Healthcare spending in the United States is higher per-capita than in any other OECD country. Reasons for this unfortunate distinction are many and varied—uncoordinated care, specialty Rx, underutilization of palliative care—but there many hidden factors driving costs for providers.
Re-admissions remain a focus and albatross on the system. They can be incredibly expensive for hospitals, especially if the patient is being treated in a value-based relationship with a payer.
The Affordable Care Act placed a much heavier burden on healthcare providers to prevent readmissions within a 30-day window after discharge, and punishment from government payers can be swift and ruthless. In October 2019, Medicare cut payments to more than 2,500 hospitals, to the tune of $563 million over one year. Hospitals are already feeling a budget crunch from the loss of elective surgeries during the COVID-19 pandemic, so administrators are managing smaller margins.
A well structured value-based arrangement is only as effective as its infrastructure and care model behind it. Given that hospitals discharge patients to dozens, if not hundreds, of nursing homes and home health agencies, it can be difficult to maintain adequate communication across the care continuum. There are a number of ways to improve coordination with post-acute community partners, and hospital administrators and heads of population health should consider the following when developing a plan to address re-admissions:
Gloomy facts about healthcare costs in the US became even scarier for the US residents when the pandemic knocked on their doors. It’s almost unbelievable to think that $2.16 billion was spent on hospital care and medical professionals.
If we take into consideration that the money doesn’t come from the rising demand for healthcare services and larger employability, but derives from high costs of services, it’s no wonder that the coronavirus brought America’s healthcare to its knees.
Furthermore, heart disease and diabetes are the most common diseases in the States. These two diseases account for 85% of all costs in American healthcare as they are time-consuming, difficult, and expensive to treat on a day to day basis.
As the coronavirus outbreak limits individual movement across the country, organizations are turning to remote solutions to stay operational.
As a result, demand for telehealth has skyrocketed — prompting health insurance payers, who haven’t always covered telehealth services, to reconsider coverage.
In April, the Centers for Medicare and Medicaid Services (CMS) made one of the most significant changes to Medicare/Medicaid coverage of the past few years. It announced it would expand coverage to more than 80 different telehealth services. Now, some insurers in the private sector are beginning to follow suit.
Here is how the pandemic is changing attitudes toward telehealth — and also the potential long-term impacts of coronavirus and telehealth service expansion.
Medicaid/Medicare and Telehealth Coverage Expansion
Many patients, wanting to reduce their chance of contracting or spreading COVID-19, are electing to avoid doctor’s offices. For some people — like the immuno-compromised and elderly — it’s no longer safe to have a checkup or routine visit. At the same time, many doctors have temporarily shut their practices and begun offering telehealth services to those who still need consultations and regular check-ins.
Others who have kept their practices open aren’t sure for how long it will be possible or responsible to do so.
The result has been an explosion in demand for telehealth services, as well as expanded offerings. Many of them, however, weren’t previously covered by Medicare or Medicaid, the public health programs that insure 34% of all Americans.
Early in April, the pressure pushed CMS to expand Medicare and Medicaid to cover 85 additional telehealth codes — including group psychotherapy, physical therapy evaluations and prosthetic training. The move came after Congress passed a coronavirus spending bill that included $500 million in telehealth coverage and several major private insurers announced they would waive copays for virtual doctor’s visits and other telehealth services.
Potential Impacts of Expanded Telehealth
The most immediate impact of the coverage expansion will be making medical services much more accessible. Current research shows that, while in-person visits are typically more effective, telehealth is great at expanding the availability of medical services. It may also help health care facilities reduce costs and improve patient satisfaction.
By Chris Hakim, general manager and senior vice president, eHealth.
Chris Hakim
Pharmaceutical manufacturers face growing pressure from legislators, employers and consumers to control prescription drug costs, which have increased by as much as 15 percent between 2008 and 2016. In late February, a congressional committee grilled executives from seven pharmaceutical companies over relentless price hikes and common industry practices that block competition. All along the health care chain, demands for greater transparency and calls to put consumers first are getting louder.
Clearly, there is no magic bullet to tame rising pharmaceutical costs. There is, however, evidence that absent political action, technology can be an effective weapon against price inflation. We witness this dynamic first hand at eHealth, most prominently among seniors, who are putting the power of information and effective technology-based tools to work for themselves as they shop for Medicare coverage.
What’s more, we’ve seen the use of online transparency tools grow. During the recent the 2019 Medicare open enrollment period, eHealth’s provider lookup tool was used by 47 percent of people shopping for 2019 coverage compared to just 5 percent the year before. In addition, 30 percent of people buying Medicare Advantage Prescription Drug plans used the tool compared to 18 percent during the previous annual enrollment period. And nearly one-quarter (24 percent) of customers who bought Medicare Part D plans through eHealth used the online prescription drug coverage comparison tool; those who enrolled in the recommended plan found a median potential annual savings of $531 on prescription drugs.
