"This is not a classic relationship between a provider and a payer. In fact, what we're doing is blurring the lines to try to come up with a better model to take care of our members and the patients of Atlantic," says Allen Karp, executive vice president of health care management and transformation for Horizon Blue Cross Blue Shield of New Jersey.
Denials are the bane of revenue cycle leaders' existence, which are often underscored with tense and often adversarial relationships between providers and payers.
But payer-provider shared accountability programs, where payments are tied to outcomes in achieving quality and cost goals, rather than volume, have the potential to dramatically change the way payers and providers work together.
That's the goal for Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ) and Atlantic Health System, which are seeing early success with a model in which the two New Jersey organizations share the financial accountability for the health, quality of outcomes, and total cost of care for a specified population of patients.
"This is not a classic relationship between a provider and a payer," Allen Karp, executive vice president of health care management and transformation for Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ), tells HealthLeaders. "In fact, what we're doing is blurring the lines to try to come up with a better model to take care of our members and the patients of Atlantic."
Perhaps one day, the partnership could shatter the need for revenue cycle processes ranging from pre-authorizations to denials.
"It absolutely could," Karp says.
Shared risk, shared data
Under this risk-sharing model, Horizon BCBSNJ and Atlantic Health System use prior cost trends to jointly set a total cost of care target for approximately 30,000 Horizon BCBSNJ members who are patients of Atlantic Health's Clinically Integrated Network. Their clinical teams also work together, even convening for biweekly huddles to manage care and address complex medical conditions.
Atlantic Health's reimbursement for caring for those members is adjusted annually based not only on how it performs as compared to cost targets, but also for the quality of care and patient outcomes it achieves. In addition, Atlantic Health has agreed to share the cost of care if those total costs exceed the agreed-upon targets.
Data sharing is key to the partnership.
"We have built a private health information exchange and we actually share our administrative data," Karp says. "We pull in the clinical data from Atlantic Health and we have a layer of analytics on top of that, so we can provide information and insights back to Atlantic Health, even when those patients go outside Atlantic Health for other services like pharmacy."
So far, the arrangement has resulted in a reduction of more than 9% in unnecessary hospitalizations, and a 5% reduction in the total cost of care for patients/members in the first program year. The program began in 2019.
A new provider-payer relationship
"This is a new way of doing business. This is the way we believe business needs to be conducted in the future," Brian Gragnolati, president and CEO of Atlantic Health System, tells HealthLeaders.
That new way of doing business has several implications for the revenue cycle.
First, it fundamentally changes the dynamic between payer and provider.
For instance, instead of having annual meetings where "you're beating each other up over fee schedules," this new relationship is one "where we look at the total population," Gragnolati says.
"We have decades of experience of negotiating rate contracts. We don't have a lot of experience … having these conversations that require us to open our books in a different way and work together in a different way," he says. "What we didn't have was the integrated claims information. That takes trust for a payer to share that with us. And we also share our clinical information. That's really what's at the core of all this."
With a focus on population health management and by paying fixed rates, Horizon BCBSNJ doesn't have to do "more draconian things that payers typically do because we have to control utilization," Karp says. Physicians are freer to focus on a patient's clinical needs and there's closer clinical collaboration between both organizations.
"It reduces denials, which actually helps the revenue cycle," he says. "And because it's not a fee-for-service model, where we're paying based on every patient who comes in who's seen, it's more tied to the population that we're managing."
That lack of squabbling over payments trickles down to the patient financial experience.
"Anything that we can do to take the scare out of healthcare for our patients, we want to engage in. I think we do a pretty good job of that clinically, but we don't do a good job of that financially," Gragnolati says. "While we may take some short-term losses in revenue … our hope is that as we continue on this journey, that more patients will gravitate toward Horizon and toward Atlantic because they know we're doing the right thing for them; we're making care easier and less scary for them, particularly on the financial side."
Alexandra Wilson Pecci is an editor for HealthLeaders.