Payer Trends​ Archives – Ensemble Health Partners https://www.ensemblehp.com/blog/category/payer-trends/ Your modern revenue cycle solution Thu, 13 Nov 2025 17:46:05 +0000 en-US hourly 1 https://www.ensemblehp.com/wp-content/uploads/2023/10/Logo-Chevron-80x80.png Payer Trends​ Archives – Ensemble Health Partners https://www.ensemblehp.com/blog/category/payer-trends/ 32 32 Payer Trendscape 2025: 3 Trends to Track  https://www.ensemblehp.com/wp-content/uploads/2025/11/Payer-Trendscape-2025.pdf#new_tab Thu, 13 Nov 2025 17:46:02 +0000 https://www.ensemblehp.com/?p=20250 Payers are reshaping hospital reimbursement at the expense of compliance + cash flow. We dig into the data + offer tips to boost performance. … Read More

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]]> Payers are reshaping hospital reimbursement at the expense of compliance + cash flow. We dig into the data + offer tips to boost performance.

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]]> 6 Terms to Close Payer Contract Loopholes  https://www.ensemblehp.com/wp-content/uploads/2025/04/Payer-Strategy-Contract-Terms_Tip-Sheet.pdf#new_tab Thu, 24 Apr 2025 12:48:23 +0000 https://www.ensemblehp.com/?p=19056 Revise contracts to include language that clearly defines dispute resolution requirements, non-compliance penalties and enforcement mechanisms … Read More

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]]> Revise contracts to include language that clearly defines dispute resolution requirements, non-compliance penalties and enforcement mechanisms

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]]> What Drives Friction Between Providers and Payers? https://www.ensemblehp.com/blog/what-drives-friction-between-providers-and-payers/ Mon, 10 Feb 2025 16:35:32 +0000 https://www.ensemblehp.com/?p=15957 Delayed or denied payment due to avoidable friction between payers + providers is unsustainable and must be addressed. Here are 3 key causes. … Read More

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What you need to know

Financially strained providers face immense pressure to collect reimbursements from reluctant payers. Addressing avoidable friction from inconsistent payer policies, excessive information requests, interoperability issues and non-equitable rate increases is crucial to ensure that healthcare systems can continue to provide efficient, cost-effective care.

Friction between health systems and insurance companies is a $200 billion problem. The process for determining what services insurance companies will cover and how much they’ll pay has become mired in administrative complexity, driving up unnecessary costs for payers, providers and patients.

For healthcare organizations grappling with rising expenses and nationwide staffing shortages, delayed and denied payment resulting from this avoidable friction — in addition to high administrative expense — is untenable. To ease financial strain on providers and reduce administrative costs across the healthcare system, the issues causing this friction must be addressed.

1. Inconsistent, unclear coverage policies

Utilization management policies are essential to ensure appropriate care is delivered at the appropriate cost. But instead of leveraging an industry standard like the clinical guidelines recognized by CMS, payers exploit vague regulatory language to enforce their own rules for deciding what care will be covered or denied based on what they consider to be the right care choices at the right time.

Not only do these policies vary widely by payer, they’re also difficult to locate and keep track of. There’s no single, streamlined repository for this information, and the rules change constantly — Ensemble’s proprietary tracking system shows upward of 180 new payment requirements and policy updates made per day across payers.

This constant flux significantly burdens providers with the task of staying updated on all payer changes, a time-consuming and complex process. Meanwhile, payers spend their time making updates and changes, and creating loopholes that often benefit them. This dynamic creates a one-sided situation that heavily favors payers, leaving providers on their own to ensure compliance and appropriate reimbursement in the face of shifting updates.

Keeping track of coverage details across policies to determine which services require prior authorizations and which services are covered is such a huge administrative burden that most payers outsource the process to third parties.

The real cost of friction:

A patient with a history of bone cancer was in the hospital for 10 days, receiving an open skull biopsy, an MRI confirming brain lesions and a CT scan confirming rib fractures and lesions throughout the chest. Despite meeting inpatient criteria defined by InterQual, MCG and CMS’ Two-Midnight Rule, the payer denied inpatient status for the patient. After exhausting the single peer-to-peer review allowed by the payer, the provider was left to choose between downgrading the case to observation status and accepting lower reimbursement, or billing the claim accurately and waiting for the ability to appeal. If appealed, the majority of these types of denials are eventually overturned, but only after an average of three appeal attempts, which significantly diminishes and delays payment for providers.

