“Up to your toes” in Value-Based Reimbursement

“Up to your toes” in Value-Based Reimbursement

Written by Denny Flint May 13, 2016

Note: This series is written for CareCloud one of the most advanced and prepared EHRs on the market today.  They had the foresight to see ahead and prepare for this paradigm shift in reimbursement.

In the introduction to this blog series, we talked about the sacking of traditional fee-for-service payments and the rapid push to value-based models that reward quality and cost-effectiveness over quantity of services provided. For this article, imagine you are staring down at a foreboding, roiling body of water and you know you have to go in. So what do you do? Dip your toes in first. Hence this blog’s title.

This isn’t like the ICD-10 transition with its numerous delays and minimal direct impact on your money. Value-based reimbursement is already here. CMS is ahead of their stated target of transitioning at least 30% of FFS to value-based models by the end of 2016. Keep in mind, commercial payers have already embarked upon the VBR campaign so we’re not just talking about CMS here. As of December 2015, the following graph indicates the percentage of contracts by payer that are already covered under value-based models.

As the above graph indicates, you may already be participating in a VBR model. And if you are participating, many of your VBR metrics are already being measured (PQRS, chronic disease burden management, PCMH, etc.) Measurements mean collecting data. Under VBR, now more than ever, data is key. Data is king. In the introductory article we emphasized the need to secure forward thinking EHR’s that possess the necessary analytics to collect quality and cost-effectiveness data that is paramount to survive and thrive within these models. In the upcoming series of articles, we’ll spend significant effort explaining the new models, what the commercial payers are doing about VBR, and what you have to do to adapt.

As an overarching touchstone, it’s worth holding these new payment models in your minds with one simple statement. “Less is more.” In other words, the revenue “driver” is no longer the volume of services, but rather less services delivered in a cost-effective, quality manner. Remember this concept as you read this series and prepare your organization. The “less is more” mantra helps guide not only revenue cycle decisions, but also the very fashion in which you mold your care delivery.

All journeys begin with the first step. For us, to get to the end of the road with a well-planned VBR approach, we first have to understand the destination. We’ll do that by explaining the different models and what they mean to you. It is impossible to discuss what is the health care industry’s most sweeping change to how you get paid without defining the acronyms and programs so bear with me. It will make sense if you spend time understanding what the pieces are in order to see how they fit into the VBR puzzle. Unfortunately, we have not seen a mandated government program with this many acronyms since we were in the military. In order to give you a “Global to Minutiae” view, we will order the acronyms in the successive blog articles from 30,000 feet to ground zero. Again, please keep in mind this is the “housekeeping” part of this blog series. I promise in the next several articles we will dive into exactly what you need to do within your own organizations in order to prevail. In the upcoming articles, we’ll take a detailed look into explaining the various VBR conduits you need to know about and exactly what you need to do.

(A quick warning: When you read value-based related articles, blogs, tweets, etc. from industry “experts” be aware many of the following terms are being inappropriately interchanged so definitions may be muddled.)

30,000 Foot View

VBR – Value Based Reimbursement

General term that describes the payment models for both government and commercial payers that replace traditional fee for service. By definition, value-based reimbursement, also called value-based payment, involves paying for quality under certain defined measures, incentivizing cost control and ultimately producing better population-based outcomes. “Less is more” rather than volume of services drives the revenue. This requires a paradigm shift in thinking for all team members. DATA  is key and having the right vendors in place is critical to collecting the required reporting data.

20,000 Foot View

MACRA – Medicare and CHIPS Reauthorization Act of 2015

When it comes to CMS, this is the regulatory force that is driving VBR momentum. Though CMS-related, commercial payers have already begun following CMS’ lead. The important thing to know about MACRA is that, under the regulation, an organization must choose one of two paths to comply. 1.) MIPS (see below), or 2.) a qualified APM (see below). Which of these two paths you choose drives your entire Medicare VBR implementation plan so do not take this responsibility lightly. Each of the two paths have unique metrics you must measure in order to take advantage of incentives and avoid penalties.

10,000 Foot Views

MIPS – Merit-based Incentive Payment System (one of two MACRA pathways)

MIPS combines 3 elements (PQRS, Meaningful Use EHR incentive, and Value-based Payment Modifier) into one consolidated program with the end result being an upward, downward or neutral adjustment to your Medicare Part B payments beginning in 2017. Though much of the MIPS legislation has yet to be finalized, keep in mind you are already being measured under PQRS and M.U. so the data-sets you create today have a direct impact on your future reimbursement. There are four weighted performance categories upon which you will be assessed: Quality, Resource Use, CPIA (Clinical Practice Improvement activities), and Meaningful Use of ONC certified technology. Choosing the MIPS pathway for MACRA means you must be able to capture the data by which you will be measured within those 4 performance categories.

APM – Alternative Payment Models (the second path that leads to MACRA)

This should be further defined as “certain acceptable” APMs because there currently exists many APMs but only certain of them qualify under MACRA. Again, choosing this pathway under MACRA negates the need to report the MIPS data. Beginning in 2019, lump sum incentive payments will be issued to providers successfully participating in APMs. According to a March 2016 National Business Group on Health survey, 55% of primary care already participates in at least one APM.

