How are payment solutions evolving with a changing healthcare economy?

In this webinar you’ll learn:

• Key differences and intersections between Revenue Cycle and Revenue Integrity.
• The most important solution functions for improving clean claims rate and addressing denials.
• The most notable effects of COVID-19 on Revenue Integrity.
• How revenue integrity needs change based on the type of user, and what functions are universally needed.

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About the Research

Revenue cycle has and continues to be one of the most difficult challenges in healthcare. These issues manifest in the claims process of submission, appeal, and remittance, but the causes are found much earlier in clinical workflows. Rather than think of these as separate issues, they should all be considered under a broader category of revenue integrity. The latest report from Chilmark Research, Revenue Integrity in Healthcare: Solutions Driving Revenue Performance, reveals a market in flux as traditional billing and auditing activities are now increasingly complicated by contracts that include performance and reporting requirements.

These activities are essential for healthcare enterprises of all sizes, scopes, and specialties. They are needed whether the organization is primarily concerned with fee-for-service (FFS) reimbursement or value-based care (VBC). The ongoing COVID-19 public health emergency has made the need for automation and reduced administrative costs even clearer. With appointment volumes dropping, provider organizations are faced with the need for reliable, accurate payments for their care activities more than ever. These solutions are equally valuable for traditional provider care and for modern virtual care solutions like telehealth.

Join Alex Lennox-Miller as he shares key learnings from the recent research.

2020 Revenue Integrity in Healthcare Webinar

John Moore III: [00:00:00] Good afternoon, everyone, and thank you for joining us today for our latest webinar, this one on the topic of revenue integrity and health care, looking at solutions that are driving revenue and payment performance for various stakeholders in the health care industry. This webinar is based off of Alex Lennox-Miller’s latest research into the space in the form of a Market Trends report that we just released last week.

John Moore III: [00:00:26] So a little bit about Chilmark Research, we are all united by the core belief that effective deployment and use of it is essential to modernize and care delivery and improving the care journey. We provide comprehensive, objective, high quality research for busy executives so they can make informed strategic decisions and have confidence that they are taking their companies down the proper path. We look to provide clarity in an uncertain time.

John Moore III: [00:00:54] Today’s presenter is Alex Lennox Miller. He joined the Chilmark research team, as in 2018 as a senior analyst specializing in our provider, Payer- Patient Convergence segment. His work focuses on value propositions for ACOs and payers, particularly in the implementation and potential use cases of analytic and workflow packages for clinical, administrative and financial areas. He came to us previously working in an operational capacity at one of the local hospitals here in Massachusetts, and he has been applying that experience and knowledge quite effectively to the work that we do here. Without further ado, I will let Alex take it from here.

Alex Lennox-Miller: [00:01:35] Thank you, John, and thank you to everybody listening. What we’re talking about today, the area of revenue integrity is one of the maybe less publicized or less commonly talked about areas in health care, but especially now it’s really taking a front and center view.

Alex Lennox-Miller: [00:01:57] And so one of the things we’re going to be talking about, we’re going to start off talking about the definition of revenue, integrity, what it is, how it’s distinct from revenue cycle where they intersect. We’ll be talking about some of the issues and challenges in revenue integrity that the solutions we profiled in the report help to address. And then we’ll be talking about some of the stuff that we actually discovered over the course of our research and where we think this revenue integrity solutions applied best, who uses them, how they use them, and the impact that they can have on those organizations. Revenue integrity is sometimes completely distinct from revenue cycle in an operational environment or sometimes conflated with revenue cycle, you see revenue cycle usually defined as the claim, essentially the claims and remittance process and revenue integrity when it exists tends to exist as a separate office, mainly doing operational improvements and things like that. But the areas of of crossover are really significant. And the fact that there’s a gap that there can be a gap between those two offices means that the effect of revenue, integrity, work on the revenue cycle are sometimes. Obscured and it’s difficult to see exactly how revenue integrity can really help fix or address some of the issues that revenue cycle faces later on downstream in process. Essentially what we’re talking about, revenue, integrity, what we’re talking about is.

