During the emergency phase of the COVID-19 pandemic, almost half of all U.S. healthcare consumers postponed routine and non-emergent care, leaving organization with significant revenue loss across all care settings. In response to the widespread financial strain on the healthcare industry, Congress has allocated $100 billion in relief funding for hospitals and other healthcare providers. But while providers clearly need the financial relief, using it (including navigating terms and conditions and eligibility) has been less straightforward. Better understanding of these relief programs and compliance requirements will help organizations confidently optimize this assistance.
Learn more about Bobbi Brown, MBA
Bobbi Brown is the Vice President of Financial Engagement for Health Catalyst. Ms. Brown started her healthcare career at Intermountain Healthcare supporting clinical integration efforts before moving to Sutter Health and, later, Kaiser Permanente, where she served as Vice President of Financial Planning and Performance. Ms. Brown holds an MBA from the Thunderbird School of Global Management as well as a BA in Spanish and Education from Misericordia University. She regularly writes and teaches on finance-related healthcare topics.
Read articles by Bobbi Brown, MBA
The year 2020 marks a decade since the passage of the Affordable Care Act in 2010 and healthcare’s first transitional steps from volume to value. The 10-year progress report is mixed. On one hand, CMS’s emphasis on quality and cost is driving an upward trend for patients and providers, with substantial improvement in readmissions; on the other hand, organizations still need to simplify and consolidate value-based programs for more widespread positive impact. As the industry enters into another decade of value, it’s time for health systems to consider the impacts of these programs so far and make sure they have the processes and tools in place to succeed in an increasingly value-driven industry.
Healthcare payers today must develop new business models to address the industry’s mounting challenges around cost, access, and quality. The best emerging models are simple and aligned, accommodate all stakeholders’ needs, and center on the patients/members.
Five key payer opportunities provide a framework for new models that will support the healthcare transformation goals of lower cost, better quality, and increased access:
Understand the impact of the Affordable Care Act.
Be ready for potential shifts due to regulatory impacts.
Understand how social determinants of health impact members.
Focus on provider relations.
Prepare for future trends.
As a performance-based incentive program, DSRIP (the Delivery System Reform Incentive Payment) is designed to help participating states reform Medicaid. To date, 13 states have implemented DSRIP and received a Section 1115 waiver from CMS to transform their Medicaid programs and align them with value-based reimbursement. These states have agreed to budget neutrality, transparency, statewide quality metrics, and frequent reporting of outcomes.
While each state’s program structure and objectives are unique, under DSRIP, participating states share three key goals:
Reducing the total medical spend.
Improving patient outcomes.
Establishing a direct link between provider performance and payment.
Since accountable care took the healthcare industry by a storm in 2010, health systems have had to move from their predictable revenue streams based on volume to a model that includes quality measures. While the switch will ultimately improve both quality and cost outcomes, health systems now need the capability of tracking and analyzing the data from both clinical and financial systems. A late-binding enterprise data warehouse provides the flexible architecture that makes it possible to liberate both kinds of data to link it together to provide a full picture of trends and opportunities.
Health systems that meet the 2018 Hospital Value-Based Purchasing Program measures stand to benefit from CMS’s $1.9 billion incentive pool. Under the 2018 regulations, CMS continues to emphasize quality. To reduce the risk of penalty and vie for bonuses, it’s increasingly critical that organizations leverage data to build skills and processes that meet more demanding reimbursement measures.
To thrive under value-based payment, healthcare systems must understand CMS’s four quality domains, and their associated measures, for 2018:
Patient- and Caregiver-Centered Experience of Care/Care Coordination
Efficiency and Cost Reduction
I am one of the brave souls who takes the time to read the report issued each spring by the Medicare Payment Advisory Commission (Medpac). The report shows the numbers of Medicare beneficiaries and claims are growing; healthcare organizations are increasingly losing money on Medicare; payment increases certainly will not keep pace with declining margins; and Medicare policies will continue to incentivize quality and push providers to assume more risk. But the report also reveals that some healthcare organizations—referred to as “relatively efficient”—are making money from Medicare with an average 2 percent margin. How do you become one of these organizations? And how do you target and counter Medicare trends that impact your business?
When expenses exceed revenue, business has a financial problem. In healthcare, the focus has been on revenue for so long, we’ve lost sight of runaway costs brought about by high labor and technology expenses, inefficient use of resources, and supply waste. Recognizing the cost problem is a big first step toward solving it.
Five expense-controlling strategies can play a significant role in returning healthcare systems to a stronger financial position:
Refocus on labor management.
Manage employed physicians.
Change the patient encounter environment.
Augment standard approaches with technology.
Manage patient access and flow through the healthcare system.
With new, value-based payment structures, shrinking margins, and decreasing reimbursements, this insight offers some new ways to think about expense inefficiency and how to get costs under control.
