“Healthcare has major risk vectors in every aspect of its operations”.
Michael Dougherty, Founder and CEO of Provident, talks to Finance Monthly about the roll out of Provident and its suite of health care consulting solutions and how these help heath care providers manage compliance, secure reimbursement and drive success.
What led you to found Provident?
In 2010, I was recruited to found the Compliance & Investigations and ICD-10 Services divisions at a national healthcare consulting firm. This was the beginning of a period of intense change in Healthcare with Meaningful Use, the acceleration of pay for quality initiatives, and the Affordable Care Act, etc. At the same time we were confronted by an historic increase in the population in the Medicare and Medicaid programs in an environment of significantly constrained public finances. I saw new market drivers emerging and the need for new services and technology to meet the demands of our clients.
By late 2012 it was clear to me that every future public and private payer reimbursement model would be tied to quality of care and patient outcomes, and the basis for compliant claims for payment would be found in the quality and integrity of clinical documentation. In other words, pay for volume would be replaced by pay for quality and clinical documentation would be the key driver of reimbursement for hospitals systems and providers.
I had a clear vision for how to meet this market opportunity but it was difficult to incubate it in a large firm that was very successful in the status quo environment. The firm was enlightened enough to concur in my analysis and so we agreed to a friendly buyout where I took the business and the people. This was effective on August 1, 2013. I deeply respect that firm and we are partnered today on many projects. In fact, they are introducing our services and technology into their client base.
Tell us more about the factors you see driving the market today.
I summarise market drivers for clients this way (See supporting charts):
The Medicare population is projected to increase from 54 million beneficiaries today to over 80 million beneficiaries by 2030. This means over 7000 new entrants per day, which will dramatically change the payer mix. The Affordable Care Act has also significantly increased the Medicaid population. By 2030, every Baby Boomer will be in Medicare.
New entrants will temporarily reduce the average age of the Medicare population, but among seniors currently entering Medicare, there is a higher prevalence of multiple chronic conditions than in the past, and as this cohort ages, the prevalence of these conditions will increase.
We are in a prolonged period of a) federal and state fiscal stress which will tend to decrease reimbursement, b) increasing cost of care that strains hospital margins, and c) increased incidences of chronic disease that crowds out high-margin procedural volumes with less profitable medical cases, thereby undermining the surgical-to-medical cross-subsidy almost all hospitals depend upon for margin stability.
The traditional fee-for-service payment methodology will account for only 20% of reimbursement by 2020 (today it accounts for 80%). Private payers are pursuing similar strategies.
Various financial models suggest that that, without intervention, the typical hospital could face as much as a 20 percentage point drop in operating margins over 10 years.
What where the main challenges you encountered at start-up and how did you overcome these?
We were very fortunate to keep our loyal clients and contracts when we spun out and this allowed us to make the very significant investments in people and technology required to create our Technology Enable Clinical Services suite. Our main challenge has been to meet the market demand for our core Compliance & Audit and ICD-10 implementation services while driving rapid expansion of our Physician Education, Clinical Documentation Improvement, Physician Advisor and Case Management services, and Denials and Appeals.
We were able to meet these challenges because we have a strong management team with a very diverse background in healthcare, technology, consulting and other industries. The team has decades of experience in healthcare operations, management and compliance. We have a proven track record of creating value and improving compliance for healthcare organisations across the country.
The team adopted a strategic plan and technology roadmap on day one and stuck with it. We defined our company as one that would bring continuous improvement to healthcare through its management consulting and suite of technology-enabled clinical solutions which are focused on the integrity of the clinical record to support quality patient care, manage compliance with law and regulation, secure appropriate reimbursement and give healthcare leaders actionable clinical data to drive success.
We also set out to develop a unique open culture; the sort of environment in which we had always hoped to work.
How did your previous experience in compliance and consultancy help you in your new role?
Our roots in compliance and consulting are essential to the services we offer now. Everything we do is focused on ensuring revenue integrity and our credibility derives from our decades of experience in ensuring healthcare systems comply with law and regulation. Provident’s solutions are focused on the integrity of the clinical record to support quality patient care, manage compliance with law and regulation, secure appropriate reimbursement, and give healthcare leaders actionable clinical data to drive success.
When you launched, what did you hope to achieve? And how have your goals altered since then?
I set the objective to become the acknowledged leader in continuous improvement of Clinical Documentation to drive compliant revenue integrity for healthcare systems. To achieve this requires significant growth in people, technology, and market share.
How do you help healthcare providers optimise on profit while maintaining service and credibility?
