Three out of four hospital executives say their organizations have partly or fully implemented electronic health records of some sort, and 83% have either selected or implemented an EHR that can fulfill federal meaningful use requirements, according to a survey conducted by Dell. The Dell Executive & Patient Survey interviewed hospital executives as well as recent hospital patients in fall 2010 to gauge their attitudes toward various issues facing the healthcare industry. The survey, which polled 150 hospital executives, also found that a third of respondents are participating in some form of local, regional, or state health information exchange, which allows multiple providers to have access to the same patient data. Another 54% are planning to participate in an HIE and almost 70% have partly or fully implemented an online physician portal.
After hours of pushing, Michelle Morales' labor was not progressing. As exhausted as she was, Morales thought she was going to keep trying to deliver the baby. But instead, her obstetrician asked nurses to bring in a device called a vacuum extractor. Placing a soft suction cup on the baby?s emerging head, the doctor eased Landon Harrington into the world at 4 pounds, 3 ounces on Sept. 30, 2009. Landon now is a beautiful little boy with serious disabilities. He is blind, has cerebral palsy and likely will never walk on his own. His parents and their lawyer blame brain hemorrhaging caused by the vacuum extraction device. They contend it should never have been used on a preterm infant like Landon, who arrived five weeks early, and he should have been delivered by caesarean section.
A female patient has alleged she was sexually assaulted by a hospital worker while she was seeking treatment in the emergency room at St. Joseph Hospital in Orange, CA, according to police. The incident allegedly occurred March 8. The next day, the woman told hospital officials that a patient care technician had assaulted her. Officials then reported the incident to police, who have not yet interviewed the employee, a department spokesman said. Orange Police Sgt. Dan Adams said that a patrol officer took reports from the hospital and the patient and filed the paperwork Thursday. But the detective bureau is generally closed Friday, Saturday and Sunday unless there is a major case like a murder, he said, and on Monday all of the department's detectives were investigating a homicide. Adams said the patient first reported the incident to hospital officials, who contacted the department. Hospital officials refused to provide details of the alleged attack, saying they needed to "respect the rights and privacy of everyone involved in this situation."
The U.S. government has filed a federal lawsuit against a Baltimore doctor, accusing him of fraudulently billing thousands of dollars for hundreds of medically unnecessary eye procedures performed on dozens of patients at an outpatient clinic owned by Bon Secours Hospital. The 33-page civil suit claims that between Oct. 29, 2002, and April 14, 2009, John Arthur Kiely, MD, repeatedly performed laser eye surgery on patients who didn't need it — more than a dozen times on some people. He then falsely billed Medicare and Medicaid for the unwarranted work, according to the court documents, which were filed March 11. The procedures led to blindness in one woman, who should have been referred elsewhere for a different procedure, records claim.
Few healthcare providers would consider going into a critical negotiation process without a plan of action – in the form of extensive patient indexes, historical reimbursement rates and methods and competitive insights – yet numerous hospitals across the country are doing just that when it comes to negotiations with payers. In fact, many hospitals do not have a consistent or effective methodology for managing and negotiating complex contracts with managed care organizations. As a result, providers often enter into negotiations blind – not knowing the projected financial impact of their future contracts.
When providers are armed with the right information and resources, they can turn the negotiations process around to capture all revenue rightly owed to them by payer organizations. Below are five important steps to maximize revenue capture and maintain profitability by product lines when negotiating contracts.
1. Embrace Modeling Technology – Effective contract management systems should include modeling and analysis technology. Modeling helps contract negotiators consider “What if …?” scenarios before entering the negotiations process while allowing providers to create their own game plan – before they receive the first proposal from a payor. When modeling capabilities are in place negotiators can view current net revenue per day against cost information and quickly determine current utilization and profitability of services from a given payor. Negotiators can also compare the current contract inventories (not merely the payor under negotiation) against the proposal to understand the overall financial impact for their book of business, leveling the playing field with payers. It is important to always use scrubbed claims data in models as this provides an “apples to apples” comparison to the Healthcare Effectiveness Data and Information Set (HEDIS).
Many contracts are complicated by specific “second dollar” stop losses, exclusions and high-dollar case rates. The modeling process brings transparency to contract terms and rates being proposed by payers and influences better decision making based on facts. Some facilities have contract modeling databases in their contract management solutions that automate the manual processing, improve accuracy and afford users to better align contract forecast to annual budgets. Requesting decision support information joined to current CDM for manual calculations is no longer needed as this functionality should exist within existing tools.
2. Invest in Training Employees – Information gleaned from contract modeling software is only as good as the claims that are available within the system. This is why employees are a hospital’s greatest asset when it comes to contract negotiations. It is employees who must select the proper set of claims and corresponding data and then interpret that data – a process that can be difficult for contract auditors who haven’t been specifically trained. Providers should empower employees to ask the “why” questions: why are we losing money in service lines; why are we not getting reimbursed correctly; and why are payers denying claims? Then, give them the tools and the authority to collect underpayments and fight for net revenue the organization is contractually owed. It’s crucial to educate and train employees on a hospital’s contract management solution to demonstrate effective utilization of the system. Organizations can also create individual policies and procedures to enable a repeatable process for recovering all they are owed and promoting better financial forecasting.
