Industry Watch

Revenue Cycle Management

In the current Medicare scenario, hospitals, physicians and other clinicians bill and are paid separately for their services. But that may change soon.

The U.S. Department of Health and Human Services (HHS) announced at the end of August that doctors, hospitals and other healthcare providers can now apply to participate in a program called the Bundled Payments for Care Improvement initiative (Bundled Payments initiative).

The Centers for Medicare & Medicaid Services (CMS) program seeks to align payments for services delivered across an episode of care, such as heart bypass or hip replacement, rather than paying for services separately. Bundled payments aim to give doctors and hospitals new incentives to coordinate care, improve the quality of care and save money for Medicare.

The Bundled Payments initiative is being launched by the new Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act. The program is based on research and previous demonstration projects that suggest the approach has lucrative potential. For example, a Medicare heart bypass surgery bundled payment demonstration saved the program $42.3 million, or roughly 10 percent of expected costs, and saved patients $7.9 million in coinsurance while improving care and lowering mortality.

“This Bundled Payment initiative responds to calls from the hospital and physician communities for a flexible approach to patient care improvement,” says Donald Berwick, M.D., CMS administrator. “All around the country, many of the leading healthcare institutions have already implemented these kinds of projects and seen positive results.”

The Center for Medicare and Medicaid Innovation’s request for applications (RFA) outlines four broad approaches to bundled payments. Providers will have the choice to determine which episodes of care and which services will be bundled together.

“From a patient perspective, bundled payments make sense,” says Dr. Berwick. “You want your doctors to collaborate more closely with your physical therapist, your pharmacist and your family caregivers. But that sort of common-sense practice is hard to achieve without a payment system that supports coordination over fragmentation and fosters the kinds of relationships we expect our healthcare providers to have.”

Find out more about the Bundled Payments initiative at www.innovations.cms.gov.

ICD-10 Conversion

On October 1, 2013, the U.S. healthcare system will transition from ICD-9 to ICD-10 as the HIPAA mandated code update is set to begin. ICD (international classifications of diseases) codes are medical diagnosis and procedure codes used for billing and health insurance reimbursement, as well as statistical analysis, clinical, epidemiological and quality reporting. These codes are used in the U.S. and around the world, although the U.S. is the last major country to migrate to ICD-10.

HighPoint Solutions has teamed with Siperian to develop the ICD-10 Appliance. The appliance serves as a centralized point for disease and procedure master data and is pre-populated with ICD-9 and ICD-10 CM, PCS codes, GEMS and reimbursement mappings.

“Chaos will ensue if payers and providers let their vendors create separate mappings and rules for each application,” says John Wollman, executive vice president of healthcare, HighPoint. “The key is to utilize a master data solution to create a single business process management layer with centralized rules, mappings and translations that can be applied uniformly to all applications.” More information: www.highpoint-solutions.com.