As insurers move away from paying providers under a volume-based reimbursement system toward a value-based system built on evidence-based quality measures, physicians will have to overhaul their current revenue cycle management processes to collect and capture revenue efficiently and cost effectively under this new business model.
The changes brought about by the Affordable Care Act (ACA), the implementation of electronic medical record (EMR), new Medicare rules, and the approaching deadlines for both meaningful use (MU) and ICD-10 are collectively placing increasingly financial pressures on physician practices. Optimizing revenue requires making the time investment to not only clear these new hurdles, but to also initiate aggressive improvement strategies in the midst of an admittedly challenging time. If providers have yet to improve their revenue cycle operations, stay current with practice technologies, or are experiencing a shortage in the quantity and quality of IT and business operations staff members, they should be very concerned about what comes next and how that translates into their survival in today’s ever-changing and fiercely competitive marketplace.
When initiating plans to stay ahead of the game, practices can find themselves too narrowly focused on, or distracted by, one seemingly more critical goal or initiative – in many cases, so much so that they neglect other key initiatives. For instance, EMR implementation to meet MU Stage 2 incentive requirements ranks high in importance for most all organizations and is certainly worthy of allocating a significant amount of time and dedicated resources. However, a practice would be wise to avoid becoming so single-minded on that particular project that they neglect preparations for ICD-10 implementation. If practices fall behind in completing the proper ICD-10 planning, testing and training necessary in the coming months to reach the Oct. 1, 2014, compliance deadline, they run the risk of experiencing a significant decrease in cash flow and loss of revenue beyond the deadline. In worst-case scenarios with much of the organizations' cash outlay earmarked for technology implementation and upgrades, these organizations stand to lose much more than what is possible to sustain.
If not already doing so, physician practices of all sizes and specialties are strongly advised to begin preparations today for current and anticipated changes in healthcare. While some practices are aware of this massive responsibility and have planning efforts already underway, the physician market continues to have significant difference in opinion on the overall state of readiness. Some aggressively proactive medical groups remain profitable, have already attested successfully to MU requirements, have begun to receive incentive dollars, and have also taken the tactical steps to sustain cash flows. Other groups are not as far along and are just beginning to define requirements and plan specifically for what should be done to bring their practice up to speed. Still others, such as the smaller privately owned practices, are operating as “business as usual” with a false sense of security that health reform will have little to no impact on them. These practices have opted to assume a “wait and see” approach. The practices in the latter of these three scenarios are strongly advised to begin strategic planning immediately to implement precautions quickly -- regardless of their size and limitations.
To ensure profitability in a value-based purchasing world, there are a number of initial steps that healthcare providers should consider quickly undertaking, including:
- Conduct baseline assessments of financial performance, technology, workflow processes and staffing across the revenue cycle continuum to identify areas of risk;
- Develop strategic and tactical plans to remediate the identified areas of risk and other issues;
- Prioritize the risk areas based on compliance deadlines and overall financial impact to their organization; and,
- Align strategically and execute upon the tactical plan to mitigate all identified risks, monitor ongoing performance in all areas, and continue to make updates and changes as the market demands.
The most important takeaway is that physician practices must stay on top of new requirements, continue to educate themselves on requirement changes and associated deadlines, and regularly look for ways to make improvements. More so than ever before, if physician practices are to survive in this new environment, they must remain flexible to changing environment pressures, open to new technologies, outsourcing, and partnering with third-party vendors and others for support.