GeBBS Healthcare RCM Blog

The Medicaid Dilemma

Posted on Wed, Mar 01, 2017 @ 02:30 PM

By Nitin Thakor, GeBBS President & CEO

There is much discussion today on what is going to happen to the Medicaid program. Congressional Republicans and President Trump are seeking to repeal and replace the Affordable Care Act (ACA) and Medicaid is a large part of that program.

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Medicaid has been a pillar of our healthcare system for 52 years and now insures nearly 1 in 5 Americans. Today, there are about 65 million Medicaid beneficiaries, including approximately 35 million children, 7 million elderly people and 11 million people with disabilities.

Many fiscal conservatives want to control the costs of Medicaid by imposing a per-capita cap or block grant. A per-capita cap (sending a fixed amount to the states for each beneficiary) or a block grant (sending a fixed amount to the states for their entire program) would offer substantially less federal funding than the government is providing under Medicaid today. The states would have to make up for the shortfall, or reduce or deny care, to some of our most vulnerable citizens.

Over the past half-century, Medicaid has grown from a small, niche program to become a major part of the U.S. healthcare system. It is today the largest single insurer, serving literally millions of low-income and medically vulnerable individuals, many of whom would go without needed care or face severe financial hardship without this coverage.

To put this growth in perspective, in 1965 Medicaid cost a total of $900 million, half of which the federal government paid. Looking ahead to 2024, when Medicaid is expected to cover 77.5 million Americans, the total bill will be $920.5 billion. The federal government’s share: 61 percent.

No matter what happens with the plans to repeal and replace the ACA, we must find a way to accomplish two things:

  1. Rein in the spiraling costs of Medicaid.
  2. Continue to protect our most vulnerable citizens with the needed coverage that this program provides.

Tags: Best Practices

Two Couples Break-Up on Valentine’s Day

Posted on Wed, Feb 15, 2017 @ 02:50 PM

By Nitin Thakor, GeBBS President & CEO

Cigna ended its merger agreement with Anthem on Valentine’s Day and said it will seek $13 billion in damages from Anthem on top of the $1.85 billion break-up fee outlined in the deal. The planned $54 billion merger was blocked by a federal district court last week on anti-competitive grounds. Cigna said the reason for the break-up was that the potential alliance cannot and will not achieve regulatory approval and was calling off the deal in the best interest of its shareholders. Industry analysts are projecting that Anthem will not pay the break-up fee without a fight.

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Also ironically on Valentine’s Day, another merger went sour. Aetna and Humana announced they had terminated their $37 billion merger following a U.S. district court judge's ruling against the deal.

In this case, Aetna will not seek an appeal and instead will pay Humana $1 billion to terminate the agreement. Aetna will also pay Molina Healthcare a break-up fee to end their agreement. Aetna had agreed to sell Molina some of its Medicare Advantage plans to win court approval for the Humana deal.

What does all of this mean?

While both mergers were blocked for different reasons, there is at least one conclusion that can be drawn from both. Industry analysts are saying that the courts have been quick to embrace the flexibility and creativity of the Obama administration’s antitrust enforcers in terms of defining product markets.

With a new administration in power, all of that could change. It’s anyone’s guess which way it will go. President Trump’s actions have not matched any previous administrations. He’s been very surprising in many different ways.

My guess is that the fast pace of enforcement we saw under the Obama administration appointees will slow, but I don’t think it will disappear. Consolidation in the insurance industry isn’t going away. It’s very likely that the mega-mergers will slow down, but larger companies may decide to pick off smaller competitors farther down the chain. More importantly, in my opinion, this will be the impact of the planned repeal of ACA. Let’s wait and see what Congress and the President are able to accomplish with this and how they plan to reconfigure the provision of health insurance and healthcare services.

Tags: Best Practices, RCM Solutions, Revenue Cycle Solutions

What Will Be the Effects of Merger Mania on the Delivery of Healthcare?

Posted on Fri, Jan 20, 2017 @ 05:00 AM

By Nitin Thakor, GeBBS President & CEO

A Healthcare Finance News article last year quoted a New Jersey hospital executive as saying: “Big is going to be better; small is not going to survive.” Time will tell if he is right, but most industry analysts agree that the coming year will be full of acquisitions and mergers as hospitals, health systems, information technology companies, software firms, medical practices and other healthcare service providers seek to discover whether or not bigger is indeed better in the new world of the Affordable Care Act (ACA) -- and whatever evolves from its planned repeal and replacement.

