1,491 diagnosis code changes were finalized earlier this year and became effective October 1.
Revenue cycle leaders should make sure that middle revenue cycle staff are up to date and using the most recent diagnosis and procedure codes as fiscal year 2023 is now in full swing and it is sure to affect hospital reimbursement.
The 2023 ICD-10-CM update includes almost 1,500 changes. Here are a few examples of the updates that your coding and CDI teams should be expected to know:
Sixty-nine new codes were created to identify the severity of dementia (i.e., mild, moderate, or severe) with or without certain behavioral symptoms including:
Agitation, which includes aberrant motor behavior such as restlessness, rocking, pacing, or exit-seeking; and verbal or physical behaviors such as profanity, shouting, threatening, anger, aggression, combativeness, or violence
Anxiety
Mood disturbance including depression, apathy, or anhedonia
Psychotic disturbance including hallucinations, paranoia, or suspiciousness or delusional state
Other behavioral disturbances such as sleep disturbance and social or sexual disinhibition
There are 43 new codes in the “diseases of the circulatory system” section—many of which add specificity to existing codes. For example, in order of ICD-10-CM chronology, the new codes relate to the following diagnoses:
Refractory angina pectoris
Atherosclerosis from bypass graft
Pericardial effusion
Nonrheumatic mitral valve disorders
Ventricular tachycardia
Dissection of aorta
Aortic aneurysm (ruptured and without rupture)
Antineutrophilic cytoplasmic antibody vasculitis
As for the inpatient procedure codes, CMS announced a modest amount of changes to the ICD-10-PCS code set, including 331 new procedure codes and 64 codes deletions. The agency did not make any code revisions.
For example, approximately 67% of new ICD-10-PCS codes for 2023 are for laser interstitial thermal therapy (LITT), which is an emerging, minimally invasive surgical technique that uses a small laser to destroy unhealthy tissue from the inside out.
ICD-10-PCS codes for LITT were deleted from the Radiation Therapy section and added to the Medical and Surgical section. These codes were moved because LITT involves tissue destruction performed using a laser probe with thermal energy rather than ionizing radiation, according to Kimberly Cunningham, CCS, CPC, instructor for Certified Coder Boot Camps at HCPro in Middleton, Massachusetts.
The coding department is one of the most critical parts of the revenue cycle. Because coding occurs mid-cycle, it provides an opportunity to catch errors introduced earlier in the process, as well as preventing similar errors in the future.
Staying abreast of these regulatory coding updates is important for revenue cycle leaders as coding—and its completeness and accuracy—has a profound impact on an organization's bottom line.
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 September, including multiple billing audits.
Here are the five updates you need to know.
A large payer is under scrutiny for not complying with federal regulations, and the payer cites provider coding accuracy as part of the reason.
While revenue cycle staff work diligently to report the most accurate diagnosis codes for their claims, a payer says it can't be expected that all codes received from providers are accurate.
This comment comes from the OIG's reviewof whether select diagnosis codes that WellCare of Florida submitted to CMS for use in the risk adjustment program complied with federal requirements.
The OIG conducted the audit by sampling 250 unique enrollee-years with high-risk diagnosis codes for which WellCare received higher payments for 2015 through 2016. The OIG found that diagnosis codes for 153 of the 250 enrollee-years did not comply with federal requirements because there was not sufficient support for those codes in the medical records.
The OIG estimated that based on the results of the sample, WellCare received at least $3.5 million in net overpayments in 2015 and 2016.
The OIG recommended that WellCare refund the federal government for the $3.5 million in net overpayments, identify and return similar overpayments, and continue its examination of its policies and procedures to identify areas where improvements can be made to ensure diagnosis codes at high risk for being miscoded comply with federal requirements.
WellCare disagreed with some of the findings, the audit methodology, and the expectation that it should ensure that 100% of diagnosis codes received from providers and submitted to CMS are accurate.
The OIG revised the number of enrollee-years in error from 156 in the draft report down to 153 in this final report.
The OIG is putting the lens on telehealth billing.
Have your revenue cycle staff check Medicare claims data, review the new program integrity measures for telehealth services, and consider other telehealth-specific risks to avoid compliance issues for these services. Those are three ways that revenue cycle leaders can incorporate guidance from a recent OIG report on telehealth services into billing compliance efforts.
As background, the OIG published a data brief as part of a series of OIG analyses examining the use of telehealth in Medicare and potential program integrity concerns related to telehealth during the pandemic.
This data brief examines provider billing for telehealth services and identifies ways to safeguard Medicare from fraud, waste, and abuse. For the data brief, the OIG focused its analysis on 742,000 providers who billed for telehealth services between March 1, 2020, and February 28, 2021.
