Smart CFOs keep focus on ICD-10

When the Centers for Medicare & Medicaid Servicdes announced a one-year delay for ICD-10 implementation in February 2012 – pushing the date back to Oct. 1, 2014 – some industry groups cheered, others jeered. What did CFOs do? The smart ones kept their focus and pushed forward with their implementation plans and schedules.

The trouble is there may not be enough smart ones.

“We’re seeing a lot of (CFOs) put their head in the sand,” said Mike Koehler, a director in the risk practice of solutions firm Crowe Horwath. “We’re seeing tremendous failure on an organizational level.”

According to Koehler, it’s imperative for healthcare provider organizations to have a steering committee and for that steering committee to keep the CFO and senior executives focused on ICD-10.

“We are telling clients they need to have the five pillars,” he said, referring to a committee that is comprised of an executive leader and a representative from the revenue cycle, from the clinical side, from IT and from coding/quality control.

“You have got to have a steering committee,” he emphasized.

Dawn Duchek, industry initiatives coordinator at medical clearinghouse Gateway EDI, agrees.

“One way to keep leadership focused on ICD-10 is to establish a steering committee made up of key stakeholders from each area of the practice,” she said. “This committee can report to executives on impacts, risks and costs associated with ICD-10 implementation, and play a lead role in helping each area of the practice with its integration needs.”

Duchek suggests a timeframe reality check for organizations that have taken their eyes off the ball.

“To help focus your leadership on ICD-10 preparation, consider sharing this information: It’s been six months since the announcement of the proposal for a year-long delay to the compliance deadline,” she said. “If your practice has put your ICD-10 implementation on hold, you’ve already lost six months of crucial preparation time.”

Holly Louie, chair of the Healthcare Billing & Management Association’s ICD-10/5010 committee believes it is incumbent upon the smart CFO to keep moving forward with their ICD-10 plans.

“The fact is, if you are accountable for the funding or operational implementation, the ball is in your court. Slowing or stopping transition efforts is short sighted and could be a fatal error,” she said.

“If you were sure you would be ready by October 2013, you are in a great position. Don’t slow down or divert resources; move ahead with completing that process and plan for mitigation,” she added. “If you are behind the curve or not out of the gate, the extra time gives you a rare opportunity to position for success.”

Koehler and Duchek both believe an insightful CFO can use the ICD-10 implementation process to improve their organizations.

“The CFO, if he or she is shrewd, is going to sit back and try to figure out how they can turn ICD-10 into a big win,” said Koehler. “They are going to have a better relationship with payers. They should improve their relationship with physicians. And they can also change some of the operational gotchas.”

“As you’re identifying ways to prepare for your ICD-10 implementation, take the opportunity to note other processes that could be improved to save time and resources,” recommended Duchek. “Your practice should begin making those process changes now, so you are working at your most efficient level possible before ICD-10 hits.”

For those providers that don’t stay focused on developing a solid plan for ICD-10, Koehler offers a doomsday prediction.

“We’ve talked to a lot of CFOs who are now saying ‘this is complicated. This is a huge operational change. This is a house-wide initiative,’” said Koehler. “What’s going to happen is the ones who were asleep at the switch are going to have this pass them by. We see some institutions that are not going to be around. They are just not going to have the wherewithal.”

Is it possible to build a robust ‘green’ pharmaceutical cold chain?

The pharmaceutical industry is facing pressure from the public and governments to reduce its environmental impact.

As focus shifts towards reducing carbon emissions, the pharmaceutical industry finds itself facing a dilemma in maintaining strict safety standards while improving its environmental credentials.

In an article, “Cutting Waste in the Cold Chain”, Geraint Thomas, technical director at Laminar Medica wrote: “The suppliers and users of temperature-controlled packaging systems are under increasing pressure to reduce the environmental impact of cold chain shipping. The widespread introduction of formal corporate social responsibility policies, together with new customer expectations and more strict regulations, mean that developing a suitable packaging system is more challenging than ever.”

But can a resource and energy-intensive area like cold chain ever become truly sustainable? The Cold Chain IQ article, “Can the Cold Chain Ever Become Truly Sustainable?” addressed this challenge: “In many countries around the world the idea of an environmentally friendly cold chain is just not viable. This does not represent a lack of commitment to green issues, but more the challenge of establishing even a basic cold chain in the first place.”

