Brad Gingerich, VP, Payer Strategy, Author at Ensemble Health Partners https://www.ensemblehp.com/blog/author/brad-gingerich/ Your modern revenue cycle solution Tue, 24 Jun 2025 14:54:18 +0000 en-US hourly 1 https://www.ensemblehp.com/wp-content/uploads/2023/10/Logo-Chevron-80x80.png Brad Gingerich, VP, Payer Strategy, Author at Ensemble Health Partners https://www.ensemblehp.com/blog/author/brad-gingerich/ 32 32 Recent ACA Plan Growth Holds Risks + Opportunities for Providers https://www.ensemblehp.com/blog/recent-aca-plan-growth-holds-risks-opportunities-for-providers/ Tue, 01 Oct 2024 18:05:54 +0000 https://www.ensemblehp.com/?p=14978 Healthcare providers must advocate for the extension of ACA plan enhanced subsidies to protect tenuous financial margins. … Read More

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What you need to know

Subsidies have made health insurance more affordable, with the added benefit of bringing favorable commercial reimbursement rates and contracting leverage to providers. However, these same subsidies are set to expire at the end of 2025. Now is the time for action — providers must advocate for the extension of subsidies to protect tenuous financial margins.

The Affordable Care Act (ACA) has expanded coverage for patients while bringing surprising benefits for providers nationwide. In 2024, 21 million people enrolled in the ACA Marketplace, a record level that’s nearly double the 11 million enrolled in 2020.

2024 ACA Open Enrollment Hits a New Record (Source: kff.org)
Growth of ACA Plan Membership (2014-2024), source: kff.org

A large portion of this growth can be attributed to the enhanced subsidies introduced during the COVID pandemic by ARPA in 2021 and renewed under the IRA in 2022. These subsidies made health insurance more affordable for all enrollees, but particularly for low- and middle-income individuals who were previously priced out of coverage. In fact, 91% of beneficiaries now receive some form of subsidy, while 74% of beneficiaries are below 250% of the Federal Poverty Level.

This expansion of accessible coverage has had a substantial impact, particularly at a regional level. States with the highest growth in ACA enrollment, such as Texas, Mississippi and Georgia, initially had high uninsured rates and have not expanded Medicaid. This has direct, positive repercussions for healthcare providers and their bottom lines, since many individuals enrolled in ACA plans were uninsured prior to the Affordable Care Act, often because of Medicaid restrictions within their state.

With the introduction of enhanced subsidies, these individuals were able to gain access to insurance plans — and not just any insurance plans, but those with the highest hospital reimbursements. The transition from uninsured to ACA plan enrollment, rather than Medicaid coverage to coverage by an ACA plans, represents the maximum revenue impact on hospitals that can be achieved via payer mix change.

Subsidies drive ACA plan membership — but they’re set to expire.

Subsidies have played a crucial role in making ACA plans affordable. There are two main types of subsidies:

  1. Premium tax credits: These reduce the monthly premiums for eligible individuals and families.
  2. Cost-sharing reductions (CSR): These lower out-of-pocket costs for eligible enrollees.

The enhanced subsidies under ARPA and IRA have expanded eligibility and increased the amount of financial assistance available. For example, households with incomes up to 400% of the federal poverty level — $103,280 for a family of three in 2024 — can receive premium tax credits. Those with incomes below 150% of the poverty level can have zero-dollar premiums for silver plans.

Low Income People Make Up the Majority of the Growth in ACA Marketplace Enrollment
Distribution of Subsidy Recipients by Income Level, source: kff.org

Not extending ACA plan subsidies brings clear risks

The enhanced subsidies are set to expire at the end of 2025. If not extended, the following risks may arise, impacting patients, providers, payers and employers alike:

Loss of coverage

Millions of individuals could lose their health insurance coverage, leading to a potential increase in uninsured rates.

Lower-Income Enrollees Would Experience the Steepest Premium Increases if Enhanced Subsidies Expire
Impact of Subsidy Expiration on Coverage and Provider Revenue, source: kff.org

Increase in self-funded employer costs

With the subsidies factored in, ACA plans are less expensive than some employer-sponsored plans. If individuals don’t have that option, they will need to move back into the employer-sponsored plans, bringing added to financial burden to those employers.

