The OIG found that incorrect modifier usage led to $4.9 million in overpayments.
Now is the time to shore up your revenue cycle as some providers may need to pay for incorrect modifier usage.
According to the recent report by the OIG investigating instances of incorrect co-surgery and assistant-at-surgery modifier usage, 69 of 100 sampled procedural services did not meet federal requirements.
An additional review of 127 corresponding services found that 49% were noncompliant with federal requirements, as well.
The OIG reviewed a randomly selected sample of 100 services rendered by Part B providers between 2017 and 2019 with certain CPT procedural codes and a Medicare Physician Fee Schedule (MPFS) co-surgery indicator of 1 or 2. The reviewed procedures included spinal fusions, knee replacements, and endovascular repairs, among others.
Having an MPFS co-surgery indicator of 1 means co-surgeons could be paid, though supporting documentation is required to establish medical necessity for a two-surgeon procedure. Having an MPFS co-surgery indicator of 2 means co-surgeons are permitted and no documentation is required if the two-specialty requirement is met.
According to the report:
49 of the sampled services (71%) were reported without the co-surgery modifier
14 of the sampled services (20%) were reported without an assistant-at-surgery modifier
6 of the sampled services (9%) were duplicate services
The OIG estimates that the errors resulted in a total of $4.9 million in overpayments during the audit period.
These additional costs add further strain during a time of historic inflation levels and workforce challenges.
As hospitals try to navigate the COVID-19 crisis, inflation, labor shortages, and rising expenses, organizations are going to finish out the year in the red, according to the latest National Hospital and Physician Flash reports from Kaufman Hall.
To increase collections and build a stronger, more positive relationship with patients amid these struggles, revenue cycle leaders are putting the spotlight on the patient experience, but as staffing shortages hit organizations’ hard and patients’ length-of-stay grow, these goals seem more unattainable.
The average length-of-stay in hospitals has increased by about 19% for patients in 2022 compared to 2019, according to data from the healthcare consulting firm Strata Decision Technology.
These delays in hospitals’ ability to discharge patients, as well as the negative consequences on both patients and hospitals, was stressed in a recent report released by the American Hospital Association (AHA).
According to the AHA, delays in discharge result in hospitals and health systems undergoing additional pressure on an already overwhelmed workforce and reduce overall community access to care.
Additional costs for hospitals are also associated with delays in discharge, as they do not receive reimbursement for any costs associated with the extra days caring for patients in the hospital while patients wait to be discharged.
With hospitals’ expenses projected to have increased by $135 billion just in the last year, and 68% of hospitals ending the year operating at a financial loss, these additional costs add further strain during a time of historic inflation levels and workforce challenges.
“Delays in patient discharges create bottlenecks in the health care system, adding to the already overwhelming challenges facing our hospitals and caregivers. Temporary relief to overburdened hospitals and other providers will help ensure patients get the most appropriate care and will relieve stress on front-line health care workers,” said Rick Pollack, president and CEO of the AHA.
The AHA is asking Congress to establish a temporary per diem Medicare payment that would be targeted to hospitals to easy capacity issues. This would include acute, long-term care, rehabilitation, and psychiatric facilities and would be made for cases identified and assigned with a specific discharge code that falls under this type of long stays.
The patient financial experience and No Surprises Act are top of mind for revenue cycle leaders as we move into 2023.
As hospitals try to navigate the COVID-19 crisis, inflation, labor shortages, and rising expenses, organizations are going to finish out the year in the red, according to the latest National Hospital and Physician Flash reports from Kaufman Hall.
To increase collections and build a stronger, more positive relationship with patients amid these struggles, hospitals are putting the spotlight on the patient experience. While streamlining front-end and back-end operations are a must, there is a wrinkle that leaders have been struggling with: The No Surprises Act.
Novant Health's Senior Vice President of Finance, Geoff Gardner, spoke exclusively with HealthLeaders on the changes he sees for the patient financial experience considering the No Surprises Act and price transparency.
“In light of recent legislation around price transparency and surprise billing, it's critical that providers listen to their patients and find ways to engage that work for them,” Gardner said.
