Since the performance year 2021, Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) were encouraged to report through the Alternative Payment Model (APM) Performance Pathway (APP), which represented a significant pivot in the Centers for Medicare & Medicaid Services (CMS) approach to value-based care initiatives.  

Designed as a streamlined reporting framework, APP aimed to enhance accountability among healthcare providers by closely aligning their performance with patient outcomes and cost-effectiveness. This shift underscored the transition from volume-driven metrics to a model that prioritizes high-quality, patient-centered care—an essential facet of modern healthcare delivery. 

New Opportunities Arise for Alternative Payment Model (APM) Performance Pathway (APP) Reporting  in 2025

One of the key innovations within the APP was its emphasis on simplifying data submission processes and encouraging greater participation in APMs.  

However, CMS is phasing out the traditional Web Interface reporting. Performance year 2024 is the final year in which the Web Interface can be used to report quality metrics for Shared Savings programs. In other words, MSSP ACOs will be mandated to report through APP in performance year 2025, according to the CMS Physician Fee Schedule final rule.

With this transition, MSSP ACOs can leverage advanced data analytics platforms and dynamic tools that provide real-time insights into performance metrics. Ultimately, this new pathway, while it could unsettle some ACO-related processes, holds immense potential to drive improvements in patient experiences and outcomes through enhanced collaboration and data transparency across all levels of care.  

How CMS Decision to Sunset Web Interface Could Impact ACO Success 

With the impending phase-out of the Web Interface for MSSP ACOs, there’s an urgent need to pivot toward new APP requirements. This transition isn’t merely a technical upgrade; it demands a strategic overhaul that affects workflows and resource allocation across the board.  

It’s important to note that the rush to adapt may expose vulnerabilities in existing systems, requiring cohesive team efforts. The upcoming changes bring increased reporting demands that directly impact operational efficiency.  

Stakeholders expect a continuation of quality data submission requirements, which include: 

• Annual quality data submissions. 
• Specific types of data collection. 
• An unyielding emphasis on accuracy, including benchmarking compliance and quality outcomes. 

MSSP ACOs must focus on meeting these requirements and invest in practical training and comprehensive data and analytics solutions to help establish a strong foundation for accurate, reliable reporting in 2025.  

Why APP Reporting is Essential for MSSP ACOs  

APP reporting is a cornerstone of ACO operations, not merely for compliance but as a strategic tool for financial viability.  

Achieving quality benchmarks through accurate reporting directly impacts CMS payment incentives. When MSSP ACOs successfully meet these standards, they unlock significant financial rewards that bolster their overall budget, allowing them to reinvest in patient care initiatives and innovative practices. Conversely, failure to report accurately can lead to steep penalties, threatening the foundation of an ACO’s operational health. 

Moreover, the intricacies of APP reporting forge a direct connection between performance metrics and earned savings. By capturing timely patient outcomes and resource utilization data, ACOs can adapt their care delivery models to avoid costly missteps. This proactive approach aligns seamlessly with CMS’s core objectives—enhancing patient outcomes while driving down healthcare costs.  

As such, robust APP reporting doesn’t just fulfill regulatory obligations; it catalyzes transformative change within organizations that strive to demonstrate value rather than volume. 

How APP Reporting Benefits MSSP ACOs 

Quality Improvement 
 
APP reporting is a powerful tool for ACOs. Reporting quality metrics requires comprehensive data aggregation and exchange that can inform clinical decision-making. By analyzing the rich, multifaceted data generated through APP reporting, MSSP ACOs can identify quality improvement opportunities and tailor interventions to more effectively meet patient population needs.  

Rather than relying on traditional performance metrics alone, MSSP ACOs gain access to timely insights about clinical outcomes and operational efficiency. This allows them to make informed decisions that enhance patient care while adhering to progressively demanding standards. 

Pay for Performance and Transparency 
 
As noted earlier, financial performance is another critical aspect where APP reporting proves invaluable. Meeting regulatory benchmarks secures higher reimbursements and positions MSSP ACOs favorably within the evolving landscape of value-based care.  

As reimbursement models shift toward outcome-driven compensation, effective utilization of APP data and analysis enables organizations to demonstrate their commitment to quality and efficiency, driving revenue and sustainability. 

Regulatory and Legal Compliance 

Moreover, staying attuned to CMS goals provides a competitive edge in an increasingly saturated healthcare market. By leveraging advanced reporting capabilities aligned with CMS objectives or other regulatory or legal requirements, the intelligence gathered from APP reporting submissions allows MSSP ACOs to attract new patients and partners seeking high-quality care while bolstering stakeholder confidence in their operational efficacy.

This strategic alignment fosters a cycle of improvement that ultimately enhances patient satisfaction and drives organizational growth—a win-win scenario for MSSP ACOs navigating today’s complex healthcare environment. 

Toughest APP Reporting Challenges Explored 

• Data Aggregation from Disparate Systems: One of the foremost challenges MSSP ACOs face in their APP reporting is the inherent complexity of aggregating clinical and claims data from disparate systems. Each provider may utilize varying technologies, leading to inconsistent data formats that obfuscate the accurate picture of patient care and outcomes. As MSSP ACOs strive to consolidate this information, they often find themselves mired in a convoluted process that can delay reporting and compromise data accuracy. 

• Data Normalization and Standardization: Compounding these issues is the pressing need for reliable data standardization and integration across a healthcare data and analytics ecosystem. A lack of harmonized protocols means that even when data is gathered, it may not be compatible or comparable across different systems. This disconnect not only hampers effective decision-making but also limits organizations’ ability to adequately identify areas for improvement.  

• Resource Constraints: Moreover, resource constraints, whether in terms of time, staffing, or technology, further exacerbate these challenges. Indeed, many MSSP ACOs grapple with limited personnel who are already stretched thin and lack the advanced technological tools necessary for efficient report generation.  As they navigate these hurdles, a renewed focus on innovative solutions will be essential if MSSP ACOs wish to enhance their reporting capabilities, advance quality patient care, and meet federal regulatory measures. 

Conquer APP Reporting: Actionable Tips for MSSP ACO Readiness 

As MSSP ACOs gear up for APP’s reporting requirements in 2025 and CMS’s decision to retire its Web Interface, the emphasis on investing in the right tools and expertise cannot be overstated. This transition demands a robust infrastructure that enhances compliance and ensures data accuracy, which is crucial for successful outcomes.

Exploring innovative solutions that streamline submissions can significantly reduce administrative burdens, allowing these ACOs to focus on managing population health rather than getting bogged down by administrative work. 

Partnering with experienced vendors like Health Catalyst can facilitate this shift, providing tailored support and allowing MSSP ACOs to leverage specialized knowledge and resources throughout the transition process. These collaborations can also offer deep insights into best practices and advanced technologies that integrate seamlessly into existing systems, ensuring a more efficient path toward APP success and increased earning potential.  

Taking proactive steps now—such as standardizing data, implementing data and analytics solutions, and educating stakeholders about CMS requirements—will set ACOs up for sustained success under new APP provisions in 2025 and subsequent performance years. 

Additional Reading

Would you like to learn more about this topic? Here are three articles we suggest:

MVPs Demystified: Streamline MIPS Reporting with MIPS Value Pathways in 2024

MIPS and CY 2024: QPP Updates You Must Know to Boost Your Bottom Line

Why Healthcare Analytics Companies Are the Latest MVPs for Hospitals

Editor’s Note: This article is based on information presented during the following webinars: Insight Into the 2025 ICD-10 CM Updates and Insight Into the 2025 ICD-10 PCS Updates, presented by Mikki Fazzio, RHIT, CCS, Charge Integrity Specialist, Health Catalyst.

The Centers for Medicare & Medicaid Services (CMS) has announced the fiscal year (FY) 2025 updates regarding the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) and International Classification of Diseases, 10th Revision Procedure Coding System (ICD-10-PCS). These alphanumeric codes represent the framework for capturing and reporting diagnoses, health interventions, and procedures.  

Healthcare providers are required to implement these codes for patient discharges and encounters effective October 1, 2024. Preparation is essential for adhering to the new coding guidelines and for medical coders and healthcare professionals to optimize billing and reimbursement.

This article explores:

• Key mandatory ICD-10-CM updates,
• Modifications to Medicare Severity Diagnosis-Related Groups (MS-DRGs) and
• A summary of the ICD-10 PCS revisions for FY 2025.

Unpacking Mandatory 2025 ICD-10-CM Updates

The FY 2025 updates include more ICD-10-CM codes, from 73,674 to 74,044. This includes 395 ICD-10-CM additions, 13 revisions, and 25 deletions. Additionally, CMS added 429 new Present on Admission (POA) exempt codes and eliminated eight POA exempt codes.

