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What Healthcare Must Plan for in Q4

Posted on September 19, 2014 I Written By

The following is a guest blog post by Ben Quirk, CEO of Quirk Healthcare Solutions.
Ben Quirk
In some ways, 2014 turned out to be not quite as cataclysmic. The early announcement of delaying the adoption of ICD-10 and the more recent announcement to allow hospitals/CAHs and Eligible Professionals participating in CMS’ Meaningful Use programs to attest using their existing Certified Electronic Health Record Technology (CEHRT) took the pressure off healthcare providers scrambling to upgrade their CEHRT to a version that was both ICD-10 and MU-compliant. However, this is only a temporary reprieve through the end of 2014 and there are other priorities that must be addressed before the year ends.

Navigating the ever-evolving healthcare environment will seem much less daunting if you focus on these four areas:

  • Meaningful Use
  • Value-Based Payment Modifiers
  • Transparency
  • Open Enrollment for ACA

Meaningful Use (MU)

If you were not able to upgrade to the 2014 Edition EHR, you will still be able to attest for MU using 2013 criteria. This provides reprieve from the 2014 criteria that requires the implementation of and patient enrollment in a patient portal.

In order to be MU-ready, your organization must proactively:

  • Determine your strategy based on the final rule. Gather data and be prepared to attest for MU by the deadline for the MU program you participate in..
  • Create an audit binder which should include screenshots of required EHR configuration during the reporting period. Should you get an audit 2 years from now, you can refer to this binder for accurate information.
  • Prepare a statement citing why you should be allowed to opt out of those MU measures that you think do not pertain to your practice. Auditors will ask for this on any audit preformed.

All organizations should be prepared to start collecting data for MU 2 by January 1, 2015. This includes having a strategy around the implementation of a patient portal and patient enrollment, sharing data amongst community and other healthcare providers, and radiology interfaces.

Value-Based Payment Modifier

The current Value Based Payment Modifier for providers who serve Medicare beneficiaries is a descendent of the Physician Quality Reporting System (PQRS). It is a way to keep the ACA cost-neutral, but there are some important things you need to know about this newer system. Value-Based Payment Modifier takes claims, Meaningful Use, and physician quality data and rates the quality of care you provide against your peers. Consequently,

  • When you report your Clinical Quality Measures or any clinical data to CMS, make sure your thresholds demonstrate that your practice is providing high quality care.
  • If your practice suffered from vendor problems with data accuracy in the past, this should be fixed.

Transparency

Transparency is something all providers should be aware of. Although available only in a few markets right now, all patients will soon be able to look up information about physicians before deciding where they would like to have their medical procedures done. For instance, if a patient decides to have an ACL repair, s/he can go online to compare exact costs and quality measures (based on the Patient Quality Reporting System) for ACL repair. Practices need to be aware that their prices and quality are being reported publicly. The implications go beyond losing reimbursement. You can actually be delisted from an insurance network. To ensure that your practice remains a viable option for patients:

  • Market your own practice and post your own prices.
  • Make sure you are reporting good quality data.
  • Use sources such as MGMA or OPTUM to see what providers in your area are charging and how you compare.
  • Determine how your reimbursement ranks vs. your competitors on the Medicare website and ensure data accuracy.

Open Enrollment for the ACA

November 15 marks the beginning of the second Open Enrollment period for the Affordable Care Act and there is no indication that this time around will be any easier than the first. Patients will be choosing plans, dealing with things very unfamiliar, and perhaps unaffordable, to them, like deductibles. This directly impacts clinics and the bottom line, especially with those patients who cannot pay their share of the costs. Last year, patients became the number one payor for many practices, even more than insurance companies, because so much revenue came from deductibles. That all resets January 1, but there are things you can do to avoid a possibly painful Q1 of 2015:

  • Check and confirm all patients’ eligibility, what plan they are on, and what their deductible is prior to their scheduled appointment, preferably through an automatic batch eligibility service. Keep this information in the practice management system.
  • Notify patients about their deductibles before they come into the clinic, and make sure to collect payments upfront, or keep a card on file.

