No recent regulation has thrown revenue cycle processes for a loop like the No Surprises Act.
CMS’ price transparency requirements, found within the No Surprises Act, have been implemented for years now, and it’s clear that not many recent regulations have caused such a shakeup in revenue cycle processes.
From streamlining technology to training staff, many revenue cycle leaders had to scramble to adhere to the law and remain out of CMS’ crosshairs.
In fact, PatientRightsAdvocate.org recently awarded 15 hospitals and health systems for what it says is exemplary transparency compliance, including in some cases a record of significant improvement, which the group says demonstrates a commitment to putting patients over profits.
Awarded by the group were the following hospitals and health systems:
Hospitals
Best-in-Class: Rush University Medical Center – Chicago, IL
Baton Rouge General - Mid City – Baton Rouge, LA
Grandview Medical Center – Birmingham, AL
Mercy Hospital Downtown Bakersfield – Bakersfield, CA
MetroHealth Medical Center – Cleveland, OH
Pullman Regional Hospital – Pullman, WA
Ridgeview Medical Center – Waconia, MN
Robert Wood Johnson University Hospital New Brunswick – New Brunswick, NJ
Saint Tammany Parish Hospital – Covington, LA
UW Health University Hospital – Madison, WI
Hospital Systems
Kaiser Permanente – Oakland, CA (98% compliance)
Community Health Systems – Franklin, TN (97% compliance)
Universal Health Services – King of Prussia, PA (92% compliance)
CommonSpirit Health – Chicago, IL (88% compliance)
LifePoint Health – Brentwood, TN (83% compliance)
For those hospitals and health systems that are still working to streamline compliance, there are lessons to be learned from those systems that are coming out ahead.
For example, Tina Barsallo, vice president of revenue cycle operations at Lifepoint Health, spoke to HealthLeaders about the health systems’ strategies in compliance.
To really get ahead of the game, Barsallo said Lifepoint created an internal pricing transparency team in the year prior to the regulation’s effective date.
Team members spanned across the entire organization and included revenue cycle operations, revenue cycle analytics, compliance, managed care, legal, and project management. Barsallo says she even brought in other team members as needed, such as the facility revenue cycle management leaders and CFOs.
Its pricing transparency team evaluated the requirements thoroughly and outlined the proper path for Lifepoint, and then executed on each aspect to ensure the requirements were met. Barsallo says the team continues to meet regularly to confirm there have been no changes to the requirements, and the revenue cycle team handles on-going monitoring of the websites and links, as well as the annual refresh.
Even if you’re already behind on compliance, it’s not too late to make a change. Barsallo suggests that revenue cycle leaders pull a team together to create joint ownership and partnership in creation of any price transparency tools and to help drive consistency and compliance.
“Reach out to peers to brainstorm on ways they have accomplished compliance, so you don’t need to reinvent the wheel. It is extremely helpful to collaborate with other providers and health systems,” Barsallo says.
CFOs are considering expanding their outpatient footprint to ward off incessant inflation and inadequate payment rates.
CMS recently released its fiscal year (FY) 2024 inpatient prospective payment system (IPPS) final rule increasing payment rates by a net 3.1%. Overall, this will increase hospital payments by $2.2 billion compared to FY 2023.
The AHA, unsurprisingly, was quick to strike back at the “woefully inadequate” payment rate increase for FY 2024.
In a statement shared with the media, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “The AHA is deeply concerned with CMS’ woefully inadequate inpatient and long-term care hospital payment updates. The agency continues to finalize rate increases that are not commensurate with the near decades-high inflation and increased costs for labor, equipment, drugs and supplies that hospitals across the country are experiencing.”
While a $2.2 billion increase seems significant, hospitals are facing historic financial challenges, meaning CFOs are digging deep to find ways to ensure financial stability.
Most hospitals underperformed in June of this year, even as the median year-to-date operating margin index increased to 1.4%, compared to 0.7% in May.
These challenges highlight the fact that leaders can’t depend on payment rate increases to keep them afloat.
"This 'new normal' is an incredibly challenging environment for hospitals," Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall, said in a press release regarding its market analysis.
