Billing Under PPACA...Elusive or Transformational

The law of the past cannot be eluded.
The law of the present and future cannot be eluded,
The law of the living cannot be eluded…it is eternal,
The law of promotion and transformation cannot be eluded…

Walt Whitman – “Leaves of Grass”

In 1961, I was born in a hospital that had been converted from a home in a small town 40 miles from the suburban community where my parents lived at the time.  When I asked my parents why they chose the small town for my grand entry, their response was, they didn’t.  Because they were both busy teachers and didn’t have a relationship with a physician, my dad’s family referred them to a physician who practiced nearby.  Since the closest hospital, where the physician delivered little bundles of joy, was in the small town 40 miles from suburbia, my parents drove “out-of-town” for my fateful arrival.  It was a small “hospital”, so crowded that mom, five hours after I was born, was moved to the couch in the hospital library because they needed her bed for a more acute patient.  Speaking of a cute patient, dad went to work that morning and wasn’t really sure where yours truly was until his family picked mom and I up the following day.  What was the cost of services for my successful transition into the world?  Twenty one dollars after insurance, and how do I know?  I possess the smallish, single page document with the typewritten services description and “balance $21” typed across the page.

Twenty seven years later, my first son was born at a suburban facility by an obstetrics physician that was referred to us by friends.  Caesarean section, nurses everywhere, transition training, dietary discussions, diaper training, nursery care, breast feeding educational services, the bottom line is we had great care and a wonderful experience.  What was the total out of pocket for all of this?  Twenty seven dollars, I think.  To be honest, all I remember was paying three dollars per prenatal visit.  I NEVER remember receiving a final statement from the facility.  I was told that because we chose a participating facility in our HMO plan, they had pre-negotiated payment for services with the hospital.

Our next three sons not so much; I think I’m still paying for the hospital’s labor and delivery suite.  So what’s the point?  The dollars and the change, not as in coin change but change in the information.  The outcomes were similar, ie., healthy babies transitioning into this world in hospitals with considerate, well trained and competent care givers.  However, by the time my last son was born, I was on the receiving end of an enormous line itemed hospital bill, countless other provider statements, EOB’s from the payor, re-filed claims, calls to the hospital, providers, etc.  Massive change, and since I was in the business, I understood most of it, but the volume, diversity of lingo and complexity of information was overwhelming.

Over the past 20 years many of the problems created due to the changes in health care, have been addressed by people.  People who were task oriented, hard-working and caring people that got busy, rolled up their sleeves and with the success of the provider foremost on their mind, found solutions.  Then slowly, an industry evolved, these caring people solved reimbursement problems for their provider’s practice.  Primarily through word of mouth and their previous triumphs, “Billing Services” began to emerge.    Call them what you will, these entrepreneurs discovered a need, found a solution and developed an industry that has helped to improve much more than the economics of health care practices, they have helped to improve the patient experience.

As medical billing software, knowledge, and best practices continue to improve, the industry has done its part in lowering costs by engaging in newer technologies, improved staff training and continuously develops leadership within their organizations.  The industry and it’s collaborative voice, the Healthcare Billing and Management Association (HBMA), have both been proactive with regulatory agencies, the payors and most assuredly the patient.  We have simplified patient statement communication, designed call centers and trained staff to be empathetic with the patient while educating them on behalf of our clients, the providers.

In 2009, Professor Antoinette Schoar[i], MIT – outlines two types of entrepreneurs.  The Subsistence entrepreneur provides solutions in a very connected way.  Motivated by provision, they engage their task oriented skillset in an effort to meet a need.  The second classification Schoar identifies is the Transformational entrepreneur.  Although, somewhat task oriented, this classification of entrepreneur is able to identify shifts in technology, policy or markets and provide organizational growth on a larger scale than subsistence entrepreneurs.

