The American Hospital Association (AHA) once again responds to a CMS' proposed rule with concern about the increased costs hospitals are facing during the pandemic.
AHA is urging CMS to reconsider the payment rate increase proposed in the inpatient rehabilitation facility prospective payment system (IRFPPS) proposed rule for fiscal year (FY) 2023. The AHA says the rate increase is not enough, pointing to increased hospital expenses during the pandemic as a reason for adjustment.
CMS proposed the FY 2023 IRFPPS rule in March, which includes a net increase in payments of 2% relative to FY 2022, or $170 million. This reflects a 3.2% market-basket update, a 0.4% cut for productivity, and a 0.8% decrease related in high-cost outlier payments.
This, the AHA says, is not a large enough increase to account for the rise in hospital costs across labor, drugs, and supplies during the pandemic, as well as inflationary pressures.
The letter cites labor expenses per patient rising 19.1% through 2021, compared to pre-pandemic levels in 2019, while January 2022 labor expenses per adjusted discharge were 52% higher than January 2020.
"We are deeply concerned about increased costs to hospitals that are not reflected in the market basket adjustment and ask CMS to discuss in the final rule how the agency will account for these increased costs," AHA writes.
"We also are concerned about the reduction for productivity and ask CMS in the final rule to further elaborate on the specific productivity gains that are the basis for the proposed 0.4% productivity offset to the market basket, as this does not align with hospitals' [public health emergency] experiences related to actual losses in productivity during the pandemic."
AHA also expresses concern over CMS' methodology in determining the increase in the high-cost outlier threshold. The proposed rule would result in a 37% increase, from $9,491 in FY 2022 to $13,038 in FY 2023. Without the significant change, outlier payments in FY 2023 would be 3.8 of total payments, based on CMS analysis of FY 2021 claims.
On CMS' request for information on the IRF transfer policy, which is meant to disincentivize early discharges from IRFs, AHA advises CMS to evaluate its data before expanding the policy.
As far as the IRF Quality Reporting Program, the AHA requests that CMS move back the proposed date of when IRF providers would have to collect patient assessment data upon admission, from October 1, 2023, to October 1, 2024. According to AHA, this adjustment would relieve some of the proposal's burden on providers by giving them time to prepare.
One in four finance leaders needs to hire 20-plus employees to fully staff their revenue cycle departments, an AKASA survey finds.
Workforce shortages have been a major challenge for healthcare leaders of late and revenue cycle in particular is in serious need of staffing.
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 by AKASA.
The developer of AI for healthcare operations surveyed 411 chief financial officers and revenue cycle leaders at hospitals and health systems across the country.
"For hospitals, lack of staff within the revenue cycle means you aren’t getting paid," said Amy Raymond, VP of revenue cycle operations at AKASA. "To attract talent, healthcare financial leaders should shift their mindsets: this means relaxing job requirements like years of experience or offer intensive training to new hires with limited background in healthcare finance.
"The second piece is retention: leaders should be investing and upskilling their staff to provide more rewarding work and ensure compensation levels are competitive."
Respondents to the survey quantified the current size of their revenue cycle team, with 64.1% answering 30-plus employees, 8.3% saying 21-30, 12.7% saying 11-20, and 14.9% saying 1-10.
In terms of vacancies within the team, 60% responding 1-10, 19% saying 30-plus, 14% saying 11-20, and 7% saying 21-30.
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 AKASA, the use of automation in revenue cycle operations increased 12% in 2021 from 66% to 78%, there remains a demand for further implementation to relieve the burden on staff.
"We've had the same discussion in the revenue cycle for the past 25 years: how do we reduce churn, increase productivity, or drive down denials?" asked Raymond. "Now, the discussion is and will continue to be around automation and being more process-oriented. How do we incorporate automation? What should change management around that look like? Where do we put our people and how do we manage them around automation?"
"We should be watching automation do everything we need it to do, embracing the fact that we can't meet modern demands with humans alone. We haven’t significantly decreased cost-to-collect in 10 years, so something has to change. We need to think about all those same 25-year-old conversations and how automation fits into them."
A physician survey by the American Medical Association (AMA) reveals the administrative burden still falls on providers.
Health insurers are not holding up their end of the bargain on mutually accepted prior authorization reforms, according to a new physician survey by the AMA.
Findings from the survey, which compiles the experiences of 1,000 physicians from December 2021, show that payers are not upholding a 2018 voluntary agreement between them, the AMA and other national organizations representing pharmacists, medical groups, and hospitals.
The consensus statement highlighted five key prior authorization reforms to increase efficiency, promote access, and reduce administrative burdens.
