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 January, including ICD-10-CM code updates and the OIG’s Work Plan.
The PHE is seeing an end.
The COVID-19 public health emergency (PHE) will end on May 11 according to a policy statement released by the Office of Management and Budget opposing House resolutions that would end the emergencies immediately if passed.
This will have implications on reimbursement for the revenue cycle, so stay tuned for future coverage.
New diagnosis codes were release, effective in April.
CMS should bolster its oversight of ASP data, the OIG says.
The OIG published a review of CMS’ oversight of manufacturer-reported average sales price (ASP) data, as the data is used to help calculate Part B payments and therefore there are concerns about the impact of inaccurate data on Part B spending.
The OIG found that there were gaps in CMS’ oversight of this data, as CMS’ quality assurance procedures did not include checks to ensure the accuracy of manual processes employed to analyze the data used to calculate Part B payment amounts.
The OIG also found CMS does not leverage its data collection system to produce reports that could monitor ASP data quality and aid in oversight. Because of invalid or missing data, CMS had issues calculating ASP-based payment amounts for a small amount of drug codes, and that can often lead to higher drug payment amounts for Part B drugs.
The OIG also found that 24% of drug codes were missing ASP data for drugs within that code in at least one quarter from 2016-2020. The OIG recommends CMS determine a strategy to strengthen its internal controls for ensuring the accuracy of Part B drug payments. CMS concurred with the OIG recommendations.
CMS slid in an update to the OPPS.
CMS published Medicare Claims Processing Transmittal 11801, which updated tables 5, 6, and added table 20 in the OPPS rule. This change updates the pass-through status of five devices that will now have an extended pass-through status for a one-year period beginning on January 1, 2023.
OIG updated its Work Plan.
The OIG updated its Work Plan and will be setting its sights on the following new items:
The Texas Medical Association (TMA) is suing HHS for the fourth time, this time for its 600% price increase pertaining to an aspect of the No Surprises Act.
That didn’t take long.
The independent dispute resolution (IDR) process has gotten more expensive for healthcare organizations, and now groups are demanding a reverse from HHS.
As HealthLeaders previously reported, it was announced that the nonrefundable administrative fee due from each party involved in any IDR payment dispute that goes to arbitration increased from $50 to $350. This 600% increase began January 1.
Revenue cycle leaders are trying to find ways to increase their bottom lines for 2023, and this news was a step in the wrong direction, especially for smaller healthcare organizations. At the time, we mentioned that this price hike may put organizations in a losing situation as they consider whether to formally dispute a payer’s proposed out-of-network payment amount.
The TMA says its newest lawsuit against federal agencies challenges the steep administrative fee hike that will strip many physicians and healthcare providers of the arbitration process that Congress enacted. These fees are "arbitrary and capricious, contrary to the law, and in violation of notice and comment requirements," TMA said in a statement.
The initial administrative fee for the IDR process was set at $50 and it was announced in October 2022 it would remain at $50 for 2023, but in January, the agencies revealed a 600% hike in the fee due to increasing expenditures in the IDR process, among other reasons.
"The steep jump in fees will dramatically curtail many physicians’ ability to seek arbitration when a health plan offers insufficient payment for care," the TMA said.
"The problem is that many payment disputes in these cases amount to less than the fees physicians would have to pay to dispute the unfair payments," said TMA President Gary W. Floyd, MD, in a statement.
"Why would doctors and providers pay the $350 nonrefundable administrative fee to arbitrate a $200 or so payment dispute with a health insurer? The fees deny physicians the ability to formally seek fair payment for taking care of our patients, and that’s just wrong," Floyd said.
The suit lists two radiology groups as plaintiffs: the Texas Radiological Society and Houston Radiology Associated. These groups bill small value claims, so they will be particularly hurt because most claims billed are less than $350, according to the suit.
Although the fee hike takes the focus of this suit, the TMA also disputes the rules’ narrowing of the law’s provisions on “batching” claims for arbitration, which Congress authorized to encourage efficiency and minimize costs in the IDR process, the TMA said.
As mentioned, this is the fourth suit filed by the TMA regarding nuances found within the No Surprises Act. Catch up on HealthLeader’s coverage here.
Creating an effective revenue cycle auditing and monitoring plan may require help from multiple departments.
Revenue cycle leaders are paying closer attention to their auditing strategies as costs rise, denials pour in, and payers tighten their grips.
It’s not unusual for an organization’s auditing responsibilities to fall on the revenue integrity department, but when looking to expand efforts, who should be recruited to help and what would their role be?
The National Association of Healthcare Revenue Integrity recently answered this question in the Revenue Integrity Insider. Read below to see the association’s answer.
Answer: Compliance and privacy must collaborate with revenue cycle and revenue integrity professionals to establish a proactive auditing and monitoring plan each fiscal year.
