Complex coding structures are driving up medical billing costs and making the U.S. one of the most expensive countries to get paid.

Billing and insurance-related costs in the U.S. are higher than the costs in other countries, and this stems from our complex coding structures, according to a study published in Health Affairs.

According to the study, researchers used a microlevel accounting of billing and insurance-related costs in different national settings at six provider locations in five nations: Australia, Canada, Germany, the Netherlands, and Singapore. This newest study supplements the prior study measuring the costs in the U.S.

“We found that billing and insurance–related costs for inpatient bills range from a low of $6 in Canada to a high of $215 in the US for an inpatient surgical bill (purchasing power parity adjusted),” the researchers said.

To compare, only Australia had similar billing and insurance-related costs to the U.S. Australia has a mix of publicly and privately funded payers, as well as universal coverage. Billing and insurance-related costs were significantly less in Canada than in the other nations. Germany, Singapore, and the Netherlands had comparable billing and insurance-related costs, the study said.

Interestingly, researchers found one common thread to these higher costs in the U.S. and Australia and it points to one area of the revenue cycle: coding.

According to the study, although most countries use ICD-10, the U.S. has a very different coding process from other countries which is driving up costs. In the U.S., each payer has its own documentation requirements, creating a significant burden on providers to translate clinical documentation into billable codes for reimbursement, thus driving up costs, the study said. Because of standardization in other countries, providers spend less time coding or do not need coders to translate documentation into billable codes.

Automation has become commonplace in the revenue cycle, and as leaders look to remedy staffing issues, adding technology may be more important than ever.

Technology has started to play an even bigger role in the revenue cycle as staffing shortages seem to have hit a high.

To this point, more than 57% of health systems and hospitals have more than 100 open roles to fill, with one in four finance leaders needing to hire more than 20-plus employees to fully staff their revenue cycle departments, according to a recent survey.

Automation has been a clear solution to not only alleviating staffing issues in revenue cycle but making the administrative process more efficient overall. While, according to survey, the use of automation in revenue cycle operations increased in 2021 from 66% to 78%, there remains a demand for further implementation to relieve the burden on staff.

In fact, one recent revenue cycle leader HealthLeaders spoke to about its automation journey was Jamie Davis, executive director of revenue cycle management at Banner Health. Banner's journey in implementing the use of AI and automating its revenue cycle management wasn't an easy process, but it was necessary to protect the organization against revenue leakage.

Banner Health currently has 22 day-to-day bots helping with its revenue cycle management. These bots complete tasks like adding insurance information and updating medical records. "All the things that our human resources shouldn't waste their time doing," Davis said.

These bots manage roughly 90 million records for Banner Health, and from mid-2020 to 2021, Banner has saved about 1.73 million man-hours by deploying them, Davis explained. Banner Health also has machine learning in its refund and variance space to help with credit and debt balances.

When it comes to taking on such a large automation endeavor, partnerships are needed Davis says.

"Our automation is done completely in partnership with our IT group. They have their own robotic process automation center of excellence, but they've also started dabbling in some process mining in our health plan data. And we are working towards automating things like low balance accounts receivable management and denials," Davis says. 

 

"The automation of the denials, low balance accounts receivable management, and the variances is really fun and innovative. That's where it's really rolling into that intelligent automation space since it's using machine learning that is predicting and reacting," Davis says.

So what can other revenue cycle leaders do when looking to streamline, or even implement, technology at their organizations?

To shed some light, Brenda L. Erley, CDEO, CPC, CCS-P, CPB, director of front and middle revenue cycle management services, at Strivant Health, recently spoke to Healthleaders on how revenue cycle leaders can better streamline technology, alleviate staffing issues, gain administrative buy-in, and see a ROI.

Healthleaders: Where are organizations seeing the biggest gaps right now and how can technology help improve them?  

Brenda Erley: Due to staffing shortages, the need for assistance with coding denials and follow-up is probably the biggest gap we are seeing. When the technology is there to code accurately at initial claim review and submission, then the expectation would be a reduction in the need for coding denials and follow-up.

HL: What tips do you have for revenue cycle leaders looking to streamline their revenue cycle management? 

