There are three prevalent issues that defined the first quarter that leaders should know.
As we wrap up the first quarter of 2024, cost containment, denials management, and cybersecurity stand out as key issues revenue cycle leaders should be mindful of going into the remainder of the year.
Cost Containment
Many health systems are toeing the line of financial stability, looking to contain – or cut – costs whenever they can.
OSF HealthCare is doing its best to maintain the financial stability it’s built after the system’s operating margin fell to -3% in 2022.
Kirsten Largent, senior vice president of financial operations, attributed the decrease to workforce disruption. The system’s current stability comes as a result of rebounds in patient volumes, reducing agency costs, negotiating managed care contracts, and strong performance on value-based contracts.
“We use many vendors as extensions of revenue cycle to assist with some of the niche billing requirements,” Rene Woerner-Utley, vice president of patient accounts, previously told HealthLeaders.
“These include, but are not limited to, vendors for workers [compensation] and third-party liability billing, second level clinical denials, low dollar account collection, and coordination of benefits collection, to name a few.”
Denials Management
Denials remain a pressing issue for revenue cycle operations. The best way to push back against payers, some leaders have found, is to stay diligent and in constant communication with them.
Much of the revenue cycle operations for One Grady, Grady Health’s billing subsidiary, are automated to help streamline processes and increase efficiency; with the tools being leveraged alongside staff like medical coders.
“We’re having to be very intentional and strategic about the way in which we handle denials and really dig into how we operationalize our workforce to be able to manage those denials,” Monica Richey, vice president of physician revenue cycle for One Grady, previously told HealthLeaders.
Cybersecurity
The Change Healthcare cyberattack in late February disrupted the revenue cycle operations of a substantial number of providers across the country, causing them to lose over $100 million in revenue a day.
The attack, and others like it, are becoming more frequent and more complex, forcing many organizations to step up their information technology and cybersecurity safeguards.
“We’re in the business of treating patients, so a lot of the time, if you don’t have people that are focused on this type of stuff and know its importance, it gets thrown by the wayside,” Joi Lee, manager of cyber governance, risk, compliance for Moffit Cancer Center, previously told HealthLeaders.
The magnitude of revenue cycle disruption in the aftermath of the Change Healthcare attack has increased the importance of health systems having a business continuity plan in place so they’re able to continue processing claims and payments.
John Zabrowski explains his system's approach to maintaining patient relationships through their preferred communication method.
The provider-patient relationship is even more important now that patients are covering more of their healthcare costs. As organizations continue to embrace tech solutions and expand their digital offerings, while some patients utilize them with ease, others may prefer a more analog approach. Meeting patients where they are, through their preferred communication method enables systems to maintain and nurture relationships with their patients, without leaving anyone behind.
Hear what John Zabrowski, senior vice president, chief financial officer, and chief strategy officer for VHC Health, had to say during HealthLeaders' Patient Financial Experience NOW Summit.
While health systems are doing their best to maintain financial stability, payers are doing their best to protect their profitability.
A new report from Premier Inc found a trend in private payers denying claims, including prior authorizations. Out of all claims submitted to private payers for reimbursement, 15% were initially denied when submitted. Most of these claims were for higher-cost treatments.
Over half of the claims denied by private payers were approved and paid, but only after multiple rounds of appeals, according to the report. The average cost for providers fighting a denial was $43.84.
What Can Providers Do?
Payer struggles are a consistent issue for revenue cycle operations, being time consuming and costly, but revenue cycle leaders can push back.
Systems like Grady Health and its billing subsidiary, One Grady, have found success in building additional automated solutions onto its existing interface.
The solutions are leveraged alongside the efforts of revenue cycle staff and Monica Richey, vice president of physician revenue, previously told HealthLeaders that identifying issues within denials and maintaining communication with payers has helped the team stay on top of any issues.
“We’re having to be very intentional and strategic about the way in which we handle denials and really dig into how we operationalize our workforce to be able to manage those denials,” Richey said.
Since payers have also been implementing automated and artificially intelligent solutions into their operations, systems like OSF Healthcare, having a substantial presence of technology in their revenue cycle operations, are able to meet payers halfway.
Cathy Beebe, director of ministry managed care, encourages all payers to utilize their EHR’s payer payment platform to streamline the claims process.
“Sometimes I have to threaten that if they don’t get that module turned on, I will turn off the clinical data exchange because we could force them to have to request paper medical records through a vendor,” she previously told HealthLeaders.
