The 2025 Healthcare Perfect Storm: How Rising Costs and Increased Scrutiny Impact Insurers

The blog post examines the health insurance industry’s challenges in 2025, highlighting rising healthcare costs, increased patient demand, and heightened government scrutiny. Insurers, particularly those focused on Medicare Advantage, must reevaluate strategies to maintain profitability. Despite these hurdles, opportunities for innovation and growth exist through personalized care and strategic partnerships.

This blog post delves into the complex challenges facing the health insurance industry in 2025, a year poised to be a pivotal moment for insurers, particularly those heavily invested in Medicare Advantage plans. Rising healthcare costs, increased patient demand, and heightened government scrutiny are converging to create what we’re calling a “perfect storm.” This confluence of factors threatens profitability and necessitates a critical reevaluation of existing operational strategies. This post expands on the themes discussed in our latest podcast episode, exploring these challenges in greater depth and offering insights into potential solutions for both insurers and healthcare providers.

Rising Healthcare Costs: A Looming Crisis

The escalating cost of healthcare is arguably the most significant challenge facing insurers. Inflation, technological advancements, and the increasing complexity of medical treatments all contribute to this unsustainable upward trend. The post-COVID surge in patient utilization, with many seeking deferred procedures, has exacerbated the problem, placing immense pressure on insurers’ financial reserves. This increased demand is straining existing resources and impacting profitability, pushing medical loss ratios (MLRs) higher than ever before. The implications are profound, forcing insurers to re-evaluate pricing strategies, negotiate more effectively with providers, and explore innovative cost-containment measures.

The Impact on Medicare Advantage

Medicare Advantage (MA) plans, once considered a goldmine for insurers, are particularly vulnerable in this environment. The increased demand for MA plans, coupled with rising healthcare costs, is squeezing profit margins. Major players like Humana and UnitedHealth Group, heavily reliant on MA for revenue, are grappling with these challenges head-on. Their financial performance is becoming increasingly dependent on their ability to manage costs efficiently while maintaining patient satisfaction and adherence to regulatory requirements.

Increased Patient Demand: A Double-Edged Sword

While increased patient demand initially appears beneficial, in the context of rising costs, it becomes a major challenge. Insurers are faced with a difficult balancing act: fulfilling the needs of a growing patient population while simultaneously controlling costs and maintaining profitability. This necessitates a shift towards more proactive and personalized care models that prioritize preventative measures and disease management. Strategic partnerships with providers are crucial for achieving these goals.

The Need for Personalized Care

The sheer volume of patients requires a move beyond traditional, reactive models of care. Personalized care, driven by data analysis and predictive modeling, is becoming essential for identifying high-risk individuals and implementing targeted interventions. This approach not only improves patient outcomes but also helps to manage healthcare costs more effectively, ultimately impacting the MLR and safeguarding insurer profitability.

Increased Government Scrutiny: Navigating Regulatory Hurdles

The health insurance industry is facing unprecedented levels of government scrutiny. Lawmakers are increasingly focused on issues of transparency, affordability, and access to care. This heightened scrutiny translates into stricter regulations, increased audits, and potential penalties for non-compliance. Insurers must navigate this complex regulatory landscape while ensuring they maintain ethical and transparent practices.

Adapting to Regulatory Changes

The regulatory environment is constantly evolving, requiring insurers to be adaptable and proactive. Staying informed about new regulations, investing in compliance programs, and engaging with policymakers are crucial for navigating this challenging landscape. Failure to adapt could lead to significant financial penalties and reputational damage.

Opportunities Amidst the Storm

While the challenges are significant, the current climate also presents opportunities for innovation and growth. Entrepreneurs and healthcare providers can leverage this disruption by focusing on high-cost patient areas and developing innovative solutions that improve efficiency and reduce waste within the healthcare system. New models of care, such as value-based care, offer potential avenues for both improved patient outcomes and reduced costs.

Innovation in Healthcare Delivery

The need for cost-effective and efficient healthcare delivery models has never been greater. Entrepreneurs are stepping up to the plate, developing innovative technologies and solutions to address these challenges. These range from telehealth platforms and remote monitoring devices to AI-powered diagnostic tools and personalized treatment plans. Insurers that embrace these innovations and forge strategic partnerships with these innovators will be better positioned to thrive in the evolving healthcare landscape.

Conclusion

The healthcare industry in 2025 faces a perfect storm of rising costs, increasing patient demand, and intensified regulatory scrutiny. Insurers, especially those heavily reliant on Medicare Advantage, are experiencing significant financial pressure. This necessitates a complete re-evaluation of operational strategies, focusing on cost containment, personalized care, and proactive compliance. However, amidst these challenges lie significant opportunities for innovation and growth. By embracing new technologies, fostering strategic partnerships, and prioritizing patient-centric care models, both insurers and healthcare providers can navigate this turbulent environment and emerge stronger. To delve deeper into this topic and explore potential opportunities, please listen to our podcast episode, “2025 Opportunities in Healthcare: Navigating the Perfect Storm.” This episode provides further insights into the challenges and opportunities discussed in this blog post and offers actionable strategies for navigating the complexities of the 2025 healthcare landscape.

Companies mentioned in this episode:

Research Links:

The Definitive Playbook for Choosing Behavioral Health Markets Value Based Care Advisory (VBCA) Podcast

