Our Chief Business Officer and Executive Vice President, Michelle Burris, wrote an excellent article in the AMGA in March.
We have all read the headlines and know that reimbursement for healthcare services is transitioning from volume to value. The relevant question that chief financial officers (CFOs) need to ask themselves and their operational team is, How do we maximize revenue in the volume-based world while we begin the transition to value-based reimbursement? Some CFOs are taking the wait-and-see approach before beginning the transition. This strategy generates certainty for budgeting and projections in the near term; however, it does nothing to prepare us for the reimbursement changes just over the horizon. In fact, some of those changes are upon us now.
The kind of change that needs to occur requires a major overhaul to the existing care delivery model. In short, it is significant change management. Those of us in health care know that change often happens slowly. It is not like flipping a light switch and your opera- tions team is ready to provide services that support value-based care. This transition takes significant time and a commitment by all in the organization as well
as an effective plan of execution and excellent follow- through. For these reasons alone, waiting to make the transition from volume to value is flawed. But, there
is an even better reason to begin the transition now. Value-based revenue is available now to facilitate the necessary transition from volume to value.
While we can still receive reimbursement for the volume of work we do, reimbursement is also available for the value of our work. In addition to all of the traditional revenue available from volume, we can implement current reimbursement models to support a gradual transition from volume to value and still main- tain current volume-based revenue.
Value-based revenue is available now to facilitate the necessary transition from volume to value.
The Medicare Wellness Program is a great example of one such program. This is a program that supports improved wellness for patients—the “value” piece of the equation—through a comprehensive health risk assessment that the clinical support staff largely per- forms, with a provider reviewing the assessment with the patient for approximately 10 minutes of the entire 45-minute visit. Based on the Physician Fee Schedule, on the Centers for Medicare and Medicaid Services (CMS) website, the reimbursement for the initial annual wellness visit averages $170. All subsequent annual wellness visits average $117 in reimbursement.
CMS introduced the Medicare Wellness program 10 years ago; yet, low utilization of the service contin- ues—generally less than 15% in most markets. CMS’s expected utilization is 60%. The biggest barriers to utilization seem to be (1) a lack of understanding of the ability for clinical support staff to complete a signi cant portion of the visit and (2) a lack of understanding on the part of Medicare bene ciaries regarding the nature of services delivered at these visits. Providers have the misconception that they must perform the entire 45-minute visit, but as mentioned above, the clinical support staff such as the medical assistant is quali ed to perform the health risk assessment and complete documentation in the electronic medical record (EMR). Therefore, the provider generally needs to spend 10–15 minutes with the patient reviewing the ndings of the assessment and completing the plan of care, which might include discussing previously undiagnosed condi- tions (e.g., depression). Similarly, many patients are under the impression that these visits are like an annual physical, where they would typically have a physical examination, which is not a component of this service.
Figure 2 illustrates the time requirement for providers, which is typically 33% of the total visit for the Medicare Wellness visits, but 100% of the visit for routine office visits.
However, as Figure 3 illustrates, the reimbursement is considerably greater than that of a more complex routine office visit.
Providers also express concern about needing to see so many Medicare Wellness patients that there is no time in their schedule to see patients with other concerns. However, a provider needs to see only two or three patients per day to achieve the expected 60% penetration rate of eligible Medicare patients. At the rate of two–three per day, a primary care physician (PCP) generates additional revenue of between $50,000 and $70,000 annually. The revenue for these services is excellent, but there is more: Most commercial payers also offer financial incentives for closing care gaps, which is achieved through the health risk assessment, where the need for preventive services might be identified. Of course, if you are part of a health system, there is the downstream revenue from any testing that is ordered as well.
Another program, sponsored by CMS and most commercial payers, which supports the transition from volume to value is the Transitions of Care (TOC) program. This program is designed to create value by improving outcomes for the transition of a patient from an acute care setting back to their home. Effective TOC can take many forms. For example, after discharge from an inpatient stay to the patient’s home, a nurse from the patient’s primary care physician of ce contacts the patient to review medication and other aspects of care speci c to the reason for hospitalization. This is an opportunity for the care team to address any concerns that the patient has, including confusion regarding which medications to continue taking, the ones given in the hospital or the ones taken previous to the hospital stay. The nurse also discusses other restrictions/requirements for the patient such as speci c dietary needs. This initial contact is critical to appropriate continued care for the patient, which keeps them from returning to the hospital. According to the CMS website, the Medicare reimburse- ment for these services is $165 or $232, depending on the medical complexity of the patient’s diagnoses. Based on my experience as CFO, commercial payers typically reimburse TOC at a higher rate than Medicare.
The key to success with TOC is an extremely timely and effective communication plan between the inpatient care team and the ambulatory or primary care team as well as an established process in the primary care setting to contact these patients and ensure they get the follow-up and access to resources to achieve the intended results of the program. This program also requires significant operational change management because typically the PCP may not even be aware that their patient was in the hospital or emergency room; therefore, they would not know to provide appropriate follow-up as required in the guidelines for TOC. Based on my experience, this program has significance to hospitals because it is shown to be a key component in reducing avoidable hospital readmissions.
Specific requirements associated with this program include contacting the patient within three business days of discharge to work through transition issues (e.g., medication reconciliation). Medication problems are actually the most common cause for an avoidable patient readmission to the hospital. Also required to achieve a billable transition of care is a face-to-face follow-up visit with the patient’s PCP within seven days of discharge. Lastly, one additional interaction with the patient is required between day seven and 30 after discharge.
Then, a claim can be submitted to Medicare or the Medicare Advantage plan with speci c TOC codes. Success in the area of TOC is manageable through effective process/change management. Similar to the Medicare Wellness program, successful TOC is a service that is largely achieved by clinical support staff. The provider’s time requirement is consistent to a typical extended office visit—i.e., 20–30 minutes.
In our experience, both of these programs, when successfully implemented, have a positive impact greater than just increased revenue. Clinical support staff report improved job satisfaction because they are working close to the top of their professional licenses and doing what they are trained to do—care for patients. Physicians are typically happy when their support staff is happy and the entire team is engaged in creating wellness for their patients from identifying previously undiagnosed conditions or confirming continued good health. Most importantly, patients achieve improved outcomes, better health, and satisfaction with their care. Implementing each of these programs creates the foundation for team-based care, which is critical for success in the value-based payment environment.
In today’s reimbursement environment, medical practices can continue to receive the same reimburse- ment for volume they have always received while gaining the nancial and clinical bene t of new programs such as Medicare Wellness and Transitions of Care. Perhaps the most bene cial impact of these programs is that implementation of each puts medical practices on the road to value-based care or team-based care through the incremental operational transition to pay-for-value.
My team has success implementing both the Medi- care Wellness and Transitions of Care programs. In the rst six months after implementation, we saw a volume increase of 178% in Medicare Wellness and over 2,000% percent in Transitions of Care. This generated an increase of $535,000 of revenue for health system- owned ambulatory practices. It also prevented hospital payment denials for avoidable readmissions as well as penalties associated with the CMS Hospital Readmis- sions Reduction Program.
Michelle J. Burris, M.B.A., CMPE, is executive vice president and chief business officer at Innovative Healthcare Teams.