GE Healthcare Camden Group Insights Blog

7 Managed Care Trends to Watch in 2016

Posted by Matthew Smith on Feb 5, 2016 11:13:56 AM

One month into 2016, it’s clear that this will be a year of massive change for the managed care industry. Here are seven predictions for some of the key issues that will emerge, intensify, or be resolved by the end of this year.

1. The impact of recent health plan mergers will come into focus

It is likely that the major payer consolidations will get sorted out this year. The big mergers are already starting to impact contract negotiations between the health plans and providers. As the larger health plan organizations continue to cut operating costs and slow the growth in reimbursement rates, providers will respond by consolidating to form larger and more integrated health systems. Expect the Federal Trade Commission to expand its examination of provider consolidations. Organizations that are consolidating must demonstrate both pre- and post-merger consumer benefit as a result of these affiliations or acquisitions. 

2. Value-based arrangements will gain more momentum

The industry is still waiting to see if the federal government will make a move on the “Cadillac” Tax, which Congress delayed for two years at the end of 2015. The question is, will Congress eliminate it all together? If they do not eliminate it, we can expect to see further benefit reductions and higher deductibles and coinsurances as employers focus on meeting the cost limits prescribed. The government and employers will continue to develop and implement new ways to bend the cost-curve. Health plans will double their efforts to create “value” or “high performing” networks that will offer narrower networks in exchange for lower premium and out-of-pocket costs to consumers. This will accelerate provider consolidation, either through mergers, affiliations, or clinically integrated networks as they attempt to offer a broader, yet differentiated, “high performing” network to the market. Once formed, these newly established networks will have to demonstrate value to attract employers and effectively move market share. Positioning your organization as the lowest cost leader in your market will not be enough; quality and patient experience and satisfaction must be met simultaneously.

3. Provider-owned health plans will gain more interest from health systems

Health systems that are continuing their transformation to clinically integrated networks will face more pressure to have more control of their reimbursement streams and incentive systems. As such, expect more providers to become interested in owning a health plan or collaborating with other providers who already own a health plan. In addition, there will likely be a shift in strategy from competing directly with large health plans to a “plan-to-plan” strategy, which will allow the integrated delivery networks (IDNs), clinically integrated networks, and health plans to collaborate more easily. Finally, some recently established provider-owned health plans have struggled, so new entrants will be more selective and cautious as they refine their market and product approach to this strategy. 

4. It will be an important year for health insurance exchange products

With the Affordable Care Act (ACA) insurance exchange products continuing to grow as we move into 2016, eclipsing the 8.8 million subscriber mark, a critical success factor of this ACA provision relies on insurers continuing to offer these products, despite incurring losses in the initial years. For instance, UnitedHealthcare Group’s 2015 annual earnings report showed that the insurer lost $720 million from exchange products, but will continue to offer and closely monitor the performance of those products throughout 2016. As a result, health systems should expect a continued increases in high-deductible plans (more bad debt on exchange accounts and a need for ever increasing focus on revenue management), and increased pressure on reimbursement rates as health plans continue to adjust these products to the newly insured’s needs and their own need for profits.

5. Consumer Operated and Oriented Plans (“CO-OPs”) will continue to lose momentum

An alarming 12 of the 23 health insurance CO-OPs have failed in roughly three years of existence, and the trend is expected to continue into 2016, as the 11 CO-OPs that remain operational—are all operating in financial stress. The ACA-led program, which was funded with $2.5 billion of taxpayer dollars, has shown an inability to compete on the exchanges with the large commercial health plans. The original intent of these plans was to increase competition on the exchanges, and lower premiums for consumers purchasing individual exchange products, but without sufficient capital in reserves, state insurance commissions have forced many to shut due to lack of solvency. In all, closures of CO-OPs have resulted in over 700,000 Americans losing coverage, and over $1 billion of taxpayer dollars lost to-date. With the CO-OP program deemed largely as a failure, the result is fewer options for health insurance coverage to individuals and businesses. Expect to see further CO-OPs failures in 2016, and ultimately, movement toward exiting the market.