Alex Lennox-Miller: [00:03:47] The ability to create a clean claim, the ability to create a claim that won’t produce a denial, that won’t require significant extra work or rework after the fact, that allows activities to be fully captured, could be captured accurately so that, first of all, they aren’t being under bill. And second of all, they aren’t being overbilled in ways that are going to either produce a denial or produce clawbacks later on. There’s a tendency to think of revenue integrity as essentially associated with fee for service, and the fact that it’s very heavily associated with claims reinforces that. But what we found is that a lot of revenue, integrity solutions and a lot of revenue integrity problems. Really do address things that are of major concern in a BBC model or a BBC organization, issues of documentation, issues of patient attribution, issues of capturing the full range of clinical activity and as detailed away as possible, all offer really significant value to a heavily BBC oriented oriented organization. One of the other interesting things that we ran into is that  lot of these revenue integrity solutions, for a lot beyond just the strict bottom line, it’s not necessarily what they’re designed for. It’s not necessarily what they’re aiming for. But when you’re talking about issues of staff deployment of staff generally of providers working at the top of the license of provider satisfaction and provider burnout, some of these solutions really have a lot to offer their patient engagement, patient communication, patient involvement, patient satisfaction with their appointments. All of these are things that can be addressed by some of these revenue integrity solutions. And so while they’re specifically targeted really at that revenue bottom line, they actually address a lot of different areas of concern in health care. So when we’re talking about revenue integrity, it’s really essential to recognize that we’re talking about something that has points of impact. All across the the workflow in health care that starts as early as the beginning of a visit or even beforehand during scheduling and registration, the ability to collect demographic information to check it against information held by the payor to make sure that the information is correct and matches to that. Those eligibility checks go through the ability to make sure that all of the correct paperwork is in place with an appointment. It has impact during the actual encounter in documentation and in capture, and then it obviously has a lot of impact during that revenue cycle process. The revenue cycle process is when flaws or mistakes earlier on will start to become evident. But if you’re only addressing those problems when they appear in revenue cycle, you’re addressing them far too late. It’s going to take extra time. It’s going to delay your payment and delay your claims, potentially cause those denials and write offs that are such a big problem for health care organizations.

Alex Lennox-Miller: [00:07:31] If you’re able to address them earlier and workflow at the point where they occur, the solutions are easier, it takes less time and it’s much less of a burden on the staff and providers who are involved in it. So what are some of these issues? Well, denials and appeals are obviously the biggest one. What we see from the research is that there’s a relatively significant number of denied claims. Most claims are paid if they’re issued correctly. But even those denied claims, if they are appealed, tend to go through problem is, in a lot of organizations, a large number of those denied claims are just never work. The result is a larger number of write offs, slower payment processing. Now, the reason that they’re not worked really runs the gamut. Some of them are simply lost in the shuffle of volume. Some of them are not valuable enough or aren’t considered priority enough to be at the top of the work queue. One of the problems that a lot of modern organizations face is that they are still operating their revenue cycle and their revenue integrity very manually. Historically, each year have really had manual processes for this kind of work. Stuff goes into a work queue. It has to be claimed by somebody. They have to make all the calls, do all the stuff by hand. The result is that the amount of work it takes to process an appeal is pretty high and the costs are pretty significant and borne almost exclusively by those provider organizations.

Alex Lennox-Miller: [00:09:21] If a claim does need rework in order for the appeal to go through, they have to go back to the provider. The provider has to go back, look at what they documented. Look at how it was coded. It’s a really significant amount of extra work. And when we talk about provider burnout, when we talk about nonclinical time that providers are spending, this is really where a lot of it is. One of the odd things that we found and this is, I think, one of the most significant findings that came out of this, is that, appeals vary really significantly depending on the OR. If you look at the data toward the bottom of the slide, we’ll see that it really has less to do with what the claim was, the volume, what was attached to it. Those denial rates vary really significantly. And so if you have a product or if you have a solution that’s trying to address this issue, it’s not enough to address it by the type of claim. It’s not enough to address it by the type of encounter. You really have to have solutions in place that look at the context of the client, including who the payer is, what do they historically deny, what is historically required by them for something to go through cleanly the first time, what’s required by them for something to go through on appeal? Because it varies a lot. It’s not standardized and it changes over time.

Alex Lennox-Miller: [00:10:59] What we found is that as these appeal numbers go up, as providers get better at submitting, Cleon claims their ratios start to shift and you need a solution in place that’s going to keep up with that. Just having something that works now based on your historical data is not a guarantee that it will continue working in the future. And that’s where a lot of the solutions that we profiled, which are leveraging AML, that are leveraging more sophisticated algorithms that are updating frequently, offer a lot of value if they can keep up with those changes in payor behavior in order to really allow their provider clients to maintain these rates of clean claims and appeal. The other big issue, obviously, is what denials are preventable, what are the causes? Well, what we found is that a lot of them are a lot of these are not problems inherent in the system. These are organizational problems. These are workflow problems. And these are problems that. If an organization is willing to commit to that kind of change, willing to invest in the solutions, they can really make a difference. When you’re talking about things like incomplete claims, when you’re talking about registration eligibility errors, when you’re talking about pre-auth, those are all things that are. Relatively easy to avoid if you have the right tools and solutions in place and if you have a culture that is willing to support those changes. And again, we see that what’s denied, how it’s denied, what the car codes are associated with, a denied claim varies really significantly based on the pair.

