If Mountain States Health Alliance (MSHA), a four-state health system based in Johnson City, Tenn., fulfills its 10-year vision, the organization will see inpatient utilization drop by as much as 30 percent.
Yet the health system will have a larger footprint than it does today. And it will be thriving because of a multi-pronged strategy:
Profits from its CrestPoint Health Insurance Co. will be reinvested, rewarding physicians who provide high-value care and supporting hospitals so they can maintain their essential services.
“The insurance company is not there to become the next WellPoint, the next United, or the next Aetna. It’s there to be a strategic asset,” said Rob Slattery, president and CEO of Integrated Solutions Health Network (ISHN), CrestPoint’s parent organization. “It is a financial asset, but we intend to use it for the right purpose, which is to ensure that we have a strong health system that meets the needs of the people whom we serve and do so in accordance with Triple Aim objectives.”
MSHA has 13 hospitals, more than 1,200 physicians on its medical staff, and annual revenues of $1.2 billion. It serves 29 counties in Tennessee, Virginia, Kentucky, and North Carolina. Its insurance arm, CrestPoint Health, is based in Johnson City, Tenn.
After a visioning process four years ago, MSHA leaders recognized that the health system’s traditional business model, which depended on increasing inpatient utilization, would not sustain the organization in the long term. As health care moves from fee-for-service to population health management, inpatient revenues will decline even as providers’ responsibilities increase.
Unique brands. In response, MSHA created Integrated Solutions Health Network (ISHN) as the home of a business model built on two new entities:
The system’s executives intentionally avoided connecting MSHA’s own name to these two entities (e.g., calling the insurer Mountain States Health Insurance Company) because they want CrestPoint Health and AnewCare to seize market opportunities wherever they can be found. “We chose to brand these as independent entities, recognizing they could become the brands that could be adopted by our other partners who integrate into our model in the future,” said Slattery.
That creates the opportunity to bring dollars from other communities alongside the investments made by MSHA, which benefits both MSHA and its regional partners. “Our goal is to take the gains that we derive through our insurance products and redistribute those gains equitably throughout the network,” he said.
While CrestPoint will partner with the AnewCare Collaborative, the ACO has its own agenda to work with a range of government and private payers. AnewCare, which is in the Medicare Shared Savings Program, is exploring a partnership with Aetna to serve large group commercial accounts that require a national network, Slattery said. In addition, AnewCare has recently partnered with Sentara’s Optima Health to launch commercial health insurance exchange products in southwest Virginia. The strategic partnership will align with current Medicaid ACO efforts that are already under way in the area.
Investment to date. MSHA’s board supported the creation of ISHN, including the ACO and the insurance company, with a capital investment of just under $15 million. Of that, $8 million was allocated to start the insurance company, including $2.5 million to acquire the license. The remainder of the money was used for innovations, including medical home development, care transition programs, care coordination and the launch of a bundled payment initiative, and building infrastructure (e.g., network development, marketing, sales, operations, medical management, and informatics). Money was also used to attract seasoned health plan executives to provide the expertise needed to build the new organizations quickly.
The first year of CrestPoint operations cost about $7 million, which included product development, branding, marketing, and sales. The insurance company is expected to break even in its third year of operations, Slattery said.
CrestPoint Health was created in early 2011 to serve as a third-party administrator for the 15,000 employees and dependents of the MSHA system. Goal number 1: Start building the infrastructure needed to accept risk and gain experience with ways to improve employee health—and, in doing so, lower the costs of care.
First steps. To begin, the startup company arranged an outsourcing agreement with another health plan, SummaCare Health Plan in Akron, Ohio. This arrangement—known as business processes outsourcing— currently provides all claims processing, customer service, utilization management, case management, and disease management for CrestPoint. “This arrangement allowed us to come to market quickly, and I didn’t have to make the investment in staff and technology to bring up a health plan from scratch,” Slattery said.
When the Centers for Medicare & Medicaid Services announced its ACO programs, CrestPoint decided to take the next step. Moving quickly, it acquired a shell license that allowed CrestPoint to sell insurance in Tennessee. In January 2013, the company entered the Medicare Advantage market with a fully insured product in a contract directly with CMS.
