Turning the Corner

from Volume to ValueLike it or not, the Center for Medicare and Medicaid Services (CMS) has turned from Fee- for -Service (FFS) to Pay-for –Performance (PFP) or a Value Based Purchasing (VBP) model. The question is not whether or not providers, hospitals and systems are ready to let go of those margins, but rather what can they do to mitigate risk today and protect the Revenue Cycle of tomorrow?

In the largest industry in America, healthcare providers are facing yet another “perfect storm” of Federal regulation and legislation. Today, we’re going to discuss three recent factors that if left unchecked, may negatively impact the Revenue Cycle in the near future.

• The Elimination of FFS and other volume-based reimbursements models by CMS

• CMS’ growing reliance on the Consumer Assessment of Healthcare Providers and Systems (CAHPS ®)

• The Patient Protection & Affordable Care Act (PPACA,) with now nationally required pricing transparency and patient engagement

Value Based HealthcareIn late January 2015, CMS identified the benchmark of 30% of 2016 claims that must be value based, this target increases to 50% in 2018. CMS announced exactly the types of value based healthcare that participating providers, hospitals and clinics need to be adopting:

• FFS with a link of payment to quality, which includes hospital value-based purchasing, Physician Value-Based Modifier, the Readmissions/ Hospital Acquired Condition Reduction Program. For these models, a portion of payments ‘vary’ based on the delivery of quality & efficient healthcare.

• Alternative payment models built on FFS architecture: Accountable Care Organizations (ACO’s,) Patient Centered Medical Homes (PCMH’s,) Medicare-Medicaid Financial Alignment Initiative FFS Model. For these types of reimbursement models, some of the payment is ‘linked’ to effective population management and coordinated care.

• Population-based Payments, Pioneer ACO’s (now in years 3-5 since inception) may participate in this reimbursement model. Payment is not directly triggered by service delivery, so volume is not linked to payment. Providers, Hospitals and Clinics are responsible for the coordinated care of the beneficiary for one year or more.

CAHPSAlthough CMS has been using patient survey tools for decades, recently these tools have been increasingly linked to Prospective

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Payment System (PPS) reimbursement. The goal of these surveys is to standardize, track and gauge the propensity of desired behaviors within the care continuum.

H-CAHPS (Hospital) were first on the scene. They track: Communication with Doctors and Nurses, Staff Responsiveness, Pain Management, Medication and Discharge Instructions, and the Cleanliness/ Quietness of the Facility.

Hospitals are required to complete approximately three hundred surveys (per year) within 6 weeks of discharge (e.g., medical, surgical, labor and delivery patients.) Hospitals are well served in establishing propensity baselines within their facilities, then working in small incremental steps toward “top-box scores.” Many successful models incorporate patient feedback and committees in go-forward improvements and efficiencies.

CG-CAHPS (Clinician Groups) track 5 domains: Overall Provider Rating, Access to Care, Discharge & Follow-Up, How well the Doctor Communicates, and the Courtesy & Helpfulness of the Staff. As Providers are working to educate and engage their growing patient base; their payment from the largest payer in America is also increasingly dependent on “soft skills.” Consumers seek compassionate, competent care in a convenient setting that save(s) them time, money and effort.

The PPACAProviders, Hospitals and Systems are now flooded with “newly minted,” nationally mandated patients who either require an incredible amount of financial & health literacy education; or have become truly savvy healthcare consumers with the loss of

their first dollar coverage and increasing pricing transparency. This consumerism dictates that providers meet patients when and how they want to be treated-or they will leave the provider, practice and facility and take their dollar to another network-possibly for the rest of their lifetime.

As CMS continues to forge the journey towards Value Based Purchasing (VBP) providers, hospitals and systems seek to attain, and then sustain the “triple aim” in Healthcare (Population Health Management, Decrease Per Capita Cost, and Improve the Experience of Care.)

CMS has determined and released a timeline for conversion from Fee- for- Service (FFS) to Pay -for -Performance (PFP). Currently 20% of Medicare services are value-based, by 2016-30% of claims need to be PFP and in 2018, a solid 50% will be required. This means a large percentage of Medicare beneficiaries will be transitioned to these new models. Further complicating this charted course is the looming large and yet pending, national conversion to ICD-10 which has been delayed more than once to date.

Models Are ChangingThe move from FFS means that Medicare patients will soon become part of a VBP model (e.g., ACO’s, Patient Centered Medical Homes {PCMH’s,}) these outcome based, reimbursement models necessitate a new level of coordinated care and communication within the continuum. The reimbursement stakes are raised by increasing percentages

In late January 2015, CMS identified the benchmark of 30% of 2016 claims that must be value based, this target increases to 50%

in 2018.

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at their house, or anywhere else the internet may reach.

In conclusion providers, hospitals and systems should resolve to enhance their current models to meet the consumer in the new healthcare marketplace-which champions consumerism and all that entails. Many areas of the country are finding that their consumers now want telehealth/ virtual appointments & walk-in or ‘minute clinic’ convenience options. Providers, hospitals and systems have started to incorporate departments devoted to tracking patient outcomes; a similar model focused on patient engagement and education will mitigate risks today and protect the revenue cycle into the future.

being based on the patients’ experience of care (surveyed through CAHPS ®.)

Now that CMS’ readmission penalties are becoming more than a nuisance (up to 3% may be at risk,) and in 2014, 2,610 hospitals have incurred said penalties; some providers and facilities are looking to coordinate care with pharmacies that can help reconcile and mange (facilitate & report back) medication compliance, track and share population health data, and take care of the follow-up phone calls -made to the patient at Day 1, 3, 10 and 30. Providers tend to agree consumers are usually more compliant with prescriptions if they have them upon discharge- or can get them onsite.

With an enhanced focus on appropriate access and utilization, healthcare service providers are squarely in the hot seat of delivering coordinated care across multiple platforms; while educating and engaging their growing patient base with less time and fewer resources. All this, while consumers demand a higher level of compassionate care delivered how, when and where they want to be treated.

Education and EngagementMany of today’s healthcare consumers don’t understand core concepts of their healthcare coverage, and their newfound coverage doesn’t guarantee appropriate access. For many consumers that do understand the financial responsibilities of a $6,000.00 family deductible- they may delay seeking treatment, until emergent care is needed-therefore receiving high resource intensive care in an inappropriate treatment setting (e.g., chronic &/or comorbid conditions such as diabetes and heart disease being treated in the ED.)

The key for providers, hospitals and systems is to jumpstart their patient facing education and engagement today, many times by extending the continuum of care into the front of the office. For many revenue cycles, battles are won and lost at the front line (i.e., Pre Access Staff.) They can also ensure their patient accounts representatives have the communication skills needed to work with peoples two biggest triggers: their health and their money. Many times, simple tools like roleplaying, sample scripting options, and incentivized collection contests empower employees to ask for that co-pay, co-insurance (coin) and deductibles.

Patient Portals are good for more than taking payments and scheduling appointments; they can also effectively and efficiently educate patients about their condition or disease, define commonly misunderstood health and financial literacy terms and generally engage consumers from their smartphones while they wait in your lobby, or