Objective 4: Provider Reimbursement Flashcards
Reasons why a health plan wants to contract with providers (contracting goals) (5)
1) Obtain favorable pricing (less than full billed amounts)
2) Obtain payment terms that result in an underwriting gain
3) Get the provider to agree to provide services to the plan’s members
4) Meet service area access standards required by the states and Medicare
5) Obtain contractual agreement for several clauses, many of which are required by the states and Medicare
Provider reimbursement contractual agreements (7)
The provider agrees to:
1) Submit claims directly to the plan, not the member
2) Not balance bill the member for any amount above the agreed-upon payment terms
3) Hold harmless the member (not bill for any amounts owed by the plan)
4) Cooperate with the plan’s utilization management program
5) Cooperate with the plan’s quality management program
6) Give the plan the right to audit clinical and billing data for care provided to plan members
7) Not discriminate (and other similar requirements)
Reasons why a provider wants to contract with a health plan (contracting goals) (7)
1) Obtain favorable pricing when in a strong negotiating position
2) Ensure that it will not be excluded from the network of a large payer
3) Receive direct payment from the plan, thereby avoiding the need to collect from the patient
4) Receive timely payment (usually 30 days or less)
5) Have plan members directed or steered to it
6) Not lose business (or medical staff) as a payer steers members to others who are contracted providers
7) Receive defined rights around disputing claims and payments
Capabilities of a well-functioning contract management system (13)
1) Identify network gaps or where provider recruiting is most needed
2) Track recruiting efforts, provide reminders, and generate recruiting reports
3) Generate new contract blanks and new contracts with information filled in
4) Store copies of different versions of any provider’s contract
5) Track and report contract changes for each provider
6) Track and manage permissions and sign-offs on contracts
7) Store images of signed documents and convert imaged documents into machine-readable formats
8) Support an entirely paperless contracting process
9) Provide early notification or reminders for upcoming actions such as re-credentialing or renegotiations
10) Direct electronic feed of required demographic information to other internal functions
11) Direct electronic feed of market-facing systems such as internet physician services
12) Be searchable on multiple attributes
13) Analyze the potential impact of changes in contract terms
Types of physicians and other professional providers (5)
1) PCPs and SCPs - for traditional HMOs, the distinction between PCP and SCP is very important because the PCP acts as a gatekeeper and must authorize any visits to a specialist
2) Hospital-based physicians - specialties include radiology, anesthesiology, pathology, emergency medicine, and hospitalist. These physicians often have exclusive rights at a hospital, so they are reluctant to contract for anything less than full charges.
3) Nonphysician or mid-level practitioners that provide primary care - the most common are physician assistants and nurse practitioners. These are a great asset in managed care because they deliver excellent primary care, tend to spend more time with patients, and are well accepted by most members.
4) Mental health providers
5) Other types of professionals - podiatrists, dentists, orthodontists, optometrists, chiropractors, physical therapists, occupational therapists, nutritionists, acupuncturists, audiologists, respiratory therapists, and home health care providers
Types of mental health providers (7)
1) Psychiatrist - a physician who specializes in mental health and is able to prescribe drugs
2) Psychologist - has a doctoral degree in psychology and two years of supervised professional experience
3) Clinical social worker - a counselor with a master’s degree for social work
4) Licensed professional counselor - has a master’s degree in psychology, counseling, or a related field
5) Certified alcohol and drug abuse counselor - has specific clinical training in alcohol and drug abuse and provides individual and group counseling
6) Psychiatric nurse practitioner or nurse psychotherapist - a registered nurse practitioner with special training in psychiatric and mental health nursing
7) Marital and family therapist - a counselor with a master’s degree and special training in marital and family therapy
Contracting considerations for different types of physician groups (7)
1) Individual physicians - advantages is the direct relationship with the physician. Disadvantage is the effort to maintain the relationship is large for just one physician.
2) Medical groups - advantage is the same contracting effort yields a higher number of physicians. Disadvantage is that if the relationship is terminated then there is greater disruption in patient care.
