Education webinar

Have you implemented new processes designed to minimize insurance denials and backlogs caused by the effects of the ICD-10 transition? Discover how to implement proactive strategies that will help your organization thrive.

Industry pundits expect insurance denials will grow from the typical 2 percent to 3 percent to over 30 percent after the transition of ICD-10.

Do you have a plan in place to mitigate your financial risk against increased expenses, DRO and DNFB, increased AR and decreased cash?

Make sure your organization’s Post ICD-10 denial strategy will return the results you’ve projected.

Free Webinar Tomorrow: Top 5 Financial Repercussions from Post ICD-10 Denials and How to Avoid Them
Join us for a webinar on Nov 17, 2015 at 2:00 PM EST.
https://attendee.gotowebinar.com/register/2661198939481400833

Register Now!

Join us and you will learn how to apply actionable tactics to:

• Identify top services and procedures that are expected to have the greatest risks for variations
• Reduce pending claims and denials
• Minimize processing backlogs
• Maximize the use of strategic denial outsourcing partnerships
• Develop leading practice approaches with CMS and Commercial Payers

Space is Limited-Register Now!

*****************Note*****************
To deliver the best webinar experience, please submit any questions you may have before the webinar begins. We will promptly return the answers to you. Send your questions to phil.solomon@miramedgs.com

Presenter:
For six years, Lyman Sornberger was the Executive Director of Revenue Cycle Management (RCM) for the Cleveland Clinic Health System (CCHS) organization. Prior to his affiliation with CCHS, he was with the University of Pittsburgh Medical Center (UPMC) for 22 years as a leader in revenue cycle management.

During Mr. Sornberger’s career, he has experience working for healthcare organizations with revenues that exceed $12 billion. In the past twenty-nine years, he is proud to have served as a consultant and advisor with various healthcare organizations across the country. He has authored over 2,200 articles for HFMA, AAHAM, and other leading publications in the revenue cycle arena.
After registering, you will receive a confirmation email containing information about joining the webinar.

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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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PF03_miniSelf-pay responsibility for health care is rising and is now the third largest payer behind Medicare and Medicaid.

The Centers for Medicare and Medicaid Services (CMS) released 2016 premium data for the “benchmark” plans in the states using federal exchanges. The data clearly indicates that the self-pay patient’s financial responsibility is increasing.

The report showed premiums rising an average of 7.5 percent. The truth is that most people don’t shop for health insurance every year; well under half of people who bought a policy in 2014 returned to the exchange to look for a new one in 2015. If their insurance policy’s price increased more than the benchmark rate (established by CMS), then they will be paying the difference out-of-pocket.

The Bronze plan went up by more than the cost of the cheapest Silver plan with an average increase of 13 percent. In 2016, the risk adjustment programs end, which will tend to push prices up.

A recent Commonwealth Fund survey found that four in 10 working-age adults skipped some kind of care because of the cost, and other surveys have found much the same. The portion of workers with annual deductibles— what consumers must pay before insurance kicks in—rose from 55% eight years ago to 80% today, according to research by the Kaiser Family Foundation.

The moral of the story; federal insurance exchanges are much more expensive than expected and aren’t offering the value that Obamacare promised. The lions share of the cost sits squarely on the shoulders of the patient.

It’s not a surprise to me (or many other industry insiders) that out-of-pocket expense for the patient is increasing. Instead of seeing a reduction of charity care and self-pay due to the expansion of Medicaid and the insurance exchanges, not-for-profit providers are experiencing increased write-offs from self-pay patients, or shall we call them no-pay-patients.

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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. 

References:

Cost of Cheapest Obamacare Plans Is Soaring – Bloomberg View

Middle-class-workers-struggle-to-pay-for-care-despite-insurance – USA Today

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The Fed is talking about raising interest rates and now Congress so far has failed to find a way to stave off an unprecedented premium increase for millions of recipients in 2016.

Is our economy ready to take this one two punch? What say you?

http://www.wsj.com/articles/medicare-rates-set-to-soar-1444865843

________________

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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MiraMed webinarTo help providers with the knowledge necessary to reduce the risk of the Post ICD-10 transition, I invite you to join an educational webinar titled: Top at Risk DRG’s in the Post ICD-10 Era & How to Proactively Address Coding Challenges.  Date: October 13, 2015 at 2:00 EDT. Register now, space is limited: https://attendee.gotowebinar.com/register/2795847332489274113

The host: Lyman Sornberger. Mr. Sornberger is a 29-year healthcare veteran who led revenue cycle activities for The Cleveland Clinic and UPMC and consults with the largest health systems in the country.

