More than 100 medical associations have taken issue with a new policy from Cigna regarding claims coded with modifier -25.
Cigna is coming under fire for its new policy requiring submission of office notes with all claims including evaluation and management (E/M) codes 99212, 99213, 99214, and 99215 and modifier -25 when a minor procedure is billed.
Cigna says 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 medical groups were quick to respond.
For background, the revenue cycle coding staff report modifier -25 for E/M services on the same day of another service or procedure when it is performed by the same physician or provider.
The medical groups, including the American Medical Association, wrote in a letter to Cigna stating that the new policy is burdensome for providers and could negatively affect patients.
“Our organizations are alarmed by the significant administrative burdens and costs for health care professionals— and Cigna—that will result from implementation of this policy. By bluntly requiring clinical documentation for all claims for an E/M service reported with modifier 25, physicians and other providers will be forced to submit an enormous number of office notes, and Cigna will be deluged with medical records,” the letter said.
The groups are urging Cigna to reconsider this policy not only due to administrative burden, but because of its potential negative effect on patients, the letter said. Instead, the groups say Cigna should partner with organizations on a collaborative educational initiative to ensure correct use of modifier -25.
The groups also questioned the guidelines Cigna used to craft the new modifier -25 policy since the CPT code description "clearly states that modifier -25 enables reporting of a significant, separately identifiable E/M service by the same physician or other healthcare professional on the same day of a procedure or other service."
This latest update just adds to the already strained provider/payer relationship.
Unlike Medicare, which has standard, heavily documented rationales and processes for denials, appeals, and audits, almost anything goes when it comes to commercial payers like Cigna. Each payer organization will have different rules and processes, and payers’ manuals and bulletins aren’t always easy to locate.
“For us, it's really about new policy changes that they try to impose throughout the year and in the mid-contract period,” Patrick Wall, vice president of revenue cycle at St. Joseph's Candler, previously told HealthLeaders.
Even when policy changes spring up out of seemly nowhere, revenue cycle leaders have agreed that sometimes the administrative burden alone is too much. For example, BCBS also recently made a substantial increase in the number of medical records it requests to pay a claim.
All this back and forth means that staying compliant with payers has been, and will continue to be, a burden on the revenue cycle workforce. With already strained staff it can be hard to find extra hands, and money, to keep up with these payers.
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 in April, including public health emergency (PHE) updates and multiple payment rate proposals.
The fiscal year (FY) 2024 inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) PPS proposed rule was released.
On April 10, CMS published a draft copy of the FY 2024 IPPS proposed rule, which is scheduled to be published in the Federal Register on May 1. CMS projects an increase in operating payment rates of 2.8% based on a projected hospital market basket update of 3.0% reduced by a 0.2% productivity adjustment. CMS projects that disproportionate share hospital payments, however, will decrease by approximately $115 million.
Other policies proposed in the rule include:
CMS is not proposing to extend the New COVID-19 Treatment Add-On Payments (NCTAP) beyond the previously established end date, which was the end of the fiscal year in which the PHE terminates. With the current plan to end the PHE on May 11, that means NCTAP would expire on September 30.
For the regular New Technology Add-on Payment (NTAP) program, CMS is proposing to move the FDA approval deadline from July 1 to May 1 beginning with applications for FY 2025. CMS is considering 19 applications for NTAP under the traditional pathway and 20 for the alternative pathway for FY 2024.
CMS proposed 395 new, 13 revised, and 25 deleted ICD-10-CM codes for FY 2024. Many of these changes apply to W codes for capturing accidents and injuries. Changes also affect codes for Parkinson’s disease, new codes for osteoporosis with pelvic fractures, additional sickle cell anemia codes, and more.
The rule also contains a variety of quality reporting program changes and changes to graduate medical education payments for training in the new rural emergency hospital provider type. CMS included a Request for Information in the rule regarding challenges faced by safety-net hospitals and ways CMS could help.
CMS published a press release and fact sheet to accompany the rule. Comments are due by June 9.
