Making it easier for patients to fulfill their financial obligations can help ensure a steady cash flow.
Many health systems are toeing the line between breaking even and operating in the red. With uncooperative payers and low reimbursement rates, revenue cycle leaders need to shift some of their efforts toward patient collections.
Since patients are responsible for more of their healthcare costs, offering different payment methods that are accessible, easy to use, and complementary to their care experience is crucial for providers hoping to maintain a continuous cash flow.
Digital Expansion
The rise of telehealth during the pandemic increased the need for digital expansion—including an efficient patient portal.
A health system’s patient portal gives patients more control over the care they receive, making it the ideal place to implement efforts to increase patient collections. Patients appreciate the convenience of being able to communicate with providers, review test results, and pay medical bills online.
It can also speed up the payment process.
When the Allegheny Health Network sought to improve billing coordination and patient communication, executives invested in a financial engagement platform that included a patient portal. In addition to being able to coordinate and manage their care, patients were also able to pay their bills or choose a payment plan.
RevTech Implementation
Revenue cycle technology solutions are often lauded for taking the administrative burden off of staff, but they can also help with pre-collection.
After implementing an accounts received platform, the BoulderCentre for Orthopedics & Spine saw a significant increase in pre-collections—so much so that they began looking into additional solutions.
“I’d like to see it as an adjunct to our practice, not to replace people,” Sherri Lewis, director of revenue cycle, said. “I’d like consistency with it if it could be that way.”
Payment Methods
Payment methods can affect how quickly bills are paid. The popularity and user-friendliness of cash sharing apps has convinced some providers to adopt them, with 54% of providers surveyed for one report saying they’d already begun to do so. Within that same survey, those who hadn’t stated they planned to do so in the future.
When Lake Washington Physical Therapy adopted electronic billing and mobile payment solutions, the number of accounts receivable decreased by 47% within the first month.
“PatientPay and our billing services have helped us get a best-in-class payment per visit, which is really important,” Ben Wobker, founder and CEO, told HealthLeaders. “We don’t have to see as many people because we’re getting what we actually are billing.
Pay rates for hospitals serving historically marginalized populations were 15% lower than those for other hospitals in one state.
A recent report by Manatt Health found a gap in commercial payment rates between hospitals that serve historically marginalized populations (HMPs) and those that don’t.
Data showed commercial payment rates in Arkansas and Massachusetts were 7% and 15% lower, respectively, than other hospitals in each state. Medicare Advantage pay rates for hospitals in Arkansas serving HMPs were shown to be 8% lower than other hospitals.
The increase is attributed inflation, prescription drugs, and behavioral health utilization.
Healthcare costs are predicted to reach a 13-year high in 2025, according to a report by consulting firm PwC.
According to the report, an 8% year-over-year increase is expected for the group health insurance market, along with a 7.5% increase for the individual market. PwC attributes the increases to inflation, prescription drugs, and behavioral health utilization.
This is unwelcome news, coming so soon after the release of the Centers for Medicaid and Medicare Services’ proposed 2025 Physician Fee Schedule. If finalized as is, physician reimbursement will be lowered by 2.8%, despite earlier predictions of practice costs increasing by 3.6% in 2025.
Additionally, provider billing practices will also face increased scrutiny, as the proposed rule aims to combat suspicious billing practices within Medicare’s Shared Savings Program.
Revenue and financial leaders have been prioritizing financial stability for the last few years, seemingly to no avail. If it isn’t inflation, it’s workforce issues, uncooperative payers, low reimbursement, or a storm of all of the above fraying system’s budgets.
Providers have long been vocal about the need for reimbursement to keep pace with inflation, or at least cover the cost of care.
Revenue cycle technology has been a popular option for many systems and individual practices looking to save money. Whether the goal is to improve efficiency or automate redundant tasks, the investment enables staff to work on more complex tasks—although the return on investment may vary.
Other leaders have seen success focusing on payers with meticulous and persistent appeals efforts for denials.
The dashboard shows the statewide median payment for different services, and how payments vary over time or by region.
Providers have been vocal about the effects of inflation and rising care costs against low payer reimbursement. The Oregon Health Authority is taking matters into its own hands by publishing an online dashboard detailing the finances and utilization of individual hospitals.
The dashboard examines the reimbursements for different procedures and treatments that state hospitals received from insurers from 2021 and 2022, how they vary over time or by region. There are three other dashboards on the OHA’s website that examine data from different angles, each developed with the intent to monitor and reign in growing healthcare costs.