In this webinar, you will learn how to address Post ICD-10 coding challenges by:

  • Identifying the top DRG’s and understanding the cost and how to decrease poor reimbursement results
  • Identifying specific documentation issues and associated risk areas
  • Understanding the costs to rework claims, how to reduce coding errors and cut expenses
  • Tracking performance through executive & operational dashboards
  • Identifying total costs and financial risks for ICD-10 coding
  • Understanding specific DRG’s at-risk and mitigation strategies
  • How to pick the right onshore/offshore coding outsourcing partner
  • What to expect from Post ICD-10 coding in 2015, 2016 & 2017

Register now, space is limited! https://attendee.gotowebinar.com/register/2795847332489274113

For more information, contact: Phil Solomon – Vice President of Global Services | phil.solomon@miramedgs.com | 404-849-8065

__________________

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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Has The IRS Used Salami Tactics to Update IRS 501(r)? 

Under the Patient Protection and Affordable Care Act (PPACA), that was enacted March 23, 2010 and amended by the Health Care and Education Reconciliation Act of 2010, the Internal Revenue Service (IRS) has added new requirements for hospital and healthcare organizations to justify their tax-exempt status under the new rules enacted under (IRS) statute §501(c)(3).

The new requirements affect the actions and policies of tax-exempt hospitals mandating that they follow new guidelines concerning serving patients unable to pay for the costs of their medical care.  Hospitals and healthcare systems are required to create an internal audit and compliance plan to provide oversight of these new policies.

New Requirements for Charitable 501(c)(3) Hospitals

Section 501(r), imposes new requirements on 501(c)(3) organizations that operate one or more hospital facilities.  Each 501(c)(3) hospital organization is required to meet four general requirements on a facility-by-facility basis:

  • Establish written financial assistance and emergency medical care policies;
  • Limit the amounts charged for emergency or other medically necessary care to individuals eligible for assistance under the hospital’s financial assistance policy;
  • Make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy before engaging in extraordinary collection actions (ECA) against the individual; and
  • Conduct a community health needs assessment (CHNA) and adopt an implementation strategy at least once every three years (these CHNA requirements are effective for tax years beginning after March 23, 2012).

The PPACA also added a new section 4959, which imposes an excise tax for failure to meet the CHNA requirements, and added reporting requirements to sections 501(r) and 4959.  If a hospital organization to which section 501 (r) applies fails to meet the requirement of section 4959 for any taxable year, a tax equal to $50,000 is levied.

The regulations allow hospitals flexibility in determining how to implement the 501(r) rules to best meet the needs of the communities they serve, but provide a detailed outline how its hospitals must operate.  The regulations will apply for tax years beginning after December 29, 2015.

These policies must be established and applied throughout the hospital organization with close collaboration among regulatory compliance, operations, and billing to ensure proper action is taken to address this tax-exempt status requirement.  The following is a summary of the four general requirements:

