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What the Texas Itemized Bill Law Means for Physician Billing Services

“As goes Texas, so goes the nation”. This saying is something anyone responsible for physician billing services should keep in mind when considering the impact of the Texas Medical Billing law. While the bill targets “healthcare facilities”, providers at all levels should pay attention – this type of legislation signals a shift in demands around the patient experience, which can easily influence the entire provider community.

The law ultimately puts providers under increasing pressure to optimize the efficiency of their billing processes, possibly incorporating the use of physician billing companies to quickly comply with new emerging standards. Revenue cycle leaders in states across the country will benefit from understanding the bill and the steps they can take to get ahead of similar legislation and sentiments in their home territory. 

An Update to Texas Medical Billing and Physician Billing Services
Texas Senate Bill 490 was signed into law in May of 2023 and took effect on September 1. It requires that patients be provided an itemized bill when they’re billed for medical services. Here’s how the bill plays out [1]:

  • Patients must be provided with an itemized bill, which can be either electronic or paper, outlining the cost of all services and supplies used during the provider visit.
  • The provider must submit the itemized bill to the patient within 30 days after the final payment is received from insurance carriers for any services or supplies.
  • Descriptions must use plain language for each distinct service or supply that was provided.
  • Bills must include all charges and billing codes that were submitted to a third party as well as the corresponding reimbursement from that third party.
  • The bill must include a calculation of the amount the provider claims is due from the patient for each supply or service provided.

An additional requirement from the legislation is what has so much potential to change patient expectations of provider billing practices – the bill entitles patients to receive an updated itemized bill by request at any time. Providers also will not be allowed to pursue debt collection against a patient for any service or supply unless they’ve met the requirements of the bill. 

The law allows for disciplinary actions against offenders, pushing providers to work with vendors to implement the system changes needed to create statements with all the required data points. It is also recommended that providers review their patient portals to decide whether it can be used to send itemized bills since this is allowed under the law. Providers will also be responsible for occasional testing to verify that the proper data is being included in the itemized bill, and also that the information is readable and understandable by patients. 

This bill does also create some complexity around patient liability. It doesn’t prohibit pre-service or time of service payments, which means portions are collected without sending an invoice. However, if insurance determines that liability is greater than what was collected, this must also be reflected in the itemized statement. This requirement means that providers will need to review their patient scheduling and registration processes for accuracy of estimations and pre-service and time of service payment policies if they would like to collect greater portions of liability before or at the time of service. 

Getting Ahead of the Trend
Anyone in charge of physician billing services should read these changes as a shift not just in legislation, but in the expectations of patients. They should be proactive in getting in front of this change, even if legislation isn’t immediately pending in their state. Here are a few tips to move forward in your physician billing services and provider itemized bills that improve the patient experience. 

Evaluate Current Practices in Physician Billing Services
Most importantly, look at your current practices. You’ll be looking at questions such as how often patients are requesting itemized bills now, or how often they’re confused about what they’re being sent. This could be the bills themselves or even simply the language used. You’ll want to look for opportunities in your processes to better inform patients and help them best understand their obligations. If you see any glaring holes, you should consider looking into physician billing companies. 

Look at Staffing
Helping patients better understand their bills will require a review of your staffing. More detailed bills not only require changes in how your billers work, but could also result in increased demands on office staff in handling calls from patients with questions. This could be an opportunity to contact physician billing companies to see who can help you evaluate and estimate your staffing needs. 

Decide on Your Metrics
The right metrics will be critical in determining whether your efforts to improve the patient experience through more detailed and informative billing are effective. Keep a close eye on cash flows and collections, as well as self-pay KPIs where applicable. You’ll also need to monitor metrics around data governance and data quality.

Consider Outsourcing Physician Billing Services
Many providers will find that the easiest way to get ahead of this trend in itemized billing is to work with physician billing companies. These services can provide you with access to a better and more consistent billing experience for your patients without the pressures of disrupting your in-house team. 

To learn how you can get started on that process today, contact us here. 

 

References
[1] S. Smith, “Texas Medical Billing Transparency Law Takes Effect Sept. 1,” Forvis, LLP, 20 July 2023. Available: https://www.forvis.com/alert/2023/07/texas-medical-billing-transparency-law-takes-effect-sept-1#:~:text=In%20May%202023%2C%20Texas%20Gov,when%20billing%20for%20medical%20services..

Hospital Billing Outsource Strategy
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Changed Your Service Lines? It’s Time to Rethink Your Hospital Billing Outsource Strategy

In the wake of COVID, budget crunches, and labor shortages, many hospitals and health systems have been making the smart decision to rethink their service lines. But what many haven’t had the space to consider is the impact on hospital billing, hospital coding, and how their decisions should impact outsourcing strategy. 