Rate sheets don't tell the whole story.In this episode, Alex Yarijanian breaks down the 8-indicator playbook he uses to evaluate any tele-behavioral health market before committing capital — and names the specific states he'd enter today and why.Most operators default to the biggest states: California, Texas, Florida, New York. But population size alone is one of the weakest predictors of a winning market. The real levers live in parity law enforcement, workforce economics, MCO concentration, and infrastructure readiness.WHAT YOU'LL LEARNWhy the biggest states are rarely the best markets for tele-behavioral healthThe 8 indicators that separate win-win markets from cheap-rate miragesHow to build a weighted scoring model before entering a new marketWhat associate-level billing eligibility does to your workforce marginsHow MCO concentration affects contracting speed and rate-cut riskWhich states Alex rates as best all-around, high-risk, and growth-stage betsTHE 8 MARKET INDICATORSMedicaid market size: Total addressable population and realistic capture potentialPayment parity: State-level mental health parity laws and strength of enforcementCost of living index: The single best proxy for labor margin on clinical staffAssociate-level billing: Whether licensed associates can bill independentlyHRSA HPSA demand mapping: Documented unmet need in mental health shortage areasBroadband & 5G coverage: Infrastructure required for reliable telehealth deliveryMCO landscape: Plan count, behavioral carve-outs, any-willing-provider law exposureTax & corporate climate: State-level business environment and regulatory postureMARKET ARCHETYPESBest all-around: Arizona, Nebraska, Delaware, OregonVolume, thin margins: Arkansas, North DakotaHigh rate, high cost niche: AlaskaGrowth stage bets: New Mexico, Montana4 ACTION STEPSBuild a scroll scoring model — layer all 8 indicators into a weighted scorecardValidate demand on the ground — overlay HRSA HPSA maps + FCC broadband gap dataCheck your plan mix — count Medicaid MCOs and behavioral carve-outsRun a payroll stress test — model cost of living vs. your target clinician pay bandRESOURCES MENTIONED HRSA Mental Health HPSA maps: data.hrsa.govFCC broadband coverage maps: broadbandmap.fcc.govNCSL mental health parity law trackerLicensure compact maps: PSYPACT, ASWB Compact, Nurse Licensure Compact State Medicaid rate databases
  1. The Definitive Playbook for Choosing Behavioral Health Markets
  2. Medicare Negotiates Like an Owner. Commercial Doesn’t.
  3. The Rural Health Transformation Fund: What States Are Funding in 2026
  4. Medicare Advantage 2026: How Payers Are Choosing Partners
  5. Digital Health at a Crossroads: The Fallout from a $100M Adderall Fraud Scheme

Unlock Financial Success with CalAIM: Budget Estimator Tool for CBOs

The CalAIM Budget Estimator Tool helps CBOs navigate the financial complexities of contracting under CalAIM. It offers an Excel-based template with built-in assumptions, cost input fields, revenue customization, and a summary tab. The tool supports informed decision-making, negotiation power, and sustainability, empowering organizations to enhance care and expand services.

Introduction

Navigating the financial complexities of contracting under the California Advancing and Innovating Medi-Cal (CalAIM) initiative can be challenging for community-based organizations (CBOs). With new Medi-Cal benefits such as Enhanced Care Management and Community Supports, understanding potential revenue and expenses is crucial. This is where the CalAIM Budget Estimator Tool comes in, offering a robust template to help CBOs project financial viability and ensure their mission’s sustainability.

Understanding the CalAIM Budget Estimator Tool

CalAIM Budget Estimator Tool: The CalAIM Budget Estimator Tool is an Excel-based template designed to help organizations estimate costs and potential revenue from providing Medi-Cal Enhanced Care Management and selected Community Support Services. These services include housing-related services and medically tailored meals.

Key Features

  • Built-in Assumptions: The tool incorporates assumptions about payment structures for these services, as outlined in the California Department of Health Care Services CALAIM Enhanced Care Management Policy Guide and Community Supports Policy Guide.
  • Cost Input: Users can enter organization-specific expenses such as staffing costs and other direct and indirect costs.
  • Revenue Customization: It includes generic rate ranges and areas for customizing expected revenue sources to calculate the program margin (ratio of revenue to expenses).
  • Summary Tab: A summary tab displays the projected margin by program year, helping users understand if their assumptions lead to a fiscally viable program.

The Importance of Financial Viability for CBOs

For CBOs, financial viability is paramount. The adage “No margin, no mission” rings true as these organizations aim to enhance services for individuals with complex health and social needs. The CalAIM Budget Estimator Tool enables organizations to model various scenarios for their programs, supporting meaningful feasibility discussions with financial officers and other decision-makers.

How the CalAIM Budget Estimator Tool Supports CBOs

The CalAIM Budget Estimator Tool is designed to facilitate informed discussions about future programming and the financial feasibility of providing new Medi-Cal services. Here’s how it supports CBOs:

  • Modeling Various Scenarios: The tool allows organizations to create multiple financial scenarios, enabling a comprehensive understanding of different potential outcomes.
  • Justifying Rate Requests: By organizing and highlighting critical financial information, the tool helps CBOs justify rate requests to MCOs during contract negotiations.
  • Enhancing Financial Confidence: With detailed projections, CBOs can confidently navigate the financial aspects of contracting with MCOs.

Step-by-Step Guide to Using the CalAIM Budget Estimator Tool

Step 1: Download the Tool

Step 2: Enter Costs

  • Input your organization-specific expenses, including staffing costs and other direct and indirect costs.

Step 3: Customize Revenue Sources

  • Use the tool to enter expected revenue sources. Customize the rates to reflect realistic projections for your organization.

Step 4: Review Summary Tab

  • Examine the summary tab to view the projected margin by program year. This will help you understand the financial viability of your program.

Benefits of Using the CalAIM Budget Estimator Tool

Informed Decision-Making: The tool provides comprehensive data to support strategic financial decisions. Enhanced Negotiation Power: With detailed financial projections, CBOs can negotiate better rates with MCOs. Sustainability: Ensuring financial viability helps CBOs sustain their mission and expand services under CalAIM.

Frequently Asked Questions

What is the CalAIM Budget Estimator Tool? The CalAIM Budget Estimator Tool is an Excel-based template designed to help organizations estimate costs and potential revenue from providing Medi-Cal Enhanced Care Management and selected Community Support Services.

How does the tool support CBOs in contracting with MCOs? The tool enables CBOs to model various financial scenarios, justify rate requests during negotiations, and make informed decisions about program viability.

What are the key features of the CalAIM Budget Estimator Tool? Key features include built-in assumptions, cost input fields, revenue customization, and a summary tab displaying projected margins.

Can the tool be customized for specific organizational needs? Yes, users can customize expense inputs and revenue projections to reflect their specific organizational needs.

How do I get started with the CalAIM Budget Estimator Tool? Download the tool, enter your organization-specific costs, customize revenue sources, and review the summary tab to understand financial projections.

