The U.S. federal government’s partial shutdown entered its seventh day as of Monday. More than 800,000 federal employees across dozens of agencies were furloughed, causing certain service-providing departments across the country to shutter. Additionally, preschool programs like Head Start, government contractors, and hotel/tourism businesses dependent on national parks have all been impacted. Lockheed Martin began furloughing roughly 3,000 employees this week. Since the shutdown began as an attempt to defund key parts of the Affordable Care Act, the shutdown could shape healthcare and some aspects of healthcare business process outsourcing.
Here’s what you need to know about how the shutdown will affect healthcare in general:
- Ironically, the most prominent part of the healthcare law is not affected. Eligible uninsured Americans are still able to sign up for online healthcare exchanges. Most of the money for the Affordable Care Act comes from new taxes and fees, as well as from cost cuts to other programs like Medicare and other types of funding that will continue despite the government shutdown.
- The most dramatic impact that the shutdown could have on the healthcare law would be to make it harder for the government to address bugs in the online health insurance exchanges. This is especially problematic when it comes to the young adult demographic, who have the highest expectations for purchasing products online and are expected to be a key part of the Affordable Care Act buy-in.
- The National Institutes of Health will stop accepting new patients for clinical research and stop answering hotline calls about medical questions.
- The Centers for Disease Control and Prevention will stop its seasonal flu program and have a “significantly reduced capacity to respond to outbreak investigations.”
- New applications for Medicare and Social Security benefits will not be able to be processed.
How the shutdown may affect healthcare BPO:
The 8th annual National Health IT Week is being held this week, September 16th to 20th. The week consists of events in Washington DC and across the country. It’s a collaborative forum where public and private healthcare constituents work in partnership to educate industry and policy stakeholders on the value of health IT. Approximately 200 public and private sector organizations are participating in the event — vendors, provider organizations, payers, pharmaceutical/biotech companies, government agencies, industry/professional associations, research foundations, and consumer protection groups — to express the benefits that health information technology brings to U.S. healthcare.
Comprehensive healthcare reform is not possible without system-wide adoption of health information technology. And as a result, healthcare business process outsourcing coordinates with health IT to play an important role in improving the quality of healthcare delivery, increasing patient safety, decreasing medical errors, and strengthening the interaction between patients and healthcare providers. BPO can do so by easing the medical records transition from paper to electronic records.
“Meaningful Use” sets the standard for electronic records
The transition to electronic records is especially important to stakeholders in health IT. A quality BPO company can convert paper records to electronic files with medical-specific scanning, indexing, sorting and archiving. Such companies can also convert microfilm to an electronic format. The conversion would help providers and hospitals to eventually achieve “meaningful use” standards.
Meaningful use is the set of standards defined by the Centers for Medicare & Medicaid Services Incentive Programs that governs the use of electronic health records and allows eligible providers and hospitals to earn incentive payments by meeting specific criteria.
The benefits of the meaningful use of EHRs include:
On October 1st, less than two months away, the health insurance exchanges portion of the Affordable Care Act (ACA) will go into effect. The ACA is a large and complicated law – nearly 1,000 pages long. Some portions went into effect as of 2010 with major provisions phased in by 2014 and remaining portions by 2020. Changes in the healthcare industry have led to a growth in healthcare BPO. But how exactly will the Affordable Care Act impact outsourcing?
First, it’s important to understand the key provisions. The ACA will consist of:
- Basic benefits package defined by the federal government
- Increased Medicare payroll tax on upper income earners
- Penalty for employers (with 50+ employees) who do not offer healthcare
- If an employer doesn’t offer insurance, people will be able to buy it directly in the Health Insurance Marketplace.
- Tax credits to small business – by 2014, 50 percent of the employer’s contributions.
- The Medical Loss Ratio. At least 85 percent of all premium dollars collected by insurance companies for large employer plans must be spent on healthcare services. For plans sold to individuals and small employers, at least 80 percent of the premium must be spent on benefits.
- Eliminating annual limits on insurance coverage for new plans and existing group plans.
- No out-of-pocket for many preventive services. All new plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance.
- Children up to age 26 can stay on their parent’s health insurance plan.
- No denial of coverage due to a pre-existing condition.
- Insurance companies cannot limit the coverage someone receives over his or her lifetime.
- Expand who will be eligible for Medicaid. States will receive 100 percent federal funding for the first three years, phasing to 90 percent federal funding in subsequent years.
- The law provides consumers with a way to appeal coverage determinations or claims to their insurance company.
- Tax credits for middle-low income uninsured. These individuals may also qualify for reduced copayments, co-insurance, and deductibles.
- The Individual Mandate. People who are not already covered or fully subsidized will be required to purchase coverage or face a penalty – with some eligible to receive subsidies towards private insurance premiums.
Four observations on how the Affordable Care Act will impact healthcare BPO:
With the ever-changing landscape of the U.S. healthcare system, the U.S. healthcare business process outsourcing market is undergoing a significant transformation. This year, the U.S. healthcare payer, provider, and pharmaceutical outsourcing markets are valued at $11.1 billion, $6.8 billion, and $65.6 billion.
According to a study released this month by Markets and Markets, the U.S. healthcare outsourcing market has great potential for growth owing to the measures taken by the government to curb the ever-increasing healthcare costs.
