Time for Healthcare to be Top of Wallet

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Adam Nelson – Vice President at NTT DATA, Inc

You may have seen on television commercials that a particular retail and credit card bank wants to know, What’s in your wallet? This question and the drive toward being top of wallet is a customer relationship management (CRM) theme that the financial industry has been focused on for decades. The intent is to drive consumers to use their credit card the most and become your bank for other services, from checking and savings accounts to auto and home loans. So, open your wallet and take a look inside. What do you see? Is it American Express, Target, or Capital One? Is it your driver’s license? Regardless of what card you see first, one thing is for certain, it was not your healthcare insurance card.

The financial industry knows how to create stickiness with its consumers attract them young via their first savings or checking account (pre-collegiate years) and then give them a credit card when they turn 18. They, then have a profitable consumer for life, which averages between 14 – 22 years in the banking industry and spans auto and home loan up-sell opportunity. However, for a healthcare insurance company, consumer stickiness, or top of wallet mindset, has been traditionally based on a once a year enrollment event or a quick scan of an Explanation of Benefits letter after a preventive or acute event (annual exam or hospital visit). This depicts an extreme lack of stickiness with a healthcare consumer, which the health plan desperately needs to have, but never considered prior to the healthcare event or as a primary focus on health management and wellness programs.

This last concept is an interesting one diet plans emerged in the 60’s with Weight Watchers, followed by Atkins in the 70’s, evolved to the 80’s era of Let’s Get Physicalgym memberships and where did we end up? With an obesity epidemic in America and abroad popularized by a shift in dining habits (eating out and eating faster), longer working hours (translating into less time for exercise) and a notable upswing in detrimental ingredients like sodium and sugar. All combined, these factors have contributed to an increase in chronic conditions that we all know; diabetes, heart disease, hypertension and the list goes on.

Now, we are entering an era of consumer directed health whereby individuals have more options, yet also want a better experience in what is being distributed as a more self-service model. So, how does a health plan create an ecosystem that is attractive to new customers (price driven), sticky (to increase retention), self-serving (cost effective), and helpful (quality of care with tangible positive outcomes)

Almost every health care insurer has some sense of a program that at the core resembles the start of a digital business similar to how retail has adopted an Omni-channel approach. In this approach, the intent is for the experience to be as similar as possible across any channel, be it in-person, phone, web or mobile, with the most significant outcome being the end state. The single qualifying question should be can the consumer do what they want across all channels; can they try, buy, return and rate and have a positive, familiar experience that drives recurring visits.

With a health plan, the same approach could be used and it is suggested that all the data and channels are in place or available today. The question to ask then is, How easy is it for an employer group or individual member (potential or existing) to shop, buy, use, and understand their benefits and all associated information from financial (FSA, HSA and maximums) to clinical (can I view my own trending lab and radiology results and vitals from multiple doctors) to prescriptions (what kind, how long, what was result) The answer is that while the data does exist, the information is not user friendly to view and therefore, no stickiness is generated between am employer or member and the health plan. In the end and with the push for consumerism, health plans, it could be argued, are almost driving too hard to the hoop for the proverbial silver bullet of a self-service, care-about-my-own-health, and know-what-to-do model.

Push the decision to visit a doctor, or any medical facility (ER, urgent care) based on funds in an HSA too hard and folks might begin to think financially instead of based on health. Shift from a $20 co-pay for a chiropractic visit to a pay-as-you-go until your deductible is met, and folks might not seek out or even research preventive care options. Sweep obesity under the rug because you only visit a doctor once a year for the free visit and there might not be multiple opinions pushing you with the cold, hard truth to change your habits or else. The balance is a fine line yet can be met with a few straightforward lessons drawing from retail, banking, and even some common sense

  1. Ease of Information Make it simple and visually appealing
  2. Person to Person Connection Make it easy to get past IVR and talk to a knowledgeable representative
  3. Interpret my Information Make it fast to view and highlight relevant information to me, typically financials and benefits
  4. Help Consumers Make Decisions help me to find the right healthcare when I need it! Whether the reason is preventive or immediate, think about the consumer experience. If someone calls at 2AM local time, chances are they need a nurse, not an IVR.

With the digital experience, consumerism and the ecosystem of data upon us, health plans that thrive will find ways to attract, retain and both qualitatively and quantitatively support their members and customers data is at the core; using it has been a decades old initiative and finally, the business processes and technology exist with suitable price points for health plans to become top of wallet.

NTT DATA welcomes you to read more at The Outsourcing Center in the article, The Shift to a Patient Centric Healthcare Ecosystem: Changing Minds, Medicine and Marketing


Adam Nelson is a Vice President at NTT DATA, Inc. Adam leads the Healthcare and Life Sciences Solution Offerings group focused on productizing service capabilities to bring predictable and relevantbusiness change to clients. Adam’s background in Industrial and Organizational Psychology helps tobring accelerated decision making and behavior change to complex enterprise programs; he has beenpublished and interviewed by Computerworld, Corporate Board Member Magazine, and Oracle’s Profitmagazine on the topics of IT Governance, Compliance, the IT / Business relationship, and Program Management.