Here is a list of the most common APMs:

  • Pay for Performance
  • Bundled Payments (BPCI – Bundled Payments for Care Improvement)
  • Patient Centered Medical Home (PCMH)
  • Shared Risk
  • Shared Savings
  • Capitation
  • Accountable Care Organizations (ACOs)

So there you have it. Your first 30,000 to 10,000 foot foray into VBR. You now have a good idea about what Medicare is doing about Value-Based Reimbursement. The next five articles address a deeper understanding of the two MACRA pathways (MIPS and APM), how to succeed in each, which pathway makes the most sense for your organization to choose, and a thorough discussion about what the commercial side of the industry is doing about VBR.

 

CareCloud and Advanced Medical Services are both prepared to help you with this paradigm shift.  Please contact CareCloud for EHR services and please contact Advanced Medical Services for revenue cycle management, physician billing, coding and value-based reimbursement consulting services. www.admedserv.com  Phone: 719-278-2888 Email: ebidwell@admedserv.com

About the author:  Denny Flint sits on the Advisory and Editorial Board of Advanced Medical Services.  He has over 30 + year in Healthcare Management Experience. He is the Director of Operations for Specialty MedCare (cardiac and thoracic surgeons in Colorado) and the Director of Operations for Peak MSO.  If you wish to contact Denny please Email: dflint@admedserv.com

The Sack of Rome in 410 AD – The Sack of Fee for Service, Now

The Sack of Rome in 410 AD – The Sack of Fee for Service, Now

By Denny Flint

Advisory Board, Advanced Medical Services

Director of Operations, Specialty MedCare and Peak MSO

 

Aided by rebellious slaves, Alaric I and the Visigoths rushed through a Roman city gate. The three-day siege was the first time in centuries (800 years) that Rome had been invaded and eventually sacked.  It was a massive political and psychological blow and the city was caught off guard. Unexpected meant unprepared for the Romans.

Unexpected? We can’t say the same for the advent of value-based reimbursement. Beginning with the early forms of quality reporting, we’ve been marching inexorably to the beginning of the end for traditional fee-for-service reimbursement. ICD-10, Meaningful Use, EHR incentive programs, and PQRS were all stepping stones for the movement towards alternate payment models (APMs). Unlike the ICD-10 transition with its years long plethora of stops, starts, and delays, the new models (APMs) are surging through our gates like a blitzkrieg. CMS is actually ahead of the 30% fee for service replacement they planned by the end of 2016. They are highly motivated to get this done in short order because if they know one thing, it is that they will save even more money than forecast because most health care providers will ignore what needs to be done until the change is forced down their throats. And by then, it’s too late. Too late to make the necessary modifications to care delivery. Too late to collect the required history of data. Too late to change treatment protocols to a “less is more” focus.

The point is, this sea change in reimbursement method, though not unexpected, catches most health care organizations unprepared and off guard. One certainty? Just as Rome was sacked, so too is the rapid sack of traditional fee for service. Some of you may be thinking, “No big deal…I’ll just read the new regs and figure it out.” Have any of you actually read the CMS guidelines for all the new acronym models? We’re talking about MACRA, MIPS and all the other APM’s flowing into the system. Trying to understand EXACTLY what you have to do to prepare gets lost in trying to understand EXACTLY what in the heck these things are.

For the past five years I was on the road preaching about ICD-10 and how you have to do it not just for coding but for the future of your practice. Why? Because it was a stepping stone – we saw this coming.  I would talk about ACOs and value-based reimbursement and people would look at me like I had two heads.  Now you can’t be on twitter or LinkedIn without seeing articles about VBR models.

What I want to accomplish with this series of blogs is similar to what I did for ICD-10 when I was on the ICDMonitor Editorial board and writing articles for many top medical societies and healthcare journals around the country.  I want to give you valuable information with a concise and hopefully engaging delivery.

I will start with background information about MARCA and MIPS then move into defining the different types of alternate payment models.  I will discuss the payer movement towards APMs and what practices are doing right now. I will discuss which industries are ready to assist you with good data for participating and which are not. Finally, I will give solid advice on how you should prepare your practice to participate successfully within these new payment models. I’ll give you a hint. Actionable data (Quality and Financial) that can only be gotten from an EHR set up to collect that data will have a HUGE impact on your ability to weather this storm. There are only a handful of health tech companies out there that have already retooled to be a partner and not a hindrance. Advanced Medical Services billing and revenue cycle company is one of them. Hopefully, you’ve had “the talk” about APM with your current vendor. If not, please do so soon!

Stay tuned for my upcoming series about Value Based Reimbursement: Payment Models Are Changing – Be Prepared!

In the words of Henry Wadsworth Longfellow “All things must change to something new, to something different.” Expecting change is the one true constant in our industry. How you deal with this change will make all the difference.

Denny Flint

Director of Operations Specialty MedCare and Peak MSO

Advisory Board,  Advanced Medical Services

www.admedserv.com

dflint@admedserv.com

ICD-10 and Beyond Advice from Denny Flint and The Talon Group: Q and A

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ICD-10 and Beyond Advice from Denny Flint and Advanced Medical Services : Q and A

September 15, 2015

 

What can we do in the 15 days remaining until the October 1st implementation?

Dual code, dual code, and then dual code some more!  This will uncover documentation and coding familiarity shortcomings.  It will force providers to become aware of new specificity for their specialty.

What does Denny Flint consider as the ICD-10 “Biggies”?