The FY 2024 inpatient psychiatric facility (IPF) PPS proposed rule was released.
On April 4, CMS released a draft copy of the FY 2024 IPF PPS Proposed Rule, which was published in the Federal Register on April 10. CMS proposes an IPF payment rate update of 1.9% for FY 2024, which is slightly higher than the proposed 1.5% increase for FY 2023.
Other proposals include an amendment to the regulations to allow hospitals to open a new IPF unit at any time during the cost reporting period as long as a 30-day advance notice is provided to the CMS regional office and the MAC. CMS included a Request for Information (RFI) regarding data CMS could collect that could be used to help inform possible revisions to payment rate calculation for FY 2025 and beyond.
CMS published a fact sheet on the proposed rule on the same date. Comments are due by June 5.
Also published was the FY 2024 skilled nursing facility (SNF) PPS proposed rule.
On April 4, CMS released a draft copy of the FY 2024 SNF PPS Proposed Rule, which was published in the Federal Register on April 10. CMS proposed a 3.7% increase to the SNF payment rate for 2024. This number incorporates the 2.3% reduction that will finish the two-year phase-in of the PDPM parity adjustment.
CMS also included a proposal regarding changes to civil monetary penalties when a facility actively waives its right to a hearing in writing in order to receive a penalty reduction. CMS said that 95% of facilities facing civil monetary penalties currently follow this process. Therefore, CMS said it would create a system in which a failure to submit a timely request for a hearing would be treated as a constructive waiver and the accompanying 35% penalty reduction would remain.
This proposal is intended to reduce the burden involved with tracking and managing written waiver requests. Other proposals in the rule include changes to PDPM ICD-10 code mappings, several quality reporting changes, and SNF value-based purchasing program changes.
CMS published a fact sheet to accompany the rule. Comments are due by June 5.
Resources were published detailing the end of the COVID-19 PHE.
On April 10, CMS updated its COVID-19 Provider Toolkit with information throughout on billing and coding for COVID-19 vaccines and antibody treatments before and after the end of the COVID-19 PHE.
The changes talk about how EUAs are distinct from and not dependent on the PHE itself, review what will happen to payment rates when the EUAs end, payment rates for providing vaccines in a patient’s home through the end of 2023, and more.
More prior authorization requirements were added for facet joint interventions.
On April 11, CMS updated its list of HCPCS codes requiring prior authorization to add facet joint interventions to that list effective July 1, 2023. Providers can start submitting the prior authorization requests on June 15 for dates of service on or after July 1.
Four hospitals were hit with major fines for not adhering to the regulation.
CMS is once again cracking down on enforcement of the price transparency rule through monetary penalties.
For noncompliant hospitals, the agency recently announced will now require corrective action plan (CAP) completion deadlines, impose civil monetary penalties earlier and automatically, and streamline the compliance process.
CMS says it conducts over 200 comprehensive reviews of hospital price transparency compliance per month, and as of April 2023, CMS has issued more than 730 warning notices and 269 CAP requests. It has also imposed civil monetary penalties on four hospitals for noncompliance.
According to CMS, the hospitals fined are:
Northside Hospital Atlanta in Georgia, fined $883,180
Northside Hospital Cherokee in Georgia, fined $214,320
Frisbie Memorial Hospital in New Hampshire, fined $102,660
Kell West Regional Hospital in Texas, fined $1127,260
Although CMS maintained its requirement that noncompliant hospitals submit a CAP within 45 days from the CAP request, it will now require these hospitals to be in full compliance with price transparency guidelines within 90 days from when it issued the request.
Previously, hospitals were allowed to propose their own completion date for CMS approval.
The No Surprises Act, which became effective last year, 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.
Unfortunately, there are still organizations are behind in adhering to this requirement.
Of the hospitals studied, 5.1% were in total noncompliance as they did not post any standard charges file, and 51.3% failed compliance because the majority of their pricing data was missing or incomplete.
While some organizations now 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.