One of the reforms focuses on encouraging the use of programs that selectively implement prior authorization requirements based on providers' performance. However, only 9% of the physicians in the AMA survey reported contracting with insurers that offer programs that exempt providers from prior authorization.
Meanwhile, 84% of physicians reported that the number of prior authorizations required for both prescription medications and medical services had increased over the past five years, running counter to the reform encouraging revision of prior authorization requirements.
Though the consensus statement agreement also included reform on transparency and easy accessibility of prior authorization requirements, 65% and 62% of physicians reported difficulty in determining whether a prescription medication or medical service, respectively, requires prior authorization.
The fourth reform outlined in the agreement centers on continuity of patient care, encouraging protections for patients during a transition period. Yet 88% of physicians reported that prior authorization sometimes, often, or always interferes with continuity of care.
Finally, only 26% of physicians reported that their electronic health record system offers electronic prior authorization for prescriptions, going against the agreement to reform automation to improve transparency and efficiency.
Despite providers and payers seemingly being on the same page about the importance of reforming prior authorization, the AMA survey makes it clear there is still plenty of work to do as far as implementation.
"Waiting on a health plan to authorize necessary medical treatment is too often a hazard to patient health," AMA president Gerald E. Harmon, M.D., said in a statement.
"Authorization controls that do not prioritize patient access to timely, optimal care can lead to serious adverse consequences for waiting patients, such as a hospitalization, disability, or death. Comprehensive reform is needed now to stem the heavy toll that continues to mount without effective action."
Based on the findings, 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.
The bipartisan legislation, which has also been backed by several provider and patient advocacy groups, is set up to be considered by the House of Representatives after surpassing 290 co-sponsors.
"When it comes to the use of medical management tools like prior authorization, Better Medicare Alliance has always worked on two tracks: seeking to increase understanding about the role of prior authorization in facilitating high-value, clinically appropriate care, while also working to simplify this process for patients and providers alike," said Mary Beth Donahue, president and CEO of Better Medicare Alliance.
"The Improving Seniors' Timely Access to Care Act is a commonsense solution that builds on the work the Medicare Advantage community has been doing to streamline prior authorization for seniors."
Better Medicare Alliance's endorsement of the bill comes on the heels of a report by the Office of Inspector General that found Medicare Advantage organizations (MAOs) often unnecessarily deny prior authorizations.
According to the report, 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.
Donahue stated that Better Medicare Alliance is looking forward to working CMS to implement electronic prior authorization process to ensure seniors aren't inappropriately denied necessary care.
In turn, the lead sponsors of the bill are eager to work with Better Medicare Alliance to pass the legislation.
"We welcome the Better Medicare Alliance's support of these reforms and look forward to working with them to get this bill signed into law," said representatives Suzan DelBene (D-Wash.), Mike Kelly (R-Pa.), Ami Bera (D-Calif.), and Larry Bucshon (R-Ind.).
The ruling protects a woman from an unexpected medical bill resulting from the hospital's chargemaster rate.
The Colorado Supreme Court has ruled that a woman will not have to pay a $229,112.13 surprise bill for an out-of-network surgery from a Centura Health hospital.
Justice Richard L. Gabriel delivered the opinion of the court that Lisa Melody French is not liable for the exorbitant bill due to the hospital not disclosing the amount to her prior to the procedure.
French went to St. Anthony North Health for spinal fusion surgery in 2014 after suffering a car accident. The hospital estimated that her procedure, which required surgeries on two consecutive days, would cost $57,601.77 and that she would be responsible for $1,336.90 out-of-pocket after reviewing her insurance information.
Following the surgery, the hospital determined that it had misread French's insurance card and that she was instead an out-of-network patient. The hospital then billed her the new cost of nearly $230,000, reflecting its full chargemaster rates—a collection of standard list prices for hospital services.
Though French had signed a hospital services agreement (HSA) in which she accepted all financial responsibility of charges not paid by her insurance, as well as a patient's bill of rights form, the contracts did not mention the hospital's chargemaster.
When French did not pay the new bill, the hospital sued her for breach of contract, alleging that the HSAs she had signed consented to paying the full chargemaster rates.
During litigation, however, Centura representatives testified that the hospital refused to provide its chargemaster to patients, including French, because it was a "trade secret."
Additionally, an expert witness for French estimated the actual cost of the procedures French underwent to be $70,500, with Centura greatly overcharging her and her insurance.
