Changes under new legislative proposals (from 340B requirements to site-neutral payments) could cost hospitals big if approved.
Changes to the Medicaid disproportionate share hospital (DSH) program, price transparency requirements, Medicare site-neutral payments, and the 340B drug pricing program, are potentially underway according to recent legislative proposals advanced by the House Energy and Commerce Subcommittee on Health.
Quick to respond to the proposals was the American Hospital Association (AHA), which voiced its opposition to the budget cuts and more in its written testimony before the House.
According to the AHA, the reductions to the Medicaid DSH program—which under the proposal would see a $32 billion cut over the next four years—were enacted as part of the Affordable Care Act, with the reasoning that hospitals would have less uncompensated care as health insurance coverage increased.
“Unfortunately, the projected coverage levels have not been realized and hospitals continue to care for patients for whom they are not receiving payment. Consequently, the need for the Medicaid DSH payments is still vital for the hospitals that rely on the program,” the AHA said.
As expected, the AHA applauded the subcommittee for its legislative improvements on price transparency requirements, but it opposed the intended site-neutrality payment cuts on the grounds that it would “result in a major cut for hospital outpatient departments that provide essential drug administration services, including for vulnerable cancer patients, who may require a higher level of care as they receive their essential treatments.”
The AHA said that the site-neutrality cuts would “exacerbate” the financial instability of hospitals and health systems already reeling from these payment cuts and, most importantly, threaten patients’ access to quality care.
The 340B proposal—which would add “new and burdensome reporting requirements” for the number of individuals receiving 340B drugs by payer total costs, payments, and savings—is considered overly burdensome by the AHA. The AHA says that none of these data points individually or collectively will tell the full story of how 340B hospitals use the program to benefit the patients and communities they serve.
Instead of advancing the 340B proposal, the AHA encouraged the subcommittee to reign in the largest drug companies who have restricted and denied hospitals access to 340B drugs and placed the financial health of critical access hospitals in jeopardy.
High expenses, low payer reimbursement rates, and inflation are to blame, the system says.
Ascension Healthcare, a nonprofit hospital operator, says it has implemented "significant improvement plans" focused on operational efficiencies and controlling expense growth as the system just reported a loss from operations of almost $1.8 billion on revenue of $21.3 billion for the nine months ending on March 31.
"As has been widely reported, hospitals nationwide are experiencing intense financial and operational pressures as a result of the after effects of the COVID-19 pandemic, continued healthcare worker staffing shortages, ongoing supply chain challenges and persistent inflation. Ascension is no exception to these trends," Liz Foshage, EVP and CFO of Ascension, said in the announcement.
The main reason for the loss though? Expenses, the system says.
Ascension attributes its expense growth to inflationary pressures consistent with the overall healthcare provider industry, it said. While Ascension said it has implemented plans focused on controlling expenses and improving efficiency, its actions didn’t gain traction against inflationary pressures.
Both supply and salary and benefit expenses decreased for the operator as Ascension relied less on contract labor, but the system reported a 15% increase in other areas like purchased services, driven by its transition to outsourced laboratory services.
Unsurprisingly, Ascension noted that the reimbursement rates from commercial and government payers have also not kept pace with operating expense inflation, which has been a common complaint heard across the healthcare leadership landscape.
Due to these ongoing business challenges, Ascension also saw a one-time, non-cash impairment losses in the third quarter of fiscal year 2023 of $715 million as the carrying value of certain assets within Ascension’s markets may not be fully recoverable, the system said.
Third quarter losses seem to be a trend as another large system recently announced similar financial results citing the same concerns as Ascension.
CommonSpirit says a decline in patient acuity and reimbursement that has not kept up with inflation impacted its financial results for the 2023 third quarter. Rising expenses, labor shortages, and the impact of a cyber security issue from late 2022 also played a role in the organization's latest financial results.
A new KPI benchmarking report shows that one in three inpatient claims submitted by providers to commercial insurers in first quarter 2023 weren’t paid for over three months.
Through the first quarter of 2023, commercial payers initially denied 15.1% of inpatient and outpatient claims for any reason compared to 3.9% for Medicare over the same period, according to the data from Crowe Revenue Cycle Analytics.
These numbers are nearly three times the number of claims delayed for that amount of time by traditional Medicare and over four times the initial denial rate for traditional Medicare claims over the same period, the study said.
Although the study said most initially denied claims become paid claims, the administrative effort to bring an initial denial to positive resolution is very costly for providers.
