New research finds payers negotiate different prices for services like CT and MRI scans within the same hospital.
Health insurers are not only negotiating prices for common radiology services less efficiently than their competitors, but across other health plans under their management as well, according to a study on pricing variation.
Published in Radiology, a journal of the Radiological Society of North America, the researchexamined commercial negotiated prices across hospitals for shoppable radiology services such as CT or MRI scans.
The authors found that on average, the maximum negotiated price for shoppable radiology services was 3.8 times the minimum negotiated price in the same hospital and 1.2 times in the same hospital-insurer pair.
"Many commercial plans are leaving money on the table when negotiating price with hospitals, especially for expensive CT and MRI scans," said study co-author Ge Bai, Ph.D., C.P.A., professor of accounting at the Johns Hopkins Carey Business School. "High prices paid by commercial plans eventually come back to bite U.S. employers and workers through high premiums and out-of-pocket costs."
CT and MRI services had the most price variation within a hospital and within a hospital-insurer pair, as well as higher prices relative to Medicare when compared to other radiology services. Brain CT had the most variation, with 25% of hospital-insurer pairs having their maximum negotiated price more than 2.4 times their minimum negotiated price.
Additionally, the study found that higher prices for higher cost services imply higher hospital profitability, which can influence hospitals to opt for high-cost imaging and lead to inefficient spending for payers and patients.
In theory, the hospital price transparency rule should discourage that behavior by hospitals and give payers and patients more information. Hospitals have been slow to adhere to the law, however, as an August report by PatientsRightsAdvocate.org found that only 16% of hospitals were complying with the rule nearly 20 months after it went into effect.
A recent report by Turquoise Health suggests facilities may finally catching up though, with the research revealing that 65% of hospitals have published robust negotiated rates.
"Price transparency took the blindfold off the eyes of commercial payers, forcing them to recognize the fact that they are often paying too much," Dr. Bai said. "Equipped with pricing information, radiologists can change the landscape of care delivery to benefit patients and payers."
The Save Medicare Act argues that Medicare Advantage (MA) plans are deceptive and overcharge seniors for profit.
MA plans are under fire once again, this time with the introduction of new legislation that's aiming to take 'Medicare' out of the name.
The Save Medicare Act, sponsored by representatives Mark Pocan (D-Wis.) and Ro Khanna (D-Calif.), arrives just ahead of the open enrolment period, running from October 15 to December 7.
The bill would prohibit private insurers from using 'Medicare' in plan titles or advertising, and levy fines on payers that use the "deceptive practice."
"'Medicare Advantage' is just private insurance that profits by denying coverage and the name is being used to trick seniors into enrolling. That’s not right," Khanna said in a statement. "This bill will prevent these private insurers from labeling themselves as 'Medicare' and allow us to focus on strengthening and expanding real Medicare instead."
It is unlikely the bill passes through the House, where MA has received bipartisan support. In January, 346 representatives, or 80% of the chamber, signed a letter to CMS backing MA.
Yet the push for the legislation is necessary, according to its sponsors, who pointed to a recent report by The New York Times that showed eight of the 10 largest MA insurers submitted inflated bills. Four of the five largest insurers—United Health, Humana, Elevance, and Kaiser—have faced federal lawsuits alleging fraudulent efforts to overdiagnose patients.
Pocan and Khanna also highlighted a report by the Medicare Payment Advisory Commission from March that found at least $12 billion in overpayments to MA plans in 2020 by the federal government.
"These non-Medicare plans run by private insurers undermine traditional Medicare. They often leave patients without the benefits they need while overcharging the federal government for corporate profit. This bill eliminates any confusion about what is – and what is not – Medicare, and ensures this essential program will continue to serve seniors and other Americans for years to come."
Over 200 CFOs and VPs of revenue cycle were surveyed on top concerns facing health systems and physician groups.
The financial challenges of the COVID-19 pandemic are still being felt across the healthcare industry and revenue cycle management (RCM) departments are no exception.
Between increasing costs and the labor shortage, providers are under pressure to come up with solutions in real-time to reduce the burden of administrative processes for not only their own sake, but for patients as well.
For its Mid-Year Healthcare Financial Trends Report, revenue management company R1 RCM surveyed 205 CFOs and RCM VPs from health systems and physician groups to gauge today's top priorities, concerns, and trends for RCM.
Increasing costs were identified as the top concern for respondents (25%), while finding a strategic RCM partner was chosen as the top solution for the second half of 2022 (28%).