As part of these changes, CMS released revisions to the ICD-10-CM codes across numerous chapters. These changes aim to enhance precision in coding various health conditions while correcting errors and expanding classifications to reflect emerging medical knowledge.

For instance, Chapter 1 includes revised codes related to certain infectious and parasitic diseases to correct spelling errors in the Ehrlichiosis group.

Further advancements can be seen in Chapter 2, where new codes have been introduced to differentiate between Hodgkin and non-Hodgkin lymphomas based on remission status. Additionally, chapters covering blood disorders introduce a new code for Fanconi anemia—a rare, inheritable condition leading to severe bone marrow failure.

These coding refinements underscore the growing recognition of rare diseases in medical literature and are expected to improve accuracy in tracking disease prevalence and treatment outcomes.

Expanded Diagnosis Codes Explored

Other notable updates include expanded diabetes subcategory codes under Chapter 4, which now account for presymptomatic stages of Type 1 diabetes and clinical severity indicators for hypoglycemia.

The updates also extend into mental health, with revised coding structures within Chapter 5 that categorize eating disorders by severity and remission stages.

New specifications for KCNQ2-related epilepsy and serotonin syndrome emerge from Chapter 6, further exemplifying the ICD-10-CM’s adaptation to incorporate a nuanced understanding of neurological conditions.

Chapter 21 sees an expansion aimed at genetic susceptibility concerning health factors such as obesity and epilepsy and tracking personal histories regarding sepsis risks.

CMS Updates MS-DRG System to Enhance Classification for Complex Procedures

CMS announced updates to the Medicare Severity Diagnosis Related Group (MS-DRG) system, which aims to improve the classification and specificity of complex medical procedures.

Among the notable changes was the creation of a new base MS-DRG 317, specifically designed for cases involving concomitant left atrial appendage closure (LAAC) and cardiac ablation procedures. Unlike many existing groupings divided into severity levels based on average costs, MS-DRG 317 will maintain a single level due to a lack of cost variation between these severity levels. This adjustment reflects an ongoing effort to streamline billing processes while providing a better representation of patient care complexity.

Further adjustments included updates in multiple Major Diagnostic Categories (MDCs). In MDC 06, for instance, procedures previously categorized under MS-DRGs 347 to 349 have been reclassified into MS-DRGs focused on major small and large bowel procedures.

Similarly, MDC 08 sees changes with interbody spinal fusion procedures being entirely restructured; three old DRGs have been eliminated in favor of eight new ones that aim to cover more specific surgical interventions and their associated complexities. Additionally, CMS added five diagnosis codes related to deforming dorsopathies to the logic list for these DRGs, enhancing clarity in cases treated under existing spinal surgery classifications.

Other revisions extend across several MDCs, including endocrine disorders and myeloproliferative diseases and disorders.

Updates to the 2025 ICD-10 PCS System Enhance Diagnosis, Procedure Codes

The FY 2025 updates to the ICD-10-PCS system introduced significant changes aimed at enhancing medical coding accuracy in the face of evolving healthcare technologies.

With the addition of 371 new codes and the deletion of 61, the total number of ICD-10-PCS codes now stands at an impressive 78,948. These updates emphasize the integration of innovative surgical tools, vital testing procedures, and advanced treatment techniques into the coding system. Yet, this year’s update does not revise existing titles or guidelines.

One notable area affected by these updates is the Medical and Surgical Section, which encompasses a wide array of body systems—from the central nervous system and cranial nerves to the lower arteries and lymphatic system.

Other impacted areas include advances in procedures concerning the hepatobiliary system and pancreas, as well as modifications related to skin treatments. The inclusion of new codes reflects not only technological advancements but also a commitment to ensure that emerging medical practices are accurately represented in health records.

Notable Advances in Medical Technology: Transforming Surgical Interventions for 2025

Indeed, exciting developments in medical technology and surgical procedures are on the horizon as healthcare providers prepare to integrate innovations into their practices. To that end, under the Medical and Surgical category, CMS highlighted several of these new approaches to improve coding accuracy for emerging medical technologies.

Among the most notable advancements is the OneRF Ablation System, which employs stereoelectroencephalographic (sEEG) radiofrequency ablation to target and destroy brain tissue associated with epilepsy. This pioneering technique significantly reduces seizure activity by carefully mapping out neuronal connections before intervention, ultimately offering new hope for patients whose conditions have not responded to conventional therapies.

In addition, the introduction of Quicktome represents a breakthrough in pre-surgical planning. This tool converts MRI sequences into comprehensive 3D maps illustrating white matter tracts within an individual’s brain. By allowing connectomic analysis of unique networks responsible for language, movement, thought, and emotion, Quicktome enhances surgeons’ understanding of a patient’s neurological landscape before any surgical intervention.

Another notable advancement is the LumiGuide for fiber optic 3D guidance during endovascular procedures. This technology provides 3D images of inside the vessel during a procedure to help direct the catheter into the branch vessels.

Similarly, advances such as the Lymphatic System Bypass procedure are designed to effectively combat lymphedema through newly established pathways between lymphatic vessels and veins, relieving this often-debilitating condition.

Enhance Your Diagnosis, Procedure Coding Accuracy in FY 2025

These updates collectively underscore a solid commitment to enhancing coding accuracy amidst rapidly evolving treatment approaches and technological advancements. With the introduction of new codes and revisions to existing ones, it is essential for providers to stay informed about these updates to ensure proper documentation and coding.

As these revisions roll out nationwide, with the hopes of improving diagnosis accuracy and patient care management and documentation strategies, healthcare professionals will need comprehensive solutions and training on these updated codes to ensure proper implementation across practices.

For a comprehensive list of new codes and revisions to existing codes, including major complication or comorbidity (MCC) and complication or comorbidity (CC) diagnosis codes, please watch Insight Into the 2025 ICD-10 CM Updates (Part 1 of 2) and Insight Into the 2025 ICD-10 PCS Updates (Part 2 of 2).

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

5 Reasons Why Home-Grown Hospital Price Transparency Solutions Fail 
 
A Look at the Outpatient Prospective Payment System (OPPS) 2024 Final Rule 
 
Four Fundamentals of the New Medicare Physician Fee Schedule (MPFS) Final Rule You Should Know 

Editor’s note: This article is based on a webinar entitled Three Keys to a Successful Margin: Charges, Costs, and Labor, presented by Bob Alexander, Cost Management, Principal, and William Malm, Vice President of Revenue Transformation, both of Health Catalyst.

As healthcare organizations grapple with rising costs and evolving payment models, achieving positive margins is more critical than ever.

The Peter G. Peterson Foundation reports that the U.S. allocates significantly more funds to fee-for-service healthcare than any other nation, nearly double the amount. Operating under a fee-for-service model incentivizes increased service volume over quality, which frequently results in excessive use of unnecessary treatments, labs, and prescriptions.

Moreover, the administrative expenses associated with managing healthcare in America are four times more than those in other affluent countries. These costs include processes such as preauthorization, claim denials, assessment of medical necessity, and dealing with multiple payers.

While the baby boomer population in the U.S. currently spends much less on long-term care than in any other country, these expanded dollars have not benefitted the American healthcare system. Indeed, the data reveals that the U.S. has the worst life expectancy, birth and infant mortality, and chronic disease management.

Top Issues Plaguing Healthcare CEOs and CFOs

In an ideal world, healthcare systems consistently prioritize early intervention to prevent disease or injury, rely on proven treatment methods, avoid duplicate or unnecessary labs and testing, and eliminate less effective interventions. They would also have more streamlined technical and administrative processes to reduce indirect costs. When applied consistently and over the long term, these strategies have the potential to result in profitable margins.

These issues have long-plagued executives, but to make matters worse, the COVID-19 pandemic exacerbated challenges, and the following issues have persisted:

• Increased medication needs and supply costs. The post-COVID-19 environment requires hospitals to have a more extensive inventory as supply chains remain disrupted.
• Increased payroll and contract labor. Labor is costly, representing 50 to 60 percent of net patient service revenue.
• Capped and shrinking reimbursements. Insurance providers are placing caps on services, and Medicare is increasingly bundling various services. This shift means that pricing can no longer be relied upon to adjust profit margins as it once was.

Healthcare leaders are also grappling with the slow adoption of value-based care or fully capitated services. In contrast, many other countries’ healthcare systems operate on capitation models, where providers are paid a specific amount for a valued outcome.

Prioritizing Cost Management in U.S. Healthcare Systems

In light of these issues, the U.S. healthcare system should focus on managing expenses and controlling costs since fees and reimbursements are hard to change.