Revenue impact

Providers could face a significant revenue impact due to the loss of commercially insured patients and a potential increase in uninsured or Medicaid patients.

Market instability

The uncertainty around the extension of subsidies could lead to market instability, affecting both insurers and providers.

Contracting leverage: an overlooked opportunity of ACA plans

The risk of not extending these subsidies is underscored by the opportunities brought to providers by the rapid growth of ACA plan membership. Chief among these is the potential for ACA plans to serve as a means of leverage during contracting.

Providers can take proactive action to capitalize on the recent proliferation of ACA plan enrollments:

  1. Lean on direct-to-consumer education during open enrollment
    The ACA opens new opportunities for contracting leverage through direct-to-consumer marketing during open enrollment. Put simply, during open enrollment, and just like with Medicare Advantage, ACA members can choose their desired plan from a level playing field — a practice distinct from employer-sponsored plans, where coverage options are determined by the employer, not the healthcare consumer.

    By aligning the term of the contract with the open enrollment window, providers can leverage the relevance of the contract negotiation against the open enrollment window, communicating with the public the potential reality that their provider will not be participating with a specific payer in the following year and asking them to consider this when making a plan selection.

    When dealing with payers that offers both Medicare Advantage and ACA products, both of which have overlapping open enrollment windows, we see a unique opportunity to challenge the payer’s membership at scale while also educating the public on their access options.

  2. Ensure contract rates for ACA are equivalent to the commercial rates
    Providers must take inventory of their current ACA contracted rates. Ensure that they are equivalent to that payer’s commercial rates.

    This creates a significant revenue opportunity for individuals that were previously uninsured or underinsured and avoids the revenue leakage due to migration from an existing employer-sponsored plan to ACA plans since the ACA plans will be the same contracted rate.

  3. Support lobbying efforts to renew + extend subsidies
    Providers hold industry expertise and influence, enabling them to effectively lobby policymakers to recognize the importance of making healthcare more accessible and affordable. Executives should collaborate with advocacy groups, participate in policy discussions and provide data-driven insights that highlight the positive impact of expanded subsidies on public health outcomes and economic stability.

    Education is key. Providers can contact their representatives in Congress, invite them to tour the healthcare facilities and show them what has been made possible from the revenue associated with these enhanced subsidies. Care innovations, community impact and other tangible improvements all support a platform that would be easy for politicians to get behind if they are educated on it.

    Additionally, providers can mobilize their networks to amplify the message, ensuring that the voices of patients and providers are heard. By actively supporting these lobbying efforts, healthcare leaders can help create a more equitable healthcare system that benefits all stakeholders.

The bottom line

The proliferation of ACA plan membership, driven by enhanced subsidies, has created substantial opportunities for healthcare providers. It has opened new contracting leverage opportunities in the struggle to negotiate fair and adequate reimbursement with payers. However, the potential expiration of these subsidies poses significant risks industry-wide that cannot be overstated.

Stakeholders — including both insurers and providers — must advocate for the extension of these subsidies. The goal is not only to expand care, but to support comparable fee-for-service rates, appropriate reimbursements and the hard-earned margins keeping organizations afloat in an industry facing numerous pressures.

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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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]]> Tips for Providers Thinking of Going Out of Network https://www.ensemblehp.com/blog/tips-for-providers-thinking-of-going-out-of-network/ Mon, 17 Jul 2023 20:56:42 +0000 https://www.ensemblehp.com/?p=11306 Understanding the implications and implementing a well-thought-out strategy is crucial to providers considering going out of network. … Read More

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Considering the decision to go out of network with a payer? Understanding the implications and implementing a well-thought-out strategy is crucial. Discover how to navigate the process of debating going out of network effectively to optimize your healthcare organization’s financial stability and patient care.

Why Consider Going Out of Network?

One common reason for health systems to exit a payer’s network is the inability to reach mutually agreed-upon reimbursement rates and terms during contract negotiations. Years of challenges with timeliness, accuracy and costs of pursuing full reimbursement from an insurance company often lead to this last-ditch effort.  

