Stacie Sutter, AVP, Payer Strategy, Author at Ensemble Health Partners

What Drives Friction Between Providers and Payers?

Stacie Sutter, AVP, Payer Strategy — Mon, 10 Feb 2025 16:35:32 +0000

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.

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.

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.

The post What Drives Friction Between Providers and Payers? appeared first on Ensemble Health Partners.

Supporting Our Clients Against MA Plans’ 340B Inequities

Stacie Sutter, AVP, Payer Strategy — Wed, 13 Nov 2024 17:50:06 +0000

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.

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.

The post Supporting Our Clients Against MA Plans’ 340B Inequities appeared first on Ensemble Health Partners.

3 Proactive Steps to Counteract Payer Denials and Delays

Stacie Sutter, AVP, Payer Strategy — Tue, 05 Nov 2024 20:17:42 +0000

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.

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.

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.

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.

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.

The post 3 Proactive Steps to Counteract Payer Denials and Delays appeared first on Ensemble Health Partners.

Deep Dive: Is Your Practice in the Pre-Payment Review ‘Penalty Box’?

Stacie Sutter, AVP, Payer Strategy — Fri, 06 Sep 2024 18:41:23 +0000

Has a payer placed your facility on pre-payment review for certain services, such as emergency room visits for specific levels of care?

Pre-payment review means your facility must submit medical records with each affected claim before the payer will agree to pay or otherwise adjudicate the claim. This process:

Increases administrative costs in the form of developing alternate workflows to submit medical records with affected claims
Delays payment and increases days in accounts receivable
Insinuates there are concerns with a provider’s billing practices

The latter observation is critically important; however, despite the serious nature of what pre-payment review suggests, payers often provide little to no explanation or basis for placing a provider on pre-payment review.

There’s often no transparency as to why it happened or what’s needed to end it. Providers have engaged neutral third parties to evaluate their billing practices, and these reviews find them to be compliant and consistent with Medicare and industry requirements. Providers are left to wonder what’s going on, how to move forward, and how to avoid this situation in the future.

Pre-payment review can be a worrisome status for a provider to have. Here are some key steps to consider if your facility is facing pre-payment review:

1. Make sure you’re aligned with CMS standards

First, consider what the Centers for Medicare & Medicaid Services (CMS) require regarding facility coding for Emergency Department (ED) Evaluation and Management (E/M) services:

Unique Methodology:

CMS acknowledges that each hospital or ED may use its own unique system for assigning E/M levels.
However, this methodology must adhere to certain principles:
- It should be medically necessary.
- The coding process should be consistent, reproducible, and correlate with the institutional resources utilized in the facility.

E/M Guidelines:

CMS emphasizes that E/M guidelines should:
- Follow the intent of the CPT® code descriptor.
- Be designed to reasonably relate the intensity of hospital resources required to the different levels of effort represented by the code.

2. Assess the ask and your own resources

Next, consider what the payer’s pre-payment review asks of your facility or practice, and what challenges it may create to agree to it and comply. These may include:

Compliance risks:

Asking a provider to re-bill their claim under a different methodology to appease the payer would arguably place the facility or provider out of compliance with CMS requirements to have a consistent coding methodology which is uniformly applied to all patients. Non-compliance with CMS guidelines can result in False Claims Act exposure, fines and penalties and exclusion from Medicare and Medicaid programs.

Administrative burden:

Pre-payment reviews require providers to adjust routine workflows and submit extensive documentation before claims are paid. This is time-consuming and resource-intensive, and it unilaterally imposes significant administrative costs on the facility or provider — not the payer.

Impact on cash flow:

Because payments are delayed until the review is complete, hospitals and providers grappling with pre-payment reviews may experience cash flow issues. Delays in payment can lead to increased borrowing costs and financial strain on the provider. This can be particularly problematic for smaller facilities or practices that rely on timely reimbursement to maintain operations and standards for patient care.

