A recent survey highlighted how payment cuts are affecting denial strategies.
Healthcare organizations are on the verge of stepping up their denials management strategies in 2023 as rate cuts are expected to impact revenue.
On the delivery side, most practices plan to continue their telehealth operations in the new year, according to the 2023 Part B News Predictions Survey conducted in the first two weeks of December.
Asked how they would respond to the reduction to the payment conversion factor, more than half, or 51%, of respondents reported that they will be “more aggressive” in challenging denied claims.
About 46% of survey respondents also said they would increase their collections efforts with payers. One respondent added that “we will be more aggressive about authorizations for Medicare Advantage plans,” according to the survey results.
More drastic measures don’t appear to be on the agenda of most practices. Just 16% of respondents said they will add self-pay services; 15% reported that they would limit staff hours; and 11% said they would be forced to delay the purchase of office equipment or software. Less than 4% of practices said that staff lay-offs are on the table, according to Part B News.
These findings come on the heels of a similar survey by Experian Health that found that the nearly three out of four respondents reported that reducing denials is their highest priority, and 70% said that it is more important than prior to the pandemic.
Additionally, the top three reasons for an increase in claims denials in the Experian Health survey were insufficient data analytics (62%), lack of automation in claims/denials process (61%), and lack of thorough training (46%).
Within the independent dispute resolution (IDR) process of the No Surprises Act, one set of codes encompassed 66% of disputes.
Emergency department visits topped the list of services that triggered a request for an IDR during the second and third quarters of 2022, according to a new report.
The IDR process is a part of the No Surprises Act that allows out-of-network providers and payers to hash out payment for items or services if they aren’t satisfied with the outcome of the open negotiation period that is also mandated by the law.
According to the report, the most common CPT codes disputed were emergency department service codes (66% of disputes), radiology codes (9% of disputes), and anesthesia codes (7% of disputes).
In addition to emergency, radiology, and anesthesia services, “approximately 5% of disputes included surgery codes, such as removals of the appendix or gallbladder and treatment of broken bones, and 4% of disputes included codes for pathology and lab. Approximately 4% of disputes included codes for neurology and neuromuscular procedures such as monitoring of the nervous system during an operation,” according to the report.
The states with the most IDR disputes initiated during this reporting period were Texas, Florida, Georgia, Tennessee, and North Carolina.
The IDR portal was opened on April 15, 2022, just over 15 months after the No Surprises Act was signed into law to protect patients from surprises out-of-network bills. The Departments estimated that 17,333 claims would be submitted in the IDR process annually. In reality, the IDR process saw 90,078 disputes over the aforementioned period in the report, far and away outpacing expectations.
Topics including payer compliance and surprise billing will lead the way for revenue cycle leaders in 2023.
2022 was hardly easy for revenue cycle leaders—between declining operating revenue for health systems, payers squeezing even harder on denials, and a fundamental shift in the workforce—last year was complex, to say the least.
2023 won’t see much of a change, as these trends will still be headache-inducing for revenue cycle leaders.
From February 15 to 17, the members of the HealthLeaders Revenue Cycle Exchange will be meeting in Carlsbad, California, to talk strategy and find workarounds and solutions to the following six trends for 2023 in hopes of remedying the headaches.
Payer compliance
There is a lot of confusion in the industry about what a commercial or managed care payer would want in order to approve a claim.
Much of this confusion comes from the timing of requirements to ensure reimbursement. The bottom line should be the same for all payers: The documentation must show a plan of care based on the working diagnosis and then progress to the goal of the plan and when the patient can expect to reach the goal. But what if payers frequently change requirements? How do revenue cycle leaders keep up?
During the event, we will talk about how revenue cycle leaders are handling payers that are increasingly more difficult to work with. Many leaders are finding that payers are pushing back on reimbursement, requesting more authorizations and medical records, and increasing denials.
Price transparency and surprise billing
The No Surprises Act, which became effective in 2021, requires hospitals to post the prices for their most common procedures as well as offer a patient-friendly tool to help shop for 300 common services.