The Shift to Value based payment: The Long and Winding Road

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The long and winding road
That leads to your door
Will never disappear
I’ve seen that road before
It always leads me here
Lead me to your door
-The Beatles

Screen Shot 2015-10-26 at 9.15.37 PM

Teresa DiMarco – Strategic Advisor at Leverage Health

If you?ve been around the health care industry for the last 30+ years, you know that the ACA and HHS? efforts around value based payment, ACOs and the like, are not new ideas. ? They have as their goal the same outcomes we?ve all been striving for over the past five decades: to achieve better health outcomes and patient care experience, cost-effectively.? We didn?t call it the Triple Aim at the time, but it?s the same thing.

The development of HMOs in the 70s and 80s was the mechanism, at the time, to re-organize health care delivery and financing in order to achieve what is now called the Triple Aim.? The initial and, some would argue, the most successful models early on were closed panel staff-model and group-model HMOs, where the providers took on full-risk and were also the payers?responsible for patient care, health outcomes and managing costs under a fixed budget, responsible for adequate patient access and for patient satisfaction, retention and growth.? We then expanded some of the principles of the staff model HMO to broad networks of providers which weren?t integrated clinically or financially, and thus had to use externally imposed controls to manage cost and quality.? We did so under the banner of managed care.

But, managed care hasn?t achieved all that we wanted, and managed care?s geographic and population reach has its limits.? Fee for service is still very alive, but not ?alive AND well? in terms of achieving our objectives.

So, now we are back to the future?or the future is back to the past?trying to figure out how we bring together providers of care, their patients and responsibility for financial and quality outcomes into one organization that is fully accountable and ?at risk?.? Thus, ACOs and value based payment models are introduced.? New names for the same concepts.

Now, CMS is tackling the unmanaged Medicare FFS program, which still represents a significant proportion of all Medicare program expenditures. ? Sylvia Burwell of CMS has announced that its goal is to have 85% of Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018.? And, the target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016 and 50% by the end of 2018.? Alternative payment models, per CMS, include ACOs and bundled payment arrangements. Beyond CMS, the commercial managed care payers have been expanding their use of value-based payment arrangements for years.? The pace is accelerating.

What Does This Mean for Providers?

What does this mean for providers?? It changes everything–how they think, how they operate on the ground, how they make clinical decisions at the point of care, what information and tools they need, what data they evaluate, what metrics and outcomes they focus on, how they invest their capital, and how they make money or avoid losing money. Providers need to lead the coordination and management of patient care across the continuum of settings and specialties, for entire episodes of care.? They also need to understand the aggregate populations for which they are now accountable and to focus and manage all the health care resources to achieve broad population-based goals for quality and cost.? It is the long and winding road.

With all the focus on ACOs and value-based payments, you?d think that was the lynchpin of change. Yes, it?s a critical and fundamental element.? It is a required catalyst to undo the thinking and unwind the systems of care that were built and optimized under 75 years of FFS payment. But, these elements, while important, won?t get us there by themselves.? They alone won?t change behavior or create the systems of care that produce the outcomes we desire.

The Lynchpin to Change

The biggest tasks ahead, which are required to change the system, are also the most critical ones?changing the care delivery processes, workflows and point of care decision processes inside provider organizations. It?s transformational.? It?s a huge job. It will take significant resources, both human and capital, to execute. These process changes represent a total care re-design and a total change in how providers THINK about patient care, which now must include financial resource management and a long-term view of outcomes.

While this payment evolution is taking place, a challenge for provider organizations will be navigating across two very different financial models?FFS for some patients and value-based payment for others.? Practically speaking, it?s unworkable to manage patient care differently and have clinicians think differently depending on each patient?s payment arrangement.? Providers, at some point, will need to make a commitment to the new care delivery processes consistent with value-based thinking.? Likely, they will experience short-term hits on revenue and profitability on the FFS patients until the new models dominate.? This transition period will be painful, but the sooner providers ready themselves for success in a value-based world, the better positioned they will be to lead in their markets.? Ready-providers can actually help to drive more payer and employer business to the new models sooner, thus reducing the amount of time and business in the uncomfortable transition.

Interdisciplinary Work?Pulling the whole system of care together

Today?s world has providers operating in silos.? Primary care providers don?t coordinate effectively with specialists.? Hospitals don?t coordinate the transitions of care–from acute to post-acute to home care settings to ensure stabilization and recovery.? Behavioral care providers operate independently of primary care, but the two are interdependent for patient well-being.? Pharmacists and dentists operate on islands all to themselves.

What needs to happen in this care redesign for the value-based world is the coming together of clinicians of various disciplines, with experts in patient-service-experience and financial leaders.? Working in teams, the different perspectives will redefine the care protocols and workflows on the ground. ? Collaboration inside the delivery system, and outside the delivery system with new partners in the community, will take time, energy and, most of all, leadership.

Information technology and new analytic systems will play a critical role in supporting care delivery teams with the dashboards, long-term system-wide insights and patient-specific point of care data needed for decision making and care coordination.? Putting the right data in the right hands at the right time will be crucial. ? For example, a nurse case manager who is coordinating patient discharge needs to know what the most appropriate and cost effective SNF or ICF or rehab or home care options make sense for this patient, and have at his/her fingertips the data about which specific providers have the best outcomes and cost so the best choice can be made.? Then, he/she will need to facilitate, manage, educate, coordinate all elements of the execution of that care plan across a multitude of provider entities, partners and community resources.? And have the systems to track it.

