Insurers may be calculating median in-network rates for specialty services using contracted rates for services that were never negotiated, study says.
In possible violation of the No Surprises Act, health insurance company calculations of qualified payment amounts (QPA) for anesthesiology, emergency medicine, and radiology services likely include rates from primary care provider (PCP) contracts,a new study says.
The study conducted by Avalere Health and commissioned by three national physician organizations examined a subpopulation of PCPs and determined that contracting practices may directly impact the QPA.
"Despite the law's directive that QPA calculation be based on payment data from the 'same or similar specialty' in the same geographic region, insurers may be calculating median in-network rates for specialty services using PCP contracted rates for services that were never negotiated, may never be provided by those physicians, and may never be paid," the study said.
This method may violate the No Surprises Act law and produce insurer-calculated QPAs that do not represent typical payments for these services, the study said.
In the study, 75 primary care practice employees who have a role in contracting with insurers were surveyed regarding whether they contract with insurers for services they rarely or never provide, as well as negotiation practices related to these services.
68% of respondents had services that they rarely provide (fewer than twice a year) included in their contracts, and 57% of respondents had services that they never provide included in their contract, the survey found.
"This new research raises significant questions about the accuracy of insurer calculated QPAs," said American Society of Anesthesiologists President Randall M. Clark, MD, FASA. "We have received reports of extremely low QPAs that bear absolutely no resemblance to actual in-network rates in the geographic area; yet these same rates are being used by insurers as their initial payment."
The American Society of Anesthesiologists, the American College of Emergency Physicians, and the American College of Radiology are calling on policymakers to eliminate the QPA as the main factor in arbitration and ensure the integrity of the QPA by insisting they be calculated based on "same or similar specialty" in-network rates.
This would mitigate "the unintended consequences of relying on health insurers' median in-network rates based partially on data from providers who don’t actively negotiate those rates," said Gillian Schmitz, MD, FACEP, president of the American College of Emergency Physicians. "Physicians rely on fair reimbursement to keep their doors open and continue providing lifesaving medical care to their patients."
Ongoing hurdles in scheduling, reimbursement, and collections compound difficulties for a healthcare industry already under stress a recent study says.
Medical Group Management Association (MGMA) recently released a report detailing new benchmarks related to the adoption rate of value-based reimbursement and other hurdles revenue cycles frequently face.
The report found that the average rate of value-based care only accounts for approximately 5.5% to 14.74% of revenue, with primary care and surgical specialties reporting lower revenue shares from value-based contracts in 2021 and nonsurgical specialties attributing 14.74% of total medical revenue to value-based contracts, the report said.
Other aspects of the revenue cycle were also studied in the report.
According to the MGMA, the return of patient volume in 2021 led to shifts in appointment scheduling benchmarks, as higher demand for care saw no-show rates hold steady and an uptick in cancellation rates which has put a large burden on revenue cycle staff.
Overall patient portal usage improved from 2020 to 2021, with a significant increase in patient logins, the MGMA found.
The study also found that increased care volumes, claim denials, and staffing shortages combined to spur concerning shifts in billing and collections benchmarks, as copay collections at time of service declined and charge-posting lag times increased for specialist practices.
Also, the percentage of claims denied on the first submission doubled across primary care, nonsurgical, and surgical specialties, the study noted.
“The medical workforce is grappling with burnout, staffing declines, decades-high inflation, operational challenges and a dynamic reimbursement environment that affects providers across the board,” said Dr. Halee Fischer-Wright, MD, MMM, FAAP, FACMPE, president and chief executive officer of MGMA.
“This report reveals how addressing scheduling errors and billing denials could help relieve the financial burden on health groups, moving them toward value-based care that promotes the welfare of physicians, staff, and patients.”
The report includes data from more than 2,300 organizations across multiple specialties and practice types.
While some organizations already have systems in place to adhere to price transparency requirements, opportunities still exist to adjust outdated revenue cycle processes.
