Hospitals are facing an additional payment cut to 2% slated for July 1 after a 1% cut took effect in April.
The American Hospital Association (AHA) has written a letter to Congress in the final weeks before additional Medicare sequester cuts are scheduled to go into effect, urging decision makers to provide financial relief as hospitals continue to deal with effects of the pandemic.
After a bill was signed in December 2021 to halt the sequestered cuts, it resumed in April with a 1% cut, which will increase to 2% on July 1 without action from Congress.
In a letter to majority and minority leaders, AHA executive vice president Stacey Hughes expresses concern over the ramifications of the additional cuts, citing expenses for labor, drugs, and supplies, as well as inflation in the economy as significant challenges facing hospitals.
"Hospitals and health systems need financial relief from this pending cut in order to maintain access to care for the patients and communities they serve, while they continue to face dire financial and workforce pressures brought on by the COVID-19 pandemic," Hughes writes.
The letter highlights a poor first quarter of the year financially for hospitals and health systems, as evidenced by operating margins declining 38.1% from March to April.
Hughes also cites how dependent many payments to hospitals and health systems are on Medicare and Medicaid, which are nonnegotiable, fixed reimbursement rates. According to AHA, 94% of hospitals have 50% or more of their inpatient days paid by Medicare or Medicaid, and more than 75% of hospitals have 67% or more Medicare or Medicaid inpatient days.
"Unlike other sectors of the economy, hospitals and health systems cannot deflect these increased costs," Hughes states.
"These fixed costs don’t allow hospitals to absorb or deflect the impact of the historic inflation levels."
After already dealing with the 1% sequester cut that took effect in April, AHA estimates hospitals will lose at least $3 billion by the end of the year if the cut increases to 2% in July.
A survey reveals more than 80% of providers support delaying the requirement until there is a standardized data exchange process.
The convening provider requirements in the No Surprises Act pose challenges for providers, who would rather delay the obligation until data exchange standards are in place, according to a survey by the Workgroup for Electronic Data Interchange (WEDI).
Under the No Surprises Act, a convening provider or facility is responsible for providing a good faith estimate (GFE) to the uninsured patient, which includes contacting all other providers or facilities that may be involved with the patient's service to obtain a GFE for their portion.
However, there is currently no standardized data exchange process between the convening provider and co-providers, with respondents in the WEDI survey saying that absence creates significant burden on providers and facilities.
Over 80% of providers surveyed (83.1%) say they are somewhat or strongly in support of the government delaying the requirement for convening providers/facilities to obtain a GFE from any co-provider/facility until there is a standardized data exchange process in place. Only 7% are somewhat or strongly opposed, while 4.4% are neutral.
"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. "Even though the government plans to end enforcement discretion for self-pay patients at the end of this year, currently there is no standard format or established workflow to transmit data to or from the convenor."
The survey was conducted in May and received a total of 273 responses from small providers/clinics (39.6%), large provider clinics (11.5%), health systems (10.4%), medium sized clinics (8.5%), hospitals (2.2%), and other provider types.
Respondents gauge the difficulties of following the convening provider requirements, with 65.8% saying it would be very difficult or difficult for providers and facilities to determine who should be the convening provider. Meanwhile, 11.7% indicate it would be easy or very easy.
An overwhelming 89.3% say it would be very difficult or difficult for the convening provider to identify all appropriate co-providers for the specific medical service, with only 4.8% believing it would be easy or very easy.
An even stronger majority (91.5%) say it would be very difficult or difficult for convening providers to collect GFEs from co-providers for the specific medical service, while just 1.1% indicate it would be easy or very easy.
Finally, 89% state it would be very difficult or difficult for the convening provider to complete the GFE process for a specific medical service and provide it to the patient within the required three business days of being requested or the service being scheduled. Conversely, 2.6% say it would be easy or very easy.
"The survey results suggest providers and facilities will face significant challenges just identifying who the convenor should be, who the appropriate co-providers/facilities should be, and how to collect GFEs from these co-providers/facilities," Stellar said.