Related: Clarification of the Two-Midnight Rule: A Win for Physician Advisory >>>

2. Broken, burdensome information exchange

The more insurance companies invest in AI-driven payment integrity systems, the more data they require from providers to approve coverage and determine payment. Payment scrutiny, which historically occurred as a post-payment audit, now occurs before care can be delivered or billed. Providers are increasingly required to submit detailed information like thorough medical records before a treatment plan is authorized and itemized bills before a payment decision is made.

Complying with authorization requirements and increasing requests for additional information is resource-intensive and the submission process is error-prone and varies by payer. Like coverage policies, submission requirements are difficult to find and often require providers to learn by trial and error.

Some payers still require providers to fax information or make phone calls to process prior authorizations. Some require files to be uploaded to a third-party tool or web-based portal, which are often out of sync with the rest of the payer’s systems, resulting in lost files and duplicate requests.

Frequently, despite providers following the correct initial process for sending the data, they must also make manual phone calls and inquiries to ensure the data is attached to the correct patient. The backlogs of waiting for requested data to properly transfer — and be attached to the correct claim — often lead to delays in both care and payment, all while consuming unnecessary resources on both sides.

In one AMA survey, 92% of physicians reported that prior authorizations delay necessary care, with decisions taking anywhere from three days to more than a month. Nearly half of physicians surveyed said these policies led to urgent or emergency care for their patients. Even once authorization has been granted, denials by payers often still occur on the back end. This forces providers to continue fighting for care that has already been authorized and deemed medically necessary for patients. This ongoing battle consumes significant resources and time, further complicating the delivery of timely and appropriate care.

The real cost of friction:

To schedule an MRI, a staff member from the provider’s office called the patient’s insurance company to determine if an authorization was required. After multiple phone calls and trial and error, they learned that while the payer didn’t require any prior authorization, a third-party was engaged to manage coverage determination for the payer and that the third-party actually required specific documentation for the MRI to be authorized. After gathering and uploading the necessary information to the designated portal, they were told there was an issue sharing the documentation back to the payer’s system and the information would need to be resubmitted.

3. Inequitable, unsustainable contract rates

Many providers are struggling just to secure standard rate increases. Major payers have approached negotiations with demands for rate concessions, making it increasingly challenging for providers to maintain financial stability. But even standard rate increases offered by payers aren’t enough to cover the real-life costs of patient care, with Medicare rates historically only covering around 80% of a hospital’s actual costs.

Despite contracting at the same rate or higher, Medicare Advantage (MA) plans only reimburse hospitals around 90% of Medicare once the cost of underpayments, delays and denials is factored in. With more than half of the Medicare-eligible population enrolled in MA plans, settling for 74 cents of every dollar owed is simply not sustainable for providers.

Unfortunately, getting payers to agree to common-sense rate increases during contract negotiations is difficult for most providers, an inequity compounded by the fact that many payers report multi-billion-dollar profits. The top five U.S. health insurers have collectively amassed over $371 billion in profits since the passage of the Affordable Care Act. Despite lobbying CMS to increase their own subsidy rates to keep up with inflation, payers are typically unwilling to offer material rate increases to address the same market pressures impacting providers.

Aggressive tactics like terminating contracts with uncooperative payers are becoming more commonplace, pitting payers and providers against each other in arduous, and often public, battles for months. Not only are these negotiations costly and time-consuming, they also cause concern and uncertainty within communities.

The real cost of friction:

When its contract was up for renewal with Florida Blue Cross Blue Shield, NCH requested moderate rate increases to cover the rising cost of patient care and preserve local access to doctors and vital services for families across Southwest Florida. Despite being the third most profitable Blue Cross program in the nation and paying NCH less than other insurers in the region, Florida Blue refused to negotiate, waiting three months to even respond to NCH’s initial proposal. NCH launched a public campaign to help educate patients and community members on the need for Florida Blue to offer fair payment and the implications of terminating its contract if agreement wasn’t reached. It wasn’t until the day that the contract was set to expire that Florida Blue started to negotiate, ultimately agreeing to a rate increase.

Related: Managing Payer Friction Through Contract Negotiations >>>

The bottom line

There’s immense pressure for financially strained providers to collect reimbursements from reluctant payers — but there seem to be roadblocks at every turn, given payers’ complex policies, delays, requests for information and a reluctance to offer equitable rates to providers.