The No Surprises Act, which became effective January 1, requires hospitals to post the prices for their most common procedures as well as offer a patient-friendly tool to help shop for 300 common services.
Unfortunately, most organizations are behind in adhering to this requirement—still.
Earlier this year,JAMA published a study that concluded that out of the 5,239 hospital websites evaluated, roughly 51% of hospitals did not adhere to either price transparency requirement.
Almost 14% of hospitals studied had a machine-readable file but no shoppable display, while 30% of hospitals had a shoppable display but not a machine-readable file, according to the study. It also found less than 6% of hospitals were compliant with both components of the mandate.
Of the hospitals studied, 5.1% were in total noncompliance as they did not post any standard charges file, and 51.3% failed compliance because the majority of their pricing data was missing or incomplete.
While some organizations now have systems in place to help them adhere to the new rules, opportunities still exist to revisit outdated revenue cycle processes to better comply with these regulations.
Connie Lockhart, director of strategy and operations at Impact Advisors, discussed with Healthleaders six key strategies that revenue cycle leaders can use to increase price transparency, mitigate the risk of surprise billing, and support efforts to improve the patient experience through enhanced revenue cycle processes.
Before diving into the six key strategies, when first shoring up price transparency processes (and as mentioned in the studies above), there are two main requirements that organizations need to adhere to immediately.
"Revenue cycle leaders need to first make sure they are following CMS' guidelines to complete a comprehensive, machine-readable file of all services and items," she says. "Ensure all requirements are met—like how a separate file must be posted for each hospital. And be cognizant of multiple hospitals operating under a single hospital license with different sets of standard charges."
Also, ensure that list is posted on a publicly available website.
Once completed, make sure to post a display in a publicly available website of 300 shoppable services in a consumer-friendly format. This should include the 70 CMS-specified, shoppable services, Lockhart says. Revenue cycle leaders should also establish a cadence to ensure both displays are updated annually, Lockhart says.
Once the basics of price transparency are in place, revenue cycle leaders can then move to streamlining other areas of the requirement. Here are six key strategies Lockhart suggests.
Shore up your scheduling
Improve the patient experience with better access to scheduling appointments and verifying patient eligibility, Lockhart says.
For eligible self-pay patients, revenue cycle leaders should ensure timelines are in place for governance of the No Surprises Act. It is the provider’s responsibility to verify if the patient is self-pay, so looping in front-end revenue cycle staff to address this task is a must.
For example, if a patient schedules more than ten business days in advance of a service, an organization has three days to issue a good faith estimate. If a patient schedules three days out, staff only has one day to issue the estimate.
Refine those good faith estimates
Patients are consumers, Lockhart says, so it’s important to establish expectations regarding the process for collecting out of pocket expenses. A lot goes into good faith estimate requirements, so it's essential for revenue cycle leaders to stay up to date on those intricacies.
For example, for services provided in 2022, patients can dispute medical bills that are $400 or higher than the good faith estimate that was provided.
For self-pay patients who do not have health insurance or choose not to use it, the good faith estimate is applicable, Lockhart says.
Work on collection communication
Convert the good faith estimate into cash collections to make it a smoother process for both the patient and the organization, Lockhart says.
Implementing scripting, automation of a patient estimator tool, and training for all pre-service/registration staff is key to ensuring timely and consistent communication and collections.
Leverage price transparency to build patient trust
One positive aspect of price transparency for organizations is that it can help build trust by providing patients the cost of service prior to receiving services, Lockhart says.
In order to build this trust with patients, revenue cycle leaders must make sure processes are streamlines and compliant.
"Ensure compliance with pricing transparency and good faith estimates by utilizing the CMS requirements as a baseline to assist in your hospital's review of the hospital price transparency final rule and complete a gap analysis to identify processes/elements that are not aligned with the requirements," Lockhart says.
It's also essential that your chargemaster is easily accessible, and that revenue cycle leaders perform quality checks to include bill audits. Lockhart says this strategy will ensure there is timely, consistent, and accurate communication with the patient regarding the cost of care before both the service and the bill.
