GeBBS Healthcare RCM Blog

Top 10 Reasons Why You Should Outsource Your Revenue Cycle Activities

Posted on Thu, Mar 19, 2015 @ 12:12 PM

In today’s healthcare environment of shrinking reimbursements, due to governmental mandates and Medicare policy changes, the importance of maintaining a healthy revenue cycle is second only to providing the best patient care possible. Without an adequate margin there can be no medical mission.

One way to ensure your revenue cycle remains as healthy as possible is to enlist the help of a healthcare BPO company to assist with -- or handle completely -- your revenue cyclegebbs outsourcing medical billing activities. These organizations are expert at keeping your revenue cycle fine-tuned and optimized to its maximum performance level, much like a highly-trained
mechanic can do for your automobile. There are literally dozens of advantages that third party revenue cycle companies can provide, such as onshore and offshore medical coding and offshore medical billing. Here, in my opinion, are the top 10 reasons why healthcare financial professionals should consider outsourcing.

  1. You will see an increase in your reimbursements and collections.

  2. Your labor costs for revenue cycle maintenance will be reduced.

  3. Requires no capital investment.

  4. You get immediate access to highly-skilled and expert personnel that will mitigate risks from frequently changing governmental regulations.

  5. Staff members will be freed up to work on other critical financial issues.

  6. You will receive daily, detailed financial reports upon which you can take immediate action.

  7. Your revenue cycle will be easier to track and manage.

  8. It’s an uncomplicated solution that works from day 1 of implementation.

  9. No additional staff, training or office spaces are required.

  10. You get immediate peace of mind that you are doing everything you can to maximize your revenue cycle.

Tags: Business Process Outsourcing (BPO), Revenue Cycle Management (RCM), Medical Coding, Affordable Care Act, Insurance Billing Solutions, Offshore Medical Billing, Offshore Medical Coding, Medical Billing BPO, Offshore Revenue Cycle Management, Remote Medical Coding, Medical Coding BPO

Why ERAs Are More Efficient than EOBs

Posted on Wed, Jan 07, 2015 @ 02:08 PM

It is no secret that the healthcare industry is burdened with costly administrative processes. A good example of this are paper explanation of benefits (EOB) forms that have been estimated to cost nearly $18,600 per physician per year in administrative fees.

With the availability of tools like the electronic remittance advice (ERA), medical practices, hospitals, billing companies and other healthcare providers can jump on the paperless bandwagon and reduce these exorbitant administrative costs.

An electronic remittance advice (ERA) -- or what is frequently referred to as the HIPAA 835 file -- is essentially an electronic EOB. ERAs contain information on whether a claim was paid or denied, final status claims and any adjustments the payer made to the billed amount.

The Affordable Care Act (ACA) requires health plans to implement ERAs under Stage 2 of its Administrative Simplification provision. This represents a strong incentive for payers like Medicare, Medicaid, and other large insurers to phase out paper EOBs.

Why Do You Need ERAs?

Manually posting payments and reconciling patient accounts is time consuming and therefore costly. According to one study, the average physician spends approximately five hours per week on administrative and nonclinical tasks. This translates into three weeks per year on billing and insurance-related tasks.

What causes this “hassle?” EOB formats and claim adjudication codes are not standardized across payers, making it challenging to manually post and reconcile payments. Also, manually processing EOBs is highly susceptible to data entry errors. If your staff accidentally inputs $20.00 instead of $200.00, they will have to check the entire batch to locate the error.

It’s easy to switch to ERAs from paper EOBs. 

