Like it or not, the Center for Medicare and Medicaid Services (CMS) has turned from Fee- for -Service (FFS) to Pay-for –Performance (PFP) or a Value Based Purchasing (VBP) model. The question is not whether or not providers, hospitals and systems are ready to let go of those margins, but rather what can they do to mitigate risk today and protect the Revenue Cycle of tomorrow?

1. Turning
the Corner
from Volume to Value
Like it or not, the Center for Medicare and Medicaid Services
(CMS) has turned from Fee- for -Service (FFS) to Pay-for –
Performance (PFP) or a Value Based Purchasing (VBP) model.
The question is not whether or not providers, hospitals and
systems are ready to let go of those margins, but rather what
can they do to mitigate risk today and protect the Revenue
Cycle of tomorrow?
In the largest industry in America, healthcare providers are
facing yet another “perfect storm” of Federal regulation and
legislation. Today, we’re going to discuss three recent factors
that if left unchecked, may negatively impact the Revenue Cycle
in the near future.
• The Elimination of FFS and other volume-based
reimbursements models by CMS
• CMS’ growing reliance on the Consumer
Assessment of Healthcare Providers and
Systems (CAHPS ®)
• The Patient Protection & Affordable Care Act
(PPACA,) with now nationally required pricing
transparency and patient engagement
Value Based Healthcare
In late January 2015, CMS identified the benchmark of 30% of
2016 claims that must be value based, this target increases to
50% in 2018. CMS announced exactly the types of value based
healthcare that participating providers, hospitals and clinics
need to be adopting:
• FFS with a link of payment to quality, which
includes hospital value-based purchasing,
Physician Value-Based Modifier, the
Readmissions/ Hospital Acquired Condition
Reduction Program. For these models, a
portion of payments ‘vary’ based on the
delivery of quality & efficient healthcare.
• Alternative payment models built on FFS
architecture: Accountable Care Organizations
(ACO’s,) Patient Centered Medical Homes
(PCMH’s,) Medicare-Medicaid Financial
Alignment Initiative FFS Model. For these types
of reimbursement models, some of the
payment is ‘linked’ to effective population
management and coordinated care.
• Population-based Payments, Pioneer ACO’s
(now in years 3-5 since inception) may
participate in this reimbursement model.
Payment is not directly triggered by service
delivery, so volume is not linked to payment.
Providers, Hospitals and Clinics are responsible
for the coordinated care of the beneficiary for
one year or more.
CAHPS
Although CMS has been using patient survey tools for decades,
recently these tools have been increasingly linked to Prospective

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Payment System (PPS) reimbursement. The goal of these
surveys is to standardize, track and gauge the propensity of
desired behaviors within the care continuum.
H-CAHPS (Hospital) were first on the scene. They track:
Communication with Doctors and Nurses, Staff Responsiveness,
Pain Management, Medication and Discharge Instructions, and
the Cleanliness/ Quietness of the Facility.
Hospitalsarerequiredtocompleteapproximatelythreehundred
surveys (per year) within 6 weeks of discharge (e.g., medical,
surgical, labor and delivery patients.) Hospitals are well served
in establishing propensity baselines within their facilities, then
working in small incremental steps toward “top-box scores.”
Many successful models incorporate patient feedback and
committees in go-forward improvements and efficiencies.
CG-CAHPS (Clinician Groups) track 5 domains: Overall Provider
Rating, Access to Care, Discharge & Follow-Up, How well the
Doctor Communicates, and the Courtesy & Helpfulness of the
Staff. As Providers are working to educate and engage their
growing patient base; their payment from the largest payer
in America is also increasingly dependent on “soft skills.”
Consumersseekcompassionate,competentcareinaconvenient
setting that save(s) them time, money and effort.
The PPACA
Providers, Hospitals and Systems are now flooded with “newly
minted,” nationally mandated patients who either require an
incredible amount of financial & health literacy education; or
have become truly savvy healthcare consumers with the loss of
their first dollar coverage and increasing pricing transparency.
This consumerism dictates that providers meet patients when
and how they want to be treated-or they will leave the provider,
practice and facility and take their dollar to another network-
possibly for the rest of their lifetime.
As CMS continues to forge the journey towards Value Based
Purchasing (VBP) providers, hospitals and systems seek to attain,
and then sustain the “triple aim” in Healthcare (Population
Health Management, Decrease Per Capita Cost, and Improve
the Experience of Care.)
CMShasdeterminedandreleasedatimelineforconversionfrom
Fee- for- Service (FFS) to Pay-for-Performance (PFP). Currently
20% of Medicare services are value-based, by 2016-30% of
claims need to be PFP and in 2018, a solid 50% will be required.
This means a large percentage of Medicare beneficiaries will be
transitioned to these new models. Further complicating this
charted course is the looming large and yet pending, national
conversion to ICD-10 which has been delayed more than once
to date.
Models Are Changing
The move from FFS means that Medicare patients will
soon become part of a VBP model (e.g., ACO’s, Patient
Centered Medical Homes {PCMH’s,}) these outcome based,
reimbursement models necessitate a new level of coordinated
care and communication within the continuum. The
reimbursement stakes are raised by increasing percentages