  1. Laterality, Site, and Region!!! (even for Sciatica)
  2. Encounter type for Accidents and Injuries (Initial, Subsequent, and Sequela)
  3. Capture the comorbidities and complications (your future reimbursement depends on it!)
  4. External cause codes (don’t let this be a reason for denials)
  5. Don’t abuse or overuse the “unspecified” codes
  6. General physical exams (child, adult, gyn., etc.) with and without abnormal findings
  7. Tobacco History, Use, or Exposure additionally coded for many conditions

What metrics does my organization want to monitor after October 1st, 2015?

  1. Provider productivity
  2. Physician queries
  3. Coder productivity
  4. Billing and AR metrics
  5. Denial reports

What can our practice expect in the initial days and weeks after October 1st, 2015?

In the first few days, I believe the transition will be “clunky” but not chaotic. The “proof in the pudding” will be the payer response. Though not confirmed, I believe the government has put the payers on notice not to play games at the outset. Therefore, the payers will most likely phase in the chaos over time by carefully choosing how far they can push the envelope and when regarding the ramp up of denials due to diagnostic shortfalls (lack of medical necessity, lack of specificity, lack of additional codes required, etc.). So externally think “Y2K” in with a whimper and a bang.  Internally it completely depends upon your implementation efforts to date and your provider commitment.  Clinical documentation improvement is the key to ICD-10 success.  Your processes adjustment is CRITICAL! (Are your waiting rooms backing up? Are your days in AR increasing?  Then you have a problem!)

What is the next “Monster Under My Bed”?

The death of fee-for-service reimbursement that awards excess (according to the payers) and the rapid march toward Value-based or Outcomes-based performance models.

 

About Denny Flint:

Denny Flint is the principle consultant of The Talon Group. He formerly served as the CEO of a large, multi-specialty physician group, full service MSO, was certified as a CPC through AAPC and has authored or co-authored numerous “common sense” practice management books and implementation manuals. He is an award winning, nationally known consultant, speaker, and educator bringing his expertise to making the complex “simple.”

Educated at the United States Air Force Academy, Denny had a distinguished career as an Air Force pilot and has a long history of commitment to excellence and dedication to his clients’ success. Contact the author at dftalon77@gmail.com or (970) 390 8970.

Inside 30 days – An ICD-10 survival message

Inside 30 days – An ICD-10 survival message

September 1, 2015

By Denny Flint

Skip this article if you know you are ready for ICD-10. This content is not for you. It’s for the thousands of organizations whose primary planning for ICD-10 consisted of “Hope.”

“Gosh, we HOPE there’s another delay.” “Gosh, we HOPE our software will take care of ICD-10.” “Gosh, we HOPE our coding and clinical support staff can do this for us.” “Gosh, we HOPE we’ll just figure it out once we go-live.” Unfortunately, HOPE is not a plan.

Right now you may think you are in a dark tunnel and the light at the end is an oncoming train. What you really need to think about is the tunnel under the train station at Disneyland. When you walk through that tunnel and find yourself on Main Street, remember the wonder of feeling like you’ve been transported to another time and place. That’s what you want Oct. 1st to look like.

So you find yourself inside of 30 days and you haven’t really done anything about ICD-10 other than attend a few podcasts and maybe a session sponsored by one of your professional organizations. Fooling yourself into thinking, “I’ll get to this next month…we’ve got so much going on right now,” you now find yourself out of months. What do you do, now? What CAN you do?

Relax, you’ve still got a little time to make significant progress. Throw out all the ideas about conducting a thorough impact assessment, creating a timeline, querying the payers, and internal/external testing. You’re out of time. The mission critical task right now is clinical documentation improvement training for your providers. This assumes your software is ready to go at least in terms of having the ability to search for a specific ICD-10 code. I’ll get to what you need to know about your software later in this article.

Clinical documentation improvement in the time you have left is easy. After dozens of ICD-10 consulting engagements over the last 6 months, I’ve found the “silver bullet” to be dual coding. I’ve presented hundreds of live and web-based ICD-10 training sessions. While the content was so stellar, men were weeping and women swooned (just kidding), 90% of the content was probably forgotten by the time the attendees got to their cars. There is no better provider training for ICD-10 than actually dual coding live encounters in both ICD-9 and ICD-10. 10 encounters per week, at a minimum, in the time you have left will get providers familiar with the new documentation elements and comfortable in understanding the significant increase in code specificity.

This is a valid approach regardless of whether or not you have internal coding staff. The providers need to know exactly what documentation is required in order to minimize the expected drop in productivity due to “hunting and pecking” around for chart note needs and codes. The providers need to know exactly what they have to do to mitigate the drop in revenue.  CMS has allowed for a year’s grace period for medical necessity denials as long as the code is in the correct “family,” but it only takes one or two more clicks to find the most specific code option. Regardless of the CMS easement, most state Medicaid programs (we spoke with Colorado, for example) will not follow suit. Likewise, most major payers will not provide the same leniency.

Here’s another impetus for embracing ICD-10’s specificity and providing enough comorbidities to tell the whole picture. On Feb. 13, Secretary Burwell from the Department of Health and Human Services announced a very aggressive timeline to transition 30% of traditional Medicare Fee for Service payments to some sort of “value based” performance model by the end of next year. Though we haven’t seen the actual quality measurements or metrics used to measure this value-basis, one thing is certain…in a “value based” environment, ICD-10 becomes the primary basis for determining the acuity levels of your patient population. Not creating a complete profile about how sick your patients are does not bode well for your future financial health. ICD-10 is important. Any comorbidities that complicate treatment or healing should be coded. Obesity, tobacco history/use/exposure, hypertension, and diabetes are all complicating factors that should be additionally coded and reported.