The study, which analyzed data from over 1,800 hospitals and 200,000 physicians, also found that eight cents of every dollar providers bill to commercial insurers will never be received or will be taken back once received.
When it comes to prior authorizations, the data showed that traditional Medicare plans tend to be easier to work with.
The initial prior authorization/precertification denial rate for inpatient claims for commercial payers was at more than 3% through the first three months of 2023. By comparison, the denial rate for traditional Medicare was 0.2% through the first quarter of 2023, the study said.
So is it time for revenue cycle leaders to start canceling commercial payer contracts? According to the data, not so fast.
“If you ask hospitals and health systems to pick which type of payer they’d prefer to have more of in their payer mix, the answer still likely would be commercial,” the study authors said.
According to the report, the data shows that commercial payers still reimburse providers at a higher amount on a per-case basis compared with Medicare:
$18,156.50 is paid by commercial payors compared with $14,887.10 paid by Medicare in average net revenue per inpatient case.
$1,606.86 is paid by commercial payors compared with $707.30 paid by Medicare in average net revenue per outpatient case.
The higher reimbursement rates may be worth the headache for most.
Hundreds of leaders were asked which rev cycle tasks require the most subject matter expertise.
More than 550 healthcare financial and revenue cycle leaders were asked which revenue cycle tasks require the most subject matter expertise and denials management took the top spot, according to a new HFMA survey commissioned by AKASA.
According to the survey shared with HealthLeaders, respondents could select up to five out of 15 tasks, and while denials management lead the pack, interestingly, coding broke ahead of prior authorization:
78.7%, denials management
50.1%, coding
49.7%, prior authorization
Seeing denials management at the top of the list is no surprise as HealthLeaders has dubbed 2023 as the year of reducing denials for revenue cycle. An abundance of recent studies have been pointing to the growing concern of denials for revenue cycle leaders as more pressure is put on these leaders to help increase their bottom lines.
On the same note, another survey this year showed that revenue cycle leaders consider denials management and prior authorizations to be the most time-consuming revenue cycle tasks.
As denial rates continue to increase, establishing a streamlined denials management strategy is key for healthcare organizations to reduce complexity and workload for staff and avoid reimbursement delays.
“Revenue cycle leaders are being challenged to do more with less as they’re strapped for resources, while also experiencing higher volumes of claims,” said Amy Raymond, VP of revenue cycle operations at AKASA. “To continue to improve yields and meet revenue goals in this environment, leaders must leverage automation and AI-driven solutions that help reduce burnout for existing employees and ensure workflows still get done reliably.”
Pulling in more expertise for both inpatient and outpatient coding tasks is also not surprising. As the payer/provider relationship grows more strained, leaders need to begin tightening up coding processes.
For example, organizations will need to stand firm on compliance and reimbursement when its revenue cycle team submits evaluation and management (E/M) claims with modifier -25 as Cigna recently dropped a new policy.
According to Cigna, it created a new policy requiring submission of office notes with all claims including E/M codes 99212, 99213, 99214, and 99215 and modifier -25 when a minor procedure is billed.
Cigna said it will deny payment for these E/M services reported with modifier -25 if records documenting a significant and separately identifiable service are not submitted with the claim, and at the time, medical groups were quick to show their frustration.
As for other tasks in the revenue cycle that require the most subject matter expertise, the survey showed the following:
47.6%, insurance follow-up
30.4%, patient cost estimation and price transparency
26.5%, eligibility and medical necessity
24.4%, underpayments
23.6%, claim edits
Commissioned by AKASA, the survey fielded responses from 556 chief financial officers and revenue cycle leaders at hospitals and health systems across the United States through HFMA’s Pulse Survey program between July 8, 2022, and August 2, 2022.
A large health system allegedly issued claims for urgent care services billed at a higher level of service than received by patients.
St. Elizabeth’s Hospital of the Hospital Sisters Health System, a multi-institutional healthcare system that sponsors 15 hospitals in 14 communities across Illinois and Wisconsin as well as an integrated physician network, is under fire.
The system agreed to pay $12.5 million to resolve allegations from a whistleblower lawsuit which alleges it committed billing errors that may have resulted in an overpayment for services, according to a release from the U.S. Attorney’s Office for the Central District of Illinois.
The whistleblower lawsuit alleges that the hospital submitted these claims for urgent care services billed at a higher level of service, according to the news release. When the errors were brought to the attention of St. Elizabeth, the hospital fully cooperated with the Department of Justice’s investigation.