As I mentioned our credibility derives from our roots in compliance and our commitment to quality in our services is driven by our Ethos. We help providers optimise compliant revenue because we are a Clinical and Financial Performance Improvement firm. From Revenue Integrity Audits, Clinical Documentation Improvement, Case Management and Physician Advisor Programs, Medical Records Audit, to Denials Management and Appeals, we deliver compliant, quantifiable, continuous performance improvement.
To what extent would you say your role is to enable healthcare providers to focus on their patients, while you take care of the bureaucracy?
This a key part of what we do. Clinical care teams should be focused on delivering high quality patient care in the most humane and efficient way possible and yet they are burdened by proliferating mandates regarding technology, medical documentation and claims, and clinical process. Our deep experience with these mandates, hospital operations and technology, and clinical process allowed us to bring technology solutions to bear to significantly decrease the burden on care teams so they can focus on what they do best.
Case Management of Patient Status is a good example of this. There are numerous laws and regulations regarding the determination of the appropriate setting of care for patients. Should they be Inpatients or Outpatients? Should they be in Observation status? Does the Attending Physician believe the patient’s medically necessary care will span two midnights? If so, what is the starting point to begin the timeline of care?
Case Managers and Physicians have to communicate in very technical terms to arrive at the correct answers to these questions and document that communication at every step to prove compliance and avoid denied claims or penalties. Usually, these communications are conducted over days or hours across multiple technology systems, emails, texts, paper records, and in-person communications. It is very difficult to manage this fractured business process in a compliant way.
We responded to this by creating DocEdge Communicator. Communicator allows physicians, physician advisors, case managers, clinical documentation specialists and other stakeholders to communicate easily through our HIPAA compliant clou- based mobile app. Each communication type is facilitated by a compliant template based on our knowledge of clinical process and compliance. This drives well documented decision making in a single mobile communication tool. The results are incorporated directly into the patient medical record and case management systems using our open HL7 interface. So, we have taken a fractured business process and made it inherently more compliant and efficient using mobile technology tools.
DocEdge Communicator technology drives integrity and clinical performance improvement into the medical records through enhanced, compliant, communication between physicians and care team members (e.g. Nurses, Physician Advisor, Case Manager, Clinical Documentation Specialist, etc.) leading to:
- Accelerated cash flow through accelerated reimbursement and reduced denials
- Reduction in Length of Stay (LOS) and Case Mix Index (CMI)
- Less administrative burden on physician, reduced errors, increased time with patients
- Greater compliance with clinical documentation being entered directly into the medical record (can interface with any EHR system)
- Increase in patient experience through coordinated care.
What are the main compliance, quality, and revenue opportunities for healthcare systems and providers in 2015?
The CMS Roadmap for Implementing Value Driven Healthcare in the Traditional Medicare Fee-for-Service Program gives good insight into this.
The Roadmap drives:
- Identification of a proliferation of quality measures
- Significant increase in payment for quality performance initiatives
- Many new measures of physician and provider resource use
- Alignment of financial incentives among providers
- Transparency and public reporting of clinical and financial data for Hopltanl systems and Providers.
Again, all of this is driven by the fact that the traditional fee-for-service payment methodology will account for only 20% of reimbursement by 2020 (today it accounts for 80%).
How do you keep up to date with these changes and how do you lead your clients through the change cycle?
Our team includes physicians, healthcare attorneys, nurses, clinical documentation specialists, clinical auditors and coders, and healthcare technologists. This team works together to stay ahead of the issues that drive the healthcare market and we share our insight with clients in real time, every day.
How can healthcare executives ensure they are ready to meet the ICD-10 criteria later this year?
Now is the time for a serious executive gut check regarding ICD-10 readiness. With only four months left and no more delays likely, executives should be challenging their organisations with questions like:
Have you completed a Clinical Documentation Assessment (CDA) that a) identified current documentation issues for your highest volume diagnosis and procedures, b) quantified their financial impact, c) documented the gaps in specificity required to support ICD-10 coding, and d) produced a training plan specific to facility, specialty, and provider?
Does your physician training plan use actual clinical documentation targeted by specialty and provider? Did your CDA identify Coder quality and training issues? Do you have a Coder training and retention plan? Can you rely on the assertion that your Coders will be ready? Do you believe that ICD-10 Certified Coder training offered by industry groups is sufficient to train a production coder without productivity loss or quality issues? Do you have a point-of-care tool ready to deploy to assist Physicians in meeting the documentation requirements?
Do you know what it means when your IT vendors say their systems are ICD-10 compliant? Will you have at least 6-9 months to test these systems?
Do you know when all of your payers will be ready for end-to-end testing? Do you know how they are changing their denial management processes? Do you know how that will impact you?
Do you have a plan for the continuity of all of your management and clinical reports that rely on ICD-10 codes or clinical definitions? Do you know how much custom coding/data formatting will be required to produce these reports in the ICD-10 environment?