In a related paper on Entrepreneurs, Jing Chen[ii] exhaustively weaves these terms; serial entrepreneurs, selection, ability, entrepreneurial experience and learning by doing into a discussion of how successful entrepreneurs think, interpret, react, resolve and grow their businesses.  Through a steady process of interpreting the need, recommending a solution, implementing the solution and then monitoring results, the DNA of the entrepreneur is to solve market problems with products and services delivered in a consistent high quality process.

Health care under the Affordable Care Act is going to evolve over the coming years.  The mechanisms for financing health care are going to require accountability, and rightfully so.  With health care approaching one fifth of our National gross domestic product, there needs to be accountability.  Health care reform legislation has charged the Secretary of Health and Human Services with creating an estimated 400 programs that improve patient access and quality of care in addition to controlling costs.  To date, fewer than 25% have been translated into regulation.  A few that we, in the billing industry, are aware of are:

  • Bundled Payments- The Agency for Healthcare Research and Quality (AHRQ) defines a “bundled payment” as a health care provider payment method in which the payment is related to the predetermined expected costs of an episode of care. Their definition includes several related concepts that have been referred to as “bundling,” “packaging” “episode-based payment,” and “warranties.” These concepts refer to different ways to aggregate services into a single unit of payment. Specific payment models may include some or multiples of these aggregation methods.
    • Aggregation of services longitudinally in time for an episode of care. The episode is defined to encompass services related to a health care treatment or condition within a defined time window. For example, a single payment could include a surgical procedure and follow-up care. Distinctions are also sometimes made between ―packaging‖ of services provided during a single patient encounter and ―bundling‖ of services during multiple visits.
    • Aggregation of services across providers who may be practicing in different care settings. For example, a single payment could be made for inpatient hospital facility services and physician professional services during an inpatient stay.
    • Warranties refer to payment arrangements where payment for services related to treatment complications is aggregated into the unit of payment. Providers assume financial risk for the cost-of-care defects above a predetermined amount

AHRQ further distinguishes the differences between these payment modalities where treatment is based on episodes of care, while global payment or capitation payment is made for the management of a defined patient population.

Source: Online: June 23, 2011

  • Carve Out Claims Processing- When the employer company provides our group medical insurance to retirees or others who do not have current employee status, Medicare Carve-Out benefits are typically provided. Medicare Carve-Out benefits coordinate with Medicare’s benefits such that combined benefits can be made available that are equivalent to the benefits provided to active employees. Medicare is the primary payer. Covered persons must enroll for Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). If a covered person fails to enroll for Medicare, benefit payments will be reduced by an estimate of the amount Medicare would have paid had he or she enrolled.

Despite the MSP rules, the law does not force an employee to accept coverage under his or her company’s group health plan. If an employee who is entitled to Medicare refuses coverage under your plan, Medicare will be the primary payer. In this situation, your plan is not allowed to provide any benefits to supplement the individual’s Medicare benefits

  • Patient Centered Medical Home (PCMH)[iii]
    • Practice Organization – Do you have a disciplined financial management approach?  Do you embrace a culture of change in your medical practice?  Do you have a staffing model & practice environment that supports a PCMH?
    • Quality Care -  Do you & your staff foster a culture of improvement?  Do your care plans include these components…? Do you utilize risk-stratified care management principles to manage your patient population?….
    • Health Information Technology – Do you have a sound technology infrastructure in place?  Is your practice digitally connected to the medical neighborhood?  Have you considered these attributes in your EHR system?….
    • Patient Centered Care – Do you have processes to ensure patients’ access to care?  Do you engage patients in shared decision-making?  Does your practice support patient self-management?…..

After reading these three simplified descriptions of new or changing regulations in health care, some of our colleagues will consider these changes as having little affect on our organizations, some will become frantic and some will see opportunity.  When looking at these examples more closely, we have to ask the question, who creates, oversees, and manages these procedures, systems, and processes now?  The answer, few, if any.

Implementation of the mountain of changes contained in the Patient Protection and Affordable Care Act will evolve for years to come.  The processes and systems to implement the changes are simply not available today.  However, the solutions will evolve as people with a relationship to a provider recognize the need.

