After the Perfect Storm, comes The Revenue Cycle tsunami

1. After the Perfect Storm, comes The Revenue Cycle tsunami 41st Annual AAHAMME Meeting Sugarloaf, Maine October 3 - 4, 2013

2. ARE ALL OF Your Revenue Cycle PROCESSES, SYSTEMS, AND PEOPLE Prepared for the TSUNAMI? Lorrie Borchert, MA, CPC, CPAM Rob Borchert, MBA, FHFMA, CPAM

3. C: Best Practice Associates, LLC “Topical Waves” • The Expansion of Medicaid??? • Open Enrollment to State Exchange Plans • Non-HIPAA Entities and ICD-10 • National Payor ID numbers • The “Death” of ICD-9-CM and the “Expectancy Period of ICD-10-CM/PCS • What Insurance Plans are looking at • Managed Care Contract Impacts- Now and beyond • After October 1, 2014

4. @Best Practice Associates Medicaid Expansion Kansas and South Dakota – undecided as of May 2013

5. C: Best Practice Associates, LLC 2013 Federal Poverty Guidelines

6. C: Best Practice Associates, LLC Medicaid Expansion • What is your percentage of Medicaid NOW! • Is YOUR STATE part of the expansion? • Will the expansion move people OFF of Medicaid and onto an Exchange Plan? • Has your staff been adequately trained on “Asking the Right Questions!” to either put people on Medicaid or advising them to move to an Exchange? • How will you be measuring this impact of addition or change in coverage?????

7. @Best Practice Associates Health Exchange Background State Decisions for Creating Health Exchanges Declared State-Based Exchange (16 States + D.C.) Planning for Partnership Exchange (7 States) Defaulted to Federal Exchange (27 States Source: http://kff.org/health-reform/state-indicator/health-insurance- exchanges/#map. Dated May 28, 2013.

8. @Best Practice Associates • Health Exchange Background • Coverage Requirements and Tiers • An exchange must offer a plan choice in each of the five categories, which are based on the actuarial value of the plan. • The actuarial value is based on the average cost share of covered health expenses reimbursed by the plan for the typical population. • In a given state, a participating payor must offer at least one Platinum or Gold plan. • The ACA also states that the federal government will select at least two multistate carriers available in every state and every exchange. • The plans must provide the 10 essential health benefit (EHB) categories in total, as defined by CMS. However, states can require a higher level of benefits. • The federal subsidy is indexed on the value of the Silver tier. • Gold (80%) • Catastrophic • (Under 30 or Qualify for Exemption) • [No Subsidy Provided] • For example, a Gold plan would cover the equivalent of $2,000 for an average patient’s • $2,500 in annual medical expenses. Higher coverage requires higher premiums.

9. @Best Practice Associates Health Exchange Background 0% to 133% of FPL Eligible for Medicaid [If State Expands Program] DSH may also be effected 100% to 250% of FPL Eligible for Cost-Sharing Support. Basic Health Plan (133% to 200%) 133% to 400% of FPL Eligible for Health Exchange Subsidy [Sliding Scale Subsidy as Tax Credit]

10. @Best Practice Associates Easy to Use Your Information Residential ZIP Code: Type of coverage: Self only Self and spouse Self + dependent child/children Family (self, spouse + dependent child/children Your date of birth: Coverage to begin: mm/dd/yyyy mm/dd/yyyy Health Insurance rates depend on when you want coverage to start, where you live, your age, and the number of people you want to insure

11. @Best Practice Associates

12. @Best Practice Associates Provider Exchange Financial Impact Analyzing the impact of payor mix changes will depend on several key assumptions • Develop a current status view – revenue and profitability by payor • Project anticipated payor mix changes • How much volume will shift to the exchanges? • How much additional Medicaid? • Project anticipated reimbursement • Sensitivity analysis on the range of reimbursement possibilities • Percentage of current Medicare or commercial rates • Determine potential impact on profitability • Negotiate rates for exchange products based upon how much margin reduction can be tolerated

13. @Best Practice Associates HIPAAA Non-Covered Entities ICD-10 Myths and Facts “Because ICD-9-CM will no longer be maintained after ICD-10-CM/PCS is implemented, it is in non-covered entities’ best interest to use the new coding system. The increased detail in ICD-10-CM/PCS is of significant value to non-covered entities. CMS will work with non-covered entities to encourage their use of ICD-10-CM/PCS”

