Healthcare Real-Time Ecosystem Under Value-Based Care

Slow, duplicative, and uncoordinated administrative actions among payers and providers characterize health episodes in healthcare systems. Both suffer from a lack of cross-functional business process cooperation and that, in turn, impedes provider/partner alignment. Insurance, medical and payment policies, medical suppliers, and relationships with partnering organizations constantly evolve and further fragment.

Yields High Cost, Poor Quality, and Consumer Frustration

Healthcare payment rework and errors drive consumer frustration and make healthcare more expensive. Wasted spending contributes to poor health outcomes and drives excessive care costs.

The cost and resources needed to challenge the small percentage of appealable denials and write off the accounts balance for non-appealable denials are significantly high. For example, in the U.S. the payer claims denials are a major category of administrative waste that cuts provider revenue collection by up to 3% of net patient revenue, a major burden that providers cannot afford.

In the U.S., the net financial impact of rework, denials review, appeals, and write-offs averages 25 to 35% of the denied amount. Consumers are frequently caught in the middle and mystified about their financial responsibilities, as it can take months for a payer and provider to resolve their denials dispute finally.

Administrative inefficiencies are the largest category of wasteful healthcare?spending, accounting for almost one-third of $1 trillion dollars of fraud, waste, and abuse in U.S. healthcare.

Many payers that have the ability to instantly adjudicate claims as they receive them choose not to issue payment until a biweekly or weekly electronic funds transfer (EFT) “check run.” Provider billing departments cannot submit claims to payers in real time if their organizations have retrospective fee for service and per diem contract arrangements in place. The result is mutual dissatisfaction. And consumers miss opportunities to get credit for value delivered, and providers absorb high administrative costs.

These are not entirely technology issues, but technology plays an essential role in overcoming them. As a healthcare IT leader, we have an important opportunity to implement advanced technologies that will enable collaboration across an evolving healthcare ecosystem — one that engages all stakeholders, whatever their role, and does so in real time.

Value-Based Care

Misaligned incentives and interests between payers and providers prevent collaboration for value-based care success. ?Sadly, historical mistrust is at the center of U.S. healthcare inefficiencies and excess costs.?With aligned motivations, goals, and metrics, entities can focus on “growing the pie” by effectively and cost-efficiently delivering more of the value that consumers covet, not on capturing more market share for themselves. To get there, CIOs and their peers must first explicitly recognize the deeply entrenched current perspectives and concerns of payers, providers, and consumers. Even though payers push to execute value-based contracts with providers, neither payers nor providers have addressed the trust and administrative preconditions that value-based care success requires. As a result, payers, providers, and consumers alike continue to be frustrated by healthcare administration that is fraught with friction.

Real-Time Payments Enable Value-Based Care

Only a real-time payment and data integration ecosystem among payers and providers can meld consumer engagement, value-based care, and care management orchestration into one cohesive whole.?The real-time ecosystem and payment model places the consumer at the very center. The result: both providers and payers can realize significant cost savings, quality outcomes can be improved, and both providers and consumers can realize the benefit of a dramatically improved experience of the healthcare system.

To enable that unification of objectives, healthcare payer and provider IT leaders should use a real-time ecosystem and payment model to guide investments in capability areas, such as coding, claims submission, claims payment, and finance. Provider revenue cycle management and payment of payer claims should be recognized as two sides of the shared process. It is the first step toward a faster, more intelligent, digitally enabled ecosystem to deliver on the health values shared by payers, providers, and consumers.

Healthcare payer and provider IT leaders that do not invest in real-time, consumer-focused, value-based care enablement will continue suffering from inefficient operations in the short term. The real penalty of inaction will be over the midterm as value-based care arrangements become more complex, financially risky, and pervasive across payers and providers. Financial inefficiencies will develop in care effectiveness gaps within these laggard healthcare organizations, which will start losing money and customers as the industry pivots toward deeper value-based care models.

Prior healthcare industry efforts of individual components of payer provider collaboration, such as near real-time claim adjudication or shortening claims processing time, show that legacy industry processes and misaligned financial incentives — not technical constraints — bar real-time interactions between payers, providers and consumers.?A complete real-time payment ecosystem, in contrast, replaces existing business processes under value-based care’s new financial incentives.

The aim of the real-time ecosystem and payment model is to make administrative processes and transactions more:

? Operationally efficient and sustainable.

? Accessible, inviting and nurturing.

? Responsive to individual preferences and needs.

? Collaborative and devoid of unnecessary clinical toil.

