Recap of the Forums Members-only Roundtable Luncheon
Friday, April 28, 2006
Hilton Minneapolis
Minneapolis, MN
Members of HFMA’s Managed Care Forum came together in Minneapolis as part of HFMA’s Managed Care Workshop event to discuss real world challenges with peers. The group discussed a wide range of topics that impact the managed care environment including:
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Using key performance indicators for managed care contracting
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Building a best practice denials prevention program
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The emerging Medicare Advantage product that is entering the market
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Payer report cards
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Auditing managed care contracts
In a large group discussion, facilitated by Don Schott, FHFMA, Director of Network Development, Blue Cross/Blue Shield of North Dakota and Terri Winning, FHFMA, Vice President, Cox Health Network, in Springfield Missouri, members shared their experiences and challenges with each topic. What follows is a highlight of the conversation.
Key Performance Indicators for Managed Care Contracting
The managed care professionals in the room felt that they could do more to begin tracking KPI’s but find a challenge in determining who will be responsible for this tracking, and how many man hours should be devoted to this process. For some providers attempting to collaborate with other stakeholders in the facility, they find it difficult to agree on what the KPI’s should be, as opinion between departments on the priority items are varied. As a result, for many, KPI tracking at this stage is only basic financial tracking.
Members touched on the HFMA Managed Care Forum contracting checklist that is available to members only on the HFMA Managed Care Forum website: http://www.hfma.org/forums/managedcare/resources/ Most agreed that the checklist can be a good source for developing KPI’s. It was noted that there are over 80 checklist items on the current version, which speaks to the complexity of the contracting process. One roundtable participant shared that they created a home-grown checklist from scratch which quickly expanded into over 40 items.
Roundtable participants asked: How do payers react to KPI tracking? Some have their own score cards, but the comparison between the payers score card, and the provider’s score cards are where the interesting conversations and negotiations begin.
Building a Best Practice Denials Prevention Program
The consensus of the roundtable participants is that it’s important to go after all denials, but focus on large dollars denials first. Most look at underpayments, clinical denials and administrative denials, grouped by dollar amount and by payer. The age of the claim is not as important, as for most, the denial work is done in a timely manner.
What happens when providers see a problem pattern with a payer? Some providers in the room are attempting to capture and measure the “Frictional cost of doing business” and are bringing this to the re-negotiation table. One measure that is part of this process is the calculated difference between what is expected to be paid and what is actually being paid. Some facilities are experiencing pain when contracted payers merge with other entities. For most providers DRG is the preferred method of payment for inpatient. Outpatient is more difficult, and asks for % of charge based on CMS grouper. Per diem contracts are the largest administrative burden on the provider.
Medicare Advantage
Of the primary concerns with this new program is the role of education and who should be explaining how the Medicare Advantage (MA) program differs from traditional Medicare. Some providers are experiencing challenges when seniors bring their traditional Medicare card. in, even though they have a MA card. This results in Medicare denies the claim, because the patient is no longer in the traditional plan. When the claim is later sent to MA for payment it is again denied because the treatment was not pre-authorized. Seniors do not understand that they have an out of pocket with these plans. One suggested work around was for providers to ask for lists of participants in MA, and take time out to educate those participants. Some hospitals are going so far as to inviting in the sellers of the MA plans into the hospital to educate seniors. They are provided a time and place for a session that often includes recommendations that seniors put away their traditional Medicare card until they choose to cancel the MA program. Some providers are witnessing frustration with the plan, noting that when patients get sick and try out the MA program, they flip back to traditional Medicare.
Not only do the seniors have to be educated, but so do the registration staff. Staff members need to be prompted to ask seniors if they have a MA card. While it can be checked on enrollment websites, it changes the front-end process.
Payer Report Cards
While payer report cards are increasingly being used to help providers in future negotiations, the question from the payers often becomes: What is the credibility of your data? To be effective, the report card should be based on objective data that is easily substantiated during the re-negotiation or on-going communication. Some providers question the effectiveness of this practice, especially for small providers. Often the small provider feels that the clout of the large payer outweighs the challenges raised in a report card. Another suggestion from the roundtable participants to providers is to use the report card to show movement to help the provider understand their relationship and the fairness in the negotiated vs. actual contract performance. Some common elements of payer report cards include:
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Days in AR
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Clinical denial rate
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Underpayment rate as a percent of charges, and number of outstanding accounts
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Relationship score- returning phone calls, response to requests for research
Auditing Managed Care Contracts
When asked if payers are including information about auditing language about audits in contracts, one participant had an observation: Payers will often set limits on specific contract elements, and providers should look at the inverse of that limit and set a similar parameter for the payer. For example, if a payer suggests that a provider can not go back more than two years to audit payments, by the same token, payers can not go back more than two years for the same purpose. Another hospital has established a payer fee associated with audits to compensate for the staff time taken away in support of the effort. Other providers insist that before a payer conduct an audit on a claim, they have to pay the claim first. If they get the clinical to agree that the charges were not accurate, then the hospital will of course reimburse.
Some providers emphasized the importance of staff education about the auditing function. Some have experienced tensions with PFS staff thinking that the contracting department is checking up on their work.
The roundtable event received high evaluation marks, with many participants hoping for more opportunities to share experience with their peers at future HFMA events.