Here are five key takeaways from the report:
Economic pressures from returning patients: 96% strongly agree there is, or will be, additional strain on RCM operations as patient volume increases.
Labor shortage: 90% are currently experiencing a labor shortage in their RCM/billing department, while 50% of their RCM/billing roles are currently vacant.
Need for automation: 45% say patients are experiencing longer hold times for scheduling and customer service calls. Additionally, 48% have witnessed billing errors due to lack of experienced staff for coding, claims, and reimbursement.
Choosing a partner: 44% are partnering with a strategic RCM company that specializes in an outcomes-focused approach to optimizing the entire revenue cycle. More than half (52%) report experiencing positive financial outcomes through their RCM partnerships.
Benefits of global delivery: 82% say their sentiment toward global delivery has become more favorable in the face of today's labor shortage.
To continue overcoming the obstacles at hand, as well as the challenges coming down the road, RCM departments will have to adjust their strategies to be more efficient and effective.
"The financial difficulties the healthcare industry is facing are driving a need for both digital and cultural transformation, which will lead to better outcomes for both staff and patients alike," Todd Craghead, SVP of Commercial Relationships at R1 RCM, said in the report.
"The best way for health systems and physician groups to address these challenges is to focus on optimizing in every way they can: investing in people, processes and technology, and embracing an open mind regarding partnerships, employee reallocation and global delivery."
A new survey finds a majority of Americans would shop around for the best price if pricing data was available.
Despite recent implementations of price transparency rules and regulations, most patients are still in the dark when it comes to finding pricing information, according to a survey by YouGov.
Commissioned by revenue cycle firm AKASA, the survey reveals that 64% of Americans have never tried looking for prices for healthcare services ahead of time.
Patients' lack of shopping around is not necessarily due to unwillingness though, as 58% of respondents indicated they would research their options for the best price if pricing information was disclosed beforehand.
Younger adults aged 18-34 were more likely to research prices (45%) for healthcare services compared to older adults aged 55-plus (27%). Meanwhile, patients with high-deductible health plans (41%) and individual plans (43%) are more willing to research prices versus other groups.
The responses, which were fielded from 2,026 individuals between March 9 and March 14, 2022, reveal a need for not only clearer price transparency, but more information and awareness about price transparency for patients.
"There's clearly a gap between what many healthcare organizations - providers and insurance companies - think helps increase price transparency and the experience of patients in finding price information conveniently and in a manner that is easy to understand," Amy Raymond, VP of revenue cycle operations at AKASA, said in a statement.
"This is a deterrent for patients in seeking out the best price like they would in any other industry, which can be incredibly frustrating."
The hospital price transparency rule went into effect on January 1, 2021, requiring facilities to post pricing information online through a comprehensive machine-readable file with all items and services they provide, as well as through a display of shoppable services in a consumer-friendly format.
On July 1 of this year, a price transparency rule for payers went into effect, requiring health insurers to post pricing information for covered items and services.
However, hospitals in particular have been slow to adhere to the law, as an August report found that just 16% of hospitals are complying with the rule.
New analysis, also conducted by PatientsRightsAdvocate.org, shows large hospital systems are still failing to disclose prices, based on newly released health insurance company data files.
The health insurer will also no longer offer Medicare Advantage plans outside of California and Florida.
Bright Health Group is scaling back its business in 2023 by cutting individual and family plan offerings, as well as removing Medicare Advantage products outside of two states.
The payer announced its decision to remove Affordable Care Act plans while also saying it has raised $175 million that is expected to close in the coming weeks and "take the business through profitability."
Bright Health will turn its focus to its Fully Aligned Care Model, which the company states is "a faster path to profitability, has greater predictability, and is more capital efficient."
The shift allows the health insurer to reach profitability on an adjusted EBITDA basis in 2023, with $3 billion in net revenue expected next year, according to the health insurer. The $3 billion is down significantly from the $6.8 billion in revenue expected in 2022 from the company's second quarter earnings report, which also showed a net loss of nearly $432 million in the first half of the year.
"We have demonstrated the power of the Fully Aligned Care Model in serving aging and underserved populations and progressed the marketplace towards seeing the promise in value-based care across all populations," Mike Mikan, Bright Health Group president and CEO, said in a statement. "The changes announced today give Bright Health a strong and stable platform for profitable growth at much lower risk. This is one more strategic step to building a differentiated and profitable business at scale."