Medical errors, for example, significantly impact profit margins and patient outcomes. Research indicates that these errors account for roughly $20 billion in annual costs¹ in the U.S.

A possible contributor to medical errors includes surgical mistakes, diagnostic failures, medication mishaps, equipment malfunctions, technology and system breakdowns, accidental falls, and a lack of hospital staff. Hospitals frequently downsize nursing staff to cut costs. This talent shortage contributes to heavier patient workloads linked to increased mortality rates.

“Now nurses are being sued and have criminal convictions for medical errors. More and more people are leaving the industry; they no longer want to accept liability.²” — William Malm, Vice President of Revenue Transformation, Health Catalyst.

The Value Creation Framework and Importance of Healthcare Data

Hospitals and physician practices seek ways to work smarter and more efficiently with fewer medical errors. They also look to increase the bandwidth of their staff using modern technologies, such as AI, and provide more preventive care to reduce hospitalizations.

To achieve these aims, healthcare organizations must transition from volume to value, improving margins, boosting quality, and eliminating waste. 

A Value Creation Framework, a process improvement methodology, addresses all three areas by implementing best practices, employing data and analytics, and adopting a new culture, leading to sustained improvement.

The Value Creation Framework involves the following initial steps:

• Quantify ideal process potential gains.
• Identify the root cause of process challenges and pains.
• Re-design and improve processes, including:
• Following evidence-based guidelines and protocols.
• Establishing expert consensus.
• Standardizing work operationally.

Data and analytics play a critical role in this process improvement methodology. 

Yet, most hospital data goes unused or misused. Health systems must capture the correct and relevant data about their processes to employ the Value Creation Framework and ensure that this data is accessible broadly. Next, end users must be able to generate valuable insights from the data and promote more informed decisions.

Tackling Charge Capture Leakage: A Cost Containment Missing Link

Inconsistent data can lead to revenue leaks that drain resources. For example, capturing charge master data has become a critical priority as charge capture leakage in healthcare hovers around 1 percent nationally.

Despite improvements thanks to automation, charge capture processes still occur within silos, continuing the charge loss phenomenon that degrades hospital margins. Failing to secure potential reimbursements leads to a decline in revenue, while incurred expenses diminish profit margins related to costs and charges. 

Consequently, healthcare organizations must proactively oversee charges before claim submission and prevent the complications linked with charge leakage and delayed billing. Achieving this necessitates moving past simple charge reconciliation toward a more comprehensive, data-oriented approach that leverages appropriate technologies, especially given that many health systems may not have sufficient personnel to manage these responsibilities.

An example of this is an AI tool employing rules-based logic to analyze all daily charges comprehensively. When a trigger appears within the charges—such as a procedure, service, supply, or medication—the system searches for a corresponding target. If the target is found, the rule remains inactive. 

Conversely, the charge gets flagged for manual examination if the target is missing. This integration of technology enables a complete review of all charges, which was not achievable before when health systems had to be more selective in conducting audits.

Traditional Cost Management Methods Fail to Meet the Needs of Complex Healthcare Environments

The issue of charge capture management is just one example of why healthcare systems need a much more effective and comprehensive cost management system.

The Ratio of Cost to Charges (RCC) and Relative Value Units (RVU) have long been used in healthcare to estimate costs. However, both methods have significant limitations when applied in medical settings:

• RCC calculates costs by applying a standard ratio to charges, which often fails to account for the complexity and variability of healthcare services beyond the limitations of charge codes. This method assumes a consistent relationship between charges and costs across all services, which is rarely accurate. For example, RCC does not consider the varying resource use or time required for different patients, leading to oversimplified and sometimes misleading cost assessments.
• RVU assigns relative weights to services based on the required resources, such as physician work, practice expense, and malpractice insurance. While RVUs can offer more granularity than RCCs, they still lack the ability needed to capture the true cost of care since patients with the same billing or RVU data will look the same.

Without a reliable understanding of what it costs to provide patient care, hospitals and health systems continue to struggle to agree on basic information about their services, such as which are most profitable.

“Cost management methods such as Relative Value Units (RVUs) or Ratio of Cost to Charges (RCC) were necessary in the 1980s, 90s, and 2000s. Methods like Time-Driven Activity-Based Costing (TDABC) are very applicable in a manufacturing setting where you have a very predictable assembly line or process that your product goes through to be produced. But in healthcare, you have a chaotic situation where it’s hard to predict (with time estimates) what will happen in your hospital or with patients each day—will their conditions worsen or improve? Without a reliable understanding of what it costs to provide care to patients, hospitals and providers struggle to answer basic questions like ‘what services are most profitable?’, ‘what should we stop doing?’ and ‘does everyone agree on the answers?’ With better data, you can start to answer these questions with more objective truths rather than relying on subjective opinions.” — Bob Alexander, Cost Management, Principal, Health Catalyst.

The Shift to Activity-Based Costing (ABC) to Gauge the True Costs of Patient Care

Activity-Based Costing (ABC) offers a more accurate and comprehensive approach to understanding the true costs of service delivery by tracing costs to specific activities and resources used in patient care. ABC leverages detailed data, often collected through Electronic Medical Records (EMRs), allowing for precise cost assessment and allocation.

Health systems have observed the following advantages of using the ABC approach:

1. Granular Cost Tracking: ABC can distinguish between different levels of resource use for patients. For example, traditional ICU costing might charge uniformly for any patient present at midnight. In contrast, ABC can account for differences, such as one patient (Patient A) being discharged four hours earlier than another (Patient B). This granular approach reveals that the costs for Patient A are lower, providing a clearer understanding of actual expenses.
2. Detailed Analysis: ABC allows for detailed analysis at various levels, including provider, service line, or patient care path. This capability enables healthcare organizations to identify cost variations and inefficiencies, encouraging more cost-effective behaviors among providers. When providers see that their efforts to reduce costs are accurately tracked and recognized, they are more likely to engage in cost-saving practices.
3. Informed Decision-Making: ABC provides a more nuanced understanding of the true costs of care. It helps identify profitable and non-profitable services, guiding resource allocation and process improvements.

Leveraging Healthcare Data for Value-Based Care, Cost Management

The ability to capture and analyze data is crucial for implementing value-based costing models. Health systems need data sets that give them the granularity and specificity required to make decisions, but that can also scale and view these data sets at a high level.

Health Catalyst’s PowerCosting uses detailed data from EMRs to track clinical costs accurately. The software allows for real-time tracking, which will enable organizations to:

• Monitor Clinical and Financial Performance: Gain insights into the cost-effectiveness of different treatments and processes.
• Identify Cost-Saving Opportunities: Detect areas where health systems can reduce costs without compromising quality.
• Support Clinical Decision-Making: Provide clinicians with reliable data to make informed decisions that improve patient outcomes.

Advanced technologies allow providers and executives to examine any procedure or group of procedures across providers and see payment variability to determine which procedures support the bottom line. For instance, they can see whether one provider’s approach, such as their vendor selection, leads to profit and if another provider’s approach leads to loss.

“We want to show providers data so they can make the best decisions at the point of care. We can inform the providers and the administrators, get everyone on the same page about how we’re tracking procedures and supply costs, and learn which methods are viable.”— Bob Alexander, Cost Management, Principal, Health Catalyst.

Moving the Needle on Value-Based Care Through Improved Cost Management Methods

The transition from volume to value in healthcare requires more than just a change in payment models; it demands a fundamental shift in how costs are understood and managed. 

By leveraging detailed information from EMRs and focusing on the actual costs of delivering care, health systems can make data-driven decisions, reduce waste, and optimize the use of resources, leading to improved margins and a more manageable shift to value-based care.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

• PowerCosting Improves Strategic Decision-Making, Increasing Revenue by $10M
• Charge Capture Improvements Increase Revenue by $552K
• Data-Driven Labor Management Delivers Financial and Operational Improvements

References

1. Rodziewicz TL, Houseman B, Vaqar S, Hipskind JE. Medical Error Reduction and Prevention. 2024 Feb 12. In: StatPearls [Internet]. Treasure Island (FL): StatPearls Publishing; 2024 Jan–. PMID: 29763131. Retrieved from: https://pubmed.ncbi.nlm.nih.gov/29763131/#:~:text=Moreover%2C%20the%
   20reported%20cost%20of,for%20hospital%2Dacquired%20infections%20alone.
2. Townley JN, Pogue CA, McHugh MD. Criminal prosecution of clinician errors: A setback to the progress toward safe hospital work environments. J Hosp Med. 2022 Oct;17(10):850-853. doi: 10.1002/jhm.12952. Epub 2022 Aug 28. PMID: 36031735; PMCID: PMC9720757. Retrieved from: https://www.ncbi.nlm.nih.gov/PMC9720575/#:~:text=RaDonda%20Vaught%
   20made%20a%20fatal,gross%20neglect%20and%20negligent%20homicide.
   

