Understanding the Claims Lifecycle: A Step-by-Step Guide
Grasping the details of the claims lifecycle in healthcare is crucial for getting timely reimbursements and maintaining financial well-being. As...
By Brian Urban, Head of Payer Marketing, FinThrive
The average healthcare patient account bounces back and forth between payers and providers multiple times before it gets anywhere near payment.
That’s why the current state of revenue cycle management may best be described as a competitive tennis match. Providers and payers lob transactions over the net, multiple times, relinquishing patient data one painstaking request at a time. It’s a major contributor to the well-reported wasteful administrative spending, which is estimated to reach as much as $570 billion per year, and a critical friction point causing frustration for payers, providers and patients alike.
What if the revenue cycle process was less of an aggressive tennis match and more of a game that both wanted to play – like gin rummy? What if we dial back the competition and let everyone at the table see each other’s cards?
The result would not only ease the administrative burden, it would also pave the way for significant improvement in patient care and patient outcomes.
The case for data sharing
The data silos that force payers and providers into adversarial positions are more than just inefficient and costly. They’re perpetuating a “sick care” system that reimburses on a fee-for-service basis rather than a value basis. They’re locking providers and payers into a transactional view of each patient encounter that prevents them from seeing a bigger picture.
What is the bigger picture? If providers and payers could move beyond the transactional approach, they’d see they are each holding data that could be used together to improve care.
Imagine if a patient presents at the ED for the seventh time within the same calendar year, and both sides of the care continuum compare notes. What if they look beyond the checkboxes of eligibility criteria and discover that the patient is best served by being connected with a primary care physician and other care coordinators? Not only do utilization costs go down, but the patient gets more consistent care.
Z Codes: Collaboration at work
Emerging research continues to prove that social determinants of health (SDOH)—such as not having access to primary care—account for as much as 80% of a patient’s health outcomes. What has been less well understood is how to use SDOH data to change the trajectory and remove barriers to care. At the government level, we now have an exciting example of collaboration from the Centers for Medicare and Medicaid Services.
CMS is using Z codes to track SDOH data and make it easily accessible for population health initiatives. CMS has assigned specific Z codes to correspond to social issues such as homelessness, employment, education and literacy, and other risk factors. SDOH data can be collected by any member of a patient’s care team and recorded in the EMR within the diagnosis list, patient history or provider notes.
Z codes are not currently reimbursable, and there are no formal incentives to collect and document them yet. Utilization research released in April 2022 by the CMS and U.S. Department of Health and Human Services showed that as of 2019 not quite 2% of Medicare Advantage enrollees sampled for the study had claims that contained Z codes. However, for things to get better, we need to understand and document where the risks are – Z codes are a way to get there.
A standardized mechanism to collect SDOH has the potential to improve patient outcomes in far-reaching ways. CMS expects that Z code data analysis will help identify individuals with social risk factors and inform more targeted care planning. Importantly, it can trigger referrals to social service agencies who can provide bus passes, employment assistance, and outreach to help remove the SDOH factors that are impacting health.
When payers and providers share data, they can not only align for better outcomes, but they also take greater responsibility for the risks and costs in care delivery. Providers and payers have not had a good history of collaboration – there have been innovations in pockets, and we need to get better. If the industry starts to collaborate through challenges together, on the same team—the patient’s team - we’ll advance the healthcare economy.
About the Author
Brian Urban
Head of Payer Marketing
Brian Urban is the Head of Payer Marketing at FinThrive and one of the hosts of the Healthcare Rethink podcast. Brian has over 13 years’ experience in health plan product development, specialty pharmacy, and non-profit work. He holds an MS, MBA and is currently working on his Masters in Public Health with Dartmouth College. Brian is passionate about advancing the healthcare economy through health equity initiatives. Connect with Brian on LinkedIn.
