Issue link: https://beckershealthcare.uberflip.com/i/182667
Finance, Revenue Cycle & ICD-10 30 At the Forefront: How Hospitals and Health Systems Can Be on the Cutting Edge With Payers By Bob Herman T his past May, Moody's Investors Service put out a red flag to hospitals. The credit rating agency said if hospitals and health systems want to have a shot of success in the future, they will have to focus on quantitatively measuring value rather than volume, and those indicators will have to coincide with the shift to risk-based contracting. Hartford, Conn.-based Cigna has been one of the most active investorowned health insurers to delve into new payment models. As of August 2013, Cigna has created 66 collaborative accountable care initiatives — Cigna's version of an ACO — and the insurer hopes to have 100 in place by 2014. The purpose of risk- and value-based contracting, of course, is to root out inefficiencies in payment and reduce the overall cost of care. Medicare is attempting to accomplish this through several initiatives, including accountable care organizations, bundled payments and the readmissions reduction program. Many payers and providers have taken big steps in finding creative ways to pay for, and be paid for, healthcare services. Here is some perspective from a few hospital executives on what other similar providers need to do to modernize their payer strategies. Commercial payers, per usual, have been following the lead of Medicare through several innovative models of their own. For example, in January 2012, Blue Cross Blue Shield of Massachusetts and Boston Children's Hospital signed a three-year deal called the "Alternative Quality Contract." Under this global payment system, the hospital receives modest rate increases that are less than the general medical inflation rate, and the hospital and physicians are only paid for quality of care provided. Boston Children's President and CEO Sandra Fenwick says the contract will save $115 million on healthcare costs through 2014. The health system perspective One of the many cited perks of hospital consolidation is the ability to negotiate with commercial payers for broader, more innovative contracts. At SCL Health System in Denver, that is precisely the goal. Debbie Welle-Powell serves as vice president of accountable health and payer strategy at SCL Health System, which operates nine hospitals. She says every health system, from a smaller, local system to a larger, multistate one, must pursue value-based contracts right now with payers. This means taking HFAP 1051 Final_Layout 1 3/20/13 3:26 PM Page 1 Confirm Your Excellence Ambulatory Surgical Center Accreditation "The HFAP survey process is straightforward. Mackinaw Surgery Center knows exactly what the regulatory expectations are without the guess work. This allows our Center to be consistent in its operations and at the same time challenges our team to strive to be the best at what we do. " -Steve Corl Administrator, Mackinaw Surgery Center, LLC Saginaw, MI www.hfap.org info@hfap.org CLIENT: Healthcare Facilities Accreditation Program APPEARANCE: ASC Review, April 2013 Norcom Incorporated Phone: 847-948-7762 E-Mail: theteam@norcomdesign.com