3. Engage the payer using proven practices

Once you’ve confirmed your own compliance and assessed your resources, it’s time to take your concerns back to the payer. Consider these next steps in navigating this situation with the payer:

Ask questions: Given the serious nature of pre-payment review, which suggest there may be concerns with a facility or practice’s coding and billing practices, it’s critical that such activities be done in complete transparency and good faith to ensure the parties fully understand the issues and work collaboratively to resolve them. Ask the payer to describe in detail the criteria it used to conduct its review and the analysis it employed to determine pre-payment review was appropriate. This is also an opportunity to ask the payer to produce the criteria it plans to use in evaluating whether to continue or terminate the pre-payment review status.
Appeal: Facilities and providers have the right to appeal pre-payment review decisions. Understanding the appeal process and preparing comprehensive documentation can improve the chances of a successful appeal.
Enhance documentation practices: Ensure that all medical records are thorough, accurate and up to date. Proper documentation can reduce the likelihood of claim denials and expedite the review process.
Request a reconsideration: If the initial appeal is denied, hospitals and providers can request a reconsideration or a hearing, depending on the payer’s policies. This may involve presenting the case to an independent review board. Additionally, consider proposing a change in payment methodology to remove the payer’s incentive to downgrade claims. For example, a blended case rate for ER visits regardless of the E/M level can help ensure fair compensation and reduce disputes.
Maintain communication: Keep open lines of communication with the payer throughout the appeal process. Regular follow-ups can help ensure that the appeal is being processed and provide opportunities to address any additional questions or concerns.
Master your contract language: Understand your rights as a Contracted Entity and obligations to strictly adhere to CMS guidelines. If there are any uncertainties, consult legal counsel to ensure payers are not violating CMS guidelines when imposing their policies on hospitals and providers. In future contract negotiations, demand transparency and a robust appeal process should the payer wish to impose a pre-payment review status.
Consider dispute resolution or litigation: Review the terms of your contractual agreement with the payer to understand the dispute resolution or litigation options available. This may involve mediation, arbitration or legal action if necessary. Engaging legal counsel can help navigate this process and ensure your rights are protected.

The bottom line

Grappling with a pre-payment review status can be daunting and feel quite unfair to providers who find themselves in this situation. However, there’s every reason to push back on payers, and numerous avenues by which to do so.

The key steps listed above offer a good start, and an expert end-to-end RCM partner can help you navigate the entire process. Ensemble is on the provider’s side, not the payer’s — when navigating pre-payment review, make sure you also have an advocate in your corner.

Your revenue cycle is too important to be left to chance.

Download our actionable checklist for questions to keep your team on track when navigating pre-payment review with payers.

The post Deep Dive: Is Your Practice in the Pre-Payment Review ‘Penalty Box’? appeared first on Ensemble Health Partners.

What Is a Reference-Based Pricing Plan?

Stacie Sutter, AVP, Payer Strategy — Wed, 01 May 2024 13:28:15 +0000

What you need to know

Reference-Based Pricing (RBP) plans: RBP plans pay providers, labs, clinics and hospitals based on an established benchmark set by a third-party administrator, rather than rates based on services rendered or value derived, like traditional private health plans. RBP plans do not offer in- or out-of-network tiers. Providers may choose not to accept these plans for scheduled non-emergency services or elective services.

What's the difference between Reference-Based Pricing plans and other commercial health plans?

Reference-Based Pricing removes the economic predictability that a contracted fee schedule provides. The model also upsets the existing economic structure of health plans, which relies on:

Network involvement: The discount provided to the payer or third-party administrator through a managed care agreement is provided in exchange for network participation.
Benefits from participation: The network then channels patient volume to the provider. In other words, the provider is discounting their rates and agreeing to payment and Utilization Management protocols in exchange for patient volume.

Under the RBP process, however, the provider’s reimbursement is unilaterally discounted by the RBP administrator, and the provider receives no volume increase in exchange.

Who's driving the adoption of these plans?

Adoption of RBP plans has been driven by employers. According to 2019 data, less than 2% of employers were using an RBP plan but 10% were actively considering it for future use. As employer-sponsored health plan costs continue to rise, more employers will be looking at alternatives like RBP plans.

Why might employers choose this type of plan?

Employers want financial savings and less expensive options while also meeting their obligations to provide health coverage under the Affordable Care Act (ACA). RBP plans meet that need, and often reduce an employer’s healthcare claims spending by 20% to 30%.

These savings, however, are accomplished by shifting the cost of care away from the employer to the employee and the employee’s providers. Employers adopting RBP plans arguably prioritize financial savings over service or employee experience.

How should providers go about accepting RBP plans?

If you choose to accept RBP plans for scheduled non-emergency services or elective services, then consider the following:

Providers: Be sure to think through your out-of-network billing policies for scheduled non-emergency services. RBP plans often increase bad debt for providers. You may consider seeking a Single Case Agreement from the RBP plan in advance of rendering the service.
Patients: Providers have a responsibility to educate patients on these types of plans so patients may understand how RBP will impact their own financial responsibility for the non-emergency services sought.