“Over the next 20 years, many of the problems created under PPACA, will be addressed by people.  People who are task oriented, hard-working and caring people that get busy, roll up their sleeves and with the success of the provider foremost on their mind, find solutions.  These caring people will solve economic and informational problems for their provider’s practice.  Then slowly, an industry will be transformed.  Primarily through word of mouth and their previous triumphs, “Billing Services” will begin a transformational process.    Call them what you will, these entrepreneurs will discover a need, find a solution and develop an industry that will help to improve much more than the economics of health care practices, they will help to transform the patient experience”.

[i] The Divide between Subsistence and Transformational Entrepreneurship – Professor Antoinette Schoar, MIT – NBER Innovation Policy and the Economy – May 29, 2009

[ii] Selection and Serial Entrepreneurs – Jing Chen – Florida International University – September 2009

[iii] AAFP –

© 2012 – Ron M Decker
Twitter -  RonMDecker
Linkedin – Ron Decker – CHBME
Related articles

Where's the heART in Health Care


Who sought the prize his heart described,

    And did not ask release,

Whose free-born valor was not bribed

    By prospect of a peace.


        From “The Week…” by Henry David Thoreau

Providers, facilities, equipment, Pharma and regulatory agencies are attempting to understand the rapidly changing landscape of health care. We should not lose focus of the objective; we should simplify and cut through the complexity and confusion. The science in health care can be measured and in turn can be taught, marginalized and plugged into formulas and templates. When new information, protocols and treatment plans are proven out, they are integrated into health care’s systems.

Historically, the process in simple terms was; recognize need, scientifically engineer a solution, prove the theory and market the solution to purchasers of healthcare. I know, way oversimplified, but that isn’t my focus. Recently, much of the discussion in the world of Medicine has been the pro’s and con’s of EMR or EHR systems that are on the market. The sales and marketing strategies being employed by companies offering these systems are promising staggering result’s, and in some cases are causing third-party payors to question the outcomes, i.e. documentation, behavior, etc. This marketing push has created noise into the process of product/service design and delivery to the health care market.

The Agency for Healthcare Research and Quality (AHRQ), whose mission “is to improve the quality, safety, efficiency and effectiveness of health care for all Americans”[i], has an initiative titled “The Effective Health Care Program”. The program:

  • · Reviews and synthesizes published and unpublished scientific evidence
  • · Generates new scientific evidence and analytic tools.
  • · Compiles research findings that are synthesized and/or generated and translates them into useful formats for various audiences.

The objective is to attempt to bring clarity and reduce the varied systems of communication in the complex world of evolutionary evidence based medicine.

In a recent post, Seth Godin compellingly differentiates Industrialists from Capitalists. Seth writes, “Industrialists are not capitalists. Capitalists take risks. They see opportunity, an unmet need, and then they bring resources to bear to solve the problem… Industrialists seek stability instead.”

The challenge in health care today is not the lack of scientific data or evidence; it’s the lack of heart. The term “cognitive dissonance” refers to an understanding that something is off, not quite right… An orchestra playing a delicate piece however, one of the instruments is flat. A photograph of a beautiful model with a deflective object in the background, or a masterfully finished, fully posed human sculpture with a face empty and expressionless. And a well-trained, skilled, and caring health care provider squeezed by a scientific delivery model to the exclusion of their art.

The slippery slope in health care today is those seeking stability by implementing systems that cognitively treat illness based on the newest scientifically based treatment plans but failing to include the soul, the heartbeat, the artist who cares for the sick, hurting and wounded. At the heart of medicine is people. Caring people, who like artists, learn, develop and master their art and consequently deliver the best medicine possible in changing times.

© 2012 – Ron M Decker

Twitter – RonMDecker


Healthcare Explosion...So What Next?