Data show that seniors are likely to use technology at increasingly higher rates. Four-in-10 now own smartphones, more than double the number in 2013, and 66 percent of individuals 65 and over use the internet, up from 43 percent in 2010. Among so-called “senior surfers,” 53 percent go online for information about health care or medical issues.
By Danielle K. Roberts, a Medicare insurance expert and co-founder, Boomer Benefits.
Danielle Kunkle Roberts
The telehealth revolution gives health providers the opportunity to assist patients in remote or rural areas; the same kind of care that they give to patients in person. It saves money on travel and improves efficiency in healthcare as well.
While telehealth options in healthcare are helpful to individuals at any stage in life, they can be particularly helpful in treating older adults with chronic illnesses. The Centers for Medicare and Medicaid Services have recognized this and have put together guidelines for primary care physicians who treat patients in geographical areas where it may be difficult for those beneficiaries to otherwise gain access to certain specialists and medical experts.
Telehealth services are made available to these Medicare beneficiaries who have signed up for Medicare Part B. Here’s how Medicare covers telemedicine for these people.
Medicare outpatient coverage for telemedicine
Medicare has two original parts: Part A hospital coverage and Part B outpatient coverage. Telehealth services fall under Part B. Medicare Part B will cover a telehealth consultation whenever a consultation is medically necessary, and your Medicare doctor follows the guidelines in arranging the consultation.
The specialist must conduct your teleconsultation using two-way interactive communication that must include both live audio and video feeds. Fortunately, with the prevalence of digital technologies and telehealth platforms, this has become common practice for most healthcare organizations.
The Medicare beneficiary needs to live within designated rural areas, and the video conferencing call must be held at a designated originating site. Approved originating sites include your physician’s office or rural health clinic. Calls can also be conducted from within a federally qualified health center, a skilled nursing facility, inpatient hospital, critical access hospital or community mental health facility.
Yet effective January of this year, CMS instituted important changes to their reimbursement policies that encourage the use of digital health tools. Most significant among these changes is the un-bundling of the Medicare/Medicaid CPT code 99091, a decision that specifically affects the adoption and deployment of remote patient monitoring (RPM) devices. In the past, CMS has only offered financial incentives for live, audiovisual virtual visits, excluding RPM—and thus excluding a major demographic from the possibility of affordable and accessible care. With the un-bundling, financial incentives for RPM are not only available, but also are deployed across multiple providers, allowing nurses and care managers as well as physicians to analyze and monitor data, creating efficiencies and lowering costs.
But while the CPT un-bundling represents an important victory for RPM, it also serves to highlight the policy’s inadequacies and the large margin for growth. With the update, care providers no longer have to worry about fully funding RPM from their original operating budgets, but the reimbursement rate ($60 per patient per month) is still far too low to be effective in most cases. Other requirements, such as a prior wellness visit with the patient and a limit of one charge to the code per month, further restrict its effectiveness.
Perhaps most problematic, while the un-bundling will have an immediate positive impact on patients over the age of 65, a large patient demographic could be outside the bounds of its effects. Commercial plans are under no requirement to follow the updated CPT guidelines, and more importantly, neither is Medicaid. And while Medicaid is the smaller of the two government run-healthcare plans (compare Medicaid’s revenue of $565.5 billion to Medicare’s $672.1 billion), it is outpacing Medicare by 10 percent in rates of spending (increasing by 3.9 percent in 2016 compared to Medicare’s 3.3 percent).
Guest post by Cheong Ang, co-founder and CTO, LucidAct Health.
Cheong Ang
As a provider, you probably have been living with meaningful use in the last many years, and now, MACRA (Medicare Access and CHIP Reauthorization Act), which combines parts of the Physician Quality Reporting System (PQRS), Value-based Payment Modifier (VBM), and the Medicare electronic health record incentive program into the Merit-based Incentive Payment System, or MIPS.
What really is the part of MIPS that matters, for this year and next, anyway? 2017 is the transition year of MACRA, but you need to report something (for various measures) or lose 4 percent Medicare payment adjustment in 2019. If you make a partial-year (90 consecutive days) report by October 1, depending on how you fare against the CMS’ annual performance benchmark, there may even be a chance to get a positive Medicare payment adjustment. In general, a provider will report in the four MIPS performance categories: quality (weighted 60 percent of total in 2017), cost (not weighted in 2017), improvement activities (loosely “care coordination,” 15 percent ), and Advancing Care Information (“EHR use”, 25 percent). Then in 2018 and 2019, with improvement activities and advancing care information remain the same, the quality category will be weighted 50 percent and 30 percent respectively, giving way to cost (10 percent and 30 percent in each of 2018 and 2019).