Impact on Providers

Two of our clients recently leveraged an out-of-network strategy that ultimately resulted in contract rates double the standard annual increase of 2%-3% for each year of their agreement. One of the organizations only went out of network for a matter of hours before settling on a higher rate with the payer. The other merely threatened to exit the network, leveraging social media and community news outlets to make their position public and put pressure on the payer to come to the table with more reasonable rates.  

Impact on Payers​

The impact of going out of network varies based on the size of the health system.  It can challenge network adequacy for government-sponsored plans, disrupt network access for commercial patients and their sponsoring employers and increase payment for out-of-network services.

Tips for Considering + Implementing an Out-of-Network Strategy With Major Payers​

Assess Current + Prospective Out-of-Network Patient Volume

Review patient volume metrics such as primary care attribution by plan type, elective procedures by plan type and patient referral patterns. If the emergency department is a primary access point for patients, the non-participating status will have a lesser impact to patient volume since all emergency services qualify for in-network benefits regardless of participation status.

Be Selective About In-Network Services

Consider keeping primary care, OB/GYN and pediatricians in-network to maintain HMO patient attribution. This is especially important for temporary out-of-network periods. It also mitigates disruption of PPO member attribution to the primary care physicians, allowing patients with out-of-network benefits to still be referred to the out-of-network facility for elective procedures. 

Educate Physicians About the Out-of-Network Experience

Reassure primary care physicians and staff about the implications of being out of network and its impact on access to care. Provide a clear roadmap of expectations and reinforce the need to have privileges at a participating facility.   

Connect With Impacted Self-Funded Employers

Rank and engage the top 10 self-funded employers utilizing the out-of-network plan. Consider offering direct-to-employer network rates or alternative insurance carriers. Consider petitioning the payer for renegotiation to restore your organization to the network.  

Keep Patients Informed + Engaged

Educate patients about the implications of being out of network for each service and plan type, including the distinctions between medical emergencies and elective procedures, whether they have secondary coverage and different plan types. Utilize existing communication channels such as patient portals and targeted outreach via mail or phone. Ensure staff are available and equipped to address specific patient questions through a centralized call center. 

Make Your Position Public

As payer/provider contract negotiations become more public, consider sharing your stance with community media outlets to shed light on your position. Clearly state your position and support it with available data to demonstrate the gap between reimbursement and cost, supporting your rationale for a higher negotiated rate.  

Prepare Your Operators for a Smooth Transition

Ensure your Patient Access team is prepared to accurately schedule and register patients and answer coverage-related questions. Update processes and tools to identify at-risk accounts and ensure compliance with the No Surprises Act and any applicable state surprise billing laws. Evaluate utilization management procedures as well as billing and collections processes to effectively manage out-of-network claims. 

In Summary

When healthcare organizations consider the decision to go out of network with a payer, it requires careful analysis and planning.

Whether it’s a temporary tactic to strengthen negotiations or a permanent decision, assessing patient volume, providing comprehensive education to staff and patients, and engaging employers are critical components for a smooth transition. By proactively managing these factors, organizations can navigate this shift successfully to strengthen financial performance and continue delivering high-quality care to their communities. 

Ensemble Health Partners offers comprehensive revenue cycle managed services to clients, including strategic guidance for health system executives and managed care departments to improve payer relationships. We support our clients with out-of-network strategy analysis and operationalization. Our payer strategy experts have more than 15 years of experience leading payer negotiations, educating managed care teams and effectively addressing and resolving payer challenges.

Brad Gingerich has 16 years of experience in managed care and revenue cycle operations, designing and implementing national payer strategies for large health systems.

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]]> Hospitals Ending 2022 in Red, Payers in Green https://www.ensemblehp.com/blog/hospitals-ending-year-in-red-payors-in-green/ Tue, 06 Dec 2022 23:07:11 +0000 https://www.ensemblehp.com/?p=9841 Hospitals are under unbearable financial pressure, many collapsing under their own weight while payers are raking in profit. … Read More

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The first quarter of 2022 was the worst financial quarter in history for hospitals. Now they’re collapsing under their own weight while payors are raking in profit.

“We’re in a position where I don’t think anyone can help us. We need to sell all seven hospitals and we need to do it quickly.” This realization was shared by a community health system’s board member and interim CEO, but the story is not unique.