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A prime example is United Health’s recent announcement that their Optum unit would buy Surgical Care Affiliates for about $2.30 billion, creating a comprehensive ambulatory care services platform, including primary care, urgent care, and surgical care services. Surgical Care and its affiliates serve about one million patients per year in more than 30 states and operate 205 surgical facilities, including ambulatory surgery centers.
 
Not all provider realignments will be associated with mergers and acquisitions, some will come as partnerships to support better clinical integration and improved care delivery. The new CMS value-based payment reimbursement models create incentives to focus on prevention and the need for hospitals and healthcare systems to work together more efficiently.  Even if health reforms, such as the new Quality Payment Programs under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, weren’t enacted, pressures in the private marketplace would have driven healthcare providers in this direction.
 
There is no doubt that market forces, including the enactment of ACA and other reimbursement issues, began the mergers and acquisition movement and continue to drive its mania. Healthcare is moving from being hospital-centered to population-health centered. Managing this transition requires providers to operate multiple local delivery centers to hold down costs and provide healthcare at a local setting.
 
Mergers also offer the opportunity to produce a cost savings, both in back office functions -- such as purchasing, revenue cycle and IT -- and ultimately enhance healthcare delivery through improved, standardized clinical protocols.
 
Only time will tell whether or not bigger is indeed better in the new world of whatever evolves from the planned repeal and replacement of the Affordable Care Act.

Tags: Best Practices, RCM Solutions, Revenue Cycle Solutions

AHA President and CEO Asks President-Elect Trump For "Steady as She Goes" Effort on Healthcare

Posted on Tue, Dec 20, 2016 @ 11:00 AM

By Nitin Thakor, GeBBS President & CEO

AHA President and CEO Rick Pollack recently sent a congratulatory letter to President-elect Donald Trump and asking him to go slowly on changes to our healthcare delivery system, particularly when it comes to the Affordable Care Act (ACA). This is good advice since healthcare represents a significant portion of the U.S. economy and essential public services. Pollack explained his case in terms that abrupt changes could lead to significant instability for patients, providers, insurers and others.

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However, he was not so cautious when it came to Stage 3 Meaningful Use and M&A mergers. Pollack urged the President-elect to cancel Stage 3 of Meaningful Use, standardize the M&A merger review process, and reform the RAC program.

Pollack's letter highlighted five areas of concern for hospitals: reducing the regulatory burden; enhancing affordability and value; continuing to promote quality and patient safety; ensuring access to care and coverage; and continuing to advance healthcare system transformation and innovation.

In my opinion, much of what Mr. Pollack asked for makes perfect sense. It is my sincere hope that President-elect Trump will understand the consequences of abrupt changes to any financial system. He has already softened his stance on cancelling ACA on Day One of his administration. There are many things wrong with the ACA and reform is needed. I am hopeful that thoughtful men and women of goodwill will come up with a new plan that includes more participation of the private sector and the ability to sell health insurance across state lines.

This will provide a replacement plan that continues to provide a mechanism for individuals to obtain affordable insurance coverage, with realistic deductible amounts. Everyone who works in healthcare knows that the regulatory burdens faced by hospitals and physicians are substantial and unsustainable.

I remain hopeful that thoughtful reform can be accomplished, and we look forward to working within this new healthcare delivery system.

Tags: Revenue Cycle Management (RCM), Healthcare Revenue Billing, Best Practices, Insurance Billing Solutions, Medical Billing BPO, RCM Solutions, Revenue Cycle Solutions

MACRA Final Rules Released

Posted on Wed, Nov 16, 2016 @ 07:00 AM

By Nitin Thakor, GeBBS President & CEO

In a recent blog we asked that CMS go slowly with the enactment of the Medicare Access and CHIP Reauthorization Act (MACRA), a landmark payment system for Medicare physician fees that replaces the sustainable growth rate formula.

MACRA.jpgAfter a listening tour and nearly 4,000 public comments, CMS released the final rule in late October with the following statement by CMS Acting Administrator Andy Slavitt: "It's time to modernize the Medicare physician payment system to be more streamlined and effective at supporting high-quality patient care. To be successful, we must put patients and clinicians at the center of the Quality Payment Program. A critical feature of the program will be implementing these changes at a pace and with options that clinicians choose. Today's policies are designed to get all eligible clinicians to participate in the program, so they are set up for successful care delivery as the program matures."

