RCM Challenges in Healthcare Reform

1. RCM Challenges in Healthcare Reform hfma Georgia Chapter November 10, 2011

2. Presentation Outline • Contracting and Payment Approaches • Payment Methodologies • Integrating Clinical and Financial Aspects of the ACO • New Revenue Cycle Requirements • Basic Revenue Cycle Challenges and Solutions • Advanced Revenue Cycle Challenges and Solutions • A Practical Health System Discussion Guide

3. The Three Tiers of Payment Approaches • Tier 1: Fee-For-Service and the World we have lived in for the past 20 years Approach • Tier 2: The Near Term changes of Procedure and Episode of Care Bundling, and Combined P4P with Physicians and Hospitals Approach • Tier 3: Managing an Accountable Care Organization Approach

4. Tier 1: Fee-For-Service • Hospitals Separate and Physicians Separate • CMS maintains Part A and Part B • APCs, DRGs, Fee Schedules, UBs and HCFAs • Payers/Providers negotiate the methodologies • %Charges, DRG Case Rates, Procedures, Per Diems, Fee Schedules, % Medicare, etc. • Administrative and Clinical Utilization Review • Denials, Underpays, Disputes, etc.

5. Tier 2: Bundling and Value-Based Contracting • Physicians and Hospitals Combined Services • All-Inclusive Procedures and Services • Procedure Specific or Episode of Care • Single Site (Acute Care) or Multiple Site (IP,OP, Office, Rehab, Home Care) • Performance Payments Severity Adjusted • EBM Guidelines Across Continuum • Contracting and Claims Adjudication

6. Tier 3: Health Systems as Accountable Care Organizations • Integrated Physician/Hospital Organization • Responsible for Identified Populations • Direct Contracting with Buyers • Accept Risk for Defined Patient Services • Have an Information Platform to Measure Clinical Performance and Perform Financial Transactions • Act like a Payer?

7. A Combined Solution for All Three Tiers • A Common Platform for All • Manage Scenarios Simultaneously • 80% Tier 1, 15% Tier 2, 5% Tier 3 • Combined Performance Reporting • CMS and Payer Tier Profiles • MC & PFS Desktop Simplification • Physician/Hospital Care Coordination • Enrollment and Payment Functionality

8. New & Expanded Payment Models • Patient-Centered Medical Home Payment • Primary Care Driven Front End of Acute Services • Bundled Procedure Payment • High Cost Services – CABG, Joints, Backs, etc. • Bundled Episodes of Care Payment • Tied to Patient Condition and Time Related • Performance Based Payment • EBM Based, Severity Adjusted, Outcome Based • Partial and Total Capitation Payment • Population and Condition Driven

9. ACO Integration Roadmap • Clinical Service Line Alignment • Clinical Pathway Development • Benchmarking Complex Procedures • Benchmarking Episodes of Care • Modeling Episodes and Procedures • Creating Bundled/Performance Contracts • Adjudicating Bundled Claims • Reporting/Managing Utilization

10. Expanded RCM Requirements • Utilization Reporting Across Continuum • Health System and Payer Driven • IP, OP, Physician, Ancillary Providers • Data Aggregation in Multiple Delivery Sites • Clinical Data from Physicians, Rehab, and Home Care • Financial Data Across the Continuum • Revenue Cycle Calculations & Transactions • Contracting, Claims Management, Adjudication • Patient/Payer Membership Management

11. Basic Revenue Cycle Challenges • Create and Model Bundled Contracts • Develop and Manage Combined Charge Masters and Fee Schedules • Aggregate Bundled Claims and Payments • Calculate Performance Payments • Provide Timely, Accurate and Transparent Clinical and Financial Reporting

12. ACO-Like Revenue Cycle Challenges • Patient Enrollment and Eligibility • Contract Modeling across Continuum • Maintenance of Multiple CDM/Fee Schedules • Case Management/Referral Services • Claim Re-Pricing/Clearing/Payment • Dispute Resolution/Collections • Risk Sharing, Gain Sharing, Treasury Services

13. The Basic Solution • Bundled Payment Capabilities • Contract Modeling and Management • Integration of Fee Schedules and CD • Patient Eligibility for Bundled Programs • Performance-based Payment Capabilities • Clinical/Severity-based Calculations • Financial/Spend-based Calculations • Integrated Reporting Capabilities • Robust Utilization and Financial Reports

14. The ACO-Like Solution • Claims Management, Clearing, Posting • Enrollment and Provider Rostering • Case/Referral/Utilization Management • Dispute and Collections Management • Provider Credentialing • ACO Patient Self-Service Portal • Treasury Services • Multi-Level Reporting – Financial/Clinical

