It is hard to believe, but we are quickly approaching the second half of 2013. 2014 will have the greatest impact on the healthcare delivery system, because it is the year that the Healthcare Reform Act insurance requirements will be implemented. The insurance changes potentially expand patient coverage and offer new payer sources through the health insurance exchanges; ultimately, impacting providers’ reimbursement. As always, when the money sources change, what providers offer for services, staffing and allocation of resources adjusts. With all of these moving parts, below is a list of top 5 changes that need to be addressed by all providers.
1. Health Insurance Exchanges
In accordance with the Healthcare Reform Act, health insurance exchanges must be operational by January 1, 2014. Each State has an opportunity to either establish its own health insurance exchange or to allow the Federal government to administer the exchange. The health insurance exchange is intended to provide individuals, who must buy insurance by 2014, an opportunity to purchase insurance through this exchange.
Now, healthcare providers need to determine which insurance plans are participating in the health insurance exchange. Providers’ participation agreements need to be updated to include participation in the exchange product. Of course, the biggest question is what the reimbursement rates from the insurance plans will be for this insurance exchange product and that is yet to be finalized.
2. Accountable Care Organizations
The shared savings program, known as Accountable Care Organizations (ACO) was created by the Healthcare Reform Act and has expanded dramatically. ACOs require providers to provide care to at least 5,000 Medicare patients and in exchange for reducing costs and achieving certain quality benchmarks, the providers will be eligible for a share in the savings realized. ACOs have grown from 18 to over 250.
Whether a hospital elects to participate in an ACO or forego the requirements, integration among providers will continue. Providers must evaluate whether they should partner with a local hospital, remain independent or join a larger network of providers to gain efficiencies. As reimbursement changes and perhaps declines, the pressure to partner with another provider escalates. Integration strategies range from integrating information technology systems, contractual affiliation arrangements, joint ventures or complete mergers. The physicians’ and the hospitals’ reimbursement will likely continue to decline, but through these integrated networks, providers may recover some of the loss by increasing efficiencies and receiving bonus payments for satisfying clinical quality metrics.
3. Patient Engagement
Throughout the Healthcare Reform Act, there are multiple programs that are intended to reduce cost and improve patient quality outcomes. Ultimately, providers will be paid based on the patients’ outcomes. However, in order to achieve the outcomes and efficiencies, patients must be a part of the healthcare delivery system. Therefore, engaging the patient will enable providers to work with the patients to reduce the number of visits, achieve treatment goals and the reduce costs. Engaging the patient now and getting them involved in the healthcare delivery system should be a focus for the second half of 2013.
4. ICD-10 Implementation
The code sets, used by providers to bill insurance plans for services, have been modified. There are now over 73,000 codes that will be used to describe what happens when a provider renders care to a patient. Specifically, the length of the visit, what type of organ was evaluated or the treatment plan initiated would be described by these very specific codes. In order to be able to bill in October 2014, individual providers must update their billing software and programs to utilize the ICD-10 codes. Therefore, for the second half of 2013, providers should focus on upgrading current billing systems, educating coders about the ICD-10 conversion and testing with the payers. If providers fail to take these proactive measures, in 2014, providers may find that they are unable to get paid because their codes are not being electronically transmitted appropriately. Therefore, in order to ensure reimbursement in 2014, the ICD-10 code implementation and testing is critical in 2013.
5. Compliance Programs.
Government enforcement activities continue to increase. One area of focus in the third quarter of 2013 will be the HIPAA regulation changes that have a compliance deadline of September 23, 2013. HIPAA penalties now go up to $1.5Million which is a significant increase. The government contracted with external auditors to audit healthcare providers and business associates to determine if they are in compliance with the new regulations. These audits will continue in 2013 and 2014.
Beyond HIPAA, billing audits and recoupments will continue as the federal government seeks to recoup what it characterizes as overpayments or payment for services that it deems are not medically necessary. Therefore, providers cannot lose sight of the importance of the compliance program. The compliance program should be part of the culture of the organization and is the responsibility of the board, owners and employees. Providers should continually audit and take pro-active measures to ensure that they are using all reasonable efforts to comply with the very complex and ever changing regulations.
Healthcare is a complex and dynamic industry. It can be confusing and overwhelming to stay on top of the fluid requirements. The above key items are just 5 of the many top priorities that will consume provider efforts moving forward into 2014.