CMS is urged to take steps to increase MA plan oversight and address issues raised in an OIG report.
The American Hospital Association (AHA) is asking CMS to take "swift action" against Medicare Advantage organizations (MAOs) that are inappropriately and illegally restricting access to care.
In a penned letter, AHA urges for accountability in response to a report by the Office of the Inspector General (OIG) on MAOs, which found that an estimated 13% of prior authorization denials and 18% of payment denials should have been granted.
"Inappropriate and excessive denials for prior authorization and coverage of medically necessary services is a pervasive problem among certain plans in the MA program," AHA writes. "This results in delays in care, wasteful and potentially dangerous utilization of fail-first imaging and therapies, and other direct patient harms. In addition, they add financial burden and strain on the health care system through inappropriate payment denials and increased staffing and technology costs to comply with plan requirements."
To address the unnecessary denials, AHA recommends that CMS:
Work with Congress to streamline MA plan prior authorization processes: Support the Improving Seniors' Timely Access to Care Act of 2021, which streamlines prior authorization requirements under MA plans by making them "simpler and uniform."
Improve data and reporting: Have standardized reporting on metrics related to denials, appeals, and grievances, while auditing plans more often.
Conduct more frequent and targeted plan audits: Consider targeting audits to MA plans that have a history of unnecessary denials.
Establish provider complaint process: Establish a process for providers to submit complaints for suspected violations of bad actors.
Align traditional Medicare and MA medical necessity criteria: Prohibit MA plans from using medical necessity criteria that is more restrictive than traditional Medicare.
Enforce penalties for non-compliance: Exercise authority in situations in which MA plans fail to comply with rules to support compliance.
Provide clarify on the role of states in MA oversight: Give states clarity on the scope of their authority to hold MA plans accountable.
Reduce incentives for plans to skimp on coverage: Prohibit MA plans from claiming diagnoses for risk adjustment purposes if the plan has denied coverage for services provided to treat that diagnosis.
CMS receives comments on the next update to the dispute resolution process as part of the No Surprises Act.
The Medical Group Management Association (MGMA) has offered recommendations to improve the independent dispute resolution (IDR) portal ahead of its next update.
In a letter to CMS administrator Chiquita Brooks-LaSure, MGMA outlines three priority changes to the IDR portal, which is used to dispute out-of-network claims protected under the No Surprises Act.
The IDR process has been under constant scrutiny since the No Surprises Act went into effect on January 1, with several organizations filling lawsuits against the Department of Health and Human Services over the arbitration.
As such, MGMA, which represents more than 15,000 medical groups comprising of more than 350,000 physicians, believes streamlining the process and making it as efficient as possible would be greatly beneficial to providers.
"Practices are struggling with staffing shortages, additional administrative costs, inflation, the looming end of the public health emergency and resulting changes in healthcare policy, as well as implementing new processes and practices to comply with other requirements under the No Surprises Act," MGMA writes. "The support of a more robust IDR Portal would be especially impactful for smaller and rural practices, that are unable to quickly adapt to changing policies and less financially resilient."
MGMA's three priority recommendations are:
Enabling communication between disputing parties and the selected IDR entity via the platform.
Providing the ability to edit an application after entering information.
Updating specific form field requirements.
Communication via the IDR portal
MGMA is asking CMS to develop a platform with the capability to allow all parties engaged in a dispute to communication through the portal during the resolution process.
As it stands, a party must download the submitted IDR claim and email it to the non-initiating party, which can burden smaller practices to manually track claims and administratively challenge larger practices with higher volumes, according to MGMA.
"An interactive platform that tracks existing disputes, incorporates a clear timeline for the required process, and serves as a communication platform among all involved parties is critical to reduce the current burden for disputing parties and ensure the IDR process is accessible to all practices," MGMA states.
Editing existing applications
To allow practices to return to an IDR form later, MGMA wants CMS to add in the function of saving an application that can be accessed through a practice login.
In addition, MGMA recommends that all redundant information throughout the IDR claim—such as dates and contact information—be auto populated, while creating a function that allows for the editing and viewing of saved line items.
