Increasing denials, unfavorable payer mix among top RCM concerns: report

Revenue cycle challenges “seem to have intensified over the past year,” according to Kaufman Hall’s “2022 State of Healthcare Performance Improvement” report, released Oct. 18. 

The consulting firm said that in 2021, 25 percent of survey respondents said they had not seen any pandemic-related effects on their respective revenue cycles. This year, only 7 percent said they saw no effects. 

The findings in Kaufman Hall’s report are based on survey responses from 86 hospital and health system leaders across the U.S.

Here are the top five ways leaders said the pandemic affected the revenue cycle in 2022:

1. Increased rate claim denials — 67 percent

2. Change in payer mix: Lower percentage of commercially insured patients — 51 percent

3. Increase in bad debt/uncompensated care — 41 percent

4. Change in payer mix: Higher percentage of Medicaid patients — 35 percent

5. Change in payer mix: Higher percentage of self-pay or uninsured patients — 31 percent

Oklahoma hospital terminates Medicare Advantage contracts amid financial challenges

Stillwater Medical Center in Oklahoma has ended all in-network contracts with Medicare Advantage plans amid financial challenges at the 117-bed hospital, the Stillwater News Press reported Oct. 14.

Humana and BCBS of Oklahoma were notified that their members will no longer receive in-network coverage after Jan. 1, 2023.

“BCBSOK is willing to work with Stillwater Medical Center in finding solutions that will allow Payne County residents continued local access to Medicare Advantage providers,” a BCBS spokesperson told the newspaper.

The hospital said it made the decision after facing rising operating costs and a high prior authorization burden for the MA plans.

“This was a very tough financial decision for the Stillwater Medical leadership team. Our cost to operate has increased 26 percent over the past 2 years,” Tamie Young, vice president of revenue cycle at SMC, told the News Press. “Financial challenges are increased by a 22 percent denial of service rate from Medicare Advantage plans. This is in comparison to a less than 1 percent denial rate from traditional Medicare.”

Hospitals urge Justice Department to probe insurers over routine denials

The American Hospital Association, on behalf of its nearly 5,000 healthcare organizations, is urging the Justice Department to probe routine denials from commercial health insurance companies. 

Specifically, the AHA is asking the Justice Department to establish a task force to conduct False Claims Act investigations into the insurers that routinely deny payments to providers, according to a May 19 letter to the department. 

The request from the AHA comes after HHS’ Office of Inspector General released a report April 27 that found Medicare Advantage Organizations sometimes delayed or denied enrollees’ access to services although the provider’s prior authorization request met Medicare coverage rules. 

“It is time for the Department of Justice to exercise its False Claims Act authority to both punish those MAOs that have denied Medicare beneficiaries and their providers their rightful coverage and to deter future misdeeds,” the AHA said in a letter to the Justice Department. “This problem has grown so large — and has lasted for so long — that only the prospect of civil and criminal penalties can adequately prevent the widespread fraud certain MAOs are perpetrating against sick and elderly patients across the country.”

Read the full letter here.

Five components of an intelligent middle revenue cycle

What is revenue cycle management (RCM)? - Definition from

Keys to achieving revenue integrity and compliance across your organization

It’s old news: Revenue cycle complexity continues to increase, exacerbating existing challenges. And as we tackle those, new ones arise to take their place.

Ever-changing regulations are a given, but adopting value-based reimbursement (VBR) models currently poses a major challenge. New payment models complicating revenue cycle activity become more difficult with additional quality reporting and other requirements. Add in the operational realities of siloed workflows, data proliferation, and disparate systems, and it’s clear why efficient collaboration can seem nearly impossible.  Intelligent middle revenue cycle operations that manage to these challenges are vital to achieving revenue integrity and financial stability.


Use the right solutions at the right time

Today’s environment requires sharpening the way you ensure revenue integrity. Providers need an easy, seamless way to manage middle revenue cycle operations, and there are several effective strategies to accomplish that. Of course, it’s important to recognize and make use of your EMR system’s capabilities. It’s also essential to leverage complementary technologies with specific core competencies that will improve revenue cycle performance. For example, a solution that continuously monitors records in real time enables timely auditing, coding adjustments and case completion to reduce billing turnaround and reimbursement delays.


Take a smart approach to enabling technology

Augmenting your core systems with complementary technologies or capabilities on a single, integrated platform makes it much easier to support internal collaboration between different departments or teams. An integrated platform also enables you to seamlessly deploy additional capabilities onto that platform, ensuring speed to value. Instead of using multiple disparate tools, a shared platform enables interdepartmental communication and helps minimize inefficiency.  A smart technology platform that crosses departmental siloes and brings transparency across teams is critical. Platforms that leverage clinically aware artificial intelligence and other automation enable staff to proactively focus on the areas where their expertise has the most impact. In addition, when leveraging an integrated platform, one expert team’s work will not get cancelled out by another team’s contributions.

Regardless of which core system you use, integrating technology with targeted competencies and connectivity adds value to the EMR. It can provide a depth of specialized expertise that drives better documentation, coding and real time audit interaction — keys to a high-performing revenue cycle.


Prioritize comprehensive, correct documentation and coding

Unfortunately, it seems the battle against claim denials is here to stay. You can’t overlook the importance of front-end data validation to eliminate rework and inefficiency. However, the ability to ensure complete and accurate clinical documentation for every case will significantly impact revenue capture and reduce the inefficiency of denials and rework.

Broaden the scope of your CDI program with technology that uses clinical intelligence to drive concurrent documentation review for all payers. Getting it right up front contributes to better coding, accurate reimbursement, and appropriate quality measures, all of which are vital to success under VBR.