Erley: Investing in AI and bots to assist wherever an organization can is paramount to streamlining an organization's revenue cycle management operations. This can help to alleviate the repetitive day-to-day tasks so team members can focus their energy and attention on more crucial revenue cycle operations. This can be anything from daily reporting to eligibility, charge entry, and coding. 

HL: Revenue cycle leaders are faced with ample workforce challenges right now including both hiring and maintaining staff. How can technology help remedy this? 

Erley: Technology doesn't get sick, it doesn’t take days off, it doesn't have to play catch up, it doesn't have bad days or good days. It is just there constantly working and processing consistently. Downtime is minimal, if non-existent, for technology, and this overall consistency helps to avoid those peaks and valleys we see in charges and reimbursement when there are disruptions in staffing.

HL: How can revenue cycle leaders position themselves best for administrative buy-in when looking to implement new technology?  

Erley: Research the technology, and put the time into building, testing, and auditing. If you can, revenue cycle leaders should also have provider buy-in so they can be an advocate for documentation improvements within their organization to further enhance the success of technology. The time you put in at the beginning will reap greater results in the end. Technology is all about adoption. Without adoption from everyone including the physicians, administrators, and c-suite executives, organizations generally won’t see the ROI. 

 

The vice president of revenue cycle at Atrium Health explains how other revenue cycle leaders can benefit from streamlining billing statements and providing patients with financial education.

Being able to articulate to patients how much they owe in a clear and concise manner is critical and has been brought to the forefront by the No Surprises Act. An opportunity to improve a disconnect in communication can start as early as patient scheduling, check in, or check out.

Chris Johnson, vice president of revenue cycle at Atrium Health, says that although burdensome to some hospitals, the move toward price transparency is only going to help improve that patient financial experience, especially when patients are educated on the information they are being presented.

"I know it's been a difficult journey for a lot of us, and the rules that require us to do some of this don't always line up with reality of either what we can do or what needs to be done. But I still believe that it should be considered a positive thing because, ultimately, it's going to give patients more information about what they will ultimately owe out of pocket and options for resolving the out-of-pocket expense," Johnson said.

The revenue cycle space is seeing a boom in automation and technology, giving patients better access to patient portals, digital front doors, and payment options.

While patients may be getting an information overload through their bills and statements, once this information is paired down and streamlined, the advancement of technology can make the patient financial experience easier and more transparent.

Johnson echoed this point by saying that "healthcare has been providing more and more information to the patients through online portals. We are moving down multiple payment paths, trying to make that a component of the patient experience as easy as it can be."

"The ultimate goal is to give the patient the information they want, when they want it, where they want it, and how they want it, including the ability to make payments and to interact with us on their financial issues in any manner that they see fit," he said.

 

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 regulatory 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 July, including OIG audits and proposed payment rules.

Here are the five updates you should review.

Transfer claims are not getting you more money from Medicare.

The OIG published a review of the financial impact of Medicare’s transfer policy and reduced outlier threshold on Medicare total payments for transfer claims as compared to what hospitals would have been paid if the beneficiary had been discharged instead of transferred.

The OIG found that the reduced outlier threshold for transfer claims did not have a significant impact on total Medicare payments.

Under the transfer policy, Medicare decreased MS-DRG rate payments by $10.8 million. However, the reduced outlier threshold led to an increase in outlier payments by $13.7 million, resulting in a net increase of $2.9 million in total Medicare payments for transfer claims compared to what hospitals would have been paid if the beneficiaries had been discharged. This total was not significant enough to indicate a need for policy changes, and the OIG therefore had no recommendations.

2023 Medicare physician fee schedule proposed rule was published this month.

CMS published the 2023 Medicare physician fee schedule (PFS) proposed rule. The rule proposes decreasing the conversion factor down from $34.61 in 2022 to $33.08 in 2023. Other proposals in the rule include but are not limited to:

• Adopting coding/documentation changes for E/M visits (including hospital inpatient, observation, emergency department, and more) that align with changes made by the AMA CPT Editorial Panel for January 1, 2023. This includes eliminated use of history and exam to determine code level, revised interpretive guidelines for levels of medical decision-making, and the choice of medical decision-making or time in determining code level.
• Delaying by one year the split-shared visits policy that was finalized in 2022 for the definition of substantive portion as more than half the total time.
• Extending the time that telehealth services are temporarily included on the telehealth services list during the PHE but are not included on a Category I, II, or III basis for 151 days following the end of the PHE
• Creating a new general behavioral health integration service that is personally performed by clinical psychologists or clinical social workers to account for monthly care integration where the mental health services furnished by these provider types are the focal point of care integration.
• Making an exception to direct supervision requirements under “incident to” regulations at 42 CFR 410.26 allowing behavioral health services provided under general supervision of a physician or non-physician practitioner (NPP) when the services or supplies are provided by auxiliary personnel incident to the services of a physician or NPP.