Thomas explained the importance of considering how your temperature-controlled packing system impacts on the environment, and suggested approaches for minimizing waste and costs.

“While it might seem at first necessary to reduce the amount of packaging used, it is important to note that under packaging is usually far worse for the environment than over-packaging. Over-packaging by 10 percent means that 10 percent of the resources needed to produce the packaging are wasted, and extra fuel will be needed to distribute it. However, under-packaging that results in the product being spoiled or damaged wastes 100 percent of the resources used to produce both the contents and its packaging, and all the fuel used to distribute it," he said.

Mark Goh, director of industry research, The Logistics Institute of Asia Pacific, told Cold Chain IQ, in order to “go green” in the pharmaceutical cold chain, you must first identify the areas where you can green and which are going to be more amenable.

He said: “I think the low hanging fruit in this case would be the secondary packaging. And today the good news is there are smart, astute service providers out there in the marketplace focusing on making sure that packaging is reusable and particularly in the area of secondary packaging.”

Goh commented on the fact that we are already seeing investment by logistics providers in this area. “Good service providers in logistics, such as UPS and DHL in fact have invested good money into this area. One example that UPS is doing is to look at the end of life of products and packaging. If done correctly it goes along way to recapture much of what we produce and not really consume directly. Today in the context of Asia, there are legislations that are driving the use for reusable packaging more so than the customers or the companies themselves, and that is a good sign,” he continued.

However, there are still many doubts as to how green the pharmaceutical cold chain can be. “Personally I doubt if we could have an entire green cold chain from source to point of supply. Certain links can certainly be greener than others. The biggest challenge would be to have green vehicles, which often form at least three links in the chain,” John Ackerman, chairman South African Refrigerated Distribution Assn., said to Pharma IQ.

The participants were asked to pinpoint three main solutions in which their organization was investing to improve the temperature-controlled supply chain.

The balancing act of reducing the environmental impact of pharmaceutical cold chain distribution while reducing cost is growing in importance among all stakeholders.

Building a robust, green pharmaceutical cold chain is not just about the packaging. Installation of renewable energy technology at the warehouse and utilizing alternative fuels during distribution are also avenues being explored for reducing the supply chain's carbon footprint.

This exploration looks set to continue as companies seek to implement green strategies efficiently and that can ultimately reduce cost.

Article contributed by Andrea Charles, Cold Chain IQ editor. Healthcare Packaging magazine recently signed a marketing partnership with global events producer IQPC to expand each organization’s reach into the cold chain packaging and logistics marketplace. The agreement will include coverage of the 10th Anniversary Cold Chain & Temperature Management Global Forum event in Chicago Sept. 24-28, 2012.

Source: healthcarepackaging

7 Projects Hospital CFOs Should Focus on in the Final Months of 2012

For the federal government, the beginning of the 2013 fiscal year is less than two weeks away. While most hospitals and health systems do not run on the federal government's fiscal year, the end of September does represent a turning point in the year.

For hospital CFOs, this may mean a few more months to hunker down and go after several financial projects before the calendar flips to a new year.

Tim Jodway is the CFO of Garden City (Mich.) Hospital. He's been with the 323-bed hospital since June 2010 and has more than 23 years of financial experience at other Michigan hospitals and auditing firms. Here, he gives some basic projects he is currently focused on at the hospital and explains why other healthcare CFOs should pay attention to them in the waning days of 2012.

1. Meaningful use and electronic health records. The federal government has given hospitals and other providers a major incentive to become meaningful users of EHRs in the form of direct repayment. As of July 2012, CMS' Medicare and Medicaid EHR Incentive Program has paid eligible hospitals and professionals more than $6.5 billion in payments, and there is still money on the table for hospitals that may be late to the party.

For Mr. Jodway, the meaningful use funds are not the only reason health information technology is so important for hospital CFOs. EHRs and other health IT initiatives are very expensive, and the CFO must ensure those projects stay under budget.

"If you don't make wise decisions about health IT hardware and infrastructure, you could easily spend an unlimited amount of money," Mr. Jodway says.

2. Point-of-service collections. After health IT, Mr. Jodway says the biggest area of concentration is the revenue cycle. Hospitals are becoming much more cognizant of the potential revenue leakage in coding, billing and collections, especially as budgets and reimbursements get tighter.