"It's time for hospital and health system leaders to begin developing and implementing a strategy for long-term sustainability, including expanding their outpatient footprint and re-evaluating where finite resources are being utilized," Swanson said.
And some CFOs have been planning just that.
The key to warding off challenges caused by rising inflation and poor reimbursement rates is reassessing any plans for growth and major capital, Matthew Arsenault, CFO at Baptist Health South Florida, recently toldHealthLeaders.
“We are in a community and a service area that is growing through people continuously moving into South Florida. So, we want to make sure that we provide care, but deciding which projects happen when and evaluating the cost of those projects and inflationary environment is something that we're constantly doing more of now, and more frequently than we have been historically because of the current inflationary environment,” he said.
When planning growth and investments in order to maintain financial stability, Arsenault said the system looks toward expanding outpatient footprints.
“We've always had a very large outpatient footprint throughout the community, and I think that really served us and our patients well. It's all about how you provide easy access to care for patients, whether it be in a virtual setting, whether it be in an outpatient clinic, or whether it be in an urgent care center,” he said.
Growing and increasing revenue is about continuing to build upon that footprint, Arsenault said. “I think that shift to outpatient is a big part of [financial stability].”
The health system is under investigation for allegations it was canceling appointments and "cutting off" patients with medical debt. What went wrong?
Revenue cycle leaders are under pressure to collect on their patient’s bills in order to help pad an organization’s bottom line, but a new investigation is pointing out that some organizations are going too far.
Allina Health, one of the largest non-profit health systems in Minnesota, was recently called out in a New York Times report alleging that it was canceling appointments and “cutting off” patients with medical debt.
The Times’ report has now prompted a formal investigation, announced last week, by Minnesota Attorney General Keith Ellison.
According to the Times, Allina Health allegedly refused to provide certain types of care for patients with, in some instances, only $1,500 in medical debt. Although Allina would provide emergency care, it had a written policy to deny other services until that debt was paid off, the Times said.
At the time of the Times' article publication, Allina Health CEO Lisa Shannon said it “will take a thoughtful pause on any new interruptions to non-emergent, outpatient clinic scheduling while we re-examine our policy.”
“Reducing barriers to care is central to our mission as a steward of community health, and we will carefully study additional ways to educate our teams about the extensive financial services available to patients experiencing financial barriers to care,” Shannon’s statement said.
Even though Allina’s policy was paused, Attorney General Ellison is not letting the health system off the hook.
“Allina is bound under the Hospital Agreement to refrain from oppressive billing practices and provide charity care when patients need and qualify for it, as all Minnesota hospitals are. Denying patients needed care on the basis of medical debt harms every Minnesotan, whether or not they are Allina patients,” Attorney General Ellison said in a statement this week.
“My office has heard from a good number of Allina patients who have shared their own upsetting stories of being denied care for this reason,” Attorney General Ellison said.
As hospitals and health systems battle to increase margins and improve efficiency to remain financially healthy, what can revenue cycle leaders do to stay afloat? Denying care is not it.
Revenue cycle leaders have been working for years to minimize the same patient payment challenges as Allina Health, albeit with better strategies.
One strategy we see time and time again? Placing more of a focus on the front end, usually through technology, to reduce the cost to collect on the back end.
In fact, this is a strategy that Augusta University Medical Center follows. The health system realized it was missing opportunities by not prioritizing pre-service and point-of-service payments, which led to a negative patient financial experience, collecting pennies on the dollar, and writing off bad debt.
“Patients are providers’ second largest payers, so collecting payment prior to or at the time of service is critical to the overall financial health of the organization and our ability to serve the community with quality care,” Sherri Creech, AVP of patient access services at Augusta University Medical Center, told HealthLeaders.
After implementing technology and establishing new staff trainings and protocols for payment collection, the system increased its point-of-service collections by 150%--thus reducing its patients’ amount owed after care.
“The team couldn’t believe how small changes every day, like collecting a copay, can add up over time and help that bottom line,” Creech said.