If your practice, hospital, billing company or provider group implements a full-service outsourced payment posting solution, you can immediately convert your paper EOBs to ERAs. Your outsourcing partner will use a technology solution that will import 837 claim data and convert your paper EOB's into postable ANSI 835/ERAs. The data will easily integrate with your lockbox or document management system. By outsourcing this work, you can immediately treat every remittance as an ERA.

if you would like more information about the blog topic or how GeBBS can help you:Contact GeBBS Now

 

Tags: Revenue Cycle Management (RCM), Electronic Remittance Advices (ERAs), Explanations Of Benefits (EOBs), Affordable Care Act

Healthcare Financial Professionals Seek New Ways to Rescue Revenue Cycle Management

Posted on Mon, Oct 06, 2014 @ 10:59 AM

Business pressures are forcing healthcare financial managers to re-evaluate their present revenue cycle management solutions, and look to the next generation of solutions for answers to their financial woes. Shifting payment models, new regulations and healthcare reform are forcingHealthcare Financials healthcare leaders to redirect previously launched budgets, priorities and strategic plans to assess if new solutions can rescue them from imminent financial catastrophes.

Most hospital CFOs and group practice managers have no choice but to look for next generation of RCM solutions in order to keep their organizations solvent. Reimbursement challenges and coping with increased self-pay volumes have driven many marginally performing healthcare organizations to the brink.

In 2014, it is predicted that changes, such as reduced reimbursements, payment reforms, accountable care organizations (ACO), ICD-10 coding transition activities, physician practice acquisitions and increased self-pay collection costs will all contribute to overall declining margins. The increase in self-pay accounts will be significant, driven the Affordable Care Act (ACA) which is going to send a huge number of newly insured patients into the healthcare delivery system. Under ACA, every U.S. citizen is required to have some form of medical insurance, or pay an opt-out fine.

Not only will physicians and hospitals be swamped by treating this new wave of patients, their infusion into the healthcare system is going to create significant financial challenges due to many of the newly insured patients having extremely high deductible insurance plans, forcing hospitals and physician groups to collect this money on their own. According to a January 2014 article in Kaiser Health News, out-of-pocket payment amounts under the ACA will range from $6,350 for individuals to $12,700 for families.

This new pressure on healthcare providers’ revenue cycles is not going away; it’s something everyone will face soon.

Tags: ICD-10, Revenue Cycle Management (RCM), Healthcare Revenue Billing, Accounts Receivable (A/R), Accountable Care Organizations (ACOs), Affordable Care Act

Healthcare Financial Professionals Seek New Ways to Rescue Revenue Cycle Management

Posted on Mon, Oct 06, 2014 @ 10:29 AM

Business pressures are forcing healthcare financial managers to re-evaluate their present revenue cycle management solutions, and look to the next generation of solutions for answers to their financial woes.Shifting payment models, new regulations and healthcare reform are forcing healthcare leaders to redirect previously launched budgets, priorities and strategic plans to assess if new solutions can rescue them from imminent financial catastrophes.

Most hospital CFOs and group practice managers have no choice but to look for next generation of RCM solutions in order to keep their organizations solvent. Reimbursement challenges and coping with increased self-pay volumes have driven many marginally performing healthcare organizations to the brink.

In 2014, it is predicted that changes, such as reduced reimbursements, payment reforms, accountable care organizations (ACO), ICD-10 coding transition activities, physician practice acquisitions and increased self-pay collection costs will all contribute to overall declining margins. The increase in self-pay accounts will be significant, driven the Affordable Care Act (ACA) which is going to send a huge number of newly insured patients into the healthcare delivery system. Under ACA, every U.S. citizen is required to have some form of medical insurance, or pay an opt-out fine.

Not only will physicians and hospitals be swamped by treating this new wave of patients, their infusion into the healthcare system is going to create significant financial challenges due to many of the newly insured patients having extremely high deductible insurance plans, forcing hospitals and physician groups to collect this money on their own. According to a January 2014 article in Kaiser Health News, out-of-pocket payment amounts under the ACA will range from $6,350 for individuals to $12,700 for families.

This new pressure on healthcare providers’ revenue cycles is not going away; it’s something everyone will face soon.