Hospitals are under unbearable financial pressure with no end in sight, forcing them to cut services or close altogether. Communities are the ones paying the price.

Hospital operating margins are 40% lower than last year, leaving two out of five rural hospitals at risk of closure when more than 46 million people living in rural areas already face significant healthcare shortages.

Healthcare leaders anticipate seeing a record number of hospital closures in the next six months with turmoil continuing for at least the next two years.

Even the largest health systems are reporting multibillion-dollar losses. Cleveland Clinic’s net losses have exceeded $1.5 billion so far this year and other large systems like Tenet Healthcare and HCA Healthcare reported a 50% or more decrease in profit for the first half of 2022 compared to 2021.

Payors are Paying Out Billions in Dividends

So how are health insurance companies expecting to close the year? With operating margins above 4%, operating cash flow double what it was last year and more than $4 billion being paid to shareholders in the first half of this year.[1]

What’s Causing the Financial Strain for Hospitals?

Declining reimbursement due to Medicare sequestration, advanced payment recoupment, and limited CARES Act funding combined with skyrocketing labor expenses and a weak investment market have left health systems with little to no financial flexibility and increasing uncertainty about the path forward.

Payors are also exacerbating the financial strain on providers by increasingly delaying and denying payments. Nearly 67% of healthcare leaders report an increase in claim denials over the past year, according to a Kaufman Hall report.

Major trends include delays related to prior authorization and eligibility validation as well as denials requiring more claim detail be provided to the payor.

Accurate claims are taking three times longer to process now than they did pre-COVID, and initial denials are increasing at an alarming rate based on an analysis by Ensemble Health Partners across more than 200 hospitals.

“From our clients’ perspective, unacceptable payor behavior has grown by 6%, which translates into a multiple-million-dollar delay in net revenue for these organizations,” explained Shannon White, chief operating officer at Ensemble Health Partners.

Payors are Investing in Technology for Increased Claim Scrutiny

According to a report by Guggenheim Securities, payors are expected to increase their investment in payment integrity technology by 30% over the next three years including in the areas of claims editing, inpatient claims review and clinical validation.

This increased scrutiny will add to the growing volume of denials related to requests for information and will continue drawing out claim authorization timeframes, which are already seven times longer than they were prior to the pandemic.

Payors are counting on this strategy for huge returns. Optum estimates $326 billion in cost savings as a result of their enhanced payment integrity capabilities and Anthem reported $300 million in savings in 2020 from their anomaly detection tool.

Hospitals are Looking for a Path Forward

The disparity in profitability between payors and providers has reached a critical mass and is creating barriers to healthcare innovation and the effective transition to true population health.

How will hospitals survive the mounting pressure? They won’t. At least not as they’re run today. Healthcare CEOs and CFOs are turning to new approaches to address current challenges including diversifying revenue streams, capitalizing on intellectual property, making strategic investments and strengthening revenue protection.

Read more about the top three strategies hospital executives are deploying to overcome financial instability.

References

[1] https://content.naic.org/sites/default/files/inline-files/health-2022-mid-year-industry-report.pdf

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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]]> How Providers Should Leverage Payer Price Transparency https://www.ensemblehp.com/blog/how-providers-should-leverage-payor-price-transparency/ Mon, 03 Oct 2022 15:31:35 +0000 https://www.ensemblehp.com/?p=9087 Providers should leverage published payer information to negotiate with payers. See our 6 steps to create a favorable negotiation strategy. … Read More

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The Transparency in Coverage Final Rules took effect on July 1st. CMS is monitoring for compliance (just like providers), requiring most health plans and health insurance issuers in the individual and group markets to publicly disclose certain pricing information on their website, including:  

  • In-network rates for covered items and services between the plan or issuer and in-network providers 
  • Out-of-network allowed amounts, including historical payments and billed charges for covered items and services 

  • Negotiated rates and historical net prices for all covered prescription drugs at the pharmacy location level  

Providers should consider mining and leveraging the published payor information to inform negotiations with payors.  

Six Steps Providers Should Know to Create a Favorable Negotiation Strategy

The veil surrounding contracted rates is now lifted. Providers now have access to the rates paid by plans and issuers to other providers, hospitals and health systems. Consequently, providers can now engage payors with more information in hand to support contract negotiations or to increase market share.  