If you are a billing or coding leader in a hospital, it’s time to review your approach to outsourcing to determine whether you have an opportunity to make changes that will positively impact your profitability as well as patient and employee experiences. 

Why Service Lines Are Volatile Today
Hospitals have lost billions in recent years, resulting in threats of service line closures and even systemic collapse without support. 

One hospital, Main Line Health, saw its expense per admission jump by 26% – significantly more than their revenue per admission, which was only increasing by 14% per admission. While they had budgeted for a $6 million loss, they actually lost $20 million. Hospitals that have seen issues like these have been closing services like obstetrics, leaving mothers who were ready to deliver facing a three-hour drive to find a hospital [1]. In 2022, hospitals cut services including obstetrics, converted pediatric units to ICU, closed emergency departments, inpatient care at a Children’s hospital, behavioral health services, at least one even temporarily closed an ICU [2].

Why Evaluating Service Lines is Important to Hospital Billing
Service lines are groups or populations of patients with similar traits based on encounter attributes. This includes DRGs, ICD groups, HCPCS codes, inpatient or outpatient status, and MDCs. Planning service lines is a way of evaluating the performance of a hospital or health system, where patients are engaging with multiple departments during a visit. By focusing on service lines, hospital leaders can gain deeper insights into the contribution that each line is making to the organization’s financial health as well as community well-being. 

Consider that, in cases where a hospital is only providing services that are highly profitable, they might not be best serving their community. And if they’re only providing the services that the community prefers, they might not be meeting the long-term health needs or supporting the health of the organization. This type of question has caused hospital leadership to change their approach to service lines in recent years. But the questions can’t stop there. 

When service lines shift, finances and revenue cycle are impacted. Every change to a service line can impact stakeholder groups including patients, providers, and other administrative departments, but especially hospital coding and billing. Hospital billing leaders must also ask whether they’re receiving appropriate and market-comparable reimbursement from all payer types, including employers, managed care, and government. 

How to Offer or Cut New Service Lines
When an organization is considering changing service lines, they have to go through a few considerations [3].

What Do We Need?
Hospitals and health systems are rethinking the revenue potential of many service lines after experiencing constraints due to COVID-19. Some add lines to gain market share, increase patient volume, or even generate new revenue. When this happens, the impact on hospital billing should always be considered.

What Are Our Operational Concerns?
Any shift in service lines will impact your labor force, the physical space different departments use, and the need for medical staff specialties. Beyond this, leadership should also consider the impact on hospital billing and hospital coding. This is because new service lines could mean different coding processes, shifts to relationships with payors, and new approaches to follow up. 

What Will the Financial Impact Be?
Adding or subtracting service lines will have a direct impact on the finances of a facility. It will be crucial to plan ahead for this. This includes understanding your starting point and ensuring you have the right metrics to properly evaluate the financial impact on your organization. These measurements also apply directly to your revenue cycle processes, where you’ll need to ensure you have efficient hospital coding and billing workflows that are ready to adapt to change. 

How Service Line Changes Impact Outsourcing Hospital Billing 
Outsourcing hospital billing in particular can be a smart option for managing this type of volatility. The Healthcare Financial Management Association (HFMA) found that over one out of every five revenue cycle leaders manage their inpatient revenue cycle, but have shifted to outsourcing for ancillary and outpatient services. Meaning that if you are considering service line adjustments in these areas, outsourcing could be a smart decision [4]. 

While 22% of survey respondents who managed RCM internally reported outsourcing some RCM services, 12% of leaders were interested in taking this step in the future. And a notable number want to go even further – 10% said they want to outsource all of their ancillary or outpatient services. The most common services outsourced were:

Survey respondents were most likely to consider outsourcing services for:

The best news is that most organizations that outsourced their RCM services were satisfied with the outcomes, and that leaders who outsourced more than one function were more highly likely to outsource more. 

The main takeaway is that, if you’ve had any service line changes, outsourcing hospital billing should be on the table for your organization. If you’d like to discuss which service lines could be a good starting point for you, or what changes you should consider after dropping service lines, contact us and we can help.