14. @Best Practice Associates HIPAAA Non-Covered Entities The ICD-10 Transition: Focus on Non-Covered Entities Definition of “best interest” • ICD-10-CM codes will provide expanded detail in injury codes, which will help automobile insurance and workers’ compensation program coordinate payment • ICD-9-CM codes will no longer be maintained once ICD-10 has been implemented. The ICD-9-CM code set will become less useful and resources will be continually harder to obtain after three years • Not adopting to ICD-10 coding could lead to undue hardship for non-covered entities’ provider. They will have to translate from ICD-10 manually

15. C: Best Practice Associates, LLC 2014 Milestones

16. @Best Practice Associates ICD-10 Impacts

17. C: Best Practice Associates, LLC The Death of ICD-9 and the “Trimester” of ICD-10 Due date: Oct. 1, 2014 No more publications of ICD-9-CM after October 1, 2013. Most payors and providers will maintain existing codes for three years! Minimum start to prepare for ICD-10-CM/PCS Is January 1, 2014. This may allow time for Education, training, testing, etc.

18. @Best Practice Associates Impacts to People Source: AAPC website

19. @Best Practice Associates Impacts to Process • Documentation practices • Productivity and efficiency practices • Contracts and business processes • HIM practices • Practice management processes • Budget • Payment conversions • System logic and edits • Claims edits • Disease & Utilization management

20. @Best Practice Associates Impacts to Process

21. @Best Practice Associates Impacts to Technology • IT system changes • Upgrade software • Modified field lengths • Modified system logic • Update superbills/encounter forms and databases • Data reporting elements • Submitting ICD-9 and ICD-10 codes • Retain access to historical coded data in ICD-9 format

22. @Best Practice Associates Revenue Cycle Impacts Patient Access Services Charge/Coding Integrity Patient Financial Services Business Process/Patient Access Scheduling Charge Capture Entry ClaimsProcessing Pre- Registration Registration Account Resolution Coding Assignment Financial Counseling Pricing PaymentPosting Clinical Clinical Intervention Test Order “Optional” Clinical Doc. IT Applications Scheduling HIS (including CPOE) Claims Clearinghouse HIM PatientAccounting Utilization Management Case Management Patient Accounting Performance Measurement Medium Impact to process and training Large impact to process and training

23. C: Best Practice Consortium Physician Practice Impacted Source: Michael Calahan: ICD-10 Operational Impact Points in the Physician Practice. PhysiciansNews Digest. 3/6/12.

24. @Best Practice Associates Contract Management and Insurance Verification • Building coverage patterns from TPP contracts • Specific specialty definitions of both CPT and diagnosis (Case Rates) • HIPAA Transaction sets • Educating and Training staff for optimum coverage in identifying both POA and principal reason for admission (medical necessity) • TPP systems monitoring

25. C: Best Practice Consortium Clinical Quality Management • Start with “simple” tasks • Choose a major specialty (volunteer) • Transform a super bill as a specific example • Physical “Body Sheets” for levels of specificity • Complete and then get assessment • Start some informative sessions to discuss people, process and technology

26. C: Best Practice Consortium Charge Capture and CDM • Will order entry screens change? • Will charge capture forms change? • Modifiers for hard codes can become CRITICAL • 76, 77, 24 • Physicians time • Prime concern are “feeder” systems such as: • Laboratory • Radiology • Surgery • Specialty Clinics • Interfaces from ALL systems

27. C: Best Practice Consortium Medical Records Documentation • Education and Training for specificity requirements • EMR with ‘drop down’ boxes for “choice” • CMS is monitoring levels from EMR • Consider/re-consider/support concurrent review with trained nurses/coders • Dictation and transcription training for specificity

28. C: Best Practice Consortium Inpatient and Outpatient Coding • Medical Necessity for: • Physician Orders • Ancillary Review • Admissions Review • Concurrent review processes • “System” support from vendors ($$$) • CodeAssist; TruCode; others • Independent education and training • Interview and assess staff for re-certification

29. C: Best Practice Consortium Claim Generation and Submission • Main Vendor System • Review of each module • Ancillary Support Systems • Ancillary areas • Clearinghouses • IT for HIPAA transactions • Bank for EFT, 835, etc.