"Survey respondents were adamant that meeting the legislation's three-day deadline to get the GFE to the patient would be difficult or very difficult. Not surprising, respondents expressed strong support for the government delaying the convenor requirement until a standardized process to exchange data between convening providers and co-providers/co-facilities is established."
Findings in a recent survey of beneficiaries push back on criticism of the service's administration.
While Medicare Advantage (MA) has come under scrutiny for administration issues, members of the service are overwhelmingly satisfied with their coverage, according to a survey by eHealth.
The licensed broker of Medicare insurance plans surveyed 2,848 MA enrollees in May and found that nearly nine in 10 members (88%) are happy with their plan.
Nearly two thirds (63%) say they are "very satisfied" with their MA plan, while 25% say they are "somewhat satisfied", 7% say they are neither satisfied nor dissatisfied, and 6% express dissatisfaction.
Among those that are dissatisfied with their plan, 29% cite lack of coverage for their preferred doctors, hospitals, or pharmacies. Another 25% cite out-of-pocket costs, while 22% take issue with their prescription drug coverage.
Still, 86% of enrollees would recommend it to family and friends in need of Medicare coverage, with only 3% saying they would not. More than half of members (51%) like their plan because it covers their preferred doctors, hospitals, and pharmacies, while 49% cite affordable monthly premiums, and another 49% say it covers their prescriptions drugs at a price they can afford.
Nearly half of enrollees (46%) say they chose MA because they wanted all their Medicare benefits wrapped up in a single plan.
The survey comes on the heels of a report by the Office of Inspector General (OIG) that found Medicare Advantage organizations (MAOs) often unnecessarily deny prior authorizations.
The OIG reported that 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.
The bipartisan legislation, which has gained the support of several provider and patient advocacy groups, as well as Better Medicare Alliance, would reform prior authorization processes for MA plans.
Respondents in the eHealth survey also detail their experience with prior authorization denials, with 13% saying they had a claim or request denied. Only 3% say they were denied coverage for a specific prescription drug, while 2% were denied coverage for visits with specific doctors, and 1% were denied coverage for inpatient hospital care. The survey notes that many of the members that experienced denials were declined for services like dental and vision care, which aren't typically covered by Medicare.
Of those who had a claim or request denied, 43% say they were informed it was excluded from coverage under their plan. An additional 15% say their coverage was denied because the service or supply was determined to be unnecessary. Another 15% say that after their claim or request was initially denied, it was eventually paid by their insurer.
"This expansive survey of more than 2,800 Medicare Advantage enrollees confirms what we already know: Medicare Advantage remains highly popular among the audience that matters most – beneficiaries – despite misleading attacks from outside groups that seek to undercut the care and coverage that more than 28 million Americans rely on," Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said in a statement.
"Further, this survey reaffirms that, overwhelmingly, prior authorization is applied appropriately and selectively as a clinical tool to coordinate care for beneficiaries."
The hospitals, which are part of the same health system, failed to comply with CMS requirements by not making public their list of standard charges for services in a machine-readable file and single digital file.
CMS first issued warnings last year to Northside Hospital Atlanta in April and Northside Hospital Cherokee in May before completing a review of the facilities in September 2021.
The civil monetary penalties were calculated as $300 per day of noncompliance, combined with the size of the hospital based on the number of beds.
The hospitals are required to pay the fines in full within 60 days from the date of the notice or can request an appeal hearing before HHS.
"CMS expects hospitals to comply with the Hospital Price Transparency regulations that require providing clear, accessible pricing information online about the items and services they provide," Meena Seshamani, CMS deputy administrator and director of the Center for Medicare, said in a statement.
"This enforcement action affirms the Biden-Harris Administration's commitment to making health care pricing information accessible to people across the country and we are committed to ensuring that consumers have the information they need to make fully informed decisions regarding their healthcare."
Northside Hospital Atlanta and Northside Hospital Cherokee were only two of hundreds of facilities across the country to receive warning letters from CMS as of early June. A total of 352 warnings have been issued, including 157 cases requiring a request for a corrective action plan and 171 hospitals who addressed their issues to have their case closed.
A recent study by JAMAevaluated by the price transparency rule six to nine months after it took effect, finding that hospitals in rural, more concentrated markets with less competition were less likely to comply.
