Summer 2014

Harnessing technologyin your practice

How Health Insurance Marketplaces may impact your practice

Not satisfied with the information you need?

Want to join a bundled payment network?

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Health information technology (HIT) is a rapidly expanding dimension of health care delivery. Physician practices are subject to government mandates but also are offered opportunities with the technology they use. Here are the active areas and steps that practices should take to succeed.

Meaningful use of EHRsSince 2011, the CMS has made incentive payments to hospitals and eligible professionals (EPs), including doctors, for their “meaningful use” of certified EHR technology to improve patient care. Over half of physicians have qualified for payments under Stage 1 and are gearing up for Stage 2.

Thresholds for many of the existing meaningful use requirements have been raised, and new requirements have been added. For example, practices must enable at least 50% of their patients to view, transmit and download their health information online, and more than 5% must actually do so. Practices also must communicate with more than 5% of their patients through secure electronic messaging.

Practice managers should check with system vendors to ensure software will be updated in time to accommodate Stage 2 requirements and work with vendors to decide how to re-engineer work processes and patient flows to satisfy the requirements.

HIPAA security risk analysesStage 1 and Stage 2 of the EHR incentive program require that practices “conduct or review a security risk analysis.” Plus, under Stage 2, they must examine the security of data they collect and store, implement regular updates, and correct identified security deficiencies. A common reason for a breakdown of a CMS meaningful use audit is failing to conduct a proper security risk analysis — a key requirement of the HIPAA Security Rule.

It’s possible that the Office for Civil Rights (within the CMS) will be enforcing these requirements

more rigorously going forward, so practices should redouble their efforts to monitor and maintain data security protection activities. In March 2014, the Department of Health and Human Services released a new security risk assessment tool designed specifically for small to medium-size practices. You can find it at http://healthit.gov/providers-professionals/security-risk-assessment.

Practice administrative simplificationBeginning this year, payers must offer physician practices electronic funds transfer (EFT) and more durable electronic remittance advice (ERA) transactions. These

improvements will simplify tasks associated with paper check remittances.

Further simplification in EFT enrollment is possible through a module developed by the Council for Affordable Quality Healthcare (http://www.caqh.org). It allows practices to submit EFT information once and authorize multiple payers to access it. On the patient payments side, procedures for insurance eligibility verification are already in place so practices can check patient service and financial responsibility in less than a minute.

To take advantage of these new measures, review current revenue cycle workflow, determine where further

Harnessing technology in your practice: HIT mandates and opportunities for physician practices

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automation would be a benefit, assess the capabilities of the current practice management system, and decide whether upgrades in system software or hardware are warranted.

ICD-10 transitionThe health care industry was scheduled to transition to a new ICD-10 procedure coding system on Oct. 1, 2014. Although that deadline has been postponed for one year, the consensus is that practices should work aggressively for the changeover from ICD-9. Here are some steps you should address soon:

• Identify processes and systems impacted by ICD-10.

• Negotiate with system vendors for solutions to identified problems.

• Calculate an implementation budget.

• Train administrative and clinical staff on the effects of the transition on their roles in the revenue cycle.

• Educate staff on documentation changes required of them.

• Conduct trial runs of coded claims with payers and clearinghouses.

• Draft a contingency plan that anticipates unprepared vendors

and clearinghouses, reduced clinician and coder productivity, and increased claims pending or denied.

The plan should contemplate the technology, staffing and financial effects of these issues.§

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HARNESS TECHNOLOGY FOR MOBILE HEALTH APPLICATIONS

Increasingly, patients use technology to gather information about the health care system and manage their interactions with it. To provide value, practices must acknowledge this trend and leverage it to their benefit. It starts by recommending existing mobile apps that might be helpful for patients.

Some 25,000 health-related apps are available in the Apple iTunes store, including those that:

• Focus on prevention and healthy lifestyles (8,700),• Are specific to individual diseases (2,000),• Target particular population demographics (1,500),• Help find a health care professional or facility (1,000),• Facilitate self-diagnosis (300),• Help in postdiagnosis education (500), and• Provide assistance in understanding and filling drug prescriptions (200).

Practices can (with the help of readily available consultants) develop proprietary apps that offer basic practice information, scheduling and bill-paying functions. Many practices’ existing EHR systems can include these capabilities, as well.

