The Triple Aim for Emergency Medicine

By John G. Holstein, Director of Business Development

Donald Berwick, MD first coined the term “Triple Aim” for the goals of the emerging health care world. Emergency medicine (EM) has the ABCs as cornerstones of the specialty. Today as this new world emerges there are significant challenges and opportunities that will redefine the meaning of EM’s ABCs; a new “EM Triple Aim” is at hand.

The first significant impetus to change was the Centers for Medicare and Medicaid Services (CMS) announcement making provider payment data available to the public. This announcement now provides critical information to everyone on how physicians have been paid by Medicare. In the context of the other changes this initial move by CMS will likely stand as an industry cornerstone/landmark change, as it will have an impact that ramifies throughout the provider community.

The second industry move of importance for physicians was the recent announcement by Aetna, Humana and United Healthcare of virtually the same change, namely the release of their payment data to the public.

Along the same lines it is important to recognize a very important article potentially linking the first two, namely Herman’s in which he begins exploring the potential for Medicare to become the health care industry’s sole payer. This may not be as farfetched as one would think. Emergency physicians need to be armed with the facts and prepared to aggressively deal with several related changes and industry maneuverings that could potentially have a dramatic impact on the finances and even the survival of individual EM practices.

The related industry changes are as follows:

1. Hospitals moving into the insurance business.
a. Most recent, major move is Ascension Health
2. The explosion of the urgent care industry.
3. Patients being able to self-direct portions of their care (i.e. lab studies).
4. Patients being able to negotiate physician and hospital charges ahead of treatment,
a. The health care version of
5. Medicaid expansion for the uninsured.
6. Increase in high deductible insurance plans.
7. The overall trend toward the “retailization” of health care.
a. Major health systems contracting with pharmacy retailers.
b. Insurers seeing no other option.

What might these changes mean for EM? These are major changes and shifts in the macro-economic and demographic landscape that could significantly impact EM practices. Big-picture issues involve hospitals maneuvering to engage the insurance industry. Medicaid expansion certainly offers the potential for EM reimbursement to increase, at least slightly, but it will be dependent of the actual levels of reimbursement. The explosion of the urgent care industry, coupled with the retailization of health care, definitely has the potential to significantly change the acuity mix of EM practices.

We are now living in an emerging health care world of physician integration, engagement and alignment, with the hospital C-suite expecting the physician community to “get on board” with these changes that are beginning to significantly impact hospital finances. A hallmark of EM is its central role in triggering hospital admissions with the emergency department (ED) accounting for at least 68 percent of hospital admissions. This landscape is however itself changing as hospitals move toward providing more care in outpatient settings. In the case of inpatient hospital admissions substantially declining, it can have devastating financial impacts on hospitals as seen recently in suburban Philadelphia.

So, it is abundantly evident the landscape surrounding EDs is dramatically changing. EM physicians must engage the hospital C-suite, the insurance industry and of course, their patients. The hospital c-Suite represents a clear challenge as it will become a balancing act on the admission issue as patient services and treatment move more and more into the outpatient settings.

The insurance industry poses a very significant challenge that necessitates constant vigilance of critical indices of EM practices, resulting in a new “EM Triple Aim.” The announcement by Aetna, Humana and United Healthcare of reimbursement data represents a watershed moment in payer-provider relations. This is a calculated move requiring constant monitoring, and may very well be followed by similar moves by other payers. Why the monitoring vigilance? During the last 20 years virtually every payer has gone through class action settlements for inappropriate denials and/or payments to physician practices. The end result of these settlements has been the pay-out to physicians of millions of dollars. These payments came years after the services were provided.

Now we fast forward to today with three major payers mirroring the Medicare announcement. EM physicians take note these maneuvers change the contracting landscape significantly. The new “EM Triple Aim” will be as follows:

A- Acuity mix of the EM practices must be monitored.
B- Baseline/benchmark contractual payment tracing and monitoring.
C- Claims denials monitoring and resultant appeal processing.

The necessity of monitoring practice acuities is warranted by the macro industry shifts noted above. The urgent care boom will certainly drain some of the lower acuity mix patients from the ED; however, until/or if the primary care network is capable of handling the newly insured, the ED remains the best option for these patients. As at least the former change (i.e. the urgent care boom) erodes ED acuities, the overall practice acuities stand to increase in severity. The combination of these patient acuity changes, coupled with the coincidental demographic changes absolutely mandate these practice indices be watched constantly, as they can have significant financial impacts on the financial standing of EM practices.

Baseline/benchmark contractual payments likewise require vigilance to first insure the accuracy of the payments. It will also be prudent to fortify and substantiate the quality and value metrics indigenous to every EM practice when engaging any payer in a contract negotiation or re-negotiation. The payer industry tactic of mirroring moves by Medicare needs to be recognized as a forerunner for potentially “negotiating rates down” for EM practices. It is incumbent on every EM practice to be prepared for this possibility and to be fully prepared with both a strong data and quality/value position when engaging payers. EM simply cannot survive as we know it at Medicare reimbursement rates.

Regarding payments there is additionally a new, special case today for EM. The ever increasing incidence of the new self-pay patient, engendered by the insurance high-deductible patients requires all new patient follow-up techniques and protocols. The quality of patient ED registration data and information becomes critical here. The self-pay patient has always been a nemesis for EM practices, and we now have a new category of these patients. This impacts cash-flow and the overall financial strength of EM practices, depending on the incidence of these patients. Payments by these patients need constant monitoring and completely new and creative follow-up protocols. The bottom line is management of the accounts receivable of EM practices is materially changing, requiring new protocols as it is not going to get any easier going forward.

The issue of claims denials and appeals is important even along with a move toward partnering with payers, which in some instances can be part of hospital plans regarding physician integration. It is one thing to consider closer relationships with payers, but it also imperative to be fully knowledgeable of the insurance industry’s historical track record, both prior to and post the numerous class action settlements. Today’s denials processing requires aggressive revenue cycle tracking and follow-up protocols coupled with technological tools that can wrap and send all appeals and required supporting documentation quickly and expeditiously. The market is changing on a daily basis, and it is imperative for EM practices to rethink, retool and aggressively monitor these practice indices along with all other standard indices to insure the financial health and strength of the specialty.

EM now has its own Triple Aim and a new ABC protocol, this time for practice management.

1 Berwick, Donald. “The Triple Aim: Care, Health and Cost. Health Affairs. May 2008.

2 “Medicare Provider Utilization and Payment Data” April 9, 2014.

3 Demko, Paul. “Health Plan Giants to Make Payment Data Accessible to Public.” Modern Healthcare. May 14, 2014.

4 Herman, Ron. “What if Medicare Were the Only Payer?” Becker’s Hospital Review. May 6, 2014.

5 Evans, Melanie. “Ascension Considers major insurance play.” Modern Healthcare. May 22,2014.

6 Snow, Blake. “On-Line Blood Work: No Doctor’s Visit Required.” Fox News. Com. April, 5, 2014.

7 Dunn, Lindsey. “ for Healthcare? Yes. Please” Becker’s Hospital Review. May 20, 2014.

8 Robeznieks, Andis. “CHE Trinity, Walgreen enter coordinated-care agreement.” Modern Healthcare. May 21,2014.

9 Williams, Katie Bo. “Why Insurers have no other option but to hire retail execs.” Healthcare Dive. May 22,2014.

10 Augustine, James, MD “Survey: The ED is the Nexus of Care.” Emergency Physicians Monthly, October, 2013.

11 Herman, Bob. “Crozer-Keystone Health System Facing Steep Losses, Low Admissions.” Becker’s Hospital Review. May 14, 2014