As part of the larger healthcare ecosystem, payers and providers should share a goal of getting care to patients in need. Both parties must therefore work toward a joint understanding of the problems at hand as well as mutually agreed-upon end goals — an action that will pay dividends in reducing friction for payers, providers and patients.

You know the causes. Now what?

Learn 3 key steps to proactively counteract payer denials and delays.

Read more

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]]> Payer Strategy Playbook: Reducing Friction to Restore Focus  https://www.ensemblehp.com/wp-content/uploads/2025/02/Booklet_Payer_Strategy_Playbook.pdf#new_tab Thu, 06 Feb 2025 14:12:32 +0000 https://www.ensemblehp.com/?p=16087 Learn 8 key strategies to reduce friction between payers and providers in order to bring patient care back into focus. … Read More

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]]> Learn 8 key strategies to reduce friction between payers and providers in order to bring patient care back into focus.

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]]> 4 Strategies to Level the Playing Field with Payers  https://youtu.be/yyEKosSa5sY#new_tab Thu, 30 Jan 2025 18:09:46 +0000 https://www.ensemblehp.com/?p=15975 Ensemble's VP of Payer Strategy shares four innovative payer strategies to negotiate better contract rates and establish market leverage. … Read More

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]]> Ensemble’s VP of Payer Strategy shares four innovative payer strategies to negotiate better contract rates and establish market leverage.

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]]> Supporting Our Clients Against MA Plans’ 340B Inequities https://www.ensemblehp.com/blog/supporting-our-clients-against-ma-plans-340b-inequities/ Wed, 13 Nov 2024 17:50:06 +0000 https://www.ensemblehp.com/?p=15672 Providers are being ignored by contracted and non-contracted MA plans in their efforts to obtain a remedy for 340B drug underpayments. … Read More

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The 340B Drug Pricing Program is a federal program that allows eligible healthcare facilities, particularly those serving low-income or uninsured patients, to purchase outpatient drugs at significantly reduced prices.

MA plans diverge from CMS guidance on underpayment of claims

In Ensemble’s experience, the agreed reimbursement rate with Medicare Advantage (MA) plans is nearly always tied to the current Original Medicare rate.

When CMS reduced the reimbursement rate for 340B-acquired drugs between 2018 and 2022, MA plans did the same. Similarly, when CMS restored the original payment rate of ASP + 6% in September 2022, MA plans again followed CMS’s lead. MA plans have not, however, followed CMS’s lead in devising a remedy for the underpayment of claims for 340B-acquired drugs which were paid between 2018 and 2022.

Providers are overwhelmingly being ignored or dismissed by contracted and non-contracted MA plans in their efforts to obtain a remedy for these underpayments. Like their peers, our partner 340B hospitals care for many uninsured or low-income patients and the 340B program allows these hospitals to expand such services to their communities. Pursuing recovery against MA plans for these underpayments can be complex and costly; therefore, providers should ensure they have reviewed their MA plan contracts carefully and evaluated their reimbursement data.

340B concerns are part of a worrying MA plan trend

In the current situation, MA plans have a significant financial incentive to ignore and disregard hospitals until actions are time-barred. While the obvious and primary impact of such tactics may be these underpayments owed to 340B hospitals, the long-term consequences of such tactics from MA plans may impact Medicare Advantage beneficiaries’ continued access to care.

As is known in the healthcare industry, providers and hospitals are exhausted with the costly and administratively burdensome tactics employed by MA plans. From reimbursement cuts to denied and delayed payments to not following Medicare coverage guidelines as required, many providers and facilities are increasingly and understandably choosing not to contract with MA plans or to terminate existing agreements.

As Medicare Advantage enrollment grows, it becomes increasingly important to ensure that MA plans tactics that limit or hinder efficient reimbursement are curtailed so that Medicare Advantage beneficiaries continue to have access to medically necessary care.

Ensemble continues to support our clients’ right to fair reimbursement

Ensemble is collaborating with our clients to provide support in pursuing potential recoveries from MA payers for 340B reimbursement. This support includes:

  • Drafting 340B inquiry and demand letters
  • Reviewing and analyzing claims and reimbursement data
  • Researching dispute resolution and arbitration terms to guide clients on their next steps

Additionally, we have partnered with the health care team at the law firm of K&L Gates, LLP, offering our clients one-on-one sessions to discuss the current landscape, evaluate potential actions against payers and address specific questions. The team from K&L Gates, led by partners Andy Ruskin and Gary Qualls, brings decades of provider-side representation experience and significant expertise on 340B issues.