3. Examine Your Source – If you have problems with a certain payor, it’s likely that you have that same problem with other payers on similar service types, and it’s important to acknowledge that the problem might be on your end. Improper billing, coding, and charging patterns and incorrectly loaded contract terms are often the culprits. Services that are often affected include cardiac care, high cost drugs and implants. It’s crucial to look for the root causes of your issues, and you should be prepared to implement true cultural changes to resolve the challenges.
Hospitals should train contract auditors to think outside the box and incent them to get to the root of issues to truly maximize returns. Tools like an “account work list” give hospitals the ability to analyze payment trends and evaluate opportunities to improve contract terms. Combined with contract modeling tools and capabilities, hospitals can model the impact of changes and make informed decisions when negotiating new payor agreements.
4. Have Plans A, B and C – As with every successful project, hospitals must have a plan for contract negotiations. It’s important to address crucial issues, such as how to handle the “what if” scenarios, how to formulate and compare large volume payers to one another, and how to make enterprise-wide cultural changes, not just departmental changes, around the negotiation process. Hospitals should start with a key goal in mind – net revenue growth. They should identify specific volume and growth expectations, always using the prior year as the basis. To ensure the total net revenue goal is met, providers must revisit prior payor behavior for trends in areas such as underpayments, overpayments, denials and patient liability shifts. This step also helps forecast how much administrative time will be spent on a particular negotiation and identify prospective views of what might roll to allowances for doubtful accounts or bad debt.
5. Know Where You Net Out – In addition to utilization, contract modeling calculates an organization’s net revenue per day per contract as well as averages of other payers, including length of visit by service line type, total patient days, visits by IP/OP and high risk items like observation and multi-service bundling. Net revenue per day serves as a benchmark of how much money a hospital must bring in per patient per day to ensure profitability, and it usually comes up during contract negotiations. Armed with this information, all internal parties involved in the negotiation process can see the causes of any reimbursement or pricing issues and work together to resolve them in advance of negotiation sessions.
Troy Roth is senior vice president of revenue cycle product strategy and solutions support for MedAssets, a financial improvement partner for healthcare providers. Roth can be reached via email at troth@medassets.com.
While the specific regulations from the Patient Protection and Affordable Care Act (“ACA”) are still evolving, the “barometer reading” for change is clear. Market place trends and healthcare reform have clear implications for physicians. The pace of change will depend on specific market dynamics, private payer initiatives, and the degree of physician organization and physician-hospital integration, not to mention government action.
Physicians in private practice have been faced with a series of challenges and opportunities in recent years, and some assume that “this too shall pass.” The risk, though, of ignoring market trends is to face the downside of evolution – extinction. Here are the top ten ways in which these market forces, dominated by healthcare reform, affect physicians. They may not all affect you now, but your radar should be scanning for “blips” of change in your market.
1.Traditional payment will decline. Since the ACA did not “fix” the Medicare formula driven by the sustainable growth rate (“SGR”), there will be threats of decreases in the traditional Medicare fee schedule – this year close to 30 percent. While it likely that these decreases will be periodically “patched” by Congressional action, it is unlikely that Medicare fees will increase in the near future. Since many private payers link their fee schedules to Medicare rates, this means no increases for the foreseeable future. For some specialties, it will mean decreases, since Medicare and some other payers are shifting dollars from specialty services to primary care – but not adding any new money to the “pot.” The only hope of “upside” will come through new payment models such as bundled payment, shared savings, and pay-for-performance.
2.EMR and connectivity are “table stakes.” With the passage of the American Recovery and Reinvestment Act of 2009 (“ARRA”), physicians have the opportunity to earn incentives up to $44,000 from Medicare for implementation of electronic medical records (“EMR”) that meet “meaningful use” criteria. But after 2015, penalties are imposed if practices fail to meet these criteria. Additionally, the need to be clinically integrated with other physicians and hospitals is growing due to various new payment methodologies, not to mention patient expectations. Within the next few years, it will not be a “benefit” to have an EMR AND connectivity with other providers, it will be a requirement to stay in the game.
3.Expect to be measured – no more “invisible man (or woman).” The Physician Quality Reporting Initiative (“PQRI”) program was expanded in ACA, so that there are increasing incentives to participate through 2014, then the penalties for non-participation begin (sense a theme here?). Results will be posted publicly on the to-be developed “Physician Compare” website sponsored by CMS. This is in addition to the data gathered by payers and other private rating websites such as HealthGrades. Whether or not the measures are “right,” they will be published and available to consumers. The forward-thinking physician organizations are collecting and sharing this information among physicians now to provide timely feedback and improve organization-wide performance and outcomes.
