scheduling pre-registration/registration processes

§  Increase revenue from insurance claims with denial resolution strategies

§  Develop POS strategies that include payment channels and mobile strategies

§  Understand the scope and trends of patient payment liability

§  Improve patient response rate by leveraging billing statement psychology

§  Improve collection recovery while maintaining patient satisfaction

§  Increase bad debt recovery: agency management, debt purchasing and patient advocacy

To register: Demystifying Revenue Cycle Best Practices – May 12, 2016 at 11:00 AM EDT https://attendee.gotowebinar.com/register/3489263138740164353

For Questions – Contact: Phil Solomon | phil.solomon@miramedgs.com| 404-849-8065

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Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business opportunities and client engagement. Phil has over 25 years experience consulting on a broad range of healthcare initiatives for revenue cycle optimization, where he has developed executable strategies for revenue enhancement, expense reduction, and clinical transformation. Previously, he was the CEO of a Fast-Tech 50 healthcare technology firm, a principal executive at an INC Magazine’s top 500 Fastest Growing Private Companies in the U.S. and he has held various senior leadership positions with national and global business process outsourcing firms. He is an active member of the HFMA Georgia Chapter, has published over 250 articles about revenue cycle optimization and healthcare reform and is a featured speaker at industry educational events. You can reach him at philcsolomon@gmail.com, 404-849-8065 or on Twitter @philcsolomon.

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My colleague, David Johnson wrote this insightful book and I recommend it highly.

Market vs. Medicine: America’s Epic Battle for Better, Affordable Healthcare is a must read for any healthcare business owner- large or small. Get your copy on May 9. Stay tuned for updates. http://bit.ly/1WLuBgw – See more at:

4A_wheel_15_03_30

Learn about 4sight Health:
4sight Health operates at the intersection of healthcare economics, strategy and capital formation. The company’s four-stage analytic (Assess. Align. Adapt. Advance.) reflects the bottom-up, evolutionary character of disruptive, market-driven change and guides 4sight Health’s professional services, which include the following:

 

Regular commentary on market-driven reform
Public speaking
Board education
Strategic advice
Capital formation design and execution
Advancing organizational change
Venture investing: strategic partnerships; capital funding; product/service design
– See more at: http://4sighthealth.com/about/#sthash.Ai1MHooP.dpuf

  • Regular commentary on market-driven reform
  • Public speaking
  • Board education
  • Strategic advice
  • Capital formation design and execution
  • Advancing organizational change
  • Venture investing: strategic partnerships; capital funding; product/service design

– See more at: http://4sighthealth.com/about/#sthash.Ai1MHooP.dpuf

Learn about the author: David W. Johnson, CEO

Dave is the CEO and founder of 4sight Health.  Mr. Johnson is currently writing Market vs. Medicine: America’s Epic Fight for Better, Affordable Healthcare that will publish on May 9, 2016. He is the author-in-residence at the Health Management Academy, writes the widely-read “Market Corner” commentaries each week and contributes regularly to Huron Consulting’s Perspectives. He is an investor and board member for three early-stage healthcare companies: Bienestar, Curate Health and HealthiPass.

During his 28-year investment-banking career, Mr. Johnson managed over $30 billion in healthcare revenue bonds and led significant strategic advisory engagements for his health system clients. Dave specializes in capital formation, asset-liability management, enterprise risk analytics and new business-model development. His expertise encompasses health policy, academic medicine, economics, statistics, behavioral finance, disruptive innovation, organizational change and complexity theory.

Mr. Johnson holds a Bachelors of Arts degree in English Literature from Colgate University and a Master’s degree in Public Policy from Harvard University. Dave was a Peace Corps Volunteer in Liberia, West Africa and a United States Presidential Management Intern. His civic and professional affiliations have included Harvard Medical School (Visiting Committee); the Chicago Council on Global Affairs (Board, Executive and Finance Committees); the University of Chicago (Harris School of Public Policy’s Visiting Committee and Student Engagement Sub-Committee Chair); the Health Management Academy; Harvard School of Public Health; CHRISTUS Health (Audit
Committee); the British-American Project (U.S. Chair); and Terence Cardinal Cooke Health Center (Finance Committee Chair).

Dave enjoys reading, traveling and has run ten marathons.

– See more at: http://4sighthealth.com/about/#sthash.Ai1MHooP.dpuf

Enjoy the book and reach out to David if you have any questions ~ Phil C. Solomon

 

 

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