How Regulatory Changes Continue to Impact Revenue Cycle Management

Transcription

1 How Regulatory Changes Continue to Impact Revenue Cycle Management Indiana Rural Health Association Annual Conference June 2015 Fifth Third Bank All Rights Reserved Member FDIC 1

2 Agenda Rural Health Healthcare Industry Trends Healthcare Payments Landscape Patient Payment Strategies Goals in Healthcare Delivery 2

3 The Health of Rural Health Rural hospitals struggle to stay open, adapt to changes Associated Press By DAVID A. LIEB May 1, :04 AM 3

4 The Health of Rural Health ivantage Health Analytics; Infographics 4

5 The Health of Rural Health 5

6 Value and Quality HHS: Value-Based Healthcare Initiative Voluntary effort, not government-mandated Four cornerstones to value-driven healthcare: HIT Reporting on quality Reporting on prices Incentives for quality and value Cornerstones Value-Based Purchasing Some definitions of Value-Based Purchasing: CMS: linking Medicare payments to a value-based system to improve healthcare quality NBCH: a demand-side strategy to measure, report and reward excellence in healthcare delivery Value-Based Healthcare Initiative Hospital VBP Program established by ACA of Requires HHS to establish a VBP program for I/P hospitals. 6

7 Population Health Management (PHM) The goal of PHM is to keep a patient population as healthy as possible Automation is key Adoption of HIT essential, but not enough by itself Healthcare leadership in HIT adoption, change management, performance assessment and coalitionbuilding The Institute for Health Technology Transformation, 2012, Population Health Management: A Roadmap for Provider Based Automation in a New Era of Healthcare 7

8 Population Health Management Definition: Population Health Management Population health takes center stage Cost pressures are driving innovation Providers become more nimble in delivering care to patients The population as a whole becomes healthier The Institute for Health Technology Transformation, 2012, Population Health Management: A Roadmap for Provider Based Automation in a New Era of Healthcare 8

9 Population Health Management (PHM) Macroeconomic perspective vs. microeconomic perspective on PHM: Institute for Health Improvement: PHM as a way to make businesses more successful and more competitive, reduce the per capita cost of care by reaching for solutions outside of acute care settings, ultimately increasing the wellbeing of all. Relationship with Self Relationship with Patient Patient Relationship with other Providers Relationship with Community PHM focus: delivery, utilization, outcomes Relationship-centered care 360-view for all participants, including those outside of traditional care settings (nutritionists, health coaches, et.al.) Coordination of care to facilitate appropriate delivery of services Relationship with community to address social determinants of health in communities Nundy, S., Oswald J. Relationship Centered Care: A new paradigm for population health management, Healthcare, Volume 2, Issue 4, December

10 Healthcare Industry Trends Legislative / Regulatory Environment Consumerization of Healthcare Cost of Doing Business Market Disruption / Consolidation Technology ACA ICD 10 CAQH CORE EHNAC Risk Management HIPAA HITECH Price transparency Mobile payments/wallets Healthcare patient financing Patient Estimation Growing collection issue Margin compression Expense Reduction Operational Excellence Standardization of provider enrollment Administrative streamlining Disruptive Innovation new solutions reshaping an existing market ACO, value based pricing, etc Public & Private Exchanges Wellness focus Rapid technological advancements and requirements Increased need for actionable data analytics Information Security 10

11 Healthcare Industry Trends Legislative / Regulatory Environment ACA ICD 10 CAQH CORE EHNAC Risk Management HIPAA HITECH 11

12 Legislative and Regulatory Primer Exchanges Privacy EMR and Meaningful Use 12

13 Efforts at Standardization ICD-9 Clinical Modeling (CM): 3-5 characters Procedure Coding System (PCS): 4 characters ICD-10 Clinical Modeling (CM): 3-7 characters Procedure Coding System (PCS): 7 characters CM Codes to be used for ALL clinical settings Changes in PCS for Hospital I/P only. CPT and HCPCS Codes continue for O/P and office The Council for Affordable Quality Healthcare Committee on Operating Rules for Information Exchange 13

14 Meaningful Use Summary Guidance/Legislation/EHRIncentivePrograms/Meaningful_Use.html 14

15 Meaningful Use & Data 15

16 Healthcare Industry Trends Consumerization of Healthcare Price transparency Mobile payments/wallets Healthcare patient financing Patient Estimation Growing collection issue 16