Information is power, but only when fully understood and appropriately used to support decision-making. Providers should follow the steps outlined below to develop a deliberate personalized strategy to download, mine and analyze this publicly available information.  

  1. Organize and create a priority list of your contracted commercial payors by contract expiration date to ensure readiness to enter negotiations with publicly available information.  

  1. Research and download the corresponding in-network rates for each commercial payor on your priority list. Be sure to create a project plan with enough lead time to support this extremely labor-intensive project due to the size and scale of the machine-readable files. And be prepared to download and review potentially thousands of files. The huge scale and complexity of the data needs to be considered when creating your plan. 

  1. Prepare for comparative analysis between your existing contracted rates vs. those publicly available by exporting the contracted rates with the same payor in a format that may be compared to that same payor’s downloaded publicly available rate data. Judgment calls may be necessary due to the sheer array of payor agreements. 

  1. Target opportunities to establish thresholds for identifying large variances between what your facility is paid vs. other facilities or health systems in your geographic area for high-dollar procedures, items and/or services. Additionally, consider the procedures, items and/or services that reflect the specialized training or experience of your physicians and facility and how your rates for those services compare to those paid to others.   

  1. Develop an individualized negotiation strategy analyzing the data to determine which items and services to emphasize during rate negotiations based upon their expected revenue impacts. Additionally, perform a historical analysis of current rates compared to sought-after rates with current patient volume. Appeal to considerations of equity, patient volume and the exceptional services provided by your physicians and facility. 

  1. Consider other contracting opportunities such as examining the potential to bring out-of-network payors in network. Analyze rates paid by out-of-network payors to other facilities and perform an analysis of opportunities for contracting based on patient volume. 

Using the strategies outlined above to leverage payor pricing information could positively impact providers creating an opportunity for a more level playing field with plans and issuers. 

 

Resource

 

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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]]> Payer Redirection of Outpatient Care: What You Need to Know https://www.ensemblehp.com/blog/payer-redirection-of-outpatient-care-what-you-need-to-know/ Thu, 14 Oct 2021 18:23:47 +0000 https://www.ensemblehp.com/?p=5126 What healthcare organizations need to know about the latest policies aimed at redirecting patient care and their impact. … Read More

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Insurance payers have recently issued a number of policies aimed at redirecting patient care with the goal of steering patients to treatment outside of hospital settings. In their attempts to do so, payers are disregarding preexisting contracts with providers and complicating the patient experience and pre-authorization processes. These policies make it increasingly difficult for providers to deliver exceptional patient experiences without a negative impact on their bottom line.

Below is what healthcare organizations need to know about the latest policies and their impact to avoid reduction in payment, decrease in volumes, and confusion among patients.

Encouraging a Site-of-Service Shift

UnitedHealth Group (UHG) recently published an article aimed at plans, members, and their caregivers encouraging “non-complex commercially insured individuals” with employer coverage to seek treatment for common outpatient procedures in Ambulatory Surgery Centers (ASCs) versus a hospital setting. UHG claims that healthcare consumers have the potential to save an alleged average of $684 per outpatient procedure.[1] The article further indicates that employer plans making this site-of-service shift could reduce plan spending by 59%. 

Key Considerations for Providers

In coming to its findings, UHG performed an analysis of claims for members with employer coverage between March 2019 and February 2020. UHG, however, noted that the actual savings realized by members will vary based on their plan design.[2] The analysis failed to provide the following key elements:

  • Detail on the benefit structure for the plans surveyed
  • Breakdown of claim review by procedures
  • The geographic regions surveyed to determine the average procedure spending by plans or patients[3]

The analysis also did not consider the various contracted rates United Healthcare (UHC) holds health systems. These managed care contracts have varied reimbursement rates and plan types for procedures in an ASC versus a hospital outpatient center. In other words, cost savings are not always guaranteed due to contract variations.

Revenue Impact on Providers

UHG’s objective is clear – to redirect site of outpatient care from hospital to ASCs.