This sounds like high school all over again – the authority sets the goals that arguably lead you to learn the materials that matter, and grade you on them. If you score well in the four MIPS performance categories, chances are your operations are running quite well. But deep down, perhaps your priorities are simply to provide great patient care, and get compensated for your expertise and services. Then this high-school approach of grading your services, and you – yes, your performance score will be available publicly on the Physician Compare website – becomes a distraction that few providers like to deal with.
So how will you live with this reality? One approach is to actually embrace and integrate MIPS into your operations! Then all MIPS requirements don’t just become some checkbox items you try to complete, but actually a tool to improve your operations. Here are three ways to “take advantage” of MIPS as a guideline to help you thrive:
Embrace a Data-driven Approach
Run your operations based on data. Many EHRs provide at least some basic level of reports that allow you to keep a finger on the pulse of your operations. Make the relevant reports accessible to your team. For the metrics that are relevant to your operations, dedicate a periodic review session to keep everyone abreast of the numbers, and your targets. To leverage MIPS to improve your bottom line, you will want at least some level of visibility through these reports how working those numbers will bring more revenues and/or patient satisfaction, or lower cost. Then it will become clear MIPS can benefit your operations.
Integrate MIPS Efforts Into Your Workflow
Then the team is to identify and make sure they engage the patients that fall in the categories of the reporting metrics to complete the required actions. While in a smaller clinic, some way of patient tracking; e.g. shared call list, may work fine. If your targets involve hundreds or even thousands of patients over a period of time, an automated, smart workflow approach will serve the situation much better. The smart workflow approach is part of the turnkey service my team at LucidAct built after experiencing such patient-care collaboration problems at San Francisco General Hospital in a consulting engagement. Smart workflows keep track of what have been done by whom for a patient, and conditionally activates the next task(s). It can also automate tasks such as calling a patient. Such care-action details in conjunction with the reports above will reveal how the team’s efforts chisel (or not) off the workloads, and improve the bottom line. Having them available in the review sessions ties the effectiveness of the team’s efforts back to the MIPS targets, allowing you to make adjustments to your operations as needed.
The proposal of the Centers for Medicare & Medicaid Services (CMS) to expand its Recovery Audit Program to Medicare Part C or Medicare Advantage (MA) plans is a new step in its efforts to fight fraud, waste and abuse in the Medicare program. The move is aimed at identifying overpayments and underpayments made on claims for services provided to Medicare beneficiaries. For physicians’ practices, the expanded recovery audit program would mean that they will have to take proactive steps to reduce their risks of falling prey to recovery audits by pay ensuring error-free submission of the claims of MA patients. Outsourcing medical billing and coding is a great option to accomplish this task.
Medicare Advantage (MA) Plans and Allegations of Billing Fraud
MA plans or Medicare Part C are offered by private insurance companies approved by Medicare, which receive payment from Medicare for the coverage provided. There are different types of MA plans which provide all of a Medicare patient’s Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Part C plans are different from standard Medicare in that they are paid a set fee every month for each patient based on a complex formula called a risk score. CMS pays higher rates for sicker MA beneficiaries than for those in good health. CMS scrutinizes the diagnosis information reported by MA organizations and calculates risk scores for each enrollee using the Hierarchical Condition Category risk adjustment model. The risk score is calculated based on the enrollee’s demographic characteristics and health conditions. This practice aims to improve the accuracy of Medicare’s payments to MA organizations and reduces the incentives for plans to select only the healthiest beneficiaries.
Identifying Improper Medicare Payments with Recovery Audits
However, in recent years, there have been various reports of overbilling MA plans, costing taxpayers billions of dollars more than warranted. In Jan. 1, 2010, the government set up the Recovery Audit Program to fight fraud, waste and abuse in the Medicare program. It detects overpayments and underpayments for Medicare claims so that CMS can implement actions to prevent improper payments in all 50 states. Under the program, Recovery Audit Contractors (RACs) — private companies hired by CMS — have the authority to review medical records at short notice. RACs notify health care providers of the outcomes of the reviews via demand letters. An RAC demand letter would contain details of the problem with a claim, such as the coverage, coding or payment policy that was violated, a description of the overpayment made, recommended corrective actions, and explanations on the provider’s right to submit a rebuttal statement prior to recoupment of any overpayment and appeal and more.