17 Price Transparency Employers interact with employees in different ways Employer tools provided to employees resulted in employees shopping for certain episodes of care Data shows that payments for three common procedures were reduced when employees used the tools provided American Journal of Managed Care, October 27, 2014, JAMA, October 22,

18 Medicine as a Retail Model Consumers are treating healthcarepurchases similar to other retail purchases and are looking for the best value. Employers providing options to help employees make informed decisions Private insurance plans attempt to reach consumers in a retail environment At the same time, retailers are joining or expanding healthcare services On-line Yelp! -like sites are being developed to support consumers 18

19 If Price Will Drive Consumers to Retail Healthcare Data integration with Retail delivery models for better patient health management Critical as patients move from traditional care channels to lower-cost, easier-to-access points of care To be answered how will this work in the continuum of care patients receive from primary care? 19

20 Healthcare Industry Trends Cost of Doing Business Margin compression Expense Reduction Operational Excellence Standardization of provider enrollment Administrative streamlining 20

21 Bundled Payments - Government November 2014 March 2015 Under the ACA, HHS establishes a 5-year voluntary pilot bundling program beginning in Bundles to include care provided 3 days prior to admission through 30 days post discharge. Test different payment methodologies Definition: reimbursement of healthcare providers on the basis of expected costs for clinically defined episodes of care; considered a bridge between the traditional fee-for-service reimbursement model and the capitation model. FOR IMMEDIATE RELEASE January 26, 2015 Contact: HHS Press Office Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value 21

22 Bundled Payments - Government In March 2015, CMS announced the Next Generation ACO Model Sets predictable financial targets Enables providers and patients to realize greater coordination of care Aims to attain highest quality standards of care For ACOs with experience in coordinating care for patient populations Higher level of financial risk and reward than under the Pioneer Model Test of financial incentives to affect action patient engagement and care management Robust patient protections for patient access to high quality care Will be evaluated on better care for individuals, better PHM, lower growth in expenditures CMS will publicly release the performances of Next Generation ACOs on quality metrics Time line for study three initial years, two optional one-year extensions Letter of Intent Application 22

23 Bundled Payment - Commercial Targeted approached to commercial bundled payments: Pockets of positive movement toward bundled payments: -Different conditions on the ground in geographic locations make some areas more amenable to the adoption of bundled payments Arkansas, Ohio, Tennessee -Targeted procedures orthopedic (knees, hips), COPD, gastro procedures, bariatric surgery, et.al. IHA California study: Integrated Healthcare Association (IHA) Bundled Payment Model Experiment Retrospective vs. Prospective Payment models Most models are retrospective Ultimate goal would be prospective Goals implement 20 payer-provider bundled payment contracts/500 bundled cases Results: High administrative burden IT issues with integrating and sharing data No clear consensus on assumption of risk Distracting from ACOs and PHM model taking hold in CA Requires redesign of approach to care delivery and buy-in by all parties Bundled payment is generally touted as a promising example of payment innovation but the true benefit of bundling payments derives from reengineering care delivery, not from combining separately paid line items into a single tab. Health Affairs Blog - August 5,

24 Healthcare Industry Trends Market Disruption / Consolidation Disruptive Innovation new solutions reshaping an existing market ACO, value based pricing, etc Public & Private Exchanges Wellness focus 24

25 Value-Based Payment Models Catalyst for Payment Reform set a goal of 20% of payments to improve value by 2020 Results in 2014 survey: By Payment Type Catalyst for Payment Reform, 2014 National Scorecard on Payment Reform By Provider Type -40% of commercial payments are value-related % of payments that are value-oriented -15% full capitation - 38% of hospital payments % FFS and P4P - 10% of O/P specialist payments - 6.7% other - 24% of O/P PCP payments % partial capitation - 1.0% shared risk - 0.6% non-ffs non-visit payments - 0.2% non-ffs shared savings - 0.1% bundled payment Issues in realizing VBP: Aligning incentives Too much uncertainty about how to deliver Defining outcomes And CMS weighs in: CMS apply a value modifier to the Medicare Physician Fee Schedule beginning in 2015 Group practices with >99 physicians (eligible professionals) subject to value modifier in 2015 based on performance in 2013 Group practices with >9 physicians (eligible professionals) subject to value modifier in 2016 based on performance in 2014 Value modifier does not apply in for physicians participating in Medicare Shared Savings Program, Pioneer ACOs, Comprehensive Primary Care Initiative All Fee-For-Service Medicare participating physicians will be affected by the value modifier in