Updating form fields
Lastly, MGMA asks that CMS adjusts what information is required to better reflect the different information providers and payers have available to them.
Specifically, this means incorporating or altering the following form fields:
Adding an identifier field that providers and insurers can leverage to ensure both parties understand which services are being disputed.
Making the form field to input the qualified payment amount optional for providers and facilities.
Making the form field for insurer type optional for providers submitting an IDR initiation.
Additional recommendations
Along with the recommended priority changes, MGMA suggests that CMS also create a timeline of the IDR process, provide additional education and make adjustments to the batched submission process, and continue to engage with providers and health plans on best practices to submit claims.
A study finds a disparity in healthcare utilization between low and high-salary employees with high-deductible plans.
Income determines healthcare utilization and spending when it comes to high-deductible health plans (HDHPs), according to a study in the American Journal of Managed Care.
Employees in HDHPs earning less than $75,000 annually have lower rates of usage and spending on preventative care, while having higher rates of acute care utilization, the study found.
"High-deductible health plans shift the cost of care to plan holders," the authors stated. "This can lead to reduced utilization of care. High-deductible health plans have potential negative consequences for individuals earning a low salary."
Researchers used commercial medical and pharmacy claims and administrative data from a large national employer between 2014 and 2018. The employer operates in the healthcare industry and has more than 60,000 employees—the study sample includes utilization patterns for 33,470 employees.
Other highlights of the study include:
The lowest-salary employees—earning less than $50,000 per year—had 40% higher total medical spending on emergency department care, but less spending on outpatient care and prescription drugs.
Low-salary employees had higher quarterly average spending on inpatient ($500) and emergency department visits ($156) than those in higher-salary groups.
Employees earning more than $100,000 annually were more likely to seek outpatient care and prescriptions compared to those earning $75,000 to $100,000.
Higher-salary employees were healthier relative to lower-salary employees, with a smaller proportion have three or more comorbidities on the Elixhauser Index.
"The utilization and cost results indicate that lower-salary employees utilize care differently than higher-salary employees in a way that suggests suboptimal care-seeking behavior," the authors state.
The study is another example of how social determinants of health contribute to disparities and inequalities in healthcare spending and outcomes.
While HDHPs tend to save employees on out-of-pocket premiums, they in turn expose them to the full cost of care, which can discourage seeking out preventable services.
"This pattern of health care utilization may lead to delayed diagnosis of health conditions and potentially miss the window and benefits of early diagnosis or prevention," the authors conclude.
The California health system's new CFO gives insight on his strategic approach to maneuvering a challenging market.
There have been easier times than now to take over the finances of a hospital or health system.
While the COVID-19 pandemic is nowhere near its peak, the ramifications of the variants are still being felt. Between that and broader economic issues, financial decision makers in the healthcare industry have their hands full.
New Scripps Health CFO and corporate senior vice president Brett Tande is embracing the challenge, making the move from Cottage Health, where he served as CFO and senior vice president of finance since 2016, to the San Diego-based four-hospital health system.
Since taking over on March 28, Tande is responsible for financial planning and financial operations, which includes corporate finance, treasury, hospital and ambulatory financial operations, real estate operations, payroll, revenue cycle and all affiliated functions.
HealthLeaders had the opportunity to speak with Tande about his new role, the current financial trends in healthcare, and how to navigate a turbulent landscape.
This conversation has been edited for clarity and brevity.
HealthLeaders: How has the experience been so far of rolling up your sleeves and diving into the work?
Brett Tande: Scripps is not unlike every other healthcare organization coming out of omicron. We've seen volumes be tough. There's been a lot of reports out there about operating margins within healthcare. There have been organizations that have been losing a little bit of money. The last couple of years have been a lot different, say, than the two decades before that in terms of hospital operations. A lot of folks were able to groove into an operating margin that was, lets call it 3%, and you can make that work. And we're finding ourselves in a fiscal year, everyone is, that is a little bit upended.