The OIG developed seven measures to identify high-risk telehealth billing (such as billing for both telehealth and a facility fee for a majority of visits, billing for both fee-for-service and a Medicare Advantage plan for the same service for a high proportion of services, etc.) and set high thresholds for those measures in an aim to identify providers whose billing poses a high risk to Medicare.
The OIG noted that the specificity of this analysis does not capture all concerning billing related to telehealth in Medicare and said incident-to billing is hard for them to monitor in these types of reviews but can also pose a program integrity risk.
Overall, the OIG identified 1,714 providers whose telehealth billing seems to pose a high risk to Medicare. These providers received a total of $127.7 million in Medicare fee-for-service payments.
The OIG said more than half of the high-risk providers are part of a medical practice where at least one other provider's billing also seemed to pose a high risk to Medicare, suggesting that certain practices are encouraging a certain type of billing among their providers.
The OIG recommends CMS strengthen monitoring and targeted oversight of telehealth services, provide additional education to providers on appropriate billing for telehealth services, improve transparency of incident-to services when clinical staff primarily delivered the telehealth service, identify telehealth companies that bill Medicare, and follow up on providers identified in the report.
CMS concurred with recommendations to follow up with providers identified in the report but did not indicate whether it concurred with any other recommendations.
MSSP saved Medicare around $1.6 billion in 2021, so expect CMS to push more organizations into participating in the program.
CMS published a press release regarding the Medicare shared savings program (MSSP), which CMS said saved Medicare $1.66 billion in 2021 compared to spending targets.
CMS reiterated its goal to have 100% of people with traditional Medicare participating in an accountable care relationship by 2040. The 2023 physician fee schedule proposed rule also included proposals to promote participation in the MSSP among healthcare providers in rural and underserved communities, which could in turn mean more work for your revenue cycle staff.
Insufficient documentation puts another payer in hot water this month.
The OIG published a review of whether select diagnosis codes that Regence Blue Cross Blue Shield of Oregon submitted to CMS for use in the risk adjustment program complied with federal requirements.
The OIG conducted the audit by sampling 179 unique enrollee-years with high-risk diagnosis codes for which Regence received higher payments for 2015 and 2016. The OIG found that diagnosis codes for 111 of the 179 enrollee-years did not comply with federal requirements because there was not sufficient support for those codes in the medical records. The OIG estimated that based on the results of the sample, Regence received at least $1.8 million in net overpayments in 2015 and 2016.
The OIG recommended that Regence refund the federal government for the $1.8 million in net overpayments, identify and return similar overpayments, and continue its examination of its policies and procedures to identify areas where improvements can be made to ensure diagnosis codes at high risk for being miscoded comply with federal requirements.
Regence disagreed with the OIG's findings and recommendations, but the OIG maintained that its findings and recommendations were correct.
CMS' lacking system is to blame for almost $1 million in overpayments.
The OIG published a review of whether Part B payments to critical access hospitals (CAH) for professional services and payments made to healthcare practitioners for the same services complied with federal requirements.
The OIG was particularly concerned because prior survey work showed Medicare was paying both CAHs and healthcare practitioners for the same professional services. The OIG found that of the 40,026 claims reviewed, CAHs and healthcare practitioners each submitted an equal number of claims but only one claim for each date of service complied with federal requirements.
As a result, providers were paid $907,438 more than they should have, and beneficiaries had to pay $281,321 more than they should have. The OIG attributed the overpayments to CMS’ lack of claim system edits to prevent and detect duplicate professional services claims for the same date of service, beneficiary, and procedure.
The OIG recommends CMS recover payments from CAHs for which the healthcare practitioners had not reassigned their billing rights to the CAHs and recover the cost-sharing overcharges for Medicare beneficiaries within the 4-year reopening period, recover the payments from healthcare practitioners for the claims for which the practitioners had reassigned their billing rights to the CAHs and recover the beneficiary cost-sharing overcharges within the 4-year reopening period, and develop system edits or alternative means to prevent and detect overpayments for professional service payments.
CMS concurred with all recommendations except the system edits/alternative means to prevent and detect overpayments for these types of services. CMS provided a variety of reasons within the report for not concurring with that recommendation, and the OIG provided suggestions as to how CMS could better monitor this issue.
The newest Kaufman Hall analysis finds hospital margins are still well below pre-pandemic levels but streamlining certain revenue cycle processes may help save.
Hospitals are still battling fluctuating margins in 2022 due to high expenses and low volume compared to pre-pandemic levels, making it likely that they will end the year in the red, according to the latest National Hospital Flash Report from Kaufman Hall.
According to the report, which draws on data from more than 900 hospitals, the median operating margins are in the red for eighth straight month.
The report goes on to say that the median year-to-date operating margin index was -0.3% in August. Operating margins improved slightly in August, increasing by a median of 4.2 percentage points over July 2022, but remain down by a median of 2.1 percentage points from August 2021.
