Vincent Valley Southview Clinic and Value Purchasing

As part of the VVH system the Southview Clinic is a multispecialty group practice with 22 physicians and is 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 VVH.)  They take both Medicare and Medicaid patients and have contracts with 3 Health Plans.    

Health care costs have been increasing rapidly in this community and all payers are becoming much more stringent on paying claims.  The payers believe that they need to impact the care delivery system by utilizing value based payment systems.    However to receive these additional payments the clinic must provide additional clinical information at the time bills are submitted.  The Health Plans have reduced their normal baseline payments by 10%.  The new value purchasing revenue can add as much as 20% above 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 even though the staff complained of being overworked.

As the staff discussed this problem they felt that incomplete coding of the bills could be causing the revenue decline.   Although the clinic had recently successfully installed an Electronic Health Record (EHR) the required clinical information seemed to be absent on the bills and therefore the Health Plans were not making value payments.   

Francis Stallings, the head nurse of the clinic said she felt the nursing staff was doing their part in making 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 assistant staffing which 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 3 months staff layoffs would have to occur.

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