This most recent policy evidences a direct, organized effort to shift patient choice from sites of service deemed appropriate by providers to those chosen by payers. UHG considers routine outpatient procedures to be those performed on digestive system, musculoskeletal system, urinary system, nervous system, integumentary system, hemic and lymphatic system, cardiovascular system, respiratory system, endocrine system, nose, mouth, pharynx, eye, ear, and female and male genital organs.[4] Many of these very broad categories can include procedures which, by their very nature, lend concerns regarding complexity and appropriateness for site-of-care.

This follows a trend within the last year of similar policies issued by UHC that seek to focus on cost savings over patient choice and physician medical decision making.

UHC implemented a policy to limit outpatient surgery payments to hospitals, and expanded prior authorization requirements and site-of-service medical necessity reviews for certain surgeries in an effort to shift surgical procedures to locations perceived as less expensive. Under this policy, UHC will only pay for a surgical procedure performed in an outpatient hospital setting if the payer determines the site-of-service for the procedure is medically necessary. Per UHC the site-of-service medical necessity reviews would apply to more than 1,100 medical codes for a wide array of planned procedures from colonoscopies and knee replacements to eye surgeries, biopsies, removal of a tumor, or insertion of a pacemaker or heart catheter, will take place during the prior authorization process. This review process would lead to delays in patient care and uncertainty in patient scheduling.

Similar policies that focus on plan/payer cost savings over individual patient needs include those that apply to radiology services in which third-parties contracted with UHC contact patients to inform them of their ability to move their case out of the hospital. Other payers followed UHC in recent years by refusing to pay for some services, such as MRIs, when performed in hospitals.

Most recently, UHG’s 2020 Sustainability Report outlines their goal of delivering 55% of outpatient surgeries and radiology services at ASCs by 2030. This goal implies the possibility to lower patient financial responsibility (deductibles, co-insurance and copayment options) for the aforementioned outpatient procedures delivered at ASCs; however, actualization of saving will be determined based on plan type.

How Can Providers Protect Margins?

Leverage Your Revenue Cycle Management Partner to Drive Four Key Initiatives

“It is our responsibility to help providers navigate a massive headwind by insurance payers to redirect care without regard to the agreements they made with providers.”

This statement by Judson Ivy, Founder, President and CEO of Ensemble, affirms the importance of revenue cycle partners working directly with hospital executive leadership to optimize revenue cycle outcomes and improve patient experiences.

Like other payers, UHC’s policy implies it will result in a reduction of plan payment and spend obligations but fails to acknowledge the added, unnecessary administrative burden and increased cost to health systems.

Your revenue cycle partner can lessen this burden by driving four key initiatives.

1. Payer Trends:

Patient Access and Surgery Scheduling teams should monitor insurance payer activity with respect to attempts to redirect care, while maintaining the delivery of superior customer service. These teams can prioritize internal review of regional and national insurance policies, including health plan changes in benefits, eligibility and patient financial responsibility, which, in turn, effects site-of-service decisions. Pre-authorization activities must maximize a patient’s ability to choose a hospital setting whenever possible based on patient medical need, access, transportation, or after-care considerations.

2. Ease of Patient Navigation:

Collaborate with providers, clinicians, and operations to drive operational improvements by quality-driven review of procedure types and patient-centered processes. Develop data-driven scripting and education for communication to patients on quality outcomes so patients and caregivers can make informed decisions. Implement pre-service and time-of-service guidance for patients and caregivers by providing the following solutions:

    • Digital scheduling and pre-registration self-service solutions

    • SMS/email scheduling confirmations and appointment reminders

    • Patient appointment waitlisting and automated cancellation backfilling

    • Digital patient payments and real-time messaging/live chat

From a continuity of care perspective, patients and caregivers can also be offered these solutions as they select convenient hospital setting locations, and review benefits and eligibility options.

3. Physician Engagement:

According to Modern Healthcare, payers like Anthem typically attribute higher charges to higher cost, which is not necessarily accurate depending on a plan’s allowable and applicable contract terms and methodology. In an effort to lower healthcare spending, Anthem no longer pays for MRIs or CT scans delivered in a hospital outpatient setting. Revenue cycle leadership must engage with physicians to clearly lay out impact on patient responsibility and projected reimbursements based on contracts and historical volume. Health systems must also contemplate related volume changes in contract negotiations. Most hospital managed care contracts already have ASC groupers and fixed copays for outpatient services. Ultimately, ensuring a compliant, seamless referral process for the hospital setting improves overall physician and patient engagement.