Connie Lockhart, director of strategy and operations at Impact Advisors, previously discussed with Healthleaders some key strategies that revenue cycle leaders can use to increase price transparency compliance. When first shoring up price transparency processes (and as mentioned in the studies above), there are two main requirements that organizations need to adhere to immediately.
"Revenue cycle leaders need to first make sure they are following CMS' guidelines to complete a comprehensive, machine-readable file of all services and items," she says. "Ensure all requirements are met—like how a separate file must be posted for each hospital. And be cognizant of multiple hospitals operating under a single hospital license with different sets of standard charges."
Also, ensure that list is posted on a publicly available website.
Once completed, make sure to post a display in a publicly available website of 300 shoppable services in a consumer-friendly format. This should include the 70 CMS-specified, shoppable services, Lockhart says. Revenue cycle leaders should also establish a cadence to ensure both displays are updated annually, Lockhart says.
A new report calls out the risk found within the No Surprises Act, including the civil monetary penalties for each violation in which a patient receives a surprise medical bill.
A new report, “25 Top Management Risks for Healthcare in 2023,” published by Crowe LLP, outlines the leading risks internal audit professionals and compliance departments are facing at their healthcare organizations. One highlighted risk has been on the radar of revenue cycle leaders for years now: the No Surprises Act.
For the report, Crowe identified 25 top management risks facing healthcare organizations in 2023 using input from executive management and board members at many of the largest U.S. health systems. The report also used input from risk assessments conducted by the company at hundreds of health systems, hospitals, and other healthcare provider clients during 2022.
One of the biggest risks tied to the No Surprises Act is compliance and monetary penalties, the report said.
CMS has begun to audit providers and payers for noncompliance with certain requirements.
Because of the added oversight from CMS, the report says risks associated with the NSA include the civil monetary penalties for each violation in which a patient receives a surprise medical bill, and the negative reputational risks resulting in lost revenue for facilities and providers.
The report says that auditing process effectiveness and compliance can help organizations mitigate those risks.
The use of technology can also help to expand NSA risk coverage, the report says. For example, using data analytics to determine whether actual billed charges are within $400 of a good faith estimate (GFE), analyzing compliance with GFE timing requirements, and using data analytics to identify potential balance billing exceptions, are all positive uses of technology to mitigate risk.
In the report, Crowe defined a risk area as anything that might impede a healthcare organization’s ability to achieve its goals in critical areas such as patient care, regulatory compliance, operations, strategic growth, and financial performance.
To manage an environment of increasing risks and limited resources, healthcare internal audit and compliance departments must align their risk assessments and audit work plans to areas most vital to achieving the strategic goals and business objectives of their organizations. The departments must do so while staying in compliance with critical regulatory and other requirements, the report said.
One CMO plans to place a larger focus on quality and safety, patient experience, and population health.
April 23-29 is patient experience week, and HealthLeaders is helping to celebrate by spotlighting the hard work leaders put into creating a positive patient clinical and financial experience at their organizations.
Check out some of our latest stories on improving the patient financial and clinical experience that you may have missed.
The Exec: Inaugural CMO Set To 'Drive Change And Improvements'
Carolyn Kloek, MD, was recently named as the inaugural CMO of the Oklahoma City, Oklahoma-based health system. As the first chief medical officer of OU Health, Kloek plans to focus on quality and safety, medical informatics, data analytics, patient experience, digital health, population health, and process improvement.
From Appointments to Bills: Using Rev Cycle Tech To Ease Patient Burnout
When revenue cycle leaders look to ease financial burdens for their organization, there is one area that can’t be overlooked: the patients.
From the patient financial experience to the clinical experience, keeping patients happy and avoiding burnout is necessary for a thriving organization. Not only can burnout negatively impact patient experience and the quality of care they receive, patient burnout can also lead to decreased patient volume and revenue for healthcare organizations.
When it comes to technology, what can be done to remedy the patient experience and avoid burnout and lost revenue? Find the answer here.