6. Compliance will become an important issue in the coming years

Federal and State actions and fines will highlight the new oversight and conduct expected of health plans and providers. Physicians and networks who are working to take on greater risk and seek rewards by lowering or limiting the number of providers in networks will come under greater examination by the regulators and by health plans. Building compliance in early to every policy and action, and then monitoring any delegated service providers, and any activities with potential member harm, requires focus and action at every level of management and governance. Do not be surprised if compliance actions become ever more common.

7. Is capitation making a comeback?

Expect to hear more about capitation this year, thanks to the implementation of the Centers for Medicare & Medicaid Services’ (CMS) Next Generation ACO (NGA) program. Most of the provider participants in this program are organized, sophisticated and have significant experience in managing financial risk. In addition, many of the participants are already at risk for managing Medicare Advantage populations through capitation or other fixed payment methodologies. Although performance year 1 (calendar year 2016) in NGA is still a fee-for-service platform, some participants may be willing to learn from their experiences and take the plunge in later years and go at-risk through capitation. Expect CMS to highlight and regularly announce the efforts for these participants. NGA could be the program that begins to further shape the health plans thinking and approach to providers taking more financial risk.

In coming months, the greatest challenge for most healthcare organizations will be finding the right pace for adapting to or embracing new payment models. Most organizations are now seeing the direction, but will have to find the right pace and organizational commitment to continue through this industry-wide transformation.

Originally published by Managed Healthcare Executive, 1/31/2016. This article is reproduced in its entirety.  

Topics: Managed Care, Trends, Matt Briskin, Adam Medlin

5 Proven Tips to Improve Provider Credentialing

Posted by Matthew Smith on Aug 15, 2014 9:11:00 AM

Credentialing, Provider Credentialing, Outsourced Managed CareProvider credentialing is often thought of as a routine business office task. Everyone assumes it will get done but only a few people actually know how it happens. However, as hospitals and health systems employ more physicians, they are paying more attention to the function.

The concept of provider credentialing is relatively straightforward. A healthcare organization sends information about a physician’s or provider’s qualifications—work history, education, certifications, licensure, and so on—to a payer for review and verification. After thoroughly vetting the information, the payer confirms the provider and begins reimbursing him or her for services rendered. Every two years, the process repeats.

Note that credentialing is different from the more nuanced process of privileging, where an organization assesses physician competency and authorizes practitioners to provide specific services to patients. The focus of this article is on the physician credentialing effort.

Simple in Theory, Challenging in Practice

Executing a consistent and reliable credentialing program is not always easy. “The volume and variety of information payers need make this a detail-heavy job that can easily go off track,” says Beth Tanner, accountant at Cameron Memorial Community Hospital. “For example, Payer A may require original documentation and the physician’s signature in black pen, while Payer B may need slightly different documentation and no physician signature. If you send the wrong thing to a payer, they don’t automatically let you know. If you don’t follow up, you could be in a situation where the provider is ready to start and the payer has cancelled his application because of a missed detail.”

In many cases, healthcare organizations do not allocate full-time resources to the credentialing effort and, as a result, an already busy staff person is tasked with managing the process amidst other priorities.

If the person hiring a physician forgets to communicate with the person in charge of credentialing, it can further delay the already time-consuming task. “Credentialing can take between 30 and 120 days depending on the provider and payer,” says Tanner. “If you don’t find out about a physician starting until a few days before his or her first day, you already are behind the eight ball and you will be late.”

The Consequences of a Poor Process

In addition to the malpractice and regulatory risks, a weak credentialing effort can have serious financial ramifications for a hospital or physician practice that employs physicians. “If a physician is not credentialed before he or she starts to see patients, then the physician may not be reimbursed by the payer for his or her services depending on the patient’s out-of-network benefit,” says Sabrina Burnett, vice president of Health Directions, LLC. “If the physician has already started receiving a salary from the hospital, then the organization is paying money out without taking any in.”

There are also potential patient satisfaction impacts. “If a provider sees a patient before being credentialed, the patient may receive an estimate of benefits from the payer indicating the patient went to an out-of-network provider and needs to pay a higher copay, deductible, or the entire bill,” continues Burnett. “This can cause patient dissatisfaction and may even affect an individual’s decision to stay with a provider long term.”

5 Strategies for Improving Credentialing

While credentialing has many moving parts, there are a few key strategies for systemizing the process and supporting better accuracy and efficiency.

1. Develop policies and procedures. These should address the who, what, when, and where of commercial and government payer credentialing. For example, a policy should describe how staff obtain accurate credentialing information.