The report also found that while patient volume is on the rise, hospitals are facing new competition for outpatient care.
"August was a better month for hospital patient volumes with both elective surgeries and discharges up, which combined to improve revenues," said Erik Swanson, senior vice president of data and analytics with Kaufman Hall.
"Despite the short-term improvements, though, overall hospital performance is still well below pre-pandemic levels. In addition, hospitals need to reckon with new market entrants, like urgent care centers and free-standing surgery centers, that are chipping away at hospital outpatient revenues and overall margins," Swanson said.
The good news is that these increases in volume improved hospitals' revenue performance in August. "Gross operating revenue was up 9.1% from July 2022. Outpatient revenue jumped 10.9% month-over-month, while inpatient revenue increased 4.9%," the report said.
As HealthLeaders reported last month, between June and July of this year, hospitals' financial performance plunged, following months of improvements, due to declining outpatient revenue, expensive inpatient stays, and decreasing operating room time.
"Hospitals fared slightly better in August than they did in July, but they still face an extremely difficult path forward," Swanson said.
So, what can revenue cycle leaders do to help improve the bottom line? According to a recent survey, revenue cycle automation might be the key.
Healthcare leaders who use automation within the revenue cycle reported having an average cost-to-collect of 3.51% compared to 3.74% for those who don't leverage automation. According to the survey, that .25% difference could potentially save hospitals and health systems millions of dollars.
For example, according to the survey, if a health system has $5 billion in revenue, a cost-to-collect of 3.74 percent without using automation would equal $187 million. If the same health system automated its revenue cycle operations and had a cost-to-collect of 3.51 percent, it would amount to $175.5 million.
This signifies $11.5 million in savings from automating revenue cycle operations.
Expanding beyond the revenue cycle silo is important to maintaining a well-rounded department, so take time to review three stories pertaining the revenue cycle published for other healthcare sectors.
MGMA shows keys to business success at medical groups
A new report from MGMA highlights the best practices of successful medical groups.
The MGMA assigns Better Performer status based on metrics including compensation and production, cost and revenue, and practice operations. The new report is based on information collected from 4,098 organizations, with 1,129 identified as Better Performers—a 36% increase compared to organizations that earned the Better Performer designation in 2021.
Michelle Mattingly, director of data solutions at MGMA, told HealthLeaders that there were three primary commonalities among Better Performers that excelled in accounts receivable.
An emphasis on collecting accounts receivable in the first 30 days of billing, leaving less dollars to be collected in the past due buckets such as 120+ days in accounts receivable
Use of a claim scrubbing tool to catch clerical and coding errors
Running monthly accounts receivable and separate out insurance and patient balances by service date
Inflation, staffing shortages, and more. How Mount Sinai South Nassau is weathering the storm
John Pohlman, CFO, and senior vice president of finance for Mount Sinai South Nassau has been working to overcome these challenges since assuming the role back in October of 2019.
He has always been mathematically focused and wanted a career in finance. He came into the healthcare industry with an understanding of how unique it is, knowing it wasn’t an area to be taken lightly, and that the financial well-being of an organization must walk together with the well-being of patients.
Pohlman recently connected with HealthLeaders to discuss the financial challenges currently facing the healthcare sector, how to overcome those obstacles, and his ultimate goal for Mount Sinai South Nassau.
New study touts value of in-person training for patient portal use
Online patient portals may offer huge benefits for hospitalized patients seeking to access healthcare resources, but they won’t work unless patients know how to use them.
New research conducted at the Ohio State University College of Medicineand published in JAMA Network Open finds that patients who are trained by their healthcare providers in person will have a better grasp on how to use digital tools than those who use videos for their education. This means that healthcare organizations should emphasize and invest in hands-on training if they want to see the full benefits from patient portals.
“Inpatient portals empower patients by giving them access to clinical data such as test results, information about their care plan and a way to communicate with doctors and nurses,” Ann Scheck McAlearney, distinguished professor in the Department of Family and Community Medicine, executive director of the Center for the Advancement of Team Science, Analytics, and Systems Thinking in Health Services and Implementation Science Research and associate dean for Health Services Research at Ohio State College of Medicine and The Ohio State University Wexner Medical Center, said in a press release. “Portal use supports a patient-centered care model where patients are more engaged and knowledgeable about their health care and feel valued as patients.”
It's already too late for healthcare leaders to start thinking about adding technology to the revenue cycle. The industry is forging ahead.
The healthcare industry is constantly changing in ways that revenue cycle leaders find it essential to keep up with. Changes in billing requirements, clinical criteria, payment models, and patient access can cause struggles for organizations with lagging processes.
A recent survey published by ModMed also adds urgency to the need for optimized technology. Sixty-one percent of patients surveyed placed importance on how easy it is to make payments when considering whether to continue with a health system. On top of this, 60% of patients surveyed were more likely to select one organization over another if appointments could be made online.