  1. Written Financial Assistance and Emergency Care Policies
  • The financial assistance policy (FAP) must identify all providers, other than the hospital, delivering emergency or other medically necessary care and whether they are covered under the financial assistance policy;
  • The hospital may grant financial assistance based on information from sources other than the individual. Also, the hospital can obtain information from patients either orally or in writing;
  • The FAP is only required to disclose discounts under the FAP and not additional discounts the hospital may provide;
  • Billing statements must include a noticeable communication of the availability of financial assistance from the healthcare organization; and
  • Emergency care administered under Section 501(r) prohibits debt collection activities that interfere with the provision of emergency medical care under the Emergency Medical Treatment & Labor Act (EMTALA).
  1. Limitations on Charges
  • A facility can change the amounts billed (AGB) method it uses at any time; it just needs to update its FAP to reflect the method and percentage discount applied;
  • The regulations clarify that the AGB limitation applies only to the amount the patient is personally responsible for paying after deductions, discounts and insurance have been applied;
  • Medicaid can be included in the calculation by itself or in conjunction with the other payers;
  • The AGB can be calculated based on all services provided by the hospital versus just emergency and medically necessary services; and
  • A reasonable allocation of capitated or other lump-sum payments made by an insurer can be incorporated.
  1. Billing and Collections
  • At least one bill post-discharge must contain a plain language summary of the FAP;
  • An oral notification of the FAP and how to obtain financial assistance is required once, at least 30 days before initiation of an ECA;
  • A summary of the ECAs the hospital intends to follow must be provided to the patient before initiation;
  • Liens placed on a portion of potential settlement proceeds when the patient has sued a third party due to an auto accident or other type of accident is not considered a collection action and thus is not an ECA;
  • The rule requires hospitals to have a written agreement with third parties (collection agencies) to abide by the 501(r) requirements;
  • Hospitals can place accounts with a collection agency within 120-day notification period if they meet the requirements;
  • The sale of debt to a third party is not considered to be an ECA. Accounts cannot be sold until after the notification period; and
  • The hospital must accept financial assistance policy applications for 240 days after the date of the first billing statement.
  1. CHNA
  • A description of the process and methods used to conduct the CHNA need to be made available;
  • A description of how the hospital facility solicited and took into account input from the public;
  • An outline that shows a prioritized description of the significant health needs and an explanation of the process and criteria used to identify the health need; and
  • A description of the resources potentially available to address the health need.

The IRS has used a Salami tactic to increase the scrutiny of tax-exempt healthcare organizations. This has put extra pressure on healthcare organization’s internal auditors and compliance officers to assess risk and appropriately create, implement and monitor their compliance standards.

The Salami tactic employed has allowed “slice by slice” changes to 501(r) to take place over the past five years without much opposition. When stepping back and viewing the broader change over time, it shows clear evidence of its significance. The small slice changes that have been made by the IRS are all connected to an enormous change in the way charitable hospitals must operate to keep their tax-exempt status intact. Section 501(r) is the most significant change to tax exemption standards for hospitals in more than 40 years.

Despite this Salamic approach, hospitals and other applicable healthcare organizations must take note and prepare themselves for compliance with the new rules.  These policies must be established and applied throughout the hospital organization with close collaboration among regulatory compliance, operations, and billing to ensure proper action is taken to address this tax-exempt status requirement.

__________________

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 U.S. healthcare system needs an overhaul. I don’t know of anyone who would disagree with me. Healthcare providers have transitioned to the new clinical documentation system called ICD-10 (International Classification of Diseases) in order to document a patient encounter. The previous system, ICD-9 lacked the level of specificity needed to adequately describe a patient’s medical issue. Leave it to the government to make things more complicated. ICD-10 has 68,000 procedure codes, as opposed to the 13,000 in ICD-9.

Below you’ll find 80 of the craziest codes created for ICD-10. Look closely at them to make sure you absorb the level detail with their description. Case in point, consider this code: “V97.33XD Sucked into jet engine, subsequent encounter”. This means someone that has been sucked into a jet engine has a follow-up visit with their provider! Will wonders ever cease? Enjoy reading the list.

R14.3 Flatulence causing injury

G4482 Or a headache associated with sexual activity

V97.33XD Sucked into jet engine, subsequent encounter

V91.07XA Burn due to water-skis on fire, initial encounter

W61.62XD Struck by duck, subsequent encounterduck

W22.02XD Walked into lamppost, subsequent encounter

V0490XA Hit by a Mack Truck

Z631 Problems in relationship with in-laws

V00.15 Heelys accident roller shoes

W22.01XA Walked into wall, initial encounter

R46.1 Bizarre personal appearance

Z621 Parental overprotection

V95.41XA Spacecraft crash injuring occupant, initial encounter

W56.22xA Struck by orca, initial encounter

V96.00XS Unspecified balloon accident injuring occupant, sequelawater-splash-23798__180

T63.442S Toxic effect of venom of bees, intentional self-harm, sequela

X52 Prolonged stay in weightless environment

Z73.1 Type A behavior pattern

W49.01XA Hair causing external constriction, initial encounter

Z62.891 Sibling Rivalry

Y93.E4 Activity, ironing

S30.867A Insect bite (nonvenomous) of anus, initial encounter

W27.4XXD Contact with kitchen utensil, subsequent encounter

W50.2 Accidental twist by another person

T505x6A Under-dosing of appetite depressants, initial encounter

W60.XXXS Contact with Sharp Leaves

R46.0 Very low level of personal hygiene

Y92.146 Swimming-pool of prison as the place of occurrence of the external cause

S10.87XA Other superficial bite of other specified part of neck, initial encounter

