The Truven Health Blog

The latest healthcare topics from a trusted, proven, and unbiased source.

 

Health Plans: Choose Your Initial Validation Audit Vendor Wisely

By Truven Staff


For health plans, the time to select an initial validation audit (IVA) vendor is drawing near. Selecting a qualified vendor should be a thoughtful and informed process. If the audit shows a plan’s EDGE data are not valid and have risk score-impacting errors, the Centers for Medicare & Medicaid Services (CMS) may act to scale down the plan’s premium risk transfer payments, which may incur negative results for the plan’s financial performance. As a CMS-accepted IVA entity, we’ve been partnering with health plans to meet this requirement since the law was implemented.

CMS developed IVA requirements to help ensure that accurate and complete membership and risk adjustment information is submitted by health plans to the EDGE servers for eventual payment transfer calculations. According to the regulations, qualified commercial health plans must have an independent auditor with certified coders review medical records for 200 random members (or less if the Finite Population Analysis applies to the issuer) selected by CMS and must validate the enrollment and the diagnosis codes submitted. The deadline to select a vendor for this year is April 28, 2017.

 Medical records review is a critical part of the validation process, so health plans should consider experience and certification when selecting a vendor. Some other important qualities to look for in an IVA vendor are:

●      Deep knowledge of ACA regulations. A vendor should have a history of monitoring, evaluating, and influencing the changing ACA requirements.

●      Data, analytics, and auditing experience. A long history analyzing large claims databases and auditing healthcare claims, and prior experience with CMS-mandated reporting, are critical experiences.

●      Experience with EDGE servers. To efficiently audit EDGE data, the vendor needs experience with EDGE data format and content, and in processing large amounts of data.

●      Risk and reinsurance expertise. Look for an auditor with experience with risk models.

●      Flexible approach. This is not a completely straightforward process. Every health plan is different, and your vendor should be able to implement a solution to meet a health plan’s specific needs.

●      Certified coders. This one is straightforward. By law, the coders must be certified by the American Health Information Management Association (AHIMA) or the American Academy of Professional Coders (AAPC).

●      An IVA Approved by CMS. Plans must choose from a list of CMS-accepted entities.

Selecting an experienced and qualified partner to support the IVA will help give health plans peace of mind in managing the IVA requirements. If complying with CMS’s EDGE server requirements is taxing your organization’s resources, it’s time to consider partnering with a qualified EDGE server administrator, and IVA vendor, so you can get back to the business of offering quality health care. Contact us to learn more.

Anita Nair-Hartman, Senior Vice President, Payer Strategy and Business Operations
Bryan Briegel, Healthcare Reform Solutions Specialist


Although Not Typical, Walmart’s Employee Benefit Costs Worth Noting

By Truven Staff
Anita Nair-Hartman imageA recent CNBC article discussed Walmart’s announcement that it will spend far more than anticipated on employee health coverage and have to trim its earnings forecast for the year. The retailer expected more workers to seek coverage under the Affordable Care Act’s (ACA) mandated coverage requirement, but the actual number topped their projections. Although this news has gotten a lot of attention, National Business Group on Health research indicates that most employers aren’t expecting as large of a jump in healthcare costs as Walmart, and Truven Health research supports this. As the CNBC article points out, Walmart’s employee base has some unique characteristics -- including low-wage workers in states where Medicaid expansion didn’t occur, forcing them to chose Walmart (rather than Medicaid) coverage. These aren’t typical employer circumstances.

Nonetheless, after years of low healthcare inflation, employee benefit costs have grown this year, and Wall Street is going to be keeping an eye on the impact to every company’s bottom line. For employers, monitoring benefits spend and strategy is more critical than ever. Equally important will be engaging employees in healthcare decision making, improving health and productivity through wellness programs, and remaining vigilant on fraud and waste.

Anita Nair-Hartman
Vice President Market Planning and Strategy

Managing Medicaid Managed Care and Encounter Data

By Truven Staff
David Nelson imageMedicaid agencies have increasingly turned to managed care organizations (MCOs) to deal with the tremendous increase in enrollment driven by the Affordable Care Act (ACA). The Centers for Medicare and Medicaid Services (CMS) released an Encounter Data Toolkit in November of 2013 to assist states with the operational task of managing the data streams from their MCO contractors. 

While most states are collecting encounter data, many face challenges in assessing the quality of data, and some still lack the confidence in their data to use it for rate setting, quality improvement, or public reporting. Over the past 15 years, Truven Health has helped nearly 20 states with their managed care programs and encounter data quality and completeness. We have assisted agencies with encounter data and managed care at all points of the encounter data process, including plan selection and evaluation, data collection, edit revisions, data quality improvement, and using data for plan management.

Most states choose to collect and process managed care data using their Medicaid management information systems (MMIS), for reasons that include the following:
  • The state can leverage the electronic data collection and translation processes already used for fee-for-service (FFS) claims.
  • The MMIS transaction system allows the state to process managed care data on a record-by-record basis, performing such tasks as editing and shadow pricing using procedures/protocols that are familiar because they are also used for FFS data.  
  • All data are maintained in the same system of record. The managed care data are housed with the FFS service data, which allows the Medicaid agency to incorporate all of the data, as needed and appropriate, in federal and state reports.
However, processing managed care data through the MMIS can also have drawbacks. Other states have experienced such issues as:
  • Delays in implementing new processes for managed care data because of the competing demands from FFS claims processing and associated system change orders.
  • Over-rejection of managed care encounters when edits designed for FFS claims processing are inappropriately applied to managed care records, which have already been adjudicated by the health plan.
  • Delays in the ongoing processing of managed care encounter data because persistent data quality issues cause repeated edit failures. This problem can be exacerbated if processes for resubmitting rejected records aren’t well designed and/or well understood and followed by the plans.
  • Inaccurate use or interpretation of managed care data in reporting and analysis because the nuances of encounter data are not accounted for in standard reports or communicated to users performing ad hoc analysis.
To avoid the above problems, states can either make appropriate adjustments to their MMIS systems and processes to fully accommodate encounter data, or consider other system options. States that are planning to re-procure their MMIS systems in the near future have the additional consideration of how much to invest in the existing MMIS system. This is particularly true for states that are moving to statewide, capitated managed care.