St. Elizabeth is not admitting any wrongdoing but has agreed to settle the claims to avoid the expense and uncertainty of litigation. The claims resolved by the settlement are allegations only, and there has been no determination of liability, the release said.
Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery.
In the Yale whistleblower case, the settlement agreement totaling $560,718 should resolve allegations of overbilling by Yale, violating federal and state laws for submitting false claims to Medicare and Medicaid for services billed by physicians when they should’ve been billed at the lower reimbursement rate of mid-level providers, according to the Department of Justice.
Revenue cycle leaders should ensure all their teams—everyone from coders to providers—understand the financial penalties associated with False Claim Act violations and be familiar with all other compliance penalties.
The AVP for corporate case management at Ardent Health Services details how its technology caught $1.76 million in potential missed inpatient revenue.
Automation in the revenue cycle is not an if, but when. As revenue cycle leaders know, automation has the power to transform the business of healthcare by streamlining repetitive tasks to improve efficiency and reduce financial waste while providing administrative support.
One healthcare system has done just that by implementing automation for strategic revenue management. Hillcrest HealthCare System, the Oklahoma market of Ardent Health Services, has created a system in which processes are designed to best serve patients instead of the other way around.
As a result, since technology implementation in 2020, Hillcrest’s clinical staff now focuses their effort on patients, not the administrative work, ultimately saving the hospital time and money.
HealthLeaders recently touched based with Rikki Moye, assistant vice president of corporate case management, at Ardent Health Services, about how the system was able to shift its focus back to its patients through technology.
The health system represents eight major hospitals in the area with over 1,200 licensed beds across the system. Moye was brought on as the vice president of case management in 2016 to build a new case management model that prioritizes patients and is supported by processes instead of led by them, she said.
HealthLeaders: Tell us more about your role at the health system. Was it a challenge creating such a complex case management model?
Rikki Moye: It was a challenge to be sure, but eventually, I thought, ‘Instead of having siloed utilization review, care coordination, and discharge planning functions that sat side-by-side within Hillcrest, what would happen if that model was tipped on its side?’ I then realized that utilization review needed to be a top-down view of the patient where nurse resource managers could oversee the efficient use of resources for each patient as they progressed through their stay, and social work and care coordination could work together to manage the patient safely and efficiently with a seamless discharge handoff.
This model we call the ‘Right Care Case Management Model,’ encompasses five ‘rights:’ The right patient, care, setting, documentation, and billing/payment. Using this approach, patients are placed at the center of the conversation, with communication and care facilitated by a resource manager following that person throughout their encounter and beyond.
HealthLeaders: After implementing this new model, why was it important for your organization to throw new technology into the mix?
Moye: Hillcrest is very large in scale, so in order to set up the Right Care Case Management Model where patients come first and processes are designed to serve them best, we needed the right technology.
Historically, it’s been challenging to introduce technology that would enable this process to the level we need. The labor required is too great, the quantity of data needed is too vast, and consistency and leadership at scale are hard to achieve. However, in mid-2020, we implemented XSOLIS’ CORTEX® platform to address those challenges and allow clinical staff to refocus their efforts on the patient, not administrative work. With it, the staff has access to a real-time, artificial intelligence-driven view of each patient’s medical necessity, prioritizing cases by revenue sensitivity and risk while also using the platform as a channel to communicate with payers.
The traditional Milliman and InterQual care approaches are binary, meaning it’s either red or green and then you have to move on. It’s also open to nurse interpretation, which means it’s at high risk for human error. Our new platform provides an agnostic, analytical assessment of patients, combined with a nurse’s clinical care skills, which enhances and encourages clinical expertise rather than defaulting to the binary clinical decision tree where you basically check your critical thinking skills at the door.
HealthLeaders: Where were you seeing gaps in the revenue cycle that made you realize a change needed to be made?
Moye: The problems we faced were the same ones that plague care management across the industry: unstructured data that is difficult to harness, gaps in compliance data, lack of consistency with education or supervision, and most impactfully, no way to prioritize the work that has the most significant downstream impact.
HealthLeaders: Case managers are arguably pretty in the weeds when compared to other leaders in the revenue cycle, so were there any hurdles with administrative or clinical staff buy-in? How did you make your case for adding in a new solution like this?
Moye: I was originally brought into bridge operations, strategy, and structure, and provide a gap analysis for where Hillcrest could go in the future. At the time, there was not a lot of case management structure at the market or the corporate level, and the organization was looking for a new way of doing things.
