The avalanche
of changes impacting home care services can only be described as dramatic. Home
care leaders are now pressingly faced with addressing an entirely new era. A
new landscape has been created that demands a new approach to protecting
revenues, ensuring business sustainability, thus survivability, and the recasting
of operational methods and processes that meet the needs of patients…and the
business.
What defines this new era?
CMS: $42 billion dollars saved via its fraud prevention
programs
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The
primary impetus is of course CMS. New regulations, reporting, coding, quality
benchmarks, bundled payments are just a few to be highlighted. The heightened
attention and regulatory oversight given to payment penalties, re-admissions,
claims reviews and audits are CMS policies that stimulate the establishment of
the new culture. One can only assume that this regulatory and heightened audit cultural
impact will continue.
Underlying
all of these actions and more is of course, the implied belief by CMS derived
from the state of the industry, that there are too many home care services,
serving too small a client base, that are under performing and are
operationally, poorly managed. CMS wants fewer home care agencies serving
larger client bases having financial stability. In addition is the ever
deepening CMS/MAC oversight that seeks to ferret out fraud, waste and abuse. The
consensus is that the number of home care agencies while having increased
dramatically will enter a period of CMS motivated decline with 12,000+ agencies
today becoming ~ 8,000 in just a few years.
Bottom
line: all major categories of financial performance are under pressure.
According to one recent industry survey source, “cash on hand” to operate has
dropped to 33 days; median revenues have fallen; accounts receivable has slowed
from 44 days to 68 days. Current asset to current liability ratio is worsening
making borrowing problematic. Unless cash flow cycles can be improved the
outlook can only get dimmer.
Everything
taken together it is indeed, a new era.
The
home care industry has been slow to recognize and follow the lead of hospitals
and SNFs for example in successfully making operational quality and efficiency
gains through automation. Hospitals and SNFs understood that outdated polices
and paper based processes were not going to enable them to produce the
efficiency gains and achieve the quality objectives that their new environment
(and CMS) demanded. Being slow to adopt automation methods designed for the new
era in home care is no longer an option given that surviving in the new era is
important.
The
issue is not just about running a home care business more efficiently and
effectively. While adopting to the new era process may seem like added costs,
industry research indicates that agencies with higher visit costs were also
more likely to have high quality and satisfaction scores and be among the top
performers. The new processes done correctly points to actually freeing
capacity to serve more clients.
Payment Error rates (PERM) are the highest since CMS tracking
began
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New
on-boarding methods utilizing automation can actually contribute to increased
revenues. Using automated home care QA and UR pre-claims automated methods can
deliver up to 50% better profit
margins in many cases and actually increase the capacity of the business to
serve more clients with the same staff levels.
Dealing with compliance audits and ADR requests is simply a
very expensive waste of time and staff resources. Technology should be and
can be the targeted solution strategy.
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Let’s look at the new paradigm with Ten Strategic Imperatives as Guideposts:
#1 STAR Ratings are the new driver. Bench-marking outcomes are now less
relevant. STARS outcomes need to be managed in real time prior to their
submission to CMS.
#2 OASIS care plans have
typically been written up hours or days post visit. All care plans and service utilization
decisions need to be done on site
during the OASIS visits. RAP submissions should be made within 2 -3 hours of
the OASIS visit.
#3 Over Utilization visits from
one episode to the next need to be
reduced. OASIS based data needs to drive staffing. Home care needs to use
OASIS data the same way hospitals use DRG data.
#4 Outcomes data needs to be
distributed to field clinicians via tools that make each field clinician accountable for the results (data) they produce.
#5 Claims submission error rate
of + 40% (current average) needs to be
sub 15%
#6 Hospital Re-admission rates
at +27% (current average) needs to be
sub 10%
What is clear from the above
is that a new approach for the new era is not just needed, it is demanded. This
means that new processes supported with new supportive automation methods is
required.
Legacy systems built for the old era requirements
of PPS will no longer meet future needs.
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#7 Avoid Being Audited into Bankruptcy
If you see what MAC sees what would you do differently?
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First
and most essential is the ability to avoid costly and time consuming audits. It
is far too easy to be ‘audited into bankruptcy’ resulting from inaccurate, or
clinically inconsistent claims. Do this enough and you are on the MAC radar
screen. Having software that uses the audit analytics that MAC uses aids you in
not submitting what you can’t defend.
#8 Don’t Miss Securing Additional
Justifiable Revenues
Missed
revenues is significantly more prevalent than most home care service providers
realize. Having software that can align claims with additional, justifiable
revenues is critical to survival and stability.
#9 Transition to a New Era Repeatable
Process
Getting
‘real time’ claims feedback enables improved, speedier claims filing without a
seeming unending cycle of ADRs. Cash flow cycles improve.
Establishing
new process methods that binds field clinicians with QA staff lessens
inaccuracies, speeds accurate claims and will in the end lessen staff
requirements and improve capacity to handle more clients. This is a key factor
as having definable repeatable on-boarding processes if the foundation that
underlies stability.
#10 Win New Business Based on Facts and
Data – Win with Strong ‘Value-based Purchasing’
Being
able to generate outcome analytics that supports quality claims becomes the
basis for new business marketing that differentiates your service and attracts
new business.
The
re-design of home care delivery is real. The numbers of the growing elderly
population with expanding care needs is real. CMS’ new regulations and
‘submission demonstrations’ are real. Increased MAC audit pressures are real. True
home care service leaders will advance to meet these realities -- the opportunity
to survive and excel is real.
Michael McGowan is President of OperaCare Inc. | Michael Radice
is Chairman, Technology Advisory Board, ChartaCloud Technologies LLC | PHOTO
Credit: lehrmach2.blogspot.com
Copyright 2016 ChartaCloud Technologies/OperaCare. All Worldwide
Rights Reserved.