Editor's note: Followingthis article's publication, Allina Health sent an email to HealthLeaders stating the following: "We have determined there are opportunities to engage our clinical teams and technology differently to provide financial assistance resources for patients who need [financial] support. We will formally transition away from our policy that interrupted the scheduling of non-emergency, outpatient clinic care." -Allina Health PR.
To ensure financial success, hospital leaders need to expand their outpatient footprint.
As the financial boost during the pandemic from federal relief funds has officially dried up, rural health and critical access hospitals are fighting to keep their doors open.
Losses on patient services, low financial reserves, rising labor costs, and increasing inflation are all contributing factors to the financial challenges facing these providers.
These challenges are leaving the CFOs of these smaller organizations to dig deep to find ways to ensure financial stability. One way to address this new normal? Leaders need to develop and implement a strategy to expand their outpatient footprint. Stacy Taylor, CFO at Nemaha County Hospital, a top 100 a critical access hospital located in Nebraska, has done just that.
The hospital, which sits in the south-east corner of Nebraska, is a small critical access hospital that sees about 2,000 ER patients a year. On top of this, roughly 25,000 outpatients come through the facility in a year.
If you’re a smaller, critical access hospital, you need to capitalize on those outpatient services, Taylor said.
“As a critical access hospital, one thing that we have done to maintain financial stability is to make ourselves true to the critical access model of reimbursement. We've stayed true to that outpatient business,” Taylor said.
This is why roughly 80% if Nemaha’s business is through outpatient services, Taylor says.
“We try to stay in the market by bringing in as many outpatient doctors that we can from the bigger cities so that they can see patients here. This way, patients are not driving an hour to get to the city, and we can see them here at the hospital in a rural setting,” Taylor said.
While shifting its focus to outpatient services has helped maintain Nemaha’s financial stability, it’s not without its challenges.
“As for other challenges, labor shortage has been the biggest challenge we've had. In the last couple of years, we've tried really hard to stay true to that core and work with hiring staff locally, but we did make the decision to start working with some contract agencies as far as getting some nursing staff coverage,” she says.
Keeping pace with the changing healthcare financial landscape is also key, Taylor says.
“We need to be able to adapt to changes that are coming to us,” Taylor said.
In order to save more money and streamline efficiency, Taylor made the decision to merge its medical records and business office into one space.
“When it comes to working with one another, we've got coders sitting right next to the billers so that way we can get our claims out the door a little more quickly,” she said.
“We've cross trained a lot of people within the business office. With having them cross trained, everyone knows how to answer the phone. Everyone knows how to cover our front desk. Everyone knows how to set up a patient and complete an admission for them. That way, we can help each other out when we were short staffed,” Taylor said.
CMS fined three hospitals for alleged price transparency violations.
Most hospitals and health systems have not had an easy ride when it comes to price transparency adherence—from overly burdened staff to costly operational changes—revenue cycle leaders have felt the pressure to adapt and thrive.
Doubling down on the pressure is CMS. The agency is continuing to fine hospitals for not adhering to price transparency requirements, and there are three new providers on the chopping block.
CMS announced it has fined Community First Medical Center $847,740, Falls Community Hospital and Clinic $70,560, and Fulton County Hospital $63,900, all in July. The hospitals have 30 days from the issuance date to appeal the fines, CMS says.
This brings the total number of hospitals fined for price transparency violations to seven. HealthLeaders reported in May that Kell West Medical Center was fined for noncompliance and the hospital is now appealing that punishment. CMS says it is reviewing Kell West’s appeal as it is “under review.”
While most organizations should have systems in place to help them adhere to the new rules, opportunities still exist to revisit outdated revenue cycle processes to better comply with these regulations.
There are three areas revenue cycle leaders must have shored up to ensure financial and operational effectiveness.
Revenue cycle leaders will continue to fight against poor operating margins, reduced reimbursement, and inflated expenses well into 2024. And at a time when a poor financial experience can negate a five-star clinical experience for patients, revenue cycle leaders are under more pressure than ever to streamline processes.
Financially successful hospitals and health systems have fully optimized three key areas of the revenue cycle, so other revenue cycle leaders need to make sure they are keeping pace.