A quick word about your software. I continue to be blown away by how unaware and unprepared many EHR companies are in regards to ICD-10. ICD-9 to ICD-10 conversions are still largely based on GEMS (not ok!); several errors still exist in some of the most well-known coding search engines; and no dual coding capability is available in many of them. (“It’s there. We just haven’t turned it on yet because we found a few minor errors.”) This late in the game, if any of these scenarios are present with your software, I have one piece of advice. FIND NEW SOFTWARE. All EHR companies are not so unconcerned or unaware. Several months ago, CareCloud, for example embarked upon an aggressive readiness campaign in order to ensure their stakeholders had the ability to turn the switch on early. In order to set an initial course for success, they offer a substantial ICD-10 training program as part of their new customer implementation projects. Another (Athena) actually reserved a substantial amount of money to cover their customers in the event of negative ICD-10 financial impact. These companies know ICD-10 is important.

If your software doesn’t possess an easy ICD-10 coding capability for your providers and staff, you can’t dual code by using the internal resources your providers will actually use on Oct. 1. Since the 1st of July, many major payers allow for the submittal of ICD-10 codes specifically for the pre-authorization of procedures and services to be accomplished after Oct. 1. If your software does not contain an ICD-10 coding capability you are left to fend for yourselves by using alternate methods. There exist some cost-affordable possibilities if your EHR software has failed you. Cypher from ICDLogic and the Ready10 Translator from Complete Medical Solutions may be options for you.

So, with less than 30 days to go, all is not hopeless. Convert your most frequently used codes (hopefully, by using your own software), identify the required new documentation elements to meet the new code specificity, and have your providers dual code at least 10 encounters per week until go-live on Oct. 1. Though you may still find kinks in the system after the transition occurs, at least the primary factors contributing to your revenue stream will be protected.

About the Author

Denny Flint is the principle consultant of The Talon Group. He formerly served as the CEO of a large, multi-specialty physician group, full service MSO, was certified as a CPC through AAPC and has authored or co-authored numerous “common sense” practice management books and implementation manuals. He is an award winning, nationally known consultant, speaker, and educator bringing his expertise to making the complex “simple.”

Educated at the United States Air Force Academy, Denny had a distinguished career as an Air Force pilot and has a long history of commitment to excellence and dedication to his clients’ success. Contact the managing partner of The Talong Group and author at dftalon77@gmail or (970) 390 8970. www.the-talon.com

“Hope is NOT a plan!” by Denny Flint

“Hope is NOT a plan!” by Denny Flint

Greetings to the Tennessee Medical Association membership. Throughout my 3+ year relationship with TMA, I have applauded the association’s aggressive efforts to ensure the doctors and staff are ready for the expected ICD-10 transition on Oct. 1, 2015 (a scant 3 months away as of this writing).  CMS has made their position well-known by the amount of time, money and resources they have dedicated to external testing. In short, the government wants to avoid additional egg on their face at all costs.  Everyone hopes this is the equivalent of Y2K, but hope is not a plan, planning is a plan.  It is the best way to assure your success.

So…for those of you “hoping” for a delay,  or “hoping” that providers and coders can figure ICD-10 out somehow with three months left until the door is closed I say to you, “Hope is not a plan.” The key to preparation is to find your ICD-10 reality. For your practice, we’re not talking about the 70,000 new codes in the entire ICD-10 code set, we’re talking about the 10 to 20 codes you most often use in your own practice. Using a combination of the GEMS conversion tool (which can be found at CMS.gov) and code books, convert those ICD-9 codes you most frequently use into the range of ICD-10 codes you will use after Oct. 1 and identify the new documentation element requirements you do not currently capture.

Remember, the elevator speech about ICD-10 is that, “Doctors have to write down more stuff.” If you identify and incorporate the “more stuff” now, you are most of the way there. The other key co-component is your technology. By now, your EHR vendor should have updated your software with an effective ICD-10 coding engine so you can start dual coding 5 encounters a week to make sure you get into the documentation rhythm. If you do these simple, easily achievable things, you will have met most of the implementation challenges and by Oct. 1st, you will be ready to go.

Regardless of what you think about ICD-10, please remember the diagnosis codes you submit are your public face to the outside world. You could be the best physician in your specialty in the state of Tennessee, have the best outcomes, the best staff, and provide the best care but no one will know it when they focus on your data to measure your effectiveness. DHHS Secretary Burwell made an earth shattering statement on Feb. 13 when she said, “30% of Medicare fee for service reimbursement will convert to a value based performance model by the end of 2016 (next year!). Your ICD-10 acuity reporting is at the very heart of the ability to measure cost effective quality of care. Think also in terms of ACO membership. If you submit unspecific diagnosis codes, not only will they not meet the medical necessity benchmarks for payment, you present yourself within an unsophisticated practice that doesn’t really know what’s wrong with the patient. This concept holds true for Patient Centered Medical Home Status, PQRS, managed care contract negotiations and a host of other scenarios that measure you based upon the acuity levels of your patients as illustrated by your coding habits. Ultimately, better data should translate to better care and at the end of the day,  that is what is most important.

