cloud EHR

Is there a Potential Impact on Pediatric Practice Revenue due to Aetna Acquisition of Coventry?

August 20, 2012 in Uncategorized by support Team  |  Comments Off on Is there a Potential Impact on Pediatric Practice Revenue due to Aetna Acquisition of Coventry?

The Healthcare environment in the United States is evolving rapidly due to the pressures to reduce costs. The Affordable Card Act (ACA) has provisions that expand coverage via Health Exchanges as well as expansions of the Medicaid program. Due to budget pressures, states are migrating from State run Medicaid to Medicaid being managed by Managed Health Care Plans. Coventry has a significant presence in the Managed Medicaid market. Aetna significantly increases their presence in Managed Medicaid and lower priced insurance plan options with the recently announced acquisition of Coventry. Given the migration of new patients to lower priced insurance plans (via the future Health Exchanges) as well as expanded Medicaid coverage, this is a potential growth opportunity for Aetna. Appears that Aetna believes in this potential opportunity due to the premium they paid for Coventry (over $5.0B).
For your Pediatric practice, it is critical to monitor the reimbursement trends by plan as these changes in the Healthcare system continue to occur. Pediatric offices usually provide one of the lowest costs of Healthcare delivery from the perspective of plans and employers. Leveraging the facilities of a Pediatric Office is in alignment with the interest of the Healthcare system by promoting wellness versus ‘sick care’. Also, services in pediatric offices are more cost effective than in hospital settings. Small Pediatric Practices can effectively manage this complex environment by adding new patients, providing quality care, and by implementing strong management of the practice revenue cycle. If a practice is unable to grow patients as well as manage their Pediatric Practice Revenue cycle effectively, they will eventually dissolve or merge with a Hospital System or large Medical Group.
Health insurers identify how to save money by lowering reimbursements – unfortunately, many use the ‘squeaky wheel’ type of rewards/evaluation. For example, a Health Insurer will not increase rates on all providers on their ‘independent products’ while negotiating high single digit rates with the Hospital System that uses their size as leverage. If the small Pediatric office does not have solid IT systems that allows them to evaluate their reimbursements, they might be underpaid compared to the Hospital System located in the same area. If your Pediatric practice provides high-quality and consistent medical care, the practice show be rewarded on the care provided. The Health Insurance companies prefer that practices are managed like the average Pediatric practice country versus Pediatric practices that consistently achieve collection rates above 99% of the contract amount. This is a good time to benchmark the collection rate and check the controls and systems in place that optimize not only the collection rate but also the Accounts Receivable (AR) days. Through good benchmarking and management of the revenue cycle, your practice can be confident on how to manage the changes in the Healthcare market like the Aetna acquisition of Coventry.