This plan would be based on the following:
Activity from previous self-audits
Activity from previous payer audits
Activity within the organization’s state
Reviews conducted by the OIG
Audits conducted by the organization’s Medicare Administrative Contractor and state Medicaid agency
It’s best practice for the organization to establish a monthly meeting between revenue cycle, compliance, and privacy professionals to share plans for auditing and monitoring as well as to go over OIG reviews. The group should review areas in which claims need to be refunded to a specific payer so they can discuss the source of the error and the mitigation plan to ensure that the error does not occur in the future.
Federal guidelines state the organization can take up to six months to quantify an error once discovered. That said, at or before the six-month mark, once quantified, the organization has up to 60 days to refund the appropriate payer.
Best practice would be for one individual in the organization to track all of those associated refunds and due dates to be reviewed by the joint revenue cycle, compliance, and privacy team so that all deadlines can be maintained and reported quarterly to the governing body of the organization.
Compliance and privacy staff will also provide guidance on privacy questions and release of medical record information as situations arise within the revenue cycle.
The AVP of revenue cycle management at Geisinger Health System discusses the necessity of the IT department when automating in the revenue cycle.
Most revenue cycle leaders have started implementing automation in one sector or another of their department, but while automation may seem like a simple fix, collaboration is usually needed with teams beyond the revenue cycle.
More leaders are bringing in their IT teams to help streamline their revenue cycle automation, and as Christy Pehanich, AVP of revenue cycle management at Geisinger Health System, says, collaborating with IT and merging skill sets is a necessity in optimizing revenue cycle automation.
HealthLeaders: What do you see for the future of automation related to revenue cycle and IT?
Pehanich: I think that we are just starting to learn how to properly leverage automation in revenue cycle. I think there's certainly going to be a lot of opportunities for IT professionals that have revenue cycle domain expertise.
We have a lot of really smart IT engineers and application developers out there, but they do not have any revenue cycle domain expertise, and we really need to merge those skill sets in order to optimize automation in the revenue cycle.
We need to create more opportunities for IT professionals and for revenue cycle experts to merge those skills through education. Just understanding the languages in each department in and of itself can be a challenge. There are so many different acronyms that get thrown out when you start talking about automation and revenue cycle, so both teams need to know what the other is saying.
The big opportunity is to merge revenue cycle domain expertise with IT expertise and once that happens, the future of automation is limitless. Really.
Photo: Christy Pehanich, AVP of Revenue Management, Geisinger Health System. Courtesy of Robb Malloy/Geisinger
HealthLeaders: How are you working to close that gap between revenue cycle staff and other departments like IT at Geisinger?
Pehanich: It's just about collaboration and taking the time to collaborate and share what each other know.
You can no longer work in isolation or in silos where revenue cycle management is behind the scenes and not collaborating with our clinical enterprise partners or our IT partners.
That type of traditional revenue cycle is not going to be able to succeed in the future. I think that it's largely about collaboration, coordination, and taking the time to talk to one another. You need to agree on opportunities and create a task force for shared learning across all departments.
SDOH capture can result in improved patient satisfaction scores and reduced provider burnout.
The CDC recently announced 42 new ICD-10-CM diagnosis codes for 2023 effective April 1. Taking the spotlight for these changes are new codes for reporting certain social determinants of heath (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.
Capturing SDOH is critical for revenue cycle teams. SDOH data can provide revenue cycle leaders with a better understanding of patient populations to inform revenue planning and strategy.
The caveat though, is that SDOH codes are not currently tied to reimbursement, meaning SDOH capture isn’t on the list of priorities for leaders. But, as Eric Penniman, DO, executive director of Summit Medical Group, recently said, there are many more positives to collecting this data, including reduced provider frustration and burnout.
“I’ve seen many family doctors over the years get frustrated because the patient didn’t show up for the appointment. Or they showed up for the appointment and they hadn’t started their meds,” Penniman explained during the 2023 CPT/RBRVS Annual Symposium, Part B News reported.
“And ultimately you see the lightbulb come on for them when [the provider realizes], ‘Oh, the patient didn’t show up for their appointment because they didn’t have a ride to the appointment, because they live in a homeless shelter and couldn’t access a ride,’” he said.
Documenting and coding a patient’s SDOH can create a shorthand that alerts the care team to challenges the patient is facing, Part B News said. In the example of the patient who lives in a homeless shelter, the diagnosis codes for transportation insecurity and sheltered homelessness explain why the patient regularly misses appointments.
SDOH codes for a patient’s intentional underdosing of medication regimen due to a financial hardship can explain why a patient didn’t get a prescription filled or isn’t taking the medicine as directed.
In both cases, the SDOH codes turn frustrating events with no solution into situations that can be addressed.
