Latest News from Praxis Healthcare Solutions
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The final reporting requirements for the new MACRA (Medicare Access and CHIP Reauthorization Act) rule for physician payment were finalized this month and will be implemented January 1, 2017. MACRA puts an increased focus on quality and value of care. According to CMS, the goal is to create and implement a core set of performance measures to be used by private and public insurers so all are on the same page when comparing quality, making data more easily gathered and understood. The intent is to build a system of better care where clinicians work together to have a full understanding of patients’ needs and making a health care system more responsive to patients and families resulting in better care, smarter spending and healthier people and communities. Therefore, Medicare pays for what works and spends taxpayer monies more wisely, and patients are in the center of their care, resulting in a healthier country.
A physician’s reimbursement may be increased or decreased depending on how well one performs on established quality and cost metrics. This new Medicare payment system for physicians allows for eligible physicians to participate in one of two tracts. The first tract is the Merit-based Incentive Payment System (MIPs). This gives clinicians the opportunity to be paid more for better care and investments that support patients. In the first year, it also provides a flexible performance period, so that those ready to report their data beginning in January can do so, but those who need more time to prepare reports may do so later in the year. The second path is called the Alternative Payment Model (APMs), such as participation in an accountable care organization or patient-centered medical home. APMs can apply to a specific clinical condition, a care episode, or a population. Clinicians get paid primarily for keeping people healthy. When they get better health results and reduce costs for the care of their patients, the clinicians receive a portion of the savings. Those excluded from the program are clinicians with low volume (less than 100 Medicare patients or less than $30K in Part B charges). At this moment, CMS will only provide performance feedback on an annual basis, but are exploring more timely feedback measures. It is anticipated that 2018 will also be a year of transition and that MACRA will continue to evolve.
The ICD-10 grace period was a time where unspecified ICD-10 codes were permitted as acceptable codes on claims submissions. Therefore, codes could be submitted and not denied when the codes were not selected to the highest level of specificity. This grace period was a joint effort between the Centers for Medicare and Medicaid and the American Medical Association to allow for a smoother transition from the I-9 diagnosis coding to the I-10 diagnosis coding. This grace period extended from October 1st, 2015 to October 1st, 2016. Many third party payers also followed this rule, however, some have not accepted unspecified codes from the beginning of ICD-10 implementation last October.
Beginning October, the use of unspecified codes may trigger denials on your claims. Coding professionals select an unspecified ICD-10 code when the provider’s documentation does not support a more specified code. Therefore, providers are urged to document conditions to the highest specificity possible so that the appropriate diagnosis codes are supported and in turn submitted on the provider’s claims. Thus, coding professionals are urged to query providers for more specific diagnoses.
Providers who do not document to the highest specificity possible may be subject to denials. These denials create a delay in reimbursement besides resulting in costly claim resubmissions and appeals in some cases. If there is a response to the query, the provider can then make an addendum to their documentation to support the highest level of specificity for the diagnosis.
In order to ensure clean claim submission and timely payment from the insurance contractors, it is best to evaluate your ICD-10 code reporting prior to October 1st, 2016 and ensure that documentation supports diagnosis coding to the highest specificity.
It has been reported that denied claims represent 90% of missed revenue opportunities. Whether this is true or not, we all can believe that denied claims are a burden due to rework and chasing for dollars that have already been spent!
According to Change Healthcare, it costs an average of $6.50 to file an initial claim. If denied, that one claim can cost an additional $25.00 to resubmit. And we know, often it takes more than this! So say you have 100 denied claims per month – the cost of submission is around $30,000/year. Now, if a larger organization gets 1000/mo or even 1000/week in denied claims, you can see how quickly the expense adds up to resubmit denied claims.
According to a study conducted by CMS< 60% of denied, lost or ignored claims will never be paid in full. What changes are you putting in place to decrease first pass denials? We know that determining benefit eligibility/verification, getting medical necessity documentation prior to and during care delivery can help make this happen. Many organizations have addressed the low hanging fruit and improved these processes. However, begin looking below the surface for many of those difficult areas that create claim denials, such as changes in procedures from that which is scheduled, or same day authorizations that are needed for radiological services. Design workflows and processes to avoid denied claims and rework among your team members.
At Praxis Healthcare Solutions, our team believes in always giving back to our community. Every quarter we raise and donate funds or goods to one of many worthy charities. As a group, our hearts are broken and prayers go out in the tragic loss of our Dallas Police Officers and their families. Yesterday we hosted a fundraiser in our building. 100% of money raised will be matched by Praxis Healthcare Solutions and donated to these hero’s and families who put themselves in harms way every day. We thank you for your hard work and dedication.
So what do we mean when we say value based care? Value based initiatives transitions the care delivery focus from volume to value. This includes thinking about the entire patient experience among multiple care settings. Many hospitals are already experiencing bundled payments as it relates to joint replacements which is a form of value based care. Therefore, reducing costs and improving quality presents financial incentives while avoiding potential costly penalties. This actually shifts some of the financial accountability away from payers to the healthcare providers. Today, maybe 5% of your total revenue has some value based component in your contracts, but is projected to increase to nearly 40% within the next 5 years. The goal of the Department of Health and Human Services is to tie 50% of Medicare payments to a value-based payment model by 2018.
Providers will begin addressing new strategies that will include more data analytical tools to address population health management as well as improved patient billing techniques. Most hospitals today possess certified electronic health record technology which is a good starting point for revenue cycle analytics. More robust analytics can identify real time claims data combined with clinical data that can measure improved quality based on outcome results. Data will reveal expensive patient populations, which tend to have high readmission rates and frequent emergency room visits.
These analytics can also better identify root causes of denials, suggest resolutions and cause fewer write-offs. Whether you outsource your denied claims or work them internally, always attempt to identify root causes so that prevention measures can be implement.
As we begin to transition to value based contracts, new payment models will address access, quality of care and patient outcomes while driving greater value for our healthcare dollar.
Yvonne Focke, RN, BSN, MBA
Vice President, Clinical Operations
Praxis Healthcare Solutions, LLC
On May 4, 2016, the Centers for Medicare & Medicaid (CMS) announced that the Quality Improvement Organizations (QIOs) were to suspend further claim audits regarding short stays. This suspension or pause is expected to be between 60-90 days. Last October 1, 2015, The QIOs had been given the CMS contract from the Medicare Administrative Contractors (MACs) to review these billed claims.
The purpose for this pause is for CMS to standardize the QIO review process, provide training to the QIOs regarding the 2 midnight (2MN) rule, evaluate previous QIO denied claims as well as conduct provider education. Therefore, the intent is for CMS to promote a consistent application of patient status medical reviews on short hospital stays.
The suspension of reviews was a result of many hospital complaints that the QIOs were not following regulatory requirements surrounding the 2MN stay. In particularly, the QIOs were not counting the time patients were in observation, nor the Emergency Department as part of the stay which would qualify for inpatient status if the span of time covered 2 midnights.
According to the American Hospital Association, hospitals were also concerned that the time between QIO audits did not allow hospitals to provide education and/or make Improvements prior to the next audit. In addition, the QIOs delayed receipt of review results which prompted hospitals to rebill denied claims under Part B due to the one year filing timeline. Had the reviews been more timely, it may have prevented hospitals from rebilling.