How providers can navigate the current payer landscape — 3 insights

The operational and financial complexity of healthcare delivery can create tension between payers and providers. This tension can be heightened due to regulations and the implementation of sub-performing technologies.

During Becker's 6th Annual Health IT + Revenue Cycle Conference, Ensemble Health Partners sponsored a virtual roundtable discussion focused on some of the key payment issues and tensions between payers and providers. The Ensemble team, which included Jim Gaffney, chief strategy officer, and Samantha Timpone, director of legal, talked with revenue cycle executives from around the country about payment-related challenges and discussed potential actions and solutions.

Three insights:

1. Rapid-fire policy updates and regulatory changes can be overwhelming. Ensemble has tracked and documented more than 46,000 payer updates in 2021 alone. These include updates in relation to the No Surprises Act, the treatment of long COVID-19 cases, not eliminating the inpatient-only list and price transparency.

A CEO of a Southern health system expressed concern about an increasing number of requests for pricing breakdowns. "Payers are now requesting a breakdown of our pricing and how it compares to the marketplace," he said. "We're in a rural community, but if a hospital is between two metropolitan areas, that rate structure is a little higher than most rural hospitals in the state. It's an uneasy feeling that could put us at a disadvantage." This health system has turned to its state hospital association and has appealed to the state for assistance on how to respond.

Mr. Gaffney pointed out how COVID policy updates did not necessarily provide relief to providers. "At the beginning of the pandemic, there appeared to be a good faith effort to relax a lot of the administrative burdens around notice of admission, authorizations and other technicalities that could lead to denying reimbursements," he said. "However, many were very temporary in nature and effective only during the time when volume was down in hospitals."

"When volumes spiked up and ICUs were filling up, those changes were no longer in effect," he added. "It seemed disingenuous and didn't provide a lot of help to providers."

Ms. Timpone suggested that providers prioritize strategies that will provide the greatest impact by having an in-house team or an external partner that can stay on top of regulatory changes. In addition, she encouraged providers to work with state legislators to address regulatory issues.

2. Payment integrity technology promises to save payers money but may increase denials.

Payer investment in fraud detection and payment integrity solutions is estimated to increase by 30 percent by 2025. Payers are focusing on acquisition and building in-house strategies in an attempt to reduce the nearly $170 billion spent on inaccurate claims and payments annually. Anthem handles roughly 85 percent 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. (According to research from Guggenheim securities cited by Ensemble Health Partners.)

Core payment integrity solutions payers 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

"In some cases, they are literally scanning thousands of line items to pick off charges that would trip a provider into a stop loss or other similar activity," Mr. Gaffney said. "So they're using a lot of this technology … to find any areas of weakness that can recoup money. It's a really big market out there." According to Ensemble, the number of fraud detection and payment integrity solutions is expected to increase by 30 percent by 2025.

Ms. Timpone encouraged providers to fight back in these situations, focusing on the fact that clinical factors are not being taken into account with these automated solutions. "They are utilizing the software to eliminate diagnoses, which is making a clinical determination," she explained. "Under a lot of statutes, that's required to be made by a physician who specializes in the area of practice for which the patient was primarily being treated. Providers can successfully argue that software systems are not physicians.

3. Payers are redirecting care to lower-cost facilities.

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 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 "noncomplex commercially insured individuals" with employer coverage to seek treatment for common outpatient procedures in ASCs versus a hospital setting.

Tips for combatting payer 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 payer 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 payer policies

Simple awareness and understanding of the landscape around payer issues, regulatory changes and growing challenges in the healthcare industry can arm providers with the knowledge they need to achieve adequate reimbursement.

To learn more about the event, click here.

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