MHA Report: ‘Hospitals Rate Health Plans — A Critical Look at Performance Variation’

BOSTON — In a first-of-its kind survey conducted by the Mass. Hospital Association (MHA), Massachusetts hospital executives shared their perspectives on the administrative performance of health insurance plans doing business in the Commonwealth, identifying best practices and highlighting areas for improvement.

In total, 31 hospital executives shared their thoughts on the performance of 12 health plans in areas such as claims payment, member education, authorization processes, and utilization management. The survey findings, as detailed in the MHA report, Hospitals Rate Health Plans: A Critical Look at Performance Variation, show a balance of strengths and weaknesses among the plans, with the Massachusetts-based health plans scoring better overall than the national plans.

“While numerous efforts are underway to reduce clinical variation and thus eliminate waste, reduce over- and under-treatment and avoid medical errors, this new report highlights a less-publicized opportunity to curb costs by continuing to streamline and simplify many of the administrative processes built into health plans’ relationships with health care providers,” said Lynn Nicholas, FACHE, MHA President and CEO. “The survey findings show that variation among health plans is a major cost driver. When administrative processes can be simplified and made more efficient, cost savings and enhanced patient and provider satisfaction can be the win-win result.”

MHA’s findings reinforce the need and benefits of collaborative improvement measures between insurers and health care providers. Ongoing efforts in this arena — such as the 2004 agreement among providers and health plans to create and implement a uniform, streamlined physician credentialing process, and jointly negotiated language in the new Cost Containment Law requiring health plans to implement national coding standards by 2012 — are a start. The MHA report offers additional, specific recommendations to move the effort even further toward the shared goal of lower health care costs.

Opportunities identified by the MHA report for health plans to improve and simplify administrative processes include:

• Enhancing radiology management programs so payers are using consistent, evidence-based guidelines, approvals are given more quickly for necessary diagnostic procedures, and inappropriate denials are minimized or eliminated;
• Adjudicating claims correctly the first time so that hospitals are paid accurately on a more timely basis, which, in turn, will help bolster hospitals’ fragile financial conditions;
• Regularly updating and disseminating evidence-based clinical guidelines to help foster cost-effective, quality care; and
• Giving providers better opportunities to review and verify information to be used in health plan “tiering” programs for physicians or procedures, and improving education for health plan members about their specific benefits and obligations, so they can be better-informed health care consumers.

“While there are current initiatives underway, both at the state level and through individual health plans working with providers, additional opportunities exist to move swiftly and collaboratively to improve quality of care, enhance patient satisfaction, and better manage cost,” said Nicholas. “In the absence of such coordinated action, consumers and health care providers will continue to bear the brunt of often unwieldy, redundant, and unnecessary administrative burdens. As we focus on the next phase of health reform, we believe this report’s information can be used as a springboard for action to address this frequently overlooked contributor to health care costs.”

For employers and consumers, the report highlights how health plans doing business in Massachusetts compare to one another in terms of the cost, effectiveness, and efficiency of their administrative practices.

A copy of the report is available www.mhalink.org.