Why is financial viability important for CBOs? Financial viability ensures that CBOs can sustain their mission and expand services, ultimately enhancing care for individuals with complex health and social needs.

Conclusion

The CalAIM Budget Estimator Tool is an invaluable resource for CBOs looking to contract with managed care organizations under CalAIM. By providing detailed financial projections, the tool empowers organizations to make informed decisions, justify rate requests, and ensure the sustainability of their mission. Download the tool today and take the first step towards financial success and enhanced service offerings.

Introducing the Care MAP Tool: A Comprehensive Guide

Introducing the Care MAP Tool, designed to support healthcare providers in managing complex care needs. This user-friendly, Excel-based tool offers a structured framework for effective care coordination, resource allocation, and patient management. With modules for an overview and practical scenarios, plus a comprehensive resource library and FAQ section, the Care MAP Tool enhances care strategies and improves patient outcomes. Download it today and elevate your care management practices.

Effective care management is crucial in today’s complex healthcare landscape. To support healthcare professionals and organizations, we are excited to introduce the Care MAP Tool, a valuable resource designed to aid in complex care management. This blog will provide an overview of the Care MAP Tool, walk you through an example scenario, and offer access to a resource library and frequently asked questions (FAQ) section.

Module 1: Care MAP Overview

The Care MAP (Management and Planning) Tool is designed to support healthcare providers in managing and planning care for patients with complex health needs. This tool provides a structured framework to help clinics navigate the intricacies of care coordination, resource allocation, and patient management. Here’s what you can expect from the Care MAP Tool:

  • Framework for Complex Care Management: The tool offers a comprehensive structure to address the multifaceted needs of patients requiring intensive care management.
  • User-Friendly Interface: The Excel-based tool is intuitive and easy to navigate, ensuring that healthcare providers can quickly integrate it into their workflows.
  • Scalable and Adaptable: Whether you’re a small clinic or a large healthcare organization, the Care MAP Tool can be scaled and adapted to fit your unique needs.

Module 2: Example Scenario

To illustrate the practical application of the Care MAP Tool, let’s walk through an example scenario:

Scenario: Managing a Patient with Multiple Chronic Conditions

  1. Patient Overview:
    • Name: Jane Doe
    • Age: 65
    • Conditions: Diabetes, Hypertension, Chronic Obstructive Pulmonary Disease (COPD)
  2. Initial Assessment:
    • Medical History Review: Gather comprehensive information about Jane’s medical history, including past treatments, hospitalizations, and medications.
    • Social Determinants of Health: Assess factors such as living conditions, access to transportation, and social support.
  3. Care Coordination:
    • Interdisciplinary Team: Form a care team that includes primary care physicians, specialists, nurses, social workers, and community health workers.
    • Care Plan Development: Create a personalized care plan that addresses Jane’s medical and social needs, with clear goals and timelines.
  4. Monitoring and Evaluation:
    • Regular Check-ins: Schedule regular appointments and follow-ups to monitor Jane’s progress.
    • Adjustments: Modify the care plan as needed based on Jane’s response to treatment and changes in her condition.

Resource Library

The Resource Library is a curated collection of materials to further support your use of the Care MAP Tool. Here, you’ll find:

  • Guides and Manuals: Detailed instructions on how to use the Care MAP Tool effectively.
  • Case Studies: Real-world examples of the tool in action, showcasing its impact on patient outcomes.
  • Training Videos: Step-by-step video tutorials to help you and your team get up to speed quickly.

FAQ

To ensure you have all the information you need, we’ve compiled a list of frequently asked questions:

Q1: Who can use the Care MAP Tool?
A1: The tool is designed for healthcare providers, including clinicians, care coordinators, and administrative staff.

Q2: Is there a cost associated with the Care MAP Tool?
A2: No, the Care MAP Tool is available for free download.

Q3: How do I get support if I encounter issues with the tool?
A3: Support is available through our online helpdesk. You can also refer to the Resource Library for troubleshooting guides.

Care MAP Tool Download

By using the Care MAP Tool, you acknowledge that you have read and agree to the disclaimer below. If you share the tool, ensure that all individuals given access to it have reviewed and agreed to the disclaimer language before using it for any purpose.

Disclaimer: The Care MAP Tool is intended as a general framework to support considerations around complex care management in a clinic setting. It is not meant for final staffing, clinical, administrative, operational, and/or financial decision-making. Information obtained from this tool is not and should not be taken as legal or financial advice and is not a substitute for consulting a qualified professional. Community Initiatives does not accept responsibility for any loss that may arise from reliance on this tool.

Source Link:

Download Materials:


Feel free to reach out with any questions or feedback about the Care MAP Tool. Happy planning!

State Policies on Provider Market Power

The Source is a comprehensive platform that monitors and documents various state-level activities related to healthcare prices and competition. It provides valuable resources in the form of legislation and litigation databases, which are searchable and easily accessible.

The Source is a comprehensive platform that monitors and documents various state-level activities related to healthcare prices and competition. It provides valuable resources in the form of legislation and litigation databases, which are searchable and easily accessible.

The Database of State Laws Impacting Healthcare Cost and Quality focuses on legislative measures that have an impact on the cost and quality of healthcare. This database allows stakeholders at the state level to gain insights into their legal and regulatory environment. By understanding the laws in place, these stakeholders can make informed decisions and take necessary actions to enhance access, quality, and efficiency in healthcare while also striving to reduce costs.

Additionally, The Source includes a collection of maps that offer a visual representation of notable legislation and initiatives in health policy and reform across all 50 states. These maps provide a convenient way to explore the different approaches taken by each state and the progress made in addressing healthcare challenges.

If users have specific laws or cases they are interested in, they can utilize the search functionality within the database. This feature enables targeted exploration of laws and cases pertaining to a particular state, making it easier to find relevant information.

Overall, The Source serves as a valuable tool for stakeholders involved in healthcare, providing them with the necessary information to navigate the complex landscape of healthcare legislation and policy across the United States.

Through a review of state laws, CPR found a short list of states – California, Massachusetts, Montana, New Hampshire, North Carolina, Oregon, and Rhode Island – that are particularly active in their policy efforts regarding healthcare provider consolidation and market power.

