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Learn How to Establish Transparency and Change Business Rules for Advanced Payment Models

June 20, 2020

Today’s healthcare industry is undergoing a transition away from traditional pay-for-service payment systems. Under this old model, patients visit a healthcare facility, receive healthcare services ranging from wellness checks to lab tests to medical procedures, and then pay an individual rate for each of those services.

That approach is being replaced by advanced payment models that emphasize quality by eliminating item-by-item payments and instead billing for services in a more comprehensive way. This may seem like a simplified approach to healthcare payment management, but it actually brings much greater complexity to the already complex tasks involved in revenue cycle management.

To leverage advanced payment models for their financial benefits, healthcare organizations need the right software tools to effectively manage these payment systems.

How Advanced Payment Models Work

With advanced payment models, hospitals reach an agreement with an insurance company to provide care to a group of patients diagnosed with a particular condition or disease. The contract will dictate the amount that the insurance company pays to the healthcare provider over a set period of time. Once that payment arrangement is set, it is up to the healthcare organization to figure out how that money is going to be distributed.

Allocating that money across the organization is an additional task that needs to be wisely managed by the organization. When the right approach to payment management is in place, hospitals can improve the efficiency of their care while also improving patient care. Because the money paid by insurance is fixed, for example, a healthcare organization can increase their profit margin by providing exceptional care that reduces the amount of time patients spend on hospital stays and other forms of treatment.

But managing those contracts can be extremely complicated, given both the scale of the contracts and how many can exist at a single time. Although bundling the costs of a group of patients together has advantages, healthcare companies often have the same type of agreement with many different patient populations. Additionally, the same type of patient population can require multiple insurance company contracts. This can place a strain on payment management systems, requiring innovative healthcare solutions to address these new challenges.

Using Technology to Manage Workflows and Complexity

Organizations must implement advanced technologies capable of managing advanced payment models benefit both patients and the healthcare company itself, organizations need to implement advanced technologies. New technology systems must be able to do three things: manage this complexity, add transparency to payment and money management processes, and enable easy configuration of those solutions as company needs evolve.

Decisions is designed to serve as a complement to other technologies involved in managing advanced payment models, supporting complex workflow management and offering a business rules engine that can facilitate automation and decision-making to better manage incoming revenue and internal expense management. With a data-driven approach to advanced payment model management, these companies can develop a sustainable approach to implementing new payment models and raising the level of care delivered to patients.

Elevating Patient Care Through Improved IT Infrastructure

One of the strengths of advanced payment models is their ability to reduce unnecessary medical costs, such as emergency department visits and inpatient hospitalizations, by improving patient care upstream before those medical needs merit more serious interventions.

This improved care is facilitated by improved care management, made possible by a renewed focus on quality. Because hospitals receive fixed payments to cover patient services, they have greater financial incentive to implement care models that address medical concerns early, before they require more costly services. With the right infrastructure to guide these processes, organizations can elevate their quality of patient care and improve profits at the same time—twin benefits that weren’t possible under traditional payment models.

High Performance at Any Scale

Managing workflows and payments in healthcare is complicated by the legal requirements of privacy regulations such as HIPAA. Organizations can’t just choose any workflow management or automation solutions to support an advanced payment model framework—they need one that can ensure regulatory compliance every step of the way.

Decisions makes that possible by offering a business rules platform that can be fully customized to address healthcare IT needs. Not only can Decisions ensure compliance with HIPAA and other regulatory laws, but it can also be securely integrated with other payment management solutions to bolster performance and IT capabilities without compromising patient data security.

Controlled Costs, Improved Outcomes

When implemented correctly, advanced payment models can improve cost management for insurance companies, stabilize payments and revenue for healthcare organizations, and make it easier for healthcare providers to prioritize patient care strategies that take a more proactive approach to managing better outcomes.

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Gordon Jones
Gordon Jones has founded and sold three companies with the last built using Decisions technology. He has also led factories and large IT implementations both in the US and in Asia, where he lived for over seven years.

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