Providers need to think and act like payers

Providers don?t need to design the new world order from scratch.? Much of the expertise and way of thinking about care at the macro-economic and system-wide level resides inside the managed care payers today. Population health thinking, care coordination and case management processes, reimbursement design, and other mechanisms for operating in a risk-based world has been the work of managed care/payers for decades. ? The population health information, the metrics, the claims systems, actuarial expertise, business processes, coordination of care tools and IT systems all exist there.

Some providers may think of managed care/payers as their nemesis. It?s understandable.? The payers had to insert themselves in the FFS system, trying to manage their risk from the outside; often, they imposed their management processes too late in the process to be optimal, and it all felt and was intrusive.? But, in an ACO environment, this thinking about value needs to move into where the patient and the provider live, and where care decisions are made.? What payers have, and what payers know, and what processes payers use, can all be brought to bear to help providers succeed in the value-based world.

So, collaboration opportunities exist not just across the health care delivery system of providers, but also with the payer world, in order to accelerate this transition to a value-based system.

The Long and Winding Road

Whether its primary care and PCMH models, Pioneer ACO models, or new BPCI (Bundled Payments for Care Improvement) programs coming soon from CMS for hip and knee replacements?. it?s all moving in the right general direction.? But, at the detail level, it?s still a great experiment.? CMS is trying new structures, algorithms, and payment formulae.? Providers are trying new structures and methods to manage care under the new reimbursement models.? Payers are trying a multitude of collaborative and control oriented models.? It doesn?t always work.? It will continue to evolve and improve.? It will ultimately lead us all to the value-based outcomes we seek.

It?s the long and winding road. We?ve seen that road before. It always leads us to that door [achieving value].


Teresa has 30 years of executive management experience in health insurance, managed care, healthcare IT, and in government-funded health care systems and BPO services (Medicaid, Medicare). ?Over her career, she was CEO of three tech-enabled health care services companies where she led them to market leadership positions and successful exits. ?She also advises companies, private equity, health care start-ups and venture-backed firms on growth strategies and operations. ?Teresa has a B.S. in Nursing and MBA from The Darden School of Business at the University of Virginia.

Healthcare 2016 Game of Thrones Shift: Consumer is King, Payer is Hero

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2015.09.22 - KingSetting the Stage

For those of you not familiar (or more appropriately heavily addicted binge watchers) with the hit series Game of Thrones on HBO, it is a story about the rise, fall, shifts and drifts of power within and between kingdoms, families and characters in a fictional medieval period. Make no mistake, even with all of the current technology and decades of knowhow available, the current healthcare system and process is feudal and the experience is draconian overly complex, hard to access and navigate, confusing and costly to all stakeholders. Consumers feel like they are being left hanging in the stocks (a medieval punishment device) in the town square when it comes to the current experience and costs associated with their health benefits and related purchases.

The good news, we are on the verge of emerging from this archaic, high resistance to change era into the next golden age of healthcare. E-commerce is the key that ignited change in other major industries (ex. banking and retail) and led to a significant spike in growth, improved experience, better efficiency and reduced costs. E-commerce and medical shopping are poised to have that same impact on healthcare.

Crossing the Gulf of Grief – Consumerism initiative driving healthcare

According to CMS Office of Actuary, of the $2.9 Trillion spent on healthcare in 2013, $381 Billion of that came directly out of consumer’s pockets for expenses other than healthcare premiums. While a significant portion of the $381 Billion was spent on co-pays, an increasing amount was spent on full cost healthcare from credit, debit, cash accounts or HSAs.

Continuing with the Game of Thrones analogy, the up and comers in a kingdom called Mereen are trying to create a better, more equitable society by challenging legacy cultural norms and the existing ruling factions. The citizens of Mereen are separated from the current centers of power think government payers, commercial payers and providers–by the Gulf of Grief. I liken healthcare consumers to the citizens of Mereen. The Mereen citizens are starting to realize their power yet struggling with becoming more self-governed and having increased voice, influence and decision making abilities. Sound familiar

Just like the citizens of Mereen, healthcare consumers will have to cross the complex, confusing and surprising currents of the Gulf of Grief to become sufficiently self-directed with less than exact information and imperfect navigational tools unless E-commerce, medical shopping and retail principles are more widely adopted by payers and providers.

Price, quality and access transparency to support the consumer experience

According to recent studies, 88% of healthcare consumers want to know their out-of-pocket costs before receiving health services. Only 46% of consumers are happy with their CDHP, HDHP benefits. The lack of insight into the true total cost of care pre-service is the #1 point of dissatisfaction among healthcare consumers. These data points above, as well as other indicators, point to an increased need for E-commerce and medical shopping initiatives.

By example, annual enrollment is a huge administrative burden on payers and confusing to most consumers. It makes sense to improve it. In my opinion, a disproportionate amount of resource investment and focus, especially in public and private exchanges, has been placed on enabling online benefit shopping and elections which typically happens 1-time per plan year. Would consumers rather have an online, more retail experience for shopping, comparing and electing their benefits Sure.