Being timely, consistent, and accurate in your price transparency and estimates will build that trust and ensure a positive patient financial experience.
Train staff on point of service collections
Educate and train revenue cycle staff to be able to clearly communicate and explain the good faith estimate to patients, Lockhart advises.
Including scripting and frequently-asked-question handouts will help front end staff better communicate with patients about these prices and bills.
Resolve patient cost share
Revenue cycle leaders can reduce denials and self-pay vendor costs by resolving patient cost share on the front end, Lockhart suggests.
To do so, it's important to implement governance and reporting for point of service collections, and to track and monitor point of service collections (e.g., expected vs. actual payments) on a monthly basis, Lockhart says.
CMS regulations and accompanying surprise billing updates are changing faster than revenue cycle leaders can keep up.
The surprise billing ban was put in place by CMS to protect patients from receiving unforeseen bills for out-of-network and emergency services after receiving treatment. While beneficial for patients, organizations have long shared their distain of the burden this causes for revenue cycle staff.
Revenue cycle leaders need to stay informed of this requirement in order to be compliant and ensure a positive patient financial experience. Review the most recent surprise billing stories from HealthLeaders.
A federal judge denied a New York doctor's lawsuit against the No Surprises Act, dismissing the request for a preliminary injunction and ruling that the law is constitutional.
U.S. District Judge Ann Donnelly rejected surgeon Daniel Haller's injunction to blow the law, which was filed on December 31, 2021, the day before the No Surprises Act took effect.
Haller and his private practice, which performs procedures on patients who are admitted after an emergency department visit, alleged in the complaint that the law is unconstitutional and deprives providers the right to be paid a reasonable payment for their services due to the independent dispute resolution process.
Several aspects of the surprise billing mandate went into effect on January 1 of this year, including federal protections against balance billing, uninsured and self-pay good faith estimate requirements (GFE), continuity of care protections, and provider directory requirements.
While the policies have been beneficial for patients, MGMA says the requirements have created administrative burden for providers as the interim final rules were published with minimal time before implementation.
The workgroup takes aim at the GFE convening provider/facility provision saying it has significant concerns with how this part of the act can be successfully adopted by two providers.
In the letter, WEDI recommends HHS consider an initial phase of the GFE requirement initiated by a patient request, extend the enforcement discretion period, identify standards-based solutions, and phase in the one- and three-day time requirement.
WEDI says these issues should be expeditiously addressed by HHS to ensure successful implementation of the legislative provisions of the act.
"While the No Surprises Act includes much needed consumer protections against catastrophic 'surprise' bills, it also includes challenging data exchange provisions such as the convening provider/facility requirement," stated Charles Stellar, WEDI president and CEO.
Yet 20% of respondents in the Morning Consult survey say they or their family have been charged unexpectedly, with another one in five billed after being treated by an out-of-network provider at an in-network facility.
The bills have been especially costly in some cases, as 22% of respondents say their charges were over $1,000.
Unexpected charges haven't just been an issue after the fact. The survey found about one in four adults delayed or skipped medical care because they were concerned with receiving a surprise bill. Emergency room care suffered the most in this facet, with 14% of respondents saying they did not seek care, while another 14% say they hesitated but ended up receiving care.
As organizations clamber to adhere to price transparency requirements, nearly half of patients have never heard of it.
Healthcare organizations' low compliance with price transparency has been in the spotlight as of late, but an even more concerning statistic comes from the patients: Nearly half (49%) of US consumers have not heard of the price transparency rule at all, according to the recent survey from Cedar.
Conversations around price transparency are commonplace among healthcare professionals, but while 49% of those surveyed have not heard of the price transparency rule, of those who are familiar with it, nearly a quarter (24%) don’t understand it.
Price transparency has yet to move the needle for patients for a variety of reasons, with low compliance and lack of centralized data just to name a few, Cedar told Healthleaders.