Following the aftermath of the SCOTUS’ ruling on the Patient Protection and Affordable Care Act

Well, it’s been almost two weeks, and the boom heard around the world is in our rear view mirror. The Boom? The gavel dropping on the SCOTUS’ decision on the constitutionality of President Obama’s pet project, “Health Care Reform”, that some said will define his Presidential legacy. In the aftermath of a nuclear explosion, you have waves of devastation; impact, heat and radiation fallout.  History will most likely judge the Supreme Court’s decision in much of the same way as a nuclear explosion.

Impact – I was fortunate or unfortunate, depending on your point of view, to have watched for a few hours the various media pundits, talking heads and politicians brave enough to comment in the moments immediately following “the explosion”.  As if the complexity of the “But we have to pass the bill so you can find out what is in it… ”, said the Speaker of the House bill wasn’t enough; the decision of the Justice’s was equally unsettling with four of the Justice’s stating in their comments that the entire bill was unconstitutional.  However, the swing vote, or knockout blow that upheld the law was strategically delivered by the Bush appointed conservative Judge Roberts.

In my contemplating and reviewing the decision, speculations and political spinning in the moments following the Court’s ruling, the visual that came to mind was one of the freakish futuristic warriors in today’s militaristic video games.  You know, the ones that allow your alter-ego to morph into hulking warriors fighting evil, brandished with 50 caliber automatic weapons secured to one arm, laser guided missiles launched by voice command from their shoulder and a 54 inch massive double edged sword on the other arm all being used in a cohesive and seemingly inexhaustible attack on their enemy…

On June 28th, 2012, Justice Roberts did battle playing the part of the warrior.   He sliced up the conservatives with his deciding vote declaring that the ACA was constitutional.  He fired a .50 caliber round at the President’s pitch to the people that “this bill isn’t a tax”!  Simultaneously, the Bush Appointee detonated what appears to have been a laser guided nuclear missile at the Democrat’s November election efforts.  With the elections closing in and even more dismal jobs numbers released recently, combined with the thought of more people qualifying for health care funded through a new entitlement program, his decision is a defining moment in our nation’s history.


Politicians – “if you can’t stand the heat”, you’ll be voted out of the, uh, office.  Please understand, I’m not a political analyst, but in the time remaining before the elections, there are going to be an incredible amount of details that shed light on the holes that the Supreme Court ruling has revealed in this entitlement expanding law.  There will be politicians who find themselves on the end of an agitated, finger pointing constituent that the elected official “thought” the constituent was on his side, only to discover that the indignant finger pointer just realized they don’t qualify for a tax credit for a government sponsored plan.  While a “legal” alien neighbor making more money does.  Or because a State doesn’t accept the Medicaid expansion, a hole will exist that some making less than 100% of poverty will fall into because the authors of the bill never planned for Medicaid not expanding.

If the last administration’s attempt at addressing health care financing reforms yielded the terminology “the donut hole”, this administration could have their attempt at reforms being referred to as “the Swiss cheese model”.  The unintended consequences of these situations are mind boggling.

States – As referenced above, the States are going to be reviewing their constitutions, political layout and current budgetary environments to determine the direction that they deem most beneficial regarding the provisions and responsibilities that come with accepting the matching Federal dollars in the form of golden handcuffs.

Obviously, with many states in dire straits from a fiscal perspective, in order to expand coverage they will be forced to accept the matching dollars just to stay solvent.  Additionally, the implications from a state perspective could prove incredibly unique when considering the potential of over half the states have indicated they are evaluating rejecting or plan to reject what they deem to be a massive overreach of the Federal government on both governance and taxation.  If you take that a step further, imagine a state that chooses to not take the Federal dollars who borders a state that does accept the additional matching funds.  What happens socially, culturally or demographically in that environment?

Hospitals – Hospitals are vulnerable in many ways under this new plan.  Facing difficult economic conditions, especially those facilities whose mix of patients includes a higher uninsured/underinsured population, the American Hospital Association supported the bill.  Now AHA’s constituents will be forecasting what life will be like in a scenario that is based on the individual states actions and its acceptance of the Feds additional funding and bureaucracy.

