Archive for the ‘Payer Fraud, Abuse, Provider Scoring’ Category

Outcomes Analysis is nothing new to healthcare payers. Like any other business, health insurers need to know whether their expenditures yield the best possible results for the health of policy holders and the ‘health’ of their ongoing corporate enterprise. Unlike other businesses however, health payers are operating in the volatile reform-focused arena of medical care. Treatment decisions are quite naturally not in their hands but in the hands of physicians whose diagnoses and applied responses to symptoms still vary dramatically. In addition, payers will now have to deal with new federal guidelines governing medical loss ratios (MLR):

CMS is supposed to work with state insurance regulators to make sure that insurers spend at least 85% of the premiums collected from large groups and at least 80% of the premiums collected from small groups and individual insured’s on medical costs.”

 

Last year’s healthcare reform bill (ACA) included the formation of the Patient Centered Outcomes Research Institute (PCORI). The new institute has a lofty mission:

“To assist decision makers by advancing the quality and relevance of evidence concerning the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed through research and evidence synthesis that considers variations in patient subpopulations, and the dissemination of research findings with respect to the relative health outcomes, clinical effectiveness, and appropriateness of the medical treatments, services, and other items”

 

Dr. Scott Ramsey of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) points out that only very large organizations such as Kaiser Permanente & Geisinger Health can and have made the significant investments required to carry out the sort of in depth, IT intensive outcomes analysis needed to match the mission. Indeed, for the majority of payers some method of public/private funding to carry out outcomes research will be essential and is built in to the plan:

“The law stipulates that PCORI will be funded initially through federal subsidy and over time by a mixture of federal funds and a tax on public and private health insurers. By 2014, available funds will be to equal $150 million plus an annual $2 fee per Medicare beneficiary transferred from the Medicare Trust Fund, and an annual $2 fee per-covered-life assessed on private health plans adjusted for health expenditure inflation…”

 

We know from an increasing number of public & private research partnerships (such as those between pharma and universities) that improved patient treatment outcomes are already emerging. But are there financial benefits to be gained by payers who pursue outcome studies? After all, private healthcare insurance must remain a profitable business if it is to remain at all.

The answer is yes. Performing outcomes analysis to find providers with the most effective treatments is the best incentive for payers to migrate their insured clients to those providers. Doing so bolsters economic assurance that payer MLR’s will meet the guidelines set by the ACA while simultaneously delivering the most successful patient care. Higher rates of treatment success ultimately emerge in the form of reduced payer expenses.  The mechanism for realizing such benefits rests in the application of the broad range of healthcare IT software and services that are gradually transforming virtually every aspect of delivering medical care.

We are in the midst of a complex merger…a merger which revolves around the dramatic improvements of IT and analytics. These advances are being applied with increased intensity from drug safety and effectiveness to more personalized medicine using EHR’s…from pharmacoeconomics to fraudulent claims discovery and in every other sector of healthcare performance.

Whether seen from the perspective of the patient, the physician/provider or the payer, superior treatment results that emerge from diverse, steadily pursued outcomes research can only result in benefits for all aspects of the healthcare sector.

The expectation of a reformed healthcare system driven by new technology is firmly established.  The recently released IT Industry Business Confidence Index cites advances in healthcare as a key force behind the industry’s optimism.

The foundation for realizing IT based reform is the adoption of EHR’s. The CMS has an incentive program in place motivating care-givers to adopt certified EHR technologies.  The CMS is by far the nations’ largest payer, distributing approximately $800 billion in benefits.

Dr. David Blumenthal, the outgoing National Coordinator for Health IT, says we have now “officially entered the age of ‘meaningful use”.  As of Feb 8th some 18,000 providers have registered to apply for the incentive program aimed at achieving ‘meaningful use’ status. 1,000’s more are expected to register throughout the year.  Meeting the meaningful use criteria is a significant challenge with some critics claiming the process is too complicated and others finding ambiguity in its directives.

According to the HHS, “meaningful use means providers need to show they’re using certified EHR technology in ways that can be measured significantly in quality and in quantity.”  In stage one (2011 & 2012) this means establishing a baseline for data capture and information sharing. The HHS is reaching out to providers to inform them of the detailed steps.

State of the art healthcare IT, like all technologies capable of bringing about revolutionary change, requires much more than the simple acquisition of a new IT system. Those already committed to the journey, such as CMIO Dr. Joel Berman of Concord Hospital (NH) explains:

“Other essential factors include unwavering senior administrative support, engaged clinical champions, dedicated physician and nurse informaticists, effective change management, familiarity with lean principles and practices, enlistment of patients, and commitment to rapid cycle improvement tools and techniques. Eighty percent of the challenges are about people, processes, psychology, and sociology; only 20 percent are about technology…”

As more and more providers commit to the technology and the process of change that comes with it, IT based healthcare reform gains significant momentum. There is no question that everyone wants the benefits that fully applied healthcare IT can ultimately bring:

  • Improved quality of patient care
  • Superior treatment outcomes
  • Increased efficiencies from enhanced data management
  • Cost reduction throughout the healthcare system
  • Anti-fraud management through advanced analytics

The only question is how rapidly providers will adopt the new healthcare IT and fully commit to achieving meaningful use. The indicators so far in 2011 point to steadily increasing commitments.

It’s been a year of steady and encouraging progress in the fight against fraud and waste in the healthcare sector. The Inspector General’s office reports an expectation of significant total savings in many sectors for fiscal 2010, with a noteworthy $3.8 billion coming from investigative receivables.

 

“…We are particularly encouraged by the success of our partnerships with HHS and the Department of Justice through the Health Care Fraud Prevention and Enforcement Action Team (HEAT),” Inspector General Daniel Levinson said in a news release.

 

Use of advanced predictive analytics in preventing fraud & waste is gaining a prominent role in the battle. At a recent healthcare fraud prevention summit HHS Secretary Kathleen Sebelius and Attorney General Eric Holder announced that the CMS will be acquiring new analytic tools. The CMS is soliciting for “state of the art, fraud-fighting analytic tools to help the agency predict and prevent potentially wasteful, abusive, or fraudulent payments before they occur.” It’s the “before they occur” aspect of the analytics that brings the greatest potential for arresting and reducing the sharply rising costs in the current healthcare system.

The CMS, with new and expanded authority,
Will be able to take anti-fraud action before a claim is paid.

 

“By using new predictive modeling analytic tools we are better able to expand our efforts to save the millions – and possibly billions – of dollars wasted on waste, fraud and abuse.” said CMS Administrator Donald Berwick, M.D.

 

Customizable analytics software & services such as IBM’s Fraud and Abuse Management System is providing the state of the art solutions now needed. ‘FAMS’ is capable of sorting through information on tens of thousands of providers and tens of millions of claims in a matter of minutes…creating suspicion indices using almost 1,000 behavioral patterns in a wide range of specialties. The highly customizable system yields rapid results as the analytic modeling tools reveal potentially fraudulent activity, waste, mis-management of funds and other sources of loss. The software, tools and services needed to combat fraud and plug many other fiscal leaks in our ailing healthcare system are ready for frontline deployment.