4. Material Change + Managed Care:

Providers should review their contracts for terms that prohibit material change(s) without written consent from both parties. Payer policy changes may violate the intent and mutual understanding of the parties at the time a contract were entered into. Accordingly, the terms of a contract could prohibit application of these policies as they fundamentally alter the contractual terms of reimbursement as payers are directly interfering with historical understanding of steerage and volume which makes it nearly impossible for health systems to accurately project true forward-looking revenue impact. Additionally, these policies not only stand to permit payors to materially alter contract terms to the detriment of health systems, but they will also increase insurer revenues as they direct care from health systems to facilities acquired by insurance companies allowing them to become both payer and provider.

Take Control Through Contract Terms

Health system leaders should work with their Managed Care department to ensure:

    • Payers are not talking a health system into acceptance of these policies

    • Payers do not attempt to enforce  contractual dispute periods for payer policies as they generally do not apply when a policy creates a fundamental or material alteration to a contract

    • Delivery of policies that materially alter terms occur in the contractually proscribed manner e.g. not general publication but directed delivery

Deploy an Offensive Strategy for Renewal or Renegotiation

Providers should also review contracts that are approaching evergreen renewal or are subject to an upcoming period of renegotiation to do the following:

    • Employ firm language to protect providers against payers positioning themselves to be the sole arbiter of what location or setting of care is required for coverage and reimbursement

    • Consider revenue impact of policies of this nature and assess contracts for rate renegotiation

    • Include terms for additional payments or penalties due to volume loss directly related to payer policies

    • Include terms for penalty is a certain percentage of claim payments are not remitted within the prompt pay period

    • Affirmatively place providers in a position to protect steerage, volumes, and revenue

    • Clarify language regarding the manner in which policies or updates that have the potential to materially impact revenues, volumes, or place unnecessary or undue administrative burden on providers must be delivered (inclusive of named recipient and title, department, acknowledgment of receipt, etc.)

    • Prohibit a payer from applying any policy (or new term in an updated provider manual) against a provider contract that may fundamentally or materially alter the terms, or which operate in opposition to the intent of the agreement

    • Define clear avenues for dispute if a provider rejects a policy or term in a manner that is fair to the provider and protects them from bad faith payer tactics

Concerned about navigating this complexity on your own? You don’t have to.

At Ensemble Health Partners, we help providers manage complex payer regulations and adapt to evolving trends by empowering them with the data and operational expertise they need to remain compliant, avoid lost revenue, and continue to deliver on their missions of providing quality care to their communities.

Tap into the power of over 7,100 certified healthcare revenue cycle experts today by emailing Solutions@EnsembleHP.com.

Additional Resources:

[1] United Health Group, Brief: Shifting Common Outpatient Procedures to ASCs Can Save Consumers

More than $680 per Procedure, available at http://www.uhg.com/outpatient-surgery-site-research (last visited Setp. 23, 2021).

[2] United Health Group, Shifting Common Outpatient Procedures to ASCs Can Save Consumers More than $680 per Procedure: Methodology and Citations, available at, https://www.unitedhealthgroup.com/content/d,am/UHG/PDF/2021/Site-of-Service-Citations-Methodology.pdf (last visited Sept. 23, 2021).

[3] Id.

[4] Id.

*This statistic shows the number of individuals served by UHG’s subsidiary UnitedHealthcare in 2020, sorted by business. In 2020, the number of commercially-insured individuals served by UnitedHealthcare stood at over 18.3 million. 18.3 million – 10% = 16.5 million

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]]> Top 5 Payer Trends Impacting Reimbursement https://www.ensemblehp.com/blog/the-top-5-payor-trends-impacting-reimbursement-and-tips-to-combat-the-pressure/ Wed, 06 Oct 2021 20:59:17 +0000 https://www.ensemblehp.com/?p=2896 Ensemble’s experts break down the top 5 macro-trends you need to know about to avoid underpayments, denials and impacts on patient volume. … Read More

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Recent regulatory updates and payor policy changes could have a big impact on providers’ operations and bottom line. Ensemble’s experts break down the top five macro-trends you and your organization need to know about now to avoid underpayments, denials, and impacts on patient volume.