Some states have recently asked Truven Health about collecting encounter data directly from their managed care organizations. States could use their data warehouse decision support system (DW/DSS) to collect and process encounter data as either an interim approach or as a longer term process independent of the MMIS. Factors in support of loading the data directly into the DW/DSS include:
  • The DW/DSS is designed to incorporate managed care data – the data model and analytic reporting applications already anticipate the inclusion of managed care data. The DW/DSS provides a single, integrated repository for FFS and managed care data, capable of supporting transformed Medicaid statistical information systems (T-MSIS) and other federal reporting, as well as state-specific reporting needs.
  • By outsourcing this specialized function to a vendor like Truven Health that is highly experienced with encounter data, a state might help speed the availability of the quality data needed for performance monitoring, rate-setting, and public accountability. 
  • Our experience with the validation of managed care data will also help speed improvements in data integrity and increase credibility of the information.
Specifically, Truven Health’s managed care encounter data services, using the DW/DSS would include:
  • Receiving, processing, and translating managed care encounter data
  • Editing encounter data and providing feedback reports to managed care plans for resubmission
  • Storing encounter data and making it accessible for analysis alone or with FFS data
  • Incorporating encounter data into select federal reports
  • Validating and improving encounter data accuracy and completeness
  • An annual in-depth study of the quality of encounter data and development of a Data Quality Improvement Plan with each managed care organization
As Medicaid agencies turn to MCOs to deal with the tremendous increase in enrollment driven by the ACA, they have a partner in their DW/DSS contractors to implement the best practices outlined in the Encounter Data Toolkit. For more information you can contact me at david.nelson@truvenhealth.com.

David Nelson
Vice President, Market Planning & Strategy

Population Health: Economics and Leadership 101

By Truven Staff
Byron Scott imageIn a recent article in Healthcare IT News, the author did an excellent job of summarizing several key components of a successful population health program, illustrated by a short case study about how finance leaders at Legacy Health in Portland, OR partnered with physicians to educate them on the financial impact of cost drivers. When discussing population health, I find it helpful to remember the Kindig and Stoddart definition of population health from 2003: “Health outcomes of a group of individuals, including the distribution of such outcomes within the group.” This really helps summarize any framework and takes into account the end result of health improvement – how to monitor variability and the associated cost.

In order to have streamlined reporting, you need data. This sounds easy, but is often complex when extracting information from various health information systems (HIS) within a hospital or physician group. Many health systems have different electronic health record systems and having the tools and software to provide interconnectivity is essential. The data extracted must also be reliable, not only for clinicians, but for any other end user in the system that has a role in managing population health. Within hospitals, having this data will be essential when trying to reduce cost and variability in one key aspect of population health –  supply chain cost. In the article, the author mentioned reducing the use of more expensive implants in the operating room, but this is the tip of the iceberg. The continued streamlining of pharmaceuticals and other medical devices will be paramount in reducing overall cost.

As a physician, I believe partnering with physicians is essential. Some may call it being aligned, but I think calling it partnering is more collegial. Reducing physician variability requires reliable data that physicians can trust. Physicians are scientists and are often competitive, and if you provide them with trusted data, they will make improvements. However, it doesn’t just happen unless you provide physician leaders to guide them, and this requires investing in order to get a return. In other words, hospitals, health systems, and physician groups must continue to invest in physician leadership education and training to provide financially-astute leaders in the era of the Affordable Care Act.

Byron C. Scott, MD, MBA, FACPE
Medical Director, National Clinical Medical Leader

Optimism about the Impact of Healthcare Reform

By Truven Staff
Linda MacCracken imageA recent survey of 74 C-suite executives, conducted by Health Affairs, revealed that 93% of hospital executives think that health reform will improve healthcare, and that is a testament to integrated hospital innovation that is already underway. These leaders, whose organizations on average, employed 8,520 workers and saw annual revenues of $1.5 billion, have an optimistic view and this is indicative of the continuing work undertaken by providers to make healthcare more accessible, cost efficient, and quality focused. 

The executives in this study cited three strategies as critically important to address in order to reduce costs:
  1. Reduce the number of hospitalizations
  2. Reduce the number of readmissions
  3. Reduce the number of emergency room visits
By demonstrating better cost controls and adaptations, our hospital clients have seen margin improvement from 3.5% to 5%.

For every Emergency Department (ED) visit that is seen in a physician office, there would be a cost savings of $1171 per visit. 62% of the ED visits are URGENT, and not EMERGENT. This number has decreased annually over the last five years, but room still exists to cut costs further.  By redirecting even 20% of the ED visits nationally, we could save $4.4B; a step forward that has many hospitals very engaged. Use of the ED for urgent care varies – with a range of 42% to 92% by market.  An expanded primary care network, more accessible urgent care and one-on-one patient or prospect engagement are keys to shifting the use of the most expensive outpatient program, while making room for the true emergencies. This is a cost, quality, and access focal point for hospitals to continue their innovation, in addition to benchmarked cost effectiveness and care delivery quality excellence.

Linda MacCracken
VP, Advisory Services

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