? Safe, secure and compliant.

? Situationally aware, smart and appropriately autonomous.

To envision this ecosystem, instead of using the lens of a provider’s real-time claims submission or that of a payer’s real-time claims adjudication, we must apply a holistic end-to-end view of the complete payment process.?We must include functions that directly affect payment transactions, like prior authorization requests and claims edits. Importantly, we must not include every administrative function (like contracting to establish overall payment parameters) to keep the model focused on the core activities of the real-time payment process.

Consumers Are Central to the Real-Time Payment Ecosystem

Consumers make many care decisions themselves and are ultimately accountable for their own health outcomes, so we cannot ignore their needs, motivations and financial role in this ecosystem. Yet, it’s true that consumers are not as digitally engaged with their care as they could be.?The scope of healthcare consumerism is rapidly increasing. Patients are playing a more prominent role in directing their own treatment journeys and forcing healthcare marketers to reckon with its impact.?The passive care recipients of the past are being transformed, sometimes unwillingly, into proactive medical consumers “shopping” for the care that best works with their wallet.

Increasingly, the healthcare purchase decision-making process is similar to that seen in other sectors, where cost is a major differentiating factor when it comes to choosing a provider/hospital, or even pursuing treatment at all. The administrative ecosystem’s challenges of misaligned financial incentives and data protectionism hinder payers’ and providers’ digital consumer engagement efforts.

Thus, we must not only include consumers as an element of the real-time payment ecosystem model, but also make consumers central to it. Providers (with their revenue cycle management [RCM] capabilities) and payers (with their core administrative processing systems [CAPSs]) represent the two pillars of consumers’ care delivery and financing needs. Consumers’ interests span those pillars as the focus and recipients of healthcare administrative action, with data flowing among all three entities.

Reinforcing Actions

Reinforcing actions are the functions, business processes and practices that payers and providers perform to administer healthcare on behalf of consumers. The key insight is that payers and providers perform the same functions, just from opposing perspectives. For example, a provider’s check of patient eligibility for coverage at the time of scheduling is the inverse of a payer’s member enrollment and eligibility communication activities. Payers’ and providers’ administrative activities are thus two sides of the same coin, and seeing these actions as inherently linked aids issue resolution.

Payer and provider IT leaders must address weaknesses in these reinforcing actions by first opening direct lines of communication with each other. They must jointly lead the charge for improved real-time administrative systems with their IT teams, business leaders and peers at partner organizations. By first laying the groundwork for cross-industry communications, IT leaders can implement business process changes and make technology investments to improve administrative efficiency and lower consumer frustration.

Payer IT leaders must:

? Transparently share claims logic rules with providers. Opaque and variable rules add administrative cost, while not preventing unnecessary care.

? Streamline internal processes and rules, like claims edits and medical necessity guidelines, that frustrate providers and hinder payment integrity operations. Speed claims adjudication timelines and settlement transactions so providers can more quickly bill their patients the final amounts for complete care episodes.

? Highlight to CEOs and CFOs the efficiency gains (such as cost saved per transaction) and customer service improvements (like improved Net Promoter Scores) that real-time payment and administrative transactions enable.

? Advocate that provider network leaders use contract provisions and financial incentives that are shared with providers to reinforce the new expectation of joint operations and collaboration to succeed in value-based care (for example, in electronic health record [EHR] integration resources and care management actions).

Provider IT leader must:

? Provide patients with a good-faith estimate of final cost sharing and likely codes that the provider will bill, given the patient’s symptoms.

? Verify patient eligibility using a payer’s portal or APIs before every visit without exception. A payer can, for example, change a patient’s plan type at midyear — and ability to see a particular provider — based on an employer sponsor’s benefit renewal date. While eligibility checks are universal upon hospital admission, eligibility checks do not always occur at outpatient sites.

? Change patient check-in and check-out procedures to take patient payment amounts after coding and claims estimation using payers’ online tools.?For example, many providers collect patient cost-sharing amounts upfront at the time of patient registration, using deductible or copayment amounts listed on the patient’s ID card or payer’s portal, without taking into account a patient’s accumulated claims balance.

? In exceptional cases when we cannot give patients a complete and final payment amount at the time of check-out, alter RCM logic to prevent patient billing until the payer pays all claims for a patient’s episode of care. For example, a patient receives services on the 13th day of the month, and your RCM system sends monthly statements to all patients on the 15th day of each month. Hold the patient’s bill until the payer pays on the 17th.