Successful organizations enhance their revenue cycles and create the bandwidth to address these changes with technology to streamline revenue cycle processes.
All areas of the revenue cycle must function at their best to achieve overall success. In this cover story, we hear from revenue cycle leaders on how they have used the best in technology to optimize their departments.
Tech to ease the good faith estimate burden
One of the biggest changes that has affected the front end of the revenue cycle is the implementation of the No Surprises Act on January 1, 2022. Within the No Surprises Act hides a new, burdensome regulation for healthcare organizations: the good faith estimate (GFE).
Under the law, healthcare organizations need to give patients who don't have certain types of healthcare coverage—or those who are paying out of pocket—an estimate of their bill before services are provided.
Not only do these GFEs need to be created, but they also need to be created quickly as patients have the right to receive a GFE for the total expected cost of items and services as soon as they schedule an appointment (the items can include costs of tests, drugs, equipment, hospital fees, and more).
The GFEs also need to be accurate since patients can dispute final medical bills if the charges are at least $400 more than what was presented on the GFE.
It's easy to see how much work this regulation is for front-end revenue cycle staff. The American Hospital Association (AHA) agrees.
According to the AHA's March letter to CMS, GFEs regularly take revenue cycle staff 10–15 minutes to produce.
Because of this time constraint, an AHA member hospital reports that their staff can only process 75 estimates per day, which is barely meeting the GFE demand. A member health system with several locations reports needing to do 1,500 per day across the system, the letter said.
It's clear that operationalizing processes to generate reliable, accurate GFEs is necessary and has pushed many organizations to enhance their technology to ease this burden.
Ochsner Health, a nonprofit health system based in New Orleans, had price transparency initiatives already in place for years prior to the No Surprises Act implementation—including an online estimator tool on its website. But when January 1 came around, enhancements in technology still needed to be made to streamline its GFE process.
Since the organization already had some programs in place to adhere to GFE requirements, when looking to optimize their front-end revenue cycle, Ochsner Health decided to look internally at their preexisting software while filling in any gaps with a third-party vendor.
Melissa Woods, CPC, assistant vice president of revenue cycle financial clearance at Ochsner Health, calls this the organization's hybrid approach to its GFE technology.
"Most of our estimates generate automatically. Within our EHR system there's real-time eligibility that runs behind the scenes to verify insurance and coverage. We have batch processes that run nightly and some that run a certain number of days in advance of a scheduled service," Woods says.
Pictured: Melissa Woods, CPC, is the assistant vice president of revenue cycle financial clearance at Ochsner Health. Photo by Jonathan Bachman/Getty Images.
"We can also manually trigger an eligibility query if we need to have the latest benefit information on the patient from the insurance company. From this we get a plethora of information including what deductible amount is left, how much they have left on their max out of pocket, and the coinsurance or copay for that particular service," Woods says.
This takes a lot of the burden off staff as roughly 85% of these estimates generate automatically through Ochsner's preexisting Epic EHR system. This is invaluable since the organization now runs about 50,000 estimates a month on average.
However, Ochsner found that not all estimates were auto-finalizing using Epic. Auto-finalizing was important for the team since it would replace the manual work of employees correcting service prices.
So the organization added automation to address gaps in the current technology.
The team worked with the AI vendor Olive to help auto-finalize the estimates. For Ochsner, its third-party vendor auto-finalizes about 20% of the estimates now, massively streamlining the process.
Additional AI was an important part of a streamlined GFE process for Ochsner's revenue cycle staff, but the entire GFE process was built and centered around the patient financial experience, and the added AI helped to improve this.
Since implementing this new technology, the moment a GFE is finalized, it automatically goes to the patient's portal, and the patient is notified that there is a new estimate available. The patient can then pay for the service immediately. Getting this information to the patients quicker and more accurately greatly improves Ochsner's patient financial experience.
"Our financial clearance call center will contact patients up to three weeks prior to their appointment to verify demographics, insurance, and communicate the upcoming expected out-of-pocket amount. Patients can pay in full right then or we can talk to them about payment arrangement options. We have internal payment plans, external payment plans—all interest-free to our patients. We work with our patients to give them plenty of options to try and pay for their care."
Adding a third-party vendor for automation on top of its existing software was the key to success for Ochsner and is the reason why this is the best in technology for the organization right now. Since being able to streamline the process and autofinalize more GFEs, the patient financial experience has greatly improved, and front-end staff are less burdened.
"My advice is to take a comprehensive look at your overall revenue cycle needs. For us, the hybrid approach worked best. We have gaps to fill with the No Surprises Act and pricing transparency requirements which are expanding faster than we can keep up with current technology and resources. That's why evolving our technology through a variety of vendors works for us right now," Woods says.