W55.41XA Bitten by pig, initial encounter

Y34 Unspecified event, undetermined intent

Y93.D Activities involved arts and handcrafts

V00.01XD Pedestrian on foot injured in collision with roller-skater, subsequent encounter

W61.12XA Struck by macaw, initial encounter2689844157_d13751baa9_m

W.56.52 Struck by other fish

W59.21 Bitten by turtle

W58.11 Bitten by crocodile

Y93.D1 Knitting and crocheting

Y92.146 Swimming-pool of prison as the place of occurrence of the external cause

Y92.250 Art gallery as the place of occurrence of the external cause

V80.2 Occupant of animal-drawn vehicle injured in collision with pedestrian or animal

Y92.253 Opera house as the place of occurrence of the external cause

V61.6XXD Passenger in heavy transport vehicle injured in collision with pedal cycle in traffic

Z73.4 Inadequate social skills, not elsewhere classified

V61.6xxD Passenger in heavy transport vehicle injured in collision with pedal cycle in traffic

W5611XD Bitten by sea lion

Z89.419 Acquired absence of unspecified great toe

V9135XA Hit or struck by falling object due to accident to canoe or kayak

Y92241 Hurt at the library

Y92146 Hurt at swimming pool of prison as the place of occurrence

W55.21XA Bitten by a cow, initial encounter

Y92.024 Injured in the driveway of a mobile home

Y92.72 Injured in a chicken coop

W5609XA Other contact with dolphin, initial encounter

W51.XXXA Accidental striking against or bumped into by another person, initial encounter

V0001XD Pedestrian on foot injured in collision with roller-skater, subsequent encounter

V94810 Civilian watercraft involved in water transport accident with military watercraft

W56.09XA Struck by sea lion

W2202XA Hurt walking into a lamppost

W6133XA Being pecked by chickenchicken peck

R46.1 Bizarre personal appearance initial encounter

V91.34 Hit or struck by falling object due to accident to sailboat

W04 Fall while being carried or supported by other persons

Y92.142 Bathroom in prison as place

W55.52 Struck by raccoon

Y92.022 Bathroom in mobile home as place

Z65.2 Problems related to release from prison

W5803XA Crushed by alligator, initial encounter

W54.1XXS Struck by dog, sequela

S1087XA Other superficial bite of other specified part of neck, initial encounter.

Y92.010 Kitchen of single-family (private) house as place

V95.44XA Spacecraft fire injuring occupant, initial encounter

95.42 Forced landing of spacecraft injuring occupant

W21.11XA Struck by baseball bat, initial encounter

A281 Or cat scratch disease

W16.222D Fall in (into) bucket of water causing other injury, subsequent encounter

Y92.131 Mess hall on military base as the place of occurrence of the external cause

Y92.834 Zoological garden (Zoo) as the place of occurrence of the external cause

Y92.311 Squash court as the place of occurrence of the external cause

W61.02 Struck by parrot

__________________

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. 

Media Credit: Various photo’s via photopin (license)

 

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ICD-10 expected to be fraught with significant challenges to coding quality because:

  • Dealing with a very new coding and documentation paradigm
  • The predictability in coding due to an unpredictable financial environment
  • Limited experience in DRG analysis and claims processing best practices

The key to working in the new ICD-10 system requires preparation to make sure that physician documentation clearly reflects the approach of the procedure. Coders must also be sure to capture the correct root operation. All of this information is a key to determining what drives the proper MS-DRG and the most reimbursement possible.

How your organization predicts cost distribution from the new Post ICD-10 environment creates challenges for budgeting, contracting monitoring utilization and a host of other important activities.

There has been plenty of discussions and testing from CMS about transition coding from ICD-9 to ICD-10. With small sample sizes, it is yet to be determined the overall result for each provider organization.

Even with the Medicare 1-year grace period for claims bearing the ICD-10 diagnostic codes that go into effect October 1 there will still be reimbursement issues. While CMS won’t reject payment simply because the ICD-10 code submitted isn’t specific enough, it will not pay the largest amount unless it includes the correct specificity.