26 Enrollment in Exchanges From healthcare.gov: Department of Health and Human Services, Office of Assistant Secretary for Planning and Evaluation Issue Brief, March 10,

27 Healthcare Industry Trends Technology Rapid technological advancements and requirements Increased need for actionable data analytics Information Security 27

28 Big Data Government, Non-Profit organizations, For-Profits, HC policy researchers and HC journalists defining big data, - data as an asset - modeling for predictive behaviors - measuring outcomes Four Vs of big data: - Volume - Velocity - Variety - Veracity A sampling of organizations: 28

29 Big Data Trends in Big Data: Funding trends indicate growth, particularly investor-backed start-ups in healthcare data analytics to continue in 2015 and beyond. Big data vs. small data debate using data already available (small data) vs. crafting analytical tools to find patterns in disparate data (big data) Patient privacy maintaining patient confidentiality, clean data to preserve patient confidentiality Big data is employed to address healthcare quality and healthcare spend Unique partnerships and collaborations for use of big data providers, insurance companies, software companies, data warehouses, et.al. Big data as a source of innovation in healthcare delivery, modeling, analytics consumer tools, analytical tools for providers, data combinations (consumer shopping trends, consumer web searches, etc.) Potential for savings estimated by some to be >$400B or more But there is a down-side if some stakeholders act in their own best interest and not with a mind to clinically defensible outcomes CB Insights, July 26, 2014, Big Data Healthcare Analytics Startups Use of Data analytics allows providers to: Identify top reasons for denials and rejections Compare allowed amounts at a Payer level Understand cash flow trends Evaluate Claim turn-around time Evaluate physician-referral patterns Establish benchmarks amongst peers Analytics will be critical to the success of value-based payment models Sharing of data and collaboration between accountable parties is needed to provide highest quality of patient care Performance data needs to be utilized to measure quality of patient service In addition, CMS (HITECH 2009) requires providers implementation of meaningful use of EHR systems by 2014 (penalties after 2016, to provide: (1) Better clinical outcomes (2) Improved population health outcomes (3) Increased transparency and efficiency 29

30 ICD-10 Implementation Delayed implementation to October 1, % of Hospitals with 600+ beds Prepared 58% of 100 or less providers were prepared for 10/2014 date Opportunity for providers to test with Payers ICD-10 does not affect CPT coding for outpatient procedures and physician services World Health Organization ICD Facts Global health information standard for mortality and morbidity statistics Used in clinical care and research to define disease patterns, manage health care, monitor outcomes and allocate resources Used by 100 countries worldwide 70% of global health expenditure allocated using ICD for reimbursement Translated into 43 languages ICD-9 ICD-11 set for release in 2017 CMS testing Acknowledgement testing in 2014 results of November test week 13,700 claims, 500 providers improved to 87% by EOW Three end-to-end testing periods in 2015 January Clinical Modeling (CM): 3-5 characters Procedure Coding System (PCS): 4 characters ICD-10 Clinical Modeling (CM): 3-7 characters Procedure Coding System (PCS): 7 characters CM Codes to be used for ALL clinical settings Changes in PCS for Hospital I/P only. CPT and HCPCS Codes continue for O/P and office April 27 May 1 July

31 Health Information Exchange (HIE) The development of HIEs are among one of the leading initiatives behind the Health Information Technology for Economic and Clinical Health (HITECH) Act. HIMSS + IWG = Alliance to help interoperability 31

32 Healthcare Payments Landscape Payers, Providers, Patients, and Employers face common challenges; the siloed solutions available fail to create common value. Common Issues Payment cost optimization Margin compression Consolidation of data Actionable data analytics Collection of payments Clarity: Consistent, simple and transparent information Siloed Solutions Lockbox services Payment portals Comparison tools Virtual cards Enrollment simplification Revenue Cycle Management 32

