Time-Driven Costing Boosts Healthcare Revenue
Thursday, January 14th, 2021

In healthcare, time-driven costing is a technique that measures the cost of resources spent as a patient progresses through the continuum of treatment. Along with the need to manage increasing costs and scarce resources, such as nurses, the approach has gained traction among hospital leaders, particularly in the face of new value-based reimbursement models.

The introduction of time-driven costs in healthcare has been problematic, despite the attraction of efficient assessment and control of costs. Past attempts, such as those in the 1990s, have failed or only partly succeeded due to the significant capital commitment needed and the complexities of the healthcare system.

Recent efforts have been made to introduce a time-driven expense approach backed by data analytics. Extracting information from the electronic health record to combine clinical information with payroll and time-keeping statistics, such as how many cases reached the ED and at what stage of the emergency severity index, creates a time-costing solution.

By executing a staffing-to-demand plan leveraging cumulative knowledge, sufficient ratios of nursing personnel and other providers is assured, and the health system is more effective at managing costs and services.

To read more, please visit https://revcycleintelligence.com/news/how-time-driven-costing-in-healthcare-boosts-staffing-revenue-cycle.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

What to Consider When Transitioning to Capitation Payments
Thursday, November 19th, 2020

In view of the COVID-19 pandemic, more providers are contemplating moving to capitation arrangements. The decision cannot, however, be made lightly; the risks and complexities of lump sum payments need to be carefully addressed by provider organizations before any decision to switch is made.

Organizations need to recognize the effect the restructuring of the healthcare industry would have on capitation payments. There is a strong financial opportunity for physicians to scrutinize hospitalizations and emergency room admissions and offer higher care levels to patients. This could be a challenge for consolidated health networks that involve hospitals and clusters of doctors. To offset fixed and variable costs of inpatient treatment while still financing alternate care facilities, these organizations may have to determine resource distribution.

Specialist benefits under capitation payments continue to be discussed. Organizations aim to place the primary care provider at the forefront of a healthcare team in alternative payment structures, and capitation payments definitely urge organizations to do so. However, under the alternative payment arrangement, specialists do need to be accountable for total care costs.

Under capitation fees, health services would need to consider how to handle financial risk. The success of capitation payments is jeopardized by complications, debilitating illnesses, and other avoidable problems. But with stop-loss insurance and payment allocation for high-cost products, such as specialty medications and equipment, providers can minimize the effects of these problems.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

The Difficulties Involved in Capitated Payment Models
Wednesday, November 4th, 2020

The pandemic and subsequent need to find innovative ways to retain patients while offices remained closed uncovered a basic truth: value based medicine is here to stay. Risk-bearing arrangements can be very successful for providers and allow for more flexibility, but varying state regulations and guidelines make deciding what type of model is good for any particular practice challenging. Under the umbrella of value-based care, reimbursement models take on varying levels of risk for providers and insurers.

Full capitation is an arrangement term when a provider is paid a fixed rate to provide patient or group care. While the rewards for this model can be high, this type of value-based arrangement can be quite complicated and is not advised if a provider has never dipped their toes into value-based care. Capitated models require the ability to track patient data along with an understanding of the cultural changes inherent in the change.

Shared-savings agreements, when providers are compensated for achieving financial and quality benchmarks, are good places for an initial value-based arrangement. Tightly aligned with Medicare, shared savings agreements can also be offered by private insurers. Some bear only upside risk while others contain some downside risk.

Instituting value-based care across the country is challenging because states have a hodgepodge of distinct regulations. Some have loose regulations, while others are quite stringent with their policies. There are some states where providers are treated like insurers, which implies they have to keep a certain amount of financial capital and undergo a burdensome registration process. Semi-annual filings are compulsory in a few circumstances, including fees and disclosing ownership.

The goal is to avoid what transpired in the 1990s from happening again. During this decade, some providers eventually filed for bankruptcy or closed their doors after taking on full-risk contracts, which resulted in insurance companies incurring significant losses. Following these events, legislation was introduced by federal and state governments mandating providers who bear financial risk to keep similar levels of reserves around as the insurance companies.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

CMS Guidelines Promote Value-Based Medicaid Payments
Monday, October 26th, 2020

Recently, CMS provided guidelines to assist states with increasing the acceptance of a value based system through their Medicaid programs. The organization has pledged to promote value-based care within Medicare and is encouraging states to make similar attempts to make the same promotion through their Medicaid services. Medicare, Medicaid, and commercial providers overlap greatly. The guidance emphasizes the value of multi-payer alignment in assuring value-based care moves toward the conversion of the healthcare delivery system.