State Policies on Provider Market Power Report

The Database of State Laws Impacting Healthcare Cost and Quality (SLIHCQ)

The Source on Healthcare Price & Competition

The Source tracks state activities impacting healthcare price and competition in both legislation (The Database of State Laws Impacting Healthcare Cost and Quality) and litigation in a searchable database to help stakeholders at the state level understand their legal and regulatory environment as they make efforts to improve access, quality, and efficiency, and reduce costs in healthcare.

Browse through the maps below to find out more about notable legislation and initiatives in health policy and reform across 50 states or search the database for specific laws and cases of a particular state.

ARTICLES & REPORT

  • by Anna Chau
    On March 6, 2026, New Mexico enacted HB306, the “Fair Pricing for Routine Medical Care Act”, to prohibit charging of healthcare facility fees for certain services, to require the disclosure of facility fees to patients, and to require the reporting of facility fees to the all-payer claims database.  The bill prohibits hospitals and clinics from […]
  • by Leelah Klauber
    Antitrust and Market Competition Playing Favorites — State Protection of Academic Medical Centers from Antitrust Oversight New England Journal of Medicine Jaime S. King, Katherine L. Gudiksen, Anna D. Sinaiko The authors explore a new trend with U.S. academic medical centers (AMCs) merging with nonacademic hospitals and health care systems.  These mergers pose risks of […]
  • by Bruce Allain, Managing Editor
    On March 26, 2026, the Department of Justice (DOJ) sued New York-Presbyterian Hospital (NYP), claiming NYP used illegal anticompetitive terms in their contracts with payors.  In the related press release, the DOJ stated that “New York-Presbyterian uses its market power to protect its margins, impede competition from rival hospitals, and prevent employers and unions from […]
  • by Bruce Allain, Managing Editor
    The Source’s founder Jaime S. King, and executive editor Katherine L. Gudiksen, working with Harvard’s Anna D. Sinaiko, have authored a report on state antitrust exemptions for academic medical centers (AMCs) published recently by the New England Journal of Medicine.  There is a recent history of AMCs merging with nonacademic systems, with states creating "carve-outs" to exempt AMCs from antitrust oversight.  The research […]
  • by Kassie Williams
    Background In August of last year, The Source shared information about the California Law Revision Committee's (CLRC) antitrust study, spurred by the 2022 Assembly Concurrent Resolution No. 95. At its outset, the study aimed to address the U.S. monopoly problem and the "threat of market concentration" in California.  The legislature tasked the CLRC with determining […]
  • by Bruce Allain, Managing Editor
    Antitrust scrutiny of anticompetitive healthcare contract terms is on the rise, and the use of anticompetitive contract terms are increasingly in the crosshairs of both regulators and courts. When healthcare systems acquire a dominant market share, one method of capitalizing on this dominance is to impose anticompetitive terms on entities they contract with for financial […]

CMS Bundled Payments for Care Improvement (BPCI) Initiative: A Discussion on Bundled Payments

There is a large disconnect between what occurs after a patient is discharged from a hospital (acute) and what occurs thereafter. The quality of care is entirely unmanaged, uncontrolled, and unmonitored. Moreover, the patient is placed at greater risk whe

Understanding the CMS Bundled Payments for Care Improvement (BPCI) Initiative

In recent years, healthcare has been undergoing a significant transformation, driven by the need to improve care delivery and reduce costs. One of the key initiatives in this transformation is the Bundled Payments for Care Improvement (BPCI) program, introduced by the Centers for Medicare & Medicaid Services (CMS). The BPCI program is part of a broader effort to move the U.S. healthcare system towards value-based care, focusing on quality outcomes rather than the volume of services.

What is the BPCI Initiative?

The BPCI initiative was launched as part of the Affordable Care Act (ACA), which allowed the establishment of the Center for Medicare and Medicaid Innovation. The goal of this center is to pilot and expand innovative payment models that improve healthcare quality while reducing costs. BPCI is one of the many alternative payment models (APMs) being tested to align financial incentives with the quality of care provided, particularly in the post-acute care (PAC) setting.

The BPCI program focuses on bundled payments, which means that instead of paying for each service separately, healthcare providers receive a single, comprehensive payment for an entire episode of care. This “bundle” covers all services related to a patient’s treatment, including post-hospitalization care, for a specified period (e.g., 30 or 90 days). The goal is to incentivize providers to deliver coordinated, high-quality care that reduces unnecessary services and prevents avoidable readmissions.

Why Focus on Post-Acute Care?

One of the most challenging areas of healthcare to manage, particularly within the Medicare Fee-For-Service (FFS) program, is post-acute care. After patients are discharged from the hospital, they often require further care in settings such as inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), or home health agencies (HHAs). The costs and quality of care in these settings vary significantly across the country, contributing to wide regional disparities in Medicare spending. In fact, 73% of the variation in Medicare spending is attributed to differences in post-acute care settings.

The BPCI initiative specifically targets these post-acute care settings because of the high cost and the potential for improvement. For example, about 20% of Medicare patients are readmitted to the hospital within 30 days of discharge, and research suggests that 75% of these readmissions could be prevented with better care coordination.

The BPCI Models

The BPCI initiative includes four different models, each offering a different approach to bundled payments:

  1. Model 1: Retrospective Acute Care Hospital Stay Only – This model focuses on hospital costs for acute care stays.
  2. Model 2: Retrospective Acute and Post-Acute Care Episode – In this model, hospitals are financially responsible for both the acute care and all post-acute care services provided within 30 or 90 days of discharge.
  3. Model 3: Retrospective Post-Acute Care Only – This model places post-acute care providers (e.g., SNFs, HHAs) at financial risk for the services they provide after a hospital discharge.
  4. Model 4: Prospective Acute Care Hospital Stay Only – In this model, hospitals receive a single, upfront payment for an acute care stay, and they cannot bill for any additional services, even if the patient is readmitted within 30 days.