Of the 5,239 hospitals researched by the study, 51% (2,668) didn't have a machine-readable file or a shoppable display.
Meanwhile, revenue cycle leaders expressed their concern that the price transparency rule is too confusing and expensive to achieve its intended purpose in an April report by KLAS.
Most of the respondents in the report said significant resource investment is necessary to implement and sustain price transparency compliance. 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.
"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 KLAS authors wrote.
The drop followed the decline in use of healthcare services during the early stages of the COVID-19 pandemic.
For the first time in more than two decades, traditional Medicare spending fell in 2020 in the wake of COVID-19's arrival, according to a Kaiser Family Foundation report.
As healthcare services experienced a significant decline in the early months of the pandemic, the study found that spending among traditional Medicare beneficiaries on Part A and Part B services in decreased 5.8% from 2019 to 2020 ($369.5 billion to $348 billion).
Medicare spending per beneficiary fell 3.6% to $10,739 per person, compared to $11,142 in 2019.
Total Medicare spending increased, however, due to federal payments per Medicare Advantage (MA) enrolee rising 6.9%, according to the analysis, which used data from CMS. MA payments did not reflect the lower utilization of 2020 as they were determined in mid-2019 before the pandemic.
"Understanding how spending and utilization changed across different types of services in 2020 is useful for identifying areas where beneficiaries delayed or skipped care in response to the pandemic, which could have longer-term implications for health outcomes and Medicare spending," the authors of the study stated.
Only three types of Medicare services saw increases in usage in 2020: hospice, dialysis, and Part B drugs. The increase was by less than one percentage point though.
Meanwhile, the largest drops in usage were for imaging services, which fell 5.5%, followed by outpatient hospital services, which declined 4.8%.
Spending for most services decreased, ranging from 0.1% less for durable medical equipment to 13.1% less for procedures. Only spending on skilled nursing facilities, Part B drugs, and hospice increased from 2019.
It's unclear to what extent the decrease in usage affected Medicare beneficiaries, but the authors write that "it is possible that the decline in use could have negative implications for future health if people delayed routine care and screenings or were unable to schedule procedures in a timely manner, missing the opportunity for early diagnosis and treatment.
"The drop in utilization also has the potential to lead to higher future health care spending if more health care services are required or if treatments are more intensive."
While 2020 marked the first time Medicare spending declined since 1999, the study attributes the aberration to the pandemic and projects spending to rebound and continue growing.
The authors conclude: "There is a question of whether any of the changes in spending and use will be sustained, though the expectation is that these were most likely one-time, or otherwise short-lived, changes."
A survey from AHIP and the Blue Cross Blue Shield Association (BCBSA) finds that the law protected millions of patients immediately after going into effect.
In its first two months as a law, the No Surprises Act protected patients from more than two million surprises bills, according to a survey from AHIP and BCBSA.
After being signed into law in December 2020, the No Surprises Act went into effect on January 1, 2022, with the purpose of ending surprise medical bills for out-of-network services.
"The No Surprises Act ended the practice of surprise medical billing in most circumstances, providing relief for millions of patients who faced surprise medical bills they did not expect at prices they could not afford," said Matt Eyles, AHIP president and CEO. "Health insurance providers applaud the Administration and Congress for taking this important step. But more work needs to be done to ensure a broken bone doesn't break the bank."
The survey conducted by AHIP and BCBSA examined the number of claims that were eligible for dispute under the No Surprises Act in the first two months of 2022. Of the 83 commercial health plans surveyed, 31 plans—representing 54% of the total commercial market—responded.
Eligible claims included emergency services by an out-of-network provider and non-emergency services by an out-of-network provider at an in-network facility.
The research found 600,000 claims, or 0.23% of the plans' responses, eligible for protection under the No Surprises Act.
Taking into account delays in claims processing, the researchers then calculated the share of eligible claims per enrollee before multiplying that number by the 2020 Census estimate of the total number of commercial enrollees (213 million).
The result was the final estimate of more than two million surprises bills avoided across all commercially insured patients, which would project to over 12 million surprises bills prevented for all of 2022.