33 Collection of Patient Payment a Potential Problem for Providers Collection of patient responsibility is a $100 billion problem in Billions of US Dollars ⁴POS collections Patient Bills Patient Write Off $1.5 mm Total Annual Billing 1 $350,000 Patient Responsibility 2 $1.15 mm Insurance Responsibility $210,000 Collected $140,000 Uncollected Revenue 2 ⁴ Department of Health and Human Services, CMS, Office of Actuary; National Health Expenditure Data Projections 2010; Includes Private Health Insurance and Other Private 33

34 Education of Patients Households who fail to pay bills either need credit or desire clarity and convenience Top reasons why people do not pay bills on time Percent, as a proportion of those who do not pay straight away (n = 656) Need clarity and convenience Not addressable Need credit Reasons for non-payment amongst debtors They have to agree that they owe the money We have to rely on them to take action Source: Quantitative market research (n = 2,000) April 2011, Oliver Wyman analysis 34

35 Patient Out of Pocket Hidden Costs Deloitte?? 35

36 Patient Pay Revenue Cycle Opportunity Decreased Opportunity to Collect Workflow Improved Performance Improved Scheduling Identity & Insurance Verification Preregistration & POS Collections Registration & POS Collections Charge Capture Check-Out & POS Collections Coding Claim Processing Post Service Payments Collections Patient Access (Registration) Billing & Collections Source HFMA,

37 Patient Payment Strategy May 2015 HFMA Revenue Cycle Strategist Kathleen B. Vega Where does your bad debt come from? Patients? Payers? From insured patients? Self-pay? Balances after insurance? Balances after self-pay? Balances after denials? Implement robust patient pay collections program Retool front-end collection processes Use eligibility tools Analyze results regularly agnet&utm_medium= &utm_campaign= &pagesid=2 37

38 Patient Payment Strategy Deliotte & Touche: Impact & Implications of Rising Consumer OOP Costs Patient Access Charge Integrity Patient Financial Services Capture revenue at key patient access touchpoints before the patient leaves the hospital, including pre-service, during initial registration, and at check-out Pre-clearance Patient Liability Emergency Department (ED) Once a patient receives care, the goal is to accurately bill all services so that insurance will cover them appropriately. For people without coverage, hospitals should make their charity care, policy clear, implement it consistently, and assure the accuracy of the community service adjustment Improve revenue collection by consistently using multiple communication channels, including mail and telephone. Hospitals might also consider offering financing Analytics allow hospitals to better predict patient liability Analytics help monitor outcomes and link them to reimbursement rates, 38

39 Revenue Cycle Challenges Challenges exist within the revenue cycle for both providers and patients Limited Payment Options Tedious Monthly Reconciliation Process Stretched Working Capital Patient Pain Points Lack of Online Tools Frustrated Patients Provider Pain Points Difficult to Comprehend Benefits Processing Manual Longer AR Days Slow cash flow Limited ability to collect patient payment at the point of care: Limited or no access to real time eligibility, benefits & estimation information or tools Increased days in A/R: average time to reconcile payments is days Escalating administrative costs due to manual or disparate processes such as reconciliation, denial management, 835 standardization s & matching remittance payments with claims Limited visibility into total collected revenue Reduced productivity Reduced liquidity & working capital - Time = money lost! Source: 1. Workscell Financial Systems 39

40 Revenue Cycle Opportunities Pre and at POC Real-time access to patient eligibility, benefits, accumulators and financial responsibility Flexibility to collect patient payment via: cash, check, card ACH, secure card on file and recurring payment plans Daily auto-posting into system of record (PAS, PMS, etc) Revenue Cycle Opportunities Post Service EOB capture and post into system of record Electronic Remittance Advice (ERA) Integration Secondary Billing Print truncation Results Lower administrative costs Business Intelligence Increase in liquidity and working capital 40

41 Goals in Providing Healthcare With the increased number of initiatives, whether regulatory, industry best practice or organizational requirements, Revenue Cycle Management processes and professionals to be efficient and adaptable. Quality & Safety Cost Containment Clinical and Operational Excellence Healthcare Organization 41

42 Questions Fifth Third Bank Healthcare Solutions Group Barbara Tully, CTP, AAP Vice President (317)