The guidelines include a host of additional concerns Medicaid directors may need to address, including how ready the delivery system is, stakeholder involvement, and financial uncertainty for providers. It also explains how states may utilize their current leverage in their Medicaid systems to implement value-based payments, including with managed care and Medicaid fee-for-service.

Numerous politicians and healthcare authorities have long supported widespread acceptance of value-based payments, which connect financial incentives from providers to the quality of treatment they offer to their patients. Per the Health Care Payment Learning and Action Network, roughly a third of healthcare payments were value-based in 2018.

To read more, please visit https://www.modernhealthcare.com/transformation/new-cms-guidance-encourages-value-based-payment-medicaid.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

Worries About the Medicare Physician Fee Schedule Rule for 2021
Wednesday, October 21st, 2020

Provider organizations are worried certain proposals in the 2021 Medicare Provider Fee Schedule regulation will worsen the financial difficulties doctors are currently experiencing during the COVID-19 pandemic, including the inadequacy of sufficient payment for telehealth and profits from sustainable practice. The legislation released in early August suggested several improvements to next year’s Medicare Physician Fee Plan, including steep rate increases for certain specialties, improvements to the list of telehealth services, and additional standards for accuracy monitoring.

Increasing relative value units (RVUs) and payment for primary care facilities and treatment of chronic disorders are the key proposals of the rule. However, the regulation also requires a drop in the payment exchange factor to $32.26 from $36.09 in order to offset the improvements to RVUs for the services.

Provider industry groups have encouraged CMS to beef up telehealth scope recommendations in the finalized version of next year’s Medicare Physician Fee Schedule. Several proposals that would increase telehealth coverage were included in the rule, including the inclusion of eight codes to the Category 1 list of telehealth providers and the development of a separate Category 3 list to extend provisional coverage.

Another leading issue affecting multiple provider groups was the tweak to quality reporting regarding the Quality Payment Program and other value-based reimbursement models. The substitution of the APM Scoring Standard with the current Alternative Payment Model Efficiency Pathway was largely opposed, particularly by provider groups.

To read more, please visit https://revcycleintelligence.com/news/top-3-concerns-with-the-2021-medicare-physician-fee-schedule-rule.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

CMS Releases 2021 Medicare Advantage Star Ratings
Friday, October 16th, 2020

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) released its 2021 Medicare Advantage and Part D star ratings. Just over twenty health plans earned five stars, including familiar names like Cigna and CarePlus by Humana. Only four health plans had low ratings of 2.5 stars, and there were no plans with ratings below that.

The CMA star rating system began for Medicare Advantage plans in 2008 to monitor performance on selected criteria for beneficiaries. By 2012, those metrics were tied to payments and bonuses for quality incentives. On a scale of one to five stars, CMS rates Medicare Advantage health and drug plans, with one star indicating bad results and five stars meaning outstanding performance.

The new star ratings are good news for the more than one-third Medicare beneficiaries who choose a Medicare Advantage plan. Medicare Advantage premiums in 2021 will be the lowest since 2007. The average star rating has increased from 4.02 in 2017 to 4.06 in 2021, and, according to CMS, approximately 77% of beneficiaries enrolling in Medicare Advantage plans with drug coverage will participate in plans with four or more stars.

Up to 44 separate consistency and success metrics are classified for Medicare Advantage with Medicare Part D prescription drug coverage contracts, and up to 32 metrics are classified for Medicare Advantage-only contracts (without coverage for prescription drugs). No new measures have been introduced for 2021. However, CMS is taking into account patient comments and experiences more heavily, including the quality of care being received by the plans. The effect of the coronavirus on star ratings has been tracked by CMS and several improvements have been implemented to forestall the impact.

To read more, please visit https://www.healthcarefinancenews.com/news/21-medicare-advantage-plans-earn-5-stars-cms-release-star-ratings.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

CMS Is Making Medicare Advantage Risk Adjustment Changes
Wednesday, September 23rd, 2020

CMS recently proposed changes to Medicare Advantage and Part D payments for 2022, finalizing a multi-year phase-in of a novel, controversial payment method where plan risk scores are based entirely on encounter data.

In the past, to complement encounter information in calculating payment, CMS has relied on reports submitted through its Risk Adjustment Processing System (RAPS) method but stated that policy would cease in 2022.

Risk scores reflect a beneficiary’s estimated medical expenses and are utilized in tailoring Medicare Advantage plan federal payments. In general, the more ill an individual is, the greater the risk score and, therefore, the greater the payment earned by an MA plan. CMS began collecting encounter data, or data based on claims data generated by a provider, supplier, physician in a practice or hospital setting, in 2012. According to insurers, this data can often be incomplete or inconsistent, so depending entirely on that data for risk scores could potentially lower federal plan payments.