The various nuances of the No Surprises Act are complicated. So what tools are revenue cycle leaders using? How are they using combined estimates and partnering with physician groups? How do they get estimated costs to patients at the time outlined?
Improving the patient financial experience
How patients are billed plays a large role in the overall patient financial experience and satisfaction. Because of this, revenue cycle leaders said that helping patients navigate the billing process is essential in creating a positive patient financial experience.
Paper statements work, but the digital age has pushed organizations into not only wanting to add in that digital billing experience, but they are needing to. Patients are now expecting both digital and automated options when it comes time to pay their bill.
On top of this, balances are getting larger, so how do revenue cycle leaders inform patients without scaring them off? How are they creating a seamless experience for the patient?
Leadership development and succession planning
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 revenue cycle leaders identify rising talent if you don’t interact with them in person? How do they guide and give opportunities for staff members to grow their career and get noticed?
Securing champions in your ring
Although the revenue cycle encompasses a large amount of a health systems' staff, we need to remember that everyone at the organization plays a role. Revenue cycle operations are the ultimate team sport and requires physician champions, IT support, compliance, and even legal teams to back everything you do.
How are revenue cycle leaders working with all entities across the organization to improve optimization?
Workforce
Like most of healthcare, the revenue cycle workforce has changed dramatically within the last several years. An entire office floor that previously housed a revenue cycle department is now silent and desolate as most staff have been working remotely for years at this point.
While working remotely has been a success for most organizations and is now a permanent work model, measuring productivity has moved to the forefront of concerns since staff are no longer under physical, constant supervision.
How are revenue cycle leaders managing remote staff effectively, ensuring their work effort, and making sure management is staying on top of issues? Are you hiring outside higher-priced markets to save labor costs? How are you fostering networking, bonding, culture, and loyalty to minimize turnover?
Join us in February to talk through all of these questions and more.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
Knowing the cost of care ahead of time tops the list of items consumers are excited about.
According to a recent OnePoll survey conducted on behalf of Ribbon Healthcare, 48% of healthcare consumers said improved insight into how much care will cost ahead of time was the top item they were most excited about with respect to innovation in healthcare.
When looking for care online, 49% of respondents said accurate, up-to-date information is most important to them, while 46% said understanding how much care will cost before being billed is most important.
These are important numbers for revenue cycle leaders as adherence to the No Surprises Act would remedy these patients' concerns.
As revenue cycle leaders toy with the idea of adding in automation to help streamline processes, it seems patients are on the same page. According to the poll, 20% of respondents said they are also excited about artificial intelligence that will improve processes so doctors can spend more time with patients.
According to the report, technology and digital transformation play a critical role in creating a positive experience for patients. “Consumers expect a trustworthy and seamless front-end experience when finding a provider,” the report said.
This data comes from 1,000 consumers across the United States that were surveyed on their experience receiving healthcare, what’s most important to them when searching for and choosing care, and which factors they view as key to a more personalized and inclusive care experience.
On April 1, your revenue cycle will have additional diagnosis code options to further capture social determinants of health.
The CDC just released upcoming changes to both the ICD-10-CM diagnosis code set and the official coding guidelines.
The new changes include 42 diagnosis code additions, seven deletions, and one code revision. All changes will go into effect April 1, which should give revenue cycle leaders time to train staff and update their coding systems.
A new social determinants of health (SDOH) code for reporting problems related to education and literacy is among the code additions. As a reminder, SDOH are social factors, such as homelessness, illiteracy, a history of childhood trauma, and joblessness or underemployment, that can affect a person’s health.
Also added are codes to update the verbiage related to critical perpetrator of abuse external cause codes with that of current CDC core data collection elements and literature related to patient maltreatment and neglect — including elder abuse.
There is also a slate of new codes pertaining to “financial abuse” of adults and children. For example, the April update brings a code for adult financial abuse, confirmed, initial encounter and a code for child financial abuse, confirmed, initial encounter.