3) Independent practice associations (IPAs)
- Advantages: a large number of providers come along with the contract, the IPA may accept more financial risk, and some IPAs perform network management, credentialing, and medical management
- Disadvantages: the IPA can hold a considerable portion of the delivery system hostage to negotiations, and the plan’s ability to select and deselect individual physicians is limited
4) Faculty practice plans (medical groups that are organized around teaching programs)
- Advantages: these programs provide highly-specialized care and they add prestige to the plan by virtue of their reputation for quality care
- Disadvantages: tend to be less cost effective in their practice styles, and they are not set up for case management, so care is not well coordinated
5) Physicians in integrated delivery systems (IDSs) - there are two types
a) Hospital systems that affiliate with private physicians
b) Hospital systems that employe physicians 0 these often have substantial negotiating leverage
6) Patient-centered medical homes (PCMHs) - these coordinate all care for a group of patients
7) Specialty management companies - these focus on managing very specialized services using physicians (e.g., single-specialty case management of neonatal care)
Elements of a typical physician credentialing application (9)
1) Demographics, licenses, and other identifiers (such as national provider identifier)
2) Education, training, and specialties
3) Practice details - such as services provided and office hours
4) Billing and remittance information
5) Hospital admitting privileges
6) Professional liability insurance
7) Work history and references
8) Disclosure questions - such as suspension from government programs or felony convictions
9) Images of supporting documents - such as a state license certificate
Types of health care facilities (13)
1) Community-based single acute care hospitals
2) Multihospital systems (MHSs) - consolidation has led to most hospitals being part of an MHS, which gives them negotiating leverage
3) For-profit national hospital companies - because these hospitals are owned by national companies, they have much less local autonomy
4) Specialized hospitals - these provide care to only a certain type of patient (e.g., children’s hospitals and psychiatric hospitals)
5) Physician-owned single-specialty hospitals - these restrict themselves to elective procedures within a single specialty, so they are not equipped to handle emergencies and severe conditions
6) Accountable care organizations - these coordinate care for designated Medicare FFS beneficiaries and participate in a shared savings program
7) Government hospitals - may be county-run, state-run, or federal
8) Subacute care (skilled or intermediate nursing facilities) - these are well suited for prolonged convalescence or recovery cases. The cost for a bed day is much less than in an acute-care hospital.
9) Ambulatory surgical centers (ASCs) and procedure centers - are typically equipped to handle only routine cases
10) Hospice - a broad term referring to health care services provided at the end of life, which may be at an inpatient facility, ambulatory facility, or no facility
11) Retail health clinics - small clinics usually associated with a retail store (such as Target or Walgreens)
12) Urgent care centers - a hybrid of a low-level emergency department and a PCP practice
13) Other types of ambulatory facilities - includes centers for birthing, community health, diagnostic imaging, occupational health, pain management, and women’s health
Types of ancillary services (4)
1) Diagnostic
a) Laboratory
b) Imaging (such as x-rays and MRIs)
c) Electrocardiography
d) Cardiac testing
2) Therapeutic
a) Cardiac rehabilitation
b) Noncardiac rehabilitation
c) Physical therapy
d) Occupational therapy
e) Speech therapy
f) Other long-term therapeutic services
3) Pharmacy
4) Ambulance and medical transportation services
Ways in which bundled payments have been used (5)
1) By providers to attract more business, including from self-pay patients and medical tourism
2) By providers to engage physicians (especially surgeons)
3) By providers to gain the cooperation of physicians to reduce hospital cost
4) By payers to reduce payments
5) By payers to encourage patients to use lower-cost or higher-quality providers
Considerations in contracting for bundled payments (9)
These include the key financial, operational, and quality issues
1) Defining the episode - what is the trigger date and when does the case end? Which services are included?