Tags: ICD-10, Revenue Cycle Management (RCM), Accountable Care Organizations (ACOs), Affordable Care Act, Insurance Billing Solutions

Strategies for Managing the Increased Self-pay Revenue Stream

Posted on Wed, Mar 05, 2014 @ 06:52 AM

web icon medical checklistIn an earlier blog, we admonished healthcare providers not to let their revenue cycles be swamped by the rising number of new self-pay patients entering the healthcare delivery stream. Under the Affordable Care Act (ACA), the self-pay portion of a healthcare provider’s receivables is going to increase significantly. According to a recent Healthcare Financial Management Association (HFMA) study, the current self-pay average is 20 percent of a healthcare provider’s receivables, but that is only going to increase over the next few years. How to manage the accounts of patients who must pay a significant percentage of their bill out of pocket will be a key strategy to achieve or maintain profitability during the new rollout of federal reform mandates.

Big changes are taking place in healthcare in 2014. Thirty to forty million new people will be covered by insurance; however, that doesn’t mean they won’t have to pay anything out of pocket. Patients who have been covered by Medicaid or charity care in the past will now be covered by high-deductible insurance plans. Everyone will be expected to pay something.

How can healthcare providers cope with these changes? The HFMA reports 95 percent of hospitals are already seeing an increase in self-pays. Regardless of a hospital’s payer mix, collection costs are going to increase. It costs seven times more to collect from an individual than from an insurer or the government.

The first step providers need to take is to ascertain how large this issue will be for them – what will be the size of their self-pay portfolio? For example, how much of a loss can you allow on the back end when you do collections? Many hospitals fail to do a good job of segmenting and identifying the likelihood that any given patient will or won’t pay.

Hospitals should also employ technology both to decrease their costs and to increase the convenience for the patient. The HFMA says only 42 percent of hospitals have an online portal where patients can pay their bills online. Automatic dialers can increase the volume of calls you make, and interactive voice response systems can let patients pay their bills by phone without having to wait for a human. And, there are analytical solutions that can help you identify which accounts are most worth pursuing.

Many hospitals make the mistake of throwing more bodies at the problem without the right tools to help them. This only increases their cost of collection. Having analytics that support self-pay collections can have a dramatic impact on your overall collection efforts. And it doesn’t have to be expensive; with the popularity of the software-as-service model, you can be up and running with very little capital investment.

Having patients pay their share, or some part of their share, up front is a good idea, but not very realistic for many patients. We’re going to need a cultural shift where patients are expected to pay for care before they receive it. Hospital admitting professionals need to alert patients to the fact that they will owe something. This type of preparation will create the expectation of payment; if the healthcare providers don’t create the expectation, it will not happen.

Can healthcare providers learn from other industries? It’s about 75 percent less expensive for collection agencies to collect bills than for hospitals, because that’s the only thing they do. They have the right analytics, the right technology, they are not afraid to ask for money, and they are persistent. It makes sense for hospitals to outsource self-pay receivables collection to agencies early in the revenue cycle, because they’re good at it. It’s a different tactic from using an agency after the charge-off -- it’s not punitive to the patient; it simply takes advantage of the agency’s skills and resources.

Another thing healthcare providers might want to consider is paying incentives to their collectors. If an agency can make more money by hitting their numbers, that can be a powerful incentive. Another self-pay lesson can come from the financial services industry, because of the way these companies do portfolio management. Healthcare providers will need to look at their increased self-pay receivables as a financial portfolio that needs to be properly managed.

 

Tags: Revenue Cycle Management (RCM), Accounts Receivable (A/R), Affordable Care Act

Managing New Patient Volume Driven By The Affordable Care Act

Posted on Tue, Feb 25, 2014 @ 09:23 AM

Health Care ReformThe good news about the Affordable Care Act (ACA) is that more patients should have insurance coverage and seek care from physicians. The bad news is that some practices may need to turn away patients due to the fact that they are "closed" to new patients or patients will have long waits for initial appointments. The Medscape Multispecialty e-Newsletter recently offered some good advice to physicians who may be swamped with these new patients -- who will have very high deductible insurance plans. They suggest physicians:

• Adopt advanced access scheduling to see patients when they want to be seen. Offer an "open" schedule for some visit slots or perhaps most of the day to permit patients to be accommodated as they call for an appointment. This involves evaluating the volume of patient access requests on a daily basis and ensuring these requests can be accommodated. The extent of open slots is also dependent on the physician’s specialty.