The ICD-10-CM Official Guidelines for Coding and Reporting have been expanded to provide more examples in the SDOH section.
For example, if a patient who lives alone suffers an injury that temporarily impacts their ability to perform activities of daily living, it would be appropriate to include a diagnosis code for problems related to living alone, the guidelines say.
The updated guidelines emphasize that the SDOH should connect directly to the episode of care.
These updates don’t come as a surprise as there has been a spotlight on reporting SDOH.
With increasing attention on population health and quality initiatives, organizations have turned their focus on SDOH and how capturing those ICD-10-CM codes impacts their patient population and their success in caring for that population.
As your middle revenue cycle works to report SDOH more accurately, a recent study is now showing what can be learned from reporting these diagnosis codes appropriately.
As HealthLeaders previously reported, a study published in JAMA Network Open found that coded housing instability is linked to higher hospital admission rates for mental disorders, longer inpatient stays, and substantial healthcare costs.
Because coding occurs mid-cycle, it provides an opportunity to catch errors introduced earlier in the process, as well as preventing similar errors in the future.
Staying abreast of these regulatory coding updates is important for revenue cycle leaders as coding—and its completeness and accuracy—has a profound impact on an organization's bottom line.
The 340B program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations and other covered entities at significantly reduced prices.
340B payments are a lifeline for some organizations, so when payments were previously cut, hospital groups were not happy, to say the least.
What happened in 2022
Luckily for these organizations, in July, the Supreme Court unanimously ruled that cuts to hospital reimbursement under the 340B drug discount program were unlawful.
In the 2023 OPPS final rule, CMS solidified the payment policy for 2023 of average sales price of 6% for drugs and biologicals acquired through the 340B program because of that unanimous Supreme Court decision.
By the time November rolled around, HHS issued a new proposed rule revising the 2020 final rule that established the 340B administrative dispute resolution (ADR) process to better align with requirements found within the Affordable Care Act. The ADR process is an administrative process designed to assist these organizations and manufacturers in resolving disputes regarding overcharging, duplicate discounts, or diversion.
The most recent update however, came this week when a federal court ruled that HHS is able to determine how to repay hospitals enrolled in the 340B program--once again concerning hospital groups.
"Henry Ford Health system and a lot of folks rely on 340B discounts and other mechanisms like disproportionate share payments. We're a big teaching institution, so a lot of these special payments that we do in order to teach the healthcare leaders of the future or make sure that we can take care of vulnerable patients are extremely important," Damschroder said.
"So that is an area that we and others are actively—in our advocacy—ensuring that these programs stay intact or evolve to a place that enhances the programs for the people that were trying to care for," said Damschroder.
Cheryl Sadro, the CFO for UC Davis Health, and Tammy Trovatten, the director of government reimbursement for UC Davis Health, also connected with HealthLeaders to discuss the financial issues hospitals and health systems have been dealing with over the course of the pandemic, one key area being 340B payments.
“One of the things we've been watching and will continue to watch through this process is where we go from here with 340B. We're the only level one trauma center in a multicounty area, and between 340B trauma and transplant, we've garnered a large portion of our bottom line,” Sadro said.
What does the future hold?
“As we think about changes in policy and things of that nature, we are paying attention to policy and how it impacts us long term. 340B going away would not only be devastating for us but incredibly devastating to our patients because it does fund some other things that we can do in our organization to serve that indigent population,” Sadro said.
Trovatten added, “It's been this ongoing saga for many years. CMS implemented a cut to 340B hospitals, which just recently got overturned, but we still are unsure how that's going to be reimbursed because it's trying to be made budget neutral. It doesn't matter who's in charge, this is just an overall problem that is concerning. All non-340B hospitals got an average wholesale cost plus 6%, where we were cut to an average wholesale price minus 22%. So, it was a weird thing that happened that got overturned, but we [are unsure] where we go in the future.”
Since revenue integrity departments tend to be relatively new, many leaders wonder how to best elevate a revenue integrity program.