Model 2 is the most complex and widely adopted model, as it requires hospitals to manage the entire episode of care, including both acute and post-acute services. The financial risk is reconciled retrospectively, meaning that CMS reviews the total cost of care after the episode is complete and compares it to a pre-determined target price. If the costs are lower than the target, the hospital may share in the savings; if the costs are higher, the hospital is responsible for the excess.

Implementation Strategies for Success

To succeed in the BPCI initiative, hospitals and post-acute care providers need to collaborate closely. Many hospitals are implementing strategies such as narrowing their networks to include only high-performing post-acute care providers. This ensures that patients are discharged to facilities with strong track records in quality care and low readmission rates.

Hospitals are also using tools like patient choice letters, which list all available post-acute care providers but highlight those that have been vetted for quality. This approach, known as “soft steerage,” helps guide patients toward the best providers without restricting their choices.

In addition to collaboration, data sharing and technology play a crucial role in the success of BPCI. Hospitals need visibility into the patient’s care journey after discharge, which can be facilitated through electronic health records and other data integration tools. This allows for better coordination and monitoring of patient outcomes across the continuum of care.

Challenges and Opportunities

While the BPCI initiative offers significant opportunities for improving care and reducing costs, it also presents challenges. One major issue is the complexity of managing bundled payments, especially with the retrospective reconciliation process that introduces delays in financial feedback. Hospitals need to track performance in real-time and adjust their strategies based on ongoing data, rather than waiting for quarterly reconciliations from CMS.

Another challenge is managing high-risk patients and outlier cases, which can significantly skew financial outcomes. However, as bundled payment models continue to evolve and expand, hospitals that proactively adapt to these challenges will be better positioned for success in the shifting healthcare landscape.

Conclusion

The BPCI initiative is an important step towards a value-based healthcare system, particularly in managing the costly and often fragmented post-acute care segment. By aligning financial incentives with quality outcomes, the BPCI program encourages providers to deliver more coordinated, efficient care, reducing unnecessary services and preventable readmissions.

As bundled payment models continue to expand, healthcare providers who embrace this shift now will be better prepared for the future. By focusing on collaboration, data integration, and patient-centered care, hospitals can succeed in the BPCI initiative and contribute to a more sustainable healthcare system.

Carenodes Behavioral Health Case Management

ETHOS AND PROGRAM DESIGN

The central premise of the Carenodes Behavioral Health Case Management (BHCM) Program is to promote collaboration between all treating providers, ensuring coordination between medical care and behavioral health care. Once members are identified, Behavioral Health Care Managers outreach / consult with our community partners in medical and behavioral health practice settings. Our program supports the treatment planning needs of providers with respect to behavioral health services and often provides consultation/ suggestions for modifications in current care. This coordination is performed through various avenues including

  • Notification letters to physicians informing them that their patients are engaged with the program,
  • Telephonic outreach calls,
  • Opportunity/option for physician peer-to-peer consultation when needed.

The essence of behavioral health management is ensuring that we direct our members to the right services at the right time.

Our triage and tracking processes include specialized support during service level transitions, such as a discharge from inpatient to outpatient follow-up treatment to ensure that members are attending follow up appointments with community providers within 7 days of hospital discharge. In addition, we utilize a readmission risk algorithm, which identifies members most at risk for readmission to inpatient hospital care. Specialty services are also offered to members diagnosed with eating disorders, maternal mental health issues, families of children and adolescents with a recent inpatient psychiatric stay, and members referred from community providers affiliated with Enhanced Personal Health Care. Also, consenting members engaged in medical care management programs with a positive PHQ2 depression screen or any other BH condition impeding the member’s ability to manage their medical condition are routed to BH for intervention.

Clinical Team/Patient/Family Engagement

Our clinicians work with the member and their family to:

  • Understand the options available for behavioral health treatment, utilize insurance benefits for the lowest possible out of pocket cost, and decrease unnecessary health care expenditures
  • Advocate for the coordination of all care, both medical and behavioral health
  • Educate on symptoms and condition management to prevent future inpatient hospitalization stays
  • Discuss and identify barriers to treatment compliance and offer resources and support to overcome them
  • Improve overall health outcomes for improved quality of life

1-Minute Pro Tip: How to Handle Claim Denials from Private Insurance Companies

Before challenging a claim, examine the reason for your denial. The reason for the payer’s denial can be found on the Explanation of Benefits or EOB. In some cases, the denial may have been caused by a clerical error such as an incorrect CPT code, a missing signature, or another simple oversight.

Before challenging a claim, examine the reason for your denial. The reason for the payer’s denial can be found on the Explanation of Benefits or EOB. In some cases, the denial may have been caused by a clerical error such as an incorrect CPT code, a missing signature, or another simple oversight.


A denial of coverage because a PA performed the service is usually phrased as “service only covered when provided by an M.D. or D.O.” or “physician assistants not considered authorized providers under the plan.” In some cases, first assisting at surgery claims are denied for incorrect use of modifier codes (Do not assume that all companies use the same code; some use -AS, some use -80, -81, or -82.) and in other cases, those claims are denied because of the use of a restricted code or for performing a surgery not necessarily requiring a first assistant.


You may need to contact the insurance company to find out what modifier should have been used and, in some cases, you may need documentation that a first assistant was medically necessary for the surgery. Insurance companies strive to (1) retain their subscribers, (2) maintain or increase their market share, and (3) keep a positive corporate image. If the insurance company made the coverage decision and you believe that the coverage decision was unfair, enlist the help of the patient and, if applicable, the business that pays the insurance plan’s premium. Their dissatisfaction is

Subcontracting Opportunities

Carenodes contracts with physicians, facilities and other health care professionals to form our provider networks, which are essential for delivering quality, accessible and cost-effective health care services. In partnership with providers (medical and non-medical, behavioral, primary, substance abuse, and others), we have developed (and are growing) community-wide coalition efforts geared towards addressing larger systemic health, infrastructure or social determinant issues with a large impact on health.

Carenodes contracts with physicians, facilities and other health care professionals to form our provider networks, which are essential for delivering quality, accessible and cost-effective health care services. In partnership with providers (medical and non-medical, behavioral, primary, substance abuse, and others), we have developed (and are growing) community-wide coalition efforts geared towards addressing larger systemic health, infrastructure or social determinant issues with a large impact on health.