Gabriel wrote in the ruling: "Moreover, as courts and commentators have observed, hospital chargemasters have become increasingly arbitrary and, over time, have lost any direct connection to hospitals' actual costs, reflecting, instead, inflated rates set to produce a targeted amount of profit for the hospitals after factoring in discounts negotiated with private and governmental insurers."
The No Surprises Act, which went into effect January 1 of this year, was created to avoid these types of scenarios by preventing surprise out-of-network bills.
However, the independent dispute resolution process has been under constant scrutiny since its implementation, with several organizations filling lawsuits against the Department of Health and Human Services over the arbitration.
The American Hospital Association (AHA) is asking for the creation of a task force to look into improper denials by health insurers.
AHAis calling on the Department of Justice (DOJ) to establish a task force to conduct investigations into health insurance companies that routinely deny patients access to care and payments to providers.
In a letter to acting assistant attorney general Brian Boynton, AHA states that it is time for the DOJ to exercise its False Claims Act authority to penalize Medicare Advantage organizations (MAOs) that restrict services to beneficiaries, citing a recent study by the Office of Inspector General (OIG).
In that report, the OIG found that many MAOs often delay or deny services for medically necessary care, even when prior authorization requests meet cover rules. An estimated 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.
"It is time for the Department of Justice to exercise its False Claims Act authority to both punish those MAOs that have denied Medicare beneficiaries and their providers their rightful coverage and to deter future misdeeds," AHA writes. "This problem has grown so large—and has lasted for so long—that only the prospect of civil and criminal penalties can adequately prevent the widespread fraud certain MAOs are perpetrating against sick and elderly patients across the country, as well as against the public fisc every time commercial insurers take $1,000 per beneficiary while denying medically-necessary services."
AHA point to Boynton highlighting the Civil Division's False Claims Act priorities in his remarks at the Federal Bar Association's annual conference when he took office in early 2021.
Boynton said that "another continuing priority for the Department is preventing the abuse and exploitation of our senior citizens. A cornerstone of that effort will be the use of the False Claims Act to combat schemes that take advantage of elderly patients by providing them poor or unnecessary health care–or too often no care at all."
According to AHA, the DOJ is more than equipped to put its anti-fraud tools to use with the creation of a "Medicare Advantage Fraud Task Force" to ensure that the oldest patients get the care they need without unnecessary denials.
CMS is urged to take steps to increase MA plan oversight and address issues raised in an OIG report.
The American Hospital Association (AHA) is asking CMS to take "swift action" against Medicare Advantage organizations (MAOs) that are inappropriately and illegally restricting access to care.
In a penned letter, AHA urges for accountability in response to a report by the Office of the Inspector General (OIG) on MAOs, which found that an estimated 13% of prior authorization denials and 18% of payment denials should have been granted.
"Inappropriate and excessive denials for prior authorization and coverage of medically necessary services is a pervasive problem among certain plans in the MA program," AHA writes. "This results in delays in care, wasteful and potentially dangerous utilization of fail-first imaging and therapies, and other direct patient harms. In addition, they add financial burden and strain on the health care system through inappropriate payment denials and increased staffing and technology costs to comply with plan requirements."
To address the unnecessary denials, AHA recommends that CMS:
Work with Congress to streamline MA plan prior authorization processes: Support the Improving Seniors' Timely Access to Care Act of 2021, which streamlines prior authorization requirements under MA plans by making them "simpler and uniform."
Improve data and reporting: Have standardized reporting on metrics related to denials, appeals, and grievances, while auditing plans more often.
Conduct more frequent and targeted plan audits: Consider targeting audits to MA plans that have a history of unnecessary denials.
Establish provider complaint process: Establish a process for providers to submit complaints for suspected violations of bad actors.
Align traditional Medicare and MA medical necessity criteria: Prohibit MA plans from using medical necessity criteria that is more restrictive than traditional Medicare.
Enforce penalties for non-compliance: Exercise authority in situations in which MA plans fail to comply with rules to support compliance.
Provide clarify on the role of states in MA oversight: Give states clarity on the scope of their authority to hold MA plans accountable.
Reduce incentives for plans to skimp on coverage: Prohibit MA plans from claiming diagnoses for risk adjustment purposes if the plan has denied coverage for services provided to treat that diagnosis.
CMS receives comments on the next update to the dispute resolution process as part of the No Surprises Act.
The Medical Group Management Association (MGMA) has offered recommendations to improve the independent dispute resolution (IDR) portal ahead of its next update.
In a letter to CMS administrator Chiquita Brooks-LaSure, MGMA outlines three priority changes to the IDR portal, which is used to dispute out-of-network claims protected under the No Surprises Act.
