Becker's Hospital Review

25 Executive Briefing: Payment Models and Reimbursement H ospitals and health systems find themselves in a confus- ing reimbursement landscape. Payment models are shift- ing from fee-for-service to new models in which provider organizations take on the financial risks of providing healthcare to pre-defined groups of people. Yet while many agree that popula- tion health management will become increasingly common, fee- for-service contracts remain and are unlikely to disappear entirely. For the foreseeable future, hospitals and health systems will have a foot in two boats — fee-for-service and fee-for value — and the engines in both must be able to run efficiently. Fortunately, many of the competencies and technologies required to succeed under risk can also pay dividends from fee-for-ser- vice contracts as well — goals such as improving patient access, improved quality and physician alignment are good for a health system's bottom-line no matter the means of reimbursement. The overarching goal for any health system should be to deliver qual- ity care while controlling costs. The following six steps can bring success to your organization in the new reimbursement landscape, whatever your level of com- mitment to population health and risk-based contracts. 1. Understand your costs Understand your total medical expenditure and cost drivers across your population of patients. Relying on payers to report costs and quality to providers is insufficient. Access to payer claims-based data is essential to understanding the total cost of care delivered by providers inside and outside your health system and to accurately attribute the costs of interventions to rendering providers. 2. Reduce out-migration from your network Pay yourself, rather than a competitor, for care you can provide. While it is unlikely your health system can provide everything to your beneficiaries, make every effort to ensure your patients have access to the entire range of services you can perform. For exam- ple, establishing or increasing after-hours care can go a long way to reducing ED visits. Understanding where costs are high outside your network may reveal opportunities for new lines of business, or the establishment of new contractual relationships. Providing cost and quality transparency to providers in your network will help them make the best decisions for patient care. Successful patient engagement is crucial to securing patient loyalty, and your approach should be both high-touch and high- tech. Healthcare is an intensely personal experience, so com- munication (such as appointment reminders, test results, etc.) with patients should be personalized, too. Whether email, text or voice, each contact with the patient should give the patient the impression that the provider organization cares about them and wants to see them receive the care they need. At the same time, patients are increasingly coming to expect the ability to schedule appointments the same way they reserve a table at their favorite restaurant. As a C-level executive at a multistate health system recently said, succeeding at patient engagement means moving from an attitude of telling a patient "the physician will see you now" to one of telling the physician "the patient will see you now." Another way to reduce no-show rates is by offering pre-visit ser- vices — precertification, prior balance presentation, financial counseling and preregistration. A recent study found that a third of patients don't know what they will owe out-of-pocket at the time of care — and financial uncertainty is a primary contributor to can- cellations. This phenomenon will only increase as high-deductible plans become more prevalent, and more and more patients be- come de facto self-pay clients. One industry analyst reports that up to 50 percent of hospital bad debt is now with insured patients. Ensuring pre-registration of patients and prior authorization from payers will help you avoid leaving money on the table — some- thing that no provider can afford. Patient portals should allow pa- tients to view their own relevant and timely clinical and financial information from across the continuum as well as provide direct access to patient representatives who can explain financial obli- gations in detail. Perfecting patient engagement requires practice, expertise and trial and error over many repetitions — in short, the ben- efits of scale. Too often, provider organizations build in-house capabilities, including large and expensive call centers and pa- tient-access departments, when partnering with a vendor that has scale and expertise in patient engagement would be more efficient. 3. Maximize pay-for-performance reimbursement Monitor your population directly against contracts and get every dollar available by closing gaps in care. Nearly every risk-based contract in the U.S. now includes some set of quality goals. Meeting or exceeding these goals can lead to additional rev- enue, or in some case represent quality "gates" whereby provid- ers failing to meet goals do not share in any cost savings — as in the Medicare Shared Savings Program. It is essential for admin- istrators and clinical leaders to monitor performance by provider, department, facility or health system to applicable quality mea- sures throughout the year, to ensure month-to-month progress against goals. 6 Steps to Health-System Success in the New Reimbursement Landscape Sponsored by

• Cover