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The Difficult Transition to Value-Based Payment

Health care leaders identify ‘pain points’ at annual conference

With commercial insurance carriers and Medicare squeezing payment rates in the ongoing drive to reward providers for value rather than volume in the delivery of medical services, health care finance executives are scrambling to identify their weaknesses and to retool their organizations for value-based care, according to a report from HealthLeaders Media, which covered the annual Healthcare Financial Management Association National Institute conference in Orlando, Florida.

At the meeting, Yvonne Chase, section head for patient access and business solutions at the Mayo Clinic Arizona in Phoenix, said data collected at the clinic indicate that 93% of patients who are satisfied with the health system’s billing practices are also satisfied with their clinical experience –– but that only 63% of patients are satisfied with their clinical experience when the billing experience is negative.

At the start of the meeting, health care finance professionals listed several concerns:

  • Clinical documentation improvement (CDI)
  • Computer-assisted coding
  • Improving the patient experience
  • Establishing revenue-cycle best practices
  • Converting paper-based record systems to electronic health records (EHRs)
  • Managing queries from coders to physicians
  • Managing coding query responses from physicians
  • Integrating physician EHRs with revenue cycle systems
  • Speeding up cash flow
  • Providing timely data to front-line health care finance and clinical staff

CDI is a key element in optimizing a health system’s revenue cycle, according to workshop speaker George Semko, the administrative director of revenue cycle at Virginia-based Augusta Health. Semko noted the importance of “opening up lines of communication between the clinicians and the revenue cycle administrators.” Accurate clinical documentation plays a fundamental role in the claims reconciliation process and cash flow levels, Semko said. The bottom line: If clinical documentation is done poorly, health systems and hospitals do not get paid on a timely basis, or not at all.

Another workshop presenter, Sandy Wood, director of revenue cycle at Florida-based NCH Healthcare System, said designing and implementing a new approach to revenue cycle operations has improved the health system’s financial performance.

Mainly because of increased pressure from competitors, NCH’s market share fell from 80% to 69% from 2010 to 2013, which prompted the health system to revamp revenue cycle administration, Wood said. In addition to CDI efforts, NCH financial administrators concentrated on leveraging health information management (HIM) capabilities. An electronic dashboard was established to circulate key clinical and financial metrics to all NCH department heads, including daily inpatient census, daily emergency room visits, and daily cash collection. NCH also started monitoring about a dozen revenue cycle metrics, including bad debt as the percentage of gross revenue, cash collection, cost to collect, billing net days in accounts receivable, and the final claims denial rate.

At the Mayo Clinic in Phoenix, the entire revenue cycle lifespan presents opportunities to boost the patient’s experience, according to Chase. “Pre-service communication sets the tone for the entire encounter,” she said, referring to the clinic’s outreach efforts before a patient arrives for services, which include collecting the correct information, scheduling patients appropriately with the right doctor, and ensuring that services are covered and reimbursed at the highest possible level for patients. “We need to give the patient at least a ‘guesstimation’ of how much it’s going to cost out of pocket,” she said.

The patient-experience “gains” at the Mayo Clinic are measurable, Chase remarked, noting that pre-service communications with patients has helped increase point-of-service collections by 12%. Moreover, streamlining of the health system’s referral process has cut appointment wait times by about a third.

To thrive in straitened circumstances, Chase said, health care providers need to learn from each other, share their success stories, and brace for the hard work of organizational change.

Source: HealthLeaders Media; June 23, 2015.


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