Beyond automation: Fulfilling your New Year’s resolution for a more efficient revenue cycle

Erika Grotto: Overcoming the “Frankencycle,” today on HFMA’s “Voices in Healthcare Finance” podcast. Hello, and welcome to the podcast. I’m your host, Erika Grotto. Today, I’m talking with Jonathan Wiik, vice president of health insights at FinThrive, about improving revenue cycle performance. But first, let’s find out what’s happening in healthcare finance news. Here’s HFMA Senior Editor Nick Hut and HFMA Policy Director Shawn Stack.

Nick Hut: Hey, everyone. We’re going back to the topic of the No Surprises Act. It’s surely the topic we’ve talked about the most in Beyond the News, and that’s because it continues to be of significant concern to healthcare stakeholders, especially providers. The latest news involves government data quantifying the backlog of cases in the independent dispute resolution portal, aka the arbitration portal for determining out-of-network payments. And there’s also a substantial increase in the administrative fee that you have to pay to participate in this arbitration. Shawn, what do you make of all this?

Shawn Stack: I guess there’s no way of sugarcoating this, Nick. It’s a big failure on CMS’s part and the tri-agencies, getting the IDR process up and estimating what the true impact was going to be. I can’t imagine it being much worse at this point. You know, we’ve seen 90,078 cases filed so far. Only 23,107 of those have been resolved. I guess the surprise, quote unquote, to CMS and the agencies has been that April 15 to June 30 of last year, only 18,163 were filed, but then the cases just blew up between July 1 and September 30, of almost 72,000 filed. So I do give them a little bit of relief there in saying that the second quarter versus the third quarter filing, the third quarter was much more increased. So that volume did explode. But still, to have this large of a backlog with only 23,000 being resolved this far is a complete failure in the process, right?

Hut: Yeah, it is. They totally missed the mark, and it’s hard to know how they underestimated the volume of cases to such an extent. One thing that maybe has providers up in arms even more right now is a fee increase. Both parties now will have to pay $350 per case for any dispute they want to take to arbitration. That’s up from $50 in 2022, and that $50 rate is what we’ve been led to believe as of late December would still be the rate for 2023. Then two days before Christmas, we get word that the rate would be increasing by what, 600%? HHS’s justification is that the amount of effort going into whittling down the backlog of cases that you just referred to, Shawn, including investigating whether cases are even eligible for the IDR process in the first place, that that additional work necessitates this increase in terms of the effort and the burden being shouldered by both federal employees and contractors. I think some provider advocates have a sneaking suspicion that the fee increases meant to alleviate the backlog by discouraging stakeholders from ever taking disputes to arbitration in the first place—in other words, providers and health plans would be encouraged now to stick to negotiating among themselves to settle on the out-of-network payment. And if that’s the route you’re gonna go, then certainly many providers would tend to be at a disadvantage in terms of leverage in such a scenario, so it’s a tough situation, without question. What are some quick recommendations, do you think, at least for ensuring that all or most of the disputes you initiate are valid under the No Surprises Act IDR process?

Stack: Yeah, Nick. Those fees are astronomical increases, I agree. And keep in mind that you’re mentioning just the administrative fees. You’re not mentioning the fees associated with the IDR entity. So these are administrative fees that are nonrefundable to both parties, is not the IDR fee that is paid by the loser. So the IDR fee, on top of that. But yeah, definitely a learning curve here for providers or for parties initiating the IDR process. You know, CMS published in their report—which, keep in mind, the report is not the complete report that they promised, because it was such a manual process they didn’t have time to calculate all the data that they had promised to calculate—but they did show a great increase in not complete filings. But most of those were folks who filed, initiated the disputes, didn’t include QPA or didn’t include supporting documentation so they were not complete filings. Another learning curve that initiating entities had was, they were filing when IDR processes when state jurisdiction ruled over determining qualified payment amounts for the specific claim that they were filing on. So that federal versus state jurisdiction determination you need to make before you file with an IDR, whether you need to take it to the state or to federal IDR process, determine that up front. So you need to make sure that you know the health plan, whether that health plan is controlled at a state level or at the federal level. And then, you know, there’s other things that folks really need to take a hard look at. There is a checklist out there that CMS provides on everything that you need when you initiate an IDR request. So please, I think that was downloaded last year in June, maybe June 3. I think CMS published that list. So please make sure that you are utilizing that list if you are filing an IDR dispute. And, you know, we saw—I don’t know if you know this, Nick, but—Texas definitely led the IDR filings for the first quarter to the second and third quarters. They came in at almost 25,000, 28% of the IDR disputes filed, followed by Florida at 10,000, Georgia at 7,000, Tennessee 7,000, North Carolina five and Virginia four. So just a handful of states, about six states, made up the majority of the filings. I don’t think we should discourage providers from filing. It’s very clear that with this number of filings, there are issues with assigning these qualified payment amounts. I just really encourage providers to seek education and to educate their folks who are filing the IDR appeals, that if they’re filing, it is sound that they are going to win, if that makes sense. Really take a look at the money you’re spending to make sure that you’re going to win the case.

