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Survey: Group Practices Need to Offer More Digital Payment Solutions

October 2, 2017
by Heather Landi
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An overwhelming majority of group practices (77 percent) still send paper bills despite a majority of patients’ preference for electronic billing (52 percent), according to a recent survey from the Medical Group Management Association (MGMA) and Navicure.

MGMA announced findings from its Digital Payment Progress Report, which is completed in partnership with Navicure, a provider of integrated cloud-based medical claims management solutions. MGMA and Navicure fielded the national survey among MGMA member organizations in May 2017 to understand billing and payment preferences and behaviors among providers. MGMA provider survey respondents include practice administrators/office managers (61 percent) and C-level executives (28 percent). Additionally, 63 percent of respondents have had responsibility for revenue management operations and/or results for more than 10 years.

The research revealed advantages for physician-owned versus hospital-owned practices, and an analysis that group practices are more advanced than hospitals in offering advanced electronic payment solutions that patients want to use.

A key finding of the Digital Payment Progress Report was the fact that 77 percent of MGMA members still send paper bills despite a majority of patients’ preference for electronic billing (52 percent). The survey also presented evidence that keeping a credit card on file (CCOF) to pay small balances less than $200 can be beneficial in alleviating several revenue cycle challenges for practices, such as reducing patient bad debt/write off (36 percent), days in patient A/R (34 percent) and cost of collections (34 percent).

What’s more, MGMA members also believe that automated payment plans can reduce cost of collections (30 percent), days in patient A/R (34 percent) and patient bad debt/write off (37 percent).  Also, 22 percent of respondents believe online bill pay is an effective way to reduce the cost of patient collections.

Twenty-seven percent of MGMA members offer online bill payment via their portal or website and 22 percent can offer a payment plan or automatically charge a patient’s account each month via credit card on file (CCOF). Seventy-eight percent of patients, according to MGMA’s Patient Payment Check-up Survey, would provide their credit card on file to be charged one time up to $200, and yet only about a quarter (28 percent) of MGMA members are keeping credit cards on file.

“A comparison of our recent studies indicates a strong need for digital payment options to improve patient collections processes and increase patient satisfaction,” Phil Dolan, chief marketing officer of Navicure, said in a statement. “The organizations that can fully embrace digital payment options, such as credit card on file, automated payment plans and patient cost estimation, stand to benefit the most as healthcare consumerism continues to impact the industry.”

The survey results also reveal several current billing and payment advantages in physician practices versus hospitals, such as, more ambulatory organizations can provide a cost estimate than hospitals.

A majority of ambulatory organization respondents (79 percent) can generate a cost estimate upon request. What’s more, 77 percent of ambulatory organizations can do so before the time of service, 19 percent can do so while the patients are still in the office and 5 percent can do so after patients leave the office, but before the bill is sent. Among those who aren’t currently able to provide patient estimates, 36 percent plan to do so within the next year.

In comparison, only 69 percent of hospital respondents can complete this task. With more than half (56 percent) of patients planning to request a cost estimate in the future, this reveals a competitive advantage for physician practices to better respond to patient billing preferences, the survey report notes. Hospitals have the same opportunity to yield high patient satisfaction by using the same solutions used by practices.

The survey also found that more group practices than hospitals believe patients are comfortable providing their contact information. Sixty-four percent of group practice respondents reported patients are comfortable sharing their email address, while only 56 percent of hospital respondents think patients feel this way. In actuality, 79 percent of patients report feeling comfortable providing their email address. The survey notes that this represents an opportunity to leverage email addresses to deliver bills electronically, saving the industry millions of dollars in cost, environmental waste and days in A/R.

The survey results also indicate that patients are more likely to pay their physician practice bill faster. More than a quarter of hospital respondents (26 percent) report it takes patients longer than six months to pay their balance in full, while only 13 percent of practice respondents report it takes this long, perhaps as a result of the frequently lower cost of services at group practices.