References
[1] D. Muoio, “‘Unsustainable’ losses are forcing hospitals to make ‘heart-wrenching’ cuts and closures, leaders warn,” Fierce Healthcare, 16 September 2022. Available: https://www.fiercehealthcare.com/providers/unsustainable-losses-are-forcing-hospitals-make-heart-wrenching-cuts-and-closures-leaders.
[2] A. Ellison, “13 hospitals cutting services,” Beckers Hospital Review, 14 July 2022. Available: https://www.beckershospitalreview.com/care-coordination/10-hospitals-cutting-services-712.html.
[3] Center for Optimizing Rural Health, “Implementing New Service Lines: Strategies and Tips You Should Know,” 8 December 2020. Available: https://optimizingruralhealth.org/implementing-new-service-lines-strategies-and-tips-you-should-know-2/.
[4] V. Bailey, “22% of Revenue Cycle Leaders Outsource Outpatient RCM Services,” RevCycleIntelligence, 13 July 2022. Available: https://revcycleintelligence.com/news/22-of-revenue-cycle-leaders-outsource-outpatient-rcm-services.

Physician Medical Billing Is Critical to Practice Health
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Why A New Look at Physician Medical Billing Is Critical to Practice Health

Challenges in physician medical billing have changed. 

From the impact of a pandemic, to shifts in government, to changes in patient demographics, practices have seen the factors that shape their physician billing services turn upside down in recent years. This means that many practices are in a position of playing “catch up” in their physician billing services. But while the path forward might be unclear, there are ways that practice revenue cycle leaders can make changes to remain healthy and align their physician billing strategy with modern challenges. Here is a look at the issues you face as well as how to get past them. 

Modern Challenges Complicating Physician Billing Services
Post public health emergency, many practices are faced with an opportunity to assess the environment they’re functioning in for better understanding of how to move forward. Here are some key challenges to look out for at your practice [1]. 

Manual Processes Are Slowing You Down
Are you still relying on paper as the backbone of your physician billing services? Many practices are sending paper bills to their patients, despite the fact that under 10% of patients want to pay a bill using a paper check. 

Beyond this, paper statements are often confusing for patients and don’t clearly communicate how much they’re owed. Manual processes slow down patient payments, with 70% saying it can take more than 30 days after a patient visit to collect. But paper isn’t only a problem with patients. Managing appeals via manual processes can slow down your cash flows from insurance companies as well. 

You Aren’t Thinking Digital
Before the COVID-19 pandemic, technology for collection was a “nice to have”, but today, it’s a necessity. Surveys have found that as many as three out of four providers still use paper despite consumers wanting online payment at about the same rate. Unfortunately, 40% of providers believe that billing and collection practices have no impact on the patient experience. 

If you aren’t open to using digital in both patient and payer collection in physician medical billing, you’re falling behind the curve and are missing out on revenue from patients and insurance companies. 

You Don’t Understand Patient Payment Trends
High deductible health plans might have dropped in use between 2020 and 2021, but the deductibles themselves have increased. The same issues apply to traditional insurance where copays and deductibles are growing. Medical practices should be paying attention to hospital trends, where balances are getting higher, and patients are demonstrating increasing difficulty in meeting their financial obligations. 

This is a challenge to physician medical billing, especially if you aren’t tracking trends and haven’t adjusted for changes to your approach to collections since before the pandemic. 

How to Adjust Your Physician Billing Services
Now is an excellent time to look at your approach to physician medical billing and make changes that will sustain you even through future upheaval. Here are some places to start. 

Ensuring Funds Are Available For Growth
As you move forward, you will have multiple decisions to make in terms of where to invest for growth and sustainability – and many of these will require financial investment. This means that your first step will be making room in your budget for potential future opportunities. 

For example, this could include things like new practice management software, training for staff on how best to collect from commercial insurance, and bonuses to retain personnel who are the most effective and who will best support your practice as new challenges arise. Keep in mind that this is a long-term need. Modern challenges in physician medical billing will continue to evolve and to stay healthy, your practice will need to keep up on an ongoing basis. 

Investing in People
There is an ever-increasing amount of technology available to help you get past manual processes and keep up with patient payment trends. But this doesn’t mean you can skip investing in people. 

Your staff will need ongoing training on things like medical billing and coding, new technologies, process improvement, and maintaining a positive patient experience as you work to keep your practice healthy. This level of focus has to happen at the strategy level, with commitment from your practice to prioritize people from now on. 

This is more than just an internal question. Many practices see benefits from expanding their access to trained staff who understand the specialized needs of their practice by partnering with external experts. Know that, as challenges become more complex, the less an individual practice will be able to handle physician billing services alone and the more they will need to consider solutions like outsourcing to access knowledge and flexible talent. 

Attracting top leadership who are up to the task
Physician owners are often in a difficult position and sometimes, they aren’t really running their practices with a business mindset. This isn’t always a choice. They could very well be open to ideas to improve practice health, but don’t have the people underneath them that they need. 