As mandated by the 21st Century Cures Act, CMS will completely transition to this risk adjustment calculation model that has been slowly increasing since 2016, when encounter data made up 10% of a risk score. In 2019, 25% of risk adjustment scores were based on encounter data, and that number increased to 75% in 2021. In 2022, encounter data will be the sole determinant for calculating risk adjustment.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

COVID-19 Shines a Strong Light on Medicare Advantage
Wednesday, August 19th, 2020

The strength and versatility of Medicare Advantage has become increasingly evident in the age of COVID-19. When the pandemic began spreading across the country this spring, Medicare Advantage plans responded quickly and were among the first to take charge, identifying and introducing changes to policies and benefits.

Many Medicare Advantage programs quickly identified an exhaustive list of supplemental benefits addressing health social determinants, crucial in the response to COVID-19. Member outreach including meal deliveries, free masks, and regular communication were instituted to help address anxieties made evident early on.

By the time June was over, Medicare Advantage membership reached almost four million, an increase of more than ten percent from the first half of 2019 and up to eight percent from enrollment by the end of the same year. In the first half of the year, insurer Humana added well over 250,000 Medicare Advantage members and predicts more than 330,000 will join before the end of the year. Humana’s success in Q2 mirrors that of many payers as a result of lower utilization during the pandemic. That number is expected to rise in the last half of the year with rising utilization including an expected increase in elective surgeries.

Seniors have recognized the value in Medicare Advantage, as demonstrated by rising enrollment, which has almost doubled during the past years. Close to forty percent of the Medicare population are now enrolled in an Medicare Advantage plan. That number is anticipated only to increase as more seniors become old enough to qualify for Medicare.

To read more, please visit https://www.fiercehealthcare.com/payer/humana-posts-1-8b-q2-profit-as-insurers-continue-to-show-strong-financial-performance-amid.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

Value-Based Care May Help Practices Remain Afloat
Wednesday, August 12th, 2020

Primary care practices have had to contend with the possibility of closure due to the pandemic. The conundrum comes in figuring out the best way for physicians to save their practices while still providing patients optimum care. The answer may lie in value-based care.

Primary care is arguably more important than ever, yet it has become increasingly evident that the traditional fee-for-service model, based solely upon actual practice visits, has become untenable. The safest option for many patients is to stay at home to stay healthy, so these physicians and healthcare practices now find themselves facing an uphill battle to remain in operation.

Value-based practices have managed to keep their doors open, take care of their patients, and even prosper in these challenging times. Instead of concentrating solely on patients that walk into the practice, value-based care is more about ensuring patients remain healthy and out of the hospital. With value-based care, practices can, for example, reach out to a patient to contact them and evaluate their care beyond the doors of the practice as well as keep in touch in the event the patient does have to go to the hospital emergency room.

The key is breaking the misconception that fee-for-service is the perfect way to pay for primary care. Primary care should be about the value created, where care is more person-based than transactional.

This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting, and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475.

CMS Will Examine Telehealth Reimbursement Rates Following the Pandemic
Thursday, July 30th, 2020
Telehealth reimbursement is being evaluated by CMS to render Medicare telehealth extensions permanent after the COVID-19 pandemic. CMS administrator Seema Verma recently suggested reforms initiated during the pandemic could become permanent, including payment for telehealth services provided to non-rural patients and the provision of telehealth treatment in patients’ homes.
To settle telehealth reimbursement rates, CMS would need to assess the costs for telehealth vs. in-person services. Medicare payment rates for in-person treatment take supply costs such as hospital gowns, washing, disinfectants, and other service costs into account. Telehealth services do not require these supplies. The costs associated with generating new systems and workflows to enable telehealth visits also need to be considered. For CMS to properly reimburse providers for permanent Medicare telehealth extensions, all such expenses will need to be reviewed.
Short-term payment changes allowed practices to implement telehealth services rapidly. Telehealth has proved essential to COVID-19 approaches for the response. Providers have been able to continue treating patients via telehealth, preventing unnecessary staff or employee exposure to the extremely infectious virus.
Virtual treatment has also proved invaluable in ensuring the health of patients and staff within the hospital setting. Hospitals have been able to reduce interaction with infected patients by using smartphones, laptops, and other mobile devices, while still placing caregivers and family near the patient.
To read more, please visit https:// revcycleintelligence.com/news/ cms-to-assess-telehealth- reimbursement-rates-post- pandemic .
This update is provided by CareOptimize. We provide healthcare management consulting services and products, managed care solutions, value-based expertise, Nextgen EHR utilities, MIPS consulting , and more. CareOptimize has helped numerous healthcare organizations succeed for more than a decade. For more information, please call 855.937.8475