AHIP and BCBSA note that even if only a fraction of these claims are ultimately disputed through the independent dispute resolution process, it would still greatly exceed the estimate of 17,000 annual claims by the government.
"There is no room for surprise medical bills in a health care system that puts people first," said Kim Keck, BCBSA president and CEO. "As recently as last year, an emergency visit to the hospital may have left patients on the hook for steep, surprise medical bills. The No Surprises Act has not only put an end to this loophole, but it has provided undeniable financial protection to millions of Americans."
The American Hospital Association (AHA) once again responds to a CMS' proposed rule with concern about the increased costs hospitals are facing during the pandemic.
AHA is urging CMS to reconsider the payment rate increase proposed in the inpatient rehabilitation facility prospective payment system (IRFPPS) proposed rule for fiscal year (FY) 2023. The AHA says the rate increase is not enough, pointing to increased hospital expenses during the pandemic as a reason for adjustment.
CMS proposed the FY 2023 IRFPPS rule in March, which includes a net increase in payments of 2% relative to FY 2022, or $170 million. This reflects a 3.2% market-basket update, a 0.4% cut for productivity, and a 0.8% decrease related in high-cost outlier payments.
This, the AHA says, is not a large enough increase to account for the rise in hospital costs across labor, drugs, and supplies during the pandemic, as well as inflationary pressures.
The letter cites labor expenses per patient rising 19.1% through 2021, compared to pre-pandemic levels in 2019, while January 2022 labor expenses per adjusted discharge were 52% higher than January 2020.
"We are deeply concerned about increased costs to hospitals that are not reflected in the market basket adjustment and ask CMS to discuss in the final rule how the agency will account for these increased costs," AHA writes.
"We also are concerned about the reduction for productivity and ask CMS in the final rule to further elaborate on the specific productivity gains that are the basis for the proposed 0.4% productivity offset to the market basket, as this does not align with hospitals' [public health emergency] experiences related to actual losses in productivity during the pandemic."
AHA also expresses concern over CMS' methodology in determining the increase in the high-cost outlier threshold. The proposed rule would result in a 37% increase, from $9,491 in FY 2022 to $13,038 in FY 2023. Without the significant change, outlier payments in FY 2023 would be 3.8 of total payments, based on CMS analysis of FY 2021 claims.
On CMS' request for information on the IRF transfer policy, which is meant to disincentivize early discharges from IRFs, AHA advises CMS to evaluate its data before expanding the policy.
As far as the IRF Quality Reporting Program, the AHA requests that CMS move back the proposed date of when IRF providers would have to collect patient assessment data upon admission, from October 1, 2023, to October 1, 2024. According to AHA, this adjustment would relieve some of the proposal's burden on providers by giving them time to prepare.
One in four finance leaders needs to hire 20-plus employees to fully staff their revenue cycle departments, an AKASA survey finds.
Workforce shortages have been a major challenge for healthcare leaders of late and revenue cycle in particular is in serious need of staffing.
More than 57% of health systems and hospitals have more than 100 open roles to fill, with one in four finance leaders needing to hire more than 20-plus employees to fully staff their revenue cycle departments, according to a recent survey by AKASA.
The developer of AI for healthcare operations surveyed 411 chief financial officers and revenue cycle leaders at hospitals and health systems across the country.
"For hospitals, lack of staff within the revenue cycle means you aren’t getting paid," said Amy Raymond, VP of revenue cycle operations at AKASA. "To attract talent, healthcare financial leaders should shift their mindsets: this means relaxing job requirements like years of experience or offer intensive training to new hires with limited background in healthcare finance.
"The second piece is retention: leaders should be investing and upskilling their staff to provide more rewarding work and ensure compensation levels are competitive."
Respondents to the survey quantified the current size of their revenue cycle team, with 64.1% answering 30-plus employees, 8.3% saying 21-30, 12.7% saying 11-20, and 14.9% saying 1-10.
In terms of vacancies within the team, 60% responding 1-10, 19% saying 30-plus, 14% saying 11-20, and 7% saying 21-30.
Automation has been a clear solution to not only alleviating staffing issues in revenue cycle, but making the administrative process more efficient overall.