The IDR process has been under constant scrutiny since the No Surprises Act went into effect on January 1, with several organizations filling lawsuits against the Department of Health and Human Services over the arbitration.
As such, MGMA, which represents more than 15,000 medical groups comprising of more than 350,000 physicians, believes streamlining the process and making it as efficient as possible would be greatly beneficial to providers.
"Practices are struggling with staffing shortages, additional administrative costs, inflation, the looming end of the public health emergency and resulting changes in healthcare policy, as well as implementing new processes and practices to comply with other requirements under the No Surprises Act," MGMA writes. "The support of a more robust IDR Portal would be especially impactful for smaller and rural practices, that are unable to quickly adapt to changing policies and less financially resilient."
MGMA's three priority recommendations are:
Enabling communication between disputing parties and the selected IDR entity via the platform.
Providing the ability to edit an application after entering information.
Updating specific form field requirements.
Communication via the IDR portal
MGMA is asking CMS to develop a platform with the capability to allow all parties engaged in a dispute to communication through the portal during the resolution process.
As it stands, a party must download the submitted IDR claim and email it to the non-initiating party, which can burden smaller practices to manually track claims and administratively challenge larger practices with higher volumes, according to MGMA.
"An interactive platform that tracks existing disputes, incorporates a clear timeline for the required process, and serves as a communication platform among all involved parties is critical to reduce the current burden for disputing parties and ensure the IDR process is accessible to all practices," MGMA states.
Editing existing applications
To allow practices to return to an IDR form later, MGMA wants CMS to add in the function of saving an application that can be accessed through a practice login.
In addition, MGMA recommends that all redundant information throughout the IDR claim—such as dates and contact information—be auto populated, while creating a function that allows for the editing and viewing of saved line items.
Updating form fields
Lastly, MGMA asks that CMS adjusts what information is required to better reflect the different information providers and payers have available to them.
Specifically, this means incorporating or altering the following form fields:
Adding an identifier field that providers and insurers can leverage to ensure both parties understand which services are being disputed.
Making the form field to input the qualified payment amount optional for providers and facilities.
Making the form field for insurer type optional for providers submitting an IDR initiation.
Additional recommendations
Along with the recommended priority changes, MGMA suggests that CMS also create a timeline of the IDR process, provide additional education and make adjustments to the batched submission process, and continue to engage with providers and health plans on best practices to submit claims.
A study finds a disparity in healthcare utilization between low and high-salary employees with high-deductible plans.
Income determines healthcare utilization and spending when it comes to high-deductible health plans (HDHPs), according to a study in the American Journal of Managed Care.
Employees in HDHPs earning less than $75,000 annually have lower rates of usage and spending on preventative care, while having higher rates of acute care utilization, the study found.
"High-deductible health plans shift the cost of care to plan holders," the authors stated. "This can lead to reduced utilization of care. High-deductible health plans have potential negative consequences for individuals earning a low salary."
Researchers used commercial medical and pharmacy claims and administrative data from a large national employer between 2014 and 2018. The employer operates in the healthcare industry and has more than 60,000 employees—the study sample includes utilization patterns for 33,470 employees.
Other highlights of the study include:
The lowest-salary employees—earning less than $50,000 per year—had 40% higher total medical spending on emergency department care, but less spending on outpatient care and prescription drugs.
Low-salary employees had higher quarterly average spending on inpatient ($500) and emergency department visits ($156) than those in higher-salary groups.
Employees earning more than $100,000 annually were more likely to seek outpatient care and prescriptions compared to those earning $75,000 to $100,000.
Higher-salary employees were healthier relative to lower-salary employees, with a smaller proportion have three or more comorbidities on the Elixhauser Index.
"The utilization and cost results indicate that lower-salary employees utilize care differently than higher-salary employees in a way that suggests suboptimal care-seeking behavior," the authors state.
The study is another example of how social determinants of health contribute to disparities and inequalities in healthcare spending and outcomes.
While HDHPs tend to save employees on out-of-pocket premiums, they in turn expose them to the full cost of care, which can discourage seeking out preventable services.
"This pattern of health care utilization may lead to delayed diagnosis of health conditions and potentially miss the window and benefits of early diagnosis or prevention," the authors conclude.
The California health system's new CFO gives insight on his strategic approach to maneuvering a challenging market.
There have been easier times than now to take over the finances of a hospital or health system.
While the COVID-19 pandemic is nowhere near its peak, the ramifications of the variants are still being felt. Between that and broader economic issues, financial decision makers in the healthcare industry have their hands full.