“I hate to be mean, but sometimes we have to do that,” Beebe said.
The funds will be directed toward providers whose revenue cycle operations were disrupted by last month's cyberattack.
Almost a month after the Change Healthcare cyberattack that affected providers across the country, UnitedHealth is advancing over $2 billion to providers whose revenue cycle operations were disrupted.
Since the initial attack in late February, the organization and federal officials have been investigating and making efforts to provide relief to affected providers. On March 18, they announced they would be releasing medical claims preparation software, with future stages of service restoration occurring in phases.
Change Healthcare’s electronic payments platform was restored on March 15 and 99% of pharmacy network services were restored on March 7.
“The company recognizes the high level of fragmentation of the U.S. health system can result in uneven experiences, therefore it continues to enhance and expand funding to support to make it easier for care providers to access funding to help at no cost,” a statement from UnitedHealth Group said.
In addition to the money, UnitedHealth will be suspending prior authorizations for select outpatient services along with utilization reviews of inpatient admissions for Medicare Advantage plans.
What This Means For Revenue Cycle Leaders
The growing number of cyberattacks has many executives on edge, and with the growth and evolution of revenue cycle technology solutions, cybersecurity has quickly become a priority. Yet, while having safeguards in place can be a proactive protective measure, it’s important for organizations to have a business continuity plan in place to avoid major disruptions.
“A lot of companies may not have a plan, or an updated plan, or may not have communicated it and had it tested,” Joi Lee, manager of cyber governance, risk, and compliance for Moffitt Cancer Center, previously told HealthLeaders.
“We’re in the business of treating patients, so a lot of the time, if you don’t have people that are focused on this type of stuff and know its importance, it gets thrown by the wayside. It’s not important until you need it.”
Providers affected by the cyberattack who are in need of financial assistance can register for the program here. Those requiring additional support should complete this form or call 1-877-702-3253.
Executives are reporting an increase in denials, putting more pressure on system finances.
Going back and forth with payers with denials is a time consuming and expensive process, and low reimbursement rates aren’t helping.
In a new survey by the Healthcare Financial Management Association, CFOs noted a significant increase in denials, which is further exacerbating financial struggles.
Of the 130 CFOs polled, 82% said the increase in payer denials has been significant compared to pre-pandemic levels. Another 84% of respondents attributed low operational margins to low reimbursement rates.
Payer denials have been an issue for revenue cycle executives, with many voicing their frustration with slow claims processing times, algorithms denying claims, and vague policy details during HealthLeaders’ RevTech Exchange.
During the event, Jonathan Benton, assistant vice president of Atrium Health, presented five methods to help leaders tackle their struggles with payers:
Prioritization – Use algorithms to determine which accounts have the greatest potential value.
Automation – Automate tasks to reduce work burden on staff and speed up revenue cycle operations.
Cultivation – Organize work to maximize system automated priority.
Analysis – Be proactive and keep track of factors impacting key performance indicators.
Resilience – Inundate payers with appeals and follow up on automated denial responses.
One strategy that OSF HealthCare has found success with is encouraging payers to utilize the system’s EHR payer payment platform to enable their automated solutions to move the claims process along more efficiently.
“I’m always promoting that [option] with the payers because it promotes automation,” Cathy Beebe, director of ministry managed care at OSF, previously told HealthLeaders. “And the more we automate with the payers, the less they bother us.”
The system's data analytics team is also performing a query to determine patterns of denials among different payers, which will enable the denials team discern commonalities or if a medical record needs to be sent along with a claim.
"We've learned alot from being pro-active," the system's director of ministry managed care said.
Looking at OSF HealthCare’s EHR dashboard is like watching a well-oiled machine at work. In fact, Cathy Beebe, director of ministry managed care, enjoys seeing how processes seamlessly flow through one another.
“It’s kind of fun to see how well we’re doing,” she told HealthLeaders. “It also tells us how many FTEs it will save us the more we automate things, so that’s really rewarding.”
As hospital systems struggle to contain costs, they also have to make sure they’re capturing the appropriate revenue through an efficient payer system that leverages automation along with best practices for those tasked with ensuring proper payments. It’s a relentless approach that OSF uses daily with the rigor of a forensic accountant.
An efficient EHR is only the tip of the iceberg for the system’s automation—which has contributed to the success and health of the system’s revenue cycle. The system has automated a number of processes, including eligibility, payments, and claims.