But, do consumers better prefer and need an E-commerce or medical shopping retail solution for how they utilize their benefits over an online enrollment solution Yes, consumers prefer E-commerce and medical shopping over online enrollment is what my informal user experience research shows. If the name of the game is to attract, acquire and retain policyholders for payers and patients for providers, then the benefit utilization experience is the primary area needing investment focus, improvement and automation. Commercial healthcare consumers on average access and utilize their benefits 13 times per year. Using the logic above of 1 enrollment experience versus 13 or more utilization experiences per year, wouldn’t logic indicate that payers and providers should prioritize and focus more resources on E-commerce and medical shopping initiatives.

If this is true, why are a disproportionate amount of payer resources tied up in online enrollment projects The answer is regulation. An online enrollment experience is mandated for public exchange benefits hence the resource prioritization on it. Lesson to be learned, healthcare and many other heavily regulated industries (ex. banking) typically do very little voluntarily in advance of regulation. That is why 9 states have or are considering transparency initiatives. That number is expected to grow. I contend that a transparency tool doesn’t go far enough in meeting the needs and expectations of healthcare consumers. The E-commerce platform will leapfrog traditional transparency tools and modernize traditional provider contracting, claims infrastructure, collections and payment processing which could save the healthcare industry $235 Billion.

Bend the cost curve in both medical and administrative expenses

PwC notes three factors that serve to “deflate” the 2016 medical cost trend: (1) The Affordable Care Act’s looming Cadillac tax on high-priced plans which is accelerating cost-shifting from employers to employees to reduce costs; (2) Greater adoption of virtual care technology that can be more efficient and convenient than traditional medical care; and (3) New health advisors helping to steer consumers to more efficient healthcare.

With respect to 2015, Milliman found the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $24,671, up from $23,215 in 2014. The 2015 family costs works out to $2,055 on a monthly basis. Total employee cost (payroll deductions plus out-of-pocket expenses) increased by approximately 43% from 2010 to 2015, while employer costs increased by 32%. Of the $24,671 in total healthcare costs for this typical family, $10,473 is paid by the family, $6,408 through payroll deductions, and $4,065 in out-of-pocket expenses incurred at point of care. Overall, the U.S. healthcare economy is seeing increases in premium rates and drug costs, and decreases coming from efficiencies in virtual care and choosing lower cost options.

The primary drivers of cost reduction in most industries, including healthcare, are automation, competition and multiple or alternative channels of consumption or distribution. According to MDLive, a leading telehealth solution provider, 90% of PCP visits can be addressed by telehealth. SpendWell Health has observed 12 27% lower health service prices by providers participating in E-commerce marketplaces with upfront patient responsibility collections versus traditional network contract fee schedules and collections. An E-commerce or medical shopping solution with embedded telehealth has the potential to impact approximately $101 Billion of U.S. healthcare spend. Using these market principles and applying them to healthcare provides strong supporting evidence for E-commerce or medical shopping with embedded telehealth being one of the best and nearest term approaches to improving consumer experience and bending the cost curve.

About SpendWell Health

SpendWellTM is the leading health care e-commerce solution that empowers insured consumers to shop, compare and buy routine health services at actual prices. SpendWell’s online marketplace integrates benefit plans, removes consumer anxiety about surprise bills with upfront payments, eliminates patient collections risk for providers and reduces administrative inefficiencies and costs for payers. SpendWell transforms the traditional health care model for consumers, providers, employers,health plans and administrators into an online retail experience. SpendWell’s nationwide community of providers includes medical, dental, vision, behavioral health, chiropractic, alternative care, imaging and more. SpendWell is a wholly owned subsidiary of Cambia Health Solutions, Inc. Learn more at CambiaHealth.com. For more information about SpendWell, visit SpendWellHealth.com.

HCEG Virtual Panel Summary

By | payer, payment, reimbursement, Uncategorized

2015.08.12 - Reimbursementy

On Thursday, August 6th, HCEG presented and HTMS?sponsored a Virtual Panel??From Concept to Reality: Practical Considerations of Implementing Alternative Reimbursement Models.?? Below is a summary of the call.

To those of us who have been in the healthcare industry for more than a few years it seems we?re always talking about alternatives to fee-for-service reimbursement.? Lots and lots of talk, and only bits of action?as an industry we?re a bit stuck in the gap between theory and practice.

To help us develop practical reimbursement innovation we were fortunate to have panelists today who are not only expert thinkers, they?re expert doers.? The panelists generously shared their practical experience in value-based reimbursement from both payer and provider perspectives.