There’s always a learning curve when implementing new technology, but the platform is now a vital part of our nurses’ jobs. The way the tool is set up, it presents medical records and quantifies data in an extremely intuitive way, telling nurses upfront where their day needs to start so they don’t feel like they’re constantly trying to figure something out. In fact, a company-wide study found our nurses got back roughly two hours in their day once it was implemented.
The tool has also improved job satisfaction among utilization review nurses, as well as the relationship between Hillcrest’s hospitals and the payers it interacts with. Hillcrest has a contract with a national payer who also uses the platform, greatly improving our communication and contributing to a better working relationship because everyone sees the same thing. Nurses now know when to push back on decisions, and payers know when to spend time reviewing. Plus, other payers who aren’t currently on the platform are learning about the benefits, and the smoke and mirrors around the term ‘criteria’ are starting to disappear.
HealthLeaders: What kind of outcomes and improvements have you seen in your revenue cycle since implementing this tool?
Moye: In the first two years, CORTEX’s inpatient-only alerts have caught $1.76 million in potential missed inpatient revenue. Along with a 12% reduction in observation rates, this has resulted in an additional $3.28 million in inpatient revenue.
We were also able to improve observation-to-inpatient conversion rates from 27% to 52% while reducing inpatient-to-observation downgrade rates to about 4%, a 50% sustained reduction. Inpatient denials were reduced by 102.34% in the first year.
HealthLeaders: What will you be focusing on for the rest of this year and into 2024? What other goals do you have for revenue cycle improvement?
Moye: Our goals now include moving from a market/regional focus to an enterprise focus across all Ardent Health acute hospitals. Our ability to leverage technology to facilitate throughput and length-of-stay reductions is one of the successes of the Hillcrest team that we are sharing with other hospitals.
Yale New Haven Health and Northeast Medical Group have agreed to a hefty settlement for allegedly submitting false claims to Medicare and Medicaid.
The federal and state governments allege that the Yale New Haven Health and Northeast Medical Group submitted false Medicare and Medicaid claims, which has since resulted in a hefty settlement from the system.
The settlement agreement totaling $560,718 should resolve allegations of overbilling by Yale, violating federal and state laws for submitting false claims to Medicare and Medicaid for services billed by physicians when they should’ve been billed at the lower reimbursement rate of mid-level providers, according to the Department of Justice (DOJ).
The DOJ says the healthcare providers submitted the false claims between July 2014 and June 2020, and as a result, the providers improperly received between 10% and 15% more in Medicare and Medicaid reimbursements for the allegedly falsely billed services.
The allegations were initially brought in a lawsuit filed by a whistleblower, a former employee of Northeast Medical doctors’ group. According to the DOJ, the whistleblower will receive about $106,500 as her share of the settlement.
Yale New Haven Health and Northeast Medical deny the allegations but agreed to the settlement to avoid a protracted legal process, according to the settlement.
A situation like this is worst-case scenario for revenue cycle leaders, and leaders should ensure their organization’s billing practices are appropriate. Address any errors identified as soon as possible and remember to return overpayments and provide education to your staff as soon as errors are discovered.
One way to easily keep an eye on fraudulent billing practices is through an internal audit. If an internal audit determines that Medicare was billed inappropriately, your orginization is in potential violation of the False Claims Act.
Revenue cycle leaders should ensure all their teams—everyone from coders to providers—understand the financial penalties associated with False Claim Act violations and be familiar with all other compliance penalties.
The most recent status update shows the huge influx of disputes.
A total of 334,828 billing disputes have been filed through the independent dispute resolution (IDR) process, nearly 14 times more than initially expected, according to a recent status report.
Between April 15, 2022, and March 31, 2023, certified IDR entities rendered payment determinations in 42,158 disputes. Overall, certified IDR entities have closed 106,615 disputes as of the end of March, over four times the volume initially estimated for a calendar year, according to the report.
In addition to confirming an ongoing backlog of IDR cases, the update also revealed a high success for initiating parties (71%), which have largely been providers.
These results aren’t much of a change from previous findings of the IDR process backlog.
For example, a previous report from the third quarter of 2022 saw nearly four times as many disputes as the second quarter, totaling 71,915.
Of the total disputes initiated in that report, 23,107 were closed, 3,576 reached a payment determination, and 15,895 were found ineligible for the IDR process. The remaining closed disputes were either withdrawn by the disputing parties, were closed because the parties reached an outside settlement, or were closed for other reasons, such as incorrect batching, data entry errors, or unpaid fees.
The backlog of disputes from all reports is due to the review and processing time needed to determine the eligibility of disputes.
