Understanding Hierarchical Condition Category (HCC) coding should be a priority for any revenue cycle leader. This is because risk adjustment coding is critical to estimating costs
Providers Are Pushing Back on Denials in Medical Billing. Is it Your Time to Join?
Healthcare providers across America burned almost $20 billion dollars in 2022 on medical billing accounts receivable – and it all went to chasing down denials and delays with payers [1]. The numbers look even more disheartening with a focus on private plans.
What’s worse is over half of that spend was wasted on claims that should have been paid when the claim was submitted – payers are burning provider resources as a stall tactic. A survey of 516 acute care hospitals found that almost 15% of all claims submitted to private payers are denied from the beginning.
This is money, time, and effort that can be better spent. Healthcare providers face the most complex revenue cycle environment in history, with advancements like AI being used against them – which is why now is the time providers should consider taking a new kind of action.
So, I was glad to see the news in July that The Health Equality Network stepped up to send a letter to CMS about the problem of medical billing denials, also including a range of congress members. Here are some of my favorite points [2]:
- “Claims are often denied without cause and lead to financial and emotional distress for individuals already burdened with the stress of healthcare issues.”
- “Medicare Advantage plans…are now inundated with prior authorization requirements and coverage denials.”
- “They (UnitedHealthcare) were sued last year for using an artificial intelligence algorithm to wrongfully deny elderly patients care.”
- “Insurance denials and prior authorization requirements affect minority and lower-income populations at a much higher rate.”
The main takeaway is that providers should focus now on tracking denials in medical billing and understanding the impact of how much money and staff time is being wasted. As more providers push back on this disturbing trend, everyone should be able to make a case for how they, their staff, and their patients are being impacted.
For many providers, doing this in an accessible and accurate way will mean outsourcing medical billing by working with a third-party vendor who has perspective on whether their investment is normal or whether they’re being taken advantage of. I am proud that 3Gen can offer this kind of support during times like these.
References
[1] D. Muoio, “Providers ‘wasted’ $10.6B in 2022 overturning claims denials, survey finds,” Fierce Healthcare, 22 March 2024. Available: https://www.fiercehealthcare.com/providers/providers-wasted-106b-2022-overturning-claims-denials-survey-finds.
[2] Healthcare Equality Network, “HEN Sends Letter to HHS Secretary Becerra and CMS Administrator Brooks-LaSure On Coverage Denials,” 3 July 2024. Available: https://www.healthcareequalitynetwork.com/hen-writes-letter-to-hhs-cms.
Hemant Apte, Chief Executive Officer in
Hemant Apte, Founder & Chief Executive Officer of 3Gen Consulting, is a seasoned executive leader with deep domain expertise in US healthcare management practices. He founded 3Gen Consulting in 2006 and has been instrumental in offering thought leadership to his clients and providing services and solutions that are unique in the market.
August 2024 Newsletter
We’ve assembled the latest news for healthcare revenue cycle leaders to help you stay on top of industry challenges and adapt your revenue
How the No Surprises Act Has Impacted Providers and Physician Billing Services
The No Surprises Act (NSA) brought with it large amounts of speculation on its impact on physician billing services, and now, in 2024, it’s been in play long enough to finally understand how it’s affecting providers and how they’re responding.
Two years in, the industry is seeing results that anyone responsible for physician coding and billing services should consider – and information they should evaluate as they consider their relationship with physician billing companies as a potential solution.
Looking Back at the No Surprises Act
The No Surprises Act went into effect on January 1, 2022, shaking up physician billing services around the country. It was intended to address “surprise medical bills” – the issue of insured consumers receiving care with an out-of-network provider they didn’t choose. They’re then shouldered with a bill they weren’t expecting and didn’t authorize. This issue happens in 20% of emergency department visits and around 9-16% of in-network hospitalizations in relation to services from providers like an anesthesiologist. Since the bill took effect, there have been developments around the arbitration process, dispute resolution, and the impact on patients.
When the act first took hold, the American Medical Association stepped in to help physicians understand their rights when caring for patients who obtained out-of-network services without their knowledge [1]. It put together a toolkit that focused on three operational challenges that physicians would need to address.
