How the health insurance exchanges and Medicaid expansion will affect your practice, and how to prepare.
When the federal Health Insurance Marketplace opened last October, staff members at Lone Star Circle of Care, a health system with 30 practices in Central Texas, hit the ground running. As a Federal Qualified Health Center, Lone Star receives enhanced reimbursement from Medicare and Medicaid for serving an underserved population, and about 30 percent of its patients were uninsured or underinsured when the marketplace went online. So physicians and staff saw the marketplace as an opportunity to help many of their patients secure the coverage they needed, says Denise Esper, Lone Star's chief revenue officer.
Lone Star staff members reached out to patients over the phone, in the community, and in clinics to spread the word about the exchanges and assist patients with application and enrollment. By late February, nearly 250 individuals had secured insurance with Lone Star's help.
As the number of insured rises, so will patient demand for services, and Lone Star is bracing for impact. Many of its practices are expanding hours, and all are working to better orient patients to their new insurance. "What we're seeing a lot is people pick the plans but they may not have understood exactly what they picked," says Maria Serafine, senior director of member services at the health system. "Making sure that you have staff who can sit down and verify someone's benefits, and can then sit down and be able to explain that to the patient is important."
Lone Star is not the only health system that will likely experience an influx of newly insured patients this year. As more patients purchase insurance through the federal and state health insurance marketplaces (also known as the exchanges), and as others gain it through the Medicaid expansion, many practices will experience higher patient demand. Here's how to evaluate how your practice could be affected, and how to prepare.
Understanding the numbers
If new patients aren't knocking on your door just yet, they could be heading your way soon. David Doyle, chief executive officer at medical billing company CRT Medical Systems, predicts that most practices will experience the highest demand from new patients mid-year.
The extent of that new patient demand will vary by practice depending on several factors, including whether a practice's physicians are rolled into plans that can be purchased through the exchanges, whether a practice is open to new Medicaid patients and its state is participating in the Medicaid expansion, and whether patients really begin taking advantage of the new coverage available to them.
Let's start with the physicians who have been identified as in-network providers by plans sold on the exchanges. These physicians' practices are likely to experience higher demand from patients who purchase plans through the exchanges, especially if other providers in their area have been excluded from the plans, says Susanne Madden, president & CEO of consulting firm The Verden Group, noting that many of the plans have created "narrow networks" to contain costs. "You could be in a city that has two hospital systems and one [that is more expensive] has been excluded all together," she says. "Any of the doctors that refer to that hospital have probably been excluded from the health insurance plan. If you're the guy that's in the cheaper hospital, or referring to the cheaper hospital, or admitting to the cheaper hospital, you may be the one that's been rolled in."
If you are unsure if you have been rolled into the exchange plans, Madden recommends asking your current payers (who may be offering them), or searching for your name in their online provider directories. If you do find that you are identified as an in-network provider, check to see if other nearby physicians are in network as well. "If they're not, you can expect to see an influx of patients pretty soon," says Madden.
Patients who purchase insurance through the exchanges represent only part of the potential new influx practices could experience. If your practice is open to new Medicaid patients, and your state is participating in the Medicaid expansion, which extended Medicaid coverage to individuals with incomes below 133 percent of the federal poverty level (because of the way this is calculated, it is effectively 138 percent of the federal poverty level, according to Healthcare.gov, or $32,913 in income for a family of four), you may experience high demand from newly insured Medicaid patients.
At press time, 27 states and the District of Columbia were participating in the expansion. To find out if your state is participating, visit bit.ly/state-specifics, scroll to the bottom of the page, and use the "get state information" menu.
Evaluating the financial impact
If it's likely that your practice will experience an influx of new patients (either due to the exchanges or the expansion), understanding how those patients will affect your revenue is critical.
If you are identified as an in-network provider on an exchange plan, Madden recommends requesting a sample fee schedule from the payer so that you can gauge what reimbursement will look like. "Typically we're seeing anywhere from 70 percent, 80 percent, or 90 percent of the HMO fee schedule being paid to providers on these health insurance exchange plans," she says.
Then, evaluate how patients with that plan will affect practice finances. If you find that they are likely to damage practice revenue, you may be able to "opt out" of an exchange plan upon annual renewal, or send a letter of termination to that payer. But proceed cautiously here, says Madden. Some payers require practices to participate in all of their plans, or none of their plans.
An influx of new Medicaid patients could, of course, be more damaging to practices financially. Still, physicians in some states are experiencing higher Medicaid reimbursement than usual due to the Medicaid parity rule, which temporarily increased Medicaid payments for specified primary-care services to Medicare levels in 2013 and 2014. While the increase is helpful, physicians experiencing it should not get lulled into a false sense of security when accepting new Medicaid patients, cautions Madden, pointing out that it's unclear how long the Medicaid payment increase will last.
As a result, practices that experience an influx of new Medicaid patients should closely monitor how that patient population is changing. If it gets too large, consider closing your doors to new patients temporarily, says Madden. That way, when you do decide to open your doors again, you will experience a "slow trickle" of new patients rather than an influx.
However, before closing your doors to new patients or opting out of certain plans, consider consulting with a healthcare attorney first.
Stepping up billing and collections
In addition to evaluating how potential new patients will affect your revenue, make sure you understand how they will alter practice operations. One of the biggest areas to consider are your billing and collections processes, especially when it comes to patients who purchase plans through the exchanges. That's because many of those plans include high deductibles. As a result, staff members will need to step up patient collection efforts, says Doyle.
Further complicating matters, many of these new patients may have lacked insurance for a long time prior to purchasing it on the exchanges or gaining it through the expansion. As a result, they may be unfamiliar with how insurance, deductibles, and copays work, says Vince Russo, president of Total Practice Management, a practice management and billing firm. To help patients make smart decisions about the types of healthcare services they request, and to help them understand that they may have to pay out-of-pocket for some of their healthcare costs, he recommends asking staff to explain to new patients how their plans work prior to patient visits.