Editor’s Note: This article is based on the Healthcare Analytics Summit 2024 (HAS24) session titled, A Prescription for Success: Data-Driven Pharmacy Supply Chain Optimization Saves Nearly $20M, presented by Kent Bridgeman, PharmD, MHI, Informatics Pharmacy Manager at Allina Health.

Rising drug costs and incomplete financial data on medications have made it challenging for healthcare providers to rein in their pharmacy supply chain expenditures.

In its aim to boost savings, Allina Health sought to implement a data and analytics solution enabling end users to easily capture accurate drug pricing information and compare these costs to ensure they made the best purchasing decisions. The solution also needed to integrate seamlessly with other data sets, including clinical diagnosis and lab data so that the health system could understand prescription use and costs as they relate to patient outcomes.

Indeed, drug costs can vary significantly, influenced by various factors on the purchasing side, such as the 340B Drug Pricing Program, and on the reimbursement side, such as wholesale acquisition costs and the Centers for Medicare and Medicaid (CMS) average sales price (ASP) and National Average Drug Acquisition Cost (NADAC).

Step 1: Establishing a Complete Look at Prescription Drug Prices

Allina Health’s electronic health record (EHR) provided some drug cost information, but it was often incomplete and inaccurate due to package size differences and missing prices. Moreover, the emergence of new departments during the COVID-19 pandemic had yet to be integrated into their electronic database, leading to further gaps in their drug cost data.

Allina Health scoured average wholesale price (AWP) through vendors’ catalogs and scraped public sites like the CMS’s ASP and NADAC programs for up-to-date drug cost data to gain a complete picture. This extensive data gathering marked the initial step to creating a comprehensive understanding of their medication expenses.

Step 2: Developing a Medication Cost Data Model

Once they acquired this information, the next task was to transform it into a functional model. Allina Health’s cost data model included the following key fields:

• NDC Code: A list of every product by its National Drug Code (NDC) number and its details, such as formulation, strength, packaging, and manufacturer.
• Start and End Dates: To estimate costs and track price changes in a period.
• Current Price Flag: To allow decision-makers to know the current cost of a specific drug.
• Range of Drug Costs: To identify potential savings, including moving products to 340B pricing.

By structuring data in this way, Allina Health could monitor and analyze drug pricing trends over time, facilitating more strategic purchasing decisions and easily uncover potential areas for cost reduction.

“Building this cost data model — having this data at the ready in our data warehouse – has allowed Allina to build new technology and analysis.”

—  Kent Bridgeman, PharmD, MHI, Informatics Pharmacy Manager at Allina Health, during HAS24 session entitled, A Prescription for Success: Data-Driven Supply Chain Optimization Saves Nearly $20 Million.

Step 3: Integrating Cost Data with Other Data to Identify Real Use Costs

After gathering the cost data, Allina Health combined it with different types of data to assess usage expenses. This integration included:

• Medication usage data from infusion centers, hospitals, and retail dispensaries.
• Invoice and contract data to verify correct billing per contractual agreements.
• Vendor data from wholesalers and public sources.

This comprehensive data integration allowed Allina Health to accurately correlate drug usage with costs, identifying discrepancies and potential savings in their medication expenditures.

Step 4: Identifying Prescription Savings Opportunities

Following the integration of multiple datasets, Allina Health employed two models to calculate savings and identify improvement opportunities in their pharmacy supply chain practices:

• Invoice Model: A retrospective approach to determine realized savings by comparing past invoices.
• Accumulated Savings Model: Combining cost and use data to anticipate potential savings.

The resulting analysis revealed effective cost-saving measures and highlighted areas needing further attention. Yet, they also discovered they could secure a 50 to 60 percent price reduction on select medications, yielding increased savings.

Step 5: Implementing Additional Data-Driven Projects

Allina Health’s cost data model revealed other potential savings opportunities, leading to the initiation of three additional major projects.

Project 1: Expanding Which Entities Qualify for 340B Pricing

Allina Health discovered that retail dispenses from a mental health hospital were not being captured as 340B, a government program that enables covered entities to purchase drugs at reduced rates. For practitioners in pharmacy supply chain management, the 340B program is the best place to start when seeking to achieve cost savings, as it often yields participants savings in high dollar amounts.

Allina Health reviewed the criteria for 340B qualifications and learned that some of its departments were overlooked. To ensure that all eligible departments were included in the 340B program, they established new covered entities for pharmacy contracts and updated the EHR system. As a result, they achieved roughly $2 million in accumulated annual savings.

Project 2: Complex Care Optimization Through Pharmacist-Led Patient Education

After falling short of their forecasted outcomes from the first venture, Allina Health returned to the data and discovered they could qualify more patients and departments for 340B pricing.

They broadened pharmacists’ roles and established specialty programs in hospitals where pharmacists provided medication therapy management. Once implemented, the effort saved over $12.2 million in 12 weeks and enhanced patient safety by offering pharmacist-led patient education.

Project 3: Invoice and Contract Reviews to Maximize the 340B Program

A thorough examination of invoicing and contract data revealed that Allina Health continued to receive bills exceeding the maximum 340B price. Therefore, the initiative required an in-depth review of invoices and contracts to verify adherence to agreed-upon pricing and rectify discrepancies.

Using designated 340B vendor data, Allina Health corrected these discrepancies, leading to $1.5 million in accumulated savings.

“You need robust analytics to do this [work]; there is a lot of tracking and a lot of follow-ups that need to happen. You need really solid analytics to understand your processes and savings.”

—  Kent Bridgeman, PharmD, MHI, Informatics Pharmacy Manager at Allina Health, during HAS24 session entitled, A Prescription for Success: Data-Driven Supply Chain Optimization Saves Nearly $20 Million.

Broader Initiatives for Cost Savings

These three initiatives jumpstarted a host of additional cost-saving efforts.

Beyond retail pharmacy, Allina Health explored ways to reduce outlays for high-volume, high-cost drugs like glucagon-like peptide-1 (GLP-1) through local government partnerships. They also evaluated biosimilars as alternative drugs for potential savings.

Attempts to reach patients outside Allina Health’s network for specialty services also showed promise. Moreover, integrating reimbursement data with cost data further helped close the cost-accounting cycle, ensuring a comprehensive view of drug expenses and reimbursement opportunities.

Data-Driven Notifications to Drive Action

Allina Health also learned that data alone isn’t enough to drive meaningful change. They enlisted various stakeholders — buyers, vendors, and programmers — to initiate cost-saving actions, achieving greater buy-in and bolstering accountability.

Allina Health developed analytics tools designed to pinpoint tasks to lowering drug costs and automate notifications across all departments. These alerts, delivered via SMS or integrated with messaging apps like Slack, included information to incite immediate action.

The notifications included action items, such as:

• Establishing new department 340B accounts
• Updating pricing changes for 340B accounts
• Tracking average 340B savings
• Capturing eligibility for complex care
• Managing new NDC build tasks

By automating these notifications, Allina Health ensured timely and accurate responses to data insights, helping the Minneapolis-based health system to scale its efforts and drive continuous improvement in pharmacy supply chain management processes.

Achieving Significant Savings and Improved Patient Care

Allina Health saved nearly $20 million by adopting a data-centric strategy for managing its pharmacy supply chain. By effectively gathering precise drug cost information, integrating data throughout, and executing cost-saving measures, the organization enhanced its prescription supply chain, ensuring better resource allocation and improved patient care.

Additional Reading

How Specialty Pharmacies Can Improve Medication Adherence and Patient Outcomes

Allina Health Awarded Catalyst Award for Excelling in Pharmacy Supply Chain and Medication Management

Increasing Centralized Capacity for Prescription Renewal Requests

The push for hospital price transparency represents a seismic shift in delivering and understanding healthcare. Yet, many healthcare facilities are approaching this challenge with makeshift, homegrown solutions that could cost them more in the long run.

DIY approaches may seem tempting due to their low initial investment and quick execution. Yet, they often fail to meet regulatory requirements, leaving hospitals vulnerable to penalties and reputational damage. Relying on piecemeal systems can lead to inconsistent information that confuses patients rather than clarifies costs, ultimately undermining the very purpose of transparency.

Hospitals that have invested in robust, technology-driven solutions designed specifically for revenue integrity and regulatory compliance have streamlined data management and displayed standard charges for shoppable services. These health systems promote a proactive stance toward transparency—offering clear pricing and empowering patients to make informed choices about their care.