While, according to AKASA, the use of automation in revenue cycle operations increased 12% in 2021 from 66% to 78%, there remains a demand for further implementation to relieve the burden on staff.
"We've had the same discussion in the revenue cycle for the past 25 years: how do we reduce churn, increase productivity, or drive down denials?" asked Raymond. "Now, the discussion is and will continue to be around automation and being more process-oriented. How do we incorporate automation? What should change management around that look like? Where do we put our people and how do we manage them around automation?"
"We should be watching automation do everything we need it to do, embracing the fact that we can't meet modern demands with humans alone. We haven’t significantly decreased cost-to-collect in 10 years, so something has to change. We need to think about all those same 25-year-old conversations and how automation fits into them."
A physician survey by the American Medical Association (AMA) reveals the administrative burden still falls on providers.
Health insurers are not holding up their end of the bargain on mutually accepted prior authorization reforms, according to a new physician survey by the AMA.
Findings from the survey, which compiles the experiences of 1,000 physicians from December 2021, show that payers are not upholding a 2018 voluntary agreement between them, the AMA and other national organizations representing pharmacists, medical groups, and hospitals.
The consensus statement highlighted five key prior authorization reforms to increase efficiency, promote access, and reduce administrative burdens.
One of the reforms focuses on encouraging the use of programs that selectively implement prior authorization requirements based on providers' performance. However, only 9% of the physicians in the AMA survey reported contracting with insurers that offer programs that exempt providers from prior authorization.
Meanwhile, 84% of physicians reported that the number of prior authorizations required for both prescription medications and medical services had increased over the past five years, running counter to the reform encouraging revision of prior authorization requirements.
Though the consensus statement agreement also included reform on transparency and easy accessibility of prior authorization requirements, 65% and 62% of physicians reported difficulty in determining whether a prescription medication or medical service, respectively, requires prior authorization.
The fourth reform outlined in the agreement centers on continuity of patient care, encouraging protections for patients during a transition period. Yet 88% of physicians reported that prior authorization sometimes, often, or always interferes with continuity of care.
Finally, only 26% of physicians reported that their electronic health record system offers electronic prior authorization for prescriptions, going against the agreement to reform automation to improve transparency and efficiency.
Despite providers and payers seemingly being on the same page about the importance of reforming prior authorization, the AMA survey makes it clear there is still plenty of work to do as far as implementation.
"Waiting on a health plan to authorize necessary medical treatment is too often a hazard to patient health," AMA president Gerald E. Harmon, M.D., said in a statement.
"Authorization controls that do not prioritize patient access to timely, optimal care can lead to serious adverse consequences for waiting patients, such as a hospitalization, disability, or death. Comprehensive reform is needed now to stem the heavy toll that continues to mount without effective action."
Based on the findings, 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.
The bipartisan legislation, which has also been backed by several provider and patient advocacy groups, is set up to be considered by the House of Representatives after surpassing 290 co-sponsors.
"When it comes to the use of medical management tools like prior authorization, Better Medicare Alliance has always worked on two tracks: seeking to increase understanding about the role of prior authorization in facilitating high-value, clinically appropriate care, while also working to simplify this process for patients and providers alike," said Mary Beth Donahue, president and CEO of Better Medicare Alliance.
"The Improving Seniors' Timely Access to Care Act is a commonsense solution that builds on the work the Medicare Advantage community has been doing to streamline prior authorization for seniors."
Better Medicare Alliance's endorsement of the bill comes on the heels of a report by the Office of Inspector General that found Medicare Advantage organizations (MAOs) often unnecessarily deny prior authorizations.
According to the report, 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.
Donahue stated that Better Medicare Alliance is looking forward to working CMS to implement electronic prior authorization process to ensure seniors aren't inappropriately denied necessary care.
In turn, the lead sponsors of the bill are eager to work with Better Medicare Alliance to pass the legislation.
"We welcome the Better Medicare Alliance's support of these reforms and look forward to working with them to get this bill signed into law," said representatives Suzan DelBene (D-Wash.), Mike Kelly (R-Pa.), Ami Bera (D-Calif.), and Larry Bucshon (R-Ind.).