  1. Craig Samitt, MD, MBA, Partner and Global Provider Practice Leader dug into the details of physician incentive alignment, using his experience at Dean Clinic where 75% of provider revenue was capitated. He offered 9 lessons learned:
  2. Following Dr. DiLoreto, Dan Tuteur, Chief Strategy Officer at Colorado HealthOP shared the pros and cons of being in a startup health plan trying to bring reimbursement and benefit innovation to a well-established marketplace. Benefiting from a blank slate and no historical friction with providers, but handicapped by the inability to promise any patient volume, Colorado HealthOP was successful in finding providers who were already on the path from volume-to-value and capitalize on their interest and experience.? Interestingly, Colorado HealthOP is able to use their benefit agreements to drive change among their members and support from providers.? Members, who complete a health survey, have a basic lab panel done, and select primary care providers are rewarded with richer outpatient mental health and primary care benefits.? Happily, this dynamic has been popular with providers.? Dan predicts Colorado HealthOP will consider capitation for primary care and some limited bundled payments for orthopedics and physical therapy, but significant innovation won?t be implemented until 2017 and thereafter.
  3. David DiLoreto, MD, CEO at Presence Health Partners, opened the discussion by walking us through how his ACO, which represents the continuum of providers, has leveraged its significant experience with government programs into the commercial arena.
    1. Moving from volume to value is a team effort; including physicians from the get-go is crucial.
    2. Don?t look to compensation redesign to fix everything. Peer pressure alone works very well in driving certain desirable changes regardless of reimbursement structures.
    3. Design a balanced mix of incentives. For example, individual physician production is still important, so don?t build compensation formulae that hurt production unnecessarily.
    4. Build a multi-tiered structure including global, departmental, and physician level components. Patient satisfaction and productivity should be evaluated for individual physicians, while quality and access are more meaningfully measured at the departmental level.
    5. Measure at the outset for two reasons?to understand baseline performance, and to benefit from the phenomenon that measurement alone tends to drive behavior changes.
    6. Offer alternatives. Physicians need multiple ?points of entry? depending on the nature of their specialty and their patients.
    7. Size matters?incentives, thresholds, have to be big enough to get the attention of providers and make them change in the desirable direction.
    8. Remember to keep hurdles low enough that providers have confidence they can get over them.
    9. Prepare to change based on evidence and experience.

The panelists also addressed several questions:

Q: When thinking about both impact and level of interest, what are the thresholds in terms of percent of revenue, percent of patients, or other levels do you think apply when trying to move to value-based reimbursement?? How much of a provider?s business must apply for them to be willing to make the investment in changes in practice to participate in an alternative reimbursement scheme?

A: Dr. DiLoreto shared that in his experience, 10% of a provider?s patients falling under value-based reimbursement is sufficient to get the provider?s attention; for a health system, 20-30% of total revenue is the threshold.

A: Dr. Samitt added that once a practice or patient population yields 30-40% of total revenue from value-based payments, the ROI for the provider is enough to drive the entire practice to a population health approach.? Dr. Samitt volunteered that in talking to physicians, he found using percentages was much less compelling than absolute dollars.? 5% seems small; $5,000 seems ?worth the hassle? of making the necessary changes.

A: Dan Tuteur explained that as a start up, they have no opportunity to drive these kinds of numbers, so instead of focusing on the volume of patients or revenue impact, they gravitated to physician who were already on the road to accepting alternative reimbursement.

Q: Can you comment on whether and how you used both benefits and provider contracts to change provider practices?

A: Dan Tuteur opened the discussion by explaining how they began by encouraging shopping for best prices and developing ways to make price transparency an advantage for members.? Colorado HealthOP hired an outside firm to manage this with members, but they found that providers? contract restrictions (with competing plans) made it difficult, in particular the way some contracts defined tiers.? They were helped by the benefit approach of offering better outpatient mental health and primary care coverage if patients participated in the wellness programs summarized above.

A: Dr. DiLoreto talked about the prevalent under-use of wellness benefits by members.? To offset member reluctance, they incorporated encouraging use of wellness benefits in provider contracts, which in turn gets more patients to their primary care physicians.? This has a secondary advantage for the provider and health plans by generating more primary care claims, which is crucial to member attribution to an ACO.

Q: Do you see a future where fee-for-service is the exception?

A: Dan Tuteur explained that as a start up their challenge in moving beyond vanilla fee-for-service is lack of historical data about their rapidly growing membership, where patterns of utilization were very different in year one than in year two.? With an accumulation of data, he believes it will be possible to estimate how quickly such a change could come.

A: Dr. Samitt wrapped up the conversation by stating that it depends on what we mean by fee-for-service?plain old payments without quality measures will become the exception within the next few years, but fee-for-service with quality incentives can and should persist.

Meaningful Use is far from Done

By | Uncategorized

2015.09.21 - ReimbursementyIn the Stage 1 Federal Register, CMS mentions that incentive payments may be received until 2021. The Stage 2 Federal Register identifies increasing levels of Meaningful Use Compliance stages through 2021. Also, the Secretary of CMS has the authority to increase annual penalty percentages for each year. So there is statutory evidence to believe providers will be held accountable to Meaningful Use at least through that date.

We also know that auditors will be involved. MU creates a structure within which CMS can reduce Medicare costs by forcing penalties that will be paid out at least through 2023 (two years after the last year of Meaningful Use). Under current legislation, the Secretary of CMS is obligated to charge penalties of up to 3% of Medicare Reimbursement, and is permitted to increase those penalties to 5%, depending on market conditions.

Here’s a credible two-part speculation. Congress has stated that Meaningful Use of EHR is an important part of the Federal goals of Health Care effectiveness, cost reduction and access to information. The legislation charged CMS with continuously increasing the sophistication by which providers use their EHR technology, through the end of the current program.

