Commercial Payers and Value-Based Reimbursement

Lea Chatham March 30th, 2016

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By Adria Schmedthorst

Like it or not, value-based reimbursement is here. With all the focus around Merit-Based Incentive Payment System (MIPS) and what will happen to Medicare reimbursements, it is easy to forget that the government payers are not the only ones getting involved in the movement. Commercial payers have jumped on board in the transition away from fee-for-service and are embracing fee-for-value at an escalating rate. This means that even if you are not a Medicare or Medicaid provider, you still need to prepare for the shift to value-based care in order to maximize your reimbursements.

Let’s take a look at some examples of how commercial payers have embraced fee-for-value over the past few years. Tweet this Kareo story

  •  In 2012, Horizon Healthcare Innovations, a Horizon Blue Cross Blue Shield of New Jersey company, began providing a “care coordination” payment to help practices transition into medical homes.
  • AmeriHealth New Jersey and United Healthcare provide primary-care doctors with monthly per-patient care management fees, in addition to fee-for-service payments in cooperation with CMS through the Comprehensive Primary Care (CPC) initiative.
  • In 2008, Blue Cross Blue Shield of Massachusetts developed its Alternative Quality Contract (AQC), setting an annual budget for provider groups to meet all the healthcare needs of their patients while still hitting quality targets.
  • In 2011, CaroMont Health and Blue Cross and Blue Shield of North Carolina (BCBSNC) implemented a bundled payment arrangement for an entire knee replacement.
  • Health Partners programs in the upper Midwest withhold one to five percent of a provider’s revenue, returning it based on reaching quality, satisfaction, and efficiency targets.
  • United Healthcare in Illinois rated providers based on quality and efficiency and gave a five percent increase on their contracted rate to physicians who met United’s goals.
  • Blue Cross Blue Shield of Minnesota is shifting focus from treating chronic and acute illnesses to prevention and is making payments based on value determined by the total cost of care and outcome measurements.
  • Humana has a Provider Quality Rewards program based on nine HEDIS measures for breast, colorectal, glaucoma, nephropathy screening, and diabetes metrics. It looks at historical practice data in smaller practices and offers providers rewards for improved quality over baseline scores.

More and more, private payers are either copying the Medicare models for value-based reimbursement or developing their own systems. What they all have in common is that they tie provider’s performance on measures of quality and efficiency to payment increases or other incentives, often incorporating a physician report card to compare the provider’s or the practice’s performance.

Whether your practice contracts with Medicare and Medicaid, private payers, or a combination you need to be ready for the shift to a system that pays for value rather than for volume. Over the next few years, your compensation will increasingly be linked to quality of care, patient satisfaction, outcomes, efficiency, and costs, whether you are billing government or private payers. Value-based reimbursement is here and it is time for all of us to prepare our practices to survive and thrive under the new system.

About the Author

Adria Schmedthorst is a writer focusing on the medical device, technology, software, and healthcare industries. Adria is the founder of AMS Copy and a healthcare professional herself with more than 10 years in practice. She now uses her knowledge of the industry to help companies achieve their goals of writing content that speaks to the hearts and minds of medical professionals. She has been featured in blogs, written articles, and other publications for the industry, and ghostwritten books for doctors in both the United States and Australia.

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Making Sense of MIPS

Lea Chatham March 24th, 2016

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By Adria Schmedthorst

By now, most providers have heard of the Merit-Based Incentive Payment System (MIPS) that was signed into law in April 2015. MIPS is a quality and performance improvement program that will roll three current Medicare programs—Physician Quality Reporting System (PQRS), Meaningful Use (MU) program, and the Value-Based Payment Modifier (VBPM)—into one.

Although MIPS is slated to begin in 2019, the two-year look-back period used by the Centers for Medicare and Medicaid Services (CMS) will make 2017 the first performance year for MIPS. That means you must use the months ahead to make sense of the new program and prepare to take advantage of the incentives and avoid the penalties.