Of course, very few people probably budgeted omicron, very few people budgeted some of the inflationary pressures that we're seeing today. And as we think forward, it is a different planning environment than we've had, I would argue since the early 1980s, maybe a little bit in the late 90s with the Balanced Budget Act during the Clinton administration.
In California, we have seismic compliance law. Scripps is one of those organizations that has to comply with that. We've got rebuilding projects that are under way at La Jolla. We're going to soon be starting that at our Encinitas campus. And we have those downtown at Scripps Mercy and at Scripps Chula Vista. So those capital programs could require as much as two billion in capital expenditure over the next five to 10 years. So we're going to have to make sure that we plan accordingly and find ways to maintain quality, to continue to grow, to maintain a bottom line that's in the black and fund these programs to make sure that we can continue providing the high level of care that we have in the past.
HL: Has there been one primary area of focus for you since you've joined?
Tande: The organization has done a lot of great planning, and that's going to have to continue because the plans we made, or for that matter any organization made, call it five or six months ago, you can take that and toss it aside. Given there are certain variables or assumptions you make related to volume, related to inflation that can dramatically change that. So whether it's a short-term financial plan or a long-term financial plan, a lot of those are going to have to get refreshed with current market thinking, the course corrections that may be necessary there and start to plan for those.
And there's ways to do that. Whether it's in revenue cycle, I would say there's always opportunity to make sure that we're coding things correctly. We don't want to get paid a penny more or a penny less than what we think should be paid given the care that was delivered to patients. We want to make sure that we're being smart with our operating expenses.
Recruitment has been a challenge, and so a lot of organizations have filled that in with travelers. We have to make sure we get down to not only how we recruit folks, but that we minimize the premium that's being paid to the extent that's possible. And that we're procuring supplies as cost effectively as we can.
HL: What do you identify as the biggest pain points for healthcare CFOs and decision makers right now, as well as going forward?
Tande: It does tend to be the case that healthcare systems' revenue on a per patient basis is perhaps a little bit more fixed than you would see on the expense side. So as an example, if we're short-staffed and revenue cycle are on the clinical side and need to supplement that, there are ways to do that with short-term staffing solutions. And that usually comes at a premium so you can see that expense pop pretty quickly. You won't necessarily see your revenue be as flexible to that as well.
The current pressure right now is variable expenses that are going to react to inflation, and we are going to see increases there. That's not how healthcare reimbursement works, right? Medicare is not going to be making those similar movements and you won't see that with commercial contracts either. So that is going to be a challenge and trying to modulate those increases with the timing there to make sure that it works for various health care systems. Those with bigger balance sheets are going to be able to weather that turbulence a bit better than perhaps those that don't.
The last couple of years, there have been other challenges to come up as well. Cybersecurity has been increasingly near the top of a lot of risks, to organizations to spend. If you would compare that five years ago to what it is today and the risks that organizations face on that front, it's a lot different. That won't be ebbing at any point soon.
HL: What are there some of the specific strategies that could be used to combat these challenges?
Tande: I always tend to view revenue cycles as being one of those, making sure that we're getting accurate bills put together and out the door as quickly as we can. Responding to inquiries from payers, having timely follow-ups. In healthcare, a lot of times, it's focusing on the rules and regulations on every front.
To the extent that we can make sure that we understand those, follow those rules, and make sure we're as precise as possible and efficient on what I'll call the back office, particularly from a financial perspective. The clinical teams are always doing a great job and to the extent that we can be efficient and precise on the back office of it, and help deliver the organization to that positive bottom line, that's always helpful.
The payer giant is accused of forcing physician groups out of network to lure them to its subsidiary, Optum.
UnitedHealth is the target of a lawsuit by Envision Healthcare and several other physician practices, who claim the country's largest health insurer engages in a nationwide practice of low reimbursement rates for providers to force them out of network.
In doing so, UnitedHealth is allegedly driving physicians to its subsidiary, Optum, and paying providers at rates lower than the company offered for in-network.
Once UnitedHealth forces providers out of network, it allegedly pays the provider less than its billed charges and then charges the patient's plan a commission or surcharge for the savings. UnitedHealth, however, has no intention of paying the billed charges for out-of-network services and denies entitlement to payment for those charges.