Users are can view payment trends by category (inpatient, outpatient, pregnancy related, diagnostic imaging and testing, etc.) and procedure and see the statewide median payment, as well as the payments that individual hospitals received.
For example, while the statewide median payment for blood transfusions was $27,812 in 2021, for the year, Oregon Health and Science University received the highest median payment, $88,102, while Kaiser Westside Medical Center received the lowest median payment at $13,935.
With the dashboards illustrating the variances in how hospitals are reimbursed and payments not keeping up with inflation, providers have data they can leverage in negotiations with payers.
In 2023, the state’s 61 community hospitals posted a median -1.3% operating loss, according to the Hospital Association of Oregon. Despite breaking even on operational expenses, reporting an operating profit of $17.2 million on operating revenues of $18.5 billion, it’s below the 3% profit margin deemed healthy for the healthcare sector.
“We had thought that [2023] would be the period when hospitals would be recovering from COVID [financially], but it looks like instead we are in the new normal,” the association’s CEO, Becky Hultberg stated.
Almost 80% of physicians surveyed by the AMA say patients are skipping care because of delays in prior authorizations.
Prior authorizations are a consistent pain point in revenue cycle operations, and a new survey shows just how detrimental they are for patients.
According to the American Medical Association’s annual prior authorization survey, 78% of physicians said issues with prior authorization resulted in patients forgoing care.
The survey of 1,000 practicing physicians offers some significant insights to the negative impact of prior authorization on the patient’s care experience:
94% said prior authorization “always, often or sometimes” delayed a patient’s access to necessary care.
19% said prior authorization resulted in an event leading to a patient being hospitalized.
13% said prior authorization resulted in an event leading to a life-threatening event or requiring intervention to prevent permanent damage.
7% said prior authorization resulted in an event leading to a patient’s disability, permanent bodily damage, congenital anomaly, birth defect or death.
Prior authorizations are a significant problem for providers as well, with many having to rely on multiple staff to work on them, according to a 2023 survey by the Medical Group Management Association.
Another report by the Kaiser Family Foundation found that 6% of the 35 million prior authorization requests submitted to Medicare Advantage in 2021 were denied. Of those denials, only 11% were appealed, and of that group, 82% were fully or partially overturned.
Some health systems, like University Health KC, have turned to tech solutions to manage prior authorizations, and seen some results.
“Within about two months of kicking off implementation, [the program] started going to payer websites and logging requests for prior authorizations by taking that information out of our EMR,” Seth Katz, vice president of revenue cycle and HIM, previously told HealthLeaders.
In January, the Centers for Medicare and Medicaid Services finalized the Interoperability and Prior Authorization Rule, setting requirements to streamline the process for Medicare Advantage, the Children’s Health Insurance Plan (CHIP), and Medicaid managed care plans, among others.
The rule adds provisions to increase data sharing, in turn, reducing the administrative burden on providers, enabling them to spend more time providing care. For example, as part of one requirement for the rule, payers must send prior authorization decisions for expedited requests within 72 hours. For standard requests, decisions must be sent within seven calendar days.
The rule is expected to result in $15 billion in savings over the next 10 years.
The proposed 2025 Medicare Physician Fee Schedule puts more financial pressure on providers.
The proposed 2025 Medicare Physician Fee Schedule puts more pressure on providers’ billing practices as well as their bottom line.
The Centers for Medicare and Medicaid Services (CMS) is poised to cut physician reimbursement by 2.8%, making it the fifth consecutive year of payment cuts. This, along with the anticipated 3.6% increase to practice costs due to inflation, does not bode well for revenues.
“The cost of healthcare is rising. There is clearly inflation in our economy, and having the reimbursement go down is absolutely the wrong direction,” Andy Anderson, executive vice president and chief medical and quality officer at RWJBarnabas Health, previously told HealthLeaders.
“The Physician Fee Schedule model is not sustainable if the reimbursement is going to be cut,” he added.
According to Anderson, the reimbursement needs to keep pace with inflation and healthcare costs.
The proposed rule will also tackle suspicious billing practices in Medicare’s Shared Savings Program, taking improper payments into account when revisiting the shared savings and shared losses calculations for accountable care organizations. Earlier this month, CMS proposed a rule examining the program’s billing activity after noting a significant increase in “highly suspect” claims.