Learn about your options

Contact Ensemble today to explore a one-on-one session.

Contact Us

The bottom line

The 340B program is vital for many healthcare facilities, enabling them to provide essential services to underserved communities. The current tensions with Medicare Advantage plans highlight the complexities of healthcare reimbursement and the ongoing challenges faced by facilities in navigating these changes.

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]]> 3 Proactive Steps to Counteract Payer Denials and Delays https://www.ensemblehp.com/blog/3-proactive-steps-to-counteract-payer-denials-and-delays/ Tue, 05 Nov 2024 20:17:42 +0000 https://www.ensemblehp.com/?p=15547 Receiving accurate, timely reimbursement and reducing unnecessary administrative cost imposed by payers requires a proactive strategy. … Read More

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What you need to know

Receiving accurate, timely reimbursement and reducing unnecessary administrative cost imposed by payers requires a proactive strategy from providers. This includes fortifying and enforcing payer contracts, investing in denial prevention and using technology to challenge delays and denials at scale.

Rising claim denials and payment delays are straining the already-fraught relationship between providers and payers.

Providers spent nearly $20 billion in 2022 pursuing delayed payments and denials, more than half of which were eventually overturned. Some health systems have seen denials double in the last year alone, with more than half of that activity coming from MA plans. Ensemble data shows MA plans issuing five times more first-pass denials than from traditional Medicare.

Across the industry, payers control the rules for how denials are determined, and they’re using advanced AI technology to enforce those guidelines by any means necessary. Providers must take a proactive approach against payer tactics that are hindering cost-effective care delivery.

Here are three efforts we’ve found effective in pushing back against increasing payment delays and denials:

1. Fortify and enforce payer contracts.

Many managed care contracts come with an evergreen clause, enabling them to renew automatically without any intervention from the provider or payer. These agreements might include an annual rate hike of a few percentage points, or they might not account for any increase at all. As more provider revenue moves from traditional Medicare to managed plans, including Medicare Advantage, the need for contract scrutiny and renegotiations becomes more critical.

Develop a payer scorecard to inform negotiations and help hold payers accountable

Leveraging accurate data and analytics during negotiations can significantly enhance a provider’s bargaining power. Evaluate performance across your commercial payers and pinpoint trends that should be addressed in your next negotiation. Concentrate on key metrics, including:

  • Clean claim rate
  • Payment as a percentage of charges
  • Speed to pay
  • Denial rates and reasons
  • Underpayments
  • Appeal volumes and success rates
  • Other year-over-year net reimbursement changes

Showing the total revenue impact of a payer’s behavior and comparing trends with other payers can help influence negotiations and accelerate issue resolution.

Close contract loopholes

Don’t accept standard boilerplate terms or unclear language that provides loopholes for payers to delay payment or increase administrative burden. Instead, revise contracts to include language that clearly defines dispute resolution requirements, penalties for non-compliance and mechanisms for enforcement. For example:

  • Require claim payment, denial or dispute within 30 days or payment remittance with interest on day 31
  • Set limits for requests for information, audit volume and appeal response timelines
  • Restrict bundling of charges and limit “lesser of” language

Even consider proposing a change in payment methodology to remove the payer’s incentive to downgrade claims, like a blended case rate for ER visits regardless of the E/M level.

Related: How to Successfully Negotiate Your Next Payer Contract >>>

Prepare an out-of-network strategy

If fair and equitable rate increases aren’t agreed upon, consider going out of network with the payer or specific plan. Many of these efforts have been successful in compelling payers to increase provider reimbursement to retain in-network status with their patients.

Prepare a strategy for your organization at least one year ahead of contract renegotiations to ensure your leadership, clinical staff, front-office staff and patients are well educated on the impact of being out of network and can access necessary resources to answer questions throughout the process.

Related: Tips for Providers Thinking of Going Out of Network >>>

2. Invest in denial prevention.

Establish a strong denial prevention program that is data-based and process-minded. 

True root cause resolution not only requires an understanding of the actual source of denials, but also an ability to connect the right dots across the revenue cycle, clinical departments and various stakeholder groups to resolve the identified issues.

