The road to value-based care is progressing—even if not as quickly as originally planned – and healthcare leaders should prepare accordingly. While hospitals and health systems have much headway to make before meeting Medicare’s ambitious goal of tying 50 percent of reimbursement to value by the end of 2018, industry data suggests that most are embracing and pursuing new payment models.
Industry movements such as the recently-introduced Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 are expected to increase momentum by upping the ante on participation. However, according to the Deloitte Center for Health Solutions 2016 Survey of US Physicians 2016 Survey of US Physicians, nearly half of doctors had not even heard of the law, and as a result are unlikely to be prepared for the impact MACRA promises to hold on reimbursement. While previous initiatives focused more on incentives for participation, new frameworks are designed to escalate those incentives, but also penalize those that are behind the value-based growth curve.
Even so, the reality for today’s providers is that fee-for-service models are also going to grow in prevalence – like it or not. Health networks—including hospitals, physician groups, and payers—must continue to manage revenue cycle amid the competing forces of fee-for-service and evolving fee-for-value reimbursement arrangements.
Balancing the demands of operating a fee- for- service business with the transformational nature of fee-for-value models is a complex undertaking—one that requires an expanded infrastructure with tool sets that not only ensure payment for traditional arrangements but also consider the nuances of risk. For instance, providers should leverage data and robust analytics to inform smart choices regarding the financial structure, scope, and breadth of risk-bearing payment models. Some of the important questions that must be answered include: How is episode defined, designed and optimized within a payer contract? How is an actual episode and network best structured? What is the best way to measure performance and attribute payments to the right providers?
All of these decisions are critical to system design that promotes the right behavior and achieves the desired outcomes. As leaders of health networks strive to implement the smartest strategies for unlocking the “value” of value-based care, they can consider these five best tips for strengthening revenue cycle management (RCM) in a fluid reimbursement climate.
1) Prioritize predictive analytics capabilities
The simultaneous management of both value-based and fee-for-service patients impacts the predictability of revenue. Within traditional reimbursement models, providers can easily anticipate earned dollars, but risk-bearing arrangements are not as certain. Thus, existing infrastructures must expand not only to address fee-for-service but to also provide the predictive analytics and forecasting capabilities needed for managing risk-bearing financial management processes. These competencies— with limited adoption across the provider market thus far—help identify key population risk indicators to inform contract, network and bundled payment arrangement design and negotiation. Data aggregation becomes critically important as providers must create a single view into an episode of care that may span many providers and HIS systems. Possessing the data alone is not enough, but when coupled with machine learning algorithms and other advanced analytics capabilities, providers can derive previously unattainable insights. Simply put, providers cannot prepare for and manage risk if they lack the data that defines it.
2) Acquire advanced RCM functionality
Contracts become increasingly performance-based within value-based payment models, requiring a broad-based understanding of the downstream impact delivered by various stakeholders. For instance, contract design must consider not only the quality of a particular provider, but also the quality of that provider’s referral network. As such, RCM capabilities must advance to support aggregation of disparate data and high-level analytics. Then, providers armed with actionable information can make informed decisions around episode and network design, attribution, utilization management, provider performance management, and payment distribution. In simultaneous support of fee-for-service arrangements, providers can leverage automation capabilities to accurately spit, disperse, and post payments—a function of billing that is becoming increasingly cumbersome as bundled payments expand.
3) Create comprehensive, end-to-end performance transparency
Delivering high quality care is one critical element of the equation. Measuring, reporting, and actively managing performance is another. Providers must have infrastructures and systems in place to accurately and thoroughly capture risk adjustment and quality measures in a consistent and scalable manner.
Additionally, performance measures and management structures must span the fee-for-service and fee-for-value continuum. If systems and processes are not designed capture end-to-end financial transparency, risk management, and overall performance, the revenue cycle is disadvantaged from the very start and is limited in its ability to achieve full reimbursement potential. Payers’ participating in commercial exchanges payments will suffer if risk populations aren’t accurately captured and identified.
4) Improve payer-provider collaboration
Success with value-based care hinges on the ability of payers and providers to work together. Historically adversarial payer/provider relationships must now give way to partnership models that also open the door for greater collaboration within fee-for-value arrangements. Balancing the tension between disagreements on fee-for-service related relational challenges and the need to act as trusting partners is a difficult task. However, when payers and providers work together to solve long-standing challenges such as per-authorizations and long claiming cycles, the potential for improving the efficiency of revenue cycles dramatically increases creating benefits for both payers and providers.
Additionally, closer payer-provider collaboration under value-based models introduces new opportunities for simplifying the patient payment experience and improving overall satisfaction. By rolling up fragmented billing and payment systems into a transparent and inclusive system, payers and providers can work together to dramatically simplify the billing experience for patients, which will in turn improve the yield and timeliness of patient collections activities. Patients trust their payers to help them navigate their financial responsibility for their care, creating an opportunity as payers and providers collaborate more closely in value-based arrangements.
5) Find the right partner
While the industry is embracing and adopting better revenue cycle models, infrastructures and processes remain largely fragmented. Resource-strapped healthcare organizations need access to broad capabilities and expertise that can address the nuances of RCM in both fee-for-service and fee-for-value operations. For many providers, the best answer is found with the right partner—one that addresses the needs of an end-to-end, integrated revenue cycle, with scalable solutions that can evolve to address new industry payment models.
Today’s revenue cycle climate introduces new opportunities and challenges for health networks. Providers can expect to operate within the competing framework of fee-for-service and fee-for-value for the foreseeable future as payment models evolve. The good news is that advanced and forward-looking solutions exist that hospital leadership can leverage to equip their healthcare organizations with the tools and data needed to successfully navigate this dynamic environment.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