Let us hope that CMS follows its own advice and does “implement these changes at a pace and with options that clinicians choose.”

The MACRA Quality Payment Program has as its goal -- reducing the administrative burden on physicians so they can focus on care improvement, promote adoption of value-based care, and smooth the transition to these new models of care. 

The final rule includes two pathways for provider participation: the Merit-Based Incentive Payment System, or MIPS; and the Advanced Alternative Payment Model, or APM. The first pathway, MIPS, is designed for providers in traditional, fee-for-service Medicare. The second, Advanced APM, is designed for providers who are participating in specific value-based care models.

MIPS rolls together and sunsets three legacy CMS programs: Meaningful Use, the Physician Quality Reporting System and the Value-Based Payment Modifier. Physicians will earn payment adjustments based on performance in four categories linked to quality and value that will be similar to the previous programs. Since CMS rolled out the proposed MACRA rule, it has settled on a gradual ramp to full participation, allowing physicians to pick their pace between the following four options in 2017:

  1. No participation and an automatic 4 percent negative payment adjustment.
  2. Submission of a minimum amount of data — i.e. one quality measure — and a neutral payment adjustment.
  3. Submission of 90 days of data for a potential small positive payment adjustment or a neutral adjustment.
  4. Submission of a full year of data for the potential to earn a moderate positive payment adjustment.

Who qualifies for the MACRA Quality Payment Program? Physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists — who bill Medicare more than $30,000 a year or provide care for at least 100 Medicare patients. For providers new to Medicare in 2017, participation is not required next year.

When does the Quality Payment Program start? Providers who are ready to start collecting performance data can begin as early as Jan. 1, 2017. However, CMS is offering providers the option to start anytime between Jan. 1 and Oct. 2. No matter when providers begin collecting data, it is due to CMS by March 31, 2018. The data collected in the first performance year will determine payment adjustments beginning Jan. 1, 2019.

We sincerely hope that CMS achieves its proposed goal of modernizing the Medicare physician payment system to be more streamlined and effective at supporting high-quality patient care. We also hope that compliance with this new mandate does not cause a tremendous burden on physicians and have the exact opposite affect that the new rule intended to achieve.

Tags: Best Practices

Be Careful of the Solutions You Create – They May Be Worse than the Problems You Were Trying to Solve!

Posted on Mon, Nov 07, 2016 @ 06:00 AM

By Nitin Thakor, GeBBS President & CEO

Some lawmakers are warning the CMS that its Medicare Access and CHIP Reauthorization Act (MACRA) draft rule on new physician payments could significantly harm small physician practices. When MACRA goes live in 2019, it is supposed to improve healthcare delivery by giving bonuses to top-performing doctors and clinicians and provide negative incentives for underperformers on a variety of measures, especially quality of care. However, many people in the healthcare industry believe that MACRA will have a net negative effect on care delivery and cause many small practices to close their doors or consolidate with other practices, which will undoubtedly lead to higher healthcare costs.

CMS wants providers to report quality measures on 90% of their patients from all payers, and 80% of Medicare patients. Currently, only 50% of Medicare patients are required. Small physician groups will have a much harder time obtaining the information technology and data needed to demonstrate that quality.SlowDown.jpg

Many small independent practices fear they may not survive the new MACRA legislation, as it stands today. A Black Book survey conducted in May 2016 with 1,300 physicians found that 89 percent of physician practices surveyed planned to reduce the number of Medicare cases they take on in order to reduce the reporting burden.

How does this improve the delivery or quality of healthcare?

Small physician practices have concerns about having adequate staffing in order to accomplish necessary reporting for MACRA. It’s very complex — 962 pages. Many small providers are currently struggling under already-existing governmental reporting policies.

The American Hospital Association (AHA) has also raised concerns about the unintended consequences of MACRA implementation. AHA Senior Vice President of Public Policy, Ashley Thompson, said that the proposed rule for MACRA implementation carries with it high costs for compliance for both hospitals and physicians. According to Ms. Thompson, what might happen is solo practitioners or those in small group settings might come to hospitals asking for employment opportunities. She also stated that there will be a number of physician retirements and some who just throw up their hands and say, “I can't really do this.”

Again, how will this improve healthcare delivery?

The Black Book survey, mentioned earlier, also found that more than three out of four (77%) of physician practices are already struggling financially. How can requiring more compliance reporting help these struggling providers?