To take this a step further, consider providing one of your staff members with additional training on insurance, payment, and payment policies and plans, says Jamie Claypool, president of practice management consulting firm J. Claypool Associates. That way someone is always ready to discuss these topics with patients when necessary.
In addition to educating patients about insurance, discuss your payment expectations with them, says Doyle. For instance, they should understand that they will need to honor copays, and if applicable, previous balances, at time of service. "The day where you could walk into a medical practice ... and walk out without paying a dime is over," he says. "We can't continue to sustain ourselves that way because too many dollars are tied up in the patient."
Finally, consider storing patient credit card numbers electronically (many merchant service providers now offer this service) so that your practice has an easier time collecting payments from patients, says Madden.
For a sample credit card authorization form and for recommendations regarding how to collect and store patient credit card information securely visit bit.ly/patient-credit-information.
But it's not just the high deductibles found in the exchange plans that could complicate collections. At press time, these plans included a 90-day-grace period during which patients continue to have coverage even if they do not pay their premiums. During the second and third months of this grace period, payers are not obligated to pay for any services the patient receives. That means practices could be left shouldering the collection burden if patients don't pay their premiums but do receive services. To prevent encountering this issue at your practice, ask patients for proof that they have paid their premium, such as faxing or e-mailing a copy of the receipt prior to patient visits, says Claypool. If a patient is unable to provide proof, ask the payer directly if the patient has paid, she says.
If you find that the patient has not paid his premium, work with him to craft a payment plan, designate him as a "self pay" patient and require him to pay you at time of service, or make other similar arrangements, says Claypool.
Protecting patient care
Another area that will have a large impact on practice operations is, of course, higher patient demand. But it may not just be more patients that your practice is dealing with. Many of them may have delayed healthcare for a long time due to lack of insurance. As a result, they may have undiagnosed chronic conditions or exacerbated health issues. "They're going to need everything from soup to nuts," says Claypool. "It's going to take more of the physician's time, more staff time, to bring them up to the level of the patients who have been continuing every year to see the doctor."
Here are some ways your practice can prepare for more patients, and for more patients with complicated conditions:
Better utilize care teams. Rethink responsibilities so that all staff members and physicians are working to the top of their licenses, says Jennifer Gingrass, principal at healthcare consulting firm ECG Management Consultants. "... There needs to be some shifting still of the mentality of being able to use care teams more effectively to manage patients that the physician shouldn't be seeing in order to leverage the physicians more," she says, noting that this will improve practice efficiency and therefore patient access. For example, while a physician is treating a patient with a complicated chronic condition, a nonphysician provider can treat coughs and colds.
Employ more nonphysician providers. Consider hiring more NPs or PAs to help you take on more patients. Still, look closely at reimbursement to determine if the benefits of accommodating new patients will outweigh the costs of employing additional providers, says Craig Trout, vice president of healthcare consulting firm Revenue Cycle Solutions, LLC. "Each independent physician practice has to make an economic decision: Is there enough incremental revenue coming in to cover the incremental cost of adding another practitioner like an NP into their practice?"
Alter your schedules. Expand office hours by offering evening or weekend hours to accommodate more patients with different schedules. Also, consider shifting to more open-access or modified-open-access scheduling to accommodate patients more quickly, says Jimmy Burnett, director of Navigant Healthcare consulting. For instance, block out a portion of the daily schedule for same-day or next-day appointments.
Identify new referral patterns. Remember, many of the plans offered in the exchanges have narrow networks. If your practice is in network for a particular exchange plan, that does not necessarily mean that the specialists to whom you refer are. To ensure your patients secure the care they need and are not hit with unexpected costs, look at your referral patterns, evaluate whether they are relevant for your new patients, and compile a list of specialists that are in network for each of the exchange plans with which you are participating, says Madden.
Expand your reach. Identify outside resources that are available to patients, such as smoking cessation programs or pediatric obesity programs at your local hospital or YMCA, says Madden. "If you have a sicker population that's coming in to your practice, have at your fingertips community resources so they can help with that so it's not all on you," she says. "Doctors are going to have to get much smarter about managing care because if they're trying to do everything themselves, they are basically servicing patients requiring more time, more effort, for less money, so that's really going to impact the financial viability of your practice."
Forced out physicians
While some physicians have been rolled into the health insurance exchange plans, others have been excluded. Unfortunately, those physicians that have been excluded but would like to be included have little pull when it comes to reversing payers' decisions, says Susanne Madden, president & CEO of The Verden Group. "If you've been excluded, there is no good way to get in because you've been excluded for an economic reason," she says. "Unless your economics change, you're probably not eligible to be in these cost-efficient narrow networks."
Patient intake: A nine-step process
Many medical practices may experience higher new patient demand due to health reform initiatives that focus on broadening patient access to insurance. Make sure your practice has a smart patient intake process to orient these new patients efficiently and effectively. Visit bit.ly/new-patient-intake to hear Gail Levy, founder and president of The Levy Advantage Consulting firm, share a simple nine-step process that medical practices can follow when patients call to set up their first appointments.
Many practices will experience an influx of new patients due to the opening of health insurance exchanges and the Medicaid expansion. Here's how to prepare:
• Consult fee schedules to evaluate how new patients will affect revenue
• Discuss insurance and payment expectations with new patients
• Consider hiring more nonphysician providers
• Extend office hours and offer more same-day and next-day appointments
• Rely more on community health resources
Aubrey Westgate is senior editor for Physicians Practice. She can be reached at firstname.lastname@example.org.
This article originally appeared in the May 2014 issue of Physicians Practice.