? Configure the RCM system by completing payer table and denial codes mapping. This is to stop generation of incorrect or confusing bills for patients with contracted payer coverage. Patients will not pay billed charges for covered services due to your contracts with payers, and they obscure the actual amounts that patients must pay. For example, listing line item “write-off” amounts from billed charges confuses consumers with complex, multipage hospital bills.

Dependencies and Supporting Technologies

A real-time chain of data and payments is only as fast as its slowest link. With value-based care, payers and providers must coordinate care management outreach, quality interventions, follow-up care and all the related actions of consumers in real time. Supporting technologies are, therefore, the IT systems and applications that enable the real-time flow of information that ultimately results in a complete and cost-effective consumer care episode and financial transaction.

Real-time administrative systems enable direct patient care and member health orchestration to happen expeditiously and accurately. However, payers and providers alike have underinvested in interoperability, because the largest benefits accrue to the system as a whole or to consumers as opposed to their own organizations. Thus, they have a collection of legacy IT systems and applications in need of updating due to systemic underinvestment.

Payer IT leaders must:

? Invest in provider network management and CRM tools to help better communicate with providers before contracting, during member care episodes, and when issues such as disputed claims or appeals arise.

? Replace CAPS (core administrative processing solutions) with next-generation solutions that support real-time claims payment capabilities.

? Develop care management and provider service IT application modules that recommend next-best patient actions for quality improvement, risk adjustment optimization, payment integrity and next-best patient action recommendations.

? Invest in clinical data integration to obtain full medical chart data from providers’ EHRs.

? Advance population health applications that the IT team can integrate with core administrative, quality improvement and community resource network management applications.

Provider IT leaders must:

? Implement a computer-assisted clinical documentation improvement (CACDI) application to enable real-time coding.

? Update patient access and scheduling applications to improve patient throughput and experience.

? Create a roadmap for the progressive implementation of value-based performance analytics, and integrate them into the practice patterns to improve quality and earn financial rewards from payers.

? Manage referrals to other providers and with payers using a cost and quality tool that includes information about providers in the patient’s network of covered providers.

Interaction Technology Changes?Marry Payers’ and?Providers’ Real-Time Transactions

Providers are pursuing real-time health system concepts, capabilities and technology assets to better serve patients and improve quality. Providers’ efforts have largely been isolated from payers’ work to better orchestrate consumers’ health outcomes under their health value management strategy.

Real-time health?system?and health value management are not competing industry visions or mutually exclusive. They, in fact, work together as payer and provider manifestations of the pressing need for all healthcare organizations to digitally transform — with consumers’ needs driving IT investments.

Interaction technology improvements will drive ecosystem changes in three areas:

? Portals, as they evolve into hubs driving consumer and provider engagement.

? Clearinghouses, as they become displaced by pervasive direct interoperable connections between payers and providers.

? Discontinuities of payments and workflows, as functional and organizational silo walls drop to deliver financial incentives to payers, providers and consumers.

Portals Become Hubs

Providers do not use payers’ online portals consistently today due to lagging quality, prior authorization and cost-sharing information that does not meet their need. Payers must continue advancing healthcare interoperability and growing capabilities to use real-time data and APIs to integrate directly with providers’ EHRs.

For providers, a patient portal should be much more than a way to meet meaningful-use requirements in the Medicare fee-for-service program. A patient portal must, instead, enable patient engagement by integrating with patients’ mobile devices, calendars and fitness apps. Likewise, providers should integrate patient data with cost-sharing, benefit plan, consumer account and incentive data that consumers currently find on payers’ member portals.

Clearinghouses Become Direct?Exchanges

The interoperability advancement now demands data exchange not just for claims but also for clinical, quality and care management data — yet clearinghouses have continued to focus on claims transactions. Today, interoperability standards like the Fast Healthcare Interoperability Resources (FHIR) are gaining traction with payers and providers.

A standard that payers and providers can use to exchange clinical data on a direct basis (or using a FHIR-certified vendor) begs the question of what value clearinghouses add to routine claims submissions and payments. We expect payers and providers to continue collaborating on direct exchange pilot programs to speed data or as part of standards-setting organizations like CAQH or HL7.

Multiple direct data exchanges will connect not just payers with provider linkages, but also consumers with community resources, the Internet of Things devices and business partners. Clearinghouses today are at the center of a hub-and-spoke design in which they connect with multiple providers and retransmit data to payers. In the future, payers’ and providers’ IT platforms will enable data to flow through distributed, interlinked networks composed of many direct connections.