WORKFORCE MOBILIZATION INITIATIVE

Did you know that locating and securing subcontracting opportunities can be just as, if not more valuable, than administering direct contract awards? There are multiple ways to partner with other contractors to maximize your chances of securing contracts through Carenodes Opportunity Network and Workforce Mobilization Initiative.

  1. Workforce of the future,
  2. Second acts,
  3. Rural resurgence.
  4. A marketplace of healthcare providers
  5. An ecosystem of healthcare consultants
  6. Clinical executives

Our Workforce Mobilization Initiative calls for increasing opportunities for mid-career workers to get the upskilling they need to continue in their current jobs and have access to new jobs. This Program encourages state governments to improve infrastructure, such as broadband, in rural areas to allow workers to work remotely and remain in their communities if they choose.

TYPES OF OPPORTUNITIES

Non-Schedules Based Contracts

These procurements require a response to an RFP or RFQ. Check back or sign up for new opportunities.

Subcontracting and Other Partnerships

Subcontracting and other partnerships involve working with other contractors in order to implement a master agreement, project segments, joint ventures, and/or other specified engagement frameworks across the United States.

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Subcontractor Interest 

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TRICARE

Effective August 31, 2020

The U.S. Department of Labor’s (DOL’s or Department’s) Office of Federal Contract Compliance Programs (OFCCP) publishes this final rule to amend its regulations pertaining to its authority over TRICARE health care providers. The final rule is intended to increase access to care for uniformed service members and veterans and to provide certainty for health care providers who serve TRICARE beneficiaries. It is also anticipated that this final rule will result in cost savings for TRICARE providers. In a reconsideration of its legal position, the final rule provides that OFCCP lacks authority over Federal health care providers who participate in TRICARE. In the alternative, the final rule establishes a national interest exemption from Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 for health care providers with agreements to furnish medical services and supplies to individuals participating in TRICARE. Thus, even if OFCCP had authority over Federal health care providers who participate in TRICARE (which this rule clarifies it does not), OFCCP has determined that special circumstances in the national interest justify granting the exemption as it would improve uniformed service members’ and veterans’ access to medical care, more efficiently allocate OFCCP’s limited resources for enforcement activities, and provide greater uniformity, certainty, and notice for health care providers participating in TRICARE. Under the final rule, OFCCP will retain authority over health care providers participating in TRICARE if they hold a separate covered Federal contract or subcontract that is not for providing health care services under TRICARE. TRICARE providers that fall outside of OFCCP’s authority under this final rule remain subject to all other Federal, state, and local laws prohibiting discrimination and providing for equal employment opportunity. This regulation is effective August 31, 2020.

Subcontracted Carenodes Advisory Services (Consulting Agreements)

ADVISORY SERVICES Subcontracted Carenodes Advisory Services (Consulting Agreements)

This agreement (“AGREEMENT”) establishes the terms under which the parties hereto agree that the consultant, who has already provided his or her corporate name (if any) and address (hereinafter, referred to as the “CONSULTANT”) will perform consulting work for a client of CARENODES, Inc. (the “CLIENT”), CARENODES’s offices are located at 3415 S Sepulveda Blvd 10th floor, Los Angeles, CA 90034, (“CARENODES”).  CARENODES and CONSULTANT may be individually referred to herein as a “PARTY” and collectively referred to herein as “PARTIES”.  CLIENT is an intended third-party beneficiary of this AGREEMENT, and CLIENT will be entitled to the rights and benefits enumerated below.