“These are the things we’re focusing on,” added Ericka Panek, MHIM, MSSW, LCSW, data analyst for the Summit Medical Group, during the same presentation, “getting that person to their appointment and making sure that everyone’s aware that is a barrier. And if it is, can we work with community resources and partners and can we get that patient a ride, or can we get in-home services that allow them to be able to do that?”
In turn, that can lead to better patient care.
“The pieces about our patients that we don’t understand. . . actually lead physicians toward burnout, because they get frustrated. And when you better understand your patients, and you begin to empathize a little bit with their circumstances, I think it can help reduce burnout in primary care as well as—obviously—provide better care for our patients,” Penniman said.
“Everyone deserves that fair chance at care. And documenting that brings more attention to where this barrier may lie,” Panek said.
Better understanding patients’ needs and preferences can result in improved patient satisfaction scores, a key factor in revenue reimbursement. Capturing SDOH information will create the opportunity for your revenue cycle to make informed decisions that will help to improve reimbursement rates while providing quality care for patients.
Emergency physician groups outline solutions to improve the surprise billing law in a recently published letter.
The American College of Emergency Physicians (ACEP) and the Emergency Department Practice Management Association (EDPMA) recently outlined solutions to address the significant challenges facing emergency physicians who try to use the independent dispute resolution (IDR) process.
In the letter sent to the U.S. Departments of Health and Human Services, Labor, and Treasury, the groups outline the various ways these burdens related to the No Surprises Act can be alleviated moving forward.
For background, the administrative burden related to the No Surprises Act has been heavy for revenue cycle staff.
As outlined in the letter, with respect to scheduled healthcare, administrative staff not only verify first-level insurance information, but they also drill down to the patient’s individual health plan type before the patient enters the exam room or treatment space.
As the ACEP and EDPMA emphasize in the letter, emergency room visits are a whole other ball game.
In this setting, revenue cycle staff must wait until after the episode of care has occurred, and then wade through individual policy benefits, relying on costly and time-consuming administrative back and-forth that may even involve the patient for more clarification, the letter says.
These special circumstances have led to an immediate need for policy adjustment, the groups say.
The groups’ 17-page letter summarizes the major issues that these providers are experiencing and provides detail about the recommendations discussed during a January meeting including the Departments, emergency physicians, insurers, and others.
Stakeholders at the meeting agreed that the statute’s lack of clarity on how to open negotiations before resorting to an independent arbiter impacts engagement in the process.
Also, the lack of information sharing from payers is delaying the IDR process before it even begins and “makes it difficult for providers and eventually for certified IDR entities to determine whether a claim is eligible for the federal IDR process,” the letter states.
During the meeting, concerns were also expressed that the qualified payment amount (QPA) methodology finalized by the departments is leading to artificially low QPAs that do not reflect market rates for services, the letter says. Further, payers are miscalculating the QPA, which drives payments down even lower.
“This combination of the QPA methodology and the miscalculations has led to QPAs that ‘don’t even pass the laugh test’—those that are so low that they are even significantly below Medicare and Medicaid payment rates,” the groups say.
The letter even outlines the experience of one physician group that said it has not received payments in more than 90% of the cases in which the IDR entity ruled in its favor.
Prior authorizations are a critical part of the revenue cycle as they impact both reimbursement and patient access to care, and automation may help simplify the process.
Many prior authorization denials occur due to insufficient documentation and an inability to match information that is spread across different systems. By having proactive protocols in place, revenue cycle leaders can ensure better denials management processes.
To help alleviate these prior authorization denials, many revenue cycle leaders have turned to automation, and as a new report from KLAS highlights, leaders are seeing positive outcomes.
According to the new report titled “Automated Prior Authorization 2023,” nearly all interviewed organizations have seen improved financial outcomes and/or staff efficiency from using automated prior authorization.
For the 78% of respondents who report improved financial performance, the report found a few key outcomes including:
A more efficient, streamlined authorization process
Decreased time to approval (within 24 hours)
Fewer denials being sent back to provider organizations
While no respondents feel their financial performance has worsened, the remaining 22% have seen no impact and have not achieved outcomes, citing authorizations being returned, not all cases being processed, and the vendor and payer failing to work together to get authorizations approved, the report said.
The report also cited a few negatives to implementing automation for prior authorizations including long implementation times, issues with electronic medical record (EMR) integration, and clunky workflows.
HealthLeaders recently touched base with Seth Katz, vice president of health information management and revenue cycle at University Health, on newly implemented technology at the organization, and Katz agreed prior authorizations are a great place to apply automation.
“Within about two months of kicking off implementation, [the program] started going to payer websites and logging requests for prior authorizations by taking that information out of our EMR. It's going very well. We're happy and we're looking to continue to expand it,” Katz said.