“Our analysis finds group practices are more advanced than hospitals in offering advanced electronic payment solutions that patients want to use,” Mariann Lowery, qualitative analyst at MGMA, said in a statement. “However, provider organizations in general still track far behind patient preferences. Patients are used to allowing other service providers to use their email address and credit card number to receive and pay their bills. Just look at the explosion of e-commerce. Healthcare organizations of any size have the opportunity to be just as safe and convenient, and provide a better patient experience.”  

 

 

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Four Ways RCM Must Transform for the Shift to Value-Based RCM

January 10, 2019
by Parag Shah, Industry Voice, President, Practice Solutions, Integra Connect
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Value-based care is driving transformation of many established operations within medical groups—and the revenue cycle is no different

It is likely that 2018 will be remembered as the year that value-based care became a financial reality for most U.S. medical practices. Those participating in MIPS (the Merit-based Incentive Payment System) received their first round of results and a view of the impact on future reimbursement rates.

Specialists taking part in advanced alternative payment models (APMs) such as the Oncology Care Model (OCM) program were also provided performance reports from CMS, in some cases accompanied by unexpected claw back demands. Finally, commercial payers such as UnitedHealthcare and Aetna promoted research and forecasts attesting to the increasing influence of value-based contracts in the reimbursement mix.

A recurring theme of value-based care is the need for practices to undergo transformation and adjust their practices, clinically and operationally. But how should they transform financially?

Revenue cycle management (RCM) has been the primary process by which practices ensure they are fairly and fully reimbursed for the care they provide to patients. In a fee-for-service system, the process is straightforward at a high level—ensure encounters are properly documented in the electronic health record (EHR), submit corresponding claims and follow through to payment. Now, with revenue streams dependent on new quality and cost performance measures, benchmarks compiled from peer groups, episode costs beyond practice walls and more, forecasting payment has become much more challenging. While fee-for-service reimbursement is not going to vanish, the shift to value-based care requires practices to revisit their existing RCM approaches and evolve them in four primary areas:

  1. Optimize based on value, not just volume. Practice financial performance once depended primarily on the “top line” of patient encounters, both the number of them and the type of services delivered. This, in turn, led to a focus on the up-front accuracy of claims, not to mention the efficiency of provider and office workflows.

By contrast, value-based programs including MIPS and APMs identify specific quality, cost, and other output measures upon which reimbursement levels depend. Therefore, optimization now also involves: 1) facilitating the accurate capture of the inputs from which measures are calculated and ensuring complete and timely submissions; 2) noting payer or peer group benchmarks, when also considered as part of performance; 3) partnering with clinical peers to identify those measures for which the practice is likely to over- or under-perform and creating financial scenarios based on likely outcomes; and 4) for areas of under-performance, working with clinical peers to address the root cause of negative outliers and drive continuous quality improvement.

  1. Minimize risk, not just denials. Financial downside in fee-for-service RCM often presented in the form of unwarranted payer denials. As a result, practice teams took pains to ensure clean claims up front and continued engagement through the approval process.

As value-based contracts grow, financial leaders must also anticipate and model the new risk factors that could negatively influence future practice revenue. Actions include projecting reimbursement levels as a result of various performance scenarios under MIPS; potentially putting aside bundled payment income until payer reconciliation is complete; or invoking stop-loss insurance as protection in two-sided risk models.

  1. Shift focus from in-office encounters to care delivered across all settings and conditions. For the most part, fee-for-service revenue cycles focused on the encounters between providers and patients that occurred between a practice’s four walls. Many value-based care models instead involve accountability for total episode costs, which can be driven by patient visits to other settings (e.g., EDs and urgent care), other providers (in the case of co-morbidities) and other treatments, including those received in the home. Revenue cycle teams will be important drivers in ensuring that proper integrations and interfaces are established to other systems in which such data resides, as well as partnering with clinicians in establishing the financial need for new practice capabilities that increase performance in the areas of expanded scope – for example, care management efforts that will focus on treating patients based on risk and with a holistic view of their “whole person” care. 
  1. Move from retrospective to real-time reporting and action. The primary KPIs by which practices measured revenue cycle performance were largely retrospective in nature: net collections, days in A/R, denial rates, and cost to collect, to name a few. Dashboards, therefore, also looked back and compared historic performance across defined periods of time—with an eye on future improvements. Practices could remediate issues with the next group of claims.

