New Physician Payment Reforms Highlight Need for Quality Coding, Accurate Documentation

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To be an effective practice owner, it is necessary to understand the financial circumstances and environment of the practice’s operation. Well-managed practices prevent the loss of time and money. Therefore, to improve productivity and operating efficiencies, you need to have a basic understanding of billing and payment initiatives that will impact the practice’s bottom line. The financial system of a medical practice will contribute to every other system within the practice.

There are many new initiatives on the healthcare platform that include new ways of getting paid, due to such programs as value-based purchasing, clinical documentation improvement and quality care across the continuum. It may be tempting for physicians and practice managers to just insist on holding on to what is comfortable—stay with the norm. But things are not the same, and we are moving into an era where the norm is something of the past. Taking a close look at all the practice and payment initiatives is vital to the financial survival of a practice. Embracing new initiatives and finding the best application to each practice can prevent leaving millions of dollars on the table.

Throughout the past few years, most practice changes have been due to initiatives spiraling down from the Centers for Medicare & Medicaid Services (CMS), such as the Physician Quality Reporting System (PQRS), meaningful use EHR Incentive Program and the clinical documentation improvement (CDI) program. Although the programs may seem different, they are designed to work together as a whole to improve quality measure reporting on patient visits and care.

In an effort to safeguard compliance and financial security with these required programs, physicians, practice managers, coders and billers must understand what is driving this increased movement toward quality reporting for the outpatient setting. Although PQRS and meaningful use started out as incentive programs, they transitioned into a penalty phase for noncompliance in 2016. These penalties could combine to make a negative financial impact of up to 9% for a practice’s annual revenue in 2017.

As if that’s not enough, Medicare announced its newly proposed Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which combines PQRS, meaningful use and the value-based modifier program, and introduced the Merit-Based Incentive Payment System (MIPS).

With the introduction of these programs, there is more scrutiny and oversight for providers to prove they’re doing due diligence in the total care of their patients. The coding and clinical documentation improvements of patient encounters are integral components for compliance, achieving quality reporting and maintaining strong financial accounting.

Although physicians are diligent in treating patients and following clinical guidelines, it is important to stay abreast of new rules and recommendations under the new payment programs by the government, as well as the insurance companies. Practices will need to reevaluate coding and documentation practices to meet the needed areas for quality reporting and avoid unnecessary revenue hits and risk adjustments in payments. This is because changes associated with the new payment initiatives mean that reimbursement will no longer be based on evaluation and management coding; it will be based on the level of services provided and the severity of a patient’s illness, which will be linked to risk—so a definitive strategy must be in place to meet the extra requirements involved in reporting quality measures.

As we transition to 2017, the new payment reforms are changing how providers document. Accurate and appropriate documentation paired with quality coding are two of the pathways for success with value-based and quality measure improvements. In order to meet all the clinical documentation improvement guidelines and varied measures, providers will need to take advantage of every existing resource available.

The ACR practice management, advocacy and registry department is here to help with navigating the new payment reform initiatives. Visit us online for all your practice needs as we focus on assisting rheumatology practices with transition of workflow, documentation and the revenue cycle.

For training information or additional questions on coding, documentation and quality measures, contact the ACR practice department at [email protected].