“You've to get creative with this. Prior authorization is a big one that a lot of people start with. It's a repetitive task. It's taking discrete data from your EMR and putting it out to a payer portal, so it's very systemic.”
And while the prior authorization process can be fairly easy to automate, it will never be a one-size-fits-all experience, he says.
“[Automation] is not a plug-and-play and it's also not one-size-fits-all. Meaning you might have a couple of different automation companies. The company you choose to help automate prior authorizations will not be the same company that we're looking at to do artificial-intelligent medical coding. You might have multiple automation vendors working at the same time too,” Katz said.
As with most things in revenue cycle, leaders must always weigh both the benefits and the risks in implementing automation.
For this report, KLAS interviewed 30 respondents from 26 unique organizations to understand their experiences using prior authorization solutions.
The average health system saw 110,000 claim denials due to prior authorization and other factors in 2022, a recent study says.
HealthLeaders has dubbed 2023 as the year of reducing denials for revenue cycle. More and more studies are 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.
Now, one more study is shedding light on the burden denials have had in the revenue cycle in 2022, and one type in particular—prior authorization denials.
Denials rose to 11% of all claims last year, up nearly 8% from 2021 according to the recent Crowe RCA benchmarking analysis. That 11% rate translates into 110,000 unpaid claims for an average-sized health system, according to the report.
According to the report, prior-authorization denials were at the heart of the cost increase.
Prior authorization denials on inpatient accounts in particular 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.
"When healthcare providers are supplying around-the-clock care for the sickest and most vulnerable patients, a denial by the payer implies that the care provided was not warranted and that its necessity must be proved by appeal. Often, these appeals take months to resolve and cost healthcare facilities thousands of dollars. Even then, the payer still might claim that the care was not warranted and not pay the provider," the report said.
According to a previous survey, 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%).
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.
Unfortunately, a retrospective medical record review recently published in JAMA Network Open is showing a gap in this data.
The study found that 28% of intentional firearm injuries resulting in emergency department admissions were inaccurately coded as accidents.
An expert panel recently characterized this coding problem as a glaring gap in the US firearms data infrastructure, the study said.
To better understand the nature of this problem, researchers reviewed electronic health records for firearm injury encounters at three level I trauma centers and compared researcher-adjudicated intent for each incident with the intent indicated by the diagnosis code assigned by the revenue cycle.
They reviewed 1,227 medical records for patients who presented to the emergency department with a firearm injury of any severity between October 1, 2015, and December 31, 2019.
Researchers determined that 837 (68.2%) reviewed cases were intentional assaults, but of these assaults, 234 (28%) were coded as unintentional injuries in hospital discharge data.
Misclassification was substantial even for patient cases described explicitly as assaults in clinical notes, the study found.
Firearm injury intent coding would likely improve if hospital records included unambiguous and explicit intent-related language, and if there were more coding instructions linked to assault, as opposed to “accident,” according to the researchers.
Making sure your revenue cycle is capturing this information correctly is the first step in ensuring an accurate firearms data infrastructure.
The independent dispute resolution (IDR) process has gotten more expensive for healthcare organizations—by 600%.
The No Surprises Act may be preventing unexpected bills, but it will now be adding to yours.
CMS recently announced that the nonrefundable administrative fee due from each party involved in any payment dispute that goes to arbitration increased from $50 to $350. This price change became affective January 1.
This news is coupled with the recent revelation that IDR disputes totaled 90,078 between April and September 2022, which far exceeded the estimated 17,333 claims annually by the federal government.
As revenue cycle leaders are trying to find ways to increase their bottom lines for 2023, this news is a step in the wrong direction, especially for smaller healthcare organizations. This huge price hike may put organizations in a losing situation as they consider whether to formally dispute a payer’s proposed out-of-network payment amount.
This is coming as a not-so-happy surprise to healthcare organizations since in prior guidance, CMS said the administrative fee for the IDR process would remain $50 in 2023.
So why the enormous change? CMS blames the mass influx of filed disputes.
CMS says the case load of disputes is nearly ten times greater than initially estimated it would be over the course of a full calendar year, requiring certified IDR entities to expend considerable time and resources to the disputes.
“Of the disputes initiated between April 15, 2022, and December 5, 2022, certified IDR entities rendered payment determinations for over 11,000 disputes but found over 23,000 disputes ineligible for the Federal IDR process,” the announcement said.
This, CMS says, has resulted in low collections of the administrative fee relative to both the volume of disputes processed in the portal and to the Departments’ expenditures in the first two calendar quarters of IDR process operations.
“Independent dispute resolution fees should be minimal to protect the ability of medical groups to initiate the IDR process. MGMA supports clear implementation guidance from the Administration to ensure practices have the information necessary to protect patients,” the MGMA said in it’s 2023 Advocacy Agenda.