Alex Lennox-Miller: [00:13:03] Ideally, we would see that car codes are consistent, that the reasons are all of the same. But it’s not what we found. It’s really an extraordinarily variable system and a solution needs to be able to handle that. We would be kind of remiss if we didn’t talk about the impacts of the COGAT pandemic. Obviously, a lot of the publicity has been on the sheer volume of appointments, the transition to telehealth and virtual care. But the impact on the provider bottom line has been really significant and it has made the previous, I don’t want to say lack of focus, but, prioritization of these issues has really been brought into sharp relief. What we found is that a lot of organizations, especially bigger hospitals, health care systems, have basically been solving this problem by throwing bodies at it. They have huge staffs dedicated to this work. Entire floors or entire buildings. That’s not the most efficient way to do it, and in the current environment, we’re simply having a bunch of people. On a floor at a bunch of desks is simply no longer a valid, viable way of doing business. They simply can’t work that way anymore. And solutions that provide a level of automation, that provide a level of support to that staff, that allow that staff to really rededicate themselves or refocus themselves on the most important claims or the claims that actually need personal human attention have a lot to offer in this environment.

Alex Lennox-Miller: [00:15:05] The other area is that. We’ve seen a significant amount of regulatory and reimbursement shift. Over this period, the one of the biggest complicating factors in guess anything in health care is that we don’t exist within a single regulatory environment. We exist in 50, or if you’re a health system that crosses state lines, you have to simultaneously manage two or three or four or more different regulatory environments. And as the the the attempts to keep up with and address the covid pandemic have progressed, we’ve seen that environment shift in ways that are different and faster than we’ve ever seen them before. That includes what providers can build for that includes who can build for what scope of practice provider licensing across state lines, new codes to address covid, new billing opportunities and virtual care and home care. These are really difficult to keep up with having a solution in place that updates frequently, that assist in this, that helps provide context and information to staff to help them understand it. And it can address some of this stuff, automate in an automated way, as opposed to relying on staff to keep up. Really is invaluable in a rapidly shifting environment like this, the AMA just released twenty, twenty, twenty, twenty one CPT codes and there are really significant changes. There are changes that are potentially going to cause a lot of problems. If you have previously relied on old work on old models for determining severity of appointments, for example. If a system can’t keep up with that, if a system can’t help staff and providers to understand or supplement their training, it’s going to cause a lot of problems with the system that’s using it further down the line.

Alex Lennox-Miller: [00:17:23] So what did we find? Well, we found that one of the most valuable things that these systems can do isn’t necessarily in finding missed coding or missed opportunities, it’s in filling out or giving more specificity and that this level of specificity matters a lot. It is not enough to simply meet the bare minimum of documentation. And this is true whether you’re in a fee for service environment or whether you’re in a VBC environment. These are examples of HCC hierarchical condition codes that sum up into a risk adjustment factor for Medicare Advantage payments. But similar things are going to be true regardless if you’re in a if you’re in a different VBC or alternative payment model (APM), the ability to really fully document not just in terms of checking off boxes, but hitting the most specificity possible, making sure that you’re covering the the the really accurate depth of diagnoses can really make a huge difference in your reimbursement.

Alex Lennox-Miller: [00:18:42] And this is an area where, again, solutions that are able to leverage AI/ML in order to assist in their CDI – their clinical documentation – improvement or their coding assistance. Solutions that are leveraging and NLP – natural language processing – in order to scan documentation, the scanned notes, but also to look at documents that may have been included in the patient record, but because they aren’t entered fully into data, have existed as individual documents, as PDF scans, faxes that previously couldn’t be integrated. Now we have modern solutions that are leveraging NLP in order to bring that into the patient documentation more fully.

Alex Lennox-Miller: [00:19:38] So who are using these solutions? Well, we broke it out basically into three different groups. The first is academic medical centers, hospitals and bigger health systems. The second is outpatient primary care and family practice. And then the third is outpatient specialty – ambulatory surgery, groups like that.