To get a sense of the importance of being ready for this new reimbursement model, here is a look at the financial impact MIPS will have on you. Tweet this Kareo story

  1. Along with Alternative Payment Models (APMs), MIPS will redefine how $250 billion per year in Medicare Part B payments will be paid to physicians in a value-based rather than fee-for-service based manner.
  2. High-performing providers will be rewarded with up to and even beyond 27% of Part B payments. 3. Low-performing providers will be penalized up to 9% of Part B payments.

Eligible professionals for the first two years of MIPS will include physicians, PAs, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists. To participate in MIPS, providers must meet a volume threshold of a minimum number of Medicare beneficiaries, items or services, and/or allowable charges.

Reimbursement will be based on an annual scoring system with each provider’s MIPS score determined by four performance categories including meaningful use of EHRs, quality, resource use, and clinical practice improvement.

These categories will be weighted as follows for 2017:

  • MU of Certified EHR Technology: 25 points
  • PQRS/VBM: 50 points
  • VBM Cost: 10 points
  • Clinical Practice Improvement: 15 points

The number of points awarded in these categories will change beginning in 2019 but it is important to note that for at least the first two performance years, 75% of a provider’s scores will come from Meaningful Use and PQRS/VBM, two categories that many providers are already focused on.

The way that the scoring system works is that based upon their composite, each provider will receive a score ranging from 0 to 100. CMS will annually define a threshold of performance such as 50. Providers with a score of 50 would not be subject to Medicare Part B adjustments while providers with scores above or below 50 would either earn incentives or receive penalties respectively.

MIPS adjustments are meant to be budget neutral, so we can expect an equal number of positive and negative reimbursement changes. Yet, there is good incentive given to the highest performers as MIPS is offering up to three times the maximum positive adjustments to these providers. Also, for the years 2019-2024, a $500 million bonus pool will provide additional incentives for up to 10% of what the law calls “exceptional performers”.

In addition to the effect a provider’s MIPS score will have on their reimbursements, these scores will also be reported on the CMS Physician Compare website. This will allow consumers to view ratings and select providers based upon their perceived quality of care and value.

MIPS has yet to be finalized and there will be even more changes to come in the next few months. MU performance and PQRS reporting are categories that CMS has hinted could see major modifications. Despite this uncertainty, one thing is sure and that is that MIPS is on its way and you must begin preparations for this massive change in Medicare Part B reimbursements now.

About the Author

Adria Schmedthorst is a writer focusing on the medical device, technology, software, and healthcare industries. Adria is the founder of AMS Copy and a healthcare professional herself with more than 10 years in practice. She now uses her knowledge of the industry to help companies achieve their goals of writing content that speaks to the hearts and minds of medical professionals. She has been featured in blogs, written articles, and other publications for the industry, and ghostwritten books for doctors in both the United States and Australia.

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5 Steps to Setting Up Your Medical Practice Social Media

Lea Chatham March 22nd, 2016

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Not sure how to get started with social media for your medical practice. Dr. Molly Maloof provides her five tips to get started and make the most of medical practice social media in this short video. Tweet this Kareo story

 

Download our free guide, 4 Steps to Building and Managing Your Practice’s Online Reputation.

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Don’t Miss Free Webinar on Pros and Cons of Common Practice Models

Lea Chatham March 17th, 2016

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The ABCs of Practice Models: From ACOs to Concierge and Everything in Between
Tuesday, March 23
10:00 AM PT, 1:00 PM ET

Get the scoop on the pros and cons of several practice models including concierge, direct primary care, and IPAs in this free webinar Tweet this Kareo story

 

Have you been wondering if you should switch to another reimbursement model like concierge or direct primary care? Or perhaps you think it is time to join a larger group like an ACO or IPA to take advantage of stronger bargaining power. How do you know if a change like this is right for your practice?