  1. Field of Consultation.  CARENODES wishes to engage CONSULTANT, as an expert in the field provided to CARENODES in the course of the on-line sign-up process, to consult with CLIENT regarding CLIENT’s work in the field(s) also provided in the sign-up process.
  • Term of Consultation.  The period of consultation will be as agreed between CARENODES and CONSULTANT beginning on the first day of the project with the CLIENT, and will continue until the project is complete, as determined by CLIENT in its sole discretion.  Consultation will take place during the term of this Agreement at times and places mutually agreed upon by CONSULTANT and CARENODES.
  • Fee.  CONSULTANT will receive the fees that have been specified separately by CARENODES, and which CONSULTANT agrees constitutes valid consideration for this AGREEMENT.
  • Termination.  CARENODES will have the right to terminate this AGREEMENT upon thirty (30) days written notice to CONSULTANT.
  • IRS Form 1099.  It is understood and acknowledged that the IRS Form 1099 that CONSULTANT will receive from CARENODES will indicate the total dollar amount that CARENODES will have paid CONSULTANT for the calendar year.  It will be CONSULTANT’s responsibility to file a Schedule C to deduct expense reimbursement so that these payments are not taxed.  CONSULTANT understands and acknowledges that this will require CONSULTANT to keep records that designate fee income versus expense reimbursements, including maintaining original receipts.  Note: For those contractors that are incorporated, this provision will not apply.
  • No Conflict.  CARENODES understands that CONSULTANT is available to perform the consulting services as provided herein for CARENODES.  CONSULTANT therefore warrants that this consultation will not cause CONSULTANT to breach any agreement or obligation CONSULTANT may have undertaken with others and that all consulting services to be performed by CONSULTANT under this AGREEMENT are fully consistent with the rules and regulations of his or her employer, if any.  All consulting services to be performed by CONSULTANT for CLIENT will be on CONSULTANT’s own time and without the support or use of the facilities of CONSULTANT’s employer.
  • No Third Party Confidential Information.  It is not CLIENT’s desire to be afforded access to, or to receive any information from CONSULTANT, which is confidential or in any way proprietary to any third party, nor to receive any information the receipt of which implies any obligations of confidentiality upon CLIENT.  CONSULTANT understands that any information provided by CONSULTANT can be freely disclosed and used for any CLIENT purpose including, for example, as incident to activities before the Food & Drug Administration, Federal Trade Commission, and U.S. Patent & Trademark Office.  CONSULTANT warrants that no other party, e.g. any employer, has any right, title or interest to or in any information, ideas, developments and inventions which may be submitted to CLIENT by CONSULTANT in CONSULTANT’s capacity as a consultant to CLIENT.  
  • Obligation of Confidentiality.  During CONSULTANT’s engagement as a consultant, it may be appropriate and necessary for CONSULTANT to have access to certain of CLIENT’s technical and business information and materials.  CONSULTANT agrees to consider as confidential all information disclosed to CONSULTANT and materials given to CONSULTANT by CLIENT during the period of this AGREEMENT, and any technical or business information CONSULTANT may learn, observe, or otherwise obtain concerning CLIENT incident to CONSULTANT’s performance under this AGREEMENT, including the fact that CLIENT may have interest in specific materials or areas of business, all of which is referred to as “INFORMATION”.  CONSULTANT agrees to take all reasonable precautions to prevent disclosure of INFORMATION or materials to third parties and not to use INFORMATION or materials without CLIENT’s express written consent.  These obligations of confidentiality and nonuse will continue beyond the term of this AGREEMENT, but will cease to apply as to any specific portion of CLIENT’s information or material which becomes available to the public. 
  • Term of Obligation of Confidentiality.  These obligations of confidentiality and non-use set forth in the section entitled “Obligation of Confidentiality” and all subsections thereof, will survive the termination of this AGREEMENT and any extensions thereof.
  • Disclosures Incident to On-Site Services.  If consulting is performed by CONSULTANT at a CLIENT facility, the obligations of confidentiality and non-use as set forth in the section entitled “Obligation of Confidentiality” and all subsections thereof, will extend to any and all confidential and proprietary information belonging to CLIENT and acquired by CONSULTANT as incident to performing such onsite services.  This information may include, for example, plant size, crew shifts, number of lines, product shipments, new product development testing, and the like.
  • Publication.  CLIENT will retain the results of CONSULTANT’s consulting work for CLIENT as confidential information.  Therefore, CONSULTANT will not publish or otherwise disclose the results of such work or other information concerning such work, without the express written consent of CLIENT.  In the event that work resulting from CONSULTANT’s consulting is published in the scientific literature, acknowledgement will be made to CONSULTANT in the accepted style, as appropriate.  CARENODES may share information collected from CONSULTANT with CLIENT, business partners, advertising companies, and other third parties.  CONSULTANT will not use CLIENT’s name without CLIENT’s concurrence.
  • Independent Contractor.  CONSULTANT understands and acknowledges that CONSULTANT is an independent contractor and not an employee of CARENODES or CLIENT.  As such CONSULTANT will not be considered an eligible participant in any CARENODES or CLIENT benefit plan other than benefits CONSULTANT was entitled to prior to the execution of this AGREEMENT.  Moreover, CONSULTANT disclaims all other disability programs and unemployment compensation programs in connection with CONSULTANT’s work with CARENODES or CLIENT.  In light of CONSULTANT’s status as a consultant, CONSULTANT understands that it is CONSULTANT’s personal responsibility to report CONSULTANT’s earnings under this AGREEMENT to both the Federal and any appropriate State or Local Governments.  Under some circumstances, however, CARENODES may be required to report payments made to CONSULTANT and/or withhold Income and/or Social Security taxes.  It is further understood and agreed that CONSULTANT is not a partner or joint venturer with CARENODES or CLIENT and has no authority to bind CARENODES or CLIENT to any contract with third parties. 
  • Inventions.  CONSULTANT agrees to disclose promptly and fully to an authorized representative of CLIENT all information, discoveries, works of authorship, designs, software, and inventions, whether or not patentable, conceived or reduced to practice by CONSULTANT as a result of CONSULTANT’s performance under this AGREEMENT (“INVENTIONS”).  All INVENTIONS will be the property of CLIENT.  Accordingly, CONSULTANT will assign outright to CLIENT the entire right, title and interest, both in the United States and abroad, to INVENTIONS, without payment other than that herein provided.  CONSULTANT will execute any documents which CLIENT deems reasonably necessary to secure its proprietary rights as set forth herein, such as to obtain patents, worldwide, or other protection covering INVENTIONS and to fully cooperate as requested to do so in the prosecution of such patents or other applications.  CLIENT will have the above-mentioned documents drafted at its own expense, as will also be the case with any patent or other applications which are filed, and with the prosecution and maintenance thereof.  CONSULTANT warrants that CONSULTANT has appropriate ownership rights in INVENTIONS to carry out CONSULTANT’s obligations under this paragraph.
  • Work for Hire.  Work done by CONSULTANT for CLIENT of a custom design and custom tailored nature will be considered work for hire.  Any materials, such as worksheets, exercises, case studies and videos, created by CONSULTANT for CLIENT as part of such custom design and/or custom tailored work, will be wholly owned by CLIENT, with all copyrights being obtained and retained by CLIENT.  
  • Personally Identifiable Information. CONSULTANT warrants that CONSULTANT will not be collecting or handling any personally identifiable information (“PII”) as a result of CONSULTANT’s consultations performed under this AGREEMENT.  PII means any information relating to a person that is sufficient to cause that person to be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to physical, physiological, mental, economic, cultural, or social identity.  If the scope of consultations under this AGREEMENT changes such that the collecting or handling of PII becomes necessary, CONSULTANT will promptly notify CLIENT in writing regarding such change. 
  • Indemnification.  CONSULTANT will indemnify, hold harmless and defend CLIENT and its AFFILIATES and CLIENTS’s officers, directors, shareholders, employees and agents from and against any and all claims, liabilities, losses, expenses (including, without limitation, fines, forfeitures, reasonable attorney’s fees, disbursements and administrative or court costs), penalties or damages (collectively, the “LIABILITIES”) from any third party claim arising from a breach of CONSULTANT’s privacy representations and warranties provided in the article entitled “Personally Identifiable Information”.
  • Compliance with Applicable Government Laws and Regulations. CONSULTANT will fully comply with all applicable governmental, legal, regulatory and professional requirements, including but not limited to anti-corruption and anti-bribery laws, such as the Foreign Corrupt Practices Act (collectively “LAWS”).   If CONSULTANT has operations physically located in the territorial United States which are involved in CONSULTANT’s performance under this AGREEMENT, then CONSULTANT will fully comply with the employee notice requirements set forth in 29 CFR Part 471, Appendix A to Subpart A and any applicable equal opportunity laws including the provisions in 41 CFR § 60-1.4 (a) (1)-(7), 41 CFR § 60-741.5(a), and 41 CFR § 60-250.5.  CONSULTANT will promptly notify CARENODES and CLIENT if CONSULTANT receives any notice, demand, summons or complaint from any governmental or regulatory authority, agency or other body relating to the subject matter of this AGREEMENT, and will take all steps, at CONSULTANT’s expense, to resolve any issues as promptly as practicable.
  • Anti-Corruption Compliance.  In addition to any other measures necessary to comply with LAWS as described above, CONSULTANT will not, and will ensure that any person or entity acting on its behalf will neither (i) offer to pay, pay, promise to pay, or authorize the payment of money or anything of value nor (ii) give or offer any “facilitating” or “grease” payments (i.e. payments given or offered in order to expedite or secure the performance of a routine government action) whether or not those payments may be considered lawful under the applicable anti-bribery laws to any (a) officer, employee or any person acting in an official capacity for or on behalf of a government or an entity owned or controlled by a government, or of a public international organization; or (b) political party or their officials; (c) candidate for a political office (“PUBLIC OFFICIAL”) in order to influence any act or decision of the PUBLIC OFFICIAL in his or her official capacity or to secure any other improper advantage in order to obtain or retain business or obtain any other business advantage.
  • AFFILIATES.  As used herein, the term “AFFILIATES” refers to any corporation, association, or other entity that directly or indirectly owns, is owned by, or is under common ownership with CLIENT, either currently or during the term of this AGREEMENT.  As used in this definition, the terms “owns”, “owned”, or “ownership” mean the direct or indirect possession of more than fifty percent (50%) of the voting securities, income interest, or a comparable equity in such business entity.
  • Entire Agreement.  This AGREEMENT constitutes the entire understanding between the PARTIES with respect to the subject matter contained herein and supersedes all prior agreements, understandings and arrangements whether oral or written between the PARTIES relating to the subject matter hereof, except as expressly set forth herein.  Nothing in this AGREEMENT may be changed or modified, nor may anything be added to this AGREEMENT, except as may be specifically agreed to in a subsequent writing executed with the same formalities as this AGREEMENT.  For their convenience, the PARTIES may use, from time to time, their standard purchase orders, invoices, or other similar preprinted forms.  The terms of this AGREEMENT shall take precedence over any standard Terms and Conditions language set forth in those forms.
  • Governing Law.  This AGREEMENT will be governed and construed in accordance with the laws of the State of California, United States of America.
  • Headings.  The headings or titles of articles, sections or paragraphs appearing in this AGREEMENT are provided for convenience and are not to be used in construing this AGREEMENT.
  • Notices.  All notices, authorizations, etc. relevant to this AGREEMENT may be personally served or sent by first class mail, postage pre-paid, to the respective PARTIES at the addresses provided and/or via email.
HEALTHCARE SERVICES: Provider / Healthcare Organizations

