How the Recent CMS Update Will Impact Traditional Medicare Reimbursement with MACRA

At the beginning of February 2018, the Centers for Medicare & Medicaid Services (CMS) proposed raising Medicare Advantage plan payments by an average 1.84 percent in 2019. In a more recent announcement dated April 2, 2018, CMS proposed an increase in Medicare Advantage plan payments from the original estimated 1.84 percent to 3.4 percent based on improvements in data submissions. CMS is committed to strengthening the Medicare Advantage and Part D programs by giving Medicare beneficiaries flexibility so that they can make informed healthcare choices. Additionally, CMS noted that the final 3.4 percent payment increase doesn’t reflect adjustments for coding trends. When included, CMS estimates the coding trend will increase risk scores by an average 3.1 percent.

Proposed 3.4% increase in Medicare Advantage plan payments: What this means

CMS makes an annual adjustment to plan payments to reflect differences in diagnosis coding between Medicare Advantage organizations and Fee-for-service (FFS) providers. In 2019, CMS is finalizing the proposal to apply a coding pattern adjustment of 5.9 percent for Medicare Advantage.

Traditional Medicare reimbursement with MACRA will be impacted by this CMS analysis. Facilities that are not focused on improving physician diagnosis documentation and coding across both Medicare Advantage and traditional Medicare will receive significantly less revenue under MACRA. CMS will use their traditional Medicare claims data submitted to set and adjust their reimbursement rates and penalties under MACRA.

The good news is that HCC diagnosis submissions are seeing improvement globally with the industry hyper focused on improving the reporting of HCCs. We know from experience there is a larger opportunity to improve performance, as does CMS, with the final adjusted rate increase to 5.9 percent. In short, it is just the tip of the iceberg for improvements.

Uncover HCC revenue opportunity with clinical documentation improvement

With improvements in clinical documentation and coding integrity, solutions from Harmony Healthcare can help you identify high-value and high-return focus areas and avoid payment reduction. In fact, Harmony helped a nationally known healthcare system located in the Midwest, do just that—uncover $10.5 million in HCC revenue opportunity.

This healthcare system located in the Midwest is a nationally known organization with a 350-bed acute care hospital, a physician specialty network of 50 clinic locations with 400 group practice members across multiple states. The quality of documentation and coding outcomes fluctuated widely across locations leading to increases in clinical and medical necessity denials across all payers.

Numerous performance improvement projects focused on revenue cycle operations within the physician specialty clinics initiated by the health system struggled to show measurable results. Concerns around clinical documentation, problem list management, and the accurate reporting of appropriate severity of illness continued.

A focal point of concern was the increased administrative burden on physicians in clinical documentation, order entry, point of care coding, billing, and EHR data entry brought on by the conversion to ICD-10. This increased workload was now taking valuable time away from their primary responsibility of providing quality patient care, contributing to physician dissatisfaction with the EHR and frustration with the increased documentation and billing time workload.

Harmony Healthcare can help

This healthcare system selected Harmony Healthcare’s Outpatient Clinical Documentation Improvement (OP-CDI) solution to improve their physician specialty clinic revenue cycle function, HCC reimbursement, and physician satisfaction.

Harmony provided an OP-CDI assessment approach to identify and quantify opportunities to improve performance across the physician workflow continuum. Using a physician-centric approach, Harmony evaluated end-to-end activities from patient registration through bill reconciliation and denial management focusing on root-causes impacting physician workload.

A data-driven approach was taken analyzing claims, financial, and performance data to identify and prioritize assessment activities. Based on the data analysis, Harmony:

  • Identified key stakeholders and specific clinic locations to conduct the operational assessment of clinic revenue cycle functions and gap analysis.
  • Performed an EHR technology assessment and physician task analysis to assess physician point of service coding, billing and charge capture workflow for effectiveness and efficiencies.
  • Conducted a medical record documentation and coding audit on outpatient Medicare Advantage encounters with the objective of validating HCC documentation and coding accuracy.
Harmony’s OP-CDI solution demonstrates value

Using the financial rates provided by the organization, the estimated financial impact from the project was approximately $4.6 million with an estimated financial opportunity across the Medicare Advantage population estimated at $10.5 million in HCC revenue opportunity.

Because of Harmony’s consulting expertise, the health system is now equipped with a performance improvement implementation flight plan and outpatient clinical documentation improvement program tailored to meet the unique needs of each location. The plan focuses on simplifying physician workflow and decreasing workload while leveraging current resources, processes, and EHR technology.

Harmony Healthcare has extensive experience helping clients navigate the changing landscape of healthcare. If you’re looking to optimize reimbursements and enhance revenue, contact us today.

Print Friendly, PDF & Email