Make denial prevention a team sport

Form a denials prevention committee capable of analyzing denial trends, sharing results with various stakeholders and holding parties accountable for upstream issue resolution. Train front-end teams on common errors that result in denials downstream as well as the financial impact denials and claims resubmissions have on the organization, so they understand the implications and importance of their roles. Ensure all teams involved understand the amount of rework their efforts will decrease by preventing denials from occurring in the first place.

Related: 3 Ways to Dramatically Reduce Denials >>>

Strengthen documentation and audits to avoid errors

Reduce the likelihood of denials and expedite the review process by capturing thorough documentation to support patient status, procedures and diagnoses. Consider adding prompts to the EHR to document clinical decision-making, like ‘Will this patient be admitted? If not, will the patient’s length of stay exceed two midnights? If so, why?’ Leverage a combination of technology and experts across coding, charge capture and CDI to ensure all claims are reviewed before they’re billed. This helps confirm all coding and charging is accurate and fully supported by documentation.

Find ways to streamline data exchange with payers

Granting access to your electronic medical record offers clear benefits for payers — including accurate risk adjustment and access to real-time records for utilization management — but can also help streamline claim adjudication, automate the authorization request process, reduce requests for information and ultimately accelerate payments for providers if implemented correctly.

One example is the electronic medical prior authorization (eMPA) capability available in Epic’s Payer Platform, which one healthcare organization used to eliminate manual intervention for nearly 90% of authorizations from a particular payer and decrease decision turnaround time from an average of three days to one hour.

Related: Payers Are Pushing for Direct EMR Access. Providers Must Push Back. >>>

3. Use technology to challenge payment delays and denials at scale.

The increasing administrative burden of appealing denials and escalating issues with payers is so resource-intensive that many providers opt out of the process altogether, accepting reimbursement far below what they deserve for the care provided. With the right technology-enabled strategy, providers can do more to liquidate outstanding AR and overturn denials.

Streamline the dispute process

Implement a robust mechanism to review payments, flag issues and automate the dispute process. Setting up a system to issue demand letters either in batches or individually can help compel payers to resolve disputes while also documenting your organization’s proactive efforts, should litigation become necessary. Leverage detailed claim statusing and collection notes to facilitate side-by-side claim analysis that will enable you to review account details and resolve outstanding AR.

Automate appeals

Reduce the time staff spend on initial denial reviews and appeal creation by leveraging generative AI to draft preliminary appeal letters based on templates tailored to different denial reasons. More sophisticated solutions can integrate with the EHR and leverage external data — like coverage criteria and payer policies — to automate complex clinical appeals so high-value resources can focus on validation rather than manually drafting arguments.

Solution Spotlight: See how Ensemble’s generative AI synthesizes disparate data to create compelling clinical appeals at scale >>>

The bottom line

Eliminating friction between payers and providers requires extensive work by both sides, but there are strategies healthcare organizations can implement in the near-term to help improve the timeliness and accuracy of payments. Taking a proactive approach to payer delays and denials not only enhances financial performance but also supports the delivery of high-quality, cost-effective care.

Don’t go it alone

A proven end-to-end partner can get your payer strategy in place quickly to help secure your organization’s financial future.

Contact Us

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]]> Managing Payer Friction Through Contract Negotiations https://www.ensemblehp.com/blog/managing-payer-friction-through-contract-negotiations/ Thu, 23 May 2024 13:48:00 +0000 https://www.ensemblehp.com/?p=13047 The fraught and evolving dynamics between payers and providers ultimately impact care delivery for patients … Read More

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What you need to know

HealthcareNOW Radio’s Healthcare de Jure podcast recently featured Ensemble VP of Payer Strategy, Brad Gingerich, discussing the fraught relationship between payers and providers.

This 30-minute Healthcare de Jure conversation, which covered the need for negotiating agreements and the tension that can arise from payer-provider lawsuits, can be accessed on demand.

Let’s take a closer look at this tension, how it’s evolving and why it’s coming to a head, and how these evolving dynamics between payers and providers ultimately impact care delivery for patients.

Medicare Advantage tensions lead to payer/provider friction

As Gingerich shared during the Healthcare de Jure discussion, many managed care agreements are grandfathered in with an evergreen clause that allows them to auto-renew with no action required on the part of the provider or payer. These agreements may have an annual rate increase of a few percentage points or they may not factor in any increase at all. Ultimately, many of these are older contracts and may not have been reassessed in quite some time.

“I came to find, early in my career, that many of these contracts were neglected; there was never really a focus on them,” said Gingerich, adding that managed care has often been an afterthought for many providers.