15. An Organizational Discussion • Board Of Directors • Senior Leadership Team (C-Suite) • Clinical and Financial Department Managers • The Revenue Cycle Team Leaders • All Revenue Cycle Personnel

16. Who is in Our Integrated ACO? RCM Solution • Provider Demographics • TINS and Sites • Facility Identifiers • CMS Information • RCM IT Information • Clearinghouse Info Answer • All of our Facilities • All Active Medical Staff • Contracted Ancillary • Physicians and Extenders • Facilities (Rehab, ASC, etc) • Home Care, Hospice

17. Which Service Lines are in the ACO? RCM Solution • Physician Roster • Sites of Service • Services Benchmarks • Model Claims • Contract Terms • Fee Schedules, Codes Answer • Cardiovascular • Orthopedic/Joints • Spine Surgery • Stage 2 Cancer

18. Who are the Covered Enrollees? RCM Solution • Contract Terms • Payment Method • Enrollment Database • Patient Demographics • Patient Benefits Answer • The Hospital Employees • Aetna Fully Insured • United ASO Employers • Tri-Care

19. What Payment Models Included? RCM Solution • Charge Coding • Calculation Engine • Contractual Discounts • Payment Posting • Performance Measures • Distributions Answer • PCMH – Primary Care • Episode of Care • Medicare SS • Blue Cross Performance based grouper outcome

20. What Rates will ACO Charge? RCM Solution • CDM & Fee Schedules • By Provider, By Contract • Grouper and EBM performance calculator • Medicare Values for all ACO Providers Answer • Will vary by Payer • Likely % Medicare • Performance-based • Individual Provider • Whatever we can

21. How Will ACO Monitor Performance? RCM Solution • Capture Claim Activity • Report Care Variance from Benchmarks • Facilitate interfaces to Providers in ACO Answer • Across Care Continuum • Primary Care • Specialty Care/OP • Acute Care/IP • Sub-Acute • Home Care/Follow up

22. How Will the ACO Handle Claims? RCM Solution • Bundled Claims Scrubbing • Bundled Claims Clearing • Calculation Engine • Performance-based • Payment Posting • Variances Answer • Receive Claims from Providers and Facilities • Send Claims or Claim Summaries to Payers • Receive Payments from Payers

23. How Will The ACO Prepare Reports? RCM Solution • Standard Reports from ACO RCM Database • Payer Report Validation • External Data Imports • Ad Hoc Reporting Answer • From the Claims Data • From Payer Data • From Clinical Data

24. Who Will Manage the ACO? RCM Solution • Implement a Platform that will manage these transactions Answer • We will for the Transactions side • The Medical Staff will run the care delivery management

25. So Then, How to Start – Part 1 • Be Sure that the Revenue Cycle Team is an Integral Part of the Health System discussions about Integrated Care • In a nice way, remind leadership that this Reform is Revenue Cycle Management reform • Take an Inventory of your Hospital Patient Accounting, Contract Management, and RCM reporting capabilities • Identify the likely Providers (Physicians and other facilities) that will be a part of your Integrated Network • Talk with your big Payers about their Interests • Monitor CMS ACO Progress

26. How to Start – Part 2 • Identify missing parts in existing RCM IT infrastructure • These will likely be in complex contract management, cost reporting, CDM and Fee Structure Management, etc. • Research opportunities with existing RCM IT vendors • Do they have platforms to integrate the new RCM functionalities for providers across the care continuum? What are their plans? • Explore the Market for New or Added Solutions • Look for platforms that accommodate the entire continuum • Remember the new requirements – enrollment, bundled modeling, bundled claim adjudication, treasury, etc.

27. How to Start – Part 3 • Present your researched RCM Functionality Plan to the Health System Integrated Care Leadership Group • Incorporate the Clinical Benchmarks, EBM Standards, and Services (CMS ACO, Cardiovascular, Ortho, etc.) under consideration by the Clinical Leadership • Determine what Services and Payment Models are being considered by your major Payers • Using your new processes, Model the potential arrangements that are being discussed by the ICLG • Bring the Information back to the Leaders for Discussion • Sign a Contract & Manage the Transactions

28. Summary • The Shift from FFS will likely be gradual and incremental • There is sufficient time to design your plans • But, it will take time culturally and operationally. • Clinical Change Management will require consensus building and professional compromise • Revenue Cycle Change Management will require operational retooling, distributed accountability, and technical upgrades to maintain a shared RCM Platform • The Market Winners will be Ready for the Change

29. Thank you !! Nick Hilger nhilger@jdaehealth.com 651-324-2943