- Notice-and-consent requirements which physicians are now required to make publicly available for all patients enrolled in commercial health coverage
- Rules around emergency services and post-stabilization for hospitals
- Their obligation to provide good faith estimates for their uninsured and self-pay patients
Impact of the No Surprises Act on Physicians
While consumers have generally celebrated the outcomes of the NSA, many are realizing that providers are now experiencing financial hardships and other burdens. Out of all providers, physicians’ groups and air medical transportation companies have shouldered much of the burden in their work to provide emergency services. This is reflected in the fact that bankruptcies in healthcare jumped 84% between 2021 and 2022, with many in the industry directly blaming the NSA along with other factors like payer contracts and higher costs of debts [2]. By November 2023, 30 public companies had pointed to the NSA as a risk to their financial performance [3].
Today, providers are open about emerging issues that are affecting them and their efforts in physician coding.
Claims Are Backlogged
One of the downstream effects of the NSA is the impact of the dispute and settlement process. When the law was created, it included requirements to address negotiations and settlements between providers and payers to handle services rendered outside contractual agreements. This falls under the “open negotiation” process, meaning that if the parties don’t come to an agreement within 30 business days of open negotiation, the decision then falls to the Independent Dispute Resolution (IDR) process which involves submission to an independent third party. The case can vary depending on the insurance plan type, sometimes following federal rules and sometimes falling under a process determined by the state.
The result has been increased complexity and slower processing in the healthcare revenue cycle. The U.S. Government Accountability Office (GAO) reports that while federal departments expected around 22,000 disputes through the IDR process in 2022, over 490,000 were submitted between April 2022 and June 2023. As of June 2023, a full 61% of the disputes were unresolved [4].
Increased Resource Use of Physician Billing Services
Of course, these new requirements don’t exist in a vacuum. Physicians have had to employ additional resources to meet the requirements of the act. Providers are required to inform every patient about protections against balance billing and have an obligation to provide good faith estimates for their uninsured and self-pay patients.
All this is happening in the midst of a healthcare revenue cycle staffing shortage that is affecting physician coding and billing across the board. According to Becker’s Hospital Review, 32% of revenue cycle leaders report challenges with hiring and training staff in 2024 [5]. This issue directly impacts provider revenue cycle outcomes, since shortages contribute to already growing denial rates.
Processes That Are More Complex
Complexity is an ongoing concern in physician medical billing. Offices face falling reimbursement rates, shifting payer relationships, and increasing costs. In addition, many are inundated with pressures to use data to make increasingly productive decisions. The NSA only increased many of these demands.
Leaders in charge of physician billing services have to adapt their revenue cycle to document and address low payments from payers they’re not contracted with. They also have to augment their staff with professionals who understand physician billing services and have the physician revenue cycle management and contract management skills that align with NSA processes.
In response to pressures from legislation like the NSA, many healthcare leaders are looking into the support of physician billing companies. These partners can help improve revenue cycle results, increase efficiency, and manage the future impact of the act. To explore some of your options, contact us today.
References
[1] A. Robeznieks, “The No Surprises Act is in effect. What physicians need to know.,” American Medical Association, 14 January 2022. Available: https://www.ama-assn.org/health-care-advocacy/access-care/no-surprises-act-effect-what-physicians-need-know.
[2] F. J. Thomas, “84% Increase of Healthcare Bankruptcies Due to No Surprises Act,” WorkersCompensation.com, LLC, 8 October 2023. Available: https://www.workerscompensation.com/daily-headlines/84-increase-of-healthcare-bankruptcies-due-to-no-surprises-act/.
[3] S. Biswas and B. Yerak, “Surprise Medical Billing Law Heaps Pressure on Healthcare Providers,” Dow Jones & Company, Inc, 28 November 2023. Available: https://www.wsj.com/articles/surprise-medical-billing-law-heaps-pressure-on-healthcare-providers-f9583485.
[4] U.S. Government Accountability Office, “Roll out of Independent Dispute Resolution Process for Out-Of-Network Claims Has Been Challenging,” 12 December 2023. Available: https://www.gao.gov/products/gao-24-106335.
[5] A. Cass, “The biggest challenges facing revenue cycle departments in 2024,” Beckers Hospital Review, 24 January 2024. Available: https://www.beckershospitalreview.com/finance/the-biggest-challenges-facing-revenue-cycle-departments-in-2024.html.
Top Risks of AI Medicare Coding Audits
New technologies in the healthcare revenue cycle are often exciting, but as many healthcare leaders have learned, it’s important to understand the risks of any new type of solution before implementing.
This is especially true in
