Leveraging CMS Payments and Policies to Drive Strategic Decisions

by Todd Bibb, Senior Implementation Consultant

Healthcare payers are charged with reviewing and analyzing large amounts of data to drive strategic decisions. The vast amount of data and number of data resources, which includes public and private entities, can overwhelm a health plan.

This is especially true when you consider that data can change (e.g., rates and policies) on a quarterly and/or annual basis. Understanding which rates to negotiate with providers and how to staff clinical, compliance, customer service, appeals and grievances areas of a company can be challenging. There is also the constant change in a population’s health. Rates and policies are one area where healthcare payers have mega-data available, but they need to understand which sources are useful and how to parse the data to make more informed strategic decisions.

So which sources should be used and how? The most common in today’s market are:

  • Trade groups
  • Pharmacy Benefit Managers (PBMs)
  • Payers
  • Centers for Medicare and Medicaid Services (CMS) payments and policies

Trade Groups
Trade groups such as America’s Health Insurance Plans (AHIP) and the American Medical Association (AMA) provide data based on existing public policies and clinical guidelines. The data provided by trade groups has, in most cases, been analyzed and is provided to inform payers and other interested parties about how certain policies or clinical guidelines affect payment or clinical outcomes. These reports and white papers can be useful as part of the strategic decision making process; however, care should be taken not to use this data as the sole source of information since it’s based on a third-party view and may not precisely align with every organization’s goals and product offerings.

PBMs provide an enormous amount of data on pharmaceutical use for patient groups and classes of drugs. This data can be beneficial for analyzing trends in the industry and determining the value of pharmacy benefits on clinical outcomes.

One recent article noted: “Health plans and PBMs are recognizing that the value of pharmacy benefits can be increased by integrating pharmacy data into broader patient care activities.”1 The use of pharmaceutical information from the payer’s PBM along with other sources will allow development of more comprehensive strategic decisions for clinical staffing needs.

Payers are excellent data sources. Data here includes claims, clinical outcomes and demographic information on their insured membership. Leveraging this existing data and comparing it to other claims data and clinical outcomes, for instance, can inform decisions for specific lines of business. Comparing
their own data to government-based data from the Centers for Medicare and Medicaid (CMS) could show if the company is over or under paying for certain services or if particular segments of their insured population are having positive or negative clinical outcomes.

CMS Payments and Policies
CMS payments and policies are publicly available and represent an enormous fountain of information. Analyzing this information in various ways can help payers make informed strategic decisions for provider contracting and overall membership health.

CMS publishes rates for all major care settings such as physician, acute and sub-acute facilities and specialty services. These rates are updated quarterly or annually, depending on the provider type, and can be used to analyze healthcare pricing trends by reviewing historical rates for particular procedures. Understanding overall payment policies as well as quality programs allows health plans to make strategic provider contracting and staffing decisions based on current and upcoming changes. Identifying trends in healthcare service rates gives payers leverage to negotiate provider contracts based on specific, measurable data; this can show upcoming policy changes to provide insight for staffing decisions across all departments.

There are tools available on the market that create efficiencies in accessing and analyzing data, but due diligence should be done when selecting the best solution for an organization. Organizations should look for a well-designed technology solution that saves more than it costs and requires minimal implementation time. In addition, it should allow flexibility to price various provider types (e.g., Professional, Hospital) and contract types (e.g., Medicare, Medicaid, Commercial). It should have the capability to provide actionable analysis such as impact assessments of retroactive changes from government programs or predict financial outcomes of network provider agreements.

In conclusion, there are various data sources that can provide health plans meaningful insight to drive strategic business decisions. However, understanding that CMS data is the standard from where most payment and clinical policies are derived can elevate the capability and usefulness of the data at our disposal. Choosing a solution with the right capabilities ensures the most valuable and cost-effective process for the organization.

Originally published on Becker’s Hospital Review/Becker’s Healthcare: http://www.beckershospitalreview.com/finance/leveraging-cms-payments-and-policies-to-drive-strategic-decisions.html