Independent health care providers are facing more challenges today than ever before. With changes in payment models and reimbursement methods, competition with a large group of employed physician practices, and changes in patients’ insurance coverage, a practice can be at risk for decreased revenue and increased financial instability. Having an efficient Revenue Cycle Management (RCM) process and integrated electronic health records (EHRs) software can help mitigate financial risk of course, but there are also other key areas that independent clinics can focus on in order to drive success in the face of changing reimbursement.
Whether we like it or not, reimbursement policies for physicians and their practices are changing. To stay relevant, independent healthcare providers must keep up or get left behind.
A recent article in Healthcare Dive touches upon today's ever-changing regulations - particularly reimbursement rules and requirements – discussing the strong and somewhat negative impact they are having on smaller and independent healthcare practices.
As the article suggests, it is becoming more and more difficult for independent practices to stay competitive in the healthcare industry as a result of reimbursement changes.
Changes in Payments and Reimbursement
The fee-for-service payment model, where physicians are reimbursed based on the number of visits or tests ordered, is becoming extinct with the push toward value-based, quality care.
The Merit-Based Incentive Payment System (MIPS) combines parts of PQRS, the value-based payment model, and Meaningful Use while also adding a new performance category for eligible providers. MIPS is intended to simplify the scoring process for eligible providers but is also adding significant pressure on providers to meet higher standards in order to get reimbursed.
In addition to adjusting to new regulations like MIPS, practices are also facing an increase number of insured patients with high deductible health plans resulting in a growing number of self-pay patients. Independent practices must continue to provide the highest level of care while also adjusting to these changes and reinventing revenue cycle management strategies to effectively collect payments.
In order to thrive in the face of changing reimbursement independent practices should maintain a strong focus on financial performance, develop clinical integration, and be able to adapt quickly.Maintain a Strong Focus on Financial Performance
By focusing on financial performance on every front, independent practices can stay competitive in a market full of larger and more financially stable practices.
In order to continue to be successful, practices should commit to using best practices for cash flow management by putting timely billing and collecting procedures into place and enforcing them regularly.
This includes measuring and comparing the following metrics to industry benchmarks:
- Claims Denial Rate
- Net Collection Rate
- Number of Outstanding Days in AR
- Percentage of Receivables Over 120 Days Past Due
- Collections on Day of Service Rate
- Cash Collection Rate
Develop Connectivity and Clinical Integration
In today's world, it is critical for independent practices to develop a system for effectively connecting their practice to other healthcare providers. However, clinical integration is not a one time activity or simply just having the technology in place but is instead an ongoing process and strategy that should ultimately improve quality of care, improve access to care, and reduce the cost of care.
Unfortunately, care coordination is the biggest challenge for health systems to achieve population health management according to a healthcare leadership survey by Philips. Having access to an EHR that can assist with care coordination initiatives and data exchange is the first step in kick starting your practice's clinical integration efforts while also resulting in better patient outcomes. In fact, according to the Robert Wood Johnson Foundation, patients who are actively involved in their own healthcare manage their conditions better and tend to stay healthier.
There are multiple benefits that result from coordinated care driven by clinical integration however, when it comes to making improvements to coordinated care efforts, budget is an obstacle for a majority of healthcare professionals. The reality is that implementing coordinated care may be challenging but it is also a must for independent practices to stay competitive.
Finding new revenue opportunities and tightening up revenue cycle management operations can free up cash flow that your practice needs in order to invest in care coordination efforts today.
Embrace Risk-Based Care
Thriving in a risk-based environment may not be second nature to you or your independent practice. However, it is something that can be embraced, learned, practiced, and eventually can become easier.
In an article published by Physicians Practice, Gabriel Perna states "Risk-based contracting is a viable option for independent physicians so long as they believe in why they are doing it, they know how to get it started, and figure out what they have to do to thrive."
Former U.S. National Coordinator of Health Information Technology and current CEO of Aledade, an accountable care organization (ACO) services company, Farzad Mostashari, spoke more about Risk Based success at the Medical Group Management Association (MGMA) Annual Conference last year.
Mostashari told attendees that in order to thrive in a risk-based setting they must know their patients, identify high-risk patients, communicate value-based features to patients, and refer patients to a value-driven specialist during transitions-of-care.
When it comes to identifying high-risk patients and succeeding with risk-based contracts, data quality and analytics are critical factors. Independent practices must make analytics a strategic imperative if they plan to succeed with risk-based care
[Also: Healthcare Metrics You Need to Track in an Age of Value-Based Payment]
Be Willing to Change with the Times
As a physician or medical practice, your ability (or lack thereof) to adapt to new regulations, technologies and best practices will be crucial to your success going forward. By being prepared for new policies ahead of time, providing ongoing training opportunities and resources for your staff, and tracking your performance on all fronts regularly, you can remain competitive in the industry.
If, on the other hand, you are consistently resistant to change and you do not embrace what is ahead, your practice is likely to suffer as a result.
Adopting new technologies that can scale with your practice is another way to remain compliant with ever-changing regulations that will arise each year, without having to do a complete overhaul of your systems with each new policy.