Partnerships with the right software vendors can facilitate greater collaboration between providers and payers.
Healthcare execs have big plans to invest in AI and advanced analytics software to improve efficiency, payer relations, and patient access.
But far too often, shiny new tools that promise to help end up doing more harm than good, according to Debbie Schardt, DSL, MBA-HCA, RN, assistant VP of revenue cycle and utilization management at MultiCare Health System.
Schardt recently told HealthLeaders Media about her approach to partnering with RCM and UM software vendors.
Take your time vetting vendors
MultiCare took their time before bringing a vendor into their revenue cycle operations. They ultimately selected a relative newcomer – becoming just the third client to partner with the vendor.
"I think I made them do 20 demos for me, then my team, and then the executive team, Schardt said.
Working smarter, not harder
The decision to work with a newer vendor was a "wise risk," according to Schardt. The partnership has been successful so far.
Among payers collaborating with MultiCare on shared software platforms, Schardt says there has clearly been a decline in denials for clear-cut cases.
It's mutually beneficial. "They've noticed efficiencies, we've noticed efficiencies, the relationship is a little bit better because we're really talking about the gray-zone cases," Schardt explained.
To learn more about Schardt's approach to payer-provider software adoption, check out our earlier coverage.
As claim denials continue to rise, state governments start to take notice while revenue cycle leaders find new ways to push back.
Surveys show that claim denial rates remain a major headache for revenue cycle leaders, prompting growing frustration from provider organizations and policymakers.
As revenue cycle leaders continue to devise their own strategies to counter claim denials, state governments have rapidly created new rules to crack down.
Claim Denial Problem is Plain to See, Providers Say
Feelings of frustration over claim denials are palpable among revenue cycle leaders and throughout provider organizations.
Reducing denials is a top priority at a significant majority of provider organizations, according to the 2024 Experian Health State of Claims survey. Among 210 respondents involved in their organizations’ revenue cycles:
84 percent say reducing denials is a priority
77 percent say they are concerned about reimbursement from payers
73 percent say claim denials are increasing
Preauthorization, the chief concern of respondents concerned about reimbursement from payers, is a shared pain point for revenue cycle leaders and their clinician counterparts.
More than 90 percent of physicians report burnout due to the administrative burden of prior authorization requirements, according to a 2023 survey from the American Medical Association.
What Are Revenue Cycle Leaders Saying?
The problem with denials extends beyond quantity.
“We are seeing more – not only in volume, but in ambiguity and variety and complexity,” Beth Carlson, VP Revenue Cycle at WVU Health, recently told HealthLeaders.
The level of complexity involved in a single denial can make it difficult to determine who should deal with them, or even if they should be dealt with. “The cost and administrative burden for overturning some of these denials really aren't worth some of the reimbursements,” Carlson said.
To make these determinations, WVU Health has implemented a triage system to determine when and how denials should be escalated. Carlson also suggests building strong partnerships outside revenue cycle departments. Physician, payer relations, and legal team can push back against high claim denial rates in their own ways.
“Reach out beyond your revenue cycle to get people at the table that can help make a difference.”
Is More Help Coming?
As revenue cycle leaders work to create and expand their internal strategies, more help may be coming as policymakers start to pressure payers to limit claim denials.
In fact, state lawmakers recently seem receptive to complaints over claim denials. At least 10 states passed laws in 2024 to create new rules around prior authorization requirements.
Others have previously passed laws just going into effect this year. At least two state legislatures and one state governor have started 2025 with new proposals to limit claim denials.
In New Jersey, for example, a law that took effect on January 1 will require payers to make prior authorization decisions within 72 hours for non-urgent requests and 24 hours for urgent requests. The law also requires prior authorizations for chronic conditions to remain valid for 180 days.
In Montana, legislators are currently considering two separate proposals to regulate prior authorization. One would ban prior authorization requirements for many generic drugs. The other would prevent denials for prescribed drugs when patients are moving to a new policy.
A proposal recently introduced in the California legislature could impose financial penalties on payers for excessively denying claims and force them to make claim denial data public.
Under the proposal, payers could be fined up to $1 million per case if more than one-half of appeals filed with state regulators were reversed in under one year.
This could spell trouble for payers considering state data shows around 72 percent of appeals submitted to one state regulatory body in 2023 led to the reversal of a denial.
Wisconsin Governor Tony Evers, in a proposed budget for 2025 to 2027, laid out plans to create processes for auditing payers if their claim denial rates exceed certain targets. These plans would also establish a government office to help patients pursue payers for unreasonable denials.
While it looks like denials aren’t going anywhere anytime soon, the uptick in government interest shows a step in the right direction in the provider/payer battle.
Revenue cycle leaders should engage with policymakers to ensure a healthy relationship between public policy and revenue cycle operations.
Revenue cycle leaders are navigating shifting regulatory landscapes with a cloud of uncertainty around government funding hanging over their heads. So, it makes sense that public policy emerged as the hot topic at the Revenue Cycle Exchange held February 5-7.
Several industry leaders gathered during the event to discuss their efforts to influence public policy.
Mike Finley, director of revenue cycle at Emplify Health, and Mike Gottesman, AVP of revenue cycle operations at Northwell Health, shared their insights on the intersection of healthcare policy and revenue cycle operations. Amanda Bessicks, executive director, government and vendor relations at Baptist Health-Jacksonville, discussed operational challenges resulting from the No Surprises Act.
The group also discussed ways that revenue cycle leaders could engage with policymaking processes. Here is what they had to say.
To learn more, read our coverage of the panel discussion.