As of June 30, Bright Health had 970,000 commercial members, 120,00 Medicare Advantage members, and 500,000 NeueHealth patients.
With this recent announcement, along with previously announced market exits, Bright Health will not offer individual and family plans in Alabama, Arizona, Colorado, Florida, Georgia, Nebraska, North Carolina, Texas, and Tennessee after 2022. It will also not offer Medicare Advantage plans outside of California and Florida.
Bright Health said it will continue meeting the needs of members for the rest of the year and will work with impacted members in the move to new plans during the upcoming annual and open enrollment periods.
CMS released the 2023 star ratings for Medicare Advantage and Part D plans, with the average rating at 4.15.
The average star rating and number of five-star contracts for Medicare Advantage (MA) plans declined for 2023, CMS announced.
The agency released the annual star ratings for MA and Part D plans to help potential beneficiaries compare plans ahead of the annual enrollment period, which begins on October 15. The ratings are on a one-to-five scale and determined on up to 38 unique quality and performance measures.
For 2023, the average rating across all plans is 4.15, down from last year's 4.37. The number of five-star contracts fell significantly from 74 in 2022 to 57 for the coming year.
Overall, there are 67 contracts that earned 4.5 stars (96 last year), 136 that earned four stars (152 last year), 116 that earned 3.5 stars (122 last year), and 90 that earned three stars (25 last year).
CMS stated that approximately 51% of MA plans that offer prescription drug coverage will have an overall rating of four stars or higher in 2023, while 72% of people currently in MA plans with drug coverage are enrolled in a plan that earned four or more stars.
The decline in ratings for 2023 isn't necessarily performance-based, as CMS adjusted its methodology to account for the COVID-19 pandemic no longer being at the height it was in recent years.
Guardrails were introduced for 2023 for all measures that have been in the Part C and D star rating program for more than three years, aside from the Consumer Assessment of Healthcare Providers and Systems survey and the Part C and Part D improvement measures.
America's Health Insurance Plans (AHIP) responded to the release of the ratings by backing MA's benefits to members.
Matt Eyles, AHIP president and CEO, stated: "The ongoing and continuing effects of factors such as COVID-19, along with recent CMS methodological and measurement changes, may have affected the 2023 Star Ratings results, which primarily relate to the 2021 performance year. Even so, the majority of Medicare Advantage enrollees are projected to be covered by high performing plans. AHIP and our member plans will continue to review the latest Star Ratings results and data closely to assess impacts."
MA advocacy group Better Medicare Alliance (BMA) also responded to the ratings by reiterating that MA beneficiaries will continue to receive quality, affordable care.
"CMS's announcement shows that, even amid the impact of the ongoing public health emergency and recent methodological changes, Medicare Advantage continues to deliver high-quality care for seniors. In fact, the number of 5, 4.5, and 4-star Medicare Advantage plan contracts is higher for 2023 than just two years ago, in 2021," said Mary Beth Donahue, BMA president and CEO.
Aetna's vice president and head of Medicare Part D shares insights into Medicare Advantage's growth ahead of the annual enrollment period (AEP).
Medicare Advantage plans will welcome an influx of new beneficiaries when the AEP opens this month, adding to the momentum towards the private sector offering.
No longer a small piece of the Medicare pie, Medicare Advantage has grown at a steady rate and now accounts for nearly half (48%) of the eligible Medicare population, according to data by Kaiser Family Foundation.
Terri Swanson, Aetna vice president and head of Medicare Part D, spoke with HealthLeaders about the Medicare Advantage surge and Aetna's plan to bring in members, as well as the shifting payer landscape.
Aetna has more than 3.2 million beneficiaries enrolled in a Medicare Advantage plan and recently announced its 2023 Medicare offerings ahead of the AEP, which runs from October 15 to December 7.
This transcript has been edited for clarity and brevity.
HealthLeaders: What do you attribute the Medicare Advantage boom to?
Swanson: It's grown for a couple of different reasons. First of all, the demographics is growing. You've got over 10,000 people aging into Medicare every day nationally. The other thing is more and more people are learning about Medicare Advantage. Because, as Medicare Advantage plans, we're able to manage the all-in, totality of members' health benefits, we've been able to invest in other kinds of benefits that original Medicare doesn't offer. So people who come to Medicare Advantage can get things like dental, vision, hearing. Now there's even more supplemental benefits as CMS has changed some of the regulations over the last few years to give plans more flexibility in terms of what we can offer people that will assist in maintaining or improving their health.