The near future. The next step is to market CrestPoint third-party administrator services—processing claims and providing other employee benefit services—to employers within its region as they gravitate away from relationships with insurers. “There are a lot of advantages, including cost savings, that employers can derive through moving from fully insured to self-funded under the guidelines of the Affordable Care Act,” Slattery said.
Beyond that, the company plans to expand into insurance marketplace products in 2015 in both Tennessee and Virginia. And it is evaluating opportunities to partner with other health systems to create regional networks that support ACOs for the managed Medicaid population in Tennessee. “We are looking to leverage CrestPoint to grow our government-sponsored business, whether it be Medicare, Medicaid, or the exchanges,” Slattery said. “I think this will become our sweet spot going forward.”
CrestPoint’s goal is to have 1 million members within five years. That means building network affiliations and offering insurance products throughout the southeast region. “To be sustainable, we need to have a broader footprint, and we recognize there are going to be other health systems that will want to plug into the infrastructure we have built,” Slattery said.
In FY12, which was CrestPoint’s first year of operation, the insurer was able to maintain a level healthcare spend for the 15,000 MSHA employees and their dependents—while the national trend was increasing about 8 percent. In FY13, healthcare costs are again projected to remain flat or potentially decrease.
“We’ve got a story now to tell to other self-funded employers in the market,” Slattery said. “I think it makes the national carriers very nervous.”
That said, starting a new insurance company that is pivotal to the future fortunes of the entire MSHA system is not an easy feat.
Earning trust. Introducing a new company into the competitive health insurance market is its own challenge. To succeed, CrestPoint needed to demonstrate that it was an organization that physicians and Medicare beneficiaries could trust.
After just nine months of operations, the company hired an external auditor to conduct two surveys. Physician partners were asked about their satisfaction on claims payments and other interactions with CrestPoint, and members were asked about customer service. Scores fell in the high 80s and low 90s on a 100-point scale. “In some respects, we were above, and in other respects, we were on par with our competition, which is remarkable for a startup plan,” Slattery said. “That was a win because it helped build confidence among senior management and the board as well as the community.”
Striving toward population health. An even bigger challenge has been introducing population health management to MSHA employees and their dependents. CrestPoint’s strategy is to create accountability for the physicians who treat plan members and for the members themselves.
For starters, MSHA narrowed employee health plan choices from about 15 options to two products, both of which are high-deductible health plans with integrated pharmacy benefits and health savings accounts. To get the lowest premium in one of the options, plan members must select a primary care physician, complete an online health risk assessment, visit the physician for a more detailed risk assessment and, if health issues are present, develop and stick with a care plan.
To improve health outcomes, CrestPoint’s case managers work directly with patients with chronic conditions, behavioral health issues, or catastrophic situations (such as spinal cord injuries) to make sure care is coordinated for best outcomes and high efficiency. “Our medical management staff works with the physicians to ensure that we have no gaps in care. They help make sure health plan members are compliant with their care plan, taking their medications, and staying on track,” Slattery said.
While he believes most plan members understand those changes are needed to control healthcare costs, not all have embraced the requirements enthusiastically. “In a lot of respects, folks are not open to change because it can be really difficult, and it gets downright personal,” he said. “But I think there’s also a recognition that if we don’t, as individuals, start to become more accountable, then whatever we do on the delivery system side is, ultimately, not going to be successful.”
MSHA’s approach to entering the insurance industry has been driven by a focus on “speed to value.” This required hiring executives with experience in provider networks, medical management, underwriting, and other key skills—rather than expecting health system executives to build an insurance company, said Slattery, a former executive at BlueCross BlueShield of Tennessee. “Recognizing that things weren’t going to slow down, that they were going to move faster than most people thought, we brought in external expertise,” he said.
That need for speed also prompted ISHN to acquire a shell license rather than embark on the time-consuming process of applying for a state insurance license from scratch. An external firm was hired to identify an available shell license in Tennessee. ISHN was able to acquire the license and receive approval from state regulators within six weeks.
It also led ISHN to contract with SummaCare rather than build its own capacity to handle benefits administration and related tasks. Initially, SummaCare provided the informatics platform that allowed analysis of claims data to understand the health status of MSHA employees, conduct predictive modeling, and profile the physician network to understand how physicians performed on quality and cost measures. Fairly quickly, however, ISHN’s need for a different approach to data analysis has become apparent. “We are acquiring our own capabilities that put us on a cloud-based platform that could allow us to deploy our capabilities across multiple markets,” Slattery said.