Value-based care models often involve sizeable performance periods with high revenue impact—for example, six months in an APM such as the Oncology Care Model—and payers share results long after practices have any ability to address issues. The revenue cycle therefore needs to implement the ability to monitor performance at a detailed level in real-time. This speaks to the need for a new foundation of data management that pulls from all the relevant clinical and financial sources that impact quality measure performance, harmonizes it and enables a layer of advanced analytics. These analytics should include both timely dashboards and the ability to run custom reports, all with the ability to drill down to the level of individual patients, providers, and practice locations to permit the identification and targeting of interventions when needed.

Value-based care is driving transformation of many established operations within medical groups—and the revenue cycle is no different. Taken together, the four steps outlined in this article point to an expanded role for the financial leaders in medical practices. The tendency for some to treat RCM as a back-office function will give way to a new collaboration with clinical peers at the forefront of the practice, modeling, tracking, and designing responses to the scenarios upon which overall financial health will depend.

Parag Shah is president, practice solutions at Integra Connect. The practice solutions division manages client engagement and delivery across all provider-facing solutions.

 


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Survey: Healthcare Organizations Skeptical of athenahealth, Virence Merger

December 3, 2018
by Heather Landi, Associate Editor
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Healthcare organization leaders are expressing some initial skepticism about the merger of athenahealth with Virence Health Technologies, as a result of Veritas Capital and Elliott Management’s recent acquisition of athenahealth.

Current customers of the two vendors say they are in “wait and see” mode following the merger of the two companies, however, the majority of non-customers say they do not plan to purchase health IT technology from the combined company, according to a new survey from Reaction Data, a market research firm focused on the healthcare and life sciences industries.

The Reaction Data survey gauges how patient care organization leaders are reacting to the acquisition of athenahealth by Veritas Capital and Elliott Management, and the subsequent merger with Virence/GE Healthcare. While mergers and acquisitions in healthcare are becoming the new normal, the merger of Virence/GE Healthcare and athenahealth is unique, the report states.

In July, Veritas Capital acquired GE Healthcare’s revenue cycle, ambulatory care, and workforce management product lines, and then several months later rebranded it as Virence Health Technologies. On November 12, private equity firm Veritas Capital and hedge fund Elliott Management announced the acquisition of athenahealth, the Watertown, Massachusetts-based electronic health record (EHR) and practice management vendor, for $5.7 billion,

Following the deal’s closing, Veritas and Evergreen Coast Capital, a subsidiary of Elliott Management, expect to combine athenahealth with Virence Health. The combined business is expected to be a leading, privately-held healthcare information technology company with an extensive national provider network of customers and world-class products and solutions to help them thrive in an increasingly complex environment, the companies said in a press release.

The deal concludes a six-month acquisition process and a tumultuous period for athenahealth and its leadership. Elliott Management, the sometimes-activist fund run by billionaire Paul Singer, has put pressure on athenahealth leadership to take the company private or explore a sale since the hedge fund acquired a 9-percent stake in the company in 2017.

For the survey, Reaction Data collected feedback from patient care organization leaders about how aware the market is about the M&A event and an analysis on how likely the newly combined company will attract, or repel, new business.

Of the respondents, 22 percent are practice administrators, 18 percent are CIOs, 12 percent are chief financial officers (CFOs) and the remaining respondents are chief medical officers, CEOs, physicians, chief nursing officers, medical directors and chiefs of staff. Thirty-two percent of respondents are athenahealth customers, 19 percent are Virence customers and 49 percent aren’t customers of either company.