Though Envision and the other medical and anaesthesia practices filed the case in Broward County, Florida, the plaintiffs—who are seeking millions of dollars in underpayments— claim UnitedHealth implements this scheme across the country.
Aside from affecting frontline healthcare workers, UnitedHealth's actions are also resulting in patients paying more for care while having less access to their providers of choice, according to the lawsuit.
"While Envision providers participated nationwide with United for years and made significant rate and other contract concessions to maintain that status, United put profits ahead of patients and 'offered' to allow Envision to remain in-network only if Envision providers agreed to take significantly reduced reimbursement that United knew Envision providers could not accept, forcing Envision out of network as part of a scheme to inflate United's profits and grow its Optum business," the lawsuit states.
Envision accuses UnitedHealth of giving preferential treatment to Optum, which isn't subjected to the same reimbursement rates as other provider groups, resulting in UnitedHealth using its own business to subsidize competition.
The lawsuit highlights an example in 2018 when UnitedHealth directed Optum to submit a "bogus bid" for Envision's ambulatory services unit to gather sensitive information about Envision's business for UnitedHealth's negotiations with the company at the time.
Ultimately, UnitedHealth allegedly wanted to steer Envision's providers out of network so it "could acquire Envision at artificially depressed values."
The lawsuit states: "United's pattern of misconduct has reportedly earned it the nickname 'evil empire' among some practitioners, and it is not difficult to see why."
A report by the Office of Inspector General (OIG) raises concerns about organizations prioritizing profits over patient access to care.
Medicare Advantage organizations (MAOs) often delay or deny services for medically necessary care, even when prior authorization requests meet coverage rules, according to a report by the OIG.
A concern with the Medicare Advantage payment model is the potential incentive for organizations to deny services in an attempt to increase profits, the study states. As more and more people enroll in Medicare Advantage, the issue of inappropriate prior authorization denials can have a widespread effect.
"Denied requests that meet Medicare coverage rules may prevent or delay beneficiaries from receiving medically necessary care and can burden providers," the report said. "Although some of the denials that we reviewed were ultimately reversed by the MAOs, avoidable delays and extra steps create friction in the program and may create an administrative burden for beneficiaries, providers, and MAOs."
After reviewing a random sample of 250 prior authorization denials and 250 payment denials issued by 15 of the largest MAOs in 2019, the OIG found that 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.
For the prior authorization denials, the study identified two common causes: MAOs used clinical criteria that are not contained in Medicare coverage rules, and MAOs indicated that some prior authorization requests did not have enough documentation to support approval—though researchers of the report found medical records were sufficient for services.
For the payment denials, the study concluded that most were caused by human error during manual claims processing reviews and system processing errors.
The report also found that MAOs reversed some of the prior authorization and payment denials, often because of patient or provider appeals. In some cases, MAOs identified their own error.
To ensure that MAOs aren't unnecessarily denying timely access to care, the OIG recommends that CMS:
Issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews
Update its audit protocols to address the identified issues
Direct MAOs to take additional steps to identify and address vulnerabilities that can lead to manual review errors and system errors
Better Medicare Alliance, the research and advocacy organization supporting Medicare Advantage, responded to the OIG report by reiterating the benefits of the plan and the importance of prior authorization.
"While this study represents only a narrow sample of Medicare Advantage beneficiaries and polling data shows that less than half of Medicare Advantage beneficiaries have ever experienced a prior authorization themselves, Better Medicare Alliance has strongly supported efforts to streamline and simplify the prior authorization process for patients and providers," Mary Beth Donahue, president and CEO of Better Medicare Alliance, said in a statement. "We look forward to our continued work with policymakers to strengthen Medicare Advantage for today's seniors and tomorrow's enrollees."
The American Hospital Association, meanwhile, said the findings "confirm—and provide data and real-life examples—of the harm that certain commercial insurer policies have on patients and the providers that care for them. The AHA continues to push back forcefully against MA plan policies that restrict or delay patient access to care, and add cost and burden to the health care system, while also contributing to health care worker burnout. We’ll continue to make the case that these commercial health plan abuses must be addressed to protect patients' health and ensure that medical professionals—not the insurance industry—are making the key clinical decisions in patient care."