“Part of the reason we decided to implement new technology was because we wanted to optimize our billing experience on mobile devices. I'm sure we'll see this trend continuing—both at Novant Health and across health systems in general. Providers should be empowering patients with a digital-forward experience that helps patients understand their bills and how insurance benefits apply.”
As 2022 ends and revenue cycle leaders start to look toward 2023, technology is at the top of the to do list for a lot of leaders.
Adding in automation can be complicated, and revenue cycle leaders should look toward their peers when looking to seamlessly implement new technology.
From perfecting your workflows to collaborating with other departments, there are a few keys to success that revenue cycle leaders should keep in mind when looking to automate processes.
Jamie Davis, executive director of revenue cycle management at Banner Health, spoke with HealthLeaders about Banner Health's journey in implementing the use of AI, automating its revenue cycle management, and lessons learned from taking on such a large task.
"In full transparency, we tried to run first, and then we fell. We realized we needed to slow down a little bit, which was a great lesson learned," Davis said. "I think anyone who is trying to be innovative has those horror stories where something worked out really well in the boardroom and not so much in real life."
Banner Health has 30 hospitals, and the appropriate workflows weren't aligning. "So, we automated a dysfunctional workflow, and it ended up being more cumbersome to utilize the machine learning. It was a good learning experience—we did the fail-fast theory."
After stepping back, realigning its strategic planning, and partnering with IT, Banner's deployment process started to turn around.
"We ended up creating hierarchal scoring for all of the automation that we wanted to consider. On one side, we have the benefits: for example, net revenues, compliance, or full-time employee re-allocation. We would then weigh those scores and compare them to the complexity of the build: for example, how many process variants does it have? How many systems are in there?" Davis shared.
After gathering those scores, Banner would use a classic grid to determine automation that was low-effort, low-return, and high-effort, high-return. This hierarchical approach made all the difference for them.
"Once we did that, we applied a continuous improvement team member to have oversight and to help be that subject matter expert in the revenue cycle to make sure we aren't recreating core processes. And from there, our automation just went gangbusters," Davis said.
CMS' plan to streamline the prior authorization process would slash the amount of time spent chasing approvals and save providers billions.
The recently released prior authorization proposed rule would place new requirements on payers could save providers $15 billion in 10 years, according to CMS.
The rule, replacing a previous proposal from December 2020, takes aim at prior authorizations, which providers have long cited as a timewaster and resource-drainer.
By revving up technology-enabled prior authorization platforms and demanding that payers provide clear denial reasons and decisions within seven days (and in some cases 72 hours), the new proposal seeks to lessen the administrative challenges associated with pre-approvals.
The impact of the set of proposals, according to CMS’ estimates, would be enormous – underscored by a reduction of 213 million hours and cost-savings of more than $15 billion over the first 10 years, Part B News reported.
Part B News analyzed the data and found that the annual per-practice savings are estimated to be $19,524, and CMS projects that the nation’s nearly 200,000 physician practices would save more than $1 billion in aggregate during the first year. That number would rise to nearly $2 billion by 2035, assuming half of the country’s practices adopt the changes.
CMS is currently seeking comments on the proposed rule and its various policies, which would kick in Jan. 1, 2026, if the rule is finalized as proposed.
HHS proposed a new standard for attachments to support claims and prior authorization transactions.
HHS recently released a proposed rule that aims to standardize claims and prior authorization transactions under HIPAA.
According to the proposed rule, HHS seeks to adopt a set of standards for the electronic exchange of clinical and administrative data to support prior authorizations and claims adjudication.
In determining the necessity of a service as part of making a coverage decision, payers often require additional information that cannot adequately be conveyed in the specified fields or data elements of the adopted prior authorization request or claims transaction, the proposed rule said.
So, if this rule is adopted as proposed, the new standards would support electronic transmissions of this information, which would lighten the load for front-end revenue cycle staff by decreasing the amount of time and resource-consuming, manual processes used today to transmit this information.
This would facilitate better prior authorization decisions and claims processing, reduce burden on providers and plans, and result in more timely delivery of patient healthcare services, the rule said.
This is seen as a step in the right direction as the Medical Group Management Association's 2022 Annual Regulatory Burden Report says prior authorization requirements ranked as the top burden for providers.