30. C: Best Practice Consortium Claim Generation and Submission • All third party insurance “systems” for monitoring, tracking, testing, etc. • State systems must also be monitored, tracked and tested for Medicaid, Medicaid managed care, DOH, State Insurance Department, etc. • Start inquiry NOW (10/1/13) on State & Federal Exchange requirements and electronic interchange

31. C: Best Practice Consortium Third Party Follow Up • Critical piece for staff in preventing delays from TPP due to their system issues, etc. • Critical piece in follow up due to the expectation that many TPPs will delay with a “medical review” statement • Follow up staff need an internal resource list of other departmental decision makers for quick turnaround response to TPP

32. C: Best Practice Consortium Payment Posting • Electronic and/or manual patient account posting may not have a critical ‘play’ with ICD10 but… • EOBs need to be monitored more closely due to expectation/expansion of underpayments in the reconciliation of contract terms to submitted claim data • DRG cross-walk still in discussion due to major ICD category shifts and major additions to PCS

33. C: Best Practice Consortium Payment Posting • Referencing BACK to Contract Management, some considered options for negotiations are: • Setting up “scheduled” payments rather than claim specific (reconcile quarterly) • Modify inpatient contracts to ‘per diem’ until DRGs are adjusted to new system • Modify outpatient contracts to ‘percent of charge’ or eliminate ICD support of ‘case rate’ • Consider bundling of selected services with no diagnostic challenge • Consider value-based purchasing based on case mix adjustments and code specificity

34. C: Best Practice Consortium Denial Management • Expectation of increase in this area due to computer system changes, data interchange specs, cross-over between payors, etc. • Increase may not be due to contractual error • Define medical necessity requirements for each payor • Reconcile InterQual criteria with Milliman since these will be re-written based upon ICD-10 criteria • Comparative will be helpful

35. C: Best Practice Consortium Denial Management • Will require ‘assertive’ staff since TPPs will be training their staff to lengthen the process • Monitor TPP experience closely and document behavior patterns • Obtain a contact with BBB and State Insurance Department for interchange of information regarding patterns of denial

36. C: Best Practice Consortium Appeals • Expectation of an increase in “peer-to-peer” reviews • Documentation support extremely important with accurate specificity • Initial development of “appeals sheet” with appropriate levels of requirements will help providers and nursing to improve Appeals process • Outsourcing “may or may not” be an answer

37. C: Best Practice Consortium Final Resolution • Final Resolution is Final Resolution • However, using the “lessons learned” approach, one should examine • Underpayment challenges • TPP behavior patterns • Major denial reasons • Success ratios • Each of your payor conversion strategy

38. @Best Practice Associates ICD-10 Effect on Payor Reimbursements • Independent analysis of some of the most common reimbursement arrangements identified conversion challenges that may modify some payor and provider reimbursement arrangements, while for others the effect will be minimal. • Solutions to these situations need to be tailored to your specific environment; however, you will want to review the possibilities identified in the analysis outlined in the table below. • In cases such as diagnosis-related group carve outs where codes have a relatively small impact on reimbursement formulas, most payors will likely experience few conversion problems.

39. @Best Practice Associates ICD-10 Impact on Payor Reimbursements

40. @Best Practice Associates ICD-10 Impact on Payor Reimbursements

41. @Best Practice Associates ICD-10 Impact on Payor Reimbursements

42. @Best Practice Associates ICD-10 Impact on Payor Reimbursements Source: Zenner, Patricia. ICD-10 Impact on Provider Reimbursement. Milliman, 2010. Retrieved from http://publications.milliman.com/publications/health-published/pdfs/icd-10-impact-provider.pdf.

43. @Best Practice Associates Examples of I-9 to I-10 Conversions

44. @Best Practice Associates MCC/CC Category Conversion

45. @Best Practice Associates Managed Care Today • Fully examine the rates you have today!!!!! • MSDRG rates • Case Rates for inpatient • APC/APG Rates for outpatient surgery and ancillary support services • Per diem rates for various services • Percent of charge rates for various services • Discount off Medicare rates

46. @Best Practice Associates Managed Care Tomorrow • Insurance Products under ACA: • No ability to deny or limit coverage for pre-existing conditions • No lifetime limits on benefits • No ability to cancel coverage without proof of fraud • Ability of patients to demand reconsideration of health plan decision to deny payment for test or treatment – includes an external appeal process

47. @Best Practice Associates Managed Care Tomorrow • Insurance Products under ACA: • Cost-free preventive services – access to screenings/vaccinations & counseling without deductible or co-insurance • Kids on parent’s plan until reach age of 26 • Must be able to choose your primary care physician – no need for referral to OB/GYN • Use nearest ED without penalty or no requirement to get prior approval and no higher deductible or co-insurance for out-of-network ED visits

48. @Best Practice Associates In God, We Trust, All Others Bring Good Data!

49. @Best Practice Associates Managed Care Tomorrow • What payers will seek from providers under BOTH Affordable Care Act (ACA) and ICD-10: • medical decision making models • capitation models • quality measures and payments • bundling payment • patient-centered medical homes • As a provider, can YOU bring your Quality and Cost factors to the table FIRST?

50. @Best Practice Associates 10 Considerations for Building a Pricing Strategy