HFMA Florida Chapter Fall ConferenceSeptember 16, 2010

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Accountable Care – Approach or “Thing” Physician/Hospital Integration Journey Concepts of Bundling Payments The Payer/Buyer Perspective Roles and Accountabilities of an ACO Potential ACO Models The ACO Revenue Cycle Infrastructure

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Genesis from “HillaryCare” in 1993◦Managed Competition and the PHO

Quality Payment for Services – CMS 2003◦Process – Evidence Based Medicine Guidelines◦Outcomes – Improvement in Quality Measures◦ Treatment of Chronic Diseases

Shared Savings for Cost Containment◦Emerging Payer/CMS Pilots in Episodes of Care

Integrated Care = Good Non-Integrated = Bad

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New Name with Newly Anticipated Functionality Entity Will Need to be Able to do the Following:◦Assemble and Manage a Broad-based Group of

Providers including Acute Hospitals, Primary Care Physicians, Sub-Specialists, and Ancillary Providers.

◦Provide Services in a Seamless Business Infrastructure◦Accept and Administer Bundled Payments from Payers◦ Identify Enrollment and Pay Providers◦Report on Quality, Costs, and Patient Outcomes◦Manage Risk and Gain-Sharing Methodologies

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Medical Staff Delegated Responsibilities◦Credentialing, Privileging, Quality Assurance

Creation of PHOs for Managed Care Service Line Development◦Specialty Partnering with Hospital

Employment of Primary Care & Sub-Specialists IT Connectivity and Meaningful Use

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Other than Employment – Not Much Regulatory Constraints ◦Stark, F&A, IRS, etc.

Cultural Issues◦Professional Independence◦Entrepreneurial Interests◦Control vs. Security

Financial IT Platform Differences◦Hospital Legacy & Practice Management Systems

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• Management of Chronic Care Patients– Screening and Lifestyle Management

• Medical Home Approach – Primary Care• Population-based Semi-Capitation• Episode of Care Fixed Payment• Performance-based Payment • Combinations of Those Above

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Slow the Rate of Cost Growth Public Health Approach – Lifestyle/Prevention◦Obesity, Smoking Cessation, Screening, etc.

Reduce Fee-For-Service Exposure◦Bundling Acute Care Episodes for Elderly◦Medical Home Fixed Payments for M&M

Shift Risk to Provider Community◦Move toward “Partial Capitation”

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Four Clinical Areas Represent 61% of Spend◦Cardio-Vascular, Orthopedic, Neuro, Cancer

Difficulty Predicting Unit Cost and Utilization Hospital and Physician Combined◦Bundled Payment Minimizes Risk of Outliers◦Pharma and Medical Device Usage Included

Pay For Performance / Enter “the Ratchet” “They” Won’t be Able to Contract for This

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Clinically and Financially Integrated Provider Network

Capability to Underwrite Risk Broad Scope of Clinical Services ◦Acute Care, Primary Care, Out-Patient Care,

Rehabilitation Services, Home Care, etc. Information Technology Infrastructure ◦ Internal and External Transaction Capabilities

Ability to Engage with Consumers/Patients/Payers

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Health Plan as ACO Independent Practice Association as ACO Multi-Specialty Group Practice as ACO Hospital as ACO Hospital and Medical Staff as ACO Other Entrepreneurial Models???

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Management of Provider Networks Administrative IT Platform - Eligibility Financial IT Platform - Claims Utilization Management Reporting Patient Engagement and Incentives Strong Capital Position Experienced in P4P/Payment Bundling

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Strong Clinical and Financial Infrastructure Durable Provider Relationships Case Management Expertise Leverage on Acute Care Costs Managed Care Contracting Expertise Focus on Patient Retention/Engagement

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Solid Administrative Infrastructure Comprehensive Clinical Coverage Integrated Clinical Platform Integrated Financial Platform Out-Patient Services Built-in Referral Network

