Why are capitated providers often required to provide "encounter data"?

Encounter data relates to patient visits to a provider for outpatient and ambulatory services. This data is tracked for various purposes and has varying degrees of importance based on how a provider is compensated. For providers who receive revenues on a capitated basis, these capitation payments are based on calculations on past and projected data of patient utilization. The collection, reporting, and interpretation of accurate encounter data is crucial for MCOs to assess risk and make adjustments based patient populations. Without the analysis of such data, risk-bearing providers would be subject to additional financial volatility due to the difficulty in determining and receiving accurate capitation payment. Other uses for encounter data involve quality improvement and prevention programs related to the tracking of types of care (e.g. procedures as chronic disease predictors) and sites of care (e.g. emergency room vs. urgent care clinic).

What is provider profiling and why is it prevalent in managed care?

Analysis and improvement in healthcare involves the use of various measurements. Provider profiling is one method which is used to evaluate the practice patterns of a provider. Profiling is based on certain data that is used to benchmark providers against other comparable providers, select and recruit providers into an MCO network, and pay incentives to providers based on performance. Some examples of the metrics used in provider profiling include wait time to schedule an appointment, hospital admissions, emergency department visits, out of network referrals, members’ satisfaction, and compliance with MCO clinical guidelines. MCO's can also use this data for utilization management and quality improvement initiatives targeting individual providers and groups of providers. The difficulties experienced in provider profiling relate to the selection of metrics, accuracy and reliability of data, interpretation, and MCO-provider relations in utilizing this data. The profiling entities and the providers to-be-profiled must generally agree on the type, validity, and interpretation of the data in order for buy-in to exist. Another potential challenge is patient privacy related to the type of clinical information which is used in profiling.

How is patient eligibility information important to a provider group?

When a patient selects a PCP, that provider typically receives a monthly eligibility or "E-list". Eligibility is the determination of whether an individual is covered by a health plan. The systems which handle eligibility match and report on queries related to the scope of services that are covered. This information is used by providers to determine how a patient should be billed and how the health plan should reimburse the provider. Various electronic systems, methods of data collections, and querying systems are used by providers and plans to determine the claims and reimbursement actions they must take.

How does the claims process work?

A claim is generated to bill for medical services provided by a provider. Various electronic and paper-based systems exist to process and transfer this information. Three processes which are essential to claims processing are claims submittal, adjudication, and payment. Claims can be submitted electronically or via paper forms and must meet certain standards established by government, regulatory, and private entities. Adjudication is the processes of determining eligibility and the levels of coverage so that the appropriate reimbursement can be processed. An important consideration in processing is that accurate and timely claims are provided in order to facilitate payment. IPAs and medical groups must be able to use claims data effectively to make decisions about efficiency and management within their processes.

Kory Razaghi has 15 years of transactional and executive management experience including operations, strategic planning, turnarounds and financial management for a variety of healthcare organizations including medical device, pharmaceutical, biotechnology and hospitals.

Mr. Razaghi heads healthcare practice at Attentus LLC, a healthcare consultancy that is providing Capital Strategy & Capital Projects Consulting, and operational turnaround services to healthcare organizations including community, children’s, government/public, and critical access hospitals, as well as healthcare sector focused private equity firms.