• If a practice has the capacity to accept new patients, ensure you are geared to take calls and online requests from new patients seeking an appointment. Train employees to use a script to effectively direct patients to other physicians in your practice if your schedule is full. This will ensure your group will not lose patients to competitors in your market.

• Consider scheduling established patients only 12 weeks out and use the appointment recall function of your practice management system to schedule patients for visits beyond this timeline. This frees up the schedule to accommodate new patient demand and vastly reduces the time and staff resources to handle reschedules of pre-booked appointments, which often exceed 30% -- and will probably increase under ACA.

What Can You Do to Educate the New Patients?

iStock 000019113929XSmallPatients are understandably confused regarding the insurance exchanges. Health insurance is complicated, and the questions patients may have will consume more time than you have to offer in the exam room. Here are the types of questions physicians are receiving from patients -- and suggestions on how to best handle them:

Q. My employer is no longer offering insurance, and I have been sent to the exchange. Which plans are you on so I can continue to be seen by you?

Q. Do you think I should sign up for a Bronze plan or a Platinum plan? Important they understand they will be responsible for over $6,000 for individuals and over $12,000 for families.

Q. Will you offer a self-pay discount if I sign up for a high-deductible plan? Another important consideration.

 

Q. Has the payer notified you of any changes to their physician network? I want to be sure I can still have you as my doctor.

To respond to these questions, it's vital to have determined the answers to the payer-related questions posed above. If you don't know which payers are part of your exchange -- and whether you're involved with them -- you won't be able to serve as a resource for these patients. Identify financial counselors in your practice who can take the telephone questions, electronic messages, or in-person queries from patients related to their health plans, coverage terms and your self-pay policies.

Identify the patient navigators in your area who are assisting patients with the exchange enrollment process and refer patients to them with questions regarding exchange plans. You can get a listing of support in your community from the federal website.

Develop a Q&A sheet or brochure of the most common questions patients are asking and post it on your website, with a link to your state exchange or the federal exchange. Revise your financial policy to ensure that patients understand common terms, such as "copayment," "coinsurance," and "deductible." Define in your policy -- the money that will be collected at the point of care when patients present for their visit.

The health plans provided on the exchanges offer a cafeteria of menu options related to patient premium and out-of-pocket obligations. The key to business survival in this changing world of health plans is based on three critical points:

(1). Make sure you understand the exchange plan details and know what you will be paid.

(2). Your new patients understand their payment obligations and how to interact with your practice.

(3). Your practice is ready and can handle the new patient volumes.

Above all, make sure you receive the reimbursements you expect -- and deserve

Tags: Revenue Cycle Management (RCM), Affordable Care Act

Hospital RCM May See More Bad Debt Due To ACA

Posted on Tue, Feb 18, 2014 @ 06:29 AM

accounts retrievable debt collection erase bad debt past due child support1Hospital Revenue Cycle Management is about to be challenged by an unintended consequence of the Affordable Care Act (ACA). Even as hospitals are set to see an influx of newly insured patients, industry watchers warn that bad debt may become an even larger problem under theACA, putting more pressure on already thin margins.

The projected increase in hospitals' bad debt is expected to come from the out-of-pocket expenses that the new influx of self-pay patients must pay. The self-pay problem has increased in recent years, as more Americans have made the switch to high-deductible health plans that bring more out-of-pocket costs. Now, health care executives and industry analysts are concerned that even more revenue may be at risk, as consumers, many of them new to health insurance, buy "bronze" and "silver" plans that will cover only about 60 and 70 percent of their healthcare costs.

