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Surviving Managed Care^© Newsletter

Volume 2, Number 4 Winter, 2001

Vision and Eyecare Business Information For The Millennium

Objectives:

To examine the importance of accurate data collection and dissemination under managed care. To review some of the problems typically faced by physicians and their administrators, and to understand the adverse impact of flawed data passed between healthplans and their providers. To learn some simple, but effective contractual negotiation techniques for minimizing the adverse affects of bad data.

  Data, Data, Who's Got the Data? (And Is It Any Good?)

Certainly one of the most frustrating aspects of managed care is dealing with a payor's management information system (MIS) and the data or, what is more likely, the total lack of quality data. HMOs and vision plans typically mandate in their provider agreements that you report certain data to them. They'll typically also agree in that document to provide certain data to you. (This is promised despite the fact that many fail or refuse to provide appropriate data during the pre-contractual negotiations period.)

Unfortunately, the data collection and/or reporting burden placed on a practice is almost always more than physicians or administrators expected. And, sadly, many times the payor's data turns out to be misleading, incomplete, or simply wrong. It's a real headache for everyone involved, and it creates problems on both sides.

Bad provider data can leave payors financially and administratively vulnerable. For example, flawed data may compromise a plan's ability to report accurate HEDIS scoring to NCQA (Health Plan Employer Data Information Set; National Committee on Quality Assurance). Compliance with data reporting requirements is so important that some plans may penalize your reporting failures by withholding future payments (see below).

And if a payor doesn't supply you with the data it's supposed to, or if that data is flawed and its use adversely affects the practice, you're probably going to assume that you have grounds for a claim against that payor. Unfortunately, you're unlikely to get far with any challenge unless you have contractual provisions granting remedy for bad data. Absent such provisions you're probably stuck with any collateral damage.

Here, I'll discuss some areas of concern centered on data collection and reporting, and give you some suggestions on ways to address the financial and administrative issues.

1)    Encounter Data

Payors typically require providers to supply various utilization and encounter information. The form and content of that information and the reporting frequency are crucial issues you must understand. Otherwise you could find that the practice is burdened with requirements it cannot meet. The downside consequence of that is easily seen in this paragraph taken from an actual ophthalmology provider agreement.

Physician shall provide healthplan with encounter data on a timely basis showing all services provided to each Participant for whom Physician receives Capitation Payments. Such encounter data shall be submitted in a format acceptable to healthplan within forty-five (45) days after the date services were rendered. All or a portion of Physician's compensation may be withheld if Physician fails to provide such encounter data in accordance with this Agreement.

Suppose You Can't (Don't) Meet The Payor’s Standards?

Now, what happens if you've signed a provider agreement with this paragraph not thinking to ask for specificity on the reporting requirements? What if after you’re seeing patients the plan tells you it needs data:

• in a computer language your system doesn’t "speak," or
• in a format and with data fields your software doesn’t and can’t handle?

You probably can't count on a payor's MIS department expending more than minimal effort and resources to import, convert, and read your data. (Remember, the contract said you'd provide data in a format acceptable to the payor.) So it would not be surprising if you are deemed out of compliance with the data reporting requirements. To comply you may be forced to invest significant sums in new software modules, or in having an existing module re-written. That's not a pleasant prospect.

But that's one you could face despite your best efforts, and particularly if you're not prompt with that data. However, these problems and possible penalties are avoidable with a little planning and negotiation.

Recommended Action Plan

This one is a no-brainer, yet it's so often overlooked. Get everything specified in writing — format, content, frequency, transfer/transmission methodology, etc. If the payor's standards are acceptable, that's fine. But if you're not able to meet the payor's data requirements at little or no added expense there will come a day when it's crunch time. You'll likely suffer the consequences.

So discuss MIS requirements with your staff well in advance of any negotiations and contract signing, and have your MIS team talk to the payor's. Agree to exchange sample data reports early in the negotiations process. And have mutually agreeable sample reports included as attachments (exhibits) to the provider agreement.