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Health Insurance Marketplaces created under the Affordable Care Act provide virtual marketplaces where consumers can shop for, compare and buy health plan coverage. They also place a handful of modest but significant new responsibilities on physician practices.

Examining the changesThe question that many physicians have is how these new plans differ from existing commercial insurance plans and how they may impact practice revenues. Depending on the plan, there may not be much difference. Most plans offered through the Marketplaces provide basic services such as:

• Ambulatory care and emergency services,

• Maternity and newborn care, • Prescription drugs, • Rehabilitation services and

mental health,

• Hospitalization, • Pediatric care, and more.

Moreover, reimbursement levels vary among payers and plans just as they do now.

Determining participation in state MarketplacesThe first step to take now is determining the participation status of your practice in your state’s Marketplace. Access the Marketplace’s website or healthcare.gov to learn which payers are offering products through the Marketplace. Does your practice participate with any of those payers? If so, decide whether you want to continue participating.

Another issue concerns specific products the Marketplace offers. The payers may have created new products specifically for the Marketplace. Ask them whether they are narrowing their provider

networks for those products. If they are, find out if your practice is included. Also ask what other types of providers are also part of the network. If you’re included, no immediate changes are necessary.

Your practice will receive this information from payers with Marketplace products through contract amendments or notices. You’ll need to send a written objection within 15 to 45 days if you don’t wish to participate in a particular plan. Failure to object is an implied acceptance.

Understanding the impact on your revenue cycleThe next step is to determine the impact of the Marketplace on your revenue cycle at these points:

• Registration — when patient demographic and insurance information is obtained,

• Eligibility and benefit verification — set time prior to a visit,

• Prior authorization — needed for required services in advance,

• Time of service collections — copayments and outstanding balances from patients,

• Charge entry — affects promptness of bill submission,

• Electronic claim submittal — affects electronic data interchange denial and rejection rates,

• Account follow-up — measured by number of days in accounts receivable (A/R),

• Payment posting — when

How Health Insurance Marketplaces may impact your practice

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payments received are posted and balances are computed,

• Denial management — overall denial rate stemming from timely filing limits,

• Payment variances — review at regular intervals (for example, 30 days),

• Patient collections — permit patient accounts to be reviewed with physicians, and

• Management reporting — how promptly reports are provided to physicians.

Once you have basic information about payers participating in the Marketplaces, inquire further about the exact reimbursement rates for the codes billed by the practice, the effective date of the payers’ Marketplace plans, size of member enrollment anticipated, and details of the plan features.

Don’t participate in Marketplace plans by default. Even if they look appealing, make only informed choices about participating.

Know the risks and rewardsThe addition of millions of new insured patients through the Marketplaces has the potential to increase dramatically the number of patients seeking your practice. But it may take months or even years before the impact is known.§

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DID YOU KNOW?

The Health Insurance Marketplaces can operate differently from one state to another. So far, 17 states, including California, Connecticut, Massachusetts and New York, are running their own Marketplaces and have some latitude in doing that. Seven states, including Illinois and Michigan, are collaborating with the federal government, with the option to take over operations at a later date.

Other states, including Florida, Pennsylvania and Texas, have defaulted to the federal government, because they chose to avoid setting up their own Marketplaces. Marketplaces run solely by the federal government or in collaboration use a standard set of Marketplace rules.

Not satisfied with the information you need?An electronic dashboard can help clarify the numbers

Electronic dashboards have been around for a while. And for good reason: They can help your practice better understand its financial standing. Here’s a primer on this valuable tool.

Measuring performanceAuto enthusiasts understand the value of having gauges that provide real-time feedback on performance. Similarly, electronic dashboards give physician practice leaders data to monitor their practices’ performance in real time.

A dashboard is an interactive, graphical representation of complex practice data that

you and your office manager or administrative physician can use to compare with existing budgets, strategic goals or other performance metrics. Financial measures that can be tracked via an electronic dashboard include gross charges and payments by reporting period, accounts receivable by payer and type (self-pay, government, private), and accounts receivable aging in days. A dashboard can also track the number of claim denials due to coding errors, and expenses incurred by type and physician.

Data can be normalized by full-time equivalent (FTE) physician

or relative value unit (RVU) for measuring performance. On a per-physician basis, the numbers can drive improvements in resource utilization by individual doctors.

Preparing the way for a dashboardBefore you can successfully employ an electronic dashboard in your practice, you must develop strategic goals and priorities that are supported by all your physicians.