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Comprehensive Acute Care Services Relationships with Ancillary Providers Large Medical Staff Footprint Local Brand Awareness Solid Capital Structure Administrative and Financial IT Infrastructure Managed Care Relationships

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Full Spectrum of Patient Services Superior Local Brand Awareness Clinical Integration Ability to Retain Risk Contracting Leverage with Payers Administrative/Financial Infrastructure

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Shared Governance Among Constituents Community Benefit Organization/Co-Op Medical Staff Roster Development Invitation to Ancillary Providers Participation Agreements Information Technology Requirements Health System Capitalization

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Choose Scope of Clinical Services Establish EBM Guidelines for Services Model Historical Financial Performance Determine Professional Fee schedules Establish Hospital Revenue Code Charges Create Combined Charge Structures Determine P4P Gain Sharing Rules Determine Risk Retention Rules

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Patient Enrollment and Eligibility Contract Modeling and Management Maintenance of CDM/Fee Schedules Case Management/Referral Services Claim Re-Pricing/Clearing/Payment Dispute Resolution/Collections Performance and Dashboard Reporting

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Receive Enrollment Data from Payers to ACO Identifying Patient Enrollees

Develop Patient Roster for Physician Offices and Hospital Registration

Perform Eligibility Checking using HIPAA Transactions and Portal Interfaces

Transmit Authorizations to Practices and Hospital Accounting Operations

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Based on ACO Developed EBM Rules: Track Utilization among Providers Identify Variances from ACO Guidelines Manage and Track Provider Referrals Create Worklists for ACO Reviewers Develop Internal Clinical Authorizations Accommodate External Clinical Authorizations

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Model Bundled Contracts using Historical Claims Data and ACO Charge Master

Load Executed Contract Terms and Rules into ACO Master Contract Library

Disseminate Relevant Terms to Providers for Verification and Reconciliation

Identify Payer Variance Record

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Create Charge Master Indexes ◦Chronic Care Bundles/Medical Home◦Acute Episodes/Procedure Package Pricing◦Bundled Charges for Episode of Care – 30 Days

Imbed Charge Master into ACO Platform Maintain and Update Disseminate to Providers

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ACO Platform Receives Un-scrubbed Claims from Physicians and Hospital – UBs & HCFAs

ACO Re-Prices Claims According to Contract Terms or CMS Methodology

ACO Bundles Individual Claims Into Bundled Claim Edited Format

ACO Clears Bundled Claim to Payer/CMS ACO Receives Payments/Pays Providers

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There WILL BE Incorrect Payments within a Bundled Payment Environment

Administrative Denials/Underpayments◦Clinical Denials/Reduction of P4P Payments◦ Financial Reconciliation Denials/Outliers

ACO Platform Re-Adjudicates Disputed Claims with Denial Management Tools

Patient Receivables – Co-Pays, etc.

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Care Management/Utilization Management◦ Flash Reporting on Active Patients◦Concurrent Clinical Variance Reporting◦Summary Reporting On Process/Outcomes

Administrative Reporting – Process Costs Financial Reporting◦Charge/Cost, Payer Variances, Gain-Sharing,

Risk/Retention, Receivables, Distributions

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The New ACO Technology Platform is not simply the Traditional PHO Platform

The Buyer Market will Change its Approach The ACO must have a Nimble Platform Physicians will need Assurances that the

Operating System is Accurate and Transparent The Current Revenue Cycle Systems and

Applications are Inadequate for the Future

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The Accountable Care Organization Concept and Construct is a MUST for Health Systems

As an ACO, Health Systems will be positioned as an Integrated Delivery Network

As an Integrated Delivery Network, the Health System can effectively deal with changing Reimbursement Methodologies from Payers

And, as an ACO, Health Systems can become a Participant in the planned State Exchanges

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Nick HilgerJDA eHealth Systems1717 Park Street, Suite 250Naperville, IL 60562nhilger@jdaehealth.com

(630)355-5220 ext. 3279 (Office)(651)324-2943 (Mobile)

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