As the revenue cycle continues to be an area of focus for organizations looking to prosper in 2023, revenue cycle leaders have turned to streamlining (and even creating) revenue integrity departments to reduce the risk of noncompliance, optimize payment, and minimize the expense of fixing problems downstream with claim edits.
But, where should revenue cycle leaders start?
“The question is more urgent than ever, but changes in the industry due to budget constraints, available skill sets, reactive cultures, and the inability to measure performance—or even define what to measure—make answers harder to come by. At the end of the day, it comes down to: How do I do more with less and do so effectively?” Caroline Znaniec, managing director of healthcare business performance improvement with Protiviti Inc., told the NAHRI Journal.
Znaniec says two important items to focus on when looking to optimize a revenue integrity department are objectives and strategies.
Here’s what Znaniec had to say:
Objectives
Better-performing revenue integrity programs have clear objectives with defined roles and expectations. This prevents overlap between functions, including those of the billing office, compliance, internal audit, and clinical operations. Your revenue integrity program charter should include a clear objective.
Strategies
In addition to stating the objectives of the revenue integrity program, specific key strategies can help a program maintain focus to meet its objectives. Better-performing organizations employ these strategies in creating, implementing, and sustaining their revenue integrity programs.
When combined, these strategies create a culture of revenue integrity within a provider organization, which is vital to sustaining the program and its efforts.
The strategies are as follows:
Create staff awareness at all levels on the individual and provider organization’s responsibilities through inclusion of responsibilities in job descriptions, on-boarding activities, and annual education
Provide periodic reviews across the organization in a well-defined, documented, and thorough manner through the creation and implementation of an annual work plan
Design and implement a monitoring program for identified high-risk areas; this program should include the development of review tools, analysis of results to identify root causes and develop corrective action plans, tracking of action plan implementation, and verification of improvement
Create and maintain a revenue integrity committee (or similar initiative) to ensure the program is meeting its primary objectives
Communicate findings of the revenue integrity monitoring activities to executive management
Claims denials are increasing between 10%-15% according to a recently released survey.
According to a recently released survey conducted by Experian Health, the top three reasons for an increase in claims denials were insufficient data analytics (62%), lack of automation in claims/denials process (61%), and lack of thorough training (46%).
These results came from surveying 200 healthcare professionals, primarily in executive or management positions, who actively take part in the decision-making processes for their organizations' claims management systems.
Additionally, nearly three out of four respondents reported that reducing denials is their highest priority, and 70% said that it is more important than prior to the pandemic.
The reasons indicated for this higher priority include payer policy changes occurring more frequently (67%), reimbursement taking longer (51%), errors on claim submissions increasing (43%), and denials increasing (42%). Those who reported denials increasing pointed to operational challenges such as insufficient data and analytics to identify submission issues, lack of automation in claim submission/denials prevention process, lack of staff training, and lack of in-house expertise, among others.
“[The increase in denials] represents billions of dollars that will take longer than anticipated to be reimbursed—if reimbursed at all—which puts pressure on providers’ cash flow,” the study authors wrote. “The overhead to rework and resubmit these claims can be considerable and further dilute reimbursement totals.”
Almost all respondents indicated they had technology in place to help improve claims and reduce denials, with more than half (52%) having updated or replaced their existing claims process technology, 45% saying they automated tracking of payer policy changes. Providers also invested in patient portals (44%), accurate estimates (40%), and digitizing the registration process (39%).
HealthLeaders' regulatory round up series highlights five essential governing updates that cover every aspect of the revenue cycle that leaders need to know. Check back in each month for more updates.
The revenue cycle is complex, detailed, and always changing, so staying on top of regulatory updates and latest best practices requires revenue cycle leaders' constant attention in this ever-changing industry.
In this revenue cycle regulatory roundup, there were an ample number of updates published by CMS and the OIG in December, including insights on telehealth use and the OIG's semiannual report to Congress.
Here are the five updates you need to know.
There was a dramatic increase in telehealth use during the first year of the pandemic.