Despite those achievements, much like other health systems, OSF has to stay vigilant when it comes to dealing with payers. While payers themselves have also invested in and implemented automated and AI solutions in their operations, many of the processes health systems complete for claims are still done manually and require a considerable amount of back and forth.
While the system is proactively able to send medical records with claims, Beebe stressed the importance of figuring out “the sweet spot” when sending medical records to payers due to the cost.
The system’s data analytics team is performing queries to learn more about the pattern of denials among various payers. Additionally, the denials team is working to discern when to attach medical records to a claim considering how costly it is to do so.
Beebe said that two payers have given the system a baseline of what a claim needs, but there isn’t much flexibility.
Another strategy that has worked with payers has been getting them to utilize their EHR’s payor payment platform, which adds to the system’s suite of automated solutions.
“I’m always promoting that [option] with the payers because it promotes automation and the more we automate with the payers, the less they bother us,” she said.
Prior authorizations are a consistent issue in the revenue cycle, and Beebe has been pushing payers to automate the system’s prior authorizations.
“Sometimes I have to threaten if they don’t get that module turned on, I will turn of the clinical data exchange because we could force them to have to request paper medical records through a vendor,” she explained.
“I hate to be mean, but sometimes we have to do that.”
Beebe’s department is responsible for loading all the rates in the system and her role in particular negotiates payer contracts. To ensure that rates get loaded into the system accurately, payers must also have their systems loaded accurately, she said.
“We have weekly underpayment reports and if we suspect that a payer has their rates loaded wrong, we’ll reach out to them,” she said.
For Medicaid payers, whenever there are changes to reimbursement rates, the system will hold its claims and work with the Medicaid configuration teams at each payer to make sure they have the rates loaded correctly.
“We’ve learned a lot from being proactive,” Beebe said. “It pays off.”
Monica Richey, vice president of physician revenue cycle for One Grady, shared insight on the strategy in a recent episode of the HealthLeaders Podcast.
In this week’s episode of the HealthLeaders Podcast, Monica Richey, vice president of physician revenue cycle for One Grady, revealed what has been working for the subsidiary of Atlanta-based Grady Health System.
During the conversation, Richey attributed the system’s numerous automated solutions to its successful cost containment in revenue cycle.
“I would definitely say we’ve tapped into other areas of automation and streamlining our processes even within Epic,” she said, noting the system’s electronic health records platform. “Using the tools we have to minimize work effort, costs, and really increase efficiency across the board.”
Richey estimates that 40-50% of One Grady’s revenue cycle processes are automated. Leveraging an existing user interface, she and her team have been able to build out additional automated solutions for professional and hospital billing.
They’ve also implemented some solutions around their front-end operations to enhance the patient financial experience.
Staff still play an important role in revenue cycle operations though, such as the team of medical coders that manage exceptions. With the system having two academic groups alongside their employee group, Richey said there are different nuances that must be reviewed to ensure they remain in compliance.
Denials and prior authorizations are consistent issues in revenue cycle operations and One Grady manages to stay on top of them by identifying issues within denials, communicating with payers, and engaging in discussion in joint committee meetings.
“Beyond that,” Richey said, “we’re having to be very intentional and strategic about the way in which we handle denials and really dig into how we operationalize our workforce to be able to manage those denials.”
Looking towards the rest of the year, Richey plans to focus on ways to lower the costs of coding and submitting cleaner claims. Prior authorization is another area she’s hoping to reassess to ensure that the system is being paid for the services it provides.
Having a back up plan can prevent major revenue cycle disruptions.
Cyberattacks affect all of an organization’s operations, including revenue cycle, preventing them from submitting or processing claims and even processing payments. The recent Change Healthcare cyberattack is reportedly costing affecting pharmacies $100 million a day.
Heather Modjesky, board member for the American Academy of Ophthalmology, emphasizes the importance of having an established contingency plan in the event of a cyberattack.
In a resource article for the academy’s website, Modjesky recommended the following practice management tips in the event of a cybersecurity attack:
Gather pertinent information, such as revenue and electronic funds transfer information and claims information, while establishing alternative claims flow measure for top payers.
Acknowledge how long you can operate with the current cash flow.
Contact your business insurance provider to inquire if your business interruption rider covers this form of disruption.
Communicate daily with your practice management team and electronic health record vendor.
Obtain CMS-1500 forms if not already readily available.