Hut: Yep. No, that certainly resonates, very important insight to keep in mind. There are a few things all stakeholders can do to improve this situation, but certainly the impetus is largely on HHS to come up with solutions. So thanks, Shawn, as always, for the keen insight. In the show notes, we’ll include the link to this report that we’ve been referring to on the IDR process based on data from between April and September of last year. There’s a lot of interesting information in there if you’re curious about how things are going with this whole deal. So thanks, everyone. Talk to you next time.

Grotto: In February 2020, I recorded an interview that never saw the light of day. I was talking with Jonathan Wiik, who is today the vice president of health insights at FinThrive, about how to reduce denials. It wasn’t long until COVID coverage superseded everything else I was doing at the time, so I put that sound file into a folder I naively named “Interviews to save for post-COVID.” I listened back to that conversation not long ago, and so much of it still rang true, but denial rates have risen the last three years, and workforce issues have been exacerbated by the pandemic. So I called in Wiik for a fresh conversation about revenue cycle challenges and a path to real improvement. The first question seems a little broad and unfair, but I’m gonna ask it anyway. What are the biggest challenges facing the revenue cycle workforce today?

Wiik: I think it’s the D word. I still hear that all the time, Erika. It’s denials for sure. I was at several conferences this last week, HFMA, traveling around the country when I speak. And at HFMA Annual, there was even a panel there that talked about denials and I think Phoenix Children’s and Banner and some others were there. They had mentioned, hey, if you kept everything else constant, what would your denials rate be? Like, if you kept your patients constant, your contracts constant, your staffing constant, your technology constant, you would think logically—not that there’s that much logic in healthcare—your denials would go down, right? You’re like, oops, they didn’t pay us last time, we need to check that box or cross that T or provide that piece of documentation, but over time you would start to understand what types of things your payers needed for you to get paid, and you would categorize inventory and start to provide those things over time if all things were kept constant, and you would have a denial rate that was maybe 5% 10 years ago and it’s 1% today, and that 1% you’re trying to get to 0 over time. But we all know that isn’t the case and it’s in fact opposite of that. That panel shared that denials were running around 1% nationally of the net patient revenue, which is millions of dollars for most hospitals, and that’s tripled. It’s running 3, I’ve even seen as high as 5, 6% of NPR now and I think hospitals now are beating their chests saying, this isn’t fair, payers, and you guys have to stop playing hardball. They’re actually suing them in court. I don’t know that attorneys solve things necessarily, and I think the panel shared that as well. We need more collaboration, and there was a session on that at HFMA Annual as well. Other things kind of challenging the RCM workforce, you know, right now is that there’s less of them. I finished this labor report, I shared it with you. About a third of the workforce has left since the pandemic. That’s amplified in nursing. When I’m talking to revenue management and revenue cycle, they’re saying that it’s up 10%, 10-20%, so they’re on the lower end of that. So what that means is if you were running at a revenue cycle of 100 folks, you’re running with 90, and before that you were probably running with 95 and it went even worse.

Grotto: We talk about patient financial conversations a lot. We don’t talk as much about the payer financial conversation, but it’s really, really important.

Wiik: Totally.

Grotto: But from what I’m hearing too is, the workforce shortages, the issues are not all hospitals and health systems. The payers are suffering these same issues too. And so it seems like it’s in everybody’s best interest, and maybe payers would be more open to, yeah, we don’t want our people in this carousel either, so let’s talk about it and let’s figure it out so we can pay your claim, deny your claim, whatever we’re going to do with it and we’re done, or whatever the case may be. I know I’m simplifying it a lot, but—