In addition to the reimbursement cut and increase billing scrutiny, a health equity benchmark, similar to that used for the ACO REACH Model, would be adopted to incentivize organizations in more rural and underserved areas to participate.
CMS will accept public comments on the proposed 2025 PFS until September 9.
A new report by Manatt Health found that high-Medicaid hospitals were reimbursed up to 22% less than average hospitals.
Examining hospital data from Arkansas, Massachusetts, and Virgina, the report found that high-Medicaid hospitals received less overall reimbursement compared to the average hospitals within their respective states. The data of the report reaffirms previous studies claiming high-Medicaid hosptials are at a financial disadvantage when it comes to reimbursement.
Here are four HealthLeaders articles that emphasize the importance of efficient, and compliant, billing practices.
As the healthcare sector becomes more consumer focused, providers must make sure their billing practices are up to standard and patient friendly. Patients are responsible for paying more of their healthcare costs, there’s also the need to adopt different methods of payment to ensure cash flow.
Simon C. Mathews, MD and Martin A. Makary, MD, both professors at Johns Hopkins University, proposed five metrics providers can use to measure billing quality. These metrics include whether or not the provider offers itemized bills, provides pricing information to patients when asked, or if patients are able to speak with billing representatives about their bill.
“In the same way medical complication rates are collected for improvement purposes, and some are available to the public,” an article on the professors stated, “Metrics of billing quality could be used to create public accountability for US hospitals.”
There’s very little room for error when it comes to billing, and providers must be meticulous to ensure patients and insurers aren’t over or under paying for the care they receive. This article offers insights from HealthLeaders’ 2023 RevTech Exchange, one revenue cycle executive who suggests forming a team to oversee price transparency efforts, and how patient portal utilization can help with collections.
A study from the University of Southern California eased some concerns from federal agencies about predatory billing practices. Of a random sample of hospitals, one in 10 hospitals were found to employ predatory billing practices like interest-bearing payment plans.
Of all the providers surveyed, 87% offered interest-free payment plans.
In 2022, UAB Selma Family Medicine Center decided to adopt a new practice management system to improve billing inefficiencies. The center was struggling financially and administrative director Jeff Denney, saw the potential to for technology to help stabilize things.
With the implementation of the new practice management system, Selma Family Medicine saw a reduction in overall denials and days in accounts receivable, and an increase in their gross collection rate.
One health system has already filed a lawsuit, could it happen to you?
The Supreme Court’s reversal of the so-called Chevron case could impact many healthcare organizations’ revenue cycle operations.
Under the initial ruling made in 1984, judges would defer regulatory disputes to federal agency interpretations of a law. With the Supreme Court voting 6-3 to roll back this decision, the healthcare sector may see a wave of litigation around reimbursement and insurance eligibility.
On June 3, the same day the Chevron deference was overturned, Hackensack Meridian Health filed a lawsuit against the Centers for Medicare and Medicaid Services (CMS). The New Jersey-based health system claims the low reimbursement rates for Medicaid Disproportionate Share Hospital payments have cost three of its hospitals—University Medical Center, Jersey Shore University Medical Center, and Raritan Bay Medical Center—almost $600,000.
In a statement on the system’s website, health system leaders claim that CMS “deprived hospitals of some of reimbursements they are due and the data to check their reimbursement rates.”
“The lawsuit also challenges CMS’ refusal to enable hospitals to effectively employ the congressionally mandated procedures for obtaining relief from these underpayments,” the statement said.
In addition to increasing its DSH payments, as part of the lawsuit, the system wants the interpretation of a low-income patient to be broadened.
Hackensack Meridian Health’s lawsuit could be the first of many to challenge CMS’ reimbursement rules. With more flexibility around the interpretation of a law, providers have some leverage when beginning legal proceedings.
However, the odds aren’t entirely in their favor. Judges may opt to ignore federal agency interpretations of laws in favor of exercising independent judgement, which could mean inconsistent rulings for similar cases.
The overturning of the Chevron deference may make it harder for HHS’ future efforts—which could have a negative effect on public health. Proposed rules for minimum staffing requirements in nursing homes and the development of new programs are now prone to being challenged.
There's a rev tech solution for just about every revenue cycle process and even more vendors.
MaryAnn Murphy (Assistant Vice President of Revenue Cycle, Northwell Health) shares why her system prefers to use multiple vendors and Shawn McCardell (Associate Vice President of Revenue Cycle, Frederick Health) shares why his system opts to have all solutions come from one vendor.