Contact your government representatives and state societies.
In a previous article, Joi Lee, manager of cyber governance, risk, and compliance for Moffitt Cancer Center, spoke to HealthLeaders about cybersecurity becoming a priority in healthcare.
There’s still work to be done, and Lee said organizations should be proactive with their security measures; ideally, by developing a business continuity plan.
“We’re in the business of treating patients, so a lot of the time, if you don’t have people that are focused on this type of stuff and know its importance, it gets thrown by the wayside,” she explained. “It’s not important until you need it.”
In addition to having a contingency plan in place, it must be tested, and staff must be familiarized with it, Lee said.
"It's not important until you need it," one cybersecurity specialist said.
When organizations decide to invest in a revenue cycle management solution, ideally, cybersecurity personnel would be included from the beginning.
“We still have some work to do where people recognize the importance,” Joi Lee, manager of cyber governance, risk, and compliance for Moffit Cancer Center, told HealthLeaders. “Because the worst thing you can do is bring stuff on site, into our environment, and not have appropriate controls in place.”
Lee has worked in cybersecurity since the early 2000s, beginning her career working with banks as they built their cybersecurity programs. She acknowledged that healthcare is lagging with its cybersecurity efforts and noted the growing presence of roles like chief information officers within organizations within the past few years.
“That’s why it’s important for the team to consistently go to training to have an ear to the ground, participate in groups where you’re talking about these various threats,” she said. “Because you just stay in your silo, you’re going to be left behind because by the time you figure out how to handle the threat, there’s going to be a new one.”
Considering the continuous growth and evolution of revenue cycle technology, information roles and cybersecurity specialists are needed for organizations to not only understand how to implement and leverage solutions, but how to ensure their data is protected.
In addition to a solution’s capabilities, organizations should make sure the vendors they’re looking at have antivirus and data protection controls in place, Lee explained, which are basic features she and her team look for.
There are a few ways organizations can be proactive in protecting themselves from security risks, like following the framework set by the National Institute of Standards and Technology (NIST). Lee’s team has modeled their policies off this framework, which include items like staff having their own usernames and passwords, having passwords be a certain length, and encrypting their information.
As we’ve seen with the recent Change Healthcare cyberattack, these threats have the potential to disrupt the operations of any health system by siphoning patient and employee information and even preventing the necessary data from being available. As cyberattacks get more sophisticated, it’s imperative that organizations have a business continuity plan in place so they’re able to continue operations.
“A lot of companies may not have a plan, or an updated plan, or may not have communicated it and had it tested,” Lee said. “We’re in the business of treating patients, so a lot of the time, if you don’t have people that are focused on this type of stuff and know its importance, it gets thrown by the wayside. It’s not important until you need it.”
With the bill's signage, the 3.37% cut to Physician Fee Schedule reimbursements was lowered to 1.69%.
President Biden signed the bipartisan spending bill for $460 million on Sunday evening.
Most notably, with the bill’s passage, the 3.37% cut to Physician Fee Schedule reimbursements was lowered to 1.69%.
Healthcare groups like the American Medical Association have been vocal in their opposition of the cuts, believing they’ll negatively affect hospitals financially.
Catherine “Mindy” Chua, DO, chief medical officer of Davis Health System, recently spoke to HealthLeaders about the potential effects of the pay cuts. Chua explained that three-quarters of physicians are employeed by hospital systems, so while the pay cut won’t affect them directly, it affect the systems and physician practices owned by systems.
“The physician fees are going to the hospitals to maintain the physicians they employ. We are not going to be decreasing what physicians are paid because Medicare is cutting our reimbursement,” she said. “You are not going to keep physicians if you do that.”
Additionally, the bill eliminated the Medicaid DSH payment cuts proposed for fiscal year 2024 and delayed fiscal year 2025 reductions until January 1, 2025.
In a statement, Bruce Siegel, president and CEO of America’s Essential Hospitals, said that with the elimination of the FY2024 pay cut and delay of the FY2025 cut, policymakers have more time to look into a solution for the “decade-long threat to DSH support.”
Steven P. Furr, president of the American Academy of Family Physicians, shared similar thoughts in his statement.
“Short-term extensions jeopardize access to care for millions of patients,” Furr said. “Without the stability of a multi-year reauthorization, family medicine residents face significant uncertainty about what their future looks like.”
“This approach to funding discourages residents from choosing to practice in areas where health care access is already at risk.”