Whether or not CMS will heed any of these concerns is unclear. The agency sent the final rule to the Office of Management and Budget on September 16. That is one of the last steps before approval. The CMS expects to release the final rule by Nov. 1. It is my sincere hope that CMS will slow down in their MACRA efforts to improve the delivery and quality of care, and “not kill the patient.”

 

Tags: Best Practices

“Thinking Outside of the Box” Pays off for Kaiser Permanente

Posted on Thu, Oct 20, 2016 @ 04:00 AM

By Nitin Thakor, GeBBS President & CEO

I was struck by recent article in the New England Journal of Medicine Catalyst entitled: “How Multi-Specialty Hubs Fill a Major Gap in the Care Continuum.” The article brings out a fact that all of us in the healthcare industry need to take to heart, and that is: how can we “think outside of the box” and take advantage of the resources we presently have and use them to improve care and reduce costs.

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Kaiser Permanente has done just that. They have pioneered a model that incorporates multispecialty hubs integrated with office-based primary and specialty care and traditional emergency department functions to improve clinical care, increased access and lower costs compared with the traditional model of medical offices and community hospital EDs.

Kaiser Permanente, Mid-Atlantic States (KPMAS) began the new concept in 2012 with five full-service medical buildings, each of which serves about 100,000 patients in Virginia, Maryland and the District of Columbia.

The assumption was that about nine out of 10 patients who normally would have been treated at hospital EDs could receive appropriate treatment at a hub able to provide advanced medical, diagnostic, imaging and surgical services across multiple specialties. Mental and behavioral health services also are available. Patients can stay in the hub up to 23 hours if necessary before being discharged.

Since the hubs are smaller than hospitals, construction costs are one-fifth those of hospital construction, an official stated in the article. The hubs are located next to large, multispecialty medical offices. If hub patients must be hospitalized, they bypass an ED and are admitted directly to one of Kaiser Permanente’s partner hospitals.

Both hospital days and ED visits per 1,000 members have fallen 23 percent since the inception of the hub concept.  The hub model also offers the potential for newly formed accountable care organizations (ACO) to expand and fill in a crucial missing piece in the care continuum.

A hub model of care solves many problems, providing complex and urgent care 24/7. This is the kind of thinking we all need to employ as we strive to improve healthcare delivery, while holding down costs.

 

Tags: Best Practices

Will Free-Standing Emergency Departments Negatively Impact Hospitals?

Posted on Wed, Oct 12, 2016 @ 03:00 AM

By Nitin Thakor, GeBBS President & CEO

A relatively new phenomenon in healthcare has the potential to negatively impact hospitals’ revenue stream. This new phenomenon is called the freestanding emergency department (FSED). We know that market share in any hospital marketing area is critical to the facility’s success. If a competing FSED opens in a hospital’s market area it will surely impact the hospital’s revenue.

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The concept of creating specialized healthcare delivery service lines has been around for some time; consider all the orthopedic and cardiology facilities. It's an old strategy; FSEDs are just a “new wrinkle.” Freestanding EDs have a greater appeal over traditional EDs because they provide a faster and often more pleasant patient experience. These patients are typically insured, and as such, in the states where FSEDs are legal, they offer a potential threat to traditional hospital-based EDs.

Not only are these FSEDs faster and more efficient, they are also less expensive for patients. It takes a lot less overhead to run a freestanding ED than it does to operate a hospital ED. And, the FSEDs are staffed with board-certified ED physicians.

Another factor is that the placement and construction of FSEDs may not require certificate-of-need (CON) approval. Therefore, freestanding EDs can go into regions where hospitals do not have locations. They will use this vacuum to create an entry portal into the area’s healthcare delivery system, maybe a suburban market dominated by a hospital.

How can hospitals compete?

Many traditional hospitals are establishing freestanding EDs of their own to capture and retain market share in their patient catchment areas. However, this is not a guarantee of success, because companies that specialize in FSEDs are very business savvy and aggressive in their business models. To that point, freestanding EDs are one of the fastest growing segments in healthcare delivery.

Another thing we need to watch, as we move to a value-based healthcare system, is large insurance plans that could gravitate toward the freestanding ED models, for the reason that it will be more convenient to insurers and cheaper, on average, than visiting an on-site hospital ED.

All providers can do is keep an eye on their local healthcare markets to determine the best plan of action for them when it comes to freestanding  EDs. They are here to stay and they must be dealt with on an economic basis.