Without being a “doom and gloom” merchant, it is worth noting what happens if you are NOT ready for ICD-10 on Oct. 1, 2015.

  • ·         Loss of productivity – For the countries who have already implemented ICD-10, there was an average 20% drop in provider productivity (taking more time to “hunt and peck” for required documentation and codes)
  • ·         Overworked billing staff following up claims issues (can your practice afford a dramatic increase in pended, denied and appealed claims due to ICD-10-related issues?
  • ·         Loss of revenue due to lack of medical necessity (If you perpetuate sloppy ICD-9 coding habits that routinely mean an “unspecified” code selection, expect this problem to exponentially increase in ICD-10)
  • ·         CRANKY DOCTORS!! (Your duties are difficult enough as it is without playing “catch-up” because you were not prepared for ICD-10)
  • ·         Breakdowns across the practice continuum (Daily workflow, Order entry, Referrals, Reporting, etc.)

So when it comes to ICD-10, please don’t be like the doctor whose receptionist runs back and says, “There’s an invisible man in our waiting room!” And the doctor says, “Tell him I can’t see him.” Do the easily accomplished, high impact steps noted above. You still have time if you start right now. ICD-10 is not going away and please remember…”Hope is not a plan!”

The author is an award-winning, nationally known speaker, consultant and educator and is the managing partner of The Talon Group. He has addressed numerous Tennessee Medical Association conferences and to date, has actively participated in over 60 ICD-10 implementation engagements across the country. He can be reached at dftalon77@gmail.com or (970) 390 8970.

Revenue Cycle Management – The Clinical/Financial Collaboration

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Revenue Cycle Management – The Clinical/Financial Collaboration

In a recent survey by market research firm, Black Book Rankings, 88% of healthcare CFO respondents believed their Revenue Cycle Management systems needed to be overhauled. Unfortunately, the majority of these same CFO’s responded they were unable to create the urgency for Revenue Cycle Management upgrades because of other priorities. They cited the ICD-10 implementation, EHR upgrades, and complying with Meaningful Use objectives as higher priorities. When you consider the American Hospital Association’s recent assertion that, “60% of hospitals operate at a financial deficit,” you wonder if an RCM refit should instead be a “front burner” item. The move to ICD-10, EHR upgrade upset, and the changing reimbursement paradigm to value-based performance models makes it imperative to place the emphasis on empowering your RCM processes to ensure faster claims payment, less denied claims, and less days in A/R.

For those organizations that have taken the plunge and made the investment to upgrade their automated or RCM focused applications, they need to remember this is not an “upgrade and walk away” proposition. The reason most automated RCM applications fail to positively impact bottom line metrics is the failure to align financial and clinical workflows. As the former CEO of a large physician group, one of my toughest tasks was explaining to clinicians why certain documentation parameters for example, were required and important. In most healthcare organizations, there exists a clinical/financial disconnect. With margins growing tighter and bad debt increasing throughout the industry due to higher deductibles and lower reimbursements, the alignment between providers and RCM processes needs to be invigorated.

There exists a desperate need for “intelligent guidance” when it comes to revenue cycle management. Instead of systematic process automation and focused and timely Revenue Cycle Management feedback, many organizations rely instead upon a “corporate brain trust” embodied by those rare and precious longtime billing staff members. Many is the organization that loses a billing pro and then languishes until that expertise can be regenerated.

With so many outstanding and cost effective solutions available today, why are we still applying a 20th century mindset to the lifeblood that is our accounts receivable? Intelligently guided RCM has become a buzz phrase. What the right application, you have the ability to immediately monitor all patient information, interpret that patient information in relation to your processes and rules, and eliminate data quality and consistency problems. This results in faster claims payment, fewer denied claims and increased cash flow due to decreased days in A/R. The cost reductions are profound. By eliminating the “trickle effect” of denied or returned claims, you lower the cost to rework those claims, reduce the time for implementing insurance payment policy changes, and reduce the risk of Medicare non-compliance. Your staff will thank you. You’ll see increased competence, improved morale and job satisfaction, and enhanced productivity. Ultimately, the patients benefit from faster, more streamlined registration processes and fewer billing errors that could lead to unnecessary patient financial responsibility.

The systemic Revenue Cycle Management failure evidenced by long days in A/R and increased bad debt can be greatly reduced by applying these “intelligently guided” RCM solutions. Do yourself a favor and look at a cost-benefit analysis. The investment will usually return exponentially. Remember, the automated RCM software solutions are a “chip of the RCM mosaic.” What is required is an enterprise-wide commitment to quality RCM data capture and process and just as important, an alignment of clinical and financial workflows. With the recent announcement by the Department of Health and Human Services that 30% of Medicare reimbursement will be based upon “value-based” performance models by the end of 2016, the collateral benefit of “intelligently guided” Revenue Cycle Management solutions coupled with clinical/financial alignment means more meaningful data. In this age of “Data is King,” apply “best practice” RCM solutions that equate to more than just hopefully getting a claim paid as the ultimate goal.

 

If you have questions about revenue cycle management, practice management, and interim CEO management please contact Denny Flint with The Talon Group.