  1. Speculation part #1 is that Congress could extend the Meaningful Use program to extend on through increasingly more sophisticated and rigorous usage as technology and internet infrastructures improve.
  2. Speculation part #2 is that CMS, in seeing the ability to assess penalties for non-compliance, could use Meaningful Use to reduce Medicare payments at least for some providers. Further, it is hard to imagine either Congress or CMS to rescind legislation that has the effect of reducing Medicare payments.

Even if Meaningful Use sunsets in its current legislative and regulatory authority, providers need to retain well-organized Meaningful Use data for six years (the audit period) after the last Meaningful Use Attestation has been filed, in 2021. However, we believe it is likely that once Meaningful Use has become institutionalized within CMS, and within the provider community, the program will be difficult to halt.

Every provider, regardless of whether they have “chosen” Medicare or Medicaid programs, will be subject to sustaining increasingly rigorous Meaningful Use status, or be subject to penalties; and are subject to audit over that period as well.

The Ticking Time Bomb of Meaningful Use

What’s the Ticking Time Bomb? The Bomb is Recoupment. It is delivered by CMS Auditors, and has a fuse that is up to six years long (although we will see a little later on that the length of the fuse could be changed at any time). What it means is that any money the government gave you could be taken away, at any time up to six years after you have spent it.

Although the Auditors deliver the bomb, the boom is really out of their hands. Any single trigger event, no matter how small, causes a full recoupment of any Stimulus paid in a year being audited. The Auditors simply look for triggers.

The triggers they look for are not necessarily whether a hospital or physician was compliant in a given year, but simply evidence showing proof of compliance. And therein lies the real issue. The Government (CMS) has never really defined what it takes to fully prove compliance, and in fact has actually issued a statement that they really can’t predict all the documentation that a provider should have.

What this means, is that Auditors are put in the position of making some impactful judgment calls. An auditor, in reviewing a Provider’s attestation of Meaningful Use from some time in the past, must decide whether the Provider can prove they were truly in compliance with each of 24 or 25 complex rules. Providers, although generally quite diligent in becoming compliant, have often been far less worried about the paperwork.

Here’s a good example. Let’s consider CPOE (Computerized Provider Order Entry). CPOE is neither more complex, nor less complex than most of the other rules, so it forms a good example. To fully understand CPOE, a diligent professional needs to read at least five separate documents. This simple four letter acronym is supported by 21 columns of fine print in the Stage 1 Federal Register, and another six columns of the Stage 2 Federal Register, eight FAQ’s (buried in a list of 300 on a CMS Website), and several pages of technology specifications in each of two separate issues of the Federal Register dedicated to what functionality a Certified EHR must have. Sound complicated yet? And yet it is quite common for a provider to rely on a single line item on a summary report from their EHR system that shows a single summary percentage.

Now, put yourself in an Auditor’s shoes for a moment. CMS has contracted with Auditors, under Congressional direction to be the steward for Program Integrity over Meaningful Use. After all, Congress authorized gross expenditures of over $30 Billion and they expect a couple things. First of all, they expect a return on that investment. That ROI should primarily consist of increased efficiencies in healthcare delivery (remember that on average, Congress pays for about 40% of healthcare in the form of Medicare and Medicaid claims). Since those efficiencies are, at best somewhere in the future, it will be impractical to try to measure ROI directly.

What this means is the Congress? stewards (the Auditors) have only one yardstick to use in measuring Program Integrity, and that yardstick is the body of regulation supporting Meaningful Use. Using CPOE as an example, an Auditor should be familiar with the entire body of regulations and use that familiarity to judge whether each provider was compliant with all of it. Auditors, being skeptical by nature (in fact, professional skepticism is actually a formal requirement of being a CPA), are unlikely in their Stewardship role, to accept a single line item on a summary report as evidence of compliance with any single rule so complex as CPOE.

What this means, is that when an audit happens, providers will be asked to produce documentation proving compliance with complex regulations, some of which have changed, using EHR Technology which almost certainly has changed, against patient data that is also time-sensitive. Further, some of what it means to be compliant with a rule will be quite hard to prove with a report. For CPOE, providers may be asked to prove that each entry was made by a licensed healthcare professional, and that it was input to the EHR in a sufficiently timely fashion that a physician could react to any alerts generated by the entry before the associated medications are administered.

Remember, the auditor has the right to expect this kind of proof.

Of course, the Auditor has some latitude. Some of their latitude is based on the normal judgment implicit in the job. Every day, Auditors have to decide how likely it is that their current target is to be non-compliant. Based on that judgment, each individual Auditor makes a choice to dig either deeply or shallowly. But even beyond that judgment call audit practices will be shaped by the policies and politics of their current client.

The Auditor’s client of course is the Federal Government, but the practicalities are a bit more complicated. CMS is part of the Executive Branch. But Meaningful Use is a recent invention of the Legislative branch, which continues to deploy their oversight agencies (GAO and OIG for starters), to make sure the Executives are administering the Congressional Mandate consistently with Congressional Intent. Does all this sound as if there could possibly be some conflicting agendas.