Tags: Best Practices

Sobering Statistics about Growing Patient Self-Pay Amounts

Posted on Mon, Dec 14, 2015 @ 10:00 AM

With the growing number of high deductible insurance plans and the Affordable Care Act (ACA), patients are now responsible for up to 35 percent of their healthcare delivery costs. Here are some staggering facts from MGMA and McKinsey & Company:

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 - Patient A/R growing to $660 billion in 2015
 - $65 billion in bad debt projected
 - Annual family deductibles average now up to $5,000
 - Some ACA plans can approach $12,000
 - 30% of patients walk out the door without paying anything
 - 3.3 billing statements will be sent before a patient’s balance is paid in full
 - Only $15.77 of every $100 owed is recovered once turned over to collections

With patient self-pay amounts growing, are you prepared to collect these large deductible amounts at the point of care?

This new A/R environment requires new procedures and new thinking to deal with this new world of large self-pay amounts. You must be prepared to implement new technologies, and an end-to-end, outsourced, comprehensive revenue cycle management solution that includes complete billing and collections services with call center follow-up support which includes compassionate collection methods used by highly trained professionals.

Make sure your outsourcing partner has expertise in multi-specialty collections and billing, and is well versed in all Medicaid state plans, managed care plans, government-funded programs, third-party insurance, and Medicare billing rules. It is also important that your outsource partner has a staff that is highly trained in compassionate collection techniques that do not employ “strong arm” tactics which can upset your patients.

In the high deductible insurance world, insurance policy and eligibility amount verifications are absolutely critical. Identifying the patient’s responsibility upfront, prior to delivery of services, is critical in managing your receivables. In the absence of proper eligibility and benefit verification, countless downstream problems are created — delayed payments, reworks, decreased patient satisfaction, increased errors, nonpayment and bad debt.

An outsourced, end-to-end, back office solution can provide the services you need to help you survive in this new world of high deductible insurance plans.

Tags: Business Process Outsourcing (BPO), Accounts Receivable (A/R), Knowledge Process Outsourcing (KPO), Best Practices, Offshore Medical Billing, Self-Pay Collections

The New World of High Insurance Deductibles Requires New Solutions

Posted on Mon, Dec 07, 2015 @ 11:00 AM

The amounts for insurance deductibles continue to grow each year and there is no end in sight to these increases. With more and more patients opting for high deductible, low premium commercial health insurance policies, and the growing usage from the Affordable Care Act (ACA), providers must seek ways to collect these large deductible amounts at the point of care, using an integrated approach that includes call centers and comprehensive end-to-end revenue cycle management, coupled with compassionate collection training.

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As patient financial obligation rise, so does bad debt.

The surge in these high-deductible health plans has also highlighted the fact that as financial obligations increase, the propensity for patients to pay any portion of that obligation decreases -- for all patients, at all income levels. One report from McKinsey states that 30 percent of patients walk out of treatment facilities without paying anything. How can you be prepared to deal with these high deductible patient insurance plans?

You and your team must adjust your procedures and your thinking to deal with this new world of large self-pay amounts. Even patients are uncertain about how much they owe for their care. By updating your point of care collections procedures and investing in technology that allows your staff to openly engage with patients about their financial obligation, you can be equipped to minimize your bad debt levels.

The next step is to implement an end-to-end, comprehensive revenue cycle management solution that includes complete billing and collections services with professional call center follow-up support. Make sure your outsourcing partner has expertise in multi-specialty collections and billing, and is well versed in all Medicaid state plans, managed care plans, government-funded programs, third-party insurance, and Medicare billing rules. It is also important that your outsource partner has a staff that is trained in compassionate collection techniques that do not employ “strong arm” tactics which can upset your patients.

With high deductible commercial insurance claims and the ACA, insurance and eligibility verification are absolutely critical. Identifying the patient’s responsibility upfront, prior to the visit is critical in managing your receivables. In the absence of proper eligibility and benefit verification, countless downstream problems are created — delayed payments, reworks, decreased patient satisfaction, increased errors, nonpayment and bad debt. An end-to-end, outsourced back office solution can provide the answers you need, and help you survive in this new world of high deductibles.

Tags: Business Process Outsourcing (BPO), Accounts Receivable (A/R), Knowledge Process Outsourcing (KPO), Best Practices, Offshore Medical Billing, Self-Pay Collections