New Scripps Health CFO and corporate senior vice president Brett Tande is embracing the challenge, making the move from Cottage Health, where he served as CFO and senior vice president of finance since 2016, to the San Diego-based four-hospital health system.
Since taking over on March 28, Tande is responsible for financial planning and financial operations, which includes corporate finance, treasury, hospital and ambulatory financial operations, real estate operations, payroll, revenue cycle and all affiliated functions.
HealthLeaders had the opportunity to speak with Tande about his new role, the current financial trends in healthcare, and how to navigate a turbulent landscape.
This conversation has been edited for clarity and brevity.
HealthLeaders: How has the experience been so far of rolling up your sleeves and diving into the work?
Brett Tande: Scripps is not unlike every other healthcare organization coming out of omicron. We've seen volumes be tough. There's been a lot of reports out there about operating margins within healthcare. There have been organizations that have been losing a little bit of money. The last couple of years have been a lot different, say, than the two decades before that in terms of hospital operations. A lot of folks were able to groove into an operating margin that was, lets call it 3%, and you can make that work. And we're finding ourselves in a fiscal year, everyone is, that is a little bit upended.
Of course, very few people probably budgeted omicron, very few people budgeted some of the inflationary pressures that we're seeing today. And as we think forward, it is a different planning environment than we've had, I would argue since the early 1980s, maybe a little bit in the late 90s with the Balanced Budget Act during the Clinton administration.
In California, we have seismic compliance law. Scripps is one of those organizations that has to comply with that. We've got rebuilding projects that are under way at La Jolla. We're going to soon be starting that at our Encinitas campus. And we have those downtown at Scripps Mercy and at Scripps Chula Vista. So those capital programs could require as much as two billion in capital expenditure over the next five to 10 years. So we're going to have to make sure that we plan accordingly and find ways to maintain quality, to continue to grow, to maintain a bottom line that's in the black and fund these programs to make sure that we can continue providing the high level of care that we have in the past.
HL: Has there been one primary area of focus for you since you've joined?
Tande: The organization has done a lot of great planning, and that's going to have to continue because the plans we made, or for that matter any organization made, call it five or six months ago, you can take that and toss it aside. Given there are certain variables or assumptions you make related to volume, related to inflation that can dramatically change that. So whether it's a short-term financial plan or a long-term financial plan, a lot of those are going to have to get refreshed with current market thinking, the course corrections that may be necessary there and start to plan for those.
And there's ways to do that. Whether it's in revenue cycle, I would say there's always opportunity to make sure that we're coding things correctly. We don't want to get paid a penny more or a penny less than what we think should be paid given the care that was delivered to patients. We want to make sure that we're being smart with our operating expenses.
Recruitment has been a challenge, and so a lot of organizations have filled that in with travelers. We have to make sure we get down to not only how we recruit folks, but that we minimize the premium that's being paid to the extent that's possible. And that we're procuring supplies as cost effectively as we can.
HL: What do you identify as the biggest pain points for healthcare CFOs and decision makers right now, as well as going forward?
Tande: It does tend to be the case that healthcare systems' revenue on a per patient basis is perhaps a little bit more fixed than you would see on the expense side. So as an example, if we're short-staffed and revenue cycle are on the clinical side and need to supplement that, there are ways to do that with short-term staffing solutions. And that usually comes at a premium so you can see that expense pop pretty quickly. You won't necessarily see your revenue be as flexible to that as well.
The current pressure right now is variable expenses that are going to react to inflation, and we are going to see increases there. That's not how healthcare reimbursement works, right? Medicare is not going to be making those similar movements and you won't see that with commercial contracts either. So that is going to be a challenge and trying to modulate those increases with the timing there to make sure that it works for various health care systems. Those with bigger balance sheets are going to be able to weather that turbulence a bit better than perhaps those that don't.
The last couple of years, there have been other challenges to come up as well. Cybersecurity has been increasingly near the top of a lot of risks, to organizations to spend. If you would compare that five years ago to what it is today and the risks that organizations face on that front, it's a lot different. That won't be ebbing at any point soon.
HL: What are there some of the specific strategies that could be used to combat these challenges?
Tande: I always tend to view revenue cycles as being one of those, making sure that we're getting accurate bills put together and out the door as quickly as we can. Responding to inquiries from payers, having timely follow-ups. In healthcare, a lot of times, it's focusing on the rules and regulations on every front.
To the extent that we can make sure that we understand those, follow those rules, and make sure we're as precise as possible and efficient on what I'll call the back office, particularly from a financial perspective. The clinical teams are always doing a great job and to the extent that we can be efficient and precise on the back office of it, and help deliver the organization to that positive bottom line, that's always helpful.