The white elephant in the room could become the biggest challenge. It is how commercial payers will respond and how their policies will slow payment and negatively affect reimbursement and revenue.

There will be plenty gray areas providers will have to navigate through, and I suspect questions will continue to come up for the foreseeable future.

MiraMed webinarTo help providers with the knowledge necessary to reduce the risk of the Post ICD-10 transition, I invite you to join an educational webinar titled: Top at Risk DRG’s in the Post ICD-10 Era & How to Proactively Address Coding Challenges. When: October 13, 2015 – 2:00 pm EDT. Register now, space is limited: https://attendee.gotowebinar.com/register/2795847332489274113

The host: Lyman Sornberger. Mr. Sornberger is a 29-year healthcare veteran who led revenue cycle activities for The Cleveland Clinic and UPMC and consults with the largest health systems in the country.

In this webinar, you will learn how to address Post ICD-10 coding challenges by:

  • Identifying the top DRG’s and understanding the cost and how to decrease poor reimbursement results
  • Identifying specific documentation issues and associated risk areas
  • Understanding the costs to rework claims, how to reduce coding errors and cut expenses
  • Tracking performance through executive & operational dashboards
  • Identifying total costs and financial risks for ICD-10 coding
  • Understanding specific DRG’s at-risk and mitigation strategies
  • How to pick the right onshore/offshore coding outsourcing partner
  • What to expect from Post ICD-10 coding in 2015, 2016 & 2017

Register now, space is limited! https://attendee.gotowebinar.com/register/2795847332489274113

For more information, contact: Phil Solomon – Vice President of Global Services | phil.solomon@miramedgs.com | 404-849-8065

__________________

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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imagesOn Monday, September 23rd the U.S. Department of Health and Human Services’ Office of the National Coordinator for Health Information Technology (ONC), outlined their continued vision, goals and strategy for health IT with the release of the Federal Health IT Strategic Plan 2015–2020 (Plan). The Plan’s aim is to improve the health IT infrastructure. However, its focus centers more on patient-centered healthcare than what is needed to implement strategies that will support the nation’s continued development of a secure health IT and data-driven infrastructure.

The 2015-2020 Plan updates the prior 2011 Plan following the lofty goals of the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009, to achieve widespread non-federal adoption of health IT which was in its embryonic stages. With over 450,000 eligible professionals and 4,800 eligible hospitals having received an incentive payment for participation in the Medicare and Medicaid electronic health record (EHR) incentive programs, the ONC strongly believes it set the foundation for future success of a robust interoperable healthcare system.

As with the previous Plan, it identifies the federal government’s health IT priorities for the next five years. While this Plan focuses on federal strategies, achieving this Plan’s vision requires collaboration from private stakeholders and state, territorial, local and tribal governments. Achieving health IT interoperability between the federal and state governments and private-sector providers is critical to ensuring that providers can exchange meaningful, standardized patient information and, as a result, deliver effective, person-centered care.

“Health IT only achieves its full potential when it seamlessly supports individuals as they strive to take control of their own health,” said National Coordinator for Health IT Karen B. DeSalvo, M.D., M.P.H., M.Sc. “Implementing the Federal Health IT Strategic Plan over the next five years drives toward a public-private partnership to achieve interoperability and will help the nation achieve important health outcomes, while remaining flexible to the evolving nature of health care and technology.”1

The guiding principles of the Plan are based on the collaborative efforts between governments and private stakeholders to:
• Focus on value.
• Be person-centered.
• Respect individual preferences.
• Build a culture of electronic health information access and use.
• Create an environment of continuous learning and improvement.
• Encourage innovation and competition.
• Be a responsible steward of the country’s money and trust.

The document represents an “action plan for federal partners, as they work to expedite high-quality, accurate, secure, and relevant electronic health information for stakeholders across the nation,” writes National Coordinator for Health IT Karen DeSalvo on the ONC website. “The Plan’s strategies for achieving this aim focus on making electronic information available so individuals can manage their health, providers can deliver high-quality care to their patients, public health entities and long-term services and supports can improve community health, and scientists and innovators can advance cutting-edge research and solutions.”