Besides improving your information systems and educating your staff on the ins and outs of managing revenue, there are many more opportunities for improvement. Here are five suggestions to help health systems improve their revenue cycle management:
Trend and benchmark your healthcare data.
Use DOS to Mine Your Healthcare Data.
Constantly ask frontline staff for suggestions.
Monitor all payer contracts.
Maintain convenient and caring touch points with patients.
The shift from fee-for-service to value-based reimbursements has good and bad consequences for healthcare. While the shift will ultimately help health systems provide higher quality lower cost care, the transition may be financially disastrous for some. In addition, the shifting revenue mix from commercial payers to Medicare and Medicaid is creating its own set of challenges. There are, however, three keys to surviving the transition: 1) Effectively manage shared savings programs to maximize reimbursement. 2) Improve operating costs. 3) Increase patient volumes. With an analytics foundation, health systems will be able to meet and survive today’s healthcare challenges.
Influential healthcare financial trends in 2017 emerged in three areas:
Transitions in payment.
Disruption from familiar players and newcomers.
Emerging data skillsets.
Uncertainty has been a common theme for 2017. Organizations continue waiting for clarity on the future of the Affordable Care Act (ACA), while working to implement value-based care. Changes from established healthcare organizations as well as the arrival of prominent newcomers (e.g., Amazon) add to the unsettled outlook, as do emerging data skillsets.
Amid the uncertainty, however, healthcare is clearly continuing on the path to patient-centered care. Organizations best positioned for 2018 will understand their performance in 2017’s top three healthcare financial trends as they evaluate their preparedness for the coming year.
Are Health Systems Ready for MACRA? Survey Reveals the Number One MACRA Concern and Varying Degrees of Readiness
The Medicare Access and Chip Reauthorization Act (MACRA) replaces a number of value-based reimbursement programs and will use 2017 as its first reporting year. But, despite being right around the corner, a survey of healthcare professionals around the country reveals only one-third are ready.
But while only 35 percent of respondents have a strategy and believe they’re prepared for MACRA, most will participate in the new program. A majority of surveyed hospitals believe MACRA will benefit their physicians (or that they’ll at least break even).
MACRA is new, complicated, and rife with uncertainties given the new administration. According to the survey, the top concern for health systems is compiling MACRA quality measures. But despite the industry’s slow movement towards MACRA, the bottom line is that it’s right around the corner, so hospitals must start preparing for MACRA today.
When it comes to maximizing analytics ROI in a healthcare organization, the more domains, the merrier. Texas Children’s Hospital started their outcomes improvement journey by using an EDW and analytics to improve a single process of care. It quickly realized the potential for more savings and improvement by applying analytics to additional domains, including:
Organization-wide clinical improvement
The competencies required to launch and sustain such an organizational sea change are all part of a single, defining characteristic: the data-driven culture. This allows fulfillment of the analytics strategy, ensures data quality and governance, encourages data and analytics literacy, standardizes data definitions, and opens access to data from multiple sources.
This article highlights the specifics of how Texas Children’s has evolved into an outcomes improvement leader, with stories about its successes in multiple domains.
The Medicare Access and CHIP Reauthorization Act (MACRA) overhauls the payment system for Medicare providers. It’s a complex program that requires careful study so physicians can make the best choice for how they want to report. This choice ultimately impacts reimbursement and the potential bonuses or penalties associated with each reporting option.
This FAQ covers both tracks of the new rule, the Merit-based Incentive Payment System (MIPS), and the Advanced Alternative Payment Model (APM), with a background review and a comprehensive list of questions and answers.
It’s a practical guide complete with next steps for strategic and tactical planning.
The Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law in 2015, with major impacts starting in 2019. MACRA attempts to prioritize quality over quantity by letting providers choose between two value-based payment tracks: MIPs and APMs. Providers won’t have to choose until 2019; until then, they will receive a .5 percent annual increase.
The industry is conflicted about MACRA. On the one hand, many believe it is part of the overall shift to value-based healthcare. On the other hand, many say the administrative burden will overwhelm providers. Another area of MACRA controversy has to do with meaningful use which, contrary to what the CMS Acting Administrator said in 2016, isn’t going away with the introduction of MACRA.
Although it seems a ways away, MACRA’s base year will likely be 2017. Armed with the seven best ways to start preparing for MACRA today, and an EDW that provides clinicians with the self-service tools to monitor their performance, health systems can be ready to tackle MACRA when it finally goes into effect.
Over half the Pioneer ACOs have dropped from the program in the last four years, despite achieving $304 million in savings, and fifty percent of the participating ACOs receiving shared savings reimbursements. Why the exodus? Overutilization and inconsistent performance benchmarking and attribution hindered the ability of many participants to achieve success. The overall impact of the program, however, has been a positive one for value-based care. In the next 3-5 years, providers and health systems will bear more of the financial risk of the populations they serve. The proliferation of data, and the tools to analyze and exchange it, will be critical to the long-term success of value-based care.