 

Avoiding Revenue Cycle Obstacles

Avoiding Revenue Cycle Obstacles

By Denny Flint

As a CEO “mentor,” I am often asked how to optimize the revenue cycle for practices and hospitals faced with “creeping” days in A/R and bad debt. As the former CEO of a large multi-specialty group practice and MSO, I know we sometimes become focused on “high-level” decision making and often overlook the day to day work processes that make it possible to collect precious revenue. We forget the smallest breakdowns can cause the biggest upset. So let’s get in the trenches and take a closer look at the “financial life cycle” of a health care encounter in regards to where the obstacles occur and what to do to keep them from perpetuating. We’ll divide the revenue “life cycle” into 3 phases: Pre-encounter, Encounter, and Post-Encounter.

Pre-Encounter (Initial contact through Registration)

Unless it’s a walk-in or an emergent visit, encounters start with the initial patient contact. Inaccurate demographics and insurance information are two of the biggest reasons for claims denials and downstream difficulty in collecting from the patients. To get an idea of the magnitude of these problems, take a look at your denial reports and accounts in collections. Your clinicians could provide outstanding care but errors such as “Insurance policy no longer in effect,” “Service not covered,” and invalid address and contact information for the patient means excellent care goes unpaid. Those errors can be avoided at this early stage by “real time” verification services that validate both insurance information and patient address.

You can get a significant “jump start” on demographic and insurance verification by offering a patient portal coupled with iPad capable sign-in tools that allow for real time download into your healthcare IT solutions. Wouldn’t it be nice (upfront) to have verified the patient’s policy is in effect, to know the anticipated service or procedure coverage, and that you have accurate demographic information for the patient? You’ll need to address “behavior modification” of the patients that mandate portal usage or iPad registration. The key is ease of use. Make it simple but required.

Encounter

Once the patient is roomed or admitted, the clinician responsibility for revenue cycle success kicks in. One of the largest “clinical” reasons for claims denials is lack of medical necessity. It is frustrating to consider your clinicians doing the work but failing to document sufficiently to meet the acuity-level requirements for the procedure or service you are providing. This is a significant area of “revenue cycle” breakdown. Again, your clinicians could be rendering outstanding care, but if they do not accurately document to the extent the optimum code choice can occur, it doesn’t matter how good your revenue cycle processes are, you are still faced with an unnecessary denial. The good news is that there exist excellent, rule-based medical necessity applications that can alert you to a problem BEFORE you submit your claim.

As an aside, be aware the advent of ICD-10 causes a sea change in medical necessity rules. Payers have already announced they will not pay claims based upon unspecified diagnosis codes. And you really can’t blame them. Imagine how you would feel if your mechanic asked you to pay for work done on your car, but doesn’t tell you what was wrong in order to justify what he or she is asking you to pay.

During the encounter or immediately after it concludes (but before the patient leaves your location), provide an estimate of services. The idea is to avoid surprises and be as transparent as you can. The patient will appreciate knowing what to expect. Again, there exist excellent tools to help estimate the “out of pocket” expense. In concert with utilization of “real time” EDI queries that verify benefits eligibility, service coverage, and insurance payment, an estimation tool you can place in your patient’s hands prior to leaving your location allows for collection of monies owed at time of service. The idea is to avoid the “bill me” paradigm at all costs. (I won’t belabor the loss of revenue during a typical “billing” life cycle – you all live it every day.)

Finally, there also exist excellent patient financial analysis tools that help you make 3 decisions: Can the patient afford to pay? Are they eligible for financial assistance? Is this a charity decision? Again, the idea is to avoid upset and financially “triage” the patient under your terms. Avoiding surprise and being transparent in all you do will reap significant gains.

Post Encounter

If you’ve satisfied the steps contained in the first two phases, you have mitigated what will be needed in the final phase. Your claims denials will be minimized and you have collected what is expected from the patient at time of treatment. Hopefully, you have immediate access to claim status and your financial policy is such that problem accounts are quickly turned to those professionals that maximize return.

As a neutral advocate, I cannot tout a particular solution. Please know, many of these resources (eligibility, address verification, medical necessity determination, etc.) are available piecemeal but few companies have the complete set of integrated products. If you can, you should identify and use those companies that offer a “soup to nuts” suite in order to avoid multiple product integration. As always, the keys to being “different” when it comes to software is real time access and ease of use. Taking advantage of the right solution means you create a better, more transparent financial experience while reducing bad debt. When it comes to revenue cycle management, it doesn’t get any better than that.

 

CEO Looks Back

CEO Looks Back at Healthcare

Ten years ago, our large medical specialty group practice had its hands full. We were instituting our first electronic health record, moving five out of six clinics and spearheading the construction of a new hospital/MOB/ASC campus. At the time the challenges seemed insurmountable. But somehow we managed to sail through the chaos and survive. Even with all the upset, things seemed so much simpler then. Why? Well…here is a list of items that weren’t even on our radar back then.

PQRS, Meaningful Use, Value-based performance, Obama Care, and ICD-10.

PQRS

To us, measuring quality meant the occasional patient satisfaction survey. We committed ourselves to customer service but it wasn’t a matter of government mandate, it was a matter of taking pride in everything we did in a way that spoke to our commitment to quality care. The days of “report cards” for doctors were unthinkable. Now, the decree either obliges us to report or suffer less payment from Medicare.