Under the ACA, deductibles will range from $6,350 for individuals to $12,700 for families, before any of the insurance plans begin making payments -- exacerbating an already bad situation. Sean Parnell, author of the book, The Self-pay Patient, has warned that as many as 75 to 80 million Americans will end up self-paying for the majority of their healthcare.

HCA, the country's largest hospital company, recorded over $1 billion in provisions for doubtful accounts last quarter, representing 12.1 percent of the company's revenue. Nashville-based LifePoint Hospitals, which operates in more rural markets, recorded over $180 million for bad debts in the last quarter, representing 20 percent of revenue.

One of the problems is that self-pay account collection can be extremely labor-intensive and expensive. Outbound communications (i.e. invoices, letters, phone calls, etc.) need to be sent to each individual patient in an effort to collect the monies owed. As a result of these necessary communications, collecting patient-pay accounts can be very costly, often much more than collecting from insurance companies. Self-pay accounts also tend to pay more slowly than other types of accounts, with the exception of possibly Medicaid.  Additionally, if not followed-up on properly, the chances of a self-pay account actually being paid drops dramatically after discharge.

This new financial challenge comes at a time when many hospitals are struggling hard to just keep their doors open. Let’s hope this new wave of self-pay patients doesn’t swamp an already shaky healthcare delivery boat!

Tags: Revenue Cycle Management (RCM), Accounts Receivable (A/R), Affordable Care Act

The Impact of Accountable Care on Your Revenue Cycle

Posted on Thu, Apr 11, 2013 @ 04:27 PM

Becoming an accountable care organization (ACO) requires that your facility adopt a completely new point of view when it comes to revenue cycle management. The goal of an ACO is to reduce costs by improving the quality of care provided to patients. Providers are encouraged to and boost preventative efforts that may ultimately reduce the future need for high-cost medical services such as hospital stays. As a reward for the collaborative efforts of the ACO, participating insurers such as Medicare will generally offer financial rewards for lowering costs and meeting quality care goals for their patients. On the down side, this also means that ACO providers are accountable to Medicare and may risk losing money if their costs run higher than expected. Costs will no longer just affect overall profitability; for example, they will be evaluated in conjunction with efficiency to determine reimbursement parameters. Healthcare organizations need to be able to collect the correct financial and quality data, compile accurate reports and run predictive analytics in order to meet ACO objectives of better care at lower costs.

Due to its many tenets, it is difficult for many healthcare organizations to fully understand the total ramifications of becoming an ACO, and how to adequately assess the risks and benefits of ACO participation to their revenue cycles. The assessment involves a careful analysis of data capture methods, revenue cycle infrastructure, and available clinical and financial analytical tools to help maximize efficiency during the transition.

One effective strategy to assess the risks and benefits of becoming an ACO is to engage an experienced RCM outsourcing partner who understands the ramifications of becoming an ACO. They can educate you on the various pro’s and con’s and assist in deciding whether or not it would be beneficial to establish an ACO or join an ACO. The decision will vary greatly among provider types, geography, local health care environment, and organizational preparedness. Those considering the ACO concept must first figure out how much risk their organization is willing and able to take.

One of the biggest misconceptions about joining an ACO is that the revenue cycle will be easier to manage. In fact, just the opposite will most likely be true. The reality is that the complexity simply shifts. Payers demand more specific data about the management and outcomes of patient populations and providers and organizations need more sophisticated cost and performance information to negotiate contracts. These cost controls are more crucial under risk-based contracts; therefore organizations need to rely more on integrated data systems and predictive analytics. Healthcare providers will require the use of  advanced analytics, measured by accurate and applicable data, to manage costs and quality of care provided to patients.

A knowledgeable RCM partner can help your organization identify and capture the critical data you need for ACO participation. Before your facility can perform a risk-benefit analysis, you must have the most effective technology to capture the correct information. Your technology must be configured correctly to capture meaningful information and workflows to support the changes expected by this new business model.