Today’s consumers seek clarity in healthcare costs, and failing to adopt effective strategies could hinder patient engagement and loyalty, which are key factors for health institutions striving to succeed in a rapidly evolving landscape.

Why Hospitals Can No Longer Ignore Price Transparency Rules

The complexities surrounding the hospital price transparency ruling can be overwhelming, leaving many healthcare facilities scrambling to comply. With the recent emphasis on regulatory changes from the Centers for Medicare & Medicaid Services (CMS), it’s clear that hospitals need to take this seriously or risk facing significant fines.

Adhering to these requirements isn’t just about checking boxes; it involves understanding processes, organizing vast amounts of data, and ensuring that information is visible in accessible formats. A simple misplacement of documents or misunderstanding of how to display charges, data elements, or language in a machine-readable file can lead to compliance issues.

As the next wave of change in January 2025 approaches, hospitals need to reevaluate their strategies and foster collaboration among their web admins, financial teams, and IT departments.

Meanwhile, homegrown solutions often lack the required intricacy for such monumental tasks. Therefore, engaging experts who specialize in price transparency compliance is also crucial.

Home-grown solutions fail to meet hospitals’ needs in meeting federal price transparency regulations for five reasons:

1. Inconsistent Data Quality: DIY solutions may struggle with data integrity and consistency, resulting in inaccurate pricing information that can undermine compliance efforts.

2. Resource Allocation Challenges: Hospitals often must divert resources from patient care and other critical areas to focus on developing these solutions, leading to operational inefficiencies.

3. Limited Technical Expertise: Many hospitals lack the specialized knowledge to develop and maintain sophisticated pricing systems that comply with federal regulations.

4. Complex Regulatory Changes: The ever-evolving nature of healthcare regulations means that home-grown solutions may quickly become outdated or non-compliant without continuous updates and monitoring.

5. Integration and Scalability Issues: Home-grown systems might not integrate seamlessly with existing hospital technology or across data and analytics systems, creating silos of information that hinder overall compliance and transparency efforts.

Why a DIY Approach Costs Hospitals More in the Long Run

Implementing a software solution designed specifically for price transparency can significantly alleviate hospitals’ financial strain by streamlining compliance efforts and reducing administrative overhead. Unlike a do-it-yourself approach, which often involves cobbling various tools and processes that lack integration, specialized software provides a cohesive platform tailored to regulatory requirements’ complexities.

Moreover, these solutions harness advanced analytics to deliver real-time insights into pricing strategies. They can handle massive data files, enabling healthcare providers to identify inefficiencies and optimize their service offerings too.

Without a proven solution or way forward, each mishap to meet the price transparency ruling translates into potential daily fines for hospitals. In fact, non-compliance can lead to penalties from CMS. When CMS audits and finds discrepancies or failures to comply within a given timeframe (currently 90 days), each non-compliant hospital incurs fines of $300 daily.

However, investing in dedicated price transparency software fosters a proactive culture, allowing healthcare organizations to focus more on patient care rather than navigating cumbersome regulations. Indeed, clarity and precision are more important than ever as institutions navigate an uncharted landscape of meeting regulatory demands while trying to uphold their commitments to patient care.

Hospitals’ Reluctance to Display Pricing Explained

Despite federal regulations mandating price transparency, many hospitals are slow to comply. One possible reason is a deeply ingrained culture rooted in confidentiality and intricacy regarding pricing, where negotiation and variation have historically defined the healthcare landscape. This lack of standardization can create apprehension among providers and fear that revealing costs may disrupt established billing processes or lead to unanticipated revenue losses.

Moreover, the complexity of healthcare pricing — often laden with layered fees, discounts for insurers, and patient-specific variables — poses significant challenges for clear communication. As such, hospitals might understandably choose to delay compliance until they can fully grasp how best to present their financial frameworks without causing confusion or backlash from patients and payers.

As institutions grapple with these intricacies while balancing operational pressures and limited resources, this wait-and-see approach only exacerbates ongoing disparities in patient access to affordable care, especially as public awareness around healthcare costs grows.

Tailored Price Transparency Solutions Enable Regulatory Compliance

Vitalware’s Hospital Price Index (HPI) significantly demystifies this process by delivering transparent cost information directly to patients. Armed with clear data on medical procedures, tests, and treatments, individuals are better equipped to make informed decisions about their care. This level of empowerment can stabilize revenue cycle management for hospitals and foster a more patient-centered approach to healthcare delivery.

Notwithstanding, the importance of regulatory compliance cannot be overstated. With new regulations coming into effect in 2025, the stakes have never been higher for hospitals seeking to avoid penalties or legal ramifications. Vitalware’s HPI delivers the following benefits:

1. Facilitates Compliance with Regulations: This solution helps hospitals adhere to price transparency laws, assisting them in avoiding hefty fines and legal complications.
   
   
2. Empowers Patients: Vitalware’s offering equips patients with transparent information regarding the costs associated with medical services, tests, and treatments. This transparency lets patients make well-informed choices about their healthcare options, allowing them to budget effectively, compare prices, and select more economical alternatives.

Moreover, Vitalware simplifies the compliance journey with dedicated expertise and proactive support systems, ensuring that hospitals can focus on providing excellent patient care while meeting stringent standards. Contrary to charting the home-grown route, such partnerships can instill confidence in healthcare institutions and ensure they are utilizing resources efficiently and effectively amidst shifting regulatory landscapes.

Additional Reading

Would you like to learn more about this topic? We recommend the following three articles:

Hospital Price Transparency: Five Changes You Should Know

Healthcare Price Transparency: Three Opportunities for Transformation

A Look Back: Federal Price Transparency Rules and Regional Quality Improvement Efforts in 2023

Editor’s note: This article is based on a recent webinar, A Data and Analytics Ecosystem, Purpose-Built for Healthcare, led by Dave Ross, Chief Technology Officer, and Mitch Kearney, SVP of Enterprise Architecture and Platform Development at Health Catalyst.

As health systems navigate an intricate landscape of patient care, regulatory requirements, and operational efficiency, the need for robust data and analytics has never been more crucial.

Healthcare organizations must transition from outdated and sluggish systems to modern architectures that support data scalability, interoperability, and adaptability.

Health Catalyst Ignite is designed to tackle these pressing issues head-on. This solution promises to streamline operations and empower healthcare stakeholders with actionable insights that can measurably and meaningfully improve financial, operational, and clinical outcomes.

Our latest webinar explored how this flagship technology offers unparalleled capabilities in harnessing real-time data while enhancing collaboration in health systems.

Why Healthcare Data Demands Modern Data and Analytics Solutions

Experts contend that making the switch to Health Catalyst Ignite could be the key to unlocking an organization’s full potential by addressing:

1. Time and Energy Constraints: Traditional data management tasks are repetitive and manual, often leading to content duplication and inefficient resource use. Ignite automates these processes, streamlining data management, enriching data quality, and ultimately saving valuable time and energy for healthcare professionals.
2. Cost of Data Management: The high costs associated with technology, licensing, and the resources needed to manage healthcare data can be prohibitive. Ignite’s scalable infrastructure is optimized to handle peak data loads without incurring excessive costs, and data management is standardized and optimized to make it more affordable and efficient in the long run.
3. Accessibility and Efficiency: In many healthcare systems, accessing and utilizing data, whether at the front or back end, can be cumbersome. Ignite simplifies this by prioritizing the delivery of relevant data in a user-friendly manner, thus enhancing accessibility and operational efficiency.
4. Data Inconsistency: Inconsistent or unreliable data can erode trust and lead to ineffective decision-making.

Ignite ensures data normalization and harmonization, providing standardized content and structure that users can rely on, thereby supporting more accurate and confident decision-making.

The Five Pillars of Ignite to Unlock Insights in Record Time

Ignite’s development was guided by five fundamental pillars, with each element contributing to users’ ability to derive insights from vast data sets at unprecedented speeds and depths:

1. Integrated: Ignite offers end-to-end technology integration, featuring a unified and extensible data model that promotes interoperability across various systems and departments.
2. Intelligent: The application boasts plug-and-play data acquisition, healthcare-specific data quality measures, embedded AI and machine learning capabilities, and over 300 configurable templates to support diverse analytics needs.
3. Modern: Utilizing flexible compute resources and event-driven processing, Ignite supports modern DataOps practices, ensuring that data operations are efficient and current.
4. Extensible: The ecosystem is designed to be adaptable, with support for extensible data acquisition, including prebuilt APIs and FHIR® (Fast Healthcare Interoperability Resources) APIs. Thus, it can evolve alongside healthcare needs and technological advances.
5. Accessible: The solution guarantees on-time, high-quality data delivery, offering self-service reporting and data science capabilities that maintain current insights and support timely interventions.