In this free webinar, Lea Chatham will review a variety of different models and options and share:

  1. What to consider before making a change
  2. The pros and cons of each option
  3. Some of the regulatory and legal considerations
  4. The role of technology and practice marketing for the various choices

Register now to reserve  your spot!

Register Now

About the Speaker

Lea Chatham is the Content Marketing Manager at Kareo and the editor of the Getting Paid blog. She is responsible for developing educational resources to help small medical practices improve their businesses. She specializes in simplifying information about healthcare and healthcare technology for physicians, practice staff, and patients. Her work has been published in many leading journals including Physicians Practice, Medical Economics, Medical Practice Insider, and the PAHCOM Journal.

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8 Ways to Enhance the Patient-Physician Relationship

Lea Chatham March 15th, 2016

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By Lisa A. Eramo

Improving patient outcomes. Increasing patient retention. Expanding patient engagement. Enhancing patient satisfaction. How can physicians accomplish each of these goals—and more—simultaneously? One word: Communication.

According to research conducted by Stanford University’s Center for Compassion and Altruism Research and Education, patients are more than twice as likely to listen to their physician when he or she is a good communicator. In addition, patients who experience compassionate care are more likely to divulge important information to their clinicians, making diagnosis more accurate, the research found.

Unfortunately, though once viewed as the core of every patient encounter, basic communication seems to have fallen by the wayside in favor of the rapid adoption and integration of health IT. In many practices, data entry trumps patient relations.

“We’ve had a lot of external forces that have pushed us into the technical realm of delivering healthcare and taken us away from the cultural piece that’s so critical,” says Williams Maples, MD, executive director and chief experience officer of the Institute for Healthcare Excellence (IHE) and CMO of Professional Research Consultants. “We’ve migrated away from the practice of medicine that truly embraces the relationship between physicians and patients.”

Maples says this migration has occurred primarily because of a reimbursement system that rewards technological competencies as well as the volume of visits and/or procedures rather than the ability to create effective and meaningful relationships with patients.

“But when you do the communication work—and then you start to layer on all of the other things that help with the technical delivery of medicine and the efficiency and re-engineering—that’s when you really start to see dramatic improvements,” he says.

Exactly how can physicians improve their communication skills? Maples provides the following eight strategies: Tweet this Kareo story

  1. Think of your most meaningful connections. When you were most afraid or particularly vulnerable, who helped sooth you and how? How did this individual communicate in terms of inflection and style? What did he or she say? This is the type of connection that many patients want.
  2. Be present. Focus directly on the patient—not the EMR, a clipboard, a phone, or a pager. The patient deserves your full and complete attention during the visit.
  3. Listen and gather as much information as possible from the patient. Let the patient tell his or her story completely. Make time for the patient to ask questions before the end of the visit.
  4. Connect with the patient. Recognize the emotion in the room, and respond appropriately. For example, if your patient discloses frustration with his or her weight gain, validate that frustration and work collaboratively to problem solve without judgment.
  5. Show appreciation. Did the patient meet a goal? Work hard on something? Share a personal detail? Thank the patient for being vulnerable and/or communicating with you.
  6. Remember that good communication doesn’t equate to longer communication. It’s about the quality—not duration—of time you spend with patients. “So often, clinicians say ‘That’s great, I can do all of that if you give me another 30 minutes,’” says Maples. “My response to that is that it doesn’t need to take longer. Once you master these skills, you can have a meaningful connection even if you only have five minutes or less to spend with a patient.”
  7. Educate all members of the clinical team. “It’s important to teach these skills in medical school, but more importantly, we need to get these skills into the hands of senior staff,” says Maples. “Young physicians leave medical school with a pretty high level of empathy and ability to connect emotionally. We quickly mentor these skills out of young physicians entering the profession. To have a sustainable effect, these skills must be introduced to every single member of the medical team.”
  8. Always strive for improvement. Not every conversation will be perfect. “It’s a lifetime career journey,” says Maples.