Today’s EHR systems make the discrete capture of large amounts of patient data possible. By applying the appropriate analytical tools to this discrete data, your organization can measure and monitor the costs and outcomes that directly impact compensation within the ACO. An experienced RCM partner can leverage a higher degree of analytics to ensure seamless coordination among healthcare providers and accurate attribution models. Likewise, when fully integrated with a practice or enterprise management system, organizations can pinpoint and predict how much it costs to treat certain patient populations and how resources should be utilized. It is this broad, population-based analysis that is necessary to put organizations in a better position to evaluate ACO opportunities and performance.

 

Tags: Business Process Outsourcing (BPO), Revenue Cycle Management (RCM), Evaluation and Management (E&M) Requirements, GeBBS Healthcare Solutions, Healthcare Revenue Billing, Medical Coding, Knowledge Process Outsourcing (KPO), Accountable Care Organizations (ACOs), Affordable Care Act

How to Deal with Today’s Shortage of Certified Medical Coders

Posted on Mon, Nov 05, 2012 @ 09:26 PM

In the face of today’s uncertain healthcare financial environment brought on by the effects of the American Recovery Reinvestment Act (ARRA Public Law 111-5) and Health Information Technology for Economic and Clinical Health Act (HITECH) and the House and Senate’s versions of the Affordable Healthcare Act for America, how can your healthcare organization deal with the shortage of certified medical coders needed for billing and audit functions?


Now more than ever, it is critical that your facility remain current with its billing and audit operations. However, this is becoming increasingly more difficult with the shortage of certified medical coders. Many organizations are seeing their charting volumes dramatically increase and their Evaluation and Management (E&M) auditing requirements also growing significantly. Simultaneously, when healthcare facilities try to hire additional coders to handle the increased workloads, they are finding that only about one-third of the medical coders interviewed were qualified for hiring. The second challenge was that the coders who were qualified were commanding salaries that were well outside the cost containment parameters most facilities have in place.


How can your facility overcome these challenges – finding qualified and certified medical coders, while still containing costs?

solution shortage medical codersqualified medical coders business process outsourcing
SOLUTION:

Many organizations are turning to business process outsourcing (BPO) or knowledge process outsourcing companies, as they are sometimes known, to solve these challenges. These companies help healthcare organizations meet the certified medical coder shortage challenges in multiple ways:

 

  • They are experts at hiring certified medical coders because they maintain a large pool of these professionals to deploy at their clients’ sites.
  • They are experts at training medical coders and getting them certified by the professional certifying organizations.

The solutions provided by a business outsourcing company can solve your coder shortage problems immediately. Not only can they provide a pool of expert HIPAA-trained outsource coders, but they can also provide the supervisory personnel to ensure your coding and auditing meet all compliance regulations, while helping you contain your coding costs.

Solve Your Coder Shortage Problem Now

Tags: Business Process Outsourcing (BPO), Evaluation and Management (E&M) Requirements, HIPAA, Medical Coding, Affordable Care Act

Top 5 Questions and Answers on Accountable Care

Posted on Wed, Oct 24, 2012 @ 11:07 PM

The federal government spends around $1 trillion a year on health care programs. Different communities — the elderly, the disabled, military and civilian federal employees, low-income individuals and their families, and others — benefit from these programs. The two largest programs are Medicare and Medicaid.

Although nearly 48.6 million Americans are uninsured (source: The Commonwealth Fund) and the cost cost of healthcare is rising, the ongoing debate about health care reform now reflects the recognition that the gaps in quality and seemingly inexorable cost increases are the result of a delivery system that is failing to fully serve the nation's needs. Part of the solution that has been proposed in the recent federal health reform bills is the concept of Accountable Care Organizations (ACOs).

national health expenditures as a share of GDP

Top 5 Question & Answers on Accountable Care & Healthcare Delivery in the United States:

1. What is Accountable Care Organizations (ACOs)?

ACO is defined as a set of healthcare providers — including primary care physicians, specialists, and hospitals — that work together collaboratively and accept collective accountability for the cost and quality of care delivered to a population of patients.

