Hospitals Are Shifting to Outpatient Services What This Means for the Hospital Revenue Cycle

Hospitals Are Shifting to Outpatient Services: What This Means for the Hospital Revenue Cycle

You can expect major changes to hospital billing this year thanks to the pandemic and shifts in patient behavior – but one of the most important that hospital and health system leaders should pay attention to is changes in use of outpatient services.

An analysis from the Guidehouse Center for Health Insights and Healthcare Financial Management Association (HFMA) addressed hospital and health system leaders including CEOs, CFOs, COOs, and other executives from 182 hospitals for insights into what they expect in the near future. It found that a full 95% of the executives surveyed expected higher outpatient volumes in 2023. As much as 40% of leaders expected increases of 10% or more.

But this shift isn’t happening on its own and those in charge of hospital coding and billing should pay attention. 41% of the leaders surveyed expected lower inpatient volumes at the same time, with 17% expecting that drop to be 10% or higher [1].

What’s Behind the Shift in Hospital Revenue Cycle

Hospitals and health systems have been navigating this flow of patients from inpatient to outpatient since the beginning of the COVID-19 pandemic – a period where patients were avoiding hospital emergency departments and many providers postponed or even canceled elective surgeries to slow the spread of the virus. HFMA has found that leaders believe that emergency department visits will increase, along with elective procedures, both at a rate of 10% or more. This is to be expected since, as things stand now, many providers still haven’t returned to pre-COVID patient volumes.

But many leaders will find themselves unprepared since they are still navigating issues with staffing and workforce problems. A full 96% of survey respondents said that their workforce issues are having a negative impact on growth strategy, and this impact isn’t minor. Among those who are having these issues, 62% report that the impact is significant. And while these problems are most prevalent on the clinical side, many are having issues on the administrative side also. Almost three out of four of the executives surveyed are looking for hospital revenue cycle, coding, and IT experts this year.

How to Adapt Hospital Billing to the Shift to Outpatient

As the “new normal” emerges, hospital revenue cycle leaders should be taking steps to adapt so that you stay ahead of the competition and in front of any future challenges you might face. 

Assess Your Current State in Hospital Billing

Now is the time to look at your current revenue cycle processes and determine your baseline before you begin to make any changes. For example, does your staff understand outpatient billing well? Will they need additional training? Do your current workflows meet the needs of increases in outpatient billing and coding?

Now is also an excellent time to determine whether your approach to measurement will be sufficient to evaluate any changes you make in your hospital revenue cycle staffing and procedures. You might want to consider creating new KPIs to make sure you have solid insights into your decisions around outpatient changes. 

Know that you’ll be doing the work of creating your own standards for using data to track outpatient claim statistics. There isn’t much of an industry standard and you’ll find considerable variation by payor and possibly even patient type, so a custom approach is best. 

Improving Your Clean Claim Rate

When deciding on goals and standards, your outpatient clean claim rate will be a useful place to start. Most hospital revenue cycle departments aim for around 95%, so if you aren’t hitting that number now, it’s a good time to start investigating ways to improve your processes and numbers. 

One of the first steps should be a focus on education and training, ensuring that your team on both the coding and billing sides understand what constitutes a clean claim for all payers on outpatient contracts. If you begin this process and realize that you have a significant amount of work to do to get your team up to the necessary standards, consider working with a medical billing and coding partner to supplement your hospital coding and billing needs. 

Dive Into Denial Management

During times of change like these, denial management only becomes more important. Having a clear strategy to measure, identify, prevent, and address denials will be immensely helpful in developing a hospital outpatient billing strategy that keeps cash flows healthy and creates a positive work environment for your hospital billers and coders

Know that denials are currently increasing and many hospitals and health systems are bleeding revenue as a result. But at the same time, the vast majority of denials are preventable. By appealing a majority of claims and aiming for a denials rate under 5% (or even lower), you can get a handle on outpatient billing issues before they even start. 

Stay dedicated to identifying and rectifying root causes, and filling in with outside support where needed, and you’ll walk into a future of increasing outpatient volumes with confidence. 

Consider Outsourcing Hospital Billing

Hospital leaders shouldn’t take on this type of unprecedented change alone. Many of your competitors are taking advantage of options in outsourced billing and coding to fill in gaps and create efficiencies that would be too difficult to achieve internally. They understand that outsourcing can stabilize revenue and reduce risk even while improving the patient experience

When you’re ready to take a fresh look at your approach to outpatient hospital billing and coding, we would love to share our expertise and insight. Just contact us here to get started



[1] J. LaPointe, “Hospital Execs Expect Greater Shift to Outpatient Care,” RevCycleIntelligence, 2 March 2023. Available:


News in Medical Billing and Coding Services: Surprise Billing Ruled Illegal Again

News in Medical Billing and Coding Services: Surprise Billing Ruled Illegal Again

The No Surprises Act is in the news yet again to start off 2023, promising more disruption for medical billing and coding services.