But with nearly 90% of consumers having compared the costs of two items while shopping, the survey said, it's clear that organizations need to give patients what they inherently want: the ability to easily price shop and compare costs when seeking healthcare.
As the patient financial experience is top of mind for revenue cycle leaders, now is the time to act. According to the survey, 74% of respondents said they wish their hospital better explained its price transparency compliance to them.
On top of this, 77% of consumers said they would price compare two hospitals prior to receiving care at a hospital if that information was available. 71% of consumers consider price transparency and costs when choosing where they go for medical care, the survey said.
So, what can revenue cycle leaders do to help educate their patients regarding price transparency? Florian Otto, CEO and co-founder at Cedar, spoke exclusively to HealthLeaders on this.
"There are many ways in which revenue cycle leaders can help educate their patients regarding price transparency, including leveraging technology to create a digital front door that prioritizes the consumer experience," Otto said.
"By offering personalized care information, consumers can engage with valuable, user-friendly price transparency data before their visit, and this way providers can ensure there is alignment on payment responsibility before a bill is sent."
The market is anticipated to increase at a compound annual growth rate of 16% from 2022-2032, and by the end of 2032, medical billing outsourcing is expected to reach a valuation of $55.6 billion, the report said.
The report explained that the pandemic has highlighted the significance of adopting proactive actions and establishing a strong, collaborative, and reactive digital healthcare infrastructure.
"As a result, in order to enhance market development, numerous organizations are adopting methods such as digitization and outsourcing of all non-core areas of their operations, such as invoicing and accounting. The rapid move to digital billing is directly related to the growing demand for the medical billing outsourcing market," it said.
This information comes amid reports of high medical billing costs and staffing shortages for the revenue cycle.
According to the study, although most countries use ICD-10, the U.S. has a very different coding process from other countries which is driving up medical billing costs.
On top of high billing costs, workforce shortages have been a major challenge for healthcare leaders and the revenue cycle in particular is in serious need of staffing.
Leaders at Hutchinson Clinic knew they had to keep patient experience in the forefront in order to ensure the success of their revenue cycle.
An important aspect to optimizing the revenue cycle for leaders at Hutchinson Clinic in Hutchinson, Kansas, is the ability to find which methods worked the best for the organization internally, while still working to improve the patient experience.
The clinic has a team of roughly 60 in-house revenue cycle management employees who needed onboarding and training before all processes could be improved. At the same time, Mike Heck, CEO, was adamant that this process didn't disrupt continuity of care for the patients stretched across Hutchinson's large geographic footprint.
"The beauty of working with a partner for onboarding and training is that they're handing all of the heavy lifting behind the scenes, enabling us to focus on patient engagement, provider recruitment, and retention," Heck said. "We've recently seen a positive response from the community as a result."
Being that Hutchinson Clinic is the primary source of care for those in Reno County, it's imperative that patient engagement is at the head.
"We see quality care and patient satisfaction as our number one responsibility," Heck said. "Having a stable revenue cycle management ensures that bills are getting out the door and payments are being made, which frees our team up to focus on other areas."
Echoed Dashun Monk, CFO, "I have peace of mind knowing that our revenue cycle, specifically the coding, accounts receivable, and posting components are happening correctly and in an efficient manner."
As revenue cycle leaders look to streamline processes and leverage technology, one health system did just that by consolidating its electronic health record (EHR) platforms.
Now more than ever, EHR systems play a vital role in running an effective revenue cycle.
As more systems now include revenue cycle management capabilities such as real-time insurance verification, good faith estimate pulls, and more, the integration of EHRs among multi-system hospitals has become a necessity for organizations looking to save money and even reduce the administrative burden of revenue cycle staff.
LCMC Health, a New Orleans-based, six-hospital health system, recently did just that. Now, LCMC Health is saving money by having consolidated all of its hospitals onto a single EHR platform.