The OIG published a report in conjunction with the Department of Defense, Office of Personnel Management, Department of Veterans’ Affairs, Department of Labor, and Department of Justice, to examine telehealth across select health care programs within those agencies and potential program integrity risks during the first year of the COVID-19 pandemic.
The report showed an unsurprisingly dramatic increase in telehealth use during the first year of the pandemic, as approximately 37 million individuals–13 times the number of individuals from the previous year–across healthcare programs in those six agencies used telehealth during the first year of the pandemic.
The percentage of individuals using telehealth varied by program, as the VA had the most telehealth usage (87%), followed by Tricare (49%) then Medicare (43%). The Department of Justice prisoner health care services saw the lowest rate of telehealth usage (2%).
The report also looked at ways the agencies made telehealth available during the pandemic, how the coverage compared across agencies, and potential program integrity risks across programs. It identified potential risks–such as upcoding, duplicate claims, high-volume billing, unnecessary durable medical equipment, or laboratory tests associated with telehealth visits–which will likely be future areas of focus for the OIG.
The OIG's Fall 2022 Semiannual Report to Congress was published.
Also in December, the OIG published its Fall 2022 Semiannual Report to Congress, which reviews OIG work from April 1 to September 30, 2022. The OIG detailed its monetary totals for expected recoveries and highlighted its most significant audit findings from this period.
Labs with questionably high billing for additional tests alongside COVID-19 tests warrant further scrutiny the OIG said.
The OIG also published a review of certain diagnostic testing along with COVID-19 tests. These add-on tests included individual respiratory tests (IRT), respiratory pathogen panels (RPP), genetic tests, and allergy tests. The OIG noted that while it is not unusual for labs to bill for multiple types of tests on the same claim, it is concerned about certain patterns of billing involving this type of testing.
The OIG examined all Part B claims paid for COVID-19 tests during 2020 with these four add-on tests. It found that 378 labs billed Part B for add-on tests at questionably high levels compared to the 19,199 other labs whose claims were examined.
OIG concerns included high-volumes of add-on tests on claims for COVID-19 tests, high payment amounts from including add-on tests, and labs who billed for add-on tests in combination with COVID-19 tests with little variation among patients, suggesting the add-on tests may not have been specific to an individuals’ needs. Payment amounts for claims which included these tests were significantly higher than claims with just COVID-19 tests. The OIG referred the labs in question to CMS for further review.
A proposed rule on advancing interoperability and improving prior authorization processes was published.
CMS published a proposed rule regarding improving interoperability and reducing challenges related to prior authorization. This rule replaces a proposed rule from December 2020 titled “CMS Interoperability and Prior Authorization (85 FR 82586),” and it builds on a final rule published in May 2020 titled “CMS Interoperability and Patient Access (85 FR 25510).” This proposed rule also incorporates feedback CMS received from the December 2020 proposed rule.
The rule is geared overall toward Medicare Advantage organizations, state Medicaid and CHIP fee-for-service programs, Medicaid and CHIP managed care plans/entities, and Qualified Health Plan issuers on the federal exchanges, as it aims to improve electronic exchange of health care data through various APIs.
It also includes proposals to require payers and Medicare Advantage organizations to implement electronic prior authorization and send decisions within 72 hours for expedited requests and seven days for non-urgent requests. It would add a new electronic prior authorization measure for certain hospitals and CAHs participating under the Medicare Promoting Interoperability Program and in MIPS.
The rule also includes five requests for information on the following topics:
Accelerating the Adoption of Standards Related to Social Risk Factor Data
Electronic Exchange of Behavioral Health Information
Improving the Electronic Exchange of Information in Medicare Fee-for-Service
Advancing the Trusted Exchange Framework and Common Agreement
Advancing Interoperability and Improving Prior Authorization Processes for Maternal Health
CMS published a press release and fact sheet on the rule on the same date. Comments are due by March 13, 2023.
National healthcare spending grew in 2021.
CMS published a press release regarding the 2021 National Health Expenditures (NHE) Report, which found that US healthcare spending increased in 2021 by 2.7% to reach a total of $4.3 trillion in total national healthcare spending.