The health company finalized the move to add the long-term care plan under its umbrella.
Anthem announced the completed acquisition of Integra Managed Care today, with the long-term care plan joining the health company's government business division.
New York-based Integra Managed Care is designed to help adults living with long-term disabilities and needs live independently in their own home. Operating in the five boroughs of New York, Nassau, Suffolk, and Westchester, Integra serves over 40,000 Medicaid members through a care management team that includes a nurse, social worker, and coordinator, according to the announcement.
"We're pleased to complete this acquisition and work alongside our new colleagues as we continue to grow our Medicaid business and enhance the healthcare experience for all of our members," Felicia Norwood, executive vice president of Anthem’s government business division, said in a statement. "Anthem and Integra's shared commitment to deliver high quality, comprehensive whole-healthcare across communities throughout New York ensures that our members will continue to receive the care and support services that they have come to expect."
Anthem's plan to acquire Integra Managed Care was initially announced in November 2021. The financial terms of the completed transaction were not disclosed.
In its first quarter (Q1) 2022 earnings call, Anthem reported organic growth across business lines, including the Medicaid side where its acquisitions of MMM and Paramount Advantage aided increases.
The result was an operating gain in the government business segment of $789 million in Q1, an increase of $311 million from Q1 of 2021.
The addition of Integra Managed Care will further bolster Anthem's Medicaid segment as the company continues to transition from a traditional payer. The rebrand as Elevance Health also reflects Anthem's desire to reposition in the healthcare business.
"Our strong momentum across all our businesses is evidence that our transformation to become a lifetime, trusted health partner continues to drive our growth and accelerate our capabilities focused on whole person health," Anthem president and CEO Gail Boudreaux said in the earnings call press release.
LifeNet claims the qualifying payment amount is still being applied to air ambulances despite a recent ruling over the regulation's billing resolution process.
Air ambulance provider LifeNet is suing the federal government over the qualifying payment amount (QPA) portion of the No Surprises Act.
The Texas-based company is the latest to file a lawsuit against the Department of Health and Human Services(HHS) over the rule, which protects patients from surprise bills when getting treatment from out-of-network providers.
LifeNet claims HHS is still applying the QPA to air ambulance providers despite the Eastern District of Texas federal court recently ruling with the Texas Medical Association (TMA) in a lawsuit against the rule's independent dispute resolution (IDR) process.
The IDR process allows providers to require minimum payment for services from the patient's insurer based on the QPA, which is the median in-network rate. However, the TMA and other providers have argued that the QPA is presumptive and unfairly caps the amount they can charge.
Though that part of the rule was struck down in the TMA lawsuit, LifeNet claims air ambulance providers are still being held to the same requirement and asks the court to vacate that part as it did in the previous case.
"Applying the QPA presumption only to air ambulance IDRs is arbitrary, irrational, and deviates from the statute," the lawsuit states. "The statutory text indicates that the QPA should be used in the same way in air ambulance IDRs as in all other IDRs, i.e., as one factor among many to be considered."
LifeNet operates from three airbases and transports patients in Texas, Arkansas, and Louisiana, according to the lawsuit. It claims it operated many emergency flights as an out-of-network provider transporting patients who were insured by a commercial health plan or insurer in 2021 and will continue to do so this year.
Air ambulance charges are known to be notoriously high and costly for patients who are short of options in emergencies. According to a study by Health Affairs, air ambulance charges were four to 10 times higher than what Medicare paid for the same services in 2016. The median charge ratios for the services increased by 46% to 61% from 2012-16.
The American Hospital Association has supported "addressing air ambulances in a federal solution to end surprise medical bills, but has serious concerns with using a benchmark rate to resolve payments between health plans and out-of-network providers."
Revenue cycle leaders are concerned about the efficacy of the regulation and the resources required to implement it.