Be certain that your provider agreement references these sample reports as the standard formats acceptable to both sides. It's also beneficial to itemize the specific data that will go into each report. Further, be sure to specify that these reports and the data elements required for their completion can be changed only by mutual consent.

Additional Benefits

Note these additional benefits of being very precise in specifying the data requirements for reports going both directions.

• You'll save time and money if you limit data aggregation and reporting to only that the payor wants and needs. Why expend resources sending the payor data it ultimately won't use?
• You'll make your own life easier if you also systematically "choke" the data pipeline coming your direction. Why in the world would you want the payor dumping megabytes or gigabytes of extraneous data on your staff?
• Perhaps the greatest benefit of all — both sides can cement a more solid working relationship and a stronger sense of trust when the data anticipated is the data received.

2)    Guaranteeing Data Validity

OK, so you agree with the payor on the type of data you'll exchange and the format it will take. Is that enough? Are you now ready to analyze and measure how you're doing under that contract? I suggest you're probably not.

Take a look at one or two of your provider agreements and then consider this simply amazing fact. Though your agreements might specify that one or both sides will provide data to the other, I'd venture you've included nothing therein obligating either party to provide accurate data. And there is probably no mention of contractual penalties for the party supplying bad data.

Bad data creates significant and likely risk for providers, particularly if they're working under capitation or any other form of risk contract. Inaccurate data will compromise or even invalidate any attempt to reconcile risk pools, measure actual utilization against historical benchmarks, allocate costs, or analyze performance on an individual physician or aggregate practice/group/network basis. And if you can't measure accurately and reward appropriately then everything you're working toward is an illusion.

Flawed Data, Mistaken Assumptions = Disastrous Results

• So let's say you discover six months into a contract that the rates you agreed to accept are not working out — the group is in a financial hole. You do a little digging and discover that:
• the actual mix and number of commercial and Medicare patients differ significantly from what the plan has been reporting each month or,
• the actual utilization of costly, out-of-network services differs significantly from the rate represented by the plan (i.e., your costs to pay for these out-of-network services are much higher than indicated/projected by the plan's data) or,
• the plan's "point counts" for Contact Capitation or other "unique encounter" compensation systems are in error, resulting in every physician being paid the wrong amount month after month.

You raise the issue with the payor. Perhaps it investigates and agrees that the data could have been better, and perhaps it agrees to make the necessary adjustments going forward. But what about all your problems incurred to date as a result of the bad plan data? Is the plan responsible for making you (or the physicians) whole — is it responsible for a retroactive reconciliation?

Well, unless your provider agreement has penalty provisions, i.e., unless the contract requires the payor to guarantee its data and specifies remedies in the event that data is not sound, you may find you're out of luck if the payor won't make any retroactive adjustments.

And good luck suing. If the agreement does not require the data to be accurate, the plan probably has not breached that agreement by supplying less than pristine reports. Unless you can prove an intent to supply bad data and deliberately mislead, then the plan has likely met its non-specific obligation to provide "data." An attorney can advise your options, but as with so many other things in managed care it's best to get things right before they have a chance to go wrong.

Recommended Action Plan

Another no-brainer — get a written statement that the payor stands behind whatever data it supplies, both before and after the agreement is signed. This not only puts the plan on notice that it must be careful to provide good information, but also gives you some leverage if that data is not what it should be. A responsible plan will get its act together quickly; a foolish plan might end up in court. A smart plan (and plan staffer) doesn't want to appear incompetent to providers; a truly dangerous plan (one you want to avoid) doesn't care.

These are the important points you'll want to pursue during negotiations:

• the plan guarantees the data,
• the plan guarantees that data will be collected and reported in a uniform manner,
• the plan agrees to "fix" any faulty data collection or reporting mechanisms immediately, and to adjust payments going forward as necessary,
• the plan agrees to reconcile your account retroactively if its data proves faulty (this is a tough negotiation, but key to your survival).
  