A Sense of Purpose: Q&A With Interim Health CEO Jennifer Sheets
Before stepping into the CEO role at Interim Health in 2019, Jennifer Sheets’ career had progressed from working as a transplant ICU nurse to CEO of different hospital systems. It wasn't until two members of her family needed home health services that she realized the importance of home and community-based services to better the patient experience.
“If you drive integrated care like we do, even if the patient is not in home health but is being supported by the home care side of the business, you can still have a touchpoint and can see the progression of that patient. That really connects with clinicians who are in this to impact lives. We focus on the fact that you can have not just a job, but a relationship with your patients,” Sheets said.
When it comes to improving the patient financial experience, it's imperative to put the microscope on an organization's billing process.
April 23-29 is patient experience week, and HealthLeaders is helping to celebrate by spotlighting the hard work revenue cycle leaders put into creating a positive patient financial experience at their organizations.
At a time when a poor financial experience can negate a five-star clinical experience, revenue cycle leaders are under more pressure than ever to streamline processes for their patients. So where should organizations start when looking to improve this patient experience?
"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, previously told HealthLeaders. Narrowing down those challenges and working on perfecting them will ensure a positive patient financial experience.
When it comes to a patient's bill, it's common for certain populations 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 real confusion."
Another added component seen across the healthcare industry is that patient bills still tend to show gross charges for the service or services provided to a patient.
"While gross charges are not the actual amount paid by insurers or patients, we continue to use them for billing purposes across our industry. Providers often assume patients are not concerned about gross charges, but this may not be the case." Johnson said.
"When we send a patient an itemized bill and they see their gross charges for $100,000—all of the sudden they are interested in those gross charges, not just what their actual financial responsibility is. So again, I think billing continues to be more complex than it needs to be as an industry," he said.
Price transparency has come a long way in the industry, but certain populations may need more education on what they are seeing in that final bill and breaking down this overload of information is an important step in achieving a positive patient financial experience.
Bringing that conversation forward and setting the expectation that a patient may see a gross charge or mentioning to a patient that they haven't met a deductible will help remove that surprise element from the patient's bill.
On top of this surplus of coding and pricing information, it's not unusual for patients to receive multiple bills from different providers for one episode of care.
"That can be confusing for patients. And again, it's not a problem that we have successfully fixed at this point," said Johnson.
Also, it's common for a patient's statement to not completely align with the explanation of benefits that the patient receives from their insurance company. Receiving multiple bills for one encounter as well as receiving mismatched facility and payer statements can greatly affect the patient's financial experience.
"While we are continuing to improve and provide better information to our patients, we have a more ground to cover in making this industry and process truly patient-friendly," Johnson said.
Under the proposed rule, acute care hospitals that report quality data and are meaningful users of EHRs will see a net 2.8% increase in payments in FY 2024 (compared to 2023). However, disproportionate share hospitals could be facing a payment cut of $115 million.
While CMS says the 2.8% rise would increase hospital payments by $3.3 billion, the American Hospital Association (AHA) says it is not enough.
“The AHA is deeply concerned with CMS’ woefully inadequate proposed inpatient hospital payment update of 2.8% given the near decades-high inflation and increased costs for labor, equipment, drugs, and supplies. Moreover, long-term care hospitals would see a staggering negative 2.5% payment update under this proposal. These insufficient adjustments are simply unsustainable,” Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said in a statement.
“2022 was the most financially challenging year for hospitals during the pandemic, with half of hospitals finishing the year with a negative operating margin. So far, this worrying trend has continued in 2023, most recently with reports of record high hospital defaults. The AHA has repeatedly requested that CMS and the Administration remedy shortcomings in its previous market basket forecasts for all hospitals, Thompson said.
For example, The AHA says CMS’ inpatient payment update was a full three percentage points less than what actual market basket inflation was in 2022 and the long-term care update was 2.9 percentage points less.
