Obamacare in 700 words. Its too bad that itll never work as advertised. The Affordable Care Act Simplified and Its Impact on Outsourcing by Vincent Vallejo on August 20, 2013 Outsourcing solutions exist to simplify the added administrative burden.On October 1st, less than two months away, the health insurance exchanges portion of the Affordable Care Act (ACA) will go into effect. The ACA is a large and complicated law – nearly 1,000 pages long. Some portions went into effect as of 2010 with major provisions phased in by 2014 and remaining portions by 2020. Changes in the healthcare industry have led to a growth in healthcare BPO. But how exactly will the Affordable Care Act impact outsourcing? First, it’s important to understand the key provisions. The ACA will consist of: ◾Basic benefits package defined by the federal government ◾Increased Medicare payroll tax on upper income earners ◾Penalty for employers (with 50+ employees) who do not offer healthcare ◾If an employer doesn’t offer insurance, people will be able to buy it directly in the Health Insurance Marketplace. ◾Tax credits to small business – by 2014, 50 percent of the employer’s contributions. ◾The Medical Loss Ratio. At least 85 percent of all premium dollars collected by insurance companies for large employer plans must be spent on healthcare services. For plans sold to individuals and small employers, at least 80 percent of the premium must be spent on benefits. ◾Eliminating annual limits on insurance coverage for new plans and existing group plans. ◾No out-of-pocket for many preventive services. All new plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance. ◾Children up to age 26 can stay on their parent’s health insurance plan. ◾No denial of coverage due to a pre-existing condition. ◾Insurance companies cannot limit the coverage someone receives over his or her lifetime. ◾Expand who will be eligible for Medicaid. States will receive 100 percent federal funding for the first three years, phasing to 90 percent federal funding in subsequent years. ◾The law provides consumers with a way to appeal coverage determinations or claims to their insurance company. ◾Tax credits for middle-low income uninsured. These individuals may also qualify for reduced copayments, co-insurance, and deductibles. ◾ The Individual Mandate. People who are not already covered or fully subsidized will be required to purchase coverage or face a penalty – with some eligible to receive subsidies towards private insurance premiums. Four observations on how the Affordable Care Act will impact healthcare BPO: 1. The Medical Loss Ratio does not offer a clear means to lower administrative costs. Thirty cents of every dollar spent on healthcare in the U.S. goes toward administrative costs. While the law says to lower these costs, it doesn’t offer a clear path to make this possible. The law provides for small businesses needing to offer insurance to its employees. The law provides tax credit to middle class families and expands Medicare to the lower class. However, payers and providers are left to figure this puzzle on their own. 2. Business Process Outsourcing can alleviate the Medical Loss Ratio burden. Services to assist providers in payment reconciliation, denial management and re-billing disputed claims can increase providers’ revenues by as much as 3 to 5 percent. In order to comply with the Medical Loss Ratio, every percentage point counts. The healthcare industry will discover what large corporations have always known. Outsourcing high-volume, data-intensive business processes can drive down costs. 3. Providers will be motivated to claim every dollar available to remain profitable. Healthcare providers write off over $92 billion per year due to an inability to get accurate and timely claim and payment information. BPO companies do not just offer savings on administrative personnel. By improving the process, providers can make more money from abandoned claims. Business process outsourcing companies streamline the revenue cycle and make the payer-provider relationship more efficient. 4. The Affordable Care Act requires standardized billing and an electronic exchange of health information. More than half of transactions between payers and providers are paper-based – significant contributor to the high cost of healthcare. Healthcare remains one of the few industries that relies on paper records. A BPO company with document imaging expertise will be able to clear out the warehouse of dusty paper records and replace it with fully secure, searchable data. The Affordable Care Act is large and complicated, but outsourcing solutions exist to simplify the added administrative burden.
Posted on: Mon, 28 Oct 2013 10:55:10 +0000
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