2) Evaluating catastrophic risk - need to do an outlier risk analysis that includes a classical stop loss analysis
3) Financial stability for low case loads - random fluctuation may be greater for provider groups with low case loads
4) Determining provider allocation of funds - the allocation should consider financial incentives for physicians to encourage them to promote more cost-effective care
5) Distinguishing case severity - could limit risk by removing higher-severity patients from the bundled payment approach
6) Quality outcome requirements - minimum thresholds may be needed to ensure quality is not compromised as services are reduced
7) Administrative complexity of supporting the contract
8) Risk-sharing alternatives - contracts that share financial risk between the provider and payer may be more viable than pure bundled payments
9) Potential for increased utilization - contracts for individual providers should not give them incentives to increase utilization to get a larger share of the bundled rate
Definition of accountable care organizations (ACOs) (4)
1) ACOs are a new category of health care provider created by the ACA as part of the Medicare Shared Savings Program
2) Definition - a legal entity composed of certified Medicare providers or suppliers. These providers and suppliers work together to coordinate care for a defined population of Medicare FFS beneficiaries, and they have control over the ACO’s decision-making process
3) ACOs that meet specified quality performance standards are eligible to receive payments for shared savings if they can reduce spending growth below target amounts
4) Medicare beneficiaries will be assigned to ACOs based on where they received the greatest amount of primary care and preventive services in the most recent 12 months, as measured by allowed charges
Eligibility requirements for ACOs to participate in the Medicare Shared Savings Program (7)
1) Must be an eligible type of provider
2) Must be capable of receiving and distributing shared savings, repaying shared losses, ensuring all providers comply with program requirements, and performing other required functions
3) The governing body must be composed primarily (at least 75%) of participating providers and must also include Medicare beneficiaries served by the ACO
4) Leadership and management criteria include:
a) Clinical oversight must be done by a senior-level medical director who is a board-certified physician
b) Providers must make a meaningful financial or human investment to the clinical integration program
5) Must exhibit a strong patient-centeredness element
6) Must have a sufficient number of beneficiaries (at least 5,000) and primary care providers
7) Must have a compliance plan, a lead compliance official, and mechanisms for identifying compliance problems
Providers eligible to participate in an ACO (7)
1) Professionals in group practice arrangements
2) Networks of individual practices
3) Joint venture arrangements between hospitals and professionals
4) Hospitals employing professionals
5) Critical access hospitals that are paid by Medicare in a way that supports the collection of data needed to assign patients to providers
6) Rural health clinics
7) Federally qualified health clinics
Ways ACOs must demonstrate patient-centeredness (8)
1) A beneficiary care experience survey
2) Patient involvement in ACO governance by representation in the governing body
3) A process for evaluating the health needs of the population
4) Systems in place to identify high risk individuals and develop individualized care plans for targeted populations
5) A mechanism in place for the coordination of care
6) A process in place for communicating clinical knowledge to beneficiaries in an understandable way
7) A process to allow beneficiaries to access their medical records
8) Processes for measuring clinical or service performance and using these results to improve care and service
Methodology for measuring ACO quality performance (3)
1) ACOs are scored based on performance in 33 measures that are grouped into the following domains:
a) Patient and caregiver experience - measures include access to specialists, health promotion and education, and health and functional status
b) Care coordination and patient safety - measures include risk-standardized readmissions, medication reconciliation, and screening for fall risk
c) Preventive health - measures include influenza immunization, adult weight screening and follow up, and tobacco use assessment
d) At-risk populations - measures include diabetes measures (such as hemoglobin control), blood pressure control for hypertension patients, and coronary artery disease measures
2) In each domain, the points earned are divided by the total possible points to determine the percentage for that domain
3) The ACO’s quality performance score is the straight average of the four domain percentages
Methodology for calculating ACO shared savings payments (7)
1) Expenditure baseline
a) Calculated from spending data from beneficiaries that would have been assigned to the ACO in the most recent three-year period
b) Data is trended to the most recent year using Medicare national spending growth rates, and is adjusted based on risk scores
c) The three years are combined using weights of 60%, 30%, and 10% (largest weights for most recent years)
2) Spending benchmark - calculated by trending the expenditure baseline and adjusting for changes in health status (based on age and sex for continuously-enrolled beneficiaries whose risk scores increase, and based on risk scores for all others)
3) Actual spending - CMS will use a 3-month run-out of claims when determining the ACO’s actual spending
4) In each contract year, savings = spending benchmark - actual spending
5) Maximum sharing rate = 60% for two-sided models and 50% for one-sided models. ACOs using the one-sided model do not share losses, and therefore receive a lower sharing rate for savings.
6) Shared savings
a) Shared savings rate = maximum sharing rate * quality performance score
b) Shared savings = savings * shared savings rate
c) Shared savings are capped at 10% of the benchmark in the one-sided model and 15% of the benchmark in the two-sided model
d) A minimum savings rate (MSR) is used to reduce the chance of payments due to random fluctuations. This rate is 2% in the two-sided model and for ACOs with 60,000 or more beneficiaries in the one-sided model. Spending must exceed this rate to trigger savings, but once the MSR is met, all savings are shared (even those below the MSR)
7) Shared losses (two-sided models only) = losses * (1 - shared savings rate)
a) Shared losses have an upper limit of 60%
b) Shared losses are also capped, starting at 5% in the first year
c) A 2% minimum loss rate is applied in the same way as the MSR
Major physician remuneration models in Canada (4)
These are the major ways in which physicians are paid for their services
1) Traditional FFS - the physician bills for each service provided. Each province establishes a schedule of benefits that lists the fees paid for the different services.