This is where strong leaders on the administrative side come in. As practice management becomes increasingly complex, practices will need leaders who are up to the task of today’s challenges, and not just those who have demonstrated past successes. 

In today’s fast-changing environment, every practice needs access to a partner who understands physician billing services and can help them adapt multiple aspects of their business to meet the issues of the future. To learn how we can be that partnership for you, contact us today.

References
[1] B. Crotty, “4 Key payment trends impacting physician practices,” MJH Life Sciences, 23 November 2022. Available: https://www.physicianspractice.com/view/4-key-payment-trends-impacting-physician-practices.

Revenue Cycle management Services
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Medicaid Disenrollment Means Providers Should Rethink Revenue Cycle Management Services

Medicaid unwinding has been a critical topic around revenue cycle management services for months now, and this is because providers will be directly impacted. Most providers should expect to see serious upheaval in their revenue cycle management services as patients are kicked off Medicaid rolls.

Medicaid Unwinding Explained
During the height of the COVID-19 pandemic, enrollment in Medicaid increased, largely thanks to the continuous enrollment provision that prevented people from having their coverage removed. For providers, this meant an unprecedented stability in the Medicaid enrollment in their care communities. But since the end of the public health emergency (PHE) this has changed. The Kaiser Family Foundation (KFF) estimates that anywhere between 8 million to 24 million people will lose their coverage as the continuous enrollment provision unwinds [1]. 

Providers such as hospitals, health systems, home health agencies, and physician practices will need to pay attention, possibly even considering working with a revenue cycle management company. But first, it will be important to understand the possible outcomes during the unwinding. 

How States Will Be Impacted
Not every state will see the same issues, so providers should be working to understand their individual risk. 

For example, Utah is expected to have the highest proportion of members who are taken off the rolls, with a possible percentage difference of 32.5%. After that is Indiana at 28.1%, Minnesota at 27.2%, and North Dakota at 26.5% [2]. States with the lowest impact include:

  • Nebraska
  • Connecticut
  • Kansas
  • Alabama
  • Alaska
  • New Mexico 

Providers in each of these states are already working on plans to adjust. Indiana University Health, for example, is offering personal assistance to members to help them keep their benefits or find a path to new coverage. They’re doing this through financial counselors at their hospitals and cancer centers as well as through community outreach events. 

Florida’s Memorial Healthcare System is in a state that could see around 1 million people disenrolled during the unwinding. The health system is working on auto-enrolling based on information gathered by the state but is also aware that work and preparation will need to happen for people who aren’t able to auto-enroll and who might need support looking for alternative coverage. 

The Uninsured Challenge
During the three-year period of continuous enrollment (February 2020 to March 2023) Medicaid enrollment increased by around 20 million people. This was the reason the uninsured rate fell to its lowest level at the beginning of 2022. Unfortunately, according to the recent KFF survey, only about one-third of states had the ability to project coverage losses around disenrollment, meaning providers will face multiple challenges in establishing revenue cycle management services that align with their needs as uninsured populations rebound [3]. 

Providers should expect that, while renewals resume for Medicaid enrollees, they will see substantial uncertainty around how many people will lose Medicaid coverage, how many will find their way to other coverage, and how many will become uninsured. That said, most providers can be sure that they will see an increase in their uninsured rates, on top of increases in enrollment in CHIP and private health insurance. 

But exact predictions will be difficult. Consider that, since Medicaid enrollment was automatically sustained through the height of the pandemic, some people who are currently listed as enrollees through administrative data could have started working and might now have insurance coverage under an employer. At the same time, the federal surveys that measure uninsured rates (through self-reporting) show smaller increases in enrollment than administrative data. 

Hospitals Could See Mixed Results
Hospitals will need to pay close attention to their revenue cycle outcomes. Hospitals now are dealing with changes from the end of the PHE including shifts in bad debt and charity care as well as other factors tied to the end of the continuous coverage requirement. 

Kaufman Hall reports that the April increases in bad debt and charity care could be directly tied to Medicaid disenrollment. They also report that hospital volumes have dropped, including both inpatient and outpatient. These decreases combined with increases in charity care and bad debt could be a signal that widespread disenrollment is at hand. Erik Swanson, senior vice president of data and analytics believes there is a link. “With states conducting their Medicaid eligibility redetermination, it’s predicted that hundreds of thousands of people will ultimately become uninsured. The data indicate that we may already be seeing the effects of disenrollment materialize with patients less likely to seek out the care they need and a continued rise in bad debt and charity care.” [4]

Hospitals will be navigating these changes while paying more for supplies and labor, stressing the importance of looking for a revenue cycle management company who can help them ride out these trends in the best way possible. 

