There is no shortage of challenges in healthcare today. Healthcare is experiencing dramatic change as the nation’s delivery system transitions to a value-based system from the fee-for-service approach that has been in place for the past half century. Remember the great Smith Barney slogan? “We make money the old fashioned way – we earn it?” Healthcare organizations are quickly finding the old fashioned way of making money is an earning mechanism starting to fade and fade quickly. With the advent of value-based care and reimbursement models, say good bye to getting paid for just doing something and say hello to earning it the hard way – being held accountable for its value. Many are asking the question of how this will affect the Revenue Cycle Management(RCM) systems and the operational processes that have been in place and supporting a Fee-For-Service structure for decades.
The answer was a bit surprising to those who attended the recent webinar, “Looking Behind the Curtain: Value-Based Care’s Impact on the Revenue Cycle”, hosted by Next Wave Connect and Encore, A Quintiles Company. Presenter Karen Marhefka enlightened attendees on the fact that value-based care and reimbursements might not impact the core revenue cycle components. She highlighted the major operational and cultural changes that will be required during the shift to value and the key focal points for change needed to maintain profitability in value-based care’s reimbursement model.
Karen Marhefka, MHA, RHIA – Service Line Executive -Value Performance Advisory at Encore is a seasoned information systems officer and an experienced healthcare operations executive with more than 25 years of experience. Prior to her current position, Karen served as the Associate Chief Information Officer for UMass Memorial Health Care and the Senior Director for Ambulatory Services. Karen draws on her background and experience in financial management and technology to share insights on issues and challenges facing healthcare finance leaders.
So what else did Karen have to say? Three days after the webinar, Next Wave Connect invited webinar attendees and members to join the Revenue Cycle- A 360° Look Community for a live Q&A event with Karen. The thought behind the event was simple….most people struggle connecting with the presenter once webinar events are over or they really need a few days for the information to percolate before asking their questions.
Question #1: With the healthcare community rapidly moving away from fee-for-service to the valued-based reimbursement model of pay-for-performance, Finance Leaders face the unique challenge of finding value in care quality and partnering with nurse managers to improve patient safety and satisfaction with the health system. What advice would you give for finance teams trying to connect the fiscal and clinical sides?
Karen Marhefka: First and foremost, I would encourage finance leaders to actually “meet” their clinical colleagues that are so close to the quality equation. Experience has shown me that these relationships often times do not already exist. Also, when you are meeting and greeting, remember that clinical leadership is throughout the continuum of care and is still, unfortunately, a bit silo-ed. Acute care/inpatient leadership is probably separate from ambulatory/outpatient leadership to make sure you are getting to know all the players in both spaces. Learn their world, learn what their challenges are and then provide the vice versa for them. Understanding each other’s space is hugely important. Start there and you will be well on your way in connecting fiscal and clinical perspectives.
Question #2: Value-based payment contracts are in their infancy, and most are structured according to a shared savings model. How do organizations go about tracking performance in these types of arrangements?
Karen Marhefka: Shared savings model seem to lean toward managing the health of patients in a particular population. Find out what that population is and what measures are being used to track improved care delivery performance. Then find out what data is being used to identify these patients in this population and what data is being used for those measures to track improvements in their care (both quality and efficiency by bringing costs down). When you have these answers… ask one more question…. DO YOU TRUST THE DATA THAT IS BEING USED? Truly trust it? Fix that, and performance tracking becomes reality.
Question #3: How do you make the fee-for-value transition a part of your organization’s culture?
Karen Marhefka: Again, education is key. Everyone will assume that everyone understands the transition, especially the organizational leaders. The transition is affecting so much of what has been the traditional way of delivering care and the way we are paid for delivering these services. Not talking about it openly or not providing very focused education on what it is and how changes will be happening will set the organization up for employee mistrust and add to the constant worry of “what will happen to me/my job”. The transition is happening, it will not go away and is it not something that an organization can just check-off a box and say Done!! Payment will be based on proving care/quality improvement, efficiency and patient satisfaction. Everyone will have to be a party to the success of that and in order to make sure of commitment to that, everyone will have to understand the genesis, the plan and how it will affect them personally.
Question #4: How do Finance Leaders put their organizations on the best path right at the beginning of the transition to a value-based reimbursement model?
Karen Marhefka: Two things to start with: Education and Transparency. Never take for granted that the leaders of your organization fully understand what this transition means. Most of are understandably focused on what I call the “crisis of the day” and these are every day, all the time, leaving very little time to stay on top of what is coming and having the time to plan for it. Providing the vehicle for educating the leaders of the organization to an understanding of the complexity of this shift as well as an understanding of what it means to the bottom line is essential. Once that education has occurred and understanding is throughout, build a strategy around achieving 1 or 2 goals related to the shift (not 50 goals) and introduce them little by little but be completely transparent about the “why”, “who”, “how” and “when” with the entire organization.
Question #5: How will the availability and use of eMeasures directly impact healthcare stakeholders?
Karen Marhefka: Their ability to maintain a workable bottom line will eventually literally depend on the reporting of eMeasures. The importance of them clinically is well known but the importance of them on the bottom line is now essential to the health of the organizations revenue. Think of reporting eMeasures in the same way as you prepare and send in claims. It always amazed me that the Fiscal side of my organization was so completely focused on making absolutely certain that every single claim was pristine, avert denial at every turn and at all costs —- but to do the same with clinical quality measures, well, the laser focus on making sure they are being calculated and reporting correctly has not quite caught on yet in regard to their impact to the bottom line. But when it does, that impact will feel like quite a punch!!
Question #6: The transition from fee-for-service to fee-for-value is a challenging journey for many healthcare organizations, but the stakes are high, and the ability of an organization to navigate the road to success in a FFV world is critical. My question to you is: How would you encourage organizations to re position their service lines to deliver value?
Karen Marhefka: Repositioning of service lines will also be gradual in the value journey. In the past, it made total sense to build cost control/cost management around a particular service line. Let’s use Orthopedics as an example…..includes things like keeping track of and managing every clinical resource, every product used, space used, facility management, patient access, all for the Orthopedic Service Line. As we know, there is typically someone at the helm of the service line, business/clinical, who is akin to a CEO for that particular entity. Works great to control the cost of delivering orthopedic care to patients but not so great when the cost control continues to be silo-ed to only a single aspect of the overall care of the patient, in this case bones and joints. In fact, today’s service lines actually “bank” on the fact that patients will eventually need them (volume) since the focus on caring for patients in a preventive mode in the primary care setting has not been rewarded to any great degree.
Well, that is all changing with value-based care where the incentives and penalties are in place to drive wellness. Remember that value-based care, first and foremost, focuses on establishing the entire continuum of care for a patient’s care and many of the value-based payment models are reflective of that, i.e. bundled payments and comprehensive payments. Reimbursement will change to no longer be just for that orthopedic care as an event.
So back to your question…how should service lines be repositioned? They need to talk, to align better around patient flow and processes. Transition points are a good place to start. I am attaching a link to a great article that focuses exactly on this. Published in 2012, it still packs a punch with some great insight with this topic. http://bit.ly/1v0IDAW