Other factors that have led to the growth of the market include developments and innovation in information technology and regulatory changes. Approximately 75 percent of U.S. healthcare companies outsource their work to external locations. This is due to the shortage of qualified staff in key positions, such as nurses and coders, and due to the new set of rules and regulations that they need to comply with. Some services that are commonly outsourced are insurance claims processing, adjudication and receivables management, billing and coding services, radiology reporting, transcription services, and clinical outsourcing, among others.
From the outside, the average billing cycle for a medical appointment looks pretty simple: Go to the doctor, pay for the visit (with your own money or insurance), repeat as necessary.
For healthcare providers, though, that couldn’t be further from the truth. The reality is more like this:
- Identify the patient
- Pre-register the patient
- Patient arrives, is treated
- Patient pays, or, in most cases, insurance claim is filed
- Claim is processed
- Insurance company may follow up to dispute claim, or deny coverage
- Office follows up with patient to receive disputed payment
- Payment may go into debt collection
- Account closed.
From a two-step process to a nine-step process, in the blink of an eye. The thing is, providers only really care about one thing: getting paid. And that’s where business process outsourcing can come in. Providers receive payments and explanations of benefits in a variety of forms, forms that vary from payer to payer. Aetna may have one form, while Medicaid and Medicare may have others. The manual matching of these forms, and syncing them to a specific provider’s system can take weeks, delaying payment along the way. According to industry data, 2.5 billion commercial payer healthcare remittances are handled manually every year.
As President Barack Obama’s Affordable Care Act starts to take hold nationwide, the opportunities are beginning to come into view. And aside from patient care, one of the biggest changes may be a boon to the business process outsourcing world: There will be paper. Lots of paper.
The United States spends more on healthcare — both as a proportion of gross domestic product and on a per-capita basis — than any other nation in the world. Current estimates put U.S. healthcare spending at approximately 15 percent of GDP, and the health share of GDP is expected to continue that upward trend, reaching 20 percent of GDP by 2016.
Worldwide, the global healthcare BPO market is growing 21 percent year over year; provider-specific BPO is growing at an astonishing 32 percent rate. All of those numbers can only grow with the ACA.
According to the Society of Actuaries, insurance companies will pay an average of 32 percent more medical claims due to the ACA, and premiums are expected to rise as well. Claims costs will also rise because insurers will no longer be allowed to turn down patients with pre-existing conditions. More patients, more paperwork, more business process outsourcing.
“I think it’s very likely we’ll see outsourcing grow” as a result of the Affordable Care Act, Joanne Spetz, professor at the Philip R. Lee institute for Health Policy Studies and Center for the Health Professions at UC-San Francisco told California HealthLine.
Third in a series
In healthcare, automating every step of the pre-adjudication cycle – meaning anything that happens before the payment of a claim – allows claims to be processed more efficiently and more accurately. As claims processing improves, auto-adjudication rates rise and the total cost per claim falls.
Healthcare payers and benefit administrators are provided with pre-adjudication technologies that replace error-prone human processes and provides applications for PPO network management, document management, workflow and overpayment protection. These solutions improve adjudication rates, increase payment accuracy and enhance customer service. Simply put, business process outsourcing can provide better, faster and more cost-effective processing than any manual, in-house paper-based method.
Second in a series
The review, investigation and processing of claims can be time-consuming and prone to human error. By initiating an advanced healthcare claims processing system, you can alleviate many of these issues and ensure the accuracy of all claims processed.
Paper and electronic data interchange (EDI) claims can be imaged and converted to electronic format and transmitted back to integrate with the appropriate claim system. With a special focus on the front-end operations for claims processing, 100 percent electronic claims submission can be enabled to reduce administrative costs and improve auto-adjudication rates.
The most trusted BPO companies have made significant investments in enterprise software and infrastructure development, specifically addressing data security requirements. Annual external audits can ensure compliance; and multisite processing models can allow for superior business continuity and disaster recovery capabilities.
First in a series
For years, Electronic Data Interchange (EDI) claims submission has reduced payer rejections and administrative costs while increasing the speed of the payment. So why do EDI transactions still have adjudication issues? The reason is that the best data the provider has is simply not good enough.
Payers and providers have natural differences in update cycles, systems and business processes that contribute to adjudication errors. Payers contract with providers at longer periods than members – and members often update their information only annually.
More often than not, data is never given to the provider until an encounter, so demographic data becomes stale very quickly. This means providers have little opportunity to get patient data corrected. Plus, they have limited resources and capabilities to keep their own demographic data synchronized with every payer.
Healthcare claims processing can involve expensive and serious consequences if the data is not processed correctly. To address these issues, healthcare payers and benefit administrators are turning to digital pre-adjudication technologies to replace error-prone human processes and increase claim payment accuracy. This involves electronically organizing the data before the payment of a claim is made.
Using technology instead of manual processes allows the solution to be customized to adapt to specific business requirements and improve performance without additional capital investment. Advanced BPO providers can automate the claims process, including claim data cleaning to increase claims quality and reduce overall costs.
With the right technology, healthcare claims can be improved so that they match system files; thus, lowering reject rates and improving adjudication rates all while ensuring HIPAA security and consistency.
Automation Technology Can Advance the Claims Process
The latest automation technology can increase data accuracy, lower costs and bring faster cycle times to the healthcare claims process. The technology can automate and integrate all aspects of pre-adjudication claims processing, including cleaning and enhancing claim data.