With the rise of managed care, ever-tighter reimbursements from government payors, and increased compliance challenges, home health agencies are under extraordinary pressure to optimize their revenue cycle management.
That’s the idea shared by Des Varady, CEO of Corridor, and Ron Malone, former CEO of Gentiva Health Services and a new member of Corridor’s board of directors. He assumed that board position as part of Corridor’s recent acquisition of Transpirus, the business process outsourcing and consulting firm of which Malone was a principal, and which had spun out of Gentiva’s consulting arm in 2012.
The combination of Corridor and Transpirus creates the largest national provider of full-service revenue cycle services dedicated to the home health and hospice sectors. Varady and Malone recently spoke with Home Health Care News about the need to master Medicare Advantage, the upside of rigorous new regulations, and the lengths some agencies are going to attract clinicians.
HHCN: What are the top challenges home health agencies are facing in revenue cycle management?
Varady: Getting the reimbursement you deserve is a challenge. With the rise of managed care and bundles, there’s more complexity. And then there’s what the government is doing, with Pre-Claim Review being front and center. So, being sure from a regulation and compliance standpoint that your documentation is in shape is a top challenge.
HHCN: Let’s zero in on that managed care piece. We’ve heard a lot about that recently, with chatter that the Trump Administration is interested in further privatizing Medicare, maybe by expanding the existing Medicare Advantage structure. Are agencies finding their revenue threatened in a managed care environment?
Malone: The amount of business with MA plans is increasing across the sector. There are few home health entities fully prepared to negotiate the contract details and pricing with MA plans. We find this is an area where small and large entities consistently struggle. How do I contract with plans and set the rates properly so I can get my money?
It is very common to run into customers who are spending a disproportionate amount of their time and money trying to collect a relatively small part of their business. They might be 80%-20% traditional Medicare versus non-traditional, and yet be spending three, four, five times the amount of time trying to collect from the MA plans, probably at a lower rate.
HHCN: Why such problems, and what can agencies do to address them?
Malone: Medicare is relatively straightforward to bill. The government can be a very tricky business partner, but the immediate billing is pretty straightforward, and it’s one set of rules that’s pervasive.
In MA, different states are different, different plans are different. You don’t do a standard contract with UnitedHealthcare, Cigna, and other payors, because what they want and how they want to see it is very different. As one discrete example, if a particular managed care plan or MA plan requires a 12-character alphanumeric authorization code, and you put in an 8-character code, it’s going to be denied. When I say working so hard to get their money, it can be completely [the agency’s] fault, but if you put in that missing information or wrong information, someone has to intervene.
And the larger the home health entity, the more branches they’re depending on to get it right in the system. If you have 200 branches, that’s an enormous challenge as well. If you’re using a good EMR system and billing is set up properly, it increases the probability you’re going to get data into the system right the first time. Everyone in health care struggles, or deals with, this stuff.
HHCN: Des, you also brought up bundled payments, such as the Comprehensive Care for Joint Replacement (CJR) model. What are the challenges there?
Varady: On managed care, it’s clearer to see a path forward. It’s going to grow. Greater than 30% of Medicare participants are in a managed care plan now, and a lot of conversation is whether that is going to go to 40% or 50%. It’s hard to know how long it will take, but the trend will continue.
It’s harder to discern bundles. The administration coming in seems more business-oriented, and value-based purchasing and bundles have proven in a number of different ways and programs to be advancing the large thing we’re trying to do, which is make sure everyone’s getting good value for their health care dollar. Is it going to be the same [bundled] programs as now, or will it change? We’re going to have to keep a close eye on it.
The good news for home health is almost universally now, and I think in any future configuration, it’s one of the lowest cost, highest quality settings to deliver care in. Everyone knows that in bundles, home health wants to be involved and should be involved. Anything agencies are doing to get involved in bundled programs is going to serve them well whether things change or it continues.
HHCN: And complying with new mandates was another challenge you mentioned, with Pre-Claim Review looming large.
Varady: I think the program has been progressing. Maybe not at the speed that everyone in the industry would like. But this is right at the heart of good documentation. We’ve worked with a number of clients on various aspects of Pre-Claim, and some are doing great and yet getting mixed responses back, and that continues to some extent, but I think it’s getting better.
Others have realized that they have work to do on their documentation. It’s hard to hear, but I think that one of the big points of Pre-Claim is that the industry as a whole has some room to improve in documentation. I could come up with a number of good arguments that the drift-net oriented Pre-Claim isn’t the best way to go about it. A big question mark for the program moving forward is, do they focus on parts of the market that need more help?
HHCN: Ron, do you agree on where Pre-Claim is at and the impact it is having?
Malone: It’ll be pretty painful for some. But the tighter the training and sets of processes, the less variability there is among big sets of branches, the easier it is to implement these kinds of things. If for whatever reason you’re a little sloppier than you need to be, an initiative like this could wreak havoc on cash flow.
Varady: One thing we haven’t talked about, and it continues to rise in importance, is workforce issues—particularly in certain parts of the country, getting the right clinicians is [a big challenge].
It’s interesting to see what some agencies are doing in terms of staff. One of our clients is thinking of changing EMR, because in their market, there are some clinicians who won’t work on their EMR. So, they’re changing to one that is more friendly for clinicians to work on. It’s almost always a painful process to change EMR, but the EMR they’re currently on is perceived as harder to work with; it’s a non-tablet-based field solution, and in that market, competitors have moved to an EMR that [clincians] view as more friendly.
HHCN: More evidence that tech is increasingly important to recruiting. Are you a big believer in the tablet-based EMR?
Varady: A tablet EMR solution versus a laptop has an edge, because it’s easier to do documentation at the bedside, and get through documentation and capture data. The biggest staff cost is the clinician in the field; the more efficient you can make them, that’s the drumbeat.
Home health agencies almost to a one look at tech the right way, as a way to increase staff productivity.
HHCN: Ron, you’ve brought up the challenges that larger providers face, and you have first-hand experience with that, from leading Gentiva. But I think the conventional wisdom is that larger providers have an edge in these tougher environments, with more resources to address new regulations, for instance. Do you agree?
Malone: I think the environment is, due to increased regulation and the rebasing cuts, a very challenging environment. It probably favors larger provider groups. There has been considerable consolidation in the last decade or so. We probably led into that [to some extent], and others did as well.
I don’t know. Everyone thinks their period in history or the time they’re operating is toughest. I think you have some tough requirements today, but that just forces you to be better. Eliminate waste. Tighten up. Ask yourself, what is really driving outcomes? Provide better patient care, and think hard about your investments.
I think there are probably fewer questionable players today, because it’s more difficult. [Providers] may all have gray hair due to this, but I think probably the end result is good. For instance, MA plans are normally not constrained in the same way traditional Medicare would be, so they can help drive innovation. I think tightly run, disciplined organizations with good IT and data resources could really drive value into the system.
I happen to be a person who says, you can make the conditions tighter, and good providers will figure it out.
Written by Tim Mullaney