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4 Reasons the Reimbursement Environment Grows Thornier

Analysis  |  By Julie Auton  
   February 26, 2019

Revenue cycle leaders are seeing increased impediments to getting paid.

This article appears in the January/February 2019 edition of HealthLeaders magazine. 

Hospitals and health systems are facing an increasingly intense payment environment from all directions. Payers are creating more roadblocks to either limit or slow the pace of reimbursement, while patients strive to cover their costs and staff turnover subverts process improvement.

To learn how their peers are battling payment woes, revenue cycle leaders will join other health system executives to discuss best practices at the HealthLeaders Revenue Cycle Exchange. The 2019 program will offer two options to ensure a personable small group environment at each: March 27–29 in Ojai, California, and December 9–11 in Palm Beach, Florida.

Leaders recently shared their views about the state of the industry, which will be addressed in moderated roundtables at the Exchanges. The following are some of the concerns expressed.

1. More adverse payer strategies

As new technologies and pharmaceuticals are entering the market for better patient care, there is a tug-of-war between payers and providers as to who will assume the risk of accelerating costs. Since payers are well-capitalized with systems, processes, and expertise, any deficiency in a revenue cycle is an advantage to a payer. Health systems need to be well-organized, aligned, and capitalized with information systems to level the playing field.

"The cost to provide care to patients goes up year after year, but we're not seeing an increase in reimbursement. Instead, we're fighting daily to get the reimbursement we are due," says Abby Abongwa, vice president of revenue cycle at UW Health in Madison, Wisconsin. "The payers are looking for opportunities to change the policy or find mistakes, but ultimately are trying to pay at a lesser amount than we would expect to be reimbursed."

Abongwa also notes that most payers are issuing more denials accompanied with requests for medical records, itemized patient billing statements, and pre-bill audits. 

"Payers are using a plethora of strategies to manage their costs, so we are developing contractual language to protect ourselves from denials, as well as standardizing how we operate, such as creating standard processes to make sure referrals and prior authorizations are always populated in the same place in our billing system, as well as implementing workflow changes. We have also developed workflows to better communicate with and keep patients engaged when we get specific types of denials where we believe engaging the patient could be beneficial in overturning the denial," she says.

Maribeth Keeven, regional director of revenue integrity/CDM/HIM coding at SSM in St. Louis, Missouri, concurs. "While we've always tried to manage and be proactive with our claim submission, we are seeing the number of denials increase. As we continuously work toward getting our internal denials processes intact, payers are doing everything they can to not pay for servicing their beneficiaries. The volume of initial denials is increasing, and payers are overturning fewer appeals and placing more at risk. So how do we win back the dollars we are due?"

Securing proper reimbursement is an even greater worry for research institutions involved in costly care.

"An academic medical center provides high-acuity, high-complexity services, so there are higher costs associated with that," says Abongwa. "There's an immense amount of work that goes into these cases to make sure the clinical team is aligned with patient access to get prior authorization. A lot of discipline is required to manage the entire revenue cycle as well as the clinical piece so that we don't lose anything on these claims."

Another factor causing angst is although new-to-market therapies are FDA-approved, many payers are still considering these drugs and therapies experimental and don't know how to appropriately reimburse for the associated charges, according to Garland Goins, director of revenue and documentation integrity, patient revenue management organization for Duke University Health System in Durham, North Carolina.

"Payers haven't necessarily had sufficient time to review/revise their medical policy to determine if the new treatment is going to be fiscally consistent and best for their beneficiaries," he says.

"We have to balance the fiscal obligation to the institution with what is clinically best for our patients by ensuring they understand the entire procedure—both clinical indications and associated cost/charges," says Goins. "Often the timing of FDA-approved drugs leaves the institution and our patients in a precarious position because the payer might not revise their medical policy for months. For these situations, we've frequently had to rely on entering into single-case agreements to ensure appropriate cost are covered."

"We've been extremely methodical in orchestrating massive coordination—from procurement, finance, compliance, government relations, payer contracting, revenue cycle, charge capture, coding, billing, pharmacy, and clinical care," he says. "It is truly a considerable amount of manpower to coordinate, but this approach has yielded significant efficiency gains in the timeliness of patients receiving these treatments and aided in capturing an abundant amount of data for analysis and improvement opportunities. Ultimately, the subject matter experts' commitment to this approach has been instrumental in allowing the creation of a reliable and repeatable framework that we are replicating for other drugs and therapies."