Next, your partners must agree to take action on the basis of the dashboard indications and be willing to spend the money needed

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to acquire the new technology. Everyone in the practice must not only accept the concept of evidence-based, data-driven decision making, but also be willing to follow through on decisions made.

Dashboards empower your office manager to make changes and adjustments in work activities. For example, a dashboard report could alert the practice manager that the largest share of rejected claims is processed by a single clerk, who could then be targeted for retraining. Another report might reveal that an ancillary service that the practice just added, or a new satellite clinic that it opened, is drawing a new type of patient that could be further reached through marketing.

Understanding the needed featuresThere are several baseline features of a utilitarian dashboard. It should allow users to select and manipulate data (such as budgets, goals and previously determined benchmarks) that is important to them and drill down to find the data details that are behind the dashboard outputs.

It should also allow you to view a graphic presentation of the practice’s key performance indicators via pie charts, line or bar graphs, and speedometer dials, and publish dashboard outputs in multiple formats.

A key dashboard component is the ability to gather data from many sources. In fact, if it’s

capable of interfacing with the practice’s existing scheduling and financial systems, the dashboard may retrieve much of its data automatically, without human intervention. Also keep in mind that the dashboard application must be able to limit users’ access to the data and functions that are essential parts of their jobs.

Assessing the costsIf you have a computer-savvy staff member, you can keep the cost of developing an electronic dashboard down by having him or her design the tool using Microsoft Excel® plus some add-ons. Or hire a consultant to develop a custom dashboard that meets your practice’s needs. Because such a system would likely also require your practice to purchase new software, the cost of implementation could be $2,000 and up.

Getting ahead of the gameAs you know, physicians and practice administrators must track more and more performance information, but have less time for doing it. Fortunately, the job can be made much easier by using electronic data dashboards.§

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Not satisfied with the information you need? cont.An electronic dashboard can help clarify the numbers

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In January 2013, the CMS announced the health care organizations selected to participate in its three-year Bundled Payments for Care Improvement initiative. It comprises four defined models of care, which link payments to the full range of services that beneficiaries require during an episode of care. Note that the “bundle” of patient-specific procedures for which a single payment is made is referred to as an “episode.”

Different modelsModel One applies to an episode of care encompassing only acute inpatient care hospitalization. Under Model Two, an inpatient stay plus 30, 60 or 90 days of postdischarge services is covered. Payment results from a retrospective comparison of a budget with actual “fee for service” payments. Only postdischarge care is the subject of Model Three. The payment arrangement is the same as Model Two. Model Four offers prospectively set payments for episodes consisting solely of inpatient care. After three years, the CMS will assess how well each model improved patient care and lowered costs to Medicare.

Model One will pay only for the services billed by the hospital. Model Two may include a bulk payment to a hospital and a rehabilitation facility.

Plan ahead for operating under such arrangements, focusing on certain provisions. First, understand rules that trigger, break or expire an episode. The payment contract should specify which CPT or ICD codes initiate each type of episode, what events may nullify the payment process, and when an episode has come to an end so that payments cease. Be clear about what providers and services are included in an episode budget.

Performance dataYou must also determine what performance data will be available about other network providers. This can help you decide to whom referrals should be made and from whom they should be accepted. Also decide when the reconciliation of payments will be made after an episode is terminated or expires.

An issue to address includes learning how disputes between providers and payers can be appealed. Inquire into the mechanisms for resolving disputes among providers and pay attention to the governance structure of the provider network. It will influence

decisions on qualifications for joining the network, adding new classes of providers, changing the formula for allocating bundled payments among providers, or renegotiating the budget for an episode. Also, be aware of exceeding an episode budget and discover how risk is allocated among participants and what happens if a provider leaves the network in midepisode.

Also, identify the process by which providers may voluntarily terminate participation in the network or be involuntarily terminated from it. Determine what steps will be taken if two providers claim the same share of an episode budget. Possibilities include simple negotiations or a decision by a tribunal.

Mind the detailsAs confusing as all this is, bundled payments are here to stay. And it’s critical that you understand the process and how your practice can fit into a network. Please contact your health care advisor. He or she can help you get through the process.§

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Want to join a bundled payment network? Here’s what you need to know

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LBMC Offers Healthcare Valuation Services

For more information on LBMC Healthcare Valuation Services, contact:

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