“Layering these inadequate inflationary adjustments on top of Medicare’s existing underpayments to hospitals does not reflect the reality of the world hospitals are providing care in. Without more substantial updates in the final rule, hospitals’ ability to continue caring for patients and providing essential services for their communities will be threatened.”
The Federation of American Hospitals piggy-backed on the AHA’s sentiment and called the update "disappointing."
“As the cost of groceries and gas continue to rise, so does the cost of caring for patients. Just as the ravages of record setting inflation are affecting every American family – community hospitals are being hit too. Hospitals aren’t immune to inflation. They are contending with rising labor costs combined with the growing challenges of a deepening caregiver shortage, drug price increases, and supply chain breakdowns, among other inflation challenges. All reasons why hospitals need more support from Medicare,” President Chip Kahn said in a statement.
“This IPPS proposed inflationary payment update is disappointing. It fails to recognize today’s headwinds that will strain the health safety net in 2024, which will further threaten patients’ access to care as hospitals are forced to reduce services or in some cases, especially rural areas, close completely.”
The IPPS proposed rule came at the same time that data from the AHA found that hospitals and health systems are dealing with an increase in financial pressures.
According to the AHA’s report, overall hospital expenses increased by 17.5% between 2019 and 2022, outpacing Medicare reimbursement, which only grew by 7.5% during the same period.
Labor costs, which typically account for half of a hospital’s budget, grew by 20.8% between 2019 and 2022. The growth in labor expenses was primarily the result of a rise in reliance on contract staffing. There has been a 258% increase in total contract labor expenses for hospitals in 2022 compared to 2019, according to AHA research.
Educating patients on how to navigate the billing process is essential in creating a positive patient financial experience.
April 23-29 is patient experience week, and HealthLeaders is helping to celebrate by spotlighting the hard work revenue cycle leaders put into creating a positive patient financial experience at their organizations.
During HealthLeaders’ Patient Financial Experience Summit last week, Mary Neal AVP of revenue cycle at Ochsner Health, and Savanah Arceneaux, director of pre-service and financial clearance at Ochsner Health, chatted with me during a summit session about how to create and streamline patient education resources in order to increase patient satisfaction among challenges such as the No Surprises Act.
Between complex billing statements and good faith estimates, revenue cycle staff have a lot on their plate when it comes to helping patients navigate these multifaceted and arduous statements. And at a time when a poor financial experience can negate a five-star clinical experience, revenue cycle leaders are under more pressure than ever to streamline processes for their patients.
So what are the keys to remedying this? Neal and Arceneaux say it ties back to patient education on all aspects of the revenue cycle, but payer and cost education can make the biggest difference.
“In recent years, payers began shifting more financial responsibility to the patients, and that's been a big challenge. This has really prompted us to look at our long-term strategic vision for how we can make this experience more consumer friendly by opening that digital front door and giving patients various options for them to gain resources and education on their plans,” Arceneaux said.
This has led Ochsner to embrace services and technology that get them closer to the patients and make that connection before they even come in for their visit.
“It can be challenging being a patient-centered organization while we are attempting to collect what is being owed to us, so we want to be able to do this while involving our patients at every step. We want them to be financially informed prior to their visits so that they are feeling satisfied when they come in,” Arceneaux said.
Another way of doing this is providing education around their good faith estimates as well.
“If you can get in touch with the patient two, three, or four weeks ahead of their service and provide them a proactive estimate of their service cost, that allows a lot of time for our staff to research questions, maintain a dialogue about pricing, and help the patients understand,” Neal said.
“It really helps to break things down for the patient prior to services rendered, so you can avoid the ‘here's your bill, this is what you're stuck with now.’ When that happens, there's a little bit less recourse and it can make the patients feel powerless since they've already had these services rendered,” Neal said.
Interested in improving the patient clinical experience too? Make sure to also check out the educational session, How to Improve HCAHPS Scores, which features Ghazala Sharieff, MD, MBA, corporate senior vice president of hospital operations and chief medical officer at Scripps Health as well as Brooke Horne, MPH, executive director of patient experience at Providence.
