The American Hospital Association (AHA) is asking for the creation of a task force to look into improper denials by health insurers.

AHA is calling on the Department of Justice (DOJ) to establish a task force to conduct investigations into health insurance companies that routinely deny patients access to care and payments to providers.

In a letter to acting assistant attorney general Brian Boynton, AHA states that it is time for the DOJ to exercise its False Claims Act authority to penalize Medicare Advantage organizations (MAOs) that restrict services to beneficiaries, citing a recent study by the Office of Inspector General (OIG).

In that report, the OIG found that many MAOs often delay or deny services for medically necessary care, even when prior authorization requests meet cover rules. An estimated 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.

"It is time for the Department of Justice to exercise its False Claims Act authority to both punish those MAOs that have denied Medicare beneficiaries and their providers their rightful coverage and to deter future misdeeds," AHA writes. "This problem has grown so large—and has lasted for so long—that only the prospect of civil and criminal penalties can adequately prevent the widespread fraud certain MAOs are perpetrating against sick and elderly patients across the country, as well as against the public fisc every time commercial insurers take $1,000 per beneficiary while denying medically-necessary services."

AHA point to Boynton highlighting the Civil Division's False Claims Act priorities in his remarks at the Federal Bar Association's annual conference when he took office in early 2021.

Boynton said that "another continuing priority for the Department is preventing the abuse and exploitation of our senior citizens.  A cornerstone of that effort will be the use of the False Claims Act to combat schemes that take advantage of elderly patients by providing them poor or unnecessary health care–or too often no care at all."

According to AHA, the DOJ is more than equipped to put its anti-fraud tools to use with the creation of a "Medicare Advantage Fraud Task Force" to ensure that the oldest patients get the care they need without unnecessary denials.

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:

1. Enabling communication between disputing parties and the selected IDR entity via the platform.
    
2. Providing the ability to edit an application after entering information.
    
3. 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.

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.

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."