For Ochsner, having a good pricing transparency model and GFE process in place has played a large part in its preservice collections, which is no small feat as Ochsner is consistently considered one of the top performers of Epic preservice collections in the nation, says Woods.
A lot of the organization's success with preservice collections comes from their hybrid use of technology for GFEs as well as patient education.
"We have so many resources available to our patients on our website regarding the estimate process, understanding their insurance, and what to expect on their financial journey. And auto-finalizing our GFEs allows us to provide so many estimates to our patients up front so that they can ask questions and get help understanding what their costs are going to be before they even have services," says Woods.
Tech to improve CDI and physician workflows
At the heart of the middle revenue cycle you'll find the CDI and coding departments. This area of the revenue cycle is not new to technology as it is generally seen as an area within an organization that is closely tied to reimbursement.
In fact, according to the Association of Clinical Documentation Improvement Specialists' 2022 Industry Overview Survey, 74.82% of respondents said their CDI departments are directly involved with reviewing clinical validation denials, proving the CDI departments' direct link to reimbursement.
That's why it was so important for Tami McMasters Gomez, director of coding and CDI services at UC Davis Health, to implement the best technology for her CDI and physician teams to improve CDI and physician workflows to ensure maximum reimbursement for the organization's middle revenue cycle.
Photo credit: Tami McMasters Gomez is the director of coding and CDI services at UC Davis Health. Photo taken by: Don Feria/Getty Images.
The first step, even before implementing technology in these areas, was to build what they considered to be the perfect organizational chart to support the mid–revenue cycle.
After reworking departments and adding to various revenue cycle teams, McMasters Gomez says UC Davis Health was able to get the teams to a place where they were performing optimally.
"We were demonstrating a return on our investment with staffing and physician education. Once that was in place, I thought, ‘Well, we've accomplished what we set out to do by increasing our staffing, touching every patient, educating our providers. What can we do now?' And the next step was bettering technology," she says.
At the time, UC Davis Health was using computer-assisted coding with natural language understanding (NLU), but McMasters Gomez wanted to take its technology to the next level.
"We then embarked on a journey of investigating where we wanted to go and researching what products existed out there," she says.
For the CDI team, UC Davis Health decided to deploy the 3M™ M*Modal CDI Engage One™ software, which uses advanced AI and NLU technology to embed proactive clinical intelligence into front-end and back-end CDI workflows.
This has been the best in technology for UC Davis Health's CDI team, and according to McMasters Gomez, "it has what I like to call all the bells and whistles for enhancements and workflows. It has a prioritization list that we've been able to customize to ask, ‘What are the cases we want to prioritize for review?'"
For example, if a case has already been optimized from an MS-DRG perspective or severity of illness and risk of mortality and has accurate documentation for reimbursement, UC Davis Health is not interested in having its CDI team continue to follow that case and look for enhancement opportunities.
"We want a case like that to be on the CDI team's radar in case there are any unforeseen events or quality outcomes that may occur during the hospitalization, but our CDI teams shouldn't be spending their time on cases like that," she says.
This is why UC Davis Health created specific and deliberate prioritization lists for the CDI team to work from. Each team member has their own prioritization list, and those cases pop up with an established priority number (one through four) next to them—one being the highest priority for review and four being lowest in priority for review. This helps the CDI team to utilize their review time more efficiently.
"We also have what's called ‘evidence sheets.' As the CDI teams are reviewing their cases, there is artificial intelligence that will pop up and say, ‘There's evidence in the record that this patient may need further specificity on a diagnosis, or there's evidence in the record that the patient may have a diagnosis that hasn't been documented.' This prompts the team to further investigate," she says.
When it came to enhancing the technology for the physician teams, McMasters Gomez looked toward 3M's computer-assisted physician documentation.
"The computer-assisted physician documentation is a physician-facing tool that we were very specific about," she says. "We did a lot of physician engagement, socialization, training videos, face-to-face meetings, you name it, to get physicians familiar with this technology. We didn't want this to replace the CDI team—we wanted it to enhance the overall program."
Adding computer-assisted physician documentation had several benefits for UC Davis Health. First and foremost, McMasters Gomez says, it allowed physicians to engage in real time as they were documenting during the patient care episode and allowed physicians to put their focus back on patient care. Its physicians were able to deliver more efficient care without being pinged after the fact or after discharge.
"As the physicians are engaging and documenting the patient's encounter, there's also NLU that's reading the documentation in real time and is asking for things like specificity of the documentation, such as, ‘Why are we treating this patient with this medication?' " McMasters Gomez says.
When it came to choosing technology and a vendor, McMasters Gomez says customization was key. UC Davis Health has since embarked on customization with various nudges with the vendor, which McMasters Gomez says is the key to successful adoption of technology.