The healthcare industry as we knew it for the past many years has ceased to exist. As we move into a new era of integrated delivery systems and a greater emphasis on value-based rather than volume-based reimbursements, the industry is going to remain in a state of flux before it stabilizes once again. The only way organizations are going to survive in this shifting landscape is by anticipating and planning for the next change so that they can stay ahead of the curve. The more an organization knows, the better it can be prepared to confront any potentially negative impact of the ever-evolving nature of the industry.

About Ben Quirk
Ben Quirk is CEO of Quirk Healthcare Solutions, a consulting firm specializing in EHR strategic management, workflow optimization, systems development, and training. The company’s clients have enjoyed remarkable success, including award of the Medicare Advantage 5-star rating. Quirk Healthcare presents a weekly webinar series, Insights, to inform clients and the general public about government programs and industry trends. Mr. Quirk is also Executive Director of the Quirk Healthcare Foundation, a learning institution which fosters innovation in the healthcare industry.

Surviving 2014: The Toughest Year in Healthcare

Posted on March 26, 2014 I Written By

The following is a guest blog post by Ben Quirk, CEO of Quirk Healthcare Solutions.
Ben Quirk
How bad is 2014 for the healthcare industry? We’ve all read about ICD-10, EHR incentives, Medicare cuts, and the Affordable Care Act. But the most telling moment for me occurred during this year’s HIMSS conference in Orlando. There was quite a bit of B2B enthusiasm, but among the civilians it was mostly a lot of stunned looks and talk about how to get through the year. Here are some of my observations:

ICD-10. CMS has made it abundantly clear there will be no further delays to the October 1 deadline for ICD-10 implementation. This is possibly the most significant change to the healthcare industry in 35 years, affecting claims payment/billing systems, clearinghouses, and private and public software applications. Anyone who provides or receives healthcare in the US will be touched by this in some way.

In a recent poll of healthcare providers conducted by KPMG, less than half of the respondents said they had performed basic testing on ICD-10, and only a third had completed comprehensive tests. Moreover, about 3 out of 4 said they did not plan to conduct tests of any kind with entities outside their organizations.

Incorrect claims denial will be the most likely result. CMS will not process ICD-9 Medicare/Medicaid claims after October 1, and there is a high potential for faulty ICD-10 coding or bad mapping to ICD-9 codes. Error rates of 6 to 10 percent are anticipated, compared to an average of 3 percent under ICD-9. ICD-10 will result in a 100 to 200 percent increase in denial rates, with a related increase in receivable days of 20 to 40 percent. Cash flow problems could extend up to two years following implementation. This will be a costly issue for providers, and a very visible issue for patients.

We advise our clients to be proactive in their financial planning. This should include preparation for delayed claims adjudication and payments, adjustments to cash reserves, or even arranging for a new/increased line of credit. Having sufficient cash on hand to cover overhead during the final quarter of 2014 could be very important, as could future reserves to cover up to six months of payment delays. Companies not in a position to set aside reserves should consider working with lenders now before any issues arise.

Meaningful Use. As with ICD-10, CMS has stated there will be no delays to MU deadlines in 2014. That means providers who have never attested must do so by September 30, or else be subject to penalties in the form of Medicare payment adjustments starting in 2015. Providers who have attested in the past will have a bit longer (until December 31), but the penalties are the same.

There is much dissatisfaction with the government’s “all or nothing” approach to MU, where even the slightest misstep can invalidate an otherwise accurate attestation. While the ONC has proposed a more lenient model for EHR certification in coming years, everything will be measured against a hard deadline in 2014.  CMS is offering some mitigation through hardship exemptions, based on rules that are somewhat broad at this point. Providers should consider applying for an exemption if no other options are available.

We advise against taking shortcuts or rushing to beat the clock on MU. Up to ten percent of eligible professionals and hospitals will be subject to audit, and large hospitals may have millions of dollars at stake. Being prepared for an audit means more than just making sure an attestation is iron-clad; internal workflow and communication are also important. A mishandled audit notification can result in a late response and automatic failure.  Data security should also not be overlooked. Medical groups have failed audits due to lapsed security risk assessments as required under HIPAA.

Medicare Payment Cuts. Medicare Sustainable Growth Rate (SGR) cuts continue to hover over Medicare providers. Enacted by Congress in 1997, the SGR was intended to control costs by cutting reimbursements to providers based on prior year expenditures. But every year costs continue to rise, as do ever-worse SGR cuts (almost 24% in 2015). And every year Congress prevents the cuts via so-called “doc fix” legislation.

