Hospitals Adapt To The New Upcoming Innovative Payment Models!


Hospitals, in the US, are facing considerable challenges in the wake of innovative payment models. Innovative payment models are four different types of payment modules which apply to various phases of treatment episode and involve payment to the provider in the form of bundled payments. To understand how these models work, it would be helpful to get a description on some of them-

  • Retrospective Acute Care Hospital Stay Only – The hospital receives discounted amount paid based on rates mentioned in Prospective Payment System for providing acute care to an inpatient during his/her stay in the hospital
  • Retrospective Acute Care Hospital Stay plus Post-Acute Care – Involves peripheral medical services involved during a hospital stay
  • Retrospective Post-Acute Care Only – Covers post care services provided by nursing, rehabilitation centers and so on
  • Acute Care Hospital Stay Only – Involves a single amount paid to hospitals for all services contained in a treatment care

As has been discussed above, all these work on the bundled payment platform, which is set to replace the FFS (Fee for Service) model because healthcare authorities believe FFS encourages spill-over care as it rewards each component/service involved in a care episode separately. And bundled payment, given its nature which rewards collectively, dis-incentives care providers to give more care than required and thus improves quality of care and rationalizes cost.

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Albeit, bundled payment has its downside-  

  • It complicates the process of preparing claims as each service involves a different billing code
  • After a treatment is over, it becomes difficult to identify where one service got over and another began
  • Additionally, Congress has chosen to use PQRS reporting as a launch-pad for quality of care by tying up both rewards and penalties with it

They have aligned incentives with the number of quality measures a care provider will report on, on one hand, and have introduced payment cuts for those who will forgo reporting or reporting on enough quality measures on the other. This leaves hospitals with very less or no option but to take reporting more seriously to avoid being targeted by CMS for payment cuts.

So, if seen closely, there are two areas causing hospitals payment concerns-

  • Delineating services within an episode to ensure proper payment distribution and of course accurate coding of services
  • Reporting

To handle these areas smoothly and ensure that they don’t affect the reimbursement prospects, hospitals have to make sure that they have smooth movement of medical information to and from points that mark the end or beginning of medical services going around as well as collectively passing onto administrative units through a singular channel. This will require considerable ramp up of existing healthcare IT through practice management and adoption of EHRs for flawless billing and coding and reporting.

MBC’s Revenue Management Consulting services can help you with this by assessing your in-house revenue management cycle and ensuring that there is sound coordination between various components of healthcare facilitating smooth flow of medical data. The outcome of this is sound documentation and helps hospitals that want to set up ACOs and join an existing one.

Additionally, MBC spots gaps in your process and addresses them by performing a series of activities as required, like replacing old software applications with new ones, blocking areas of revenue leakage and identifying areas of staff training. Our staff training helps you staff to be familiar with CDT codes and the other changes that innovative payment models have brought in., the largest consortium of billers and coders in the US, has also been helping several hospitals, in big and small cities of the US, with its Outsourcing services handling the entire range of activities involved in billing and coding starting from preparation of claims through submission to post-submission follow-ups. You can also pick and choose such parts of our services as fit your billing and coding needs and pay for exactly what you need.

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