Increase collaboration with payers

As long as payers and providers continue working at odds, the costly onslaught of denials will persist. In a perfect world, both sides would join forces to find mutually beneficial solutions for claim errors, denials and payment delays. Imagine the savings in administrative inefficiency alone. However, we’re not in that world yet. Therefore, it’s important to make a proactive effort to understand the specifics of each payer’s contract and adjust your internal processes and technology rules accordingly. As operating margins get smaller, organizations have no choice but to increase efficiency and accuracy, and working together with payers can contribute significantly to that goal.


Consolidate, collaborate, communicate

Industry pressures to improve performance are unrelenting, especially around smart solutions, innovation, and increasing both efficiency and the bottom line. Organizations are expected to improve these areas while, at the same time, enabling patient-centric operations. One way to achieve this is to leverage innovative, integrated tools to augment core systems and promote partnership, communication and efficiency across multiple related disciplines.

Consider clinical documentation, coding and auditing. Numerous departments need pieces of that information for different reasons, including utilization review, medical necessity determinations, chart audits and quality monitoring, in addition to bill preparation. A single repository containing up-to-date data in a real-time view driven by supporting workflow, rules and alerts provides consistent and reliable information when and where it’s needed.

As patient care becomes more complex, so does the middle revenue cycle. Seek solutions that will simplify and manage the complexity in an administratively efficient way. Consider your prospective vendor’s core competencies when evaluating solutions and look for integration and intelligent automation that will add the most value to your organization.






Out-of-pocket costs rising even as patients transition to lower-cost care settings

Patients saw increases of up to 12% in their out-of-pocket responsibilities for inpatient, outpatient and ED care in 2018.

A new TransUnion Healthcare analysis has found that most patients likely felt a bigger pinch to their wallets as out-of-pocket costs across all settings of care increased in 2018. The new findings were made public yesterday at the 2019 Healthcare Financial Management Association Annual Conference in Orlando.

The analysis reveals that patients experienced annual increases of up to 12% in their out-of-pocket responsibilities for inpatient, outpatient and emergency department care last year.

In 2017, the average inpatient cost was $4,068; the average outpatient cost was $990; and the average emergency department cost was $577.

In 2018, the average inpatient cost was $4,659; the average outpatient cost was $1,109; and the average emergency department cost was $617.


There are certain factors that are influencing this trend, according to Jonathan Wiik, principal of healthcare strategy at TransUnion Healthcare.

“Patients are becoming more aware that emergency care is expensive and somewhat inefficient,” Wiik said. “No one wants to go to the emergency room unless we have to, because we don’t want to deal with the time there or the expense. They aren’t the best place to get primary or even urgent care.”

Another factor, he said, is that providers realize the emergency department is a care setting of last resort for many. Providers want to make sure that have room in the ED for cases that are real emergencies, so they’re essentially curating their patients, steering patients to the most cost effective settings possible — often primary care, which is the least expensive setting.

Noting that the biggest annual increases were in inpatient and outpatient care, Wiik said that was largely a function of utilization and just a general wariness, in addition to the fact that most EDs have pretty flat contracts. Financial communication with patients is also an issue.

“Most people can’t afford the average out-of-pocket, so providers are really trying to educate patients as early as they can about those costs,” said Wiik. “Emergency care is a really hard place to educate people on finances, let alone collect on them.”


The analysis found that, during a hospital visit, patients are likely experiencing cost increases that continue the trend of higher out-of-pocket costs. About 59% of patients in 2018 had an average out-of-pocket expense between $501 and $1,000 during a healthcare visit. This was a dramatic increase from 39% in 2017. Conversely, the number of patients that had an average out- of-pocket expense of $500 or below decreased from 49% in 2017 to 36% in 2018.

And with out-of-pocket costs increasing, the trend toward consumerism is growing as more patients, payers and providers transition to lower cost settings of care.

One example: Inpatient care, traditionally the most expensive healthcare option, has seen a leveling off with the percentage of price estimates remaining at 8% between 2017 and 2018. The percentage of outpatient services estimates, generally about one-quarter of the cost of inpatient services, rose in that same timeframe from 65% to 73%.

“Patients are likely seeing more providers and payers recommending that they take advantage of cost-effective healthcare options, which brings down costs for all parties,” said Wiik. “This is especially important as costs continue to rise in all areas of healthcare, particularly in inpatient, outpatient and emergency department services.”

This is having an impact on providers, payers and patients, he said.

“Let’s pretend Joanna had an MRI in her head, and that ran $3,200. That might have been paid by Blue Cross Blue Shield, and $100 out of Joanna’s pocket. Now Joanna’s paying $300. Most patients don’t look up how much the MRI’s going to be. They just get the bill later and try to figure it out. I think the patient portion of the bill is going to be in the 35, 40% range very soon. What that means is we’re quickly approaching half of the bill coming from the patient and half from the payer. That’s not insurance anymore, that’s a bank account.”

A recent Kaiser Family Foundation study indicated that 34% of patients are finding it difficult to pay their deductible before insurance kicks in. In addition to patients being challenged to make payments, the trend is that providers are also feeling the pressure of increased denial rates and write-offs, which is increasing bad debt.

Considering these factors together — increased out-of-pocket expenses, a patient’s challenge to make payment, and increased denial rates — collecting payments from all payers is critical for providers. In order for providers to ensure they receive payment for the patient-care services rendered, it is vital that they implement strategies that maximize reimbursements.