This was a far slower increase than the 10.3% jump in 2020, and CMS attributed the slower growth to the decline in government expenditures for health care that followed strong growth in 2020 due to the COVID-19 pandemic response. The share of the GDP devoted to health decreased from 19.7% in 2020 to 18.3% in 2021, but that is still higher than the 17.6% share from 2019. Medicare spending increased by 8.4% in 2021, a significant jump from a 3.5% increase in 2020.
Revenue cycle leaders say helping patients navigate the billing process is essential in creating a positive patient financial experience.
How patients are billed plays a large role in the overall patient financial experience and satisfaction. Because of this, revenue cycle leaders said that helping patients navigate the billing process is essential in creating a positive patient financial experience, especially considering the No Surprises Act.
Paper statements work, but the digital age has pushed organizations into not only wanting to add in that digital billing experience, but they are needing to. Patients are now expecting both digital and automated options when it comes time to pay their bill.
When first taking that step toward a digital billing experience, patient education is once again vital to success. Organizations can offer the most sophisticated bill-pay technology, but what use is technology if a patient doesn’t know how to use it?
Three prominent revenue cycle leaders addressed this conundrum during our recent revenue cycle roundtable in Nashville, TN. They discussed why it’s imperative to improve the patient billing experience and examined the benefits of patient education in light of the No Surprises Act.
Read on to learn what they had to say.
Savanah Arceneaux, Director of Patient Financial Services, Ochsner Health: “In terms of the legislation that's being implemented with pricing transparency and surprise billing, it's important to get the patients involved in their patient financial journey. Ensuring that they understand what they're seeing when they get a bill and knowing what questions to ask is important. And even helping them anticipate what that bill might look like before they get it allows them to understand their benefits ahead of time.
At Ochsner we proactively provide estimates to our patients prior to being seen and this helps them understand the differences between the charges, contractual allowances, and their patient responsibility.”
Mary Wickersham, Vice President-Patient Financial Services, Avera Health: “From a market share standpoint, patients—depending on their insurance— they can choose to go to a competitor and if they have a bad financial experience, they may go across town to the competitor, because they feel like there's more focus on the billing experience than there used to be. There's a lot more scrutiny because of price transparency and people want to challenge everything, which is good, but I think there's just been that shift and the light is shining more on the financial side.
We have outside providers that come in and treat patients. The anesthesia group that we have, it's not Avera. But they're putting people to sleep in our hospital, and they don't understand that they're not Avera, so they get a separate bill from them and that doesn’t make sense.
But with the No Surprises Act, we're going to have to put their charges on our estimate, so the patient has that full picture—how are we going to figure all that out?”
Mary Neal, Assistant VP of Revenue Cycle, Ochsner Health: “Not every patient has the financial literacy or literacy in general to grasp even the most simple concepts sometimes, so that can make it harder on us to educate.
I think when you're speaking about the consumer experience in general, even taking healthcare out of it, we don't dissect the different pieces and parts and say, ‘Well, the care was great, but the billing part was just okay.’ You're evaluating that product or service as a whole.
If the financial piece is not where it needs to be, one could only assume this is representative of the level of quality of everything else that you're going to get.”
Wickersham: “There's an overarching misunderstanding in every community, they look at our charges and they're like, ‘Why are they so high? How can the hospital not be making money?’ There's this thing called contractuals. It's like there needs to be some big news special explaining healthcare, charges, contractuals, payer contracts, because people don't get that, and I wouldn’t understand it either unless I worked in it.”
Neal: “As much as we try to automate to lower the cost, the automation is only as good as the people who build it and validate it regularly.
It's difficult when you're trying to explain to a patient that maybe there was an error on their bill because not every single claim gets a human looking at it for accuracy before it goes out the door.
There's good, legitimate reasoning behind that, but patients don’t want to hear, ‘oh, this is wrong because it just ran through the machine, and this is what bill we sent you.’"