Demystifying the Technologies Underpinning the Ignite Ecosystem

Each aspect of the Ignite ecosystem is purposefully integrated to address healthcare’s unique and complex needs. Every click and interaction is designed to optimize and enhance the use of available data. Let’s examine the distinctive elements that buttress Ignite’s functionality.

Core Enabling Technologies

Ignite’s core technologies provide a robust and scalable foundation for securely and efficiently handling of vast healthcare data. Key components include DevOps, which facilitates continuous development and deployment to keep the system agile and adaptable.

The cloud data infrastructure offers flexible and scalable storage solutions, accommodating data growth. In that regard, cloud computing enables real-time analytics and data processing with advanced computational capabilities.

Meanwhile, data security measures protect sensitive healthcare information, maintaining compliance with industry standards. Access management controls safeguard data integrity and confidentiality, allowing only authorized personnel to access and modify data.

Ignite’s Lakehouse Architecture

Ignite’s architecture seamlessly integrates the best features of data lakes and data warehouses. It includes specialized components like Source Marts, Data Collections, and Domain Marts, which facilitate the transformation of raw data into structured formats. This architecture is particularly advantageous for healthcare, as it allows for scalable, real-time data processing, storage, and analytics, enabling faster insights and more informed decision-making.

The Lakehouse architecture also supports various healthcare use cases, ensuring structured and unstructured data is always ready for analysis and reporting. What’s more, integrating specialized analytics tools like Pop Analyzer for population health and Healthcare.AI for predictive analytics, plus data entry and visualization tools, culminates into a unified model and analytic engine to inform and facilitate measurable improvements.

Comprehensive Data Acquisition Processes

Ignite’s comprehensive data acquisition process efficiently connects to diverse data sources, including EHRs, pharmacy systems, streaming data, claims, legacy systems, imaging, and HL7® FHIR® interfaces. This process ensures data is accurately captured, integrated, and standardized, making it immediately available for analysis.

By automating data acquisition, Ignite significantly reduces the manual efforts required, ensuring that data is timely and accurately prepared for all downstream processes.

Impact on Key Performance Metrics for Health Systems

Technology aside, Ignite significantly enhances patient care coordination, clinical decision support, operational efficiency, and population health management by turning data and analytics into strategic intelligence.

However, experts acknowledged that many health systems often face challenges in gaining buy-in for new technology due to budget constraints, a learning curve, a fear of integration challenges, or an aversion to change. Therefore, they suggested starting small with a phased implementation and demonstrating value to stakeholders early in the transition process.

Ignite’s design prioritizes accessible and user-friendly data consumption through the following:

• Structured Data Flows ensure users receive reliable and timely information tailored to various organizational needs. 
• Application and Insight integration enables event-driven workflows and data sharing across different systems.
• Unified View of Data provides a consolidated view, allowing stakeholders to access comprehensive and consistent information, which is critical for making informed decisions.
• Support for Advanced Analytics, reporting, and real-time data visualization, providing stakeholders with the information they need when they need it.

A Compelling Call to Action: Adopting a Modern Data and Analytics Ecosystem

Ignite is a modern data and analytics ecosystem built for healthcare use cases. It offers a balanced blend of the comprehensive capabilities of big enterprise solutions and the flexibility and customization of point solutions.

With Ignite’s data and analytics capabilities, healthcare organizations can harness the full potential of their data and cultivate a culture of innovation, collaboration, and transparency.

Finally, as the healthcare landscape evolves with increasing complexity, embracing modern data solutions is no longer an option for today’s health systems but a strategic necessity.

Editor’s note: This article is based on a 2024 Healthcare Analytics Summit (HAS) session titled, “From Nay to Yay – Denials to Dollars,” presented by Kearstin Jorgenson, MSM, CPC, COS, Operations Director for Physician Advisor Services, and Sathya Vijayakumar, MS, MBA, Senior Clinical Operations Manager with Clinical Excellence, both with Intermountain Health.

Healthcare payers’ rejection of insurance claims can severely impact patients, providers, and healthcare institutions’ revenue cycle management. Denied claims may interrupt the flow of care and postpone essential medical services.

Additionally, these denials can lead to higher costs and efforts in resolving claim disputes. As such, health systems are increasingly focusing on reducing claim denials as a critical priority.

Intermountain Health identified novel opportunities to collaborate with one of its most prominent healthcare payers to improve the patient experience while reducing insurance claim denials.

In its targeted approach to fortifying payer relationships, Intermountain adopted innovative technology and healthcare analytics into a new review process that eliminated manual spreadsheet tracking and improved cross-functional team collaboration. This resulted in Intermountain reviewing more than two thousand cases and overturning more than $20M in denials over 24 months.

Intermountain shared its journey with industry leaders at the Healthcare Analytics Summit 2024 (HAS 24), addressing three main objectives:

1. Collaborating with payer contracting to involve payers in constructive peer-to-peer conversations.
2. Forming a diverse multi-functional team of stakeholders to manage the claims processes.
3. Streamlining the claim denials process by implementing a cloud-based, automated data monitoring tool.

Engaging Healthcare Payers in Productive Peer-to-Peer Conversations

Effective partnerships with healthcare payers should prioritize meaningful discussions to address the issue of rising payer denials, which can lead to significant financial losses for healthcare systems.

During the HAS 24 educational breakout session, Intermountain’s Kearstin Jorgenson, MSM, CPC, COC, CIC, CCS Senior Operations Director for Physician Advisor Services, and Sathya Vijayakumar, MS, MBA, Director – Physician Advisor Services with Clinical Excellence, showcased how they successfully implemented a peer-to-peer review process and claims denial tracking tool that resulted in over $35 million in projected revenue. 

By establishing open communication among care management, physicians, healthcare payer representatives, revenue integrity, and cross-functional teams, the health system gained valuable insights to improve outcomes. 

Furthermore, utilizing healthcare analytics enhanced coordination and enabled efficiency by providing real-time payment tracking of case progress and outcomes, and the ability to cull necessary documentation in a centralized platform. This streamlined approach facilitated improved communication and enriched meetings with healthcare payers.

Establishing a Multi-Functional and Diverse Claims Management Team

Intermountain initiated its initiative to reduce denials by bringing together a diverse set of stakeholders, including payers, physician advisors, care management teams, and revenue integrity and billing staff, too. At the time, the group did not adequately track how much revenue the health system lost or delayed due to denials, nor were claims denial trends easily accessible.

Engaging essential stakeholders in the denials review process, however, proved to deliver the following benefits:

• Improved data capture processes.
• Ensured proper documentation capture.
• Centralized and optimized its patient population care needs. 

As an example, Intermountain developed diagnostic criteria for treating certain medical conditions, such as sepsis, which one of its payers agreed to honor. This agreement guaranteed payment for claims once the criteria were met. By implementing these criteria for sepsis, Intermountain successfully eliminated denials related to sepsis with that particular payer and saved over $5M in the process.

Automating the Peer-to-Peer Request Process Through Web-based Data Tracking

Jorgenson and Vijayakumar encouraged providers to enhance their algorithms and embrace modern technology to align their data capabilities with payers and effectively manage the intricate and data-heavy claims transmission process. Intermountain discovered that by implementing a robust, semi-automated peer-to-peer process, they could scale their denials work across multiple payers without needing to increase full-time employees. 

Their approach involved tracking cases in real-time using a newly developed software tool that replaced spreadsheets and streamlined claims management processes. The tool templates included pre-established clinical criteria and citations for specific conditions, allowing Intermountain to broaden its claims denial program. 

All stakeholders can access this tool, which provides comprehensive patient case information and triggers alerts for necessary actions. Additionally, a new written appeals process complements the peer-to-peer system, with the latest tool monitoring the denial workflow. 

Initially handling around 50 denial reviews per month, Intermountain now manages >200 monthly and is working towards implementing the web-based tool system-wide.

Key Revenue Cycle Management Challenges Related to Billing, Payments

Intermountain’s example demonstrates the importance of integrating healthcare analytics with insurance claims management workflows so that providers can secure timely approvals. Yet, the healthcare industry often faces key challenges in utilizing healthcare analytics, including data quality, integrity, and integration across its information technology ecosystem. 