Point-of-service collections are of particular emphasis for Mr. Jodway. He says when a patient comes into the hospital for an elective procedure, both the patient and hospital should have an idea of what the co-insurance, co-payments and other fiduciary responsibilities are.

Garden City Hospital is currently implementing software to help with point-of-service collections. The software is based off data from health insurers and the hospital's charges — eventually resulting in specific costs for the patient upon arrival. "Getting the right data back from insurance companies is the biggest challenge, and then integrating that with our data is the next hurdle," Mr. Jodway says. "Our main goal is to communicate to the patient what their responsibility-amount is."

3. Clinical documentation improvement. As Garden City Hospital readies itself for ICD-10 — and the general trend toward greater accountability — Mr. Jodway says the hospital has focused on improving its clinical documentation through CDI specialists. Registered nurses, who are the CDI specialists, are being trained on extensive documentation practices and are ensuring there is no miscommunication between physicians and coders.

"Clinical documentation is going to be even more important with ICD-10, as documentation from doctors on the floor will have to support the correct DRG," Mr. Jodway says. "This involves some software and a lot of training. The CDI nurses want doctors to document [their] thinking."

4. Auditing efficiency. Medicare Recovery Auditors, or RACs, have been cited as major administrative burdens for hospitals for the past several years. In the second quarter of 2012, RAC activity continued to increase, as roughly one-third of hospitals said they spent more than $25,000 managing their RAC process.

However, Mr. Jodway says Medicare RACs are not the only auditing bugaboos. He says Garden City Hospital has also seen an increase in claims denials from Medicaid HMOs. Most importantly, hospitals need to monitor where auditing activity is coming from and make sure the process is as smooth as possible, even though it may be a hassle.

"There hasn't been a huge amount of dollars we've had to return. It's just the administrative burden of reviewing all these records," Mr. Jodway says. "Every couple weeks, our HIM department is always pulling records."

5. Innovative programs for the uninsured. Although the Patient Protection and Affordable Care Act will greatly expand health coverage to millions of Americans, that concept will not really start to materialize until 2014. In addition, there will still be a sizable uninsured population after the PPACA fully takes effect.

Mr. Jodway says Garden City Hospital is helping the uninsured in a unique way. Uninsured and self-pay patients sometimes don't have the means to pay for the entire cost of their care, and the hospital is able to write the provided care off as charity care. However, the process is not easy for either side. "Usually, a patient goes through the system, fills out charity care paperwork, may or may not get a discount and may or may not pay," Mr. Jodway says. "It's a hassle for both sides."

The hospital has used a concept called community assisting pricing for a little while now. Essentially, the hospital sets a heavily discounted fee schedule for uninsured patients. If the patient is able to pay off the discounted price at the time of service, the bill is automatically settled. While the hospital does not collect the full amount, some revenue is better than none. "With this fee schedule, we say if you don't have insurance, pay this amount, and you're good," Mr. Jodway says.

6. Physician engagement. Healthcare reform is putting physicians, especially primary care physicians, at the forefront of the battle lines. Mr. Jodway says hospital CFOs have to be a part of making sure the physicians are integrated within the system. That job should not lie solely in the lap of the CEO, CMO or other physician leaders.

7. Lean-based process improvement. Over the past decade, Lean principles — which emphasize the preservation of value-based processes and the elimination of wasteful byproducts — have become pillars of success for hospitals. Mr. Jodway agrees, saying hospitals need to examine every process, including things as simple as patient scheduling, to make sure efficiency prevails. "Like most places, we have to get more efficient," Mr. Jodway says. "For example, how can we reduce length of stay by cutting out waste in the system?"

Source:beckershospitalreview

3 reasons why hospitals should adopt EHRs

Hospitals and physician clinics continue to adopt electronic health records (EHRs) at a growing rate. An American Hospital Association (AHA) study found that 81% of hospitals plan to implement EHRs to achieve meaningful use so that they may become eligible for incentive payments. Those healthcare professionals who do decide to implement a certified EHR system in the near future will benefit themselves by increasing office efficiency, acquiring government incentives and avoiding penalties for not complying.

1) Increasing Efficiency

The prime reasons for adopting EHRs are for improved quality of care and an advanced level of efficiency. So it should not be a surprise that physicians found that to be true. Practice Fusion interviewed 100 primary care providers and found that 59% cited the use of new technology as a way of making things easier for their practice. Additionally the survey found 11% percent of doctors saying improvements in healthcare technology impacted their practice positively, and 7% said electronic health records were a positive trend.