HL: What is driving Aetna's Medicare Advantage strategy?
Swanson: We've had really strong growth over the last number of years and we expect to continue on that trajectory. One of the things we work on every year is to make sure we have a product portfolio that has something for everyone. The Medicare population and particularly the people driving Medicare Advantage are very diverse. Minorities comprise over a third of Medicare Advantage beneficiaries, versus closer to 15% on the fee-for-service side. Medicare Advantage beneficiaries tend to be low-income. Many are dual eligible, which is a large and growing sector of the business. And they're medically complex with multiple chronic conditions. So our product strategy is to make sure we have products for that diverse spectrum of people.
HL: What factors are driving competition the most and how have those evolved?
Swanson: The marketplace is incredibly competitive and that's actually one of the things I like about it, to be quite honest. It's really competitive because you have companies like ours and our peers in the industry, who are very focused on growth. So we want to bring something to the market that beneficiaries will like. We want to meet their needs, we want to innovate, and continuously innovate to keep upping our game. In the grand scheme, that's how our country really benefits from having the private sector involved in things like Medicare Advantage plans.
There are tons of plans available, something like 4,000-plus nationally, the momentum is not going to slow down. With the different kinds of benefits we're now allowed to offer, we can just give beneficiaries things they can't get in a traditional Medicare fee-for-service plan.
HL: In general, what do you identify as the biggest challenges facing payers in the near future?
Swanson: There are a lot of changes coming. The Inflation Reduction Act that was recently passed has a lot of changes for Medicare and particularly Medicare Part D. All of us have to navigate those changes and pivot. It will be good in the long term but it's a lot of regulatory change and that’s always challenging. It's a feature of our business. That particular set of changes is the most significant set of changes for Medicare Part D since its inception in 2006.
The other thing is, with the nature of our changing membership base, the expectations are much higher. We talk about things often in terms of not wanting to necessarily judge ourselves relative to other insurance providers, but our members are going to judge us based on every other digital experience they have. So we are very aware that people expect our online experience to be like Amazon, like Google, like Uber or other services they use that are purely consumer services. So as CVS Health and certainly Aetna as part of that, we are very focused on making sure the member experience is as great as it can possibly be, whether that's digital on the phone or in one of our in-person locations. That rising tide of expectation is something that the entire industry needs to step up in and do right by our members.
The Office of Inspector General (OIG) discovered improper Medicare payments totaling $39.3 million to acute-care hospitals from 2016 to 2021.
Changes to CMS' system significantly reduced Medicare overpayments to acute-care hospitals for outpatient services provided to beneficiaries who were inpatients of other facilities, according to an audit by OIG.
The report uncovered $39.3 million in inappropriate Medicare Part B payments to acute-care hospitals from September 2016 through December 2021, none of which should have been paid because the inpatient facilities were responsible.
However, only $3.4 million, or less than 9% of the $39.3 million in overpayments, was improperly paid from June 2019 through December 2021, after CMS edited its system in May 2019. The system edits were not working properly prior to May 2019, OIG stated.
The audit was conducted as a follow-up to a previous OIG report that found Medicare overpaid acute-care hospitals $51.6 million from January 2013 through August 2016. The payments were for outpatient services to beneficiaries who were inpatients of long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs), and critical access hospitals (CAHs).
To review payments from 2016 through 2021 and determine if CMS had corrected the system edits, OIG identified inpatient claims from LTCHs, IRFs, IPFs, and CAHs and then used beneficiary information and service dates to find outpatient claims from acute-care hospitals that overlapped with the inpatient claims.
In the report, OIG explains the postpayment and prepayment edits in the Medicare claims processing system as such: Before Medicare administrative contractors (MACs) pay outpatient claims, all claims are sent to CMS' Common Working File (CWF) for verification, validation, and payment authorization. The CWF consists of both postpayment and prepayment system edits that should detect overpayments.
Once the CWF has processed a claim for payment, it sends information to the MAC about potential errors on the claim. If the outpatient claim is processed for payment before the inpatient claim, once the inpatient claim is processed, a postpayment edit should send an alert to the MAC so the payment can be recovered. The MAC is responsible for covering the overpayment.
If the inpatient claim is processed for payment before the outpatient claim, once the outpatient claim is processed a prepayment edit should deny the outpatient claim.
In response to the findings, OIG recommends CMS direct the MACs to recover the portion of the $39.3 million in overpayments that is within the four-year reopening period, as well as instruct acute-care hospitals to refund beneficiaries up to $9.8 million that may have been incorrectly collected from them.