Alongside these broader analytical shortcomings, the speakers also expressed that managing insurance claims presents specific hurdles that healthcare organizations must address, such as the following: 

• Overreliance on spreadsheets for claims data management, 
• Lack of solid relationships between clinicians, teams, and payers,
• Inadequate technology systems for claims denial management, 
• Absence of cohesive strategy integrating analytics and processes, including EMR claims workflows, 
• Poor documentation leading to lost revenue, 
• Difficulties with provider-payer communication to resolve claims and documentation discrepancies, 
• Limited monitoring of encounters and payer criteria specifications,
• Gaps in closing the approval-to-payment loop efficiently, and 
• Keeping up with payer technology advancements in claims management.

Fostering Teamwork and Transparency to Boost Healthcare Payer Partnerships, Financial Performance

As demonstrated by Intermountain, effective management of healthcare payer denials necessitates the utilization of advanced healthcare analytics and cutting-edge technology to seamlessly integrate, notify, and expedite claims data.

By streamlining operations through automation, Intermountain saved valuable time and resources and enhanced its financial performance while empowering healthcare teams and external partners to address critical needs efficiently. 

Additional Reading

Interested in learning more about this topic? We suggest the following articles:

How One Hospital System Advances Clinical Documentation Improvements with Augmented Intelligence

Analytics Relieves Payer Authorization Pains

Denials Management Analytics Reduces Denials by Nearly $5M

Integrated Data Platform and Improvement Efforts Recovers $3M in Revenue

Most healthcare organizations participate in dozens of clinical registries to enhance their quality of care, improve clinical, financial, and operational outcomes, comply with regulatory and accreditation guidelines, and support research endeavors. 

Meanwhile, registry standard setters and governing bodies provide complex and specific data collection guidelines that clinically oriented, highly trained abstractors must follow to meet submission requirements.

However, when you consider the associated labor and technology costs, and the burden of ongoing maintenance, registry participation comes with a hefty price tag that can strain even well-funded healthcare organizations. Competing priorities, resource constraints, and data availability make it challenging to act upon registry outputs to achieve measurable outcomes and maximize the value of their participation.

For this reason, today’s healthcare leaders are turning to innovative approaches to reduce costs, leverage technology, and enhance resource allocation to optimize the benefits of registry participation.

One such solution, tech-enabled managed services for clinical chart abstraction (TEMS), is a form of outsourcing that transfers ownership and ongoing responsibility for data abstraction and registry submissions to an outside partner.

The partnership incorporates data abstraction best practices, tools, and technology to enable more accurate and efficient data collection and submission. 

Additionally, optimizing reporting and analytics and adopting proven improvement frameworks allow an increased focus on improving care, bolstering public performance ratings, and maximizing reimbursement.

The Complexities of Clinical Registry Participation Explained

Clinical registries are organized data collections that evaluate specific outcomes for a defined patient population. They aim to learn more about a disease or condition and monitor and improve the quality of care provided.

Subsequently, registry governing bodies publish detailed data collection specifications that chart abstractors must follow strictly to meet data quality standards.  There are submission guidelines and certified registry submission tools that are used to populate registry databases. 

In turn, registries provide process and outcome measure performance and benchmarks to inform clinical treatments, medical interventions, and care pathways. Also, registry participation may be required for accreditation and licensure to treat certain populations, and performance ratings may become publicly available. 

Five common clinical registry focus areas include:

1. Oncology
2. Cardiovascular
3. Surgical
4. Stroke
5. CMS Core Measures (Sepsis, Perinatal Care, and Behavioral Health) and eCQMs

With the increasing, ongoing burden of registry participation, many U.S health systems have opted to outsource clinical chart abstraction functions to help them optimize their resource allocation and address key performance indicators such as:

• Efficient data collection and submission processes
• Improved data quality
• Reduced data abstraction labor costs
• Streamlined registry data management
• Increased data availability and reliability

Leveraging Clinical Chart Abstraction Model to Boost Registry Participation Value

Healthcare leaders remain focused on getting the most value from registry participation. While these registries play a critical role in improving patient outcomes, when organizations face prohibitive costs and workflow challenges, they may be limited in their ability to glean actionable insights and benefit significantly from their participation. 

Reducing the financial burden of clinical registry participation opens avenues for increased collaboration among providers, researchers, and policymakers in service to their patient populations. Moreover, engaging in clinical registries provides organizations with greater credibility while positioning them as innovators in patient care practices; this competitive advantage empowers health systems to engage physicians and meet the diverse needs of patients.

TEMS for clinical chart abstraction increases the value of registry participation by lowering data abstraction labor costs and management, reducing technical burden, and increasing the return on EMR workflows to deliver reliable, high-quality data. This enables end users to shift their focus to improving care.

The tools and best practices developed and maintained by TEMS for clinical chart abstraction, including the use of generative AI, give health systems the ability to:

• Increase their data availability and access deeper data insights.
• Enable their clinical quality staff to shift their focus to more complex, higher-value work.
• Improve team member engagement, providing their chart abstraction staff with an opportunity for career growth and to collaborate with and learn from others in their field.
• Align their resources and priorities to derive greater value from their data.

Addressing Cost Barriers to Registry Participation with Tech-Enabled Managed Services

In conclusion, addressing the financial, resource, and technical burden associated with clinical registry participation is crucial for fostering broader engagement, supporting evidence-based practices, and achieving measurably improved outcomes.

By adopting a tech-enabled managed services approach, organizations can realize value quickly by lowering labor costs, maximizing the appropriate role of technology in data collection, leveraging expert clinical knowledge, and adopting proven improvement methodologies. 

As registry and regulatory requirements increase and value-based payment models emerge, the need for efficient, scalable data collection and reporting tools and processes will become increasingly important.  Still, many health systems face financial limitations and lack the dedicated staff to support their registry participation.

Therefore, health systems must continue prioritizing innovative approaches in healthcare, such as tech-enabled managed services for clinical chart abstraction, to overcome resource constraints and ensure they can maximize participation in clinical registries to benefit all stakeholders.

Additional Reading

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Compare Outsourcing VS Managed IT Services in Healthcare

Award Honors INTEGRIS Health for Pioneering Tech-Enabled Managed Services

How to Launch Managed IT Services in Healthcare the Right Way

What is IT Managed Services in Healthcare?

Editor’s Note: This article is based on a webinar entitled, Empowering ACOs: Leveraging Quality Management Tools for MIPS and Beyond, presented by Hazel Morrison, Product Manager, MeasureAble, and Shannon Campbell, CPHQ, Sr. Manager, Regulatory Measures Program, both of Health Catalyst.

The Quality Payment Program (QPP) measures are sometimes said to be unnecessary and burdensome tasks imposed by the Centers for Medicare and Medicaid Services (CMS) on Accountable Care Organizations (ACOs). They should, however, be understood as tools allowing ACOs to maximize benefits resulting from the quality care they are likely already giving their patients.

The QPP measures are designed to promote better clinical outcomes using evidence-based care standards and protocols – standards and protocols QPP participants are likely already practicing. Rather than seeing the QPP measures as a burden, why not leverage the best practices already implemented within your ACO? Using these measures to maximize an ACO’s clinical performance can result in increased financial incentives and cost savings to fund additional quality improvements and feed the progression to clinical excellence.

In recent years, the Medicare Shared Savings Program Accountable Care Organizations (ACOs) have been modifying their quality data reporting to meet MIPS requirements and improve program reporting. By implementing effective quality management tools, ACOs and their participants can streamline MIPS reporting, elevate their quality processes, overcome common reporting obstacles, expand their quality improvement initiatives, and ultimately maximize the rewards of their quality enhancement efforts.

Regulatory Roadmap for Quality Improvements: Rewards and Disincentives

Engaging in MIPS can lead to financial rewards for exceptional clinical quality, but it also carries the possibility of reduced payments for poor performance. CMS evaluates ACOs and ACO participants submitting via the APM Performance Pathway (APP) across three performance categories:

• Quality (50% of MIPS Score)
• Improvement Activities (20% of MIPS Score)
• Promoting Interoperability (30% of MIPS Score)

The Cost performance category is weighted at 0% for ACOs in the APP.

Avoiding ACO Reporting Pitfalls, Resolving Inconsistent Engagement

Some ACOs only engage with MIPS measures once each year when they submit to CMS. While this is technically permissible, it does not align with the spirit of the program or its objectives and is a poor use of the resources an ACO has dedicated to the EHR and data collection. Most importantly, it risks patient care as the ACO does not identify and close care gaps that might otherwise be identified during the year.

This approach also means the ACO denies itself unclaimed incentive funds available from CMS. Instead, ACOs and ACO participants should actively monitor their data throughout the performance period to promptly identify and address any gaps. By doing so, they can enhance the quality of care provided to patients, exert greater control over performance scores compared to previous years, and consequently increase financial incentives.