If an executive can’t get high confidence regarding these questions they should get help immediately.
How does risk management in a healthcare scenario differ from risk management in other sectors?
Healthcare has major risk vectors in every aspect of its operations. The delivery of the “product” itself is extremely complex and risks medically adverse outcomes, governments and their agents are involved in every step of the business process, payment is contingent on numerous third-parties, and, increasingly, patient experience (which is very difficult to influence and measure) is driving reimbursement. At the same time technology and government incentives are driving transparency. Actual and perceived negative outcomes get easily magnified.
You also provide litigation and investigation support. What can you tell us about this? What are the most common types of litigation you deal with?
The intense scrutiny of federal and state regulatory agencies has been accompanied by a concurrent increase in whistle-blower and class action lawsuits, fraud-related investigations and contractual disputes. We help healthcare organisations and their internal and external counsel prepare for, manage, and defend investigations and support them in commercial litigation and financial transactions.
How often are you called upon to assist in securing financial reimbursement for clients?
Compliance driven revenue capture and continuous improvement is a core part of our business which we deliver through ProvidentEdge Revenue Integrity Audit services. Through this we:
- Maximie revenue opportunities while validating for DRG compliance
- Audit findings result in actionable role-specific training, delivered directly to the staff’s inbox.
- Provide targeted weekly AHIMA approved CE training to coders, case managers and clinical documentation specialists to ensure continuous process improvement.
- ProvidentEdge Audit typically achieves:
- Benefit per chart reviewed: $1000+ (€880)
- Value per chart with recommended change: $5,000-10,000 (€4,400-8,800)
- ROI: $7-$15 rebill (€6.20-13.20) opportunity per $1 (€0.88) of Audit Cost
- Weekly Continuous Improvement Training for all relevant staff
Many firms conduct revenue audits. We are different; we are a compliance driven firm and every audit we conduct results in continuous improvement training so errors are not perpetuated and improvements are integrated in future action.
How would you describe your management style?
I believe in a flat and open culture of personal responsibility. My job is to lead by example and to create a team of mutually supporting experts who are empowered to be creative, challenge orthodoxy, and drive outcomes in service to our clients. It is also my job to always be looking ahead to understand and define the opportunities created for our clients but the challenges created by our healthcare system.
What motivates you?
I have always been motivated by challenges and obstacles and I thrive on looking beyond “no” and “can’t” and “it’s too hard” to finding novel solutions.
If you hadn’t launched Provident what else would you have liked to do?
I can’t imagine having done anything else. It seemed to be the natural extension of my career. That said, when I retire I would like the opportunity to re-enter public service to do what I can to help drive positive change.
What is next on the agenda for you?
Deliver and stay close to our clients as we help them navigate a very difficult course to clinical excellence and financial stability in the years ahead.
To thrive hospital systems need:
- Long-term reductions in cost growth;
- Enhanced revenue capture and avoidance of loss;
- Improved throughput and efficiency; and
- Proactive case mix management that sustains profitable procedural growth while managing low-margin medical cases in low-cost settings.
Provident is built to help clients thrive in the future of healthcare.
About Michael Dougherty
Michael is the founder and Chief Executive Officer of Provident and is an internationally recognized compliance and investigations professional. Prior to founding Provident, Michael was a Managing Director and practice leader for Huron Healthcare’s Compliance & Investigations (HCI) practice which provided comprehensive solutions for healthcare organizations and their legal counsel, addressing all aspects of compliance, governance, risk management, audits, investigations, and litigation.
Michael also led Huron Healthcare’s ICD-10 Services Team which integrated Huron’s extensive healthcare operations and technology experience in Revenue Cycle, Clinical Documentation, Labour and Non-Labour Assessment and Optimization, and Health Information Systems. Michael has extensive global consulting experience, including at a “Big Four” firm, where he served clients in multiple industries conducting investigations of fraud and misconduct and designing regulatory and ethics compliance programs. He also served as the Americas Leader for Fraud and Misconduct Assessment. Earlier in his career, Michael served in federal law enforcement and was later a member of the founding staff of the Department of Homeland Security (DHS).
Provident was founded in 2013 by a management team from a national consulting firm with decades of experience in healthcare operations, management and compliance. We have a proven track record of creating value and improving compliance for healthcare organizations across the country. Leveraging our deep operational experience and real world understanding of the regulatory landscape, Provident partners with its clients to meet the diverse challenges of the evolving healthcare industry.
Today, Provident brings continuous improvement to healthcare through its management consulting and suite of technology-enabled clinical solutions which are focused on the integrity of the clinical record to support quality patient care, manage compliance with law and regulation, secure appropriate reimbursement and give healthcare leaders actionable clinical data to drive success.