Carenodes contracts with physicians, facilities and other health care professionals to form our provider networks, which are essential for delivering quality, accessible and cost-effective health care services.

In partnership with providers (medical and non-medical, behavioral, primary, substance abuse, and others), we have developed (and are growing) community-wide coalition efforts geared towards addressing larger systemic health, infrastructure or social determinant issues with a large impact on health.

Click here to learn more about joining Carenodes Network.

E&M Coding Advice: Simplified

E&M Coding Advice
Physicians and Medicare alike have struggled for many years with correct coding, documentation, and payment of evaluation and management (E&M) services. That’s because, by their nature, E&M services are a diverse set of cognitive procedu

Physicians and Medicare alike have struggled for many years with correct coding, documentation, and payment of evaluation and management (E&M) services. That’s because, by their nature, E&M services are a diverse set of cognitive procedures, making them difficult to quantify.

 

Carenodes medical executives offer the following highly simplified but useful “bottom-line” E&M coding advice. 

 

Regardless of how much history, physical examination, and/or medical decision-making related to an E&M encounter are recorded.

 

  • Do not consider reporting the highest two codes of any code family:

  • When fewer than three distinct medical conditions/complaints  were evaluated and managed during the encounter,
    OR
  • No problem evaluated and managed, without appropriate intervention, conferred at least a 50/50 likelihood of worsening, disability, or death between the time of the current encounter and the next physician encounter. 
  • Do not consider reporting the highest codes of any code family:

  • When fewer than four distinct medical conditions/complaints  were evaluated and managed during the encounter,
    OR
  • No problem evaluated and managed, without appropriate intervention, conferred at least a 50/50 likelihood of worsening, disability, or death between the time of that encounter and the next physician encounter. 
  •  

 

This approach simplifies coding E&M services by eliminating from consideration the highest-level codes for reporting services that – by their clinical nature – usually do not require a detailed or comprehensive history and physical, high- (and sometimes moderate-) complexity medical decision making, or lengthy counseling and coordination. It addresses the most common source of known Medicare E&M coding errors: failure of medical records to demonstrate the work of and/or medical necessity of higher level E&M services reported for payment.

 

Don’t Lose Revenue With an Outdated Fee Schedule

If you have not updated your practice’s fee schedule for several years, you may be in for some surprises. Carenodes Advisory recommends that you analyze and update your fees annually to make sure they are higher than insurance allowables.

If you have not updated your practice’s fee schedule for several years, you may be in for some surprises. Carenodes Advisory recommends that you analyze and update your fees annually to make sure they are higher than insurance allowables.

Remember, insurers typically will pay you either their allowable or your fee – whichever is lower. By charging less than the allowable, you are not getting the maximum reimbursement you are entitled to receive. If you are receiving 100 percent of your billed charge from a managed care plan, this could indicate your fee is set too low.

Many commercial plans base their fees on Medicare reimbursement, making it easier for you to evaluate their reimbursement patterns. As Medicare publishes its new fee schedule each year, you have an opportunity to compare your own fees against the new rates. At the same time, you can make revenue projections for the coming year and assess the value of your managed care contracts to your practice.