UC Davis Health needed to be more sophisticated and deliberate about its technology enhancements, as it didn't want to lose physician engagement by pinging physicians for things that they already knew and documented well.
"When implementing technology, we wanted to be very deliberate about how we engaged with our teams. They are the customers and their voices matter to us. Listening to your revenue cycle teams' needs and putting patient care as the priority makes all the difference," she says.
To that point, McMasters Gomez says that technology deployment and enhancements are great, but technology can only be successful if your revenue cycle team is using it.
This is why UC Davis Health conducts extensive piloting and onboarding practices when implementing technology.
"Getting a large-enough pilot group and representation from various types of service lines is the key to success. Make sure you get a full pilot group that can provide you candid feedback, listen to what they have to say, and make sure that you actually hear them. Your revenue cycle staff and providers are your customers and if they don't engage with the technology, it's useless," McMasters Gomez says.
Since implementing these new technologies for CDI and physician teams, UC Davis has seen overall improvement of physician workflows, improved documentation accuracy, and an almost 5% increase in comorbidity capture rates.
"When it comes to implementing technology, making sure you stay flexible and willing to pivot and change is a huge takeaway," she says.
"You also have to make sure to hold the vendors accountable to product development. There may be technology that you need that the vendor is not equipped to give you, but if you had it, it would make all the difference for your organization," McMasters Gomez says. "Never stop asking them for more."
A judge rejected HHS' stated plan to wait until January 1 to restore drug payment rates to 340B hospitals.
A federal judge has ordered HHS to immediately end the nearly 30% cut in Medicare Part B drug payments to many 340B hospitals.
In July, the Supreme Court unanimously ruled that cuts to hospital reimbursement under the 340B drug discount program were unlawful, yet HHS had no immediate timeline to recoup these payments; now it must pay immediately.
Yesterday, Judge Rudolph Contreras with the U.S. District Court for the District of Columbia rejected HHS' stated plan to wait until January 1, 2023, to start restoring the full outpatient drug payment rates to 340B hospitals.
According to Contreras, "HHS should not be allowed to continue its unlawful 340B reimbursements for the remainder of the year just because it promises to fix the problem later."
340B President and CEO Maureen Testoni said in a release that "this is an important victory for 340B hospitals that have been fighting these unlawful Medicare cuts for nearly six years."
"CMS has the clear responsibility to restore the appropriate payments for 340B drugs immediately, and now a federal court has ordered it to do so without delay," Testoni said.
This ruling comes on the heels of a recently filed amicus brief by the American Hospital Association (AHA) urging immediate action to the recoupment of these payments, as the group said it was been waiting too long for reimbursements.
The AHA had this to say of Judge Contreras' ruling: "The AHA appreciates Judge Contreras' ruling … Halting these cuts will help 340B hospitals provide comprehensive health services to their patients and communities," the AHA said in a press release.
"We continue to urge the administration to promptly reimburse all the hospitals that were affected by these unlawful cuts in previous years and to ensure the remainder of the hospital field is not penalized for their prior unlawful policy, especially as hospitals and health systems continue to deal with rising costs for supplies, equipment, drugs, and labor."
Hospital groups are asking CMS to avoid added advanced explanation of benefits (AEOB) burdens.
The American Hospital Association, American Medical Association, and Medical Group Management Association are urging CMS not to include a convening framework when implementing the AEOB and insured good faith estimate (GFE) provisions under the No Surprises Act.
For background, the convener requirement asks staff to create charge estimates for patients that cover not only their own services but those of downstream providers, creating an AEOB.
CMS is being asked that it reject any standard process that would require billing providers to consolidate cost data into a single GFE prior to submission to an insurer for the creation of an AEOB, “as it is neither practical nor in the patients’ best interests,” the groups said.
Instead, the groups say CMS should allow each billing provider to submit their own GFE to the health plan to create an AEOB.
“In addition to the inefficiencies with creating a new process discussed above, we also are concerned about the volume of comprehensive GFEs that would need to be created if the convening provider/co-provider framework were to be applied to all patients,” the letter said.
As revenue cycle leaders are aware, and as the groups echo in the letter, the creation of comprehensive GFEs for uninsured patients are burdensome and the process requires a significant amount of administrative time.
“While this process may ultimately be tenable for the uninsured patient population (if technical solutions can be successfully developed), it will inevitably add burden on providers, who will need to navigate an entirely new process prior to care,” the groups add.
In the letter the groups cite the 2020 Census data that shows approximately 8.6% of Americans are uninsured. Conversely, over 61% of Americans are covered under commercial health insurance, the groups said, whose care would be subject to the AEOB requirements.
“As a result, the volume of additional administrative work if the convening provider/co-provider were to be applied to the insured population would be impractical and unsustainable. This would likely result in care delays as providers would need substantial time to complete this process in between scheduling and providing care,” the groups said.