ACOs would benefit most from fostering a culture that aligns with QPP principles, emphasizing proactive monitoring of ACO performance and quality measures. This approach empowers an ACO and its clinicians to address performance gaps effectively, enhancing agility in CMS quality reporting and enabling swift adaptation to program changes. For example, one clinician in the ACO may not meet a measure, yet another ACO clinician may close an identified care gap during a subsequent visit.

An ACO has committed to sharing in the accountability of its patients’ care. The data-sharing aspects within an ACO inherently support this commitment and align with the QPP quality requirements, providing an ACO with the EHR tools needed to maximize the financial incentives available.

Achieving Data Completeness, Data Quality, and Actionable Healthcare Analytics

Numerous ACOs have already standardized clinical care, and leveraging these initiatives can result in performance incentives under the QPP. Over a third of webinar participants said they track their quality performance throughout the year. 

ACOs can enhance their quality improvement efforts by utilizing a comprehensive quality management tool to optimize performance and clinical outcomes. Data completeness, data quality, and actionable healthcare analytics are crucial for implementing evidence-based clinical practices to succeed in the MIPS program. 

MeasureAble is an advanced tool for healthcare providers, including ACOs, to manage quality measures efficiently. This application integrates complete data, measures, visualizations, and workflows into a single system for measurement, improvement, and submission processes. 

It calculates data completeness and performance rates while offering a dashboard to track performance. With MeasureAble, ACOs can easily submit data to CMS or export it as QRDA III files, saving time and resources. Additionally, this application utilizes actionable data to enhance CMS reporting, boost quality performance, and drive financial success.

“We want you to use your performance, monitor it continuously, and dig into the insights that will help you and your organization perform those important improvement activities to ultimately receive better compensation.”

– Hazel Morrison, MeasureAble Product Manager, during Empowering ACOs: Leveraging Quality Management Tools for MIPS and Beyond webinar

Using Advanced Technological Tools for MIPS and Beyond

Upon integrating MeasureAble, organizations are equipped with a singular, actionable repository for MIPS data. This quality performance solution empowers organizations to evaluate optimal submissions through in-depth data analysis. Organizations can proactively monitor performance metrics at various organizational tiers by utilizing the robust measures engine and intuitive data visualization dashboard. 

With features that are specifically tailored for ACOs, the tool provides an estimated composite score for a proactive quality performance strategy and instant submission validation and feedback. 

Additionally, the solution facilitates the establishment of performance targets and aids in identifying and addressing care gaps to qualify for exceptional performance incentives. Through this tool, organizations can visually track performance across different measures and delve into provider-specific, population-based, and individual patient levels to extract actionable insights to continuously improve MIPS performance.

Indeed, the tailored features for ACOs ensure seamless monitoring, enhancement, and data submission to CMS. Therefore, embracing MeasureAble today can elevate an organization’s performance and drive continuous improvement in healthcare delivery.

“That is the benefit of the Health Catalyst platform. Our absolute bread and butter is pulling together multiple data sources, standardizing and normalizing that data, and then providing that in a cohesive way to our measures engine.”

– Hazel Morrison, MeasureAble Product Manager, during Empowering ACOs: Leveraging Quality Management Tools for MIPS and Beyond webinar

Additional Reading

Empowering ACOs: Leveraging Quality Management Tools for MIPS and Beyond

MIPS and CY 2024: QPP Updates You Must Know to Boost Your Bottom Line

A Complete Guide to MIPS Quality Measures

Many health systems have undertaken initiatives to pursue high-value data and analytics to produce actionable insights that drive clinical quality and operational and financial improvements.

Given the pressures health systems face, this quest to leverage data-driven insights is a noble and vital undertaking.

In response, solutions providers have developed more advanced data and analytics platforms to handle extensive and complex data sets. These data and analytics ecosystems offer a robust foundation for processing, modeling, and visualizing data, leveraging advanced technologies such as augmented intelligence (AI), machine learning, and natural language processing (NLP) to uncover hidden patterns, correlations, and trends from a standardized platform.

Healthcare organizations increasingly rely on these modern data and analytics ecosystems to derive meaningful insights while continuously refining processes and optimizing workflows. Such organizations have realized multiple benefits. The following examples illustrate the transformative impact of data-rich insights catapulted by modern data and analytics platforms.

High-Value Data and Healthcare Analytics Decreases Care Variation 

Health systems face increased pressure to improve the quality of care while reducing costs, which makes unwarranted clinical variation a top improvement opportunity. Novant Health New Hanover Regional Medical Center (New Hanover), in partnership with Health Catalyst, leveraged the data and analytics platform and a comprehensive suite of applications, developing an improvement methodology based on applicable data and analytics and a comprehensive approach to identify improvement opportunities. 

After devoting considerable time and effort to building its own data warehouse, New Hanover realized the need for a more flexible solution to gain actionable insights for improvements. Their aim was to systematically enhance processes and boost organizational performance, patient outcomes, and financial results, leveraging AI and prescriptive business intelligence tools to support population health initiatives and risk-based contracting.

They also devised an analytics strategy encompassing data governance and analytics enhancement for improved clinical and operational performance. The intent was to enhance payer strategies and accountable care operations while reducing care variation. This approach allowed them to establish a scalable data and analytics platform that adapted to evolving organizational needs.

In under three years, the organization achieved a $7M cost reduction, including a $5.4M reduction by reducing unwarranted clinical variation and a $1.4M reduction through improved analytics efficiency. The health system also standardized spine care, blood utilization, high-cost medication use, and the treatment of sepsis in the emergency department (ED).

Relevant Data and Analytics Drive Post-Surgery Improvements, Reducing Readmissions

Post-surgery complications following cardiovascular (CV) procedures impact patients’ lives and can impose financial burdens on healthcare organizations. WakeMed Health & Hospitals (WakeMed) recognized the potential of leveraging valuable data and analytics to minimize these complications effectively. 

To achieve this, WakeMed implemented Health Catalyst’s data platform and other solutions, including a CV-enhanced recovery after surgery (ERAS) solution and Healthcare.AI. Through these resources, WakeMed’s clinical leaders assessed performance, compared patient demographics and providers, and identified other opportunities for clinical advancement.

As a result, the Raleigh, North Carolina-based organization reduced direct variable costs for cardiac surgery patients by $4.5 million with the proper tools. It also achieved the lowest risk-adjusted mortality rate, 0.8 percent, among all hospitals reporting performance to the Centers for Medicare & Medicaid Services (CMS) while achieving a 38 percent relative reduction in its 30-day readmission rate. 

Finding Population Health and Shared Savings Success with Healthcare Analytics 

UnityPoint Health needed advanced analytics to support clinical decision-making regarding the balance between population health priorities and shared savings for its accountable care partnership.

The organization used claims and clinical data integrated into Health Catalyst’s data and analytics platform to develop a model to predict population health and financial trends. The predictive model risk-stratified patients, identifying the likelihood of inpatient admission, ED utilization, 30-day readmission, and missed outpatient appointments. 

Over the past decade, leveraging robust data and population health analytics has led to an average annual shared savings of $31M at UnityPoint Health. Enhanced ED utilization was also evident, with a 40 percent relative reduction in ED visits through effective ambulatory care measures.

Healthcare Analytics Relieves Payer Authorization Pains, Drives Data-Driven Improvement

Lastly, delays in payer authorization and denials of care can lead to anxiety and frustration. Using the Health Catalyst data platform and a payer analytics application, Allina Health found it easier to visualize the workload associated with each bill and quantify the workload by payer, including trends over time.

In turn, Allina Health has lowered labor costs, increased profitability, and improved the patients’ experience. Resolving issues related to outstanding payments has also prevented the shifting of payment responsibility to patients.

As Allina Health continues to leverage data for operational decision-making, it has logged nearly 300,000 unique sessions in its analytics applications and over 160,000 unique views of reports. Notably, these efforts have contributed to more than $33M in positive margin impact through expense reduction and increased hospital revenue from in- and outpatient services.

Healthcare Analytics Investments Accelerate Outcomes Improvement

Healthcare provider organizations like these have embraced data-driven insights and have the ability to achieve strategic objectives. Through continuously tracking critical performance metrics, they can pinpoint areas for enhancement and take preemptive action to rectify them. These organizations have recognized the significance of utilizing data to inform decision-making, enhance patient care, and boost their bottom lines.

As evidenced by these case studies, the implementation of advanced technology and analytics applications has proven to enhance healthcare delivery on a large and meaningful scale.

Don’t wait for tomorrow to revolutionize your healthcare data management – act today and transform your operations with our cutting-edge, secure, and adaptable data ecosystem. Learn more.