Nursing Homes Are Waiting to See Outcomes
Even as hundreds of thousands have already been removed from Medicaid rolls, the impact hasn’t been severe for Medicaid-dependent nursing home residents according to McKnight’s Long-Term Care News. Their survey of a dozen sector associations about the end of the COVID-19 PHE and Medicaid unwinding found reports of no significant impact. As a result, members are following their standard processes to continue serving their Medicaid-eligible residents. That said, in Oklahoma, where 70% of disenrollments have been a result of procedural issues (vs. proven ineligibility), neither the Oklahoma Health Care Association or LeadingAge Oklahoma could comment on the situation in nursing homes [5].

How to Approach Revenue Cycle Management Services
This is a time of ongoing uncertainty for providers. Cash flows will undoubtedly be impacted even as expenses are increasing. Providers should be taking a step back to examine their approach to revenue cycle management services, assessing whether they have the ability to monitor and respond to this type of unprecedented change. Most will also need to consider partnering with a revenue cycle management company to navigate the coming changes. To learn more about a revenue cycle management company that can help you in this process, start here.

References
[1] J. Tolbert and M. Ammula, “10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision,” KFF, 9 June 2023. Available: https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/.
[2] R. Wilson, “How many people could lose Medicaid coverage, state-by-state,” Becker’s Healthcare, 31 March 2023. Available: https://www.beckerspayer.com/payer/how-many-people-could-lose-medicaid-coverage-state-by-state.html.
[3] A. Burns, E. Williams, B. Corallo and R. Rudowitz, “How Many People Might Lose Medicaid When States Unwind Continuous Enrollment?,” KFF, 26 April 2023. Available: https://www.kff.org/medicaid/issue-brief/how-many-people-might-lose-medicaid-when-states-unwind-continuous-enrollment/.
[4] J. LaPointe, “Hospital Finances Break Even as PHE Ends, Medicaid Unwinds,” RevCycleIntelligence, 31 May 2023. Available: https://revcycleintelligence.com/news/hospital-finances-break-even-as-phe-ends-medicaid-unwinds.
[5] J. R. Towhey, “As Medicaid disenrollments surge, concerns about nursing home residents persist,” McKnight’s Long-Term Care News, 5 June 2023. Available: https://www.mcknights.com/news/as-medicaid-disenrollments-surge-concerns-about-nursing-home-residents-persist/.

From the Desk of CEO
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Physician Billing Should Be Ready for the Protections of Medical Conscience Bill

If you’ve been paying attention to what’s going on with healthcare in Florida, you probably know that the Florida House passed a bill that gives physicians the option to opt out of services for reasons of conscience – meaning they won’t face negative repercussions for refusing to perform a medical procedure. But payers are mentioned in the bill too, and this isn’t getting enough attention.

If you read the text of the bill, payers are mentioned right alongside providers. For example, look at this wording [1]:

 “A health care provider or healthcare payor has the right to opt out of participation in or payment for any health care service on the basis of a conscience-based objection.”

So, payers are allowed to withhold payment for services based on “Conscience-based objection”. According to the bill, this is defined as,

“…an objection based on a sincerely held religious, moral, or ethical belief. Conscience, with respect to entities, is determined by reference to the entities’ governing documents; any published ethical, moral, or religious guidelines or directives; mission statements; constitutions; articles of incorporation; bylaws; policies; or regulations.”

This definition offers a lot of leeway.

So, what does this mean? I don’t think it’s cause for alarm, but I do think providers who could be affected should keep a close eye from a physician billing services perspective, specifically around denials and during contract negotiations. This is because the bill opens a potential new path for denials and payers not properly compensating providers – and providers would be left with few options if they’re in a state that takes similar measures.

I want to be clear that I don’t see this as a blank check for payers to deny claims however they like. But I do think that it could mean providers in multiple states around the country might need to shift their thinking around denials management and physician billing services.

Now is as good a time as ever to refresh your denials management strategy and approach to physician billing services with coming changes in mind. And if your state doesn’t have comparable legislation in play, you’ll want to watch the political news in your area to see if something similar, even if less aggressive, might be headed your way.

References
[1] Florida House of Representatives, “CS/CS/HB 1403: Protections of Medical Conscience,” 2023. Available: https://www.flsenate.gov/Session/Bill/2023/1403/BillText/c2/PDF.

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.
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