Alex Lennox-Miller: [00:20:08] By and large, we found and this is why we group them the way we did that activity within these groups was pretty consistent. Where it was variable was based on the size of the organization. When you’re talking about a larger health system or an academic medical center, you’re talking about an organization with a lot of staff, with specialized expert staff, they might have data scientists available to help with reporting, with projections, with strategic planning. They have obviously almost universally some kind of of EHR. They have those really deep data reserves that are just begging to be analyzed and and utilized. And they benefit a lot from solutions that address a large number of their issues, and they have, I guess you would call it, the patience or the capacity for really long term planning. They can look at things and say, well, all right, if we do this, if we implement a process improvement drive as we make these changes, we’re going to start to see really significant changes five years down the road. On the other hand. As we look at non hospital primary care and family practice, what we see is that by and large, these are pretty small. These are practices that don’t have really specialized staff. They have staff who are overworked, they have staff who are multitasking, who are performing multiple roles, and their real focus is on solving an immediate problem. And solving it now, getting results as soon as possible. This is only becoming more true in the current environment as practices close and patient volume really starts to shift onto the practices that remain. These are practices that don’t have the capacity to learn a new system, to learn new processes, they need something that’s turnkey that works now, that fits into what they’re currently doing and how they’re currently doing it. They probably don’t have those deep reserves of data. And like I said, they need to see results soon. A short term ROIC is essential to these organizations because they need help. They have a specific problem, they need to solve it and they need to see the results. The outpatient ambulatory specialty and ambulatory surgical groups sort of sit in the middle here. They have a little bit more capacity for long term planning, a little bit more patience for it. They likely have a little bit more commitment to long term strategic planning, but again, their horizon is a little bit shorter. They might be able to get a little bit more value off a more complicated solution, something that that addresses multiple areas, but they don’t have the long term prospects or the prospect is the wrong word, but they don’t have the long term horizon for planning and execution that a major hospital system has.

Alex Lennox-Miller: [00:24:08] We broke the vendors out, which were profiled in the report also into three different groups. We have the chance. We have platform vendors. Those are vendors that are offering a large number of solutions, specifically within the revenue integrity space, unified in a single unified in a single piece of software. And then we have what we call the specialized best of breed solutions. Those are a little bit more focused. Those are smaller solutions that are targeted at solving individual specific problems that aren’t specifically targeting revenue integrity. But the reason we picked the ones we did and the reasons we profiled them is that all of them have something really significant to offer in the revenue integrity space. While they’re solving those individual problems. They do something, each of them, to really help revenue integrity issues. And that includes things like pre registration and eligibility checking, it includes patient engagement and patient outreach.

Alex Lennox-Miller: [00:25:24] It includes potentially really good RCM components, really good coding components, or, you know, really interesting, innovative uses, for example, of AI and ML in this space.

Alex Lennox-Miller: [00:25:46] Each of these vendor types has a slightly different customer focus, obviously. The cars are almost the baseline everybody had on basically everybody has one historically, as I said before, their solutions have been highly manual and they’ve been relatively slow to innovate and bring some of this newer technology, some of these newer solutions to bear on some of these issues. That’s changing. Now they’re getting more innovative. Their innovation timelines are shrinking. They’re starting to deploy this stuff. And so where there are gaps in their functionality or where they haven’t brought those innovations online yet, there’s still a lot of opportunity, especially for the best of breed solutions, to sort of fill in those gaps, fill in those niches. The are getting a lot better. The biggest obstacle that they have is that most people have one already.

Alex Lennox-Miller: [00:26:54] The independent platform vendors really rely on the fact that. They have generally more innovative solutions. They have generally more technologically progressed solutions, and because they aren’t individual point solutions, the way the best of breed solutions are, they are more easy to integrate into workflow and more easy to integrate into technology than a provider already has in use.

Alex Lennox-Miller: [00:27:24] The problem that they face, first of all, is pressure from the charge, but second of all, it’s that some of them are simply too powerful and have too much to offer for a smaller customer. We’re talking about health systems or hospitals or practices that probably already aren’t using their article capacity and maybe kind of unwilling or hesitant to deploy another large, powerful solution that offers a lot of different tools that they aren’t sure they’re going to be able to use to their fullest advantage.