According to the survey, 97% of respondents agreed that a reduction in regulatory burdens like this would allow their practice to reallocate resources toward patient care.
The AHA also echoed this sentiment and praised the HHS’ proposed rule.
The standard would apply to all providers who currently lack an efficient and uniform method of sending attachments, which can lead to provider burnout, slow down processing, and delay payments or patient care, the AHA said.
"The AHA supports establishing a standard for attachments to reduce the administrative burdens facing clinicians, and we look forward to providing robust commentary after analyzing the rule's specifics," Terrence Cunningham, AHA's director of administrative simplification policy, said in a release.
According to the report, CMS should recover overpayments of $1 billion resulting from incorrectly assigning severe malnutrition diagnosis codes to inpatient hospital claims, ensure that hospitals bill appropriately moving forward, and conduct targeted reviews of claims at the highest severity level that are vulnerable to upcoding.
In a previous audit, the OIG found that hospitals incorrectly billed Medicare for severe malnutrition diagnosis codes for 173 of the 200 claims that we reviewed.
In that audit, the OIG found that hospitals used severe malnutrition diagnosis codes when they should have used codes for other forms of malnutrition or no malnutrition diagnosis code at all, resulting in net overpayments of $914,128 for the claims in its sample, the OIG said.
"On the basis of our sample results, we estimated that hospitals received overpayments of $1 billion for incorrect severe malnutrition diagnosis codes for fiscal years 2016 and 2017," the report said.
At the time, the OIG said it also found that hospitals are increasingly billing for inpatient stays at the highest severity level, which is the most expensive. The number of stays at the highest severity level increased almost 20 percent from fiscal year 2014 through fiscal year 2019, ultimately accounting for nearly half of all Medicare spending on inpatient hospital stays, the report said.
To remedy the situations the OIG gave CMS a lengthy list of suggestions, and while the OIG says CMS has started to take initial steps toward implementing the recommendations, there is more work to be done; thus, landing this issue on the 2022 list.
"In response to our recommendation that CMS conduct targeted reviews of Medicare Severity Diagnosis Related Groups and stays that are vulnerable to upcoding, as well as the hospitals that frequently bill them, CMS did not concur but acknowledged that there is more work to be done to determine conclusively which changes in billing are attributable to upcoding," the OIG said.
Further oversight and recovery audit contractor reviews, which are already being conducted, are essential to ensuring that Medicare dollars are spent appropriately, the report noted.
Strong CDI and physician collaboration directly contributes to the overall health of an organization's revenue cycle.
With the growth of automation, data availability, and tracking, it is increasingly important for the middle revenue cycle to become a priority for healthcare organizations, and department collaboration is the key to success.
That's why Kearstin Jorgenson, operations director of physician advisor services, and Dr. Kory Anderson, medical director of physician advisor services, CDI, and quality, at Intermountain Healthcare worked to streamline their middle revenue cycle by bringing their physician and CDI teams together.
Here are three tips they have for other revenue cycle leaders looking to improve team collaboration.
Center key performance indicators (KPI) on quality metrics
Dr. Anderson and Jorgenson have talked to numerous facilities around the country, and they see many aligning under a finance focus. Finance can be the loudest message sometimes, but what needs to resound is quality, they said.
Intermountain Healthcare focused on quality metrics that were directly impacted by clinical documentation, physician engagement, and education.
"We used to struggle to get an audience," Dr. Anderson said. "Now people are coming to us to talk about strategies and what they could do to improve those metrics."
Bring teams together in a way that still enables them to do their best work
For Intermountain Healthcare, the CDI nurses continue to focus on trends and identify what the team needs to learn. They collaborate with the physicians, and then the physicians go out and build relationships, look for common and shared understanding, and deliver educational presentations.
Bring education work in-house when possible
Intermountain Healthcare used to contract education out to vendors. Now the team does in-house training whenever possible.
Dr. Anderson and Jorgenson say they're getting better engagement with providers because educational sessions are happening between colleagues.
The person leading the session and those who attend see and work with each other in the hospital every day. This allows for more natural accountability and continuous improvements and adjustments because conversations can happen on the job and in the moment, they said.
