Reference no: EM132668850

Case Study: VVH Southview Clinic and Value Purchasing

As part of the VVH system, Southview Clinic is a multispecialty group practice with 22 physicians located in a suburban office park. It has grown rapidly as the service area has increased in population. The doctors in the practice admit to three different hospitals (two are in VVH). They take both Medicare and Medicaid patients and have contracts with three health plans.

Healthcare costs have been increasing rapidly in this community, and all payers are becoming much more stringent about claims. The payers believe that they need to shape the care delivery system by using value-based payment systems. However, to receive these additional payments, the clinic must provide additional medical information at the time bills are submitted.

The health plans have reduced their normal baseline payments by 10 percent. The new value purchasing revenue can add as much as 20 percent to the baseline payments. Each of the health plans had recently sent new instructions to the clinic on coding systems that are unique to each health plan, and the medical informatics director sent these instructions to the medical staff by memo.

At the weekly staff meeting, Alice Englund, the chief financial officer of VVH, made a special visit because she needed to express her growing concern. The clinic's revenue had been declining over the last six months, though the staff complained of being overworked.

As the staff discussed their problems, they felt that incomplete coding of the bills could be causing the revenue decline. Though the clinic had recently successfully installed electronic health record (EHR) software, the required clinical information seemed to be absent on the bills. As a result, the health plans were not making value payments.

Frances Stallings, the head nurse of the clinic, said she felt that the nursing staff was doing its part to make sure the clinical information on each patient visit was complete before it was used by the billing department. However, she said noticed that the staff frequently had to treat patients with incomplete information, such as lab and radiology reports, at each appointment. Dr. Smith, medical director of the clinic, said the physicians were completing the procedure codes but were not always able to complete the diagnostic codes and other value purchasing clinical information as the lab test results were not always in the system. He also complained about the lack of nursing assistants, who had assisted the physicians in assembling the information necessary for coding.

Alice concluded her remarks by stating that if the clinic revenues did not improve within three months, layoffs would occur.

Activity

Create two cause-and-effect diagrams. The first diagram will identify the problems, and the second diagram will identify solutions.