Why is that? Much of a hospital’s revenue used to be through traditional Medicare. Today, more and more of that revenue is moving into the managed space — i.e., Medicare Advantage (MA) plans, plans offered by private companies that contract with Medicare, which are very different than traditional Medicare plans. Since they’re routed through third-party commercial companies, MA plans are all based on negotiated contracts, meaning that a greater portion of hospital revenue is also subject to these contracts.

The confluence of these market pressures — neglected managed care contracts coupled with a rise in Medicare Advantage enrollments — means that providers seeking appropriate reimbursement for services rendered now need to shift their focus to properly managing these contracts.

“This is one of the most heightened, focused areas of any healthcare provider,” said Gingerich. “There are limits on what you can do to really draw patient volume — you can market, you can advertise, you can try to bring in new services, things like that — but at the end of the day, one of the last remaining opportunities to actually drive revenue into a health system is those negotiated contracts you have with payers.”

...at the end of the day, one of the last remaining opportunities to actually drive revenue into a health system is those negotiated contracts you have with payers.​​

Brad Gingerich, VP of Payer Strategy, Ensemble Health Partners​

Providers are feeling the pressure

Given inflation and other headwinds, providers face a great deal of pressure to get these contracts right. Although operating margins performed relatively well in Q1 2024, March’s numbers saw declines in volume and associated revenue.

Half of U.S. rural hospitals still operate at a loss, with hundreds vulnerable to closure. As a result of extreme financial pressures, more hospitals closed in 2023 than opened, while the largest health insurance companies accumulated $1.1 trillion in revenue — a five-year high.

For small hospitals, much of the difficulty comes from the fact that MA plans — which are increasing in enrollment — don’t have to pay the full amount it costs to provide services, unlike traditional Medicare. This means that facilities may be receiving one-third less in payment, depending on the plan alone. Add in Medicare Advantage marketing pushes and low and delayed reimbursements, and providers’ concerns around these managed plans are understandable.

Taking a firm stance on managed care contracts represents one way providers can push back against these market pressures. One example comes in the form of network access.

Historically, Gingerich said, health systems were giving away network access — a provider might have contracts with every payer without creating scarcity around that notion. Collectively, this open access to a provider’s network pushed reimbursement rates down. When it comes to network access, however, there’s an opportunity for providers to take a stand.

There’s a delicate balance between allowing access and requesting a rate that covers a health system’s bottom line, says Gingerich, adding, “health systems have to find ways to bridge those gaps, and so creating more of a value structure around access to the health system is one way to be able to command those rates.”

Historically, providers have not taken a hard stance to pick and choose the payers with which they sign. But in making those specific choices, Gingerich notes, providers can request that these business partners reciprocate with proper rates and proper terms.

Leaning on contract negotiations

When it comes to revenue, the critical lifeblood of the healthcare industry, there will always be tension in the market. However, revenue cycle management partners like Ensemble are working to ease this friction between payers and providers — or at least enable them to collaborate.

One predominant issue is that there’s a lack of transparency in the payer/provider relationship, says Gingerich. “No one really wants to show their cards. Payers, for example, are not really transparent when they tell you what their medical necessity criteria are going to be. You have to stumble through it… It’s very challenging to know exactly what payers want. They hold a lot of things close to the chest as proprietary and as a result, we get into a stand-off in many cases.”

This type of stand-off, an impasse in contract negotiations, most often happens because of a requested rate increase or the language of the contract, which governs how claims are paid and at what cadence.

With the clock ticking down to the time that a hospital will be out of network with a specific insurance company, Gingerich says the advantage is to the provider. Payers don’t want the negotiations to spill into the public domain, riling up patients and the press about the possibility of going out of network.

Between inflation, cost challenges, staffing challenges and more, today’s providers are operating in a whole new world, and they will have to embrace contract negotiations as one lever to pull to stay afloat.

“These opportunities have always existed but now cannot be ignored,” says Gingerich. “Now, providers have to stand up and preserve what they’ve negotiated for…historically, maybe the provider had the wherewithal to not be aggressive about that. That luxury is gone.”

Choosing out-of-network as a strategy

The out-of-network landscape has gone through a lot of changes in the past 10 years, says Gingerich. Providers are focused on serving their communities and increasing access; ideally, they want to be in network with as many payers as possible.