2) Enhanced FFS - most provinces offer bonuses and fee schedule enhancements for family physicians and some specialties. Enhancements include bonuses for chronic disease management, additional funding for treating special-needs populations, and an increase in fees in qualifying rural or remote areas.
3) Alternative payment plans (APPs) - these methods are an alternative to traditional FFS payment
4) Salary - a regular payment which is specified in an employment contract. Remuneration is often done through “time-based payments” such as annual salaries or hourly rates.
Types of payments included in APPs (8)
1) Fees for clinical services
2) Capitation
3) Time-based payments, such as hourly pay
4) Rewards for participation in specific clinical initiatives
5) Bonuses for achieving specific quality targets
6) Remuneration for administrative duties and costs
7) Financial contributions for medical information technology
8) Additional payment types for academic physicians:
a) Compensation for teaching
b) Research funding
c) Stipends for administrative duties
d) Partial compensation or subsidies for staff, facilities, and equipment
Components that may be included in APPs that target primary care physicians (12)
1) Patient-enrolled models - these models require providers to formally enroll patients in their practices and register this enrollment with the ministry of health (MoH)
2) Rostering - this is the process of enrolling patients and registering that enrollment with the MoH. Many APPs pay the physician a fee for the administrative work of rostering patients.
3) FFS billing - payment is made based on the provincial fee schedule. An APP may incorporate a bonus top-up, such as an extra percentage of the fee for enrolled patients.
4) Capitation payments - the physician receives a fixed payment for the comprehensive annual care of a rostered patient. The payment varies by age and gender.
5) Shadow FFS billing - physicians who participate in a capitation APP must still submit FFS invoices for services provided to rostered patients. The MoH needs this information for evaluating patient access and utilization.
6) Preventative care bonus - annual bonuses are offered for physicians who meet certain percentage targets for preventative health care.
7) Comprehensive care management fee - a payment for the ongoing administrative work and upkeep that comprehensive family doctors do in addition to seeing their patients
8) Chronic disease management bonuses - an annual bonus for managing chronic diseases
9) New patient incentives - fixed bonuses to physicians who accept “orphaned” patients (i.e., those who do not have a family doctor) as new patients into their practices
10) Administrative fees - per-patient fees paid annually to help cover some of the administrative costs of meeting the accountability criteria of capitation APPs
11) Sessional fees - fees based on an hourly rate and paid for specific services. Many emergency departments offer physicians a guaranteed sessional fee for working as the doctor on duty.
12) Block funding - a guaranteed payment to provide medical services for patients in a specific locations (typically a rural or remote area) for a defined interval of time
Description of the unintended incentive in ACO payment models (4)
1) Current rules suggest CMS will calculate benchmarks for a new three-year period in the way original benchmarks were calculated. For example, a 60% weight will be applied to the most recent year.
2) This creates an incentive to increase spending in that year in order to increase the benchmark
3) Conversely, this removes the incentive to create savings in that year, penalizing ACOs that do so by giving them a lower benchmark
4) As a result of the unintended incentive, the current payment model may result in higher rather than lower Medicare FFS spending
Proposed strategies for improving incentives in ACO payment models (2)
1) Modify the benchmark weights to give equal weight to each of the three years that are used for calculating the benchmark
a) This would reduce the incentive to increase spending in the last year before a new contract
b) Alternatively, even more than three historical years could be used when calculating benchmarks
2) Introduce a form of “yardstick competition”
a) Base an ACO’s benchmark not only on its own past performance, but also on the performance of other Medicare providers or on a local benchmark
b) This would introduce competition into the payment model. The more an ACO lowered its spending relative to that of its competitors, the greater its cumulative rewards would be.
Process for developing episode based measures of quality performance using a claims database (4)
1) Opportunities are identified
2) Quality Measurement Event (QME) opportunity is attributed to physicians using fixed attribution rules
3) A compliance rate is calculated for each physician by comparing opportunities with successes
4) Performance can be assessed in terms of a relative compliance rate