2. New rules for 2019 from Centers for Medicare & Medicaid Services

CMS continues to place more demands on health systems to perform and produce value. New requirements are being issued that contain layers of complexity to reduce or slow payment.

"The amount of information coming out of CMS which requires providers to analyze and provide comment back to them is increasing," says John Settlemyer, assistant vice president of corporate revenue management and CDM support at Charlotte, North Carolina–based Atrium Health. "Not only do we have the traditional proposed and final rules for various payment programs, but now imbedded within those rules are requests for additional information. It's difficult to provide substantive comment to CMS due to the sheer volume of
requests coming out."

Settlemyer cites the scrutiny and political sensitivity around pharmaceutical expenses as one example.

"There are multiple initiatives coming from CMS that are in some way related to drug pricing, which requires providers to read and understand what's contained within to determine whether the proposal directly impacts them fiscally or operationally. It's almost impossible to stay on top of this and provide meaningful feedback to CMS as to why we do or don't support the proposals," he says. 

"Another issue is with outright payment reductions that seemingly exceed CMS' authority. An example is with the Medicare outpatient prospective payment system and ambulatory surgical center payment system final rule changes for 2019. CMS has implemented a non-budget-neutral payment reduction for clinic visits for hospitals. Consequently, the ‘grandfathered' off-campus departments that were protected by section 603 language will now be seeing a reduction in payment."

Revenue cycle leaders are also concerned that CMS' pricing transparency initiative requiring providers to list standard charges on their website by January 1, 2019, may cause additional confusion for patients.

"While providers have an obligation to work with patients for accurate price estimates, the chargemaster itself is not going to be very helpful because of the multiple facets to a hospital bill," says Settlemyer.

Keeven adds, "The challenge is to be in compliance of the regulation versus assisting patients in their personal responsibility. Our process has been to be specific to the patient and help them on their financial journey, and meeting the regulation isn't assisting the patient but I believe causing confusion."

3. Administrative work contributing to physician burnout

Clinical documentation demands are accumulating with new CMS regulations and escalating denials—and consequently, enmeshing physicians in more administrative details than before.

"Our ability to get reimbursed rests on providers having to correctly document, but we have to be careful as to engaging doctors so that we're not part of the problem with burnout," says Abongwa.

"There are instances with documentation deficiencies in which we will have HIM, our hospital clinical documentation integrity team, our facility coding team, and various professional (specialist and ancillary) coders all requesting information from physicians separately," she says. "That's four and even sometimes up to five well-intentioned groups reaching out regarding the same inpatient stay. So how do we align our workflows that allow all of us to get everything we need in a more coordinated manner?"

4. Ensuring a high-performing workforce

Retaining an underpaid front-end staff, who are responsible for scheduling patients, overseeing pre-authorizations, and capturing correct patient and payer information is a constant struggle. Another vacuum occurs with the rising turnover in nursing, requiring frequent training for new staff on documenting properly.

"Having front-end staff who make minimum wage tasked with important work is a challenge," says Abongwa. "There's value to their role, but the market data we receive from human resources hasn't caught up with paying them appropriately. Their ability to do their very demanding jobs well is critical, but unfortunately, we have a revolving door in some of these roles."

Turnover of clinical staff also impacts documentation.

"We often have problems obtaining clinical documentation for start and stop times related to infusions," says Tina Rosier, director of revenue integrity, acute care services at Community Health Network in Indianapolis. "While we recently implemented IV pumps that communicate event times with Epic, we still have situations where staff do not take the steps necessary to validate the times and resulting in them not interfacing to the legal medical record. We have found that new technology is only as effective as the training and workflows created to support its use."

"Because of this, we track the number of missed stop times and the potential impact on revenue per month. In a collaborative effort, this information is shared with nursing leadership at our six hospitals," she says. "And as a result of the data, we have begun to focus on units and/or staff with a high error rate for retraining on proper use of the new pumps. Time will tell, but we hope that this new focus on reeducation will facilitate the times being available in the chart for optimal charge capture."

Another issue that impacts optimal documentation and charge capture involves turnover of clinical staff and the continual need to educate them on documentation standards, says Rosier.

"We meet with new ED nurses 30 days after they onboard and focus on the top 10 high-intensity services that drive the ED acuity, the importance of service capture, and infusion start/stop times," she says. "But with baby boomers retiring and younger generations not always staying long with one employer, it is a continuous challenge to meet the educational needs for new staff."

Julie Auton is the leadership programs editor for HealthLeaders.

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