Sherri Mills, LCMC Health's chief nursing informatics officer, recently spoke to HealthLeaders contributing writer Scott Mace to explain more.
HIMSS Analytics recently recognized two of LCMC Health's hospitals for reaching Stage 7 of the HIMSS Analytics Electronic Medical Record Adoption Model (EMRAM), the highest validation of EHR adoption bestowed by the HIMSS organization.
The achievement caps the four-year project to migrate LCMC Health's hospitals from six different EHRs, coming at a time when the health system is in a growth and acquisition phase.
"We are relatively young as a hospital system," says Mills. The EHR migration was a key factor, she says, in LCMC Health's efforts to coalesce.
"We know the HIMSS methodology helps organizations take a good look at how they're leveraging technology for patient safety and quality," she says.
The investment in the EHR transition cost the health system tens of millions of dollars, Mills says, but LCMC Health is coming out ahead financially compared to EHR expenses prior to consolidating.
"Through good application rationalization and consolidation, we actually are saving money," she says.
One of its hospitals was actually documenting patient charts on paper before the migration. "They did have a way to do order management [electronically], but documentation was still on paper," Mills says.
Read even more about LCMC’s EHR consolidationhere.
According to the study, researchers used a microlevel accounting of billing and insurance-related costs in different national settings at six provider locations in five nations: Australia, Canada, Germany, the Netherlands, and Singapore. This newest study supplements the prior study measuring the costs in the U.S.
“We found that billing and insurance–related costs for inpatient bills range from a low of $6 in Canada to a high of $215 in the US for an inpatient surgical bill (purchasing power parity adjusted),” the researchers said.
To compare, only Australia had similar billing and insurance-related costs to the U.S. Australia has a mix of publicly and privately funded payers, as well as universal coverage. Billing and insurance-related costs were significantly less in Canada than in the other nations. Germany, Singapore, and the Netherlands had comparable billing and insurance-related costs, the study said.
Interestingly, researchers found one common thread to these higher costs in the U.S. and Australia and it points to one area of the revenue cycle: coding.
According to the study, although most countries use ICD-10, the U.S. has a very different coding process from other countries which is driving up costs. In the U.S., each payer has its own documentation requirements, creating a significant burden on providers to translate clinical documentation into billable codes for reimbursement, thus driving up costs, the study said. Because of standardization in other countries, providers spend less time coding or do not need coders to translate documentation into billable codes.
Review recent OIG activity, including a special fraud alert targeting contracts with telehealth companies.
The Office of Inspector General (OIG) has been busy lately. Review some of the latest OIG audits and reports to help ensure your organization is staying compliant.
Federal watchdogs say CMS still has not collected the nearly $500 million in Medicare overpayments identified in audits over a two-year period dating back to 2014.
The OIG at the Department of Health and Human Services did a follow-up review of 148 Medicare audits it conducted between October 1, 2014, and December 31, 2016, and could verify that CMS had collected only $120 million of the $498 million in overpayments.
In the recent audit, the OIG focused on seven groups of high-risk diagnosis codes, aiming to determine whether selected diagnosis codes submitted by Peoples Heath Network—a Medicare Advantage organization—for use in CMS’ risk adjustment program complied with federal requirements.
Federal officials have issued a special fraud alert targeting contracts with telehealth companies and offered seven characteristics of an arrangement that could be illegal.
The notice, issued by the OIG, follows several recent investigations into companies claiming to offer what they define as telehealth services, but which often constitute illegal marketing schemes.
Medicare and its beneficiaries paid considerably more at provider-based facilities than they would have for the same services at freestanding facilities, according to the OIG.
The OIG's audit examined $3.95 billion paid for evaluation and management (E&M) services at provider-based facilities from 2010 to 2017 in eight states: California, Colorado, Florida, Louisiana, Michigan, Missouri New York, and Texas. Based on outpatient and Physician Fee Schedule claims for E&M services performed at provider-based facilities, researchers compared the data to what would have been paid at freestanding facilities.