Regardless of the outcome of the State’s actions, Hospitals don’t have an option with regard to the day to day.  They treat patients, operate hospitals on shrinking margins; and are forced to somehow strategically plan for the status quo or a significant change in both revenues and increases in patients.  The bottom line is hospitals are anxious based on a recent Modern Healthcare article titled:   “States draw battle lines Hospitals wary as GOP governors vow to fight Medicaid expansion


Today we know the Supreme Court’s decision on the Constitutionality of the Patient Protection and Affordable Care Act.  Some of what we don’t know is:

  • Of the over 2000 pages in the bill, how many new programs will the Secretary of Health and Human Services create under the direction of the Law?
  • It is estimated that, so far, the law has been translated into over 200,000 pages of regulation and policy, if few took the time to read 2000 pages of the bill, who is watching over the regulations being inked in the 200,000 policy pages?
  • If we assume that the real objective of this reform was to stop the current unsustainable utilization model and transition to a quality and improved outcomes model, while increasing the access to the uninsured population in the US, why do the rules for the Health Insurance Exchanges (the provision in the law for fairness, transparency and easy access to health care under PPACA) seem ambiguous and fluid?
  • In March, the Department of Health and Human Services released the Final Rule on Health Insurance Exchanges.  In an April 2012 article in Health IT, “Insurance exchange rule unveiled”, Senior Editor Mary Mosquera quotes HHS Secretary Kathleen Sebelius, “More competition will drive down costs and exchanges will give individuals and small businesses the same purchasing power big businesses have today”.  Why then in the article does it state that; Exchanges will be operational by October 2014, States consider cost as the biggest barrier for planning Exchanges, Exchanges will coordinate with Medicaid and finally, “The federal government will put in place an exchange for states that choose not to establish one or will not have one operational by 2014.”?

An important fundamental thought that must stay in the forefront of the discussion is simple in principle, but somehow has been lost in the bureaucratic dialogue.  Patient and Provider, this should be the driving force or the focus in the debate.  No matter where the patient is seen, no matter who finances or pays for the services, the one overriding theme should be to improve the communication between the patient and the provider for the purpose of improving the patient outcome and experience.  This has been and should be in the future the core of providing quality patient centered health care.

However, both parties, Patient and Provider, must understand that change is eminent and that the future “will be” different.  The days of providing care, collecting co-insurance, uploading claims, posting payments, storing ERA’s/EOB’s, and having staff assist/educate patients will be giving way to a new era for the prosperous health care practice.  The practices of the future will contain words like; Coordination of Care, E-Clinical Template, Bundled Payments, Unit Measuring, esMD, Power Mobility Devices, Carve Out Claims Processing, Health Information Handler, and Interoperability. It will also use traditionally non-clinical terminology like; data-mining, Business Intelligence, SaaS, Petabyte, MANET and other Information Technology jargon standard with business today.

This final thought or summary to my post was much more difficult to write.  It is both a closing and an opening.  Most health care Professionals will agree that the “radiation” or fall out of this bill will be massive.  I hope I am wrong, but I believe that in 20 years those of us who have managed healthcare organizations through this time may conclude that PPACA was the largest US entitlement program ever.  As the Justices discovered, this law is multi-faceted, just like health care.  The debate on this subject was unfortunately done in seven second sound bites, by media types, special interest groups, uneducated politicians who were paraded out in town hall meetings to be the messengers, at a minimum, and maybe more accurately the martyrs for a “greater good, Affordable Health Care for all” campaign.

Like health care, radiation used by the knowledgeable and trained expert can yield great results.  However, when exploded in an uncontrolled environment, radiation will cause irreparable damage.  Just because the issue is complicated, doesn’t mean we can sit on the sideline.  Take time to read, educate ourselves and then communicate our position, continuously.


© 2011 – Ron M Decker

Ron Decker’s Blog – rmdmusing

Twitter -  RonMDecker