3. In late January 2015, CMS
identified the benchmark of 30%
of 2016 claims that must be value
based, this target increases to 50%
in 2018.
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at their house, or anywhere else the internet may reach.
In conclusion providers, hospitals and systems should resolve
to enhance their current models to meet the consumer in the
new healthcare marketplace-which champions consumerism
and all that entails. Many areas of the country are finding that
their consumers now want telehealth/ virtual appointments
& walk-in or ‘minute clinic’ convenience options. Providers,
hospitals and systems have started to incorporate departments
devoted to tracking patient outcomes; a similar model focused
on patient engagement and education will mitigate risks today
and protect the revenue cycle into the future.
being based on the patients’ experience of care (surveyed
through CAHPS ®.)
Now that CMS’ readmission penalties are becoming
more than a nuisance (up to 3% may be at risk,) and in
2014, 2,610 hospitals have incurred said penalties; some
providers and facilities are looking to coordinate care with
pharmacies that can help reconcile and mange (facilitate &
report back) medication compliance, track and share
population health data, and take care of the follow-up phone
calls -made to the patient at Day 1, 3, 10 and 30. Providers
tend to agree consumers are usually more compliant with
prescriptions if they have them upon discharge- or can get them
onsite.
With an enhanced focus on appropriate access and
utilization, healthcare service providers are squarely in
the hot seat of delivering coordinated care across multiple
platforms; while educating and engaging their growing
patient base with less time and fewer resources. All this,
while consumers demand a higher level of compassionate
care delivered how, when and where they want to
be treated.
Education and Engagement
Many of today’s healthcare consumers don’t understand core
concepts of their healthcare coverage, and their newfound
coverage doesn’t guarantee appropriate access. For many
consumers that do understand the financial responsibilities of a
$6,000.00 family deductible- they may delay seeking treatment,
until emergent care is needed-therefore receiving high resource
intensive care in an inappropriate treatment setting (e.g.,
chronic &/or comorbid conditions such as diabetes and heart
disease being treated in the ED.)
The key for providers, hospitals and systems is to jumpstart
their patient facing education and engagement today, many
times by extending the continuum of care into the front of the
office. For many revenue cycles, battles are won and lost at
the front line (i.e., Pre Access Staff.) They can also ensure their
patient accounts representatives have the communication skills
needed to work with peoples two biggest triggers: their health
and their money. Many times, simple tools like roleplaying,
sample scripting options, and incentivized collection contests
empower employees to ask for that co-pay, co-insurance (coin)
and deductibles.
Patient Portals are good for more than taking payments
and scheduling appointments; they can also effectively
and efficiently educate patients about their condition
or disease, define commonly misunderstood health and
financial literacy terms and generally engage consumers
from their smartphones while they wait in your lobby, or