Wiik: No, you bet. Every payer I’ve talked to—we had a payer panel at our HFMA event last week too, and we need to get more payers there. One day, Erika, you and I will be in a conference room and they will be the majority in the audience versus the minority. They’re like deer, right, you never seem ‘em. They put their ears up and they kind of bolt when people know that they’re there. And I think they’re scared, and they shouldn’t be. There’s just a lot of animosity between those two entities now, the provider and the payer, and you need to bring them back to the table. I completely agree with you, I mean, I worked with a payer. I wanted nothing less than less people working on things that should be automated. And payers have been very automated for a very long time. They have an eligibility clearinghouse and a claims processing and adjudication clearinghouse. And what all that means is, things come in electronically. It should go through yep this is my patient, yep this is covered, yep I’m gonna pay it and out the door it goes. Those three things, right. If that happened, you and I wouldn’t have jobs. It doesn’t. I don’t know if this is my patient or not. How come you typed Wiik with a c instead of an i. How come you typed Grotto with one t. Wait a minute, this is her baby, not her. It’s this mess. This is out-of-network or in-network. Don’t get me started on No Surprises Act and those things. I’m sorry, you went to the wrong place, Erika, you should have went to this place. We sent you the book that no one ever reads, but the book that says all the places you can go and this isn’t one of them. You’re welcome to go there, this is America, but for us to pay for it, you have to go to these ones. So there’s absolutely want to not have to touch things, and I think there’s a lot of work on the provider side where people just thought that would get better. I think providers right now are just in such an angry mood that they don’t want to really be accountable to what they’re actually sending too. Charts should go with stuff that requires a chart. Authorizations should go with stuff that requires an auth. Claims should not have things on it that were twice or priced like 30 times higher than someone else. Those types of things are things that we all have to introspectively look at. I could talk to any provider, any CFO, CRO in the country and say, hey, do you think you’re sending your claims clean to the payer? They all would say no. They’d say they probably did a pretty good job, but most clean claim rates are aspiring to get to 90%, which means 10 to somewhere, 25-30% of the stuff that’s going over is garbage. It doesn’t have the information complete or it’s inaccurate, so you’ve gotta look at that technology as well and kind of make sure that what you’re sending is good, it’s homework, and it’s gonna get granted by the payer, and trust me, they’re tough. And they have to have resources and staff, to your point, to validate that information, and if it’s not correct, that takes the time on them, so absolutely, it’s a point well taken. Payer-provider collaboration, I think, is huge to where getting those parties there going OK, what’s driving us both nuts? Is there a way that we can connect that piece of data in a more accurate, efficient way to where we could both see it? I think we would see a lot less administrative expense. Every study that’s out there—HFMA, JAMA, New England Journal of Medicine—said there’s billions of dollars, with a b, of waste because of the rules that the payer has and the inefficiencies the provider has, and if we could break both those down, I think you’d see healthcare costs come down too.

Grotto: That seems like a good place to end. Jonathan Wiik, thank you for joining me today.

Wiik: Thank you, Erika. Have a great day.

Grotto: You too. Voices in Healthcare Finance is a production of the Healthcare Financial Management Association, and written and hosted by me, Erika Grotto. Sound editing is by Linda Chandler. Brad Dennison is the director of content. Our president and CEO is Joe Fifer. I hope by now you’ve seen our new website. If you haven’t, I highly recommend you check it out. There’s a transcript of every podcast episode as well as a blog post, not to mention all the other content we produce. Take a look at hfma.org.

In a surprise to no one, denials are still a big problem for providers

On a recent episode of HFMA’s “Voices in Healthcare Finance” podcast, Jonathan Wiik, vice president of health insights at FinThrive, discussed how provider organizations continue to struggle with denials in a time when staff is hard to find. Denials have increased over the last decade, creating headaches for providers, he said.

“I think hospitals now are beating their chests saying, ‘This isn’t fair, payers, and you guys have to stop playing hardball.’ They’re actually suing them in court,” he said. “I don’t know that attorneys solve anything. We need more collaboration.”

Collaboration is difficult with a smaller workforce

In revenue management and revenue cycle, provider organizations have lost 10%-20% of staff, Wiik said. Those shortages have made it difficult to send clean claims and has added to the animosity between providers and payers. Payers automate a lot of their work but claims with issues increase the work that cannot be automated, he said.

“I don’t know if this is my patient or not. How come you typed Wiik with a ‘c’ instead of an ‘i?’How come you typed Grotto with one ‘t?’ Wait a minute — this is her baby, not hers. It’s this mess,” he said. “And, I think, providers right now are just in such an angry mood that they don’t want to really be accountable for what they’re sending. Charts should go with stuff that requires a chart. Authorizations should go with stuff that requires an auth.”

Collaboration is key

“There’s a lot of animosity between [providers and payers] now, and you need to bring them back to the table,” Wiik said. “Payer-provider collaboration, I think, is huge to …getting those parties [to say], ‘OK, what’s driving us both nuts?’”

More efficient practices and collaboration on both sides could help everyone, he said.

“Every study that’s out there … said there’s billions of dollars of waste because of the rules that the payer has and the inefficiencies the provider has,” he said. “If we could break both those down, I think you’d see healthcare costs come down too.