In addition, CMS should notify appropriate providers so they can identify, report, and return any overpayments in accordance with the 60-day rule, along with continuing to review the system edits to prevent future overpayments.
Lastly, OIG also recommends CMS direct the MACs to recover any inappropriate payments after the audit period.
In written comments to the report, CMS concurred with all but the final recommendation and said it will consider how to address any overpayments made after the audit period.
In a separate, recent audit, OIG found that CMS had collected only $120 million of the $498 million in Medicare overpayments, despite CMS reporting it had collected $272 million.
A new report compiles survey responses from healthcare leaders to better understand revenue cycle strategy.
Reducing costs and improving efficiency are among the driving factors for why health systems seek out revenue cycle partnerships, according to a report from The Health Management Academy.
Sponsored by revenue cycle management company R1 RCM, Vetting the Right Revenue Cycle Partner includes 40 quantitative survey responses and eight qualitative interviews among C-suite executives, as well as vice presidents and directors in finance and revenue cycle management roles at leading health systems.
The report states that 83% of health systems outsource some revenue cycle components but maintain internal oversight of most of their revenue cycle functions, with challenges like budget constraints hampering further investing in revenue cycle partnerships.
Meanwhile, the survey finds 10% of health systems use end-to-end partnerships, with an additional 36% in modular partnerships answering they would consider investing in a future end-to-end solution.
Health system pursue revenue cycle partnerships because of four key reasons, according to the report:
Improve financial performance: From accelerating cash flow, to minimizing denials, revenue cycle partnerships first and foremost serve to increase operational efficiency, reduce costs, and improve revenue.
Drive standardization to increase efficiency: Standardization, such as automating workflows, can eliminate variation across the organization.
Optimize the patient experience: Partnerships that can support tailored digital interfaces can give patients more price transparency and digital self-service processes.
Create a sustainable workforce: With the labor shortage presenting a major problem for health systems, revenue cycle partnerships that support automation can relieve administrative burden and extend staffing capabilities.
These reasons, leading to improved outcomes, are what's driving investments in revenue cycle partnerships.
The report states: "There is near-consensus across health systems that relying on manual processes prone to human error or stop-gap technologies only solves specific RCM pain points. Furthermore, internally built technologies have struggled to keep up with the complexities of RCM or technology leveraging automation and artificial intelligence (AI). This recognition ultimately results in those health systems abandoning their own solutions and 'do-it yourself' mindset"
Groups are applauding CMS for lowering premiums ahead of the upcoming Medicare open enrollment period.
The Biden administration announced it will lower premiums for Medicare Advantage (MA) plans in 2023, a decision backed groups like America's Health Insurance Plans (AHIP) and Better Medicare Alliance (BMA).
Beneficiaries will see the projected average premium for MA plans decrease nearly 8%, from $19.52 in 2022 to $18 per month next year.
The announcement comes in the lead-up to the Medicare open enrollment period, which runs from October 15 to December 7. CMS said it projects enrollment will reach 31.8 million people in 2023.
The administration is also highlighting the effects of the new Inflation Reduction Act on Medicare prescription drug coverage, which includes a $35 cost-sharing limit on a month's supply of each covered insulin product.
"The Inflation Reduction Act will provide much needed financial relief and increase access to affordable drugs," said CMS Administrator Chiquita Brooks-LaSure. "It is more important than ever for people to review their health care coverage and explore their Medicare options during Open Enrollment this year."
Supporters of MA have touted CMS' decision to cut premiums, with AHIP president and CEO Matt Eyles noting that health insurers are doing their part to improve affordability.
"More than 29 million seniors and people with disabilities choose Medicare Advantage because it delivers better services, better access to care, and better value," Eyles said in a statement. "Today's announcement from CMS is a further demonstration of that value. Even as average premiums continue to decline, Medicare Advantage offers benefits well beyond those in original Medicare does not, such as a cap on out-of-pocket costs; integrated vision, hearing, and dental benefits; and comprehensive prescription drug coverage.
Meanwhile, MA advocacy group BMA also responded to CMS' announcement with praise.
"With the lowest average monthly premiums in 16 years, and separate data showing that Medicare Advantage saves seniors nearly $2,000 per year on total health expenditures, Medicare Advantage is poised to bring meaningful health and financial security to millions of seniors in 2023," said Mary Beth Donahue, BMA president and CEO.