4.Are you now or have you ever been an ACO? ACOs will be selected by CMS beginning in 2012. Some private payers and self-insured employers are evaluating this model as a way to reduce healthcare cost inflation and improve population health. It is widely accepted that ACOs must be physician-led in order to achieve these objectives. Since the infrastructure required to function successfully as an ACO is substantial, many smaller physician groups will be participate in ACOs; others will be large enough to potentially qualify as an ACO. The key question for physicians to consider is: what role should/can we play in an ACO model, and what resources, leadership skills and partners will we need to successfully fulfill that role?
5.Would you like to be a pilot? The ACA calls for the funding of $10 billion to the CMS Center for Medicare/Medicaid Innovation to provide grants and lead demonstration projects to identify new delivery models and/or payment models. The hope is that through incentivizing discovery, new care delivery models such as the patient-centered medical home (“PCMH”) or payment models such as bundled payment will evolve to “reduce program expenditures while preserving or enhancing quality of care.” Alert physician organizations, large and small, can participate in these demonstration projects to be at the leading edge of innovation and seize opportunities to lead the market.
6.Access (when and how) matters. Providing the estimated 32 million or more currently uninsured individuals with access to health insurance will likely create or exacerbate access issues for medical care. Patients already have difficulty obtaining physician appointments within a desired timeframe in some communities. Given the current shortage of primary care physicians in many markets, access to primary care is likely to be the first to be affected. Only through redesigning care delivery models, implementing electronic visits (e-visits) and other electronic tools such as telemedicine, effectively utilizing a broad array of healthcare practitioners and support staff, and empowering patients to play an active role in their health will an access “meltdown” be avoided. Even today, patients are increasingly expecting ready access (defined by the patient) to their healthcare providers through e-mail, portals, and, when necessary, the face-to–face visit at home. Physicians who cling to the traditional office visit as the only venue for care will risk declining patient preference and limited – hence declining – patient revenue.
7.Patient expectations will continue to rise. A combination of factors will result in an increase in patient expectations for healthcare services:
The newly insured will expect to have access like anyone else.
Those with insurance may face increased cost-sharing, so will now “shop” for the best service and quality.
The Baby Boomer generation wants to avoid looking or feeling older, and will expect their healthcare provider to provide the solution(s).
There will be an increasing demand for the ability to communicate via text, social networking, or web portal with healthcare providers.
Disruptive innovators and innovations can change the competitive landscape (e.g. Google, Walmart).
Exploding wealth of data and health information will appear online for the worried well, chronically ill, or recently diagnosed patient.
These factors will result in an increasingly savvy healthcare consumer who expects that their physician is responsive to their expectations. Language in the ACA speaks of rewarding providers who embrace “patient-centric” processes; physicians must take stock of their practice and processes to evaluate how well they are prepared for these expectations.
8.Reframing the clinical workforce. The ACA includes funds to increase training positions for primary care and general surgery, add training in preventive medicine and public health, and support training for medical homes and team management of chronic disease, among other initiatives. But these will likely fall short of filling the gap of demand/capacity in many key specialties – particularly primary care. In addition, the generational shift in expectations among young physicians – for employment models that provide greater security, balanced work life, and part-time options that many small private practices cannot offer – creates a dynamic in many markets where the big groups (or hospital-owned) get bigger, and the small practices disappear as physicians retire. All this requires physicians to evaluate how their group or practice is structured for recruitment of a clinical workforce to facilitate growth and/or succession planning to meet community need. This may require looking to advanced practice nurses or physician assistants as well as a re-evaluation of compensation plans, benefits, and even medical group structure.
9.No relief in operating costs. Despite the fact as previously noted that traditional sources of revenue are likely to be constrained in the future, there is nothing in the ACA or in economic trends that give practices any relief in day-to-day practice expenses. The ACA does little to mitigate increases in malpractice costs, the taxes on biotech and pharmaceutical companies are likely to increase these supply costs, and implementing EMR requires annual maintenance fees. So the recent trends of increasing overhead costs will not likely go away – unless practices evaluate new models of care or ways to achieve economies. This means evaluating how support staff are being utilized (i.e., are they working at the top of their qualifications in a way that maximizes provider productivity and effectiveness)?
10.Hospital relationships matter. In recent years the “centricity” of the hospital as the focal point of the healthcare community has been affected by conflicting trends: on the one hand, hospitals are the employer of physicians at an increasing rate; on the other, there are many physicians who never set foot in the hospital and are unaware where the medical staff dining room is or cannot recognize key specialists other than by name. Further, many of the hopes for healthcare reform are riding on better chronic care management, which is not a skill most hospitals possess. What the new payment models (e.g., shared savings, bundled payment, PCMH) and the “triple aim” espoused by Dr. Don Berwick of CMS (i.e., “better care, improved health, and lower costs”) require, though, is a care delivery system that is based on collaboration between physicians, hospitals, and other healthcare providers. To achieve optimal performance under any of the proposed payment models, whether you are a small practice or large multispecialty practice, requires collaborative physician-hospital relationships. This will require both hospitals and physicians to put aside old frameworks that assume one entity “controls” the other; how these partnerships evolve will depend on who leads innovation and demonstrates a commitment to healthcare improvement and operates effectively to remain financially strong.