FAQ

When can providers choose not to accept a Reference-Based Pricing plan?

Providers have the option not to accept these plans for scheduled non-emergency services or elective services. For emergency services, patients with private or commercial health coverage, including employment-based group health plan coverage, are protected from balance billing under the No Surprises Act (NSA) and sometimes state law. Any decision not to accept RBP plans should include review by your legal and compliance advisors.

Who sets the rates? How is the benchmark defined?

Employers engage third-party administrators (TPA) who develop pricing according to a reference or benchmark, like Medicare, and often use provider cost reports to do so. The TPA will develop rates in reference to that benchmark and which they think is fair, but without the provider’s agreement or consent.

What sort of agency do providers have for recouping payment for non-emergency services or elective services?

There are two possibilities when it comes to provider involvement:

Dispute the rates: This is specifically relevant to elective procedures, educating patients regarding what their plan does not cover. Alternatively, providers can still bill patients, but must notify them that they’ll be billed. The patient then contacts the plan, so that the plan negotiates with the provider. Essentially, the Reference-Based Pricing model uses the patient as the AR follow up person rather than staff. Without the plan’s intervention, the patient may be “balance billed” for the remainder of the provider’s fee.
Work out additional payment: Providers don’t know what the rate will be — the standard notice under NSA simply states that this provider doesn’t participate with the insurance plan. This then gives the provider an opportunity to work out additional payment, since the patient has to go to their health plan, and then the plan goes back to the provider to address any remaining differences.

Get in touch with one of our experts to learn more about Reference-Based Pricing plans and how they may impact your revenue cycle.

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

Stacie Sutter, AVP, Payer Strategy — Wed, 09 Aug 2023 14:17:07 +0000

Providers Must Take a Thoughtful Approach Before Granting Full EMR Access to Payers

Major payers like Anthem, UnitedHealthcare, Aetna, Cigna and Humana are pushing providers to grant them direct electronic medical record (EMR) access. The benefits to payers are clear – direct access to records to drive HEDIS and Stars quality measures, accurate risk adjustment for capitated members and access to real-time records for utilization management. However, this step toward interoperability has huge potential for providers as well, if implemented appropriately.

As the dominant EMR, Epic has introduced the Epic Payer Platform (EPP) as the conduit for connectivity between payers and providers. EPP contains several different modules, including Clinical Data Exchange, Electronic Authorizations, Claims Payments and Value-Based Care Management. Payers adopting EPP are mainly prioritizing connectivity that meets their needs – gaining access to necessary clinical documentation and quality outcomes to adjust risk scores of beneficiaries (and associated government reimbursement) as well as enhance their rankings against other health plans.

But using EPP to streamline claim adjudication, automate the authorization request process, reduce or eliminate requests for information, and ultimately accelerate payments for providers is equally as critical.

Since access to EMR data is so valuable to payers, we encourage providers to take a thoughtful approach before giving it away without an equitable exchange. Establish a strategically aligned agreement to improve revenue cycle outcomes and ensure your organization sees as much value as the payers. Avoid providing unchecked access to your EMR system by establishing the right access restrictions and performance-based contracts to meet your objectives and retain control of your information.

Ensemble offers comprehensive revenue cycle managed services to clients, including strategic guidance for health system executives and managed care departments to improve payer relationships.

The Real Cost of Medicare Advantage Plan Success

Stacie Sutter, AVP, Payer Strategy — Wed, 09 Aug 2023 14:13:01 +0000

MA Plans Cost Taxpayers More, But Pay Hospitals Less, Than Medicare

Nearly half of the Medicare-eligible population is now enrolled in a Medicare Advantage (MA) plan. By 2032, MA enrollment is expected to grow above 60 percent. These plans are funded by the government but managed by private-sector insurance companies. They’ve proven to be so lucrative Humana plans to exit the commercial business entirely and go all-in on government-funded programs like MA. Unfortunately, they’re proving to be more costly to taxpayers and providers.

Medicare Advantage (MA) plans have never cost taxpayers less than traditional Medicare, despite that being the entire goal of the program. According to the Medicare Payment Advisory Commission’s 2021 Report to Congress, aggregate MA payments are 4 percent higher than Medicare spending levels, meaning these plans are 4 percent less efficient than the fee-for-service model they were designed to improve.

