Narrowing networks, high-deductible plans, and declining reimbursement have made the administrative burden of running a medical practice more onerous today than when I entered medicine decades ago. These are just a few of the changes with which my pediatric practice is dealing. ICD-10 regulation appears to have a fighting chance at implementation as of Oct. 1, and the highly anticipated, but little understood, transition from fee-for-service to value-based reimbursement has my practice reevaluating how to make the numbers work. And now, with potential payer consolidation looming large, even more uncertainty is on the horizon.
One would think that this is a time to pull back and separate from payers. Many practices are focused on increasing their self-pay collections, or hiring staff to battle with payers over the narrow margins they still have to collect. But this overlooks the very real opportunities for payers and practices to align. The two may seem like strange bedfellows, but in fact, physicians and payers share a general tightening of belts. Payers have a number of pressures of their own, such as meeting the requirements of HIPAA, complying with administrative simplification regulation, and implementing the latest Council for Affordable Quality Healthcare core operating rules. With more plans now available on the healthcare insurance exchanges, competition is becoming a real motivator. Payers are looking for any way possible to get lean and automate workflows in order to cut costs and do business more efficiently.
With so much industry change, regulation, and market disruption, payer-provider alignment has never been more important than it is today. The unexpected glue in this arrangement, I would argue, is IT vendors. What do I mean by that?
Cloud-based technology that handles EHRs and revenue cycle management collects tremendous insight into payer performance and can expose real areas for performance improvement. Those that are active partners to payers in adjudicating billing issues can and should coach them on process improvements, too. It's a mutually beneficial arrangement: These insights help improve payer performance, while limiting disruption and aggravation for practices. My IT vendor does this for me. As a result, we've benefitted from greater transparency into the dynamics that create inefficiency and cost across the supply chain, to better respond to industry change.
The importance of efficient payments can't be overstated; this is what makes or breaks our business. Physicians are slowed down by a constellation of small claims processing issues. Sometimes, it feels like death by a million paper cuts. We need insight into how payers perform as our payer mix shifts, too, so that we can choose how to work with them and advocate for ourselves.
KNOWLEDGE IS POWER
This type of service doesn't just improve payer-provider interactions, but strengthens providers' leverage as they enter a changing market. As providers increasingly take part in risk-sharing models and navigate market disruption, finding payer partners with strong core operations is key. That makes it important to have full insight into their financial, administrative, and transactional performance.
Even if contract negotiations go smoothly, at the end of the day, we need real benchmarks:
• How difficult does this payer make it to get paid?
• Do they reimburse in a timely fashion?
• Do their denial codes make sense?
• Are their claims submissions and clinical policies transparent?
• Are their electronic transactions accurate, efficient, and clear?
This insight is a powerful guide for providers as they work to serve patients and get paid most efficiently.
The good news is that there's a lot to indicate that this type of transparency is working, if gradually. Regional health plans have risen in prominence, for good reason; practices are increasingly turning to their local payer counterparts due to ease of partnership and strong operational performance. Further, as national payers continue to consolidate, regional health plans will provide added protection to providers against rate drops and performance dysfunction.
Practice-payer alignment is more important than ever before. To truly work as one, we need to invite IT vendors into the process to help establish transparency, advocate for providers, and help payers implement new policies. Vendors are the grease between the wheels for payer-provider alignment. I'm happy to finally have an ally.
Tom Mohr, MD, is president and CEO of Pediatric Partners, a 20-provider pediatric practice with 10 locations in San Diego, Calif. He can be contacted at [email protected].