Alex Lennox-Miller: [00:28:03] And the best of breed solutions, like I said, are generally focused on solving something specific. They’re the ones that providers go to a practice’s go to when they have a specific issue that’s been identified that needs to be solved. They’re generally really good at that. The ones we profiled are very good at that. Because they’re specialized, they may require extra work, they may require extra integration, they may not be as tightly integrated into the workflow as a platform or certainly as something coming from any aircraft. Because they they do what they do very well, because they specialize in those areas, they’re generally more innovative, they’re generally more effective. The problem is, it’s tough to say that the level of effectiveness that they have over, for example, an option that maybe isn’t as good but is already present. May be tough to sell.

Alex Lennox-Miller: [00:29:22] These are the areas where we evaluated each of the solutions, you can see we kind of tried to break things out into different functional groups. We tried to identify. We tried to break groups out. Compare apples to apples, make sure we weren’t, you know, really evaluating these companies unfairly. We identified a range of different sizes, a range of different solution types. You know, it’s it’s interesting because, even though they all have a lot in common and even though they are approaching similar issues, they really are approaching them in very different ways. And it was very interesting to see the breadth of how they’re approaching solutions, what they prioritize, what they see is as essential or less important. And it really is a lot of variability out there. This is obviously a pretty significant market. As we said, we see the market as not static, but certainly flowing relative to where it was here. Cars have run into growth issues and we think that’s reflected in their market growth going forward. The independent platforms represent the single biggest sector of the market and have a little bit more growth. We think they’re going to start selling into some of those smaller organizations and some of those smaller practices that maybe previously haven’t been able to see where the value is or haven’t been willing to take that leap. And as their innovation really continues, we’re seeing more and more organizations and health systems that are simultaneously having an EHR and then leveraging one of these platforms for their revenue cycle in their revenue integrity mark.

Alex Lennox-Miller: [00:31:42] The best of breed solutions, the independent point solutions are the smallest component of the market, but we see them growing a lot. They have a lot to offer, especially to smaller organizations and smaller practices that are really starting to understand where these pressures come from and starting to understand how badly they need to address them. They have a lot to offer to larger organizations that have these issues and are starting to realize that the solutions they have in place maybe aren’t as effective or that their manual solutions can benefit from additional technology and a second look.

Alex Lennox-Miller: [00:32:24] So what did we really learn? Well, we learned that this is not an issue strictly tied to fee for service. This is not an issue strictly tied to size of organization. This is not an issue strictly tied to type of organization. This is something everybody struggles with.

Alex Lennox-Miller: [00:32:43] The struggles are maybe a little bit different, but they’re all pretty similar and all of them need to address it. The solutions that are out there address different sides of things, address things from different directions, but whether you are predominantly fee for service, whether you’re predominantly BBC or APM, whether you are a hospital or an outpatient clinic. This is an issue that you have and this is an issue that needs solving. It is likely that simply deploying the technology is not going to be enough for avoidable denial’s, the avoidable issues that exist within workflow needs to be addressed with technology, but also need to be addressed in workflow and culture and inhabit. It’s not enough to simply give people a tool, you have to teach them how to use it. You have to make sure that they’re using it. We’ve seen that this is not really a static issue, we tend to think of it that way, that we have this problem and if we solve it, it will go away. What we found is that these are living problems that need to be addressed, that need to be understood in context, not just of patients, not just in appointment or or encounter types, not just in claim types, not even from the denial types. But that really need to be understood in the context of the players who are issuing them and how that behavior changes and evolves over time and IT systems and solutions don’t address that. The value that they provide is strictly short term. And finally, we found that these solutions have a lot to offer beyond just the bottom line, whether we’re talking about the ability to automate and better deploy staff resources to take work off of staff hands, stop it from being offloaded to staff or the nurses for patient outreach to assist providers with their documentation, with accurate documentation, and to prevent the need for going back retrospectively during the denial’s process to prevent providers from needing to constantly address issues that came up weeks ago or months ago in an encounter in order to try and get a claim of denial overturned. These are cultural problems. These are satisfaction problems. These are burnout issues. And these tools can really help address some of those while they’re assisting in improving the bottom line.

Alex Lennox-Miller: [00:35:50] If you have any questions or if you want to get in touch with me about this report or about anything else, please feel free to email me. I’m alex@chilmarkresearch.com. Thank you so much for listening. I hope this was educational and informational and I hope you have a great day.

John Moore III: [00:36:11] Thank you so much, Alex. That was fantastic. And we appreciate all those insights that you were able to share with the people who were in attendance today. And thank you to everyone that showed up live for this session. We hope you have a great rest of your day and a wonderful Labor Day weekend.