The added administrative burden would drive up costs for organizations as they would need to hire more revenue cycle staff during a time of widespread labor shortages.
The American Hospital Association (AHA) says HHS steadfastly refuses to recognize its obligation to promptly repay hospitals.
The AHA told D.C courts it should reject HHS' request to devise its own timeline to remedy its underpayments to 340B hospitals with no limitations and no oversight by the court, according to the AHA's recently filed amicus brief.
"Despite conceding that it has maintained an unlawful payment policy for five years, underpaying 340B hospitals by billions of dollars, HHS steadfastly refuses to recognize its obligation to promptly repay Plaintiffs and their members," AHA wrote in its brief.
HHS has had years to find a solution in the event of an adverse final decision—and more than three months since the Supreme Court's ruling—yet it displays absolutely no urgency about implementing a remedy, the AHA said.
"Defendants should not be allowed to deny already-suffering hospitals the vital funding to which they are legally entitled," the brief said. "This court should retain jurisdiction to provide sufficient oversight to ensure HHS promptly effectuates an appropriate remedy."
In July, the Supreme Court unanimously ruled that cuts to hospital reimbursement under the 340B drug discount program were unlawful.
The justices said that HHS' failure to survey hospital costs before enacting the cuts exceed the agency's authority under the Medicare statute, making the decision to reduce 340B reimbursement unlawful.
The ruling is the culmination of a court battle stretching back to 2017, when CMS finalized cuts to hospital reimbursement under the 340B program in the 2018 outpatient prospective payment system final rule.
Following the ruling, the AHA asked the district court to order HHS to immediately stop underpaying certain hospitals that participate in the 340B program and promptly repay them for the unlawful cuts since 2018 without penalizing other hospitals.
Revenue cycle leaders should work to lighten the load for back-office staff immediately, experts say.
Maintaining the revenue cycle operations of an organization comes with a unique set of challenges. Labor shortages in particular have been plaguing the healthcare industry for years, forcing revenue cycle leaders to reevaluate the way they remedy staff burnout and responsibility.
In fact, Surgeon General Vivek Murthy, MD, issued an advisory on building a thriving healthcare workforce that included ways organizations can help revenue cycle staff avoid burnout, including reexamining time spent on prior authorizations, optimizing back-end technology, and more.
Inefficient work processes, burdensome documentation requirements, and limited autonomy can result in negative patient outcomes, a loss of meaning at work, and health worker burnout, the advisory said.
These combined challenges are putting pressure on revenue cycle leaders, and now is the time to act, especially when it comes to back-end revenue cycle operations, says Titus Leo, SVP and head of healthcare provider practice at Sagility.
"The recently issued advisory shows how the healthcare labor crunch has had a serious impact on both frontline workers and back-office provider operations," Leo said.
And, he says, if health systems don't address revenue cycle staffing challenges per the Surgeon General's guidance, cash flow and revenue will suffer, and this at a time when providers struggle to make progress toward financial recovery from the pandemic.
To help alleviate the burden on back-office staff, Leo says health providers should employ the following strategies, supported in part by technology:
Automateback-office functions to create efficiencies. As hospital volumes fluctuate and administrative labor resources may be scarce, automation fills the gaps and takes over repetitive, manual processes, Leo says.
Apply analytics to the revenue cycle workflow to use staff more effectively. For example, Leo says collecting low-balance accounts through manual processes often provides little return. By applying analytics to assess likelihood of payment, providers can allocate staff resources to follow up on accounts most likely to be paid.
Consider staff augmentation to fill labor gaps. With labor shortages plaguing the healthcare industry, revenue cycle talent is increasingly hard to come by, Leo says. External business process management experts can provide scalable staff and expertise to mitigate worker burnout and offset talent gaps as volumes fluctuate.
"Utilizing these strategies in conjunction with the latest technology can enhance revenue cycle staff capabilities, ultimately helping to better serve the needs of workers and reduce burnout," Leo says.
Todd Mallon, CFO of Advocare, says the organization has a near-perfect net collection ratio.
Improving net collection rates and overall revenue cycle management processes is top of mind for revenue cycle leaders and adding in new solutions and automation to streamline those operations has been a must for many organizations.
Todd Mallon, CFO of Advocare, one of Pennsylvania and New Jersey's largest independently physician-owned and physician–governed multi-specialty medical organizations, recently spoke with HealthLeaders about implementing new technology to streamline the health system's revenue cycle management operations.
With over 650 providers and 3,000 staff across over 150 independent care centers that facilitate roughly two million patient visits annually, Mallon said it was essential to simplify its revenue cycle.
Since implementing new technology from eClinicalWorks to help with its revenue cycle management operations, Advocare now has a 99% net collection ratio. As the industry standard ratio for net collections is 95%, Advocare is now operating well above average and experiencing the positive effects of that change across all of its care centers.