The result will be a far higher number of IT application integrations among payers’ and providers’ IT platforms, enabling seamless data exchange on consumers’ next-best health actions and administrative records. Payers and providers that invest in platforms will also draw in new ecosystem partners, creating consumer value across multiple payer and provider relationships over time.

Discontinuities Become Reconciliations

Neither payers nor providers help consumers reconcile their healthcare bills today. Payers’ explanations of benefits often do not align with patient billing statements due to discrepancies between payers’ and providers’ operational timing, coding practices and medical policies. Payers’ and providers’ business processes and supporting technologies are disconnected, causing discrepancies and confusion. As a result, consumers do not have clear, final cost information for their healthcare services. Consumers are oddly stuck in the middle — and left out — of today’s healthcare payments and administration.

By re-envisioning RCM and core administration as two sides of the same coin, payer and provider CIOs will realize a joint opportunity to drive down provider bad debt for patient cost sharing, while increasing consumer satisfaction. Likewise, by moving data and money in real time, payers and providers can reconcile their financial systems, instantly, while presenting cohesive and timely financial statements to consumers. Both payers and providers have responsibilities to use these capabilities to increase consumer engagement.

Giving consumers increased visibility to the costs of care and needed follow-up actions (such as a lab test) will enable payers’ incentive programs and care management to be more effective, while streamlining providers’ collection activities. Critically, consumers will become full participants in their own care, with workflow activities and data flowing back to them, along with billing information. A single consumer statement will engage consumers much more than a stream of disconnected provider bills, physician orders and EOBs. Unified consumer statements should include final cost sharing, linkage to consumer-directed accounts (such as a health savings account), follow-up care and wellness resources.

Use a Real-Time Payment Model to Develop a Technology Roadmap

A comprehensive real-time healthcare payment ecosystem is, however, too massive a goal for any single IT leader or organization to tackle alone. To accelerate its advancement, IT leaders must:

? Work with peers at contracted — and even competing — firms to craft industry-level solutions.?Surrounding technologies like clinical data integration, consumer payments, computer-assisted coding, improved patient billing statements and consumer-level EOB reconciliation all help support a real-time administration ecosystem.

? Focus on the consumer needs to maintain momentum.?Industry and organizational change — especially one as large as the transformation to value-based care — takes time and requires new ways of thinking about the same old problems.?Payer and provider IT leaders both frequently mention consumer or user experience as a top area for increased funding, likely reflecting the priority that their CEOs place on customer experience for revenue growth.?For example, a fully adjudicated and paid claim with finalized patient responsibility at the time of patient check-out after a provider office visit resolves consumer angst over healthcare billing — improving consumers’ satisfaction with the care they receive. Consumer experience benefits help justify the investments that payer and provider IT leaders must make in complete coding, instantaneous communication about quality gaps, and frictionless payments to power seamless patient check-out.

? Explicitly measure their progress.?Value-based care is more than a financial bonus or a penalty for providers. Instead, value-based care relies on trust, transparency and coordinated actions through IT system interoperability. Organizational profitability is just one of many progress measures. So create new digital key performance indicators?(KPIs) to track efficiency gains to payers and providers, along with the health status improvements that your investments help consumers obtain. IT leaders need to hold themseves, their IT team, business leaders, vendors and industry partners accountable.

Healthcare payers need flexible and durable IT systems to work toward real-time administration. Payer IT teams are building toward a real-time claims-processing environment. However, this cannot be achieved with an ineffective claims editor. IT leaders should assess current and future capabilities to foster integration into a real-time claims-processing environment.

How Healthcare Payer IT Leaders Can Future-Proof Claims Editing

Healthcare payers need flexible and durable IT systems to work toward real-time administration. To foster integration into a real-time claims-processing environment, they should assess current and future capabilities, hold vendors accountable and include the claim staff in technology decisions.

Future-Proof Your Claims-Payment Capabilities

Claims editors?are the first line of defense to correct any inaccurate claim submissions. While they are central to?the ability of payment integrity programs to successfully identify, they?should work in the background.?As a IT leader, you should have the confidence that your claims editor is screening for basic coding and claims accuracy. Claims managers are not burdened by supporting the application’s ongoing function.?Thus, many IT leaders, including CIOs, do not routinely assess claims editors or keep up-to-date with new developments in the space.

But what happens when your enterprise architecture changes or there are new requirements to implement? With payers’ push to adopt more composable IT systems, now is a great time to reevaluate your current claims-editing technology against future needs.