On February 6 of this year, District Judge Jeremy Kernodle issued another judgment in favor of the Texas Medical Association (TMA) – one that providers across the country will look at positively. He ruled that a revised arbitration process favors insurers and that challenges to parts of the final rule are unlawful. The president of the TMA, Gary Floyd, MD, weighed in with his opinion. “The decision will promote patients’ access to quality care when they need it most and help guard against health insurer business practices that give patients fewer choices of affordable in-network physicians and threaten the sustainability of physician practices.” [1]

The suit, which was originally filed in September, was done in conjunction with UT Health Tyler Regional Hospital and a physician and gained the support of 30 other national and state medical groups in the form of amicus briefs. Insurers have presented the idea that providers were baseless in claiming there were “early signs of a beneficial trend, where the [No Surprises Act] has furthered good faith network negotiations over reasonable rates.” The insurance trade group AHIP, stepped out in support of HHS [1].

Previously, the TMA filed a lawsuit in October of 2021 which challenged the rule with the claim that it didn’t follow direction from Congress in implementing the dispute resolution process. It was called “short-sighted” and accused the rule of driving down reimbursement rates while encouraging insurance companies to narrow networks. It was ruled against by a federal judge in February 2022.

What Is the No Surprises Act
As this piece of legislation continues to pop up in the news, providers considering the future of their medical billing and coding services will benefit from understanding it from the beginning.

The term “surprise medical bills” refers to the situation in which insured consumers receive care from an out-of-network provider like a hospital, doctor, or provider they didn’t choose, inadvertently triggering billing they didn’t authorize. This has been found to happen in around one out of five emergency room visits. On the non-emergent care side, about 9%-16% of in-network hospitalizations have been found to potentially include unexpected bills from an out-of-network provider like an anesthesiologist the patient had no hand in selecting. These bills are an issue for patients because they often result in significant financial burden through denials or out-of-network cost sharing. Consumers are also subject to “balance billing” from providers that are out-of-network that don’t have contracts to accept discounted payment rates from a health plan. The bill potentially applies to around 10 million surprise, out-of-network medical bills each year.

This most recent news addresses the arbitration process which allows for the determination of surprise bills through negotiation between providers and insurance plans and, if negotiations are not effective, the use of an independent dispute resolution (IDR) process.

But the dispute resolution process has remained a challenge, with providers issuing more submissions for appeal than was expected. Providers have made such heavy use of the IDR process that the system has become clogged and in response, the Biden administration has raised fees for engaging in the process. In December of 2022, the Treasury Department and the Department of Health and Human Services (HHS) made a significant increase in the resolution fee, increasing it to $350 from $50 per party for each disputed claim. The goal was for the fee to be a deterrent to use. These charges went into effect January 1, 2023 [2].

Patient Impact of the No Surprises Rule
Providers who care about their medical billing and coding services and work with medical coding outsourcing companies are keeping a close eye on how the bill could impact patients. This is because patient perception impacts how they choose providers and, as more patients are aware of what the practice of surprise billing can mean for them, they will predictably weigh that in their decision-making. For example, before regulation became more intense, private equity firms were taking advantage of the opportunity to bill out-of-network services from tens of thousands of physicians which they used to staff hospitals. This included the emergency department, which left patients caught in the middle.

Impact on Provider Medical Billing and Coding Services
So, what does all this mean for providers? It means a rocky future for surprise billing and arbitration, complicating billing strategies for providers across the country. Many leaders will not only have to consider the impact of their contract negotiations, but also how their approach to medical billing will intersect with future changes in the legislation. Some providers who have already considered medical coding outsourcing companies are also looking to outsource medical billing to relieve themselves of challenging decisions as the legislative environment continues to evolve. If you are in this position and want to talk more about how the No Surprises Act could impact your organization, contact us today.

[1] J. Emerson, “Federal judge rules against HHS — again — over surprise-billing arbitration rule,” Becker’s Healthcare, 7 February 2023 . Available:
[2] L. Santhanam, “How this law reshaped medical billing, and what challenges remain for patients,” NewsHour Productions LLC, 20 January 2023. Available:

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