This is where managed care agreements come in, which Gingerich describes at their most basic level as being “like a Groupon — I’m going to steer all my members your way, you give me a discount.” If a provider chooses to go out of network, however, the payer no longer gets a discount, which brings with it a threat of increased spend to the payer.

In today’s market, full risk products are the largest source of revenue for payers. Outside of employer-sponsored coverage, however, patients are plan-agnostic and have the ability to choose a plan. They care most about seeing their preferred provider, rather than sticking with a preferred plan. This dichotomy provides leverage for providers in contract negotiations.

Shifting friction to collaboration

How can the relationship between payers and providers improve for the better? That is the critical question often overlooked in conversations about the friction between payers and providers.

“I think we need to understand what everyone’s really after,” says Gingerich. “As a provider, the objective is to be paid quickly, timely and easily. What that means is they don’t want to have to do a lot of rework, they don’t want to have to bill a claim and then have to substantiate why it’s payable for the next 90 days — submit medical records, itemize bills, have a physician write an appeal — they don’t want to have to do any of that.”

Ultimately, he says, for providers, it comes down to efficient reimbursement so care can continue: “We provided the care six months ago, but we’re still fighting for payment today. That’s a problem for us. If the payers are ultimately going to release funds, how can we move it upstream faster?”

Payers, on the other hand, want predictability. They’re seeking to predict their future spend, so they can right-size their premiums and really manage their expenses. If a contract with a provider is terminated abruptly, that represents a significant rate increase that a payer doesn’t have forecasted into their budget.

Negotiations need to be about collaboration, says Gingerich, less about finding a middle ground and more about coming to the table with trust and acting in good faith. Ultimately, these evolving dynamics between payers and providers impact care delivery, affecting the very patients that all parties were formed to support. With collaboration in mind, contract negotiations can help keep the patient at the center, while ensuring both payers and providers have the financial flexibility to continue their important work.

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]]> Making ICHRA Plans Work for Providers and Patients https://www.ensemblehp.com/blog/ichra-plans-providers-patient/ Tue, 06 Feb 2024 16:52:51 +0000 https://www.ensemblehp.com/?p=12690 With the increased adoption of ICHRAs, now is the time for providers to proactively rethink their contracting strategies with exchange plans. … Read More

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What you need to know

The adoption of individual coverage health reimbursement arrangements (ICHRAs) increased by 64% from 2022 to 2023, and major ACA exchange payers are placing their bets on these types of plans to further disrupt the employer group insurance market. ICHRA plans will likely have an eventual impact on reimbursements to providers since individual plans traditionally pay less than employer-sponsored plans. With the increased adoption of ICHRAs, now is the time for providers to proactively rethink their contracting strategies with exchange plans.

Individual coverage health reimbursement arrangements (ICHRAs) enable employers to reimburse their employees for a designated amount of health insurance premiums toward individual health plans purchased by the employee on their state’s ACA exchange.

This recent model, first offered in 2019, stands in contrast to the traditional group health plan model where employers pay the entirety of a health plan’s cost directly rather than through reimbursement to an employee.

The subsidized structure of ICHRA plans offers benefits to several key stakeholders:

  • For payers: Annual reports from a major payer show that their most profitable lines of business are the fully insured, where the payer holds the risk. Self-insured employer plans offer limited margins for payers since the employer funds the actual claim for payment and therefore holds the risk themselves, with the payer acting as a Third-Party Administrator (TPA). When employees opt for a fully insured product, as in ICHRA plans, the model becomes more profitable for payers.
  • For employers: Employers can set a reimbursement limit that fits their existing financial structure, often making ICHRA plans more affordable for an organization than traditional group health plan options. The variety of plans an employee can choose from under an ICHRA structure can also make an employer’s benefits more competitive for talent acquisition. Finally, ICHRA plans relieve employers of many administrative responsibilities, as well as of the need to internally monitor and address legislation that might impact group health plans.
  • For employees: The structure of ICHRA plans is meant to give employees the flexibility to choose the plan that’s right for them and their families. Often this might mean staying with a preferred provider or opting for coverage specific to their needs. This helps avoid the one-size-fits-all format of traditional employee group health plans.

Of note — unlike their counterpart plans, Excepted Benefit HRAs (EBHRAs), which are general-purpose HRAs meant for employees under an employer-sponsored group plan, ICHRAs are integrated with individual market coverage and Medicare but not with a group health plan.