With the modernization of core administrative processing systems (CAPS), new business requirements and a heightened focus on real-time operations and interoperability, you need to reevaluate your claims editor’s performance.

Leading vendors have intuitive claims-edit groupings that automatically update with any major regulatory changes, requiring little intervention on your end for a majority of your lines of business.?However, not selecting the right edits can have negative consequences. Your claim cycle time increases, claim payments are delayed, members and providers receive?inaccurate?statements, claim data becomes inaccurate and compliance rates decrease.

By?ensuring that your claims editor meets your customization needs, you — as a payer IT leader — can avoid the trap of inaccurate claims editors. You should also have easy visibility into which edits are applied to which groups through dashboards. Sharing this visibility with your claim staff lowers the likelihood of incorrect edits being applied.

Review Claims-Editing Capabilities

Claims editing is a mature space with?seemingly?little movement, which is the exact reason why IT teams should proactively review their capabilities. You want to be able to take advantage of the incremental — but important — product changes that you would not otherwise know are coming to market.

At a minimum, claims editors are meant to reduce appeals, decrease payment inaccuracies and ensure compliance. Additionally, changes within your lines of business and future needs can lead to more extensive requirements and expectations of claims editors. Situations that can point to growing complexity in claims editing include:

? Increasingly complex value-based payment agreements.

? Providers’ growing use of alternative coding methods for revenue cycle gain.

? Self-funded employers’ demands for greater transparency.

Additionally, new care services, such as those for social determinants of health (SDOH) regulations, introduce new places and types of service ranging from language interpretation to transportation and food.?Because of these factors, you need well-selected out-of-the-box edits and flexibility to assign your own edits.

Put Vendors on the Record?to Guarantee?Integration?Success

Increasing member expectations and operational demands are pushing payer IT leaders to modernize their core administration systems.?A recent Gartner survey shows that:

? 60% of respondents are moving their core administration system from on-premises to the cloud.

? 34% are consolidating to a common platform.

? 26% are replacing proprietary solutions with commercial off-the-shelf (COTS) solutions.

? 17% are replatforming mainframe to a modern architecture.

The movement of core administration platforms means that payer IT leaders will need to integrate their new or modernized solution with their current claims editor.?Take advantage of this by reviewing your claims editor while you review your core administration solution. This way, you can ensure it allows for the claims-processing efficiency expected from your new claims system.

Payers are looking to make data flow easier to set the foundations for real-time claims processing. However, this undertaking is usually complicated because of the many data silos and legacy platforms.?To enable real-time claims processing, your claims editor must interact easily and quickly with many other IT systems within the claims flow, such as:

? Your core administration platform.

? Eligibility software.

? Claim pricers.

? Provider network management applications.

? Billing software.

Consequently, a seamless claims process is particularly dependent on ease of integration.?When looking to procure any technology within your claims stack, you should:

? Require the vendor to provide named customer success and value stories that include similar technology stacks.

? Create strong SLAs that include financial penalties if timelines are not met.

? Share your enterprise architecture under a nondisclosure agreement (NDA) to confirm that the vendor can integrate with your specific platforms.

? Confirm the vendor’s ability to adapt to meet your five-year roadmap needs, because new regulations, member experiences and circumstances can shift.

Involve Claims Teams in Proactive Vendor Screens

Involve members from your claims team in the vendor evaluation process by creating a fusion team.?This initial claims-editing fusion team will consist of:

? A product owner from the claims side.

? A claims team member.

? A provider services team member.

? A developer.

? A tester.

However, the structure of the team will change depending on the?scope of the initiative.?For example, an enterprise architect and procurement team member would join the team if a new claims editor was being purchased. When an organization is updating their current claims editor, those roles will not be needed in the fusion team.

Use fusion team as an input source by surveying members when procuring a new solution or deploying new features within your current system.?Claims staff develop “hotkey” shortcuts that allow them to adjudicate claims quickly. This means that any change in software including updates or selecting a new vendor can disrupt their workflow and increase their processing time.?Engaging with the claims staff directly during these decisions will increase the speed of adoption for any new technology and features. It will also create a better employee experience. The claims fusion team should focus on limiting any employee abrasion and increasing operational efficiency. This will support the payer’s larger goal — adjudicating claims quickly and accurately.

Text taken from Gartner articles "Healthcare Administration Requires a Real-Time Payment Ecosystem Under Value-Based Care" and "How U.S. Healthcare Payer CIOs Can Future-Proof Claims Editing."