Interested in learning more patient engagement strategies? Download this helpful guide.

About the Author

LisaEramofreelanceLisa A. Eramo is a freelance writer/editor specializing in health information management, medical coding, and healthcare regulatory topics. She began her healthcare career as a referral specialist for a well-known cancer center. Lisa went on to work for several years at a healthcare publishing company. She regularly contributes to healthcare publications, websites, and blogs, including the AHIMA Journal and AHIMA Advantage. Her focus areas are medical coding, and ICD-10 in particular, clinical documentation improvement, and healthcare quality/efficiency.

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Check Out Latest on MU, Practice Models & Medical Billing in Getting Paid Newsletter

Lea Chatham March 8th, 2016

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The March Kareo Getting Paid Newsletter provides medical billing tips on improving your days in A/R, the latest on the Meaningful Use hardship exemption, and an overview of concierge medicine. Discover upcoming events, news, and resources from Kareo. Plus, learn about how to register for upcoming webinars. Read all this and more now! Tweet this Kareo story

 

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Meaningful Use Hardship Exemption Deadline Extended – Again!

Lea Chatham March 7th, 2016

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If you weren’t sure you could get your application in to CMS by March 15 to request a hardship exemption to avoid the 2017 penalty, you now have a bit more time. Tweet this Kareo story

In a recent statement, CMS announced that they were extending the deadline to give providers and hospitals more time to apply. The new deadline for eligible hospitals and providers is July 1.

If you are unable to attest for Meaningful Use for 2015, a hardship exemption would allow you to avoid a penalty beginning in 2017. You can find instructions and the application form on the CMS website.

As a reminder, the application was previously streamlined and allows you apply as an individual or as a group. You can apply for the hardship exemption if you were unable to meet meaningful use for one of these reasons:

  1.  Insufficient Internet connectivity
  2. Extreme and uncontrollable circumstances (natural disaster, practice closure, severe financial distress, EHR vendor certification issues)
  3. Lack of control over the availability of a certified EHR
  4. Lack of face-to-face patient interaction

You do not need to apply for a hardship exemption if:

  1. If you are a new provider (Note: new to Medicare)
  2. If you are a hospital employed provider
  3. If you are in one of these specialties: Anesthesiology, Diagnostic Radiology, Interventional Radiology, Nuclear Medicine, or Pathology

For more information on Meaningful Use, visit the Meaningful Use Resource Center.

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10 Tips to Improve Your Average Days in A/R

Lea Chatham March 7th, 2016

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By Lisa A. Eramo

Days in accounts receivable (A/R) is the average number of days it takes a practice to collect payments due. This metric provides valuable insight into the overall efficiency of your revenue cycle. A lower A/R implies faster payment—a necessity in today’s self-pay and high-deductible health plan environment. Physicians need to collect every dollar that’s due to them as quickly as possible. All practices should strive for an average 40-day A/R cycle to ensure smooth cash flow and operations.

To determine your average A/R, divide your total accounts receivable by your average daily gross charge. Your average daily gross charge is your total gross charges for the past year divided by 365 days.

What are some strategies that practices can use to stay within the 30-40 day A/R timeframe? Consider the following 10 tips: Tweet this Kareo story

1. Verify insurance eligibility and demographic information prior to each visit. Does you have the correct address, phone number, and email address on file? Is the patient’s insurance active? Will a copayment and/or deductible be due? If so, what is the amount? Let patients know this information in advance.

2. Consider a batch eligibility system. This system provides a report showing each patient’s current coverage and eligibility status. Run this report two days before each patient appointment to identify potential errors in data input as well as any undetected gaps in coverage. The system ensures up-to-date information, and it helps practices catch any changes that might occur between the booking of the appointment and the actual date of service.

3. Collect 100% of all copayments at the time of service—when the patient checks in for his or her appointment. Let patients know in advance of this expectation.