Healthcare financial leaders will encounter a myriad of challenges and improvement opportunities in 2016.
2016 will force health system financial leadership to focus and prioritize, with challenges including increased healthcare spending, continued momentum toward value-based care, and the need to reexamine the revenue cycle after years of focusing so intently on ICD-10.
But 2016’s financial healthcare trends include more than just challenges; exciting opportunities abound, from using technology to engage patients to a national focus on population health.
Engaged healthcare financial leaders—particularly those with the characteristics of effective leaders (resilient, collaborative, and inspirational)—are positioned to stay ahead of the curve in 2016.
The shift to value-based payments and a greater focus outcomes and cost reduction has hospital leaders seeking new ways to work more efficiently and improve patient satisfaction. Monitoring and analyzing productivity more effectively is crucial to ensure healthcare organizations are aligned with this goal. Getting overtime and labor productivity under control isn’t an easy task, but it’s not impossible. A few best practices can shorten the learning curve. These include 1) secure leadership commitment, 2) implement data governance, 3) ensure financial targets are defined, 4) create transparency, and 5) keep productivity metric balanced with quality goals.
In the brave new world of value-based healthcare, investing in population health management (PHM) is a requirement for success. Defining PHM isn’t easy, but there is one common term that appears among all the diverse interpretations—outcomes. Assessing the potential ROI for investments in PHM using a clear, understandable framework, can help organizations methodically identify and prioritize their PHM investments. While not every PHM intervention makes sense for every situation, it is important to determine which programs provide the most benefit, as well as determining when the investment will begin paying dividends, to achieve success in the era of PHM.
CMS’s proposed changes to the controversial two-midnight rule that governs short hospital stays, has been met with strong opposition by the healthcare community. While the core of the rule is fairly straightforward, implementation could be anything but. Being classified as an outpatient or inpatient can have a substantial financial impact the patient and the hospital. Adding to the confusion, CMS has also stated this policy won’t override a physician’s judgment. Unfortunately, CMS failed to provide details on what the physician must provide in order to justify their decision. The good news is there is still time to provide feedback to CMS. Take action, understand the new rules, let your voice be heard, and most importantly, be prepared for the new rule in 2016.
The bill repealing SGR and replacing it with a more reliable payment schedule will alleviate physicians having to wonder whether their Medicare reimbursement rate will be slashed each year. However, it has also accelerated the need for providers to adopt value-based reimbursement (VBR). While the transformation won’t happen overnight healthcare organizations can, and should, begin preparing now. The following steps will make the transition easier: 1. Get educated and involved; 2. Understand the new law; and 3. Most importantly, providers should consider ways to take advantage of the upcoming 5 percent bonus. Providers that are already participating in VBR arrangements should consider how to increase the volume of their VBR business. Those that have not yet embraced VBR practices need to start immediately. Having a solid roadmap by the end of 2015 will ensure for a successful transition to a value-based system.
Avoidable readmissions are a major financial major problem for the healthcare industry, especially for government payers. To tackle this problem, CMS launched the Hospital Readmissions Reduction Program (HRRP). While some hospitals may be able to absorb the financial penalties under HRRP, they still need to track increasingly complex reporting metrics. Most tracking solutions are inadequate for today’s complicated reporting needs. A healthcare enterprise data warehouse and analytics applications, however, are designed to solve the numerous reporting burdens. When used together, they also deliver a robust solution that enables hospitals to track and drive real cost and quality improvement initiatives, all without the need for users to be technical experts.
CMS has announced a new, more aggressive timeline for implementing Medicare fee-for-service (FFS) payments to value-based reimbursement. While this transition is needed gaps in several areas of the VBP models are causing angst among provider organizations. Healthcare organizations can begin to improve quality and lower costs today as CMS works to address the challenges associated with these models. An EDW is key in enabling organizations perform the sophisticated analysis and tracking to meet the requirements set by CMS successfully.
As the healthcare industry moves closer to value-based care, there are a lot of projections about the changes that will occur in the near future. This article discusses seven of the top trends the industry is focused on: (1) physicians start to feel the financial impact of CMS’s rules; (2) the use of technology in healthcare is exploding; (3) financial viability is a key concern for CEOs; (4) reducing exposure to risk performance is becoming more important; (5) interest in population health management continues to grow; (6) outcomes improvements will continue to increase; and (7) collaboration between providers and payers will increase.
Healthcare organizations are looking to analytics applications that will help them identify and prioritize the best areas for improvement projects. Even once they choose an analytics solution, though, it’s difficult to know where to start because of all of the data health systems have stored. Two solutions will help eliminate the guesswork: a healthcare enterprise data warehouse and sophisticated analytics applications, such as the Key Process Analysis (KPA) Application. The KPA application uses the Pareto principle to find areas with highest variation and highest resource consumption. This valuable information gives health systems a starting point as they begin their journey to improve the delivery of care and reduce costs.