Trend #1: Payors becoming providers

The line between payor and provider is becoming more blurred as payors continue growing their presence in primary care, post-acute care, telemedicine, behavioral health, pharmacy and other care delivery environments. Optum has become one of the country’s largest collections of doctors, with more than 5% of physicians in the United States. Earlier this year, Cigna agreed to buy MDLive in an expansion of its telehealth offering and Humana acquired a South Florida primary care physician network.

Trend #2: Rapid-fire policy updates and regulatory change

So far in 2021 alone, Ensemble has tracked and documented more than 46,100 payor updates. Recent significant updates included:

These policies updates and regulatory changes are constant, sometimes seemingly arbitrary, and sometimes lacking in guidance or specificity for how to implement or comply.

Policy were relaxed during the lowest volume of COVID cases, but reinstated during the peak. Relief provided was temporary and has not provided the support health systems have needed throughout this pandemic.

Trend #3: Increasing investment in mergers and acquisitions, payment integrity technology

Payor investment in fraud detection and payment integrity solutions is estimated to increase by 30% by 2025. Payors are focusing on acquisition and building in-house strategies in an attempt to reduce the nearly $170B spent on inaccurate claims and payments annually. Anthem handles roughly 85% of payment integrity related activities in house and partners with dozens of outside vendors to cover the remainder. Optum has acquired Equian and Change Healthcare and estimates $326 billion in cost savings via enhanced capabilities.[1]

Core payment integrity solutions payors are leveraging:

  • Claims editing: Variety of capabilities from simple rules to complex algorithms
  • Clinical validation: Typically, clinical coding teams to ensure diagnoses are substantiated
  • Inpatient claims review: Systematic review and evaluation of provider claims
  • Fraud, waste, abuse: Predictive analytics are increasingly common
  • Subrogation: Injury claims are increasingly picked up on the front end through specific rules

Trend #4: Payor policy conflicts with clinical guidelines

  • National coding guideline conflicts – for example, application of Sepsis-3 criteria to claims is illegal in California and New York yet CMS still utilizes Sepsis-1, which can create conflicts with review of their claims for Massachusetts plans
  • Downgrading ER visits based on final diagnosis, not presenting diagnosis
  • Accessing lab data for downgrades 

Trend #5: Payor redirection of care

Payors have recently issued a number of policies aimed at redirecting patient care with the goal of steering patients to treatment outside of hospital settings. In their attempts to do so, payors are disregarding pre-existing contracts with providers and complicating the patient experience and pre-authorization processes. These policies make it increasingly more difficult for providers to deliver exceptional patient experiences without a negative impact on their bottom line. For example, UnitedHealth Group (UHG) recently published an article aimed at plans, members, and their caregivers encouraging “non-complex commercially insured individuals” with employer coverage to seek treatment for common outpatient procedures in Ambulatory Surgery Centers (ASCs) versus a hospital setting.

Tips for combatting payor pressure

  • Know what you’re up against
    • Have a strategy to cut through the noise of the thousands of updates to get the ones with the most impact
    • Identify in-house or partner SMEs who can stay on top of changing regulations
    • Understand contractual implications
  • Leverage volume to your advantage
    • Submit aggregated disputes that reflect the impact of payor policies
    • Engage state government where necessary
    • Submit bulk sampling to government agencies in complaints to show the volume of patient care impacted
  • Be an active advocate
    • Take advantage of engaging in notice and comment periods for regulatory change
    • Engage with state legislatures and administrative entities to push back on payor policies

Concerned about navigating this complexity on your own? You don’t have to.

At Ensemble Health Partners, we help providers manage complex payor regulations and adapt to evolving trends by empowering them with the data and operational expertise they need to remain compliant, avoid lost revenue, and continue to deliver on their missions of providing quality care to their communities.

Tap into the power of over 7,100 certified healthcare revenue cycle experts today by emailing Solutions@EnsembleHP.com.

[1] Guggenheim Securities, Provider-Payor Trends Report April 2021

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