4. Revise billing statements to communicate effectively with patients. Include the dates of service as well as a detailed breakdown of the services rendered, insurance payments, fees collected at the time of service, and a total amount due.

5. Send two patient statements and then follow up with a phone call for 90-day past due balances. Then decide whether to send the account to collections or write off the amount.  Sending more than two statements is typically unfruitful, and it wastes valuable time and resources.

6. Send bills to patients and/or insurers as soon as possible (i.e., weekly rather than monthly). Lengthening the time between the date of service and the date of billing oftentimes causes downstream effects in terms of payment delays. Patients are more likely to pay their bill when it arrives as close as possible to the date of their appointment.

7. Offer credit card or online bill pay to make it easier for patients to comply. These options are particularly important for patients with high-deductible health plans and/or health savings accounts who are covering the majority of the bill.

8. Hire a certified coder. This individual can:

  • Ensure accurate assignment of ICD-10-CM diagnosis and CPT procedure codes
  • Help physicians improve documentation to meet specific payer requirements and accurately reflect patient severity as well as the care provided
  • Stay on top of industry trends and regulatory requirements
  • Answer patients’ questions about copayments and deductibles

9. Get a good picture of your data. Consider these tips to enhance performance:

  • Calculate overall average days in A/R as well as average days in A/R by payer. Does one payer, in particular, continually cause problems? If so, address the issue directly with this payer.
  • Calculate days in A/R with and without accounts sent to collections to get a truer picture of performance.
  • Don’t forget about older aging buckets (i.e., past 90 or 120 days). Your overall average A/R days might be satisfactory even when these buckets are elevated. Monitor these statistics separately.

10. Strive for constant improvement. Monitor your data and compare it with previous quarters and/or years. A/R suffers the most when practices remain complacent and don’t address balances from month to month. Tackle the problem head-on. With a little effort, you A/R can improve significantly.

If you are looking for ways to improve you medical billing, use this Billing Best Practice Checklist to establish goals for best practices.

About the Author

LisaEramofreelanceLisa A. Eramo is a freelance writer/editor specializing in health information management, medical coding, and healthcare regulatory topics. She also works as a healthcare content specialist for Agency Ten22. She began her healthcare career as a referral specialist for a well-known cancer center. Lisa went on to work for several years at a healthcare publishing company. She regularly contributes to healthcare publications, websites, and blogs, including the AHIMA Journal and AHIMA Advantage. Her focus areas are medical coding, and ICD-10 in particular, clinical documentation improvement, and healthcare quality/efficiency.

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Is Concierge Practice Right for You?

Lea Chatham March 7th, 2016

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By Adria Schmedthorst

In concierge practices, patients pay for enhanced medical access and service. Although they may have been around since the mid-1990s, they have gained significant traction in the past decade. This type of practice charges a retainer from $2,000-20,000 plus per year for the benefit of immediate physician accessibility, more personalized care, telephone visits, executive-type physicals, and sometimes even house-calls.

According to Concierge Medicine Today (CMT), over 80% of concierge practices function as a hybrid type of model, charging a retainer and billing insurance for covered services. Tweet this Kareo story

This retainer-based system allows these practices to reduce their patient panel to less than 500 patients compared to conventional practices, in which over 63% reported a patient panel of more than 1,000 in Kareo’s 2015 Practice Models Perspectives survey.

Concierge and direct-pay practices have many similarities resulting from the fact that the patients seen in these practices take a more active financial role in their healthcare. These practices also share common ground in their price transparency, physician access, and personalized level of service.