2) Government Incentives

Next to increasing efficiency and improving patient care, eligible professionals may receive incentive payments for implementing, adopting and demonstrating meaningful use of their electronic health records. Those eligible may receive as much as $44,000 over 5 years under the Medicare EHR Incentive Program and up to $63,750 over six years under the Medicaid EHR Incentive Program. In order to take advantage of the incentive payments 41% of office-based physicians are currently planning to attain meaningful use of certified EHR technology according to a National Center for Health Statistics (NCHS).

The University of Kentucky Healthcare and Central Baptist Hospital in Lexington are leading the way in this endeavor. They are the country’s first hospitals to receive incentive bonus checks under the 2009 stimulus law. The University of Kentucky received $2.8 million, and Central Baptist received $1.3 million. Kentucky should be receiving over $100 million in incentive payments for hospitals over the next four years to ensure electronic health record systems are implemented and maintained in the healthcare community.

3) Avoid Penalties

Healthcare professionals who do not adopt an EHR system by 2015 will receive a 1% reduction in Medicare payments and the penalties will grow to 3% over the next three years according to the Academy of Orthopedic Surgeons. In order to receive payment for the Medicaid Incentive Program meaningful use must be met by 2016, however there is no Medicaid reimbursement penalty for not adopting an EHR after 2016. Medicare incentive payments are greatest in 2011 and continue decreasing for the next five years. This means early adopters will have the greatest incentive advantage compared to hospitals and physicians which adopt in a few years.

What will the future hold for Electronic Health Record adoption?

Source: healthcarefinancenews

6 of the biggest segments in healthcare M&A

Mergers and acquisitions generally occur because organizations want to become bigger or they want to acquire capabilities that will make them more effective, but no matter what the reasons for the transactions, they aren't simple.

"Consolidating a healthcare organization is a big deal. There's a lot of change that has to be thought through regarding impact on people's lives," explained Doug Fenstermaker, executive vice president of healthcare for Warbird Consulting Partners, a professional services firm with a focus on healthcare financial management. "Organizations and infrastructures have failed because they didn't think through these integrations," added Fenstermaker's colleague Jim Fox, director and senior CFO consultant.

Fenstermaker and Fox gave Healthcare Finance News this list of six types of M&A occurring around the nation right now in order of significance.

1. Hospital-to-hospital integration.

Many hospitals are trying to figure out how to be more regionalized with their delivery of care. With multi-hospital systems not all services will be available everywhere. "Some services may be better suited centralized in one facility to get the most economy of scale/quality of care," said Fenstermaker. Consolidating clinical services reduces the amount of cost – like distribution services – a hospital has.

2. Clinic-to-hospital integration.

The allure of the independent doctor is going away. Physician clinics are becoming absorbed by larger hospital systems. Doctors are leaving independent practices (and operational overheads) to become primary care physicians solely or to focus on areas of specialty, and they want to become part of a larger system when they do.

3. Physician-to-physician integration.

Some larger physician clinics are integrating with other physician clinics. "Those organizations with 300 doctors are getting their economy of scale relative to their size. But they're opening up to smaller clinics and working out relationships based on partnerships with insurers or surrounding area hospitals," said Fox.

4. Hospital-to-doctor clinic integrations.

Doctors are joining hospital systems. They're becoming part of multi-state organizations where systems have restructured health plans, or are acquiring/expanding health plans to large health insurers. "Sometimes," Fox said, "they're outright merging to become big integrated delivery networks."

5. Joint management companies

Management services organizations (MSOs) are reaching out to smaller organizations to give them an opportunity to participate with larger systems without necessarily being acquired or controlled. "Not everyone wants to be part of a big organization. They want to retain their independence, but have an affiliation with an organization that has resources and strategies. So, these MSOs provide services and capabilities small organizations may not normally have access to," said Fox.

6. Payer acquisitions

There's a movement for consolidation happening on the payer side, too, with both bigger groups and payers acquiring physicians. "This has some hospital systems concerned about payers who have a lot of capital on their balance sheet," said Fenstermaker. "They could be come a very disruptive force in the relationship between physicians and hospitals."

Source: healthcarefinancenews