While Veritas acquired several important product lines from GE Healthcare six months ago, less than half of respondents (44 percent) were aware of that M&A event. Conversely, the majority of respondents (60 percent) are aware that Veritas and Elliott Management are acquiring athenahealth and plan to merge it with Virence (GE Healthcare).

Looking at overall impact, 45 percent of respondents are neutral on the impact of the merger, while 26 percent expressed a positive opinion and 29 percent have a negative opinion on the merger. Half of respondents who are current customers (51 percent) say they are in “wait and see” mode when it comes to sticking around for the long haul, with the remaining respondents are equally split between leaving (25 percent) and staying (24 percent).

“Reassuring the customer base that integration pains will be minimized and that investment and support will continue will be key priorities for the new ownership team,” the report says.

The rest of the market (non-customers) is another story. As of right now, the majority (57 percent) state they are unlikely to consider Virence or athenahealth for future purchases. Thirty percent of non-customers are in “wait and see” mode.

“While, at present, this certainly isn't an optimistic result, if the new owners execute the integration at a high level, word will quickly get out that the new combined entity truly is greater than its individual parts and the pendulum will swing back in its favor,” the report says.

The report authors also note that skepticism among healthcare organizations is expected among healthcare M&A deals. “Enough of these events in healthcare have gone south that it's perfectly reasonable for customers, and the market alike, to be professionally skeptical about its future. However, it should be noted, that these are two sizable companies brought together by two world-class private equity firms so it is entirely possible that this new company will emerge as a truly formidable competitor to industry titans Cerner and Epic,” the report authors wrote.

Related Insights For: Revenue Cycle Management

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Survey: Providers Remain Challenged with Optimizing Revenue Cycle-Related EHR Functions

November 29, 2018
by Rajiv Leventhal, Managing Editor
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Healthcare providers continue to focus on technology to spearhead revenue cycle improvements, but remain challenged with optimizing electronic health record (EHR) functionality, according to new research from consulting firm Navigant and the Healthcare Financial Management Association (HFMA).

The survey of 107 hospital and health system chief financial officers and revenue cycle executives, released this week, found that 68 percent of respondents said their revenue cycle technology budgets will increase over the next year, down from 74 percent last year.

Results also showed that, compared to last year: 39 percent fewer executives project a budget increase of 5 percent or more; and 53 percent more executives predict no change to their budgets.

However, this slowing of IT spending does not mean providers are satisfied with their current EHR functionality, researchers noted. Fifty-six percent of executives said their organizations can’t keep up with EHR upgrades or underuse available EHR functions, up from 51 percent last year.

Further, 56 percent of executives suggested EHR adoption challenges have been equal to or outweighed benefits specific to their organization’s revenue cycle performance. Both hospital-based executives and those from smaller hospitals cited more challenges than benefits, compared to health system and larger hospital executives. This is likely due to greater capacity and scale in health system and larger hospital IT departments, researchers concluded.

“Hospitals and health systems have invested a significant amount of time and money into their EHRs, but the technology’s complexity is preventing them from realizing an immediate return on their investments,” Timothy Kinney, managing director at Navigant, said in a statement accompanying the survey. “When optimized correctly, a good portion of the ROI can come from EHR-related revenue cycle process improvements.”

When asked which revenue cycle capability their organization is most focused on for improvement over the next year, most executives (76 percent) once again selected technology-related capabilities. Revenue integrity continues to be the top area of focus among them, cited by 24 percent of executives who noted such revenue integrity program benefits as reduced compliance risks, and increased revenue capture and net collection.

The survey results also showed that, compared to last year, EHR optimization as an improvement priority rose from 15 percent to 21 percent, while physician documentation fell from 18 percent to 12 percent.

What’s more, even though providers do appear to be better prepared to address consumer self-pay, the area continues to be an issue, the research revealed. Eighty-one percent of executives said they believe the increase in consumer responsibility for costs will continue to affect their organizations, down from 92 percent last year. Among them, 22 percent think that impact will be significant, compared to 40 percent last year. Executives from health systems and larger hospitals believe their organizations will be more heavily impacted by consumer self-pay.

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