Reasons to Consider Switching to a Concierge Practice

  1. Get more time to spend with patients: According to CMT, concierge physicians see an average of 6-8 patients per day compared to conventional physicians, averaging 20-24. Additionally, Kareo’s 2015 survey showed that 72% of these providers were able to spend 30-60 minutes with each patients compared to the 15-30 minutes spent by their counterparts.
  2. Reduce reliance on insurance: Separating from the insurer payer system was cited by 46% of doctors who switched their practice to a concierge or direct-pay practice as the reason behind the change. Moving into a retainer-based system, even while billing insurance for covered services, drastically decreases your practice’s reliance on 3rd party claims payments for its financial viability.
  3. Focus on preventative care: Switching to a concierge practice also allows the physician to focus on lifestyle and preventative care plans for their patients. The retainer charged in these practices can be used to cover these proactive services that insurance typically excludes and allows providers to concentrate on wellness.

Pros and Cons of the Concierge Model

As with every practice model, concierge medicine comes with its advantages and disadvantages. Some of the most obvious advantages of moving to concierge practice include the reasons discussed for switching in the first place, such as:

  • Being able to spend more time with each patient to really talk to them and use your skills to their fullest extent
  • Relying less on 3rd party payers

Other benefits include:

  • Increased job satisfaction
  • Decreased time on administrative duties (on average 5 hours less per week according to Kareo’s 2015 survey)
  • Fewer staff members required due to less dependence on insurance
  • Lower overhead expenses

The negatives of choosing a concierge model include:

  • Increased financial impact when patients choose to leave the practice due to the smaller patient pool
  • Inability to rely on insurance contract to bring in new patients
  • Effective and regular marketing essential to the recruitment of new patients

Legal and Regulatory Issues
Before making the switch to this model, there are potential legal and regulatory issues that must be examined. The first is whether or not the practice will trigger insurance law. These laws vary by state. For example, New York is fairly restrictive and offering unlimited patient visits, even for a high retainer, could classify your practice as an insurance business.

Other states have laws in place that could result in a concierge practice being viewed as discriminating based on the retainer fee required to become a patient. Additionally, practices that accept insurance could violate the hold-harmless clause included in many HMO provider contracts. It is always beneficial to get the advice of an attorney to help you navigate these legal pitfalls.

Federal Medicare laws must also be taken into consideration if the practice will accept Medicare patients since these laws prohibit charging Medicare recipients more than the allowable amount for participating physicians. Concierge practices must also be watchful about including services in their retainer fee that are covered by Medicare as this is considered double-billing and comes with steep penalties.

Many concierge physicians choose to opt-out of Medicare due to these concerns. If you choose to opt-out, make sure to follow the process precisely since violating any of Medicare’s opt-out rules can result in the loss of rights to enter into any private contract and receive any Medicare reimbursement for up to 2 years as well as liability under the False Claims Act.

Making the Decision
If concierge practice is the right choice for you, you may just get the best of both worlds, a retainer-based system that allows you to focus on preventative care and time with your patients as well as insurance billing that supplements your income. Evaluate the pros and cons carefully and seek legal advice to ensure you start off on the right foot and avoid a financial dip during your transition.

To learn more about concierge practice and other practice models, register for the upcoming webinar ABCs of Practice Models.

About the Author

Adria Schmedthorst is a writer focusing on the medical device, technology, software, and healthcare industries. Adria is the founder of AMS Copy and a healthcare professional herself with more than 10 years in practice. She now uses her knowledge of the industry to help companies achieve their goals of writing content that speaks to the hearts and minds of medical professionals. She has been featured in blogs, written articles, and other publications for the industry, and ghostwritten books for doctors in both the United States and Australia.

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Video: Use Referrals to Grow Your Medical Billing Company

Lea Chatham March 3rd, 2016

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Are you looking for ways to grow your medical billing company? In this short video expert Paul Bernard shares his secret to success—referrals—and how to get them. Tweet this Kareo story

If you are looking for more tips on growing your medical billing company, download this helpful guide.

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Welcome to Getting Paid, a weblog by Kareo offering ideas, news and opinions about medical billing and practice management with the goal of making medical billing easier and yes, getting you paid. Visit the Product Blog for more information on our products.

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