Streamlined patient financial experience
If your patients aren’t happy with their billing experience, you’re in trouble.
How patients are billed plays a large role in their overall financial experience and satisfaction with your healthcare organization. Revenue cycle leaders need to help patients navigate the billing process easily if they are going to create a positive patient financial experience.
Paper statements work, but digitization has pushed organizations into offering a modern billing experience. Patients expect digital and automated options when it comes time to pay their bill—and more importantly, the information presented needs to be precise.
"There are quite a few challenges in the market today when it comes to a patient's billing experience," Chris Johnson, vice president of revenue cycle at Atrium Health, said.
For example, when it comes to a patient's bill, it's common for consumers to find the amount of information presented overwhelming.
"Healthcare billing continues to be a complex process especially since you have the provider, patient, and payer all involved," said Johnson. "Quite frankly, when some patients see an insurer's use of CPT and ICD-10-CM codes, it can be like a foreign language, and it can cause confusion."
How can revenue cycle leaders do this?
Cleaning up these bills by omitting unnecessary information and making payments as easy as possible—either via text or patient portal—is a must. Missing the mark on a patients’ financial journey is a make or break for leaders.
Foolproof leadership development
Maintaining the revenue cycle operations of an organization comes with a unique set of challenges. Labor shortages have been plaguing the healthcare industry for years, forcing revenue cycle leaders to reevaluate the way they remedy staff burnout and responsibility. Part of dealing with labor shortages is having a solid staff development and succession plan.
How do you bring on star revenue cycle staff? More importantly, how do you keep and grow them?
“You have to make recruiting part of your job as a revenue cycle leader. You can't just rely on HR or talent teams,” Bill Arneson, director of revenue cycle process and system support at Moffitt Cancer Center, said.
“Also, you have to assess where your budget is at. If you can’t afford to hire the star IT people, then you have to commit to developing them. Ask yourself, are you the New York Yankees with unlimited money? Or are you the Tampa Bay Rays who have to work the farm system and develop players?” Arneson asked.
“I've had people from both: I've brought in people from Epic, Cerner, and Siemens, as well as home-grown people. I just find the best talent I can—you know, the emotionally intelligent good team members, and then tweak along the way until they find their groove,” he said.
Staff development is never a “set it and forget it,” Arneson said.
“Once you hire someone, you have to constantly be thinking [about] how you can bring them in and find new skill sets. People's interests change over time as well, so be prepared to constantly be growing the team members that you already have. That will help you retain and grow your staff so you’re not always recruiting.”
The revenue cycle workforce will continue to evolve, so recruiting and retaining star revenue cycle staff must be a priority.
Refined multi-department collaboration
Although the revenue cycle encompasses a large portion of a health systems' workforce, leaders must remember that everyone at the organization plays a role in revenue cycle. Revenue cycle operations are the ultimate team sport and requires physician champions, IT support, compliance, and even legal teams to back everything revenue cycle does.
How are revenue cycle leaders working with all entities across the organization to improve optimization?
Successful leaders have already started bringing in their IT teams to help streamline revenue cycle, said Christy Pehanich, AVP of revenue cycle management at Geisinger Health System.
However, Pehanich said the challenge of this is that leaders must merge revenue cycle domain expertise with IT expertise.
“We have a lot of smart IT engineers and application developers, but they do not have any revenue cycle domain expertise, and we need to merge those skill sets in order to optimize automation in the revenue cycle,” Pehanich said.
“We need to create more opportunities for IT professionals and for revenue cycle experts to merge those skills through education. Just understanding the languages in each department in and of itself can be a challenge,” she said. “There are so many acronyms … when you start talking about automation and revenue cycle, so both teams need to know what the other is saying.”
Once that merger of expertise has happened, the future is limitless, Pehanich said.
Leaders need to make sure their revenue cycle teams have a sequence of importance for SDOH codes to uphold the organization's overall goal.
CMS recently released the fiscal year 2024 inpatient prospective payment system final rule, and within it, CMS finalized a higher severity level designation for three different social determinants of health (SDOH) codes describing homelessness.