  Note that in exchange you'll probably need to agree to the following:
• the providers guarantee their data,
• the providers guarantee that data will be collected and reported uniformly.

Waiting For The Other Shoe To Drop

Now having these guarantees may still not be enough. You must monitor the data every month to be certain that it looks "right." And you must ring the alarm bell early if you suspect problems.

Remember that there is no such thing as trust in managed care. Just because a contract says that a plan guarantees its data, that's not any assurance that a plan actually follows through on its responsibility.

Data can be blatantly false; it can be innocently misleading. The nature of the problem really doesn't matter if you don't catch it. You must be wary.

2)    Eligibility

Now having said all that about getting contractual guarantees that a plan's data will be accurate, you're still going to have data problems that may not be resolvable to your complete satisfaction. Those problems center on eligibility.

Flawed information in a payor's eligibility data base is one of the thorniest issues you'll face. Though payors will provide or give you access to eligibility lists, the truth is those lists are out of date on the day they're issued. Updated (i.e., retroactive) enrollment and disenrollment information can take several months to appear in a plan's data base, and even longer to get to providers.

If you've provided authorized care only to find that months later the plan wants its money back, that's a rude shock. It's especially upsetting when you've received a written referral authorization from a primary care physician or directly from the plan. Only after the fact do you learn that's not automatically a guarantee of eligibility and, certainly, not of payment.

You think: "Wait a minute. The contract says the plan guarantees its data. How can it now take back money when we were authorized to provide services"?

The Fundamental Problem: Does Anybody Know For Certain Who's Eligible On Any Given Day?

Few payors tell you up-front (i.e., during negotiations) that their eligibility data bases can be and probably are unreliable. Still, they'll reserve the right to take back payments for patients on whom authorization was issued but who ultimately turned out to have been ineligible on the date of service. In other words, the payor absolves itself of any problem issuing flawed data resulting in invalid authorizations, and puts the problem on your shoulders by telling you to go and bill the patient.

The payor takes a position that its data bases are only as good as the data reported by employers or government agencies. And a healthplan will state that it tries to do its best to keep the data as current as possible, and to provide physicians with the most current data as reported by employers and the government. In that effort it will argue it meets any obligation to guarantee accurate data — it's supplying the best data available at that time.

A healthplan may take a position that any persons seeking services who later turn out to have been non-eligible probably knew that they were not eligible on the day of service. There are no eligibility surprises for the patient they'll tell you — it's black and white, not grey. Therefore, don't be surprised to find a plan arguing that the patient presented under false pretenses, knew they were not eligible, and is responsible for payment on the services. (Obviously, the argument that the patient actually knew he/she was not eligible can be argued all day long — perhaps in court.)

Why Are These Data Bases So Often Inaccurate? Is Anything Being Done?

Many employers and, especially, the federal government are notoriously slow reporting disenrollment and coverage changes to payors. Employees leave their jobs, Seniors opt-in and opt-out of Medicare HMOs, people change insurance plans or types of coverage. The result? It's common that a plan's "current" eligibility information may be three or four months out of date.

And, as HMOs go out of business or out of certain lines of business (e.g., the current mess with closed/closing Medicare HMOs), or as employees switch their coverages from one HMO to another, or from HMO to PPO to Point of Service, this problem with flawed eligibility data bases will only get worse. Some payors realize that it's a problem that can’t be kept hidden from providers, for it only causes incredible resentment. They're now making the problem known up-front — warning providers that this problem may occur and that there are specific avenues they can and should use to seek redress.

For example, United Health Care's provider agreements for year 2000 contain wording along these lines. (This is taken from a Virginia provider agreement.)

With wording such as this no provider should be caught unaware that there is a reasonable likelihood of retroactive denials and financial "take-backs." The plan is saying "Bill the patient" (or whatever other insurance might have been in place at the time).