Meaningful Use

To be honest, when we implemented our first EHR, we did it because we wanted to expand and in our market, real estate was pricey. It doesn’t seem that long ago we had aisles and aisles of patient charts and 9 (yes, 9!) storage units chocked full of years old charts, X-rays, and hundreds of boxes of assorted flotsam. We had no room to add more revenue-producers. If the by-product of going paperless to find more room for doctors was smoother flow, all the better but that wasn’t the primary reason for such a massive undertaking. The scanning alone took over 6 months to complete. To be sure, a properly deployed electronic record SHOULD increase productivity. But the initial hit, especially amongst our, let’s call them “more seasoned” doctors was substantial. The meaningful use of an EHR was our idea to adopt, not the government sanctions we see now.

Value-based Performance

Cost effective quality care is nothing new. Ten years ago, we strived to provide the highest standards with the least amount of waste. Secretary Burwell’s announcement two weeks ago heralds a whole new ball game in reimbursement. By the end of 2016, 30% of Medicare payment will be tied to a value-based model. Ten years ago, it was easy. We got paid for the services and procedures we rendered according to a set schedule. With the advent and ramp up of performance-based models driving Accountable Care Organization, Patient Centered Medical Home, and now Medicare (with Commercial payers already committing to follow suit) have we seen the death of traditional fee for service reimbursement. Ten years ago that was unthinkable, especially with the long past demise of the old “capitated” payments.

Obama Care

Ten years ago, the challenge was to ensure we captured the blend of insured lives to financially sustain. We wrangled with managed care organizations over fee schedules and carve-outs and carefully watched our payer mix. With the Accountable Care Act comes a government program that feeds many into the system. We see patient premiums continue to climb to the extent the employers (ala Roberto Duran) say, “No mas.” Many employees, formerly immune to health costs, now see only catastrophic care coverage paired with extremely high deductibles. In order to care for the many we turn to assembly line medicine that means less face time with the patients. It is no wonder the forecast for numbers of doctors in front line specialties is dim.

ICD-10

Ten years ago, ICD-10 was a distant specter we would have to deal with “someday.” Not that day is here in concert with RAC audits, meaningful use, PQRS, ACA patients, and trying to figure out how to predict survivability under this “value-based thing” that’s coming. I agree with the recent thought that ICD-10 doom and gloom is overstated. It’s not that bad if organizations embark on the clinical documentation improvement and training required to meet the new specificity. But it’s still a project that needs to be resourced. While everyone is trying to do their “real” job, time has to be taken away in order to learn the new coding constructs. Doctors have to learn the new elements, technology has to be addressed across the enterprise, and we all wait with baited breath about just how badly the payers are going to game the new system.

I never thought I’d say this but with all the bedlam, I find myself longing for “the good old days.” The disarray caused by SO MANY changes to the way we do business is overwhelming. The old hassles didn’t go away. We still have to deal with the paper chase involved in credentialing, benefit and professional liability haggling, and seemingly endless payer payment policy changes. But we had well-defined targets with clear objectives that took basic organizational skills to navigate. Unlike ten years ago, there are so many unknowns. Where are they going with quality measurements and meaningful use mandates? How far down the road is ICD-11 and/or SNOMED? Is Obama Care merely the first step down the path of completely socialized medicine that will put the entire industry in turmoil? Are they going to tell us exactly how we’re going to be paid under value-based performance by the end of 2016? As a CEO, it is critical we know the answers to at least some of these questions so we can take care of those who depend upon us to make the right decisions.

With the increased complexity of our jobs, it’s now a lot harder to find time to smile. So, for all you past, present, and future CEOs and Administrators out there, I hope this brightens your day.

The CEO and the Frog

A guy was walking through the forest one day when a frog called out to him from the side of the path…

It said “If you kiss me, I’ll turn into an enchanting, beautiful princess”. He bent over, picked up the frog, put it in his pocket and continued with his walk.

The frog chimed up again and said, “If you kiss me and turn me back into an enchanting and beautiful princess, I will stay with you for one week.” The guy stopped, took the frog out of his pocket, smiled fondly at it, returned it to his pocket and resumed his walk.

The frog then cried out, “If you kiss me and turn me back into an enchanting, beautiful princess, I will stay with you and bring you happiness to the end of your days.” Again the guy took the frog out, smiled at it and put it back into his pocket.

Finally, the frog asks in exasperation, “What the heck is wrong with you? I’ve told you I’m an enchanting, beautiful princess; that I’ll stay with you and make you happy the rest of your days. Why won’t you kiss me?

The guy said, “Look, I’m the CEO of large health care organization. With all the new challenges I have to deal with I don’t have time for a girlfriend. But a talking frog – How Cool is THAT!! “

  

Government Legitimacy, Commercial Payers and Value Based Reimbursement

dennis flint image 2014

Government Legitimacy, Commercial Payers and Value Based Reimbursement

Two weeks ago HHS Secretary Burwell announced the aggressive shift of 30% of Medicare fee for service payments to value-based performance models by the end of 2016. What will the commercial payers do with the government commitment to an entirely new payment paradigm? (Hint: the answer is revealed below by the recent announcement from the “Health Care Transformation Task Force” comprised of 28 payers and health systems.) In order to understand the industry-wide ramifications of this momentous change, let’s take a walk down memory lane.

Let’s start with DRG’s. Yale University started working on the Diagnostic Related Groups in the early 1970’s. The government wanted to move away from cost-based reimbursement and despite the tepid performance of DRG’s during the pilot program in New Jersey, the new payment model was finally adopted in 1983. Hundreds of poorly prepared hospitals went out of business. What did the commercial payers do? Sensing a windfall, within a few years, DRG’s became the predominant payment model for inpatient services throughout the country.