As revenue cycle leaders continue placing a heavier focus on capturing SDOH codes, having CMS continue to increase severity level designations will continue to promote their use.
While SDOH data collection is top of mind, what revenue cycle leaders might not realize is that only a certain number of SDOH codes will fit on a Medicare claim—meaning revenue cycle leaders need to make sure their middle revenue cycle has a sequence of importance for SDOH codes in order to uphold the organization’s overall impact goal.
While the bill goes to the insurance company, only the top 25 diagnostic codes are billed for the inpatient side and it’s even fewer for the outpatient side, Kimberly Cunningham, instructor for the certified coder boot camp programs at HCPro, explained in a recent webinar.
“So, now there’s a potential conflict—should coders report SDOH codes within that top 25 and leave out some other codes that may be impactful for patients that have more than 25 codes on an inpatient claim or 12 on an outpatient claim?” Cunningham asked.
CMS’ decision to finalize the severity level designation change for homelessness codes has likely pushed those SDOH codes to the forefront of the coders’ and billers’ attention.
However, Cunningham says that for the remainder of the SDOH codes, individual organizations need to determine the sequence of importance for SDOH codes for themselves. For example:
What are the outcomes that the organization is hoping to have?
How is the organization hoping to impact patients?
By answering these questions, leaders can determine what they view to be of the utmost importance when capturing data. From there, they can make sure teams are reporting the associated diagnosis codes according to their levels of importance. This, in turn, will aid programs that the organization seeks to implement, Cunningham says.
“Outreach programs, insurance companies, and programs rely on this data being reported. Organizations may need to focus on specific SDOH codes and determine what they want to report,” she says.
Hospitals will be seeing a payment bump for cases that report homelessness.
CMS recently released the fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) final rule. Along with its yearly payment rate changes, the final rule placed a focus on promoting high-quality care and rewarding hospitals that deliver such care to underserved populations.
Notably, CMS finalized a higher severity level designation for three different social determinants of health (SDOH) codes describing homelessness.
More than 80% of hospitals are collecting data on SDOH—many right through their EHR platform and health information exchanges—yet only half of those hospitals are collecting data regularly. As revenue cycle leaders continue placing a heavier focus on capturing SDOH codes, having CMS continue to increase reimbursement rates will continue to promote their use.
CMS has changed the following codes from the severity designation of "non-complication or comorbidity" to "complication or comorbidity," thus increasing their reimbursement rate:
Z59.00, Homelessness unspecified
Z59.01, Sheltered homelessness
Z59.02, Unsheltered homelessness
According to CMS, after a data analysis of claims data tracking the impact on resource use generated for hospitals, CMS finalized the changes based on the higher average resource costs of cases with those ICD-10-CM diagnosis codes in comparison to similar cases without these codes.
In a news release, CMS stated, “This action is consistent with the Administration’s goal of advancing health equity for all, including members of historically underserved and under-resourced communities … As SDOH diagnosis codes are increasingly added to billed claims, CMS plans to continue to analyze the effects of SDOH on severity of illness, complexity of services, and consumption of resources.”
CMS also finalized changes to The Hospital IQR program, with an increase in operating payment rates of 3.1%. “As part of CMS’ health equity goals, we are rewarding hospitals that deliver high-quality care to underserved populations and, for the first time, also recognizing the higher costs that hospitals incur when treating people experiencing homelessness,” said CMS Administrator Chiquita Brooks-LaSure in the release.
“With these changes, CMS is laying the foundation for a health system that delivers higher quality, more equitable, and safer care for everyone,” Brooks-LaSure said.
Hospitals will be seeing a payment bump, but will it be enough to ward off rising inflation and labor costs?
CMS recently released the fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) final rule increasing payment rates by a net 3.1% for FY 2024 for hospitals that are meaningful users of electronic health records and submit quality measure data.
This 3.1% payment update reflects a hospital market basket increase of 3.3% as well as a productivity cut of 0.2%. Overall, the agency will increase hospital payments by $2.2 billion compared to FY 2023, which also includes a $957 million decrease in disproportionate share hospital payments and a $364 million decrease in new medical technology payments, according to the IPPS final rule.
