When considering various affiliation arrangements, providers should conduct a thorough financial analysis to determine how payment varies based on the site of care.
In this interview, Robin Gelburd, president of FAIR Health, a New York-based independent not-for-profit organization that manages the largest database of private health insurance claims in the country, discusses site-of-care trends, price transparency, and other payment topics.
On the value of claims data analytics for strategic decision-making. “We are living in a time now that allows for data to be collected that can light the way to decision-making,” Gelburd says. “We can use actionable data not only to understand what has actually occurred but to identify clinical and programmatic trends. Those trends will allow providers to strategically position themselves to capitalize in a productive way that brings value to the healthcare system.”
Year-Over-Year Comparison of Place-of-Service Utilization 2009-17
For example, FAIR Health, which has a database that includes more than 26 billion claims records from plans covering more than 150 million individuals, has tracked a significant increase in the use of nontraditional care. Specifically, more patients are seeking care at urgent care centers, ambulatory surgery centers (ASCs), retail clinics, home health, and telehealth services.
The organization also has documented notable differences in service prices by site of care. For example, patient evaluation and management (E&M) codes are often associated with wide price variations depending on the care setting. “There are notable differences whether you are going to receive evaluation at a physician’s office versus a retail clinic versus an urgent care center,” Gelburd says. In fact, the charges for patient E&M in physicians’ offices tend to track higher than similar services rendered in retail clinics.
In addition, FAIR Health has tracked notable differences in charges between hospital outpatient departments and ASCs for common procedures such as colonoscopies and endoscopies.
Given these trends, finance leaders at hospitals and health systems may need to review their affiliation strategies with nontraditional care providers, Gelburd says. When considering various affiliation arrangements, providers should conduct a thorough financial analysis to determine how payment varies based on the site of care.
Another consideration is determining whether to acquire or invest in nontraditional care providers, such as ASCs, telehealth services, or retail clinics, Gelburd says. At the same time, finance leaders may need to invest in developing and implementing a coordinated care framework that creates a seamless continuum of care among these different venues. This may require investing in technology, such as population health management software, as well as human resources like care coordinators.
On which procedures tend to have the widest spread between charges and allowed amounts. Claims data provides insights into what providers charge and the maximum amount that a plan will actually pay for a service. “Certain surgeries, such as neurosurgeries and spinal surgeries, sometimes have large differences between a billed amount and an allowed amount,” Gelburd says. This also can vary by medical market, depending on factors such as provider competition and the availability of a particular service.
How might providers narrow the spread between what they bill and what they receive? Providers may be able to make their case during health plan negotiations. “It would be incumbent upon them to try to distinguish what their offering is and why the value to the patient is so palpable that it would support that level of charge,” Gelburd says.
On the mistakes that providers make when analyzing cost data for episodes of care. As value-based payment models gain traction, providers are turning to claims data to analyze and model their performance. Yet unlike payers, providers often lack a window into all of the costs associated with an episode of care, which may involve treatment in multiple care settings. To get a comprehensive view of an episode of care, providers can fill in the gaps with information from claims databases on the market. Having access to such data also may help providers more effectively negotiate with health plans and request upside payments if specific outcomes are achieved, Gelburd says.
On making prices more transparent for consumers. Pricing data also can be an important tool for enhancing the patient-provider relationship. One of the biggest complaints that patients have is receiving surprise, out-of-network bills for anesthesiology, radiology, or emergency services at an in-network institution, Gelburd says. “This is giving rise to legislative activity all across the country,” she says. “Many states are now grappling with those scenarios and how they can hold consumers harmless and how they can sort out an appropriate level of reimbursement between the plan and the provider.”
As these laws evolve, finance leaders should make sure they understand the implications for their business. They also should make it clear to patients what services may be deemed out of network across the enterprise, Gelburd says. Providing patient financial services staff with training and resources for effective patient financial communications can go a long way in reducing confusion.
Gelburd also suggests that providers enhance their websites with cost calculators, published prices of common procedures, or links to free pricing websites so patients can better understand their financial responsibility.
“It is in providers’ interest to offer those kinds of services because there are financial consequences to not providing certain levels of price transparency,” she says. “You subject your institution to more challenges and possible litigation when there is confusion about what the responsibility is. Eliminating that on the front end not only breeds goodwill between you and the patient community, it actually reduces the administrative cost of having to field those challenges.”
Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill., and a member of HFMA’s First Illinois Chapter.
Interviewed for this article:
Robin Gelburd, JD, is president of FAIR Health, New York.