Sharieff and Horne discuss a range of issues related to improving HCAHPS scores. Two of the top topics are improving physician and nurse communication scores.
Revenue cycle leaders were asked to rank the most time-consuming tasks at their organization, and the results aren’t surprising.
556 chief financial officers and revenue cycle leaders at hospitals and health systems across the United States were asked to rank the most time-consuming revenue cycle tasks at their organizations in a new survey commissioned by AKASA.
Topping the list of the most time-consuming revenue cycle tasks were denials management and prior authorizations.
In the survey, respondents were able to select up to five out of a list of 15 different revenue cycle tasks. Of the tasks listed, the following five were selected the most by the leaders:
76%, denials management
60%, prior authorization
58.6%, insurance follow-up
26.6%, eligibility and medical necessity checks
26.4%, patient cost estimation and price transparency requirements
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.
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, AKASA noted.
“When thinking about the biggest bang for your buck as a revenue cycle leader, few things are as effective as focusing on denials management,” said Amy Raymond, VP of revenue cycle operations at AKASA, said in a statement shared with HealthLeaders.
“But it’s important to avoid the common mistake of only focusing on working denials, and instead address the root causes. Leveraging robust, AI-driven automation can help overcome shortcomings of a typical denial management strategy—improving processes holistically to reduce denials in the first place and better address them when they occur,” Raymond said.
Seeing prior authorizations at the top of the list is of no surprise either, especially since prior authorizations are having a large impact on denials. In fact, a separate study earlier this year highlighted the burden prior authorization denials have had in the revenue cycle in 2022.
According to that study, denials rose to 11% of all claims last year, up nearly 8% from 2021, and prior-authorization denials were at the heart of the cost increase. Prior authorization denials on inpatient accounts were a key driver behind the dollar value of denials increasing to 2.5% of gross revenue in August 2022 up from 1.5% of gross revenue in January 2021—an increase of 67%, according to the report.
Clinical validity denials occur when there is a lack of clinical evidence in the patient chart to support a billed diagnosis. Claims may be denied, for example, if they lack clinical criteria necessary to support a diagnosis, contain inconsistencies, or do not meet payer-specific diagnostic criteria.
A key defensive strategy for preventing these denials is provider education, Reck said. This can involve bringing data on the financial impact of documentation inconsistencies to providers and explaining how they can be prevented. Streamlining this process to avoid these clinical validation denials will help to lessen the burden of overall denials management.
The list ranks the top-performing hospitals across the U.S. by net patient revenue.
A report published earlier this year by Definitive Healthcare ranked the nation’s top-performing hospitals by net patient revenue. As revenue cycle leaders know, to thrive as an organization, a streamlined and optimized revenue cycle is a must. Every area from the front end to the back end need to be well aligned and working efficiently.
As a key indicator of a healthcare organization’s financial strength, many thought leaders believe increasing net patient revenue to be one of the most difficult challenges hospitals face nationwide, the report noted.
Fluctuating patient volumes, decreasing reimbursement rates, and constant pressure to keep up with changing regulations as the reasons why improving financial performance is such a struggle, it said.
Hospitals calculate net patient revenue by subtracting deductions such as charitable donations, bad debt, and contractual adjustments from the gross revenue received for all patient care performed, the report noted. According to the report, the following data is displayed and ranked according to the most recent 12-month interval tracked in its database.
Here are the top five hospitals on the list along with net patient revenue:
Tisch Hospital, $6,273,707,636
Cleveland Clinic Main Campus, $6,037,196,525
NewYork-Presbyterian Weill Cornell Medical Center, $5,734,047,089
AdventHealth Orlando, $5,004,081,001
Vanderbilt University Medical Center, $4,691,813,631
Many hospitals on the list are bringing in billions of dollars in net patient revenue with the top ten reporting over $3.9 billion, the report said. Combined, the top 50 hospitals earned more than $151 billion in net patient revenue, while the average hospital earned roughly $3.03 billion.
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