While a $2.2 billion increase seems significant, hospitals are facing historic financial challenges. In fact, hospital margins for the year rose in June, but the divide between the haves and have-nots widened as expenses and economic pressures remained high according to a recent Kaufman Hall analysis.
Most hospitals underperformed in June, even as the median year-to-date operating margin index increased to 1.4%, compared to 0.7% in May.
These challenges highlight the fact that leaders need to stop relying on payment rate increases to keep them afloat.
"This 'new normal' is an incredibly challenging environment for hospitals," Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall, said in a press release regarding it's market analysis.
"It's time for hospital and health system leaders to begin developing and implementing a strategy for long-term sustainability, including expanding their outpatient footprint and re-evaluating where finite resources are being utilized," Swanson said.
The AHA doubled down on the “woefully inadequate” payment rate increase for FY 2024.
In a statement shared with the media, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “The AHA is deeply concerned with CMS’ woefully inadequate inpatient and long-term care hospital payment updates. The agency continues to finalize rate increases that are not commensurate with the near decades-high inflation and increased costs for labor, equipment, drugs and supplies that hospitals across the country are experiencing.”
From analyzing marketplace dynamics to remedying ongoing workforce struggles, stakes are high for CFOs in 2023.
CFOs are not seeing any relief in 2023—between declining operating revenue for health systems and a fundamental shift in the workforce—this year continues to be financially complex, to say the least.
This is why CFOs need to get creative when it comes to retaining talent, succession planning, and maintaining the overall financial health of their organizations.
From August 9-11, the members of the HealthLeaders CFO Exchange will be meeting in Napa Valley, California, to talk strategy and find workarounds and solutions to the following four trends in hopes of alleviating the headaches.
Current Financial Stress
Does the age old adage "grow or die" apply to healthcare organizations? Many think so. But then how can CFOs ensure their organizations grow while keeping expenses low? There needs to be the perfect set of processes put in place, but what are they?
When considering investments, it’s critical to have strong discipline and balance appropriate risk-taking, and with a changing market CFOs need to be thinking differently about investment portfolios. How can CFOs utilize industry connections to identify new ideas and opportunities to improve?
Supply chain optimization and shortage considerations aren’t only for the clinicians. CFOs need to create a plan for increasing costs of supplies, services, and technology—costs that likely won’t see any relief.
Workforce
Labor shortages, diminished margins, accelerating expenses, and leadership vacancies: A perfect storm of factors is pressing financial leaders to employ meticulous strategies to rein in costs while creatively thinking about building a sustainable workforce.
Turnover within leadership across the industry has been pervasive, so CFOs are doubling down on succession planning to discourage talented staff from jumping to new opportunities outside the organization. How can CFOs improve physician partnerships, retention, and the encroaching union activity?
On top of this, how are CFOs improving nursing pipelines and filling needs for other key positions across the entire organization—everyone from therapists to tech?
CFO Exchange attendees gather to talk financial and operational strategy during a previous event.
Marketplace Dynamics
When it comes to smart growth strategies, CFOs have some major decisions to make. Is it best for their organization to build, buy, partner, or merge? There are also major disruptors to worry about. How does a CFO decide to compete or partner? Or better yet, how do you go about competing or partnering?
Acquisitions and mergers are still top of mind as well. How should a CFO respond to practice acquisition by investor-owned entities?
Innovation and Technology
CFOs know that a one-star financial experience can negate a five-star clinical experience, so how can CFOs create a better customer experience and think more like a disruptor? Many CFOs know that implementing AI is the key to a streamlined patient experience, but how do you manage it in the right way and at the right pace?
While AI and technology is essential for the patient experience, digital solutions maximize workflow and increase the business footprint, so how do CFOs decided where to start when expanding into hospital at home, RPM, telehealth, and more?
Stay tuned for more coverage of these topics once the event is in full swing.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
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CFO Exchange attendees gather to talk financial and operational strategy during a previous event.