ICHRA plans in action

ICHRA plans have been estimated to eventually impact millions of Americans. Once fully established, “roughly 800,000 employers will offer ICHRAs to pay for insurance for more than 11 million employees and family members,” reported HHS in a 2019 FAQ about the ICHRA plans.

This growth goes hand-in-hand with ACA on-exchange enrollment trends, which hit a record high of 15.7 million in 2023 and saw more than 20 million enrollments during the most recent open enrollment period.

If close to a million employers are predicted to move from traditional group plans to individual reimbursements, what does this shift in coverage mean for hospitals and providers, and for the reimbursement amounts they can expect?

With many major payers expanding their ACA offerings, these are questions worth asking.

Rethinking traditional ACA participation agreements

When exchange plans first came onto the scene, they had minimal adoption in many areas and did not carry significant membership. ACA exchange plans have always been government subsidized and were therefore recognized as having different economic constraints based on their funding source.

For many, these exchange plans were regarded as a cost of doing business, or a small product contract that rode the coattails of the larger payer agreement or relationship. The ACA agreements have typically been an afterthought, and providers don’t put up a strong rate ask on them since, historically, they were so small.

These factors led to the current reimbursement situation: Most providers heavily discount their participation agreements with ACA exchange plans as compared to a standard commercial product. It’s common for providers to significantly discount rate agreements with ACA plans as compared to their commercial agreements. This rate disparity creates a problem as members migrate from the higher-paying, employer-sponsored plans to the ACA plans and their associated fee structures.

Recognizing the revenue impact of ICHRA plans

In order to know if an organization is experiencing an issue stemming from wider adoption of ICHRA plans, it will first need to monitor the volume and utilization of both ICHRA and traditional employer-sponsored plans, noting outmigration from the employer-sponsored to the ICHRA model.

To identify specific employers that have transitioned, an organization might analyze the guarantor data for instances where a patient’s plan changed from employer-sponsored to ICHRA while the patient remained with the same employer as when they had an employer-sponsored plan. This could indicate the specific local employer that has moved to an ICHRA model.

Allowing ICHRA plans to empower provider negotiations

There are regulatory requirements imposed on these plans to ensure the plan has an adequate ability to serve the insured members. As employers eye implementation of ICHRA plans, providers need to understand where they have negotiating power.

To mitigate the revenue impact, providers might look to contract with ACA products at rates consistent with the alternative commercial product. Many of the ACA plans are relatively new entrants to the markets they operate in and may need the provider’s network for adequacy purposes. This may help establish the leverage to command the equivalent rates.

The exchange products are also subject to an open enrollment period. This creates an entirely new opportunity for providers as they approach contracting and communicating with their members.

Currently, employers in traditional group health plans make the decision on what plan the employees get. An employee’s preferred provider or facility may not be in network for the employer’s selected plan, or the plan might change from year to year, causing inconsistencies in care. For employees who would prefer to choose and remain with a particular provider, this can be a difficult transition.

Under the ICHRA plan structure, employees can select between individual health plans available on their state’s ACA exchange, often giving them the ability to choose a plan that offers coverage for a particular provider or set of providers for themselves and their families.

This driving impetus for patients also creates a new lever for providers to consider in their negotiation strategies. If the employee had the freedom of choice between multiple ACA plans each year at the time of open enrollment — as Medicare beneficiaries do — a savvy provider could utilize this and align their negotiation efforts around open enrollment. Then, if a deal is not reached, the provider could accurately inform the community and steer those patients into a participating plan that agreed to the provider’s rate demands.

Leveraging the ICHRA plans in this way can empower providers in their negotiation strategies while at the same time enabling patients to stay with their preferred provider by choosing the plan that’s best for their own needs.

The bottom line

Negotiations with payers are one example of how providers can be empowered by the growth of ICHRA plans to improve both reimbursement rates for themselves and network adequacy and access for patients. This is not a “wait-and-see” scenario; actual adoption of ICHRA plans has more than tripled since their 2020 introduction. With 89% of employers considering ICHRAs as a solution by 2026, providers need to be proactively monitoring the adoption of ICHRA plans and be prepared to address this trend to prevent negative consequences.

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Ensemble Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.

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]]> Providers Should Push Back Against Direct EMR Access for Payers  https://solutions.ensemblehp.com/payor-emr-access#new_tab Tue, 29 Aug 2023 23:53:18 +0000 https://www.ensemblehp.com/?p=13451 Lessons learned from providers who have granted direct EMR access to payers​. … Read More

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