Healthcare Revenue Cycle Management
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RESEARCH AND REPORT BY $ $ $ $ $$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ HEALTHCARE$ $ $ REVENUE $ $ CYCLE MANAGEMENT TRENDS IN ALTERNATIVE PAYMENT MODEL ADOPTION 2016 1 Contents Executive Summary 3 Vendors Covered in this Report 4 Demographics 5 Most Critical Aspects of RCM 6 Alternative Payment Model Adoption Rates 9 Why not adopting? 11 Revenue Cycle Management Alphabet Soup 12 A Key to Understanding APMs Accountable Care Organization (ACO) Bundled Payments Capitation Comprehensive Primary Care (CPC) and CPC+ MACRA - MIPS and APMs Pay for Performance (P4P) Value-Based Purchasing (VBP) Alternative Payment Models 14 Alternative Payment Vendors Used 15 Recommendation Ratings 17 Deficiencies 18 Alternative Payment Vendors Considered 19 Impact of Value-Based Adoption 21 Outsourcing 25 Conclusion 27 2 Executive Summary Revenue cycle management (RCM) runs the show on the financial end of health care. RCM solutions come in all shapes and sizes from tracking patient data to appointment scheduling to insurance verification to coding...and beyond. A good RCM solution reduces time between service and payment-- and getting paid sooner is always a good thing-- while taking the load off of employees who have more important duties to perform. In this updated report from a similar study last year, providers shared their current opinions on what they believe the impact of alternative payment models for value-based care will be on their organizations, which areas of RCM they will most likely need to outsource, and what vendors they are considering (whether for the first time or in replacement of their current solution). Disclaimer: As alternative payment models for value-based care are being adopted at staggeringly slow rates (if at all), there are few providers who felt they could give informed recommendations or opinions on this subject. This Reaction Report is a quick look at what’s going on in this realm. The data reflects that-- take it how you will. Research & Analysis: Jeremy Bikman Chris Jensen Junior Analyst: Jordyn Crowley 3 VENDORS COVERED IN THIS REPORT Disclaimer: We understand there is an array of payers and vendors who help providers with their varying revenue cycle management needs. In an attempt to simplify the lan- guage as we make comparisons, we will be referring to all as “vendors” throughout the report. 4 DEMOGRAPHICS Our participants represent a broad spectrum of opinions and concerns in their varying roles. Each provides a different perspective that vendors need to consider when servicing their solutions. Different sizes of hospitals also have very different opinions, concerns, and needs from their RCM vendors. Participants by Title *Other = Assistant Administrator; Chief Nursing Officer; Comptroller; Deputy Director of Recovery; Manager of Applications & Integration; Physician; Regional Director of Risk, Compliance, Privacy Officer; RN Participants by Bed Size 5 MOST CRITICAL ASPECTS OF RCM With varying importance placed on each item of this list, one thing is clear: effective RCM operations are absolutely critical to the overall health of every single provider organization in the country. Most Critical Aspects of RCM 6 CRITICAL ASPECTS CONT. Critical Aspects by Bed Count When segmented by organization size and by role, the individual trends generally follow the overall figures in the previous graphs, with most important aspects of RCM displayed on the left and less important on the right. However, we see a few segments breaking rank. Hospitals between 50-100 beds are more evenly concerned about these items with some exceptions. Where it becomes a little more interesting is in the 501-1,000 bed size organizations; this group appears to have a reverse trend in comparison to the other care facility sizes, with “clinical and financial outcomes” peaking in this segment. This group appears to be more concerned with the weight of an eventual, but inescapable, shift to true value-based care. In other areas, “eligibility and benefits” is the hot button for ambulatory facilities as they operate like small businesses rather than hospitals. Where many hospitals operate with government subsidies, ambulatory facilities need consistent patient payment for care (i.e. insurance) in order to keep the doors open. 7 CRITICAL ASPECTS CONT. Critical Aspects by Title 8 ALTERNATIVE PAYMENT MODEL ADOPTION RATES One year ago, in 2015, our data to see that this perspective has not changed showed that 36% of hospitals reported that much as value-based care continues to pick up they were adopting alternative payment steam. Luckily, providers elaborate on these models; 61% said they were not yet adopting decisions as pertaining to their opinions of such