Follow-through is also greater with in-house education. Intermountain Healthcare has set up quarterly meetings to connect on what’s going well, what isn’t going well, and how to close the gaps.
Reported housing instability is linked to higher hospital admission rates for mental disorders, longer inpatient stays, and substantial healthcare costs, a recent study found.
Social determinants of health (SDOH) are social factors, such as homelessness, illiteracy, a history of childhood trauma, and joblessness or underemployment, that can affect a person’s health.
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.
A recent study published in JAMA Network Open found that reported housing instability is linked to higher hospital admission rates for mental disorders, longer inpatient stays, and substantial healthcare costs.
Researchers at the University of Michigan Institute for Healthcare Policy and Innovation reviewed more than 87 million hospital records for patients 18 to 99 years old using the 2017 to 2019 national inpatient sample. The researchers then screened those records for the ICD-10-CM codes related to housing instability.
The researchers then analyzed the records to determine associations between coded housing instability and reason for inpatient hospitalization, length of stay, and cost of admission.
Researchers found that housing instability was associated with higher rates of admission for mental, behavioral, and neurodevelopmental disorders. In addition, housing instability was significantly associated with longer hospital stays (6.7 versus 4.8 days) and high medical costs.
Between 2017 and 2019, inpatient hospitalization costs for patients with coded housing instability was $9.3 billion. These findings highlight the importance of improving tracking of housing status in healthcare and taking steps to better address the needs of patients experiencing homelessness.
Lifepoint Health's vice president of revenue cycle operations chats about trends the health system is watching for 2023.
Hospitals and health systems have been struggling financially as they try to navigate rising expenses.
Challenges like this mean organizations are going to finish out the year in the red, according to recent reports from Kaufman Hall.
As organizations plan to tighten their belts in 2023, revenue cycle leaders are feeling the pressure of cost cutting, regulatory burdens, and staffing shortages.
HealthLeaders recently chatted with Tina Barsallo, vice president of revenue cycle operations at Lifepoint Health, to get a better idea of the revenue cycle trends the health system is following for 2023 and how it navigated challenges in 2022.
HealthLeaders: How has the financial strain on hospitals affected your revenue cycle in 2022? Did budget cuts or restraints have you adjusting any workflows or processes?
Tina Barsallo: Reductions and the strains on ability to hire have created the need for additional automation around patient access and patient self-scheduling here at Lifepoint.
Also, manual claim reviews and delays in authorizations with payers have caused increased denials, appeal delays, and untimely payment. As payers allow, additional Joint Operations Committee meetings have been established to work through delays and various processing backlogs.
Staffing challenges have also created the need for modified workflows on low balance insurance follow up and need to outsource/offshore certain customer service and follow up activities.
HealthLeaders: What was your biggest obstacle in the revenue cycle for 2022 and how did you overcome it?
Barsallo: Staffing and recruitment. Changes in payer policies and behaviors post-pandemic drove the need to establish new approaches, modify workflows, and additional payer meetings without additional resources at best.
Pictured: Tina Barsallo, vice president of revenue cycle operations at Lifepoint Health. Photo courtesy of LinkedIn.
HealthLeaders: What trends do you see coming for revenue cycle leaders in 2023?
Barsallo: In 2023, we anticipate we will continue to see the same challenges, such as staffing challenges, regulatory changes (like pricing transparency and the No Surprises Act), payer policy changes with limited notice, higher volume of post-pay reviews, and denials and underpayments as a result.
On a positive note, CMS has delayed enforcement of part of the No Surprises Act which will give us the much-needed time to work on ways to automate the good faith estimates, an essential part of the act.
HealthLeaders: On that note, what regulatory burdens are you watching the closest for 2023?
Barsallo: Definitely the No Surprises Act. We want to create ways to better automate and communicate the good faith estimates with co-providers, patients, and payers.
HealthLeaders: What is one goal you have for your revenue cycle in 2023?
Barsallo: In 2023 we want to implement patient experience technology to help minimize resource constraints and improve performance (reduced wait times, speed to schedule, etc.) by increasing automation and patient self service capabilities. We also want to offer scheduling ‘as a service’ at our facilities.