Many revenue cycle leaders believe the price transparency rule is too confusing and expensive to achieve its intended purpose, according to a KLAS report.
While the respondents in [[{"fid":"12585","view_mode":"default","fields":{"format":"default"},"link_text":"the report","type":"media","field_deltas":{"1":{"format":"default"}},"attributes":{"class":"file-default media-element","data-delta":"1"}}]] feel price transparency allows for more patient empowerment and fights the consumerization of healthcare, they doubt the efficacy of the regulation.
CMS' price transparency rule went into effect January 1, 2021, and requires each hospital to provide pricing information online for at least 300 different shoppable services.
To gauge how hospitals are responding to the regulation and their plans with price transparency, KLAS interviewed 66 revenue cycle leaders over the past year.
Though nearly half of the respondents say that price transparency will significantly or moderately improve patient financial outcomes, over half who answered moderate improvement believe the existing regulation needs additional clarification and federal guidance.
"There are concerns about cost, data accuracy, and patient adoption of pricing tools; some respondents worry about patients’ ability to understand the displayed pricing data, and today, most patients are unaware online pricing information exists or are unsure of how to interpret it," the authors of the report state.
Meanwhile, 26 respondents believe the rule will have no improvement on patient financial outcomes, and seven feel it will cause moderate or significant deterioration.
The two aspects of the regulation that many respondents are highly dissatisfied with are the requirement to use machine-readable files containing pricing information, and the requirement to broadly publish online a master list of rates.
To implement and sustain price transparency compliance, most respondents say significant resource investment is necessary. However, finding resources can be difficult as organizations weigh the financial burden of investing in a regulation that doesn't provide a return on investment, according to the report.
"This lack of investment can be problematic since knowledgeable and experienced resources are required to keep the pricing information accurate and compliant," the authors say. "Over the next year, respondents expect they will need to continually invest in people, processes, and technology to meet price transparency mandates."
The report states that hospitals are more likely to use third-party solutions rather than their electronic medical record (EMR) vendor, with 36% of respondents saying third-party vendors are best positioned to lead in price transparency.
Though satisfaction rates are higher with third parties, some respondents who currently use a third party say they will consider moving to their EMR vendor's platform to consolidate systems.
Ultimately, the report states that CMS' regulation is confusing and organizations are unclear on how to approach it. While some respondents say their organizations have brought in consulting groups, and other say they have educated their employees about the rule, the number and types of resources required is still uncertain.
"Many organizations are not investing beyond the bare minimum requirements, and they don't plan to do more until there is further clarity around the regulations and the expectations going forward," the authors conclude.
The lawsuit was filed in the U.S. District Court of the Central District of California against HHS and HHS secretary Xavier Becerra, who are alleged of using different definitions for "entitled" in the "days entitled to benefits under part A"—one of the factors included in the DSH payment adjustment calculation.
According to the lawsuit, this results in lower payments to the hospitals, and "is the epitome of arbitrary and capricious agency action and must be reversed."
The disproportionate patient percentage is calculated as the sum of two fractions, the social security income (SSI) fraction and the Medicaid fraction, according to the lawsuit.
The numerator of the Medicaid fraction consists of days of patients who were both eligible for medical assistance or Medicaid, and not entitled to benefits under Part A or Medicare. The denominator for the Medicaid fraction is the hospital's total patient days for the period.
The SSI fraction consists of the days for patients who were entitled to benefits under Part A of Medicare. The denominator includes all Part A days, and the numerator includes only those Part A days for patients who are also entitled to SSI benefits.
The hospitals allege HHS used different definitions of "entitled" depending on which side of the fraction was being considered.
Along with invalidating HHS' policy, the hospitals want the department to recalculate the DSH and make prompt payment of any additional amount owed, plus interest.
The lawsuit concludes that "because the purpose of the DSH adjustment is to provide additional payment to hospitals that incur higher costs in treating low-income patients, an agency interpretation that does not take into account SSI payment status codes associated with eligible SSI individuals is also unreasonably and impermissibly inconsistent with the legislative history and purpose of the Medicare DSH Statute."