In 2013, the Executive Branch is eager to be part of Stimulating the Economy. Relative to Meaningful Use that translates into making sure as many providers as possible receive as much Stimulus Payment as possible. Congress, of course passed the law and is (largely) of the same mind. At the moment, anyway. But even so, Congress has already initiated multiple reviews of CMS’s administration of the Meaningful Use Program, and has at times been critical of some aspects.

All this plays into the Auditor’s latitude when reviewing proof of compliance. If Congress and/or the Executive Branch wanted to be sticklers on making sure every attestation was squeaky clean, the complexity of the regulations opens a lot of doors for denial of compliance, based on whether or not a provider, up to six years in the past, developed, organized and deployed adequate documentation to support attestation to a complex set of regulations, in a complex organization.

So far, Auditors seem to be taking the position of only looking for egregious or intentional non-compliance. Still, when faced with a lack of documentation, they have little latitude other than to judge a provider as non-compliant. In a case of non-compliance, CMS has little latitude other than to demand recoupment, based on the law passed by Congress.

The Ambiguity of Documentation Requirements

CMS has published over 1,600 pages defining and describing Meaningful Use. In none of those pages is there a definition of what documentation a provider is required to produce in the event of an audit. In spring of 2013, almost three years after passage of the Meaningful Use law, CMS finally published a five page briefing on how providers should document their compliance. While this booklet gives some direction, one single sentence puts providers on notice that they should expect no definitive structure, and that significant individual judgment is the only standard:

An audit may include a review of any of the documentation needed to support the information that was entered in the attestation. The level of the audit review may depend on a number of factors, and it is not possible to detail all supporting documents that may be requested as part of the audit.

As time passes, providers will share their experiences with audits. We will all learn more about what documentation techniques and strategies best mitigate audit risk, and what cost is reasonable to incur in developing defensive documentation. The problem will always be that today’s audit program is not necessarily tomorrow’s audit program. CMS’s policy is to review their audit program each calendar quarter and make adjustments, based on their success in defending program integrity.

It could be simple, in an environment of easy audits to assume that all future years will be equally as easy. The danger in this perspective is that CMS could decide, at any point, to reach back to the initial years of the Meaningful Use program and audit aggressively.

The Difficulty of Documenting Compliance

EHR’s are certified to be able to support Meaningful Use. Supporting Meaningful Use is quite a different story than proving it, though. Remember back to CPOE. In order to become Certified, an EHR is required to correctly calculate a percentage from a numerator and denominator. Certification testing does not extend to exhaustively proving that the population in either the numerator or the denominator is correct. In cases where hospitals (or even physician staff) use multiple EHR technologies during a reporting period, it is often necessary to combine data from multiple systems. We refer to this numerator / denominator calculation as the Certified EHR Report.

The Certified EHR Report is not in itself acceptable proof to an auditor that a provider is compliant for multiple reasons. First, it only shows summary statistics for each measure, and auditors are notorious for wanting to see the details making up those summaries. It is important to understand that there is no assumption that simply because software is certified, that its reported Meaningful Use percentages are accurate. The certification process is not required to exhaustively test for completeness or accuracy, but simply to verify that the EHR will create percentages.Second, the existence of a measure, even if accurate, does not in itself assure that the underlying processes were compliant. In one well-known case, a hospital officer was prosecuted for fraud when he loaded his Meaningful Use content into the EHR after patients were discharged from the hospital.

How Meaningful Use Audits differ from other compliance audits

Consider the example of Joint Commission Audits in hospitals. The auditor conducts a review, issues a report, and provides the opportunity for any procedural shortfalls to be remediated. The hospital corrects its documentation, and the actual non-compliant processes, then invites the auditor to return and verify. In the case of Meaningful Use, though, audits are always ?fter-the-fact, and it is not possible to correct a process that was flawed in a prior year. And if you can’t prove what your process was in a prior year, you may have difficulty refuting an auditor’s assertion of non-compliance.

What’s the bottom line? Even after all your providers have achieved compliance with all the Meaningful Use measures and requirements you will need to sustain a Meaningful Use compliance process, individual and database to support ongoing scrutiny from CMS or bear penalties based on reductions of your Medicare fee schedules from now on.

When a Doctor Is Always a Phone Call Away

By | Uncategorized

 

A 39-year-old truck driver was hauling through the Midwest in the middle of the night in 2011 when he began to feel a bit of indigestion. Then a lot of indigestion. He pulled over, recalling that his company had recently signed on with Teladoc, for which I was then the chief medical officer. The service allowed him to get a doctor on the phone within 15 minutes. He called and described his symptoms: nausea, chest pain, a little numbness in his left arm. He was having a heart attack, and his GPS guided him to the nearest emergency room. Getting that doctor on the phone saved his life, and potentially the lives of whoever his 10-ton rig might have plowed into had he keeled over behind the wheel. If efficient and affordable quality treatment is the goal, telemedicine should be the future of health care. Read more at The Wall Street Journal.

Join Boxer and many other industry thought leaders at the HCEG Annual Forum, October 25-28th, in Hollywood, Florida. This year’s theme “Healthcare Evolution Revolution, Inquire Within” promises to provide a compelling agenda and constructive dialog on Consumer Engagement, Payment Reform and Delivery of Care.Email us for additional information.


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Join thought leaders and industry experts for transformational dialog andpresentations at the HealthCare Executive Group’s Annual Forum.