"I spend much less time discussing processes and denials with our accounts receivable teams. We now have the space and flexibility to focus on expanding our operations and meeting the needs of more patients in our community," Mallon says.
HealthLeaders: What sort of problems were you seeing in your revenue cycle that made you realize you needed to implement a change? What was your main driver?
Todd Mallon: Our net collection ratio was the strongest indicator that we needed to change our revenue cycle management solution. The net collection ratio measures how effectively our practice collects reimbursement for services from patients and payers. This metric has always been a top identifier of financial success in healthcare organizations.
However, our net collection ratio was continuously dropping with our previous practice management system. I felt like I spent most of my time at every financial review meeting discussing accounts receivable, denials, and current processes to get to the core of this issue. This meant our teams were spending most of their time fixing the day-to-day operations, which limited our ability to grow and provide high-quality care to more patients. So, our main driver for changing our revenue cycle management was to equip our finance and accounts receivable teams with the support and resources they needed to improve our net collection ratio.
HealthLeaders: What was the process of implementing new technology, and who was involved with the decision-making at your organization?
Mallon: Everyone on our leadership team supported the decision-making process. Between our CEO—who provides a medical perspective, the admin team and myself—who provide the financial and operational perspective, and our task force—comprised of multiple physician leaders across all of our specialties, we wanted all stakeholders represented in the decision-making process.
Leading up to the implementation, we had several meetings with our vendor to define specific goals, metrics, and deliverables to improve our net collection ratio. Once we aligned on the basic workflow and back-end operations, the next step was training. The system was new for everyone—from our CEO to the providers to the management staff—so we needed a lot of support to train our people. Without proper training, we were unlikely to see our net collection ratio improve.
Before the launch, a select group of our staff went to Boston for a complete overview and training of the new system. Three months before the launch, our vendor's team trained our providers so they would feel confident with the system. We also provided pre-launch training courses to the rest of our staff. However, even after the training, the team was available for a quick phone call or chat to answer questions or troubleshoot a potential issue with the system or workflow.
HealthLeaders: How long did it take for your organization to fully implement the technology, and how did implementation work since your practice spans so many clinics?
Mallon: Launching the system was challenging, and we could not have implemented the technology smoothly without the vendor's support. We rolled out the new solution across all 150 health centers in one day. We went all in from the beginning, and we needed to start strong.
We had eClinicalWorks trainers at every care center for about a week to two weeks after the launch to help with the transition process and to train additional Advocare staff. During the implementation, we trained internal staff as point people for the solution so they could carry on with further implementation and staff training.
HealthLeaders: Since implementation, what positive outcomes have you noticed?
Mallon: The most noticeable positive outcome is our increased net collection ratio. Several things contributed to this increase.
First, we now have a dedicated eClinicalWorks team that handles our day-to-day collections and follow-ups to ensure we receive claims on time. To create an efficient workflow, the team helped us set up ready-to-bill rules to ensure care centers complete reports accurately. We can create alerts for missing information or incomplete claims. In addition to these in-workflow rules, the team notifies us of any issues, which gives us plenty of time to gather additional information from providers or communicate the next steps with payers.
Second, our vendor's team also handles denial appeals for our care centers. So, if a denial comes back for a claim from a specific center that needs to be addressed or changed, they will help that center submit an appeal and track the claim progress within our system. Once we receive payments, they handle the cash collections and posts them internally so we can keep track of our revenue in real time.
HealthLeaders: What are some keys to success you could share with another organization looking to do the same for their facility?
Mallon: The first key to success I'd share with other organizations looking to improve their revenue cycle is to know where you currently stand. Know your net collection ratio and how many days your accounts receivable is outstanding. Once you have a baseline, you can set goals and implement strategies to improve workflows and increase collections. And once you have these measurements, keep track of them and update them regularly. We have regular meetings with our team to discuss our current metrics, compare them to our revenue and collections goals, and adjust our workflow and operations as needed. Everything needs to be measurable to be successful, especially in revenue cycle.
Second, train your team on the new technology. Especially for multi-site healthcare operations, it is imperative to have people at each care center who can monitor the solution’s success and train new staff as needed. Now each care center runs at its best. It is also easier to open new care centers because we have a unified system.
Finally, choose a health IT vendor that listens to and learns from your organization. Open communication between a health IT vendor and a practice customer can benefit both parties. For example, based on our experience with their technology and conversations between our staff and the eClinicalWorks team, they came up with a mass lock button that would lock multiple charts at once to minimize clicks and improve billing efficiency. The most valuable part of our partnerships is open communication. We are willing to learn from them, and they are willing to learn from us. Because of this open communication, our providers and staff leverage more efficient workflows and our net collections increased. Through them, we are also exposed to new opportunities to improve health IT solutions.
In the end, patients get a better experience, and everyone wins.