“Organizations may want to require providers to maintain a current profile in the not-for-profit Councils for Affordable Quality Healthcare (CAQH) database,” says Tanner. “This database houses most of the information needed for credentialing. If a physician keeps his or her profile up to date, then the credentialing department can access information from one central location, limiting the need to hunt down items from various sources.”

Organizations also should outline the credentialing steps for commercial versus government payers. Medicare has described its process on its website.

“Enrolling providers in Medicare and Medicaid is usually a little easier than the commercial credentialing process, but there are some unique nuances that providers should fully understand,” comments Tanner.

It can also be useful to outline payer follow-up times, says Burnett. “For instance, you may want to state that for all commercial payers, you will follow up at 30 days and then every 15 days after that.”

2. Create a centralized credentialing function. For organizations that hire a large number of physicians and/or have multiple sites, it can be beneficial to centralize the credentialing process.

“Having one department focusing on credentialing helps with efficiency and eliminates duplication of work,” says Burnett. “It can also enhance provider satisfaction. For instance, if a three-hospital system has separate credentialing departments with different people working on commercial payer and government payer credentialing in each department, then the provider could receive multiple phone calls asking for very similar information. Having a centralized department limits provider contact and prevents frustration. It also gives the provider one source for asking follow-up questions, heading off the possibility of miscommunication or information getting lost.”

3. Allocate sufficient staff. Even if centralizing is not a possibility, organizations should try to dedicate specific staff to the credentialing effort instead of lumping the job with other responsibilities.

“I am a staff accountant and in charge of commercial payer credentialing as one aspect of my job,” says Tanner. “Since we are a small hospital and don’t credential a lot of providers at one time, I have been able to manage the work. However, if we start hiring more physicians this may become difficult. In the ideal situation, you would have people dedicated to this work and some redundancy. It’s not always easy to step into a credentialing professional’s shoes because of all the details, so it is helpful if there is trained back up.”

When looking to hire an individual or individuals to spearhead physician credentialing, look for people who are organized, detailed-oriented, and proactive. “This job requires someone who is comfortable juggling a lot of details and is not afraid to follow up with payers,” says Tanner.

A number of hospitals and health systems choose to outsource credentialing. “Depending on your organization, this could be a good approach,” says Burnett. “You don’t have to recreate the wheel, and it can be seamless with the rest of the business office. An outside firm can also weather fluctuations in physician hiring, allowing you to scale up when the organization is bringing on a lot of new physicians and reduce the effort when hiring slows.”

4. Leverage technology. Some organizations choose to create their own technology tools to facilitate the credentialing process. “I rely on multiple spreadsheets to keep track of effective dates, provider status, and payer requirements,” says Tanner. “By having a cheat sheet for each commercial payer, I can manage the different requirements and make adjustments as things change.”

Others opt to use specific credentialing software. “A solution that is especially designed to support credentialing can trigger action through automated reminders and alerts, ensuring providers don’t fall through the cracks,” comments Burnett. “You can also pull up a provider record and see the status for all payers in one location.”

5. Build relationships with payers. While technology can enable an efficient process, healthcare organizations cannot ignore the human element when it comes to credentialing. “Strong relationships with payers are key,” says Burnett. “That way if there are problems or issues with a provider’s application, you can pick up the phone and resolve them in real time, instead of waiting for a letter or, even worse, receiving no communication at all.”

Good relationships can also allow an organization to be more proactive. “Having a strong rapport has been helpful on many levels,” comments Tanner. “First, the reps give me the heads up when things are changing so I know ahead of time instead of after I send all the information. Second, if we have a situation where we need to expedite approval, they can sometimes move the process along. In particular, if there is a hold up on their end, they can work to get to the bottom of it.”

A Little Work Goes a Long Way

While improving provider credentialing may not be a top priority for every organization, having a streamlined process can ensure timely reimbursement and prevent unnecessary delays that could impact revenue and patient satisfaction. Developing consistent policies, allocating the appropriate resources and technology, and building relationships can help your organization onboard physicians faster and smoother.


Originally published Tuesday, July 22, 2014 by HFMA. Kathleen B. Vega, author.

Topics: credentialing, Provider Credentialing, Managed Care, Outsourced Managed Care

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