Next Stage of Reimbursements

By | payer, payment, reimbursement

2015.07.28 - ReimbursementyTo those of us who have been in the healthcare industry for more than a few years, the perennial discussion about moving away from fee-for-service is getting a bit tiresome when do we stop talking and start doing on a broad scale.

When we look back at the 1960’s (Medicare and Medicaid were passed in 1965), the story was about getting more dollars into the system to pay for the care of elderly and disadvantaged populations. Today, we’re in a serious hunt to find ways to wring dollars out of the system. And the journey we’ve taken with Medicare tells us a lot about what has happened and will happen in the commercial sector.

When Medicare was implemented we paid providers based on submitted charges what seems like a quaint and na’ve approach, but alternatives didn’t show up until 1972 (the HMO Act), with the first reimbursement reform appearing in 1989 when the first step toward non-charge based reimbursement was legislated for Medicare a requirement that professional providers be paid according to a relative value scale. Medicare HMOs didn’t appear until 1997. Every few years another tweak in benefits or payments was legislated, with 2003 bringing the first prescription drug coverage. 2008 started Medicare, tracked in large part by commercial health plans, down the road to mandated reporting on quality measures, federally-incented investments in EHRs, and penalties + payments to drive better, more cost-effective care.

Finally we capped off the decade with the passage of the Affordable Care Act which included not only reforms to the insurance business but various permanent programs to reduce overall costs and improve outcomes. As we look to 2016, when HHS plans to make 30% of its fee for service payments through alternative models and 85% of payments tied to quality or value, growing in 2018 to 50% and 90% respectively, it’s clear we’re moving into a serious doing phase.

For some expert thinking on what this doing phase looks like already and where it’s headed, please join us for our panel discussion From Concept to Reality: Practical Considerations of Implementing Alternative Reimbursement Models. To understand the doing phase, we need to listen to expert doers, and we will be privileged to hear from three of them.

Dr. DiLoreto will talk about how delivery systems are responding to new reimbursement models and provide his perspective on ways payers can work more effectively with their networks.

2015.07.28 - Reimbursementy PromoDan Tuteur will share his lessons from developing innovative reimbursement methods in a startup health plan forging brand new provider relationships.

Craig Samitt will talk about actualizing the vision of changing physician behavior by aligning incentives based on his personal experience.

After their respective brief presentations the panel will take your questions and engage in a lively discussion. Please do not miss this opportunity to listen to and talk about the real world of alternative reimbursement.

Why is Healthcare Security Now More Critical?

By | Security

2015.06.07 - SecurityI’m not a security expert. I’m a strategy officer for a health plan. My job is to connect the dots on factors that could impact our strategic future. I have to say the dots related to privacy and security are threatening. Like many of you, I received emails from Marriott and American Express after the Epsilon breach years ago saying my credentials had been stolen. More recently, I’ve had similar messages from Sony, Target, Home Depot and others.
2015.06.07 - Security Webinar PromoThis year these dots directly impacted healthcare. My daughter, business colleagues and neighbors, along with 90 million other people, received Anthem and Premera letters giving them credit tracking and fraud insurance. CareFirst just had a 1.1 million member breach. And the OIG claims to have warned one of them that their information was at risk. This problem is not new. It has been on the MCEG/HCEG Top 10 issues 3 of the last 6 years, but keeps getting bumped by other priorities, such as ICD-10, the ACA and others. I’ve just finished the day at AHIP’s pre-conference forum on Cybersecurity, Technology and Infrastructure. It was excellent but disturbing as to where we are at in cybersecurity as an industry.

Why is healthcare security now more critical The financial world doesn’t have a security system they have a remuneration system. Money goes missing from my account and they put the dollars back no harm, no foul, I’m secure, right It is different in healthcare. Unconscious in an ER after an accident, if my blood type or medications comes up in an EMR because someone used my identity for a fraudulent procedure, it just might cost me my life. No one can put that back in the account. Finding out I’ve exceeded my dental plan deductible because someone already had a root canal and crown using my stolen Dental Plan ID makes me acutely aware that my personal information is not secure.

Attempting to connect these dots reminds me of Whack-a-Mole at the circus. We have a mallet in both hands and are pounding down the goffers (cybercriminals, in this case) just as fast as we can. The problem is that there are a lot more dedicated and financially rewarded cybercriminals (as banks just keep reimbursing their fraudulent transactions) than we have mallets. Risk management versus risk avoidance continues to feed the beast. RSA’s President, Amit Yoran, said recently the threat landscape has changed and we have to constantly challenge the existing thinking to get ahead of our adversaries. RSA should know as they had their own significant security breach a few years ago affecting dozens of governments around the world and almost every major defense contractor.

This is a serious trend in healthcare with serious implications. And, it is a battle we are obviously losing. I suggest that we need to do more than challenge our existing thinking we need a whole new way of thinking! Without a whole new approach and focus on security, the credibility and future of healthcare could be in serious jeopardy. The HealthCare Executive Group is accelerating the dialogue on critical issues like security with the launch of the HCEG Webinar Series. Join in the open discussion on June 17th by registering at ww.hceg.org/webinars. We will pick this discussion back up then.