Going forward, he expects ISHN will bring other functions in-house. But the benefit of initially outsourcing those functions is that ISHN had immediate access to expertise. “It has allowed us to really execute efficiently on these new issues as we bring them into our business model to make sure that we are at a level of excellence without falling down,” he said.
MSHA’s vision does not include acquiring a broad range of physician practices and other medical assets. Slattery believes mutually beneficial contractual relationships work better. “That really allows us to get to a better value proposition, yet maintain a level of independence and productivity that we wouldn’t get in a Kaiser-like, all-employed health plan model,” he said. “If we can do this right, I think this is going to be a model that could be a beacon for other communities, and we can evangelize this way of bringing greater value to communities.”
Lola Butcher is a freelance writer and editor based in Missouri.
Interviewed for this article: Rob Slattery is president and CEO, Integrated Solutions Health Network, Johnson City, Tenn.
Priority Advantage: Helping Organizations Optimize Their Medicare Advantage Plans
ROi: Delivering a Complete Provider Driven Supply Chain and GPO Strategy
TriMedx: Unlocking the Full Potential of an Organization's Clinical Assets
Grant Thornton: Providing Robust Due Diligence to Facilitate Successful Health System Mergers and Acquisitions
Xtend Healthcare: Helping Organizations Optimize Their Revenue Cycle
In this business profile, Mike Morris, president of Xtend Healthcare, discusses the value of partnering with a revenue cycle management vendor that has deep experience in delivering strong ROI.
AvaSure: Using Video Monitoring to Improve Patient Safety and Achieve Cost Efficiencies
6 Patient Revenue Cycle Metrics You Should Be Tracking (and How to Improve Your Results)
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
10 Ways to Reduce Patient Statement Volume (and Reduce Costs)
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
Reduce Patient Balances Sent to Collection Agencies: Approaching New Problems with New Approaches
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
The Future of Online Patient Billing Portals
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Payment Portals Can Improve Self-Pay Collections and Support Meaningful Use
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Large Health System Drives 10% UP (Patient Payments) and 10% DOWN (Billing-related Costs)
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
ICD-10: Managing Performance
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Clarity Drives Collections
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Orlando Health Gains Insight into Denials, Reduces A/R Days with RelayAnalytics Acuity
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
Revenue Cycle Payment Clarity
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Streamlining the Patient Billing Process
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Wallace Thomson Hospital Automates to Maximize Limited Resources
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
7 Steps for Building and Funding Sustainability Projects
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Key Capital Considerations for Mergers and Acquisitions
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
Key Capital Considerations for Mergers and Acquisitions
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Trend Watch: Providers adapt as value-based care moves from hype to reality
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center case study
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Reforming with a New 50-Bed Acute Care Facility
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
5-Minute Briefing on Revenue Integrity Through HIM WhitePaper Hospitals FS
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
5-Minute Briefing on Accelerating Cash Flow Through HIM WhitePaper Hospitals FS
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
5-Minute Briefing on Reducing the Cost of RCM WhitePaper Hospitals FS
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
Providers Focus Too Much On Revenue Cycle Management
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
Lucille Packard Children’s Hospital Stanford Case Study
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
Using Predictive Modeling To Detect Meaningful Correlations Across Claims Denials Data
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
ZOLL and Emergency Mobile Health Care Case Study
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Maximizing Medicare Reimbursements White Paper
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Denials Deconstructed: Getting Your Claims Paid
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Automation and Operational Improvement Drive Sustainable Results
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Revenue Cycle Management Resolves Migration Implementation Issues
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
Partnering For Success – Provider Achieves Strength in Stability
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
Building a Clinically-Integrated Network
As value-based payment models evolve, providers are challenged to maintain superior clinical outcomes while controlling costs.
Winning in the Post-Acute Marketplace
Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.
Building A Common Vision with Employed Physicians
HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.
Practice Performance Improvement
The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.
Clinical Integration Without Spending a Fortune
Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.
Adding Value to Physician Compensation
Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?
Effective Revenue Cycle Management in Your Network
Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.
Succeeding in Value-Based Care
This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.
Therapy: Benefits at All Levels of Care
Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.
Does Your Budgeting Process Lack Accountability?
With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.
Cost Accounting: the Key to Cost Management and Profitability
Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.