CMS is seeking comments on a variety of topics from the rule, such as how to improve global surgical package valuation and pay more accurately for global surgical packages under the PFS, the potential use of the proposed and updated Medicare Economic Index cost share weights in calibrating payment rates, changes in coding and policies regarding skin substitutes, and more.

CMS published a press release, fact sheet on the PFS rule as whole, fact sheet on the quality payment program changes, fact sheet on Medicare shared savings program proposals, and a blog post on behavioral health changes on the same date.

The 2023 outpatient prospective payment system (OPPS) proposed rule was also released this month.

CMS released the 2023 OPPS Proposed Rule. While the rule proposes paying for drugs and biologicals acquired through the 340B program at average sales price (ASP) minus 22.5%, it notes that the Supreme Court’s decision in American Hospital Association v. Becerra now prevents CMS from varying payment rates for drugs and biological in the way the 340B payment currently varies.

CMS did not have sufficient time before publishing the proposed rule to account for the Supreme Court’s decision, and it noted in the fact sheet for the rule that it anticipates applying a rate of ASP plus 6% for 340B drugs in the final rule. The rule proposes updates to both OPPS and ambulatory surgical center payment rates by 2.7% for 2023. Other proposals in the rule include:

• Establishing provider enrollment procedures and payment rates for rural emergency hospitals (REH)
• Removing 10 services from the inpatient-only list and adding one service to the ambulatory surgical center covered procedures list
• Continuing coverage for behavioral health services furnished remotely by hospital staff to beneficiaries in their homes beyond the end of the PHE as long as the beneficiary receives an in-person service once every 12 months
• Adding facet joint injections and nerve destruction as an additional service that would require prior authorization

CMS is seeking comments on a variety of topics within the rule, including whether there is additional data CMS could release on mergers/acquisitions/consolidations/changes in ownership in addition to the hospital and skilled nursing facility data CMS current releases. It also seeks comments on methodologies for counting organs to calculate Medicare’s share of organ acquisition costs and comments on payment approaches to use for software services. Comments are due on September 13.

CMS published a Fact Sheet on the rule, Fact Sheet on the REH provisions, and Press Release to accompany the rule. 

Tighten up your billing for critical care services as health system faces new heat.

The OIG published a review of whether Lahey Clinic, Inc., complied with Medicare requirements when billing for critical care services performed by its physicians.

The OIG found that Lahey did not comply with Medicare billing requirements for 56 of the 92 critical care services reviewed. It said 54 of the critical care services billed were for patients whose conditions did not indicate that critical care services were necessary or for which the physician did not directly provide services at the level of care required for critical care services.

The OIG also found two critical care services which were billed using an incorrect CPT code. The OIG estimated that as a result of these errors, Lahey received $6,015 in unallowable Medicare payments. 

The OIG recommended Lahey refund the $6,015 in overpayments, and it made procedural recommendations for Lahey to strengthen its policies and procedures. Lahey concurred with the findings for 16 of the 56 services found to be in error, but it stated that the remaining 40 critical care services were justified. The OIG said that Lahey did not provide any additional medical record documentation to support its arguments for those 40 services and therefore it maintained its original findings.

CMS is considering a new payment system.

CMS published a Report to Congress regarding a potential unified prospective payment system for post-acute care (PAC). This type of payment system was included as a provision of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014.

In this report, CMS presented a prototype for what the unified PAC PPS could be and the data analysis used to design and calibrate it. Because this type of PPS is in the very early stages of development, the report does not include any legislative recommendations, as CMS will be performing additional analysis on this topic. However, the report provides an early framework of what could be coming in terms of PAC payments in future years.