In addition to costing taxpayers more, MA plans are paying hospitals less than traditional Medicare. Instead of paying 102 percent or more as outlined in their contracts, MA plans are actually paying less than 90% of Medicare rates to the organizations delivering care to their patients.

Medicare reimbursement rates have never covered the total cost of care, so when MA reimbursement falls below that already-low baseline, hospitals are left to absorb the difference. With rising costs, record inflation and dwindling labor, many hospitals simply can’t afford to cover the difference anymore. Providers across the country continue to face near-zero operating margins, forcing many to reevaluate the services they’re able to offer their communities, forego upgrades to facilities and equipment, and consider consolidation.

To address this critical issue, providers continually attempt to renegotiate rates and hold payors accountable for paying what they’ve agreed to and paying on time. If successful, these negotiations typically result in slight rate increases under the commercial insurance plans, not MA plans. Since the majority of commercial plans are self-funded by employers, business owners fund the rate increases, preventing any erosion to insurance company profits.

Calling for a real solution:

We need a system overhaul that requires all stakeholders to come to the table and work together to define a sustainable path forward. Here are a few ideas:

We need to reinforce efforts to hold MA plans accountable to the same standards as Medicare. No more loopholes on what services will be covered. No more ambiguity on what information is required before a service can be authorized. No more denials for care that is clearly medically necessary. We urge providers to hold MA plans accountable for the changes CMS is enacting to require MA plans to follow traditional Medicare rules for coverage decisions. We hope to see additional legislation that enforces common standards, eliminates undue administrative burden caused by variability, and prevents unnecessary care delays and deferrals.
We need to eliminate inequitable agreements between MA plans and providers. Healthcare organizations must put a higher price on the value of their network and stop accepting MA participation without the right guardrails in place. Agreements should follow the Medicare standards, outlined by the provider’s contract terms, not the payor’s. Rates should be set to sufficiently offset the impact of burdensome administrative practices imposed by these plans that far exceed traditional Medicare standards. Consider partnering with only the top few MA plans that strategically align with your organization’s goals and are willing to agree on equitable terms.
We need to educate communities about the real economics of Medicare and MA plans. Inform patients about the difference between coverage options, plans and costs during the open enrollment period. Share information about how often care is denied under Medicare compared to MA plans. Help shape the public narrative to combat the PR campaigns currently being driven by payors regarding the value of these plans.

Equip your organization with the information needed to hold payors accountable and improve negotiations.

Ensemble offers comprehensive revenue cycle managed services to clients, including strategic guidance for health system executives and managed care departments to improve payor relationships.

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.

Stacie Sutter, AVP, Payer Strategy, Author at Ensemble Health Partners

What Drives Friction Between Providers and Payers?

What you need to know

1. Inconsistent, unclear coverage policies

The real cost of friction:

2. Broken, burdensome information exchange

The real cost of friction:

3. Inequitable, unsustainable contract rates

The real cost of friction:

The bottom line

You know the causes. Now what?

Supporting Our Clients Against MA Plans’ 340B Inequities

MA plans diverge from CMS guidance on underpayment of claims

340B concerns are part of a worrying MA plan trend

Ensemble continues to support our clients’ right to fair reimbursement

Learn about your options

The bottom line

3 Proactive Steps to Counteract Payer Denials and Delays

What you need to know

1. Fortify and enforce payer contracts.

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

Close contract loopholes

Prepare an out-of-network strategy

2. Invest in denial prevention.

Make denial prevention a team sport

Strengthen documentation and audits to avoid errors

Find ways to streamline data exchange with payers

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

Streamline the dispute process

Automate appeals

The bottom line

Don’t go it alone

Deep Dive: Is Your Practice in the Pre-Payment Review ‘Penalty Box’?

1. Make sure you’re aligned with CMS standards

2. Assess the ask and your own resources

Compliance risks:

Administrative burden:

Impact on cash flow:

3. Engage the payer using proven practices

The bottom line

Your revenue cycle is too important to be left to chance.

What Is a Reference-Based Pricing Plan?

What you need to know

What's the difference between Reference-Based Pricing plans and other commercial health plans?

Who's driving the adoption of these plans?

Why might employers choose this type of plan?

How should providers go about accepting RBP plans?

FAQ

When can providers choose not to accept a Reference-Based Pricing plan?

Who sets the rates? How is the benchmark defined?

What sort of agency do providers have for recouping payment for non-emergency services or elective services?

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