Providers and payers have struggled to get on the same page on how the IDR process should be settled, with medical associations filing multiple lawsuits contending the emphasis on the qualifying payment amount, or the median in-network rate.
CMS has an FAQ available for leaders needing to catch up on revenue cycle changes now that the public health emergency (PHE) has ended.
The COVID-19 PHE has officially concluded, and to assist providers during this transition, CMS released an FAQ to clarify the end to various waivers and flexibilities affecting the revenue cycle and beyond.
CMS will continue to pay providers approximately $40 per dose for administering vaccines through the end of the calendar year (CY) in which the vaccine’s emergency use authorization (EUA) declaration ends. The EUA declaration is distinct from, and not dependent on, the PHE, and it is still in effect. Starting January 1 of the year after the one in which the EUA declaration ends, CMS will align the administration payment rate for COVID-19 vaccines with the administration payment rate for other Part B preventive vaccines, which is currently $30 per dose.
These rates do not apply for Federally Qualified Health Centers, rural health clinics, or other settings that are paid at a reasonable cost for preventive vaccines and their administration. Medicare will also continue to pay approximately $36 plus regular administration fees for COVID-19 vaccines administered at home through the end of CY 2023.
The enforcement discretion that allows mass immunizers to bill Part B directly for vaccines furnished to skilled nursing facility (SNF) patients will end on June 20, 2023. “Beginning on July 1, 2023, SNFs will be responsible for billing vaccines furnished to SNF patients in a Part A stay,” stated the FAQ.
Medicare coverage of COVID-19 treatments are remaining the same. For diagnostic testing, beneficiaries can continue to receive COVID-19 PCR and antigen tests with no cost-sharing if the test is performed by a laboratory and ordered by a physician.
The three-day stay requirement for SNFs is no longer in effect. Any covered SNF stay that began on or prior to May 11, 2023, without a qualifying health stay (QHS) can continue for as many benefit days as the patient has available, given all criteria are met. However, covered SNF stays that begin after May 11 will require a QHS.
Many Medicare telehealth flexibilities have been extended through December 31, 2024. However, CMS noted that individuals will now no longer be able to receive routine home care via telehealth under the hospice benefit.
The FAQ detailed billing practices for the following codes now that the PHE concluded:
Q3014 (originating site facility fee) should not be billed unless the beneficiary is located within a hospital and receives a telehealth service from an eligible distant site practitioner.
G0463 (clinic visit) can be billed if a beneficiary is within a hospital and received an outpatient clinic visit, including mental/behavioral health, from a practitioner in the same physical location.
C7900–C7902 (remote mental health services) can be billed if the patient is in their home and received a mental/behavioral health service from hospital staff through the use of telecommunications technology and no separate professional service can be billed.
Additionally, hospitals are no longer able to bill Q3014 “to account for resources associated with administrative support for a professional Medicare telehealth service,” according to the FAQ.
Denials aren't going anywhere, but streamlining how you manage them will help improve revenue cycle operations.
Revenue cycle leaders are still feeling the stress as regulatory burdens and never-ending denials are putting massive strains on revenue cycles.
Even if your front, middle, and back-end revenue cycle is a well-oiled machine, payers aren’t shy about throwing a wrench in things. In fact, it’s not uncommon for payers to have complicated, multi-tiered structures and rules that seem to always be changing, regardless of their contracts.
One leader has found that using a targeted approach for denials by creating teams that work by payer, establishing regular meetings, and data tracking can help tremendously in denials management.
Frank Cantrell, corporate director of revenue integrity at Penn Highlands Healthcare, says that each facility’s issues with denials can vary, but there are several constants that can be applied to improve denials management.
Here are three tips Cantrell says revenue cycle leaders can use to streamline denials management:
Know your contracts. Knowing not just the agreed upon payment rates but knowing the language and what rights you have makes a big difference. Many hospitals do not share contract language with those working the denials. This puts those staff members at a disadvantage when dealing with the payers.
Payer calls. Establish regular (we do monthly) calls with your payer representative. We provide a spreadsheet of claim issues—both payment and denial issues—prior to the call. This gives the payer time to review them and come to the meeting with answers. We put the burden back on the payer to tell us why the denial is valid and how to resolve it moving forward.
Track your data. We track all our denials by payer, reason, etc. so we can use this during contract negotiations. We provide this information to our managed care contracting director. If you have data the payer cannot refute, you have a greater chance of getting concessions on the new contract.
82a1.jpg)
