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Coming Together to Streamline Value-Based Payment
September 06, 2018

Coming Together to Streamline Value-Based Payment

CAQH is a non-profit alliance of health plans and related associations working together to achieve the shared goal of streamlining the business of healthcare. The ongoing need to reduce healthcare costs—especially administrative expenses—while concurrently increasing information accuracy is at the heart of CAQH activities. In concert with a wide range of healthcare stakeholders, CAQH develops and implements shared, industry-wide initiatives to eliminate long-term business inefficiencies, producing meaningful, concrete benefits for healthcare providers, health plans and patients. CAQH initiatives are fundamentally changing the direction of healthcare: re-defining how the industry does business today and in the future.
Written by Erin Weber, director of CAQH CORE.

An incredible change in how care is measured, billed, and paid is slowly transforming large portions of the United States healthcare industry. Many believe value-based payment can change the trajectory of national health expenditures and improve the quality of care, yet its success remains uncertain.

Early adopters of value-based payment have encountered numerous challenges to operationalizing the new model. In many ways, fee-for-service administrative processes and systems simply do not align with the needs of value-based payment. For example, no single system supports exchange of all the necessary data for value-based payment. The claims system was designed to support fee-for-service reimbursement. Electronic health record (EHR) systems hold much of the clinical data needed for direct patient care, yet they were not intended to integrate financial and clinical data or to serve as analytics tools. Health plans also maintain siloed systems, in which there is no clean way to integrate clinical data from providers.

Innovation has delivered important advances, and it has also created an operational patchwork of work-arounds and proprietary approaches. The challenge is that some uniformity is needed to prevent administrative roadblocks that can keep new payment models from thriving. The success of value-based payment hinges on achieving a new level of collaboration and cooperation between stakeholders.

We’ve seen this happen before. CAQH CORE was founded to address a similar issue arising from the initial adoption of electronic fee-for-service transactions. Health plans, providers, vendors, clearinghouses, government entities, standards development organizations, and other stakeholders came together to hammer out common rules of the road to help the industry uniformly and more fully implement Health Insurance Portability and Accountability Act (HIPAA) standard transactions. Through ongoing collaboration, these stakeholders continue to create and promote rules that, in combination with other industry efforts, help health plans, providers, government entities, vendors, and clearinghouses conduct fee-for-service administrative transactions electronically and securely. Importantly, these rules help eliminate many manual phone, fax and mail transactions.

As our organization followed the advance of value-based payment, it became clear that the emerging system was at risk of repeating fee-for-service-era mistakes. After a 2-year study, CAQH CORE released a report, All Together Now: Applying the Lessons of Fee-for-Service to Streamline Adoption of Value-Based Payments, which identifies 5 opportunity areas that, if improved, would streamline value-based payment operations. The report also details specific strategies to address each of these areas.

One of the opportunity areas identified in the report—data quality and uniformity—tackles the common problem of irregularities in data. That is, healthcare operational data often lacks the precision necessary to achieve the fluid interactions needed across stakeholders for success in value-based payment.

Discrepancies in the quality or uniformity of data can cause a host of issues in value-based payment. Missing, inaccurate, or obscure provider data can impact quality, cost, and patient experience. It may cause inaccurate risk-based payments when a provider’s specialty and relationship to the patient are unclear. Inaccurate provider data may cause unsuccessful provider-to-provider network referrals, affecting the overall amount of payment able to be made and potentially increasing patient out-of-pocket cost. Provider identity also plays a role in care accountability, which can affect quality measurement, system cost, and patient cost.

As an example, the lack of a single, universal standard for provider identification can be a source of confusion. Some commercial health plans use a proprietary identifier in lieu of the standard National Provider Identifier (NPI) on claims. Medicaid programs typically use both a Medicaid ID and NPI (when applicable based on the provider). CMS uses both the NPI and the tax identification number (TIN), which sometimes identify physicians at the group level.

Of course, data quality and uniformity are affected by many other issues. Even inconsistent use of seemingly common terms can be a source of trouble. When used inconsistently, terms to describe the date and time of an event, such as “discharge from an emergency department” or the nature of an event, such as “admission for observation,” can compromise the ability to measure timeliness of care and affect patients’ financial obligations.

Also, while standards exist for the use of many medical code sets in HIPAA-mandated transactions, EHR systems, quality measures, and so forth, there are no standards for the use of others. For example, a provider reporting the number of diabetics with an HbA1c level above 9.0% may encounter an error because “HbA1c” can be represented in more than 100 different ways.

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