Recommended Action #1 — Pursuing The Patient

There are no simple, sure-fire solutions. Certainly you can bill the patient and chase him down that road. Some practices have been successful, and aggressively pursue collections. But without some leverage initiated prior to service, typically what are your chances of successful collection, and are the end results consistently worth the effort? Sometimes that's a very tough call, and every practice will measure success differently.

You can initiate certain measures to inform patients and attempt to preclude problems. Most practices have already taken this first step, but if yours has not then begin by placing a small sign at the reception window stating patient payment responsibility policies. Supplement that by establishing a written understanding with each patient that he or she is financially responsible if coverage is retroactively denied. Note that you'll want to work with your attorney to assure that this document complies with all state and/or federal law, and that you are not forcing the patient to agree to what is essentially an improper or illegal relationship. (Be very careful here!)

Remember, HMO contracts state you can never charge the patient for covered services, even if the plan fails to pay. (This assumes the patient was actually eligible for that insurance on the date of service.) But if the patient was not eligible you should not be precluded from billing the patient and pursing him or her through "Collections Hell" if that's what it takes.

Note: Proceed cautiously with Medicare and Medicaid eligibility and collection issues. Note also: You should always insist that your provider agreement contains specific language giving you the right to bill the patient for any non-covered services, or in the event a patient turns out not to have been eligible on the date of service.

Recommended Action #2 — Putting Limits On The Plan (Creativity Counts)

In rare instances a payor may agree to work with you to interface with employers or other insurance plans, and assist you with recovery of retroactive take-backs on claims denied based on inaccurate eligibility data. But plans are not obligated to do so, so this is not something to count on.

In some even rarer instances, for example when contracting directly with an employer, it's possible to negotiate provisions guaranteeing payment or partial payment for services rendered in good faith to those who later turn out to be non-eligible (but reported as eligible on a flawed data report). Of course this works only if your staff completes proper, prior eligibility verification. Obviously, this also means staff must keep detailed records. Again, don't bank on getting this written into your provider agreement.

You're more likely to reach a partial, satisfactory solution if you ask the payor to put a time limit on retroactivity. Short of eliminating all retroactivity, which is unlikely, a favorable outcome would be to limit how far back the plan can go. So I'd suggest trying to limit retroactivity to no more than 60 days. If the plan won't go for less than 90 days consider taking that if everything else with the contract is acceptable.

Ultimately though, don't be surprised if the plan refuses to compromise or help, denies any and all responsibility, considers this data exempt from any requirement to guarantee data validity, and insists it reserves the right to take back money without limitation. There may be no way out of this nightmare for many physicians, especially those dealing with very aggressive payors or those with seriously flawed data bases. All you can do is track the instances and costs of such occurrences and decide at what point it's better to cut losses and terminate the contract. For your practice's health's sake, be certain that someone is on top of this.

Final note: in recent months there has been some action at the state level to make healthplans accountable for their data bases. Some legislatures are moving to limit the impact of flawed data bases by restricting a payor's ability to "take back" monies paid to providers. Be sure to check with your state society and attorney to see if anything in your state's laws precludes a payor from unrestrained retroactivity.

These materials are intended to provide useful information about the subject matter covered. The author believes that the information is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation of the materials are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any type are disclaimed.

The materials are not intended as legal advice, nor is the author engaged in rendering legal services. The materials are not intended as a replacement for individual legal or professional advice. Information contained herein is presented only for illustrative purposes, and it should not be used to establish any fees or fee schedules, nor is it intended and it should not be construed as encouraging any user of the materials to take any actions that would violate any state or federal antitrust laws, tax laws, or Medicare or Medicaid laws.

Copyright © 1998-2000, Gil Weber, MBA. No part of this newsletter may be reproduced or distributed in any form whatsoever without the author's prior written authorization.

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