The following is a guest blog post by Brad Hill, Chief Revenue Officer at RemitDATA.
Whatever the future holds for the Affordable Care Act (ACA), the shift to value-based care is likely here to stay. The number of providers and payers implementing value-based reimbursement contracts has grown steadily over the past few years. A survey of 465 payers and hospitals conducted in 2016 by ORC International and McKesson revealed that 58 percent are moving forward with incorporating value-based reimbursement protocols. The study, “Journey to Value: The State of Value-Based Reimbursements in 2016” further revealed that as healthcare continues to adopt full value-based reimbursement, bundled payments are the fastest growing with projections that they will continue to grow the fastest over the next five years, and that network strategies are changing, becoming narrower and more selective, creating challenges among many payers and hospitals as they struggle to scale these complex strategies.
Given the growth of adoption of value-based care, there are certainly many hurdles to clear in the near future as policymakers decide on how they plan to repeal and replace the ACA. A January 2017 report by the Urban Institute funded by the Robert Wood Johnson Foundation revealed that some of the top concerns with some potential scenarios being floated by policymakers include concerns over an immediate repeal of the individual mandate with delayed repeal of financial subsidies; delayed repeal of the ACA without its concurrent replacement; and a cutoff of cost-sharing subsidies in 2017.
With the assumption that value-based healthcare is here to stay, what steps can you take to continue to prepare for value-based payments? The best advice would be to continue on with a “business as usual” mindset, stay focused and ensure all business processes are ready for this shift by continuing to:
- Help providers establish baselines and understand their true cost of conducting business as a baseline for assuming risk.
- Analyze your revenue cycle. Look at the big picture for your practice to analyze service costs and reimbursements for each – determine if margins are in-line with peers. Identify internal staff processing time and turnaround times by payer. Evaluate whether there are any glaring issues or problems that need to be addressed to reduce A/R days and improve reimbursement rates.
- Determine whether there are reimbursement issues for specific payers or if the problem is broader in nature. Are your peers experiencing the same issues with the same payers?
- Capture data analysis for practice improvement. With emerging payment models, hospitals and practices will need expertise in evaluating data and knowledge in how to make business adjustments to keep the organization profitable.
- Determine how you can scale and grow specific payment models. Consider, for example, a provider group that maintains 4 different payment models and 10 different payers. The provider group will need to determine whether this system is sustainable once payment models shift.
- Break down department silos in determining cost allocation rules. Providers need a cost accounting system that can help determine exact costs needed to provide care and to identify highest cost areas. Cost accounting systems are typically managed by the finance team. There needs to be clinical and operational input from all departments to make a difference. Collaborate across all departments to determine costs, and design rules and methodologies that take each into account.
- Compare your financial health to that of your peers. Comparative analytics can help by giving you insights and data to determine your practice’s operational health. Determine whether you are taking longer to submit claims than your peers, have a higher percentage of denied claims for a specific service, percentage of billed to allowed amounts and more.
Though change is a part of the healthcare industry’s DNA, ensuring business processes are in line, and leveraging data to do so will help organizations adapt to anything that comes their way.