No one can deny that much progress has been made with health IT in the last five years. ONC is betting on this Plan signaling the federal government’s goals to continue to work towards widespread use of all forms of health IT and help guide the nation’s shift towards focusing on better health and delivery system reform. Lofty goals are always part of governments’ strategies; hopefully in five years consumers and stakeholders will be satisfied with the ongoing progress.
http://www.hhs.gov/news/press/2015pres/09/20150921b.html

Published on MiraMed Global Service’s Blog

__________________

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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downloadThe transition to value-based payment calls for healthcare systems to rethink and redesign care delivery across services lines. Service line management is well defined in the healthcare industry as a means to determine which of its diverse services are profitable and how the market share of a given service compares to competing providers. Service lines are typically limited to a handful of well defined, mutually exclusive categories or groupings of individual services or interventions such as oncology, cardiovascular and orthopedics. Since no such service line designation exists in standard transactional coding systems or taxonomies, service line is generally assigned based on primary diagnosis codes, procedure codes and other patient attributes such as age, gender or genetic characteristics.

Healthcare data analytics is thriving as integrated delivery systems seek an understanding into their data to help guide their transition to a value-based contracts. The questions being explored may include: What service lines are profitable to our system? What service lines are linked to the changing demographics of our geographic location? What data supports our overall effectiveness in developing a quality outcome for our patients? The answers are in the data; but are they the right answers?

In analyzing any payment model, a variety of factors may impact the final conclusions of whether the revenue minus the costs results in a profitable service line. Without safeguards in place to ensure the integrity of the cost and revenue cycle data there is a risk in reaching the right conclusions. The cost side of the equation is on somewhat solid footing due to the industry-wide use of generally accepted accounting principles. Hampering both the cost and revenue cycle data is the need to identify standards for what data is in and what data is out of the formula. In moving to a value-based payment based on specific service lines all costs and services delivered related to that episode of care must be captured. This includes inpatient, outpatient, nursing home, professional fees and ancillary costs and services.

In today’s world, much of the data is on various platforms that include different discrete data points. You have the Medicare Severity – Diagnosis Related Groups (MS-DRG) identifying a mishmash of services on the inpatient side and Current Procedural Terminology/Implantable Cardioverter-Defibrillator (CPT/ICD) codes for much outpatient care. To negotiate a meaningful value-based contract an organization needs to be able to evaluate and analyze all data related to that patient’s episode of care. When the data is combined the financial ramifications of variances in the delivery of care may be spotted and addressed.

Even when the health system has anticipated the need for a robust clinical and financial data reporting capability, there is no guarantee that the right data is being captured unless the organization has verified the integrity of the data. This involves all clinicians and administrative staff that interact with the patient during that episode capturing the relevant data correctly. The old adage of “garbage in and garbage out” applies here. If the physician is omitting critical patient-specific health care data, or the coder is assigning an incorrect CPT or MS-DRG code, the value of the data is questionable and wrong conclusions are possible.

Electronic health record (EHR) optimization projects are the new trend. The goal is to alleviate the dissatisfaction by clinicians with too many clicks and worthless information while ensuring that the records are being used to mitigate recurring issues in the revenue cycle process through prompts or omissions of key data. For example, a physician cannot bypass the reason for ordering a specific diagnostic test. The physician would work with a clinical documentation specialist and an EHR technician to redefine the critical data elements of the EHR. In short, now that the rush to implement the EHR has passed, the technology can be fine-tuned to aid physicians rather than handicap them during a patient encounter.

The next step in the integrity review of the data is to verify that the coder and chargemaster are assigning the correct codes based on the medical record documentation. The billing, accounts receivable, contract management and denial management teams’ workflow and policies and procedures are always reviewed for accuracy and optimization.
Early adopters of value-based payment systems indicate that several key factors must be aligned. They are:
• strong leadership, core operational strength and an appropriate legal structure to move forward;
• provider collaboration and a delivery system that supports clinical protocols through the entire patient’s episode of care; and
• robust clinical informatics and reporting based on the integrity of the data.

In January, the Department of Health and Human Services announced its intent to tie 30 percent of Medicare’s provider payments to value-based payment models by 2016, with the share rising to 50 percent by 2018. Healthcare organizations’ only choice is to move forward now or face the consequences. A good place to start is at the beginning—the physician/patient encounter; from the initial touch point to the episode’s conclusion the integrity of the data is critical since the life of the organization’s future is resting on it.

Published on MiraMed Global Service’s Blog

__________________

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

By David Johnson, 4SightHealth‘s 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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