Accountable care organizations (ACOs) have proliferated in the past three years. The increase has been spurred by private payors' interest in coordinated care management and the Patient Protection and Affordable Care Act, which introduced the Medicare Shared Savings Program. There has been a significant amount of ACO development within the past years. According to the National Accountable Care Organization Congress, "since the 2nd National ACO Congress in November 2011, the ACO trend has demonstrated great momentum. As of June, there are more than 200 ACOs identified in the U.S., a 38% increase in only six months. The number and variety of organizations adopting accountable care demonstrates providers’ strong belief that the accountable care model is a crucial component of the future of American healthcare".


2. The new health reform law–The Patient Protection and Affordable Care Act–supports the evolution of accountable care organizations (ACOs) as key to containing health care costs. Do you agree with this assessment?

 

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3. Why are Accountable Care Organizations important to achieve improved cost and quality?

Although nearly 46 million Americans are uninsured and the cost cost of healthcare is rising, the ongoing debate about health care reform now reflects the recognition that the gaps in quality and seemingly inexorable cost increases are the result of a delivery system that is failing to fully serve the nation's needs. Part of the solution that has been proposed in the recent federal health reform bills is the concept of Accountable Care Organizations.

The Affordable Care Act includes a provision that allows Medicare to reward health care organizations with a share of the savings that would result from improving care quality and reducing the cost. To participate in this “shared savings programs,” health care organizations need to become Accountable Care Organizations (ACOs).

The belief is that, if well conceived, ACOs can achieve both cost and quality improvements because the coordinated and collaborative nature of the delivery system itself is paid for and rewarded for its quality outcomes, not for its volume of services.  Therefore, the structure of an ACO becomes important—experts believe that ACOs must be physician-led, primary care-centered, and patient-focused systems of care.  Currently, there are many health care systems of physicians and hospitals that function as ACOs are intended to fucntion, and the research conducted on these entities support the prevailing notion.  By encouraging the evolution and growth of ACOs through payment incentives and a nurturing legal climate, ACOs may be America’s best chance to control costs and improve quality and access.

 

Annual Per Capita Health Care Costs

Annual Per Capita Health Care Costs resized 600

Data from the OECD. Compiled by PGPF. NOTE: Per capita health expenditures in 2009, except Japan and Australia data which are from 2008. Foreign health spending was converted into U.S. dollars using purchasing power parity.

 

4.  What is being done on the commercial side of our health care insurance system?

 

ACOs as proposed by the ACA would receive bonus payments if they are able to manage the cost and improve care quality under the Medicare fee-for-service shared savings program.
Commercial health insurers are also revealing extensive plans for ACO development. They are partnering with hospitals and physician’ groups to test new models of care delivery.  Payment by insurers and the government should incentivize cost control and the improvement of care.
Major payors like Cigna, UnitedHealth Group, Blue Cross Blue Shield and Aetna continue to pursue performance-based contracts with providers across the country.

Learn more about 80 commercial and Medicare ACOs

5. What are the real cost savings that can be anticipated by an ACO and how will they be achieved?

The Congressional Budget Office projects that the ACO shared savings program included in the Affordable Care Act will save approximately $5.3 billion over 2010–19.  This is only a small portion of the savings the CBO projects through implementation of all of the provisions of the ACA.

However, the real cost savings are unknown—both to an individual ACO and to the country as a whole.  Much will depend on the extent to which:

  • How ACOs are formed
  • How effective they are in improving quality and containing costs
  • Whether the shared savings program works as a fee-for-service incentive or if the payment model needs to be modified
  • The capabilities of ACOs of handling different expectations of different payers

 

Tags: Revenue Cycle Management (RCM), Accountable Care Organizations (ACOs), Affordable Care Act