Reimbursement Roundup: HMOs pulling together on new claims system
Reimbursement Roundup
HMOs pulling together on new claims system
Seven of the nation’s largest managed care companies have entered into a venture to create a real-time transaction electronic system to process medical claims and other administrative functions.
The new company, MedUnite, says the venture reduce the time and hassle associated with checking a patient’s insurance eligibility, verifying benefits, submitting claims, determining the status of claims, and getting paid promptly.
"Our goal is to give the health care marketplace the level of connectivity that you would find today in banking or finance," notes Dave Cox, president and CEO of the San Diego-based business.
MedUnite’s founding partners include Aetna, Hartford, CT; Anthem, Indianapolis; Cigna Corp., Philadelphia; Health Net, Woodland Hills, CA; Oxford Health Plans, Norwalk, CT; PacifiCare Health Systems, Santa Ana, CA; and WellPoint Health Networks, Thousand Oaks, CA.
Collectively these firms represent more than 61 million lives, or 26% of the insured population. MedUnite plans a pilot test of its system starting in February, with full rollout projected sometime this summer.
Incentives to boost bottom line
Hoping to get a two-for-the-price-of -one pay-off from their physician incentive systems, more practices are attempting to boost profits and increase quality by creating physician bonus formulas based on both patient production and quality factors, notes Brian Kayman, a health care expert with Arthur Andersen Consulting’s Chicago office.
According to Kayman, the idea works like this:
Assume a physician’s base salary is $100,000, with an outside bonus potential equal to 20% of base pay, or $20,000.
Eighty percent of the total potential bonus — $16,000 — depends on the doctor meeting a pre-determined production goal. However, to become eligible for the production bonus, the physician must first meet certain quality measures — for example, in the areas of preventive care and outcomes.
The remaining 20% of the bonus — $4,000 — depends on how well the doctor’s patient satisfaction scores add up.
If you really want to fine-tune the formula, you can even install a sliding scale, with a lower bonus for generating 12% over minimum production goals, a bigger bonus for going 15% over target, and a super bonus for producing 20% more than the goal.
One easy solution: Give docs more space
Barb Swehla, quality services supervisor and risk manager at St. Peters Hospital in Helena, MT, has come up with a simple way to reduce mistakes resulting from misreading orders due to a physician’s illegible handwriting: Leave more space between the lines of order forms so doctors will have room to writer larger — and ideally more legible — instructions.
Soon after her hospital changed to the redesigned order sheets, physicians began writing larger and errors decreased dramatically, Swehla says .
This same principle can also apply to evaluation and management forms and other documentation, which can prompt an audit if outside reviewers are not able to read and understand the physician notes justifying a particular diagnosis and course of treatment.
HCFA official: Compliance gripes exaggerated
Some HCFA officials think the agency has gotten a bum deal from providers claiming its compliance regulations and investigators sometime go too far in their effort to ferret out waste, fraud, and abuse.
"We were pained by the accusation that we had this terrible mess of regulations, and we are worse than the IRS," Hugh Hill III, deputy director of HCFA’s Program Integrity Group, said recently at Lab Institute 2000, a conference on the clinical lab practices.
Hill said many provider groups overstated their case when complaining to Congress about being overburdened with too many new regulations and overzealous inspectors. "The impetus for change may have been lost because complaints were too large, and later found to be untrue," said Hill. "I don’t think efforts to fix the problem were aided by exaggerating."
Basing pay on man-days’
Here’s an interesting approach for paying physician-partners at Rehlen Bartlow & Goodman MDs, a single-specialty dermatology practice in Southern California. This practice’s compensation system is based around days worked by its doctor shareholders, with consideration for individual production. It works like this:
• Add up each partner’s "man-days." In addition to the number of days each physician works each month, the practice uses two adjustments — a larger one for conducting in-office skin cancer surgery and a smaller one for performing hospital consults. A busy physician working 20 days in a month who also performs a lot of surgery can end up with 27 man-days.
• Calculate a dollar value for each man-day. Each quarter, the practice determines its profit without considering the partners’ pay, then divides that by the partners’ total man-days to get a man-day dollar value.
• Multiply the man-day dollar value by each partner’s man-days to arrive at an overall pay level.
Cap rates rising, study finds
Nearly 70% of providers and HMOs report their capitation rates have increased this year, and 78% say they are either seeking more capitation or maintaining their current level of risk agreements for global coverage, primary care, hospital services, and ancillary services, finds a National Health Information survey. Other findings include:
— On average, 2000 global per member per month rates increased 7.4% compared with the 1999 average, rising from $107.88 pmpm to $115.95 pmpm.
— Average commercial primary care rates increased 8.8% compared with last year, rising from $11.07 pmpm to $12.05 pmpm.
— Twenty-six of 35 specialties saw their commercial cap rates rise this year. Specialties with hikes in the double digits included endocrinology, laboratory, neurology, psychiatry, and radiology.
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