Adapting the Healthcare Revenue Cycle to Changing Regulation
By - Providers continue to evaluate healthcare revenue cycle and volume in relation to the Affordable Care Act (ACA). ACA’s underlying elements — Medicaid expansion and reform — are under close examination.
Derek Bang, CPA, CGMA, Chief Innovation Officer and Leader Of Healthcare Performance Consulting at Crowe Horwath LLP, spoke with RevCycleIntelligence.com about direction of the healthcare revenue cycle regarding payer demographic shifts and what happens when hospitals sacrifice their reimbursements in an attempt to generate increased revenue.
Bang says providers can effectively adapt dynamic benchmarking solutions to properly assess performance and ROI of tools used to assist in collection and uninsured conversion to coverage. “We are collecting daily transaction-level data from hundreds of hospitals that allows for ‘pure’ calculation of performance metrics and in near-real time (versus periodic surveys of hospitals or asking them to self-report data),” he reveals.
As revenue cycle’s structure continues to change, the need to better understand its performance is rapidly increasing. Bang says this loud demand is being actively addressed.
“The response from health systems wanting to participate in our initiative has been phenomenal, so there seems to be a real belief and desire for more precise analytics around revenue cycle performance, and the timeliness of the data is very important, given how quickly the landscape is changing,” he explains. “The report we have just released is merely a snippet of the data that we now have access to for benchmarking performance.”
Such analysis comes at a critical time. Hospitals are sacrificing their reimbursements in an attempt to receive more revenue. The focus of revenue cycle and medical reimbursement is shifting.
“Consumer-driven healthcare is a very significant trend, given the growing prevalence of high-deductible health plans noted in our report, along with an increasing focus by the payers on value-based reimbursement models,” Bang maintains. “Competitive and transparent pricing of services, high quality clinical outcomes, and effective billing and collection process are becoming more important than ever.”
The payer base has shifted amid market changes. Perspectives require adjusting. This directly affects long term revenue cycle, Bang claims.
“There are several important impacts driven by the shift in payer mix,” he continues. “The front-end of the revenue cycle must be diligent with determining Medicaid eligibility and assist uninsured patients understand their coverage options with the insurance exchanges. There must be greater focus on point-of-service cash collections, given the growing amount of patient responsibility for payment. Lastly, communication and coordination between revenue cycle teams and clinical areas to properly support and document outcomes, respond to denied claims, etc. will continue to be a challenge.”
The primary reason a state chooses to consider Medicaid expansion, especially in regard to those who most recently implemented expansion, is driven by a variety of factors.
“Most Republican states have taken the view that traditional Medicaid programs are fiscally unsustainable and have not supported expansion,” Bang observes. “Most recently, Indiana (Republican leadership) has agreed to expand Medicaid through the Healthy Indiana Plan (after getting clearance from CMS), which is a non-traditional Medicaid program that requires some patient payment responsibility and other factors that may better control the long-term fiscal impact on the state.”
The future implications of claim management mean an outpouring of problematic outcomes requiring fresh resolution, says Bang.
“Claim management will likely only become more complex, due to several factors: difficulty in verifying coverage and determining the responsible party (patient, insurance, Medicaid, etc.) for portions of claims, managing a high amount of uncompensated care from high-deductible health plan members, responding to a higher volume of claim denials from a larger population of insured claims, and the need to support value-based reimbursement determinations,” he states.
According to the Crowe Horwath benchmarking analysis, 18 percent of high-deductible health plans are employer-sponsored. Bang expects this number to increase in 2015.
“Many employers are having to move to high-deductible health plans from preferred provider organizations or other products to avoid being penalized in future years by the ‘Cadillac plan’ tax under the Affordable Care Act (in addition to the potential economic benefits of lower benefit costs/smaller annual premium increases to employees),” Bang adds.
Crowe Horwath’s data shows contrasting financial indicators between Medicaid expansion and non-expansion states.
It additionally reports net revenue per case in Medicaid expansion states has increased more substantially than in non-expansion states because of the conversion from self-pay to Medicaid.
Although there was a 10.8 percent increase and a 2.2 percent increase, respectively, Bang says it may be too early at this time to effectively define what such information implies.
“It is possible that pent up demand for services from newly-eligible Medicaid patients could account for the increase in 2014 but may not necessarily continue, but that is speculation at this point,” he notes.