How about RBRVS? RBRVS was the “next big thing” as far as provider payment systems. The Harvard Study on Resource Based Relative Values was published in JAMA in 1988. Curiously, the AMA (excepting a few surgical-related professional associations) supported the new outpatient payment model. Again, the government was looking for a way to move beyond paying providers based upon “customary, prevailing, and reasonable” charges and developed a system based on effort. Usual, customary, and reasonable payment gave too much control to the clinicians and RBRVS was a lock-solid way to create an objective, not subjective reimbursement disbursement system. The states soon followed for Medicaid and Work Comp and guess what? Few payers had the budget or experience to develop their own fee schedule and RBRVS provided a way, legitimized by the government, to “lock-in” payment. Managed Care plans began to present fee schedules loosely based on RBRVS. When providers complained, the payers had an out by citing the innate credibility a government mandate provides.

Now we’re at the next stop down the road. Value-based performance models for physician payment. While RBRVS pays based on “effort,” a value-based system pays based on “effect.” As with DRG’s, clinicians who are unprepared for, and unaware of, what it will take to prevail in this “report card” that grades cost savings, proven efficacy, and population health will find themselves in financial limbo.  What will the commercial payers do with the legitimacy government support of value based performance provides? Becker’s Hospital CFO online newsletter reported The Health Care Transformation Task Force, comprised of 28 major payers and health systems, “have pledged to turn 75% of business to value-based arrangements by 2020.

Value-based models are going to be around for the foreseeable future and will be the prevailing payment method for the industry. During this time of upheaval (MU Stage 2, ICD-10, RAC audits, etc.) I know it’s asking a lot, but take a moment to learn what you can.  Your future reimbursement will depend largely on the quality of data you capture right now. George Bernard Shaw said, “If history repeats itself and the unexpected always happens, how incapable must Man be of learning from experience.” As my father used to say, “Don’t be that guy.”

In conclusion, it’s worth noting this value-based push will require the ability to create stellar data in order to exist. With the SGR bill vote looming in March, it would be duplicitous to delay ICD-10 while at the same time announcing a government mandate for value-based measurements. You can’t have one without the other. Along with the CMS commitment to E2E testing, the announcement of a move to value-based performance models signals that ICD-10 adoption this year is a good bet.

Tyranny by the Minority

Tyranny by the Minority – Reprise: Feb. 9, 2015

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The Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), has scheduled a hearing for Wednesday, February 11, at 10:15 a.m.  The hearing is entitled,  “Examining ICD-10 Implementation.”

I first wrote “Tyranny by the Minority” on June 1, 2014. I think it’s worth a reprise in light of today’s hearing. Congress seems to be on track for allowing the Oct. 1, 2015 ICD-10 compliance date to actually happen but who knows? They pulled a fast one last year. Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.), in their interpretation of the Government Accountability Office report released Feb. 6 agree that CMS has adequately addressed congressional concerns about ICD-10. But again, who knows? The same players are involved. The same outcome could happen. Tyranny by the Minority is a cautionary tale that’s worth a reprint.

What’s the difference between a money launderer and a congressman? Once in a while the money launderer passes a few good bills. But HR 4302 wasn’t one of them. What a target rich environment for a rant. Do I go after Boehner and Reed and whoever paid them off for the only time those 2 ever agreed on anything? No…too easy. Do I go after CMS or DHHS or the White House for getting caught with their pants down? I mean Marilyn Tavenner was literally telling an audience there would be no further delays when an audience member received a news alert about the proposed ICD-10 delay on their phone. No…still too easy. The AMA is a likely culprit despite their protestations to the contrary. Merely days before the bill’s release, the AMA came out against the patch for a more permanent solution and…oops, what? There was a provision in there to delay ICD-10? Oh my goodness! How did THAT get in there? I mean this little nugget was a better kept secret than the raid on Bin Laden. Months ago I already ranted about following the money to really understand the AMA’s position. Can you say, “inevitable drive toward diagnosis based reimbursement that makes the CPT code system irrelevant and obsolete?”

No, since I have to focus my rant, I’m targeting every single ICD-10 detractor to expose what they really know and don’t know. Let’s review. ICD-10 is a data set that, for the first time in modern medical history, allows providers to reclaim control of their destiny. We get beaten up in every single managed care contract negotiation because we have to take a knife to a gunfight. Their highly skilled actuaries spin the data to take advantage of provider and patient alike. Now, we finally have the ability to fight their data with our data and the very constituents that should be ICD-10 champions have maligned it to the extent its eventuality is in question. We now have the ability to create accurate acuity level databases that prove…our patients are sicker and we therefore deserve additional compensation. Yet those with the most to gain are its most vocal opponents.

Denny is the principle consultant with The Talon Group. He formerly served as the CEO of a large, multi-specialty physician group, full service MSO and was certified as a CPC through AAPC. He has authored or co-authored numerous “common sense” practice management books and implementation manuals. He is an award winning, nationally known consultant, speaker, and educator bringing his expertise to making the complex “simple.”

Educated at the United States Air Force Academy, Denny had a distinguished career as an Air Force pilot and has a long history of commitment to excellence and dedication to his clients’ success. Contact the Author via email or (970) 390 8970.