In early 2014 there was surprising bi-partisan agreement on a permanent doc fix, whereby Medicare reimbursements would be based on quality measures rather than overall expenditures. However, the legislation was derailed by linking it to a delay of the ACA’s individual mandate. As of mid-March there is still no permanent or temporary solution. Congress will almost certainly intervene to prevent SGR cuts, but by how much is uncertain.

The ACA. As the cost of insurance has increased over the past decade, high-deductible plans have become more and more common. Due to the Affordable Care Act, this trend has become the norm. Media outlets focus on the impact to consumers, and argue about whether more “skin in the game” leads to better choices or less care. What we’re hearing from the front lines is much more concrete: high deductibles are having a negative impact on revenues.

Very few people understand their liabilities under a typical health insurance plan. Last year George Loewenstein, a health-care economist with Carnegie Mellon University, published a survey showing that only 14 percent of respondents understood the basics of traditional insurance policies. At the same time, hospitals report that about 25 percent of bad debt originates from patients who are currently insured. With millions of new enrollees in high-deductible plans and an ongoing economic slump, the situation can only get worse.

The ACA had a further impact by reducing the amount of Disproportionate Share Hospital (DSH) charity funds available, based on a projected increase in insurance coverage.  But with some states not participating in Medicaid expansion, combined with an increase in patients lacking the knowledge or resources to manage large medical expenditures, the reduction in funds comes at exactly the wrong time.

Providers can cope by adjusting revenue cycle processes. For example, new programs should focus on estimating patient liabilities pre-arrival, educating the patient at check-in, and instituting proactive billing/collection at the point of service. In general, providers must pay more attention to the self-pay process, focusing on patient education and offering transparent, easy-to-use billing and payment methods.

Value Modifier. This program has not been a worry for most providers thus far. Not because it won’t have an impact on revenue, but because they don’t know about it. A little-known provision of the ACA, the Value-Based Payment Modifier mandates adjustments to Medicare reimbursement based on quality and cost measures. The program is being phased in, and so far has applied only to group practices of 100 or more Eligible Professionals (EPs). In 2014, smaller groups of 10 or more EPs will be subject to the legislation. These groups must apply and report to the program by October 1. Otherwise, they will be subject to a 2 percent cut in Medicare reimbursements starting in 2016.

One of the most important aspects of the program is its definition of “eligible professional” when defining the size of a group practice. For the purposes of Value Modifier, eligible professionals include not only physicians but also practitioners and therapists. That means that a practice with 8 physicians, a nurse practitioner, and a physical therapist would qualify as a practice with 10 EPs.

Value Modifier is part of the growing trend toward quality-based reimbursement. Even commercial payers are considering some version of the program. The scoring calculations are complex and poorly understood, so we advise clients to get up-to-speed as soon as possible. Groups with high quality and low cost will receive incentives rather than cuts, with additional upward adjustment for services to high-risk beneficiaries. Groups that are not paying attention may be surprised by an additional hit to revenue in 2016. In addition, quality scores will eventually be published to the general public on the Medicare.gov Physician Compare website.  Sub-par or missing scores could have a negative financial impact on a practice.

Conclusion

These are only the most high-profile impacts to the healthcare industry during the current year. Much else flows from them: changes to workflow, to computer systems, to financial expectations. Tremendous pressures are coming to bear within a limited timeframe.  We’re seeing an industry in the midst of tectonic change, with 2014 as the fault line. It’s unclear whether these disruptions will be for better or worse. But there certainly will be winners and losers, and those who plan ahead are most likely to survive.

______________________

Ben Quirk is CEO of Quirk Healthcare Solutions, a consulting firm specializing in EHR strategic management, workflow optimization, systems development, and training. The company’s clients have enjoyed remarkable success, including award of the Medicare Advantage 5-star rating. Quirk Healthcare presents a weekly webinar series, Insights, to inform clients and the general public about government programs and industry trends. Mr. Quirk is also Executive Director of the Quirk Healthcare Foundation, a learning institution which fosters innovation in the healthcare industry.