a payment model, but they would be in value-based payment models in the sections the future; only 3% said they would not adopt below. alternative payment models. It’s interesting Alternative Payment Model Adoption (Year-by-Year) Will your organization adopt alternative payment models for value-based care? 9 PAYMENT MODEL ADOPTION CONT. Adoption Rates by Title This trend seems to fit what would are more likely to be confident in making the be expected: bigger hospitals are much change. What we find interesting is the percent more likely to have the resources to pull off of outpatient participants suggesting they a new payment model adoption than smaller will wade out into the murky waters of value- hospitals. This trend has stayed fairly constant based care, despite the significantly different when considering last year’s study as well; business models many of the facilities operate hospitals with less than 500 beds are likely to under compared to hospitals. be the slowest to adopt, and the large hospitals Adoption Plans by Bed Count 10 WHY NOT ADOPTING? Providers who indicated they would not be adopting a value-based payment model offered up a variety of explanations. Some were of the opinion that doctors would be paid less than ever before due to noncompliant patients; outcomes determined primarily by patient compliance could lead to physicians cherry-picking patients whose outcomes will show higher levels of value. One provider even called the value-based system “diabolical.”’ “[Alternative payment model] [o]utcomes are determined primarily by patient compliance and it is diabolical to blame doctors for this. Doctors should be paid on the basis of how much work they do (that is how every other professional is paid!), and not on the basis of patient compliance. Under this new model, physicians will start to cherry pick patients, and the sicker, less compliant patients will have no care.” One opinion worth mentioning spoke to the metrics used by different payers; with no standardized approach, quality as measured by national organizations might not accurately reflect local volumes and supply and demand metrics. “Metrics used by payers are not reflective of the true quality of services delivered. Payers have different metrics-- no standardized approach as a group of payers… Payers change metrics in short term.” 11 ALTERNATIVE PAYMENT MODEL ALPHABET SOUP A Key to Understanding APMs Knowing just how many options providers have when it comes to alternative payment models (APMs), and what types of payments each model covers, is critical in understanding the revenue cycle management decision-making process. Which payments are guaranteed and which ones rely on performance? Which payments depend solely on quality and which factor in quantity? The main APMs, according to the data at hand, are briefly explained in the section below. Accountable Care Organization (ACO) PARTIAL Capitation payments are used to Groups of health care providers, ranging from pay providers a fixed sum based on specific hospitals to individual doctors, come together services that a patient receives for a specified in Accountable Care Organizations (ACOs) to amount of time; unspecified services will be coordinate care and provide the best possible paid on a fee-for-service basis. quality of service. Medicare offers differing ACO programs to incentivize providers, but Comprehensive Primary Care (CPC) and participation is voluntary. CPC+ Bundled Payments The Comprehensive Primary Care (CPC) initiative is a four-year, multi-payer, According to the Bundled Payments for Care single-model initiative (ending December Improvement initiative, under the Affordable 2016) taking place in seven U.S. regions Care Act, payments for multiple services to encourage providers to support five provided in one episode of care are linked “comprehensive” care functions. CPC together. Bundled payments serve as a happy practices receive a monthly care management medium between fee-for-service billing and fee. capitation. This initiative encourages more accountability when dealing with preventable Comprehensive Primary Care Plus (CPC+) conditions and coordination across health is a CPC redesign, beginning January 2017 care providers. and planned to run for five years. CPC+ Capitation will support up to 20 regions and will offer two payment tracks with requirements FULL Capitation payments are used to that should offer greater flexibility to care pay providers a fixed sum per patient for a beneficiaries. Providers who participate in specified amount of time. Capitation rates CPC+ will be paid up incentives up front, but are typically determined on a per patient, will have to return their payments should per month basis (PMPM to use management performance not be up to par. jargon), and vary by local