Category: Industry News

Last week, I sat down with Professor Thomas Campanella, Director of Health Care Economics at Baldwin Wallace University, and we recorded a webinar about the steps hospitals need to take to prepare for life after COVID-19. This blog is a synopsis of that conversation. (Please note, these views are Thomas Campanella’s and are simply excerpts from the recorded webinar. For our entire discussion, please view the free webinar.)

The traditional ‘hospital’ model must be reinvented.

The largest financier of healthcare is the government (through Medicare & Medicaid), followed by employers and consumers. The unique relationship between the consumer of healthcare services and the funding provider (i.e., government, employer) has driven a true lack of competition within the healthcare market and has allowed prices to continue to soar without any emphasis placed on the true value of services. This buyer/consumer relationship is unique to the healthcare industry.

As demand in outpatient centers and homecare services continue to increase, due to escalating healthcare costs, hospitals have the most to lose because of the traditional fee-for-service model and their current reliance on the federal government bailouts as a result of COVID-19. The financial packages that are part of the Financial Recovery effort will dramatically increase the already historic highs in the national deficit.

Hospitals cannot go back to “business as usual.” They need to focus on their high fixed costs which includes infrastructure, technology and employee salaries and determine the optimal combination of these factors to allow them to be successful in the new world of healthcare.

Who’s to blame for the trouble hospitals are in?

Hospitals aren’t at fault for the situation they are facing. The fault lies with the payers who historically were not demanding value in return for their healthcare investments. This doesn’t mean consumers because they have mostly been insulated from the cost implications of their healthcare purchases. The government and employers, as the top financiers, are to blame.

Medicare and Medicaid account for approximately 50% of our healthcare costs. Medicare payment methodologies, policies and regulations influence all of the other payers that service the employer and individual markets. These policies and regulations have helped stifle competition within communities in different ways, including paying hospital-based outpatient services and procedures at least twice as much as their local competitors.

A couple of other issues that have contributed to the challenges facing hospitals are the lack of malpractice reform and the lack of interoperability between electronic medical records (EHRs). Malpractice laws in conjunction with inflationary payment methodologies incent over-utilization in the name of “defensive medicine.” The lack of “real” interoperability between EHRs not only negatively impacts cost and quality, but it is an obstacle to a more competitive environment where patients could potentially seek care from multiple providers in the community.

How can hospitals get back on solid ground?

Ideally, Medicare needs to take the lead in transitioning our healthcare system to be more value-based. The focus has been on value-based care for quite some time, but the reality is that fee-for-service is still the primary engine fueling our healthcare system. Lobbyists present a big challenge because focusing on value and bending the cost curve will negatively impact the revenue of healthcare stakeholders.

However, as a result of COVID-19, tough decisions that need to be made may now be made. Medicare has been hit especially hard by this pandemic. It is likely that we will see more of an increased focus on transitioning to Medicare Advantage Plans so the government can pass along some of the financial risk to a third-party carrier. In turn, those plans will likely have added incentives to pass along to providers to ensure their profitability, which will support the transition to more value-based care.

More employers are starting to move from fully-insured health insurance plans to self-insured as a result of escalating healthcare costs. This trend will result in employers demanding much more value in their investments and will incentivize their employees to transition into a more prudent purchaser of healthcare services.  

As Tom has noted in previous webinars and blogs, the trend of declining hospital inpatient admissions and increased acuity of the patient will escalate as a result of the pandemic. Outpatient settings and care in the home will increasingly be the location where healthcare services and procedures are provided. These care settings allow for more completion as payers are increasingly searching for value and enhanced cost/quality transparency.

Mostly because of the lobbying efforts at the state and national levels, hospitals have previously avoided the disruption in healthcare by still embracing the status quo. However, COVID-19 has disrupted healthcare and the effects will be lasting. Enlightened health systems will need to embrace this new reality rather than holding on to past business models and look to collaborative relationships in different forms. It may make sense for physicians to enter into collaborative relations with independent physician groups within the community. The new reality in the healthcare industry will create competitive challenges for integrated health systems that are already burdened with high fixed costs (e.g., personnel, infrastructure, technology).

Empowering physicians to lead the necessary change.

Physicians are the brightest of the bright and they can be change agents. This may be the opportune time for hospitals to provide selective physicians more administrative roles to help lead the design of the new business models needed to be successful in this new world of healthcare.

There is a potential for the utilization of Centers of Excellence (COE) for certain inpatient services. The packaging of these services to regional and national self-insured employers and commercial payers could create both additional revenue for the hospital as well as employment opportunities. In certain communities with regionally or nationally recognized hospitals, they could be more focused on treating the high-risk patients within their communities, as a result of COVID-19.

Finally, hospitals and hospital associations must play a leadership role in working with government at all levels to ensure that we, as a society, are prepared for similar types of catastrophic events as the COVID-19, because they will occur.

Up until now, in many communities we have seen individual organizations trying to solve big health problems, like social determinants of health, in a piecemeal way. The collaboration we’re seeing today has shown that maybe it’s better to work together, and hospitals should take a lead in this arena.

Collaboration will be the key to sustainable, successful and leading healthcare systems as we move into the world of the “new normal.”

Ken Magness is a focused healthcare professional with more than a decade of experience in helping clients understand the true value of automation in the revenue cycle management process. As the Strategic Initiatives Leader at Quadax, Ken and his team are passionate about connecting with healthcare providers to help them create and leverage the appropriate technology solutions to optimize the revenue cycle process and improve the experience of their patients and staff.

{WATCH} We recently sat down with Thomas Campanella to talk about the next steps for hospitals as they prepare for life after COVID-19.

As COVID-19 continues to spread through the country, hospitals are scrambling to overcome unprecedented clinical and patient care disruptions contrasted by new demands. More than simply making adjustments to their financial projections, hospitals need to be aware of operational issues related to COVID-19 that could negatively impact cash flow and overall performance.

Here are five Operational Considerations outlined by Healthcare Financial Resources:

1) Coding COVID-19 Claims

Coders need to be educated in the use of the new COVID-19-related CPT and HCPCS codes for both private payer and government claims. And, stemming from the National Emergency declaration, Medicare has expanded payments for professional services via telehealth, virtual check-ins, and e-visits. Failure to code COVID-19-related care correctly will likely result in denials and payment delays, which may be more difficult and time-consuming to resolve in the current environment. Here’s more information on COVID-19 coding and reporting guidelines.

How Quadax Can Help

Quadax is more than a clearinghouse. Claims Management by Quadax allows for the creation of user-defined rules, including: provider-specific edits, auto-correct or suppress edits, and custom converts. Easily stop a claim; change, leave blank or move field data; auto correct to modify data based on a particular error; or suppress an error on a claim. Our Edits and Documentation Group (EDG) is dedicated to staying on top of the latest developments for submitting COVID-19 claims.

2) Monitor Clearinghouse or EDI Capabilities

It is important that hospitals monitor clearinghouse or bank electronic data interchange (EDI) capabilities to ensure 837 and 835 files containing claims and payment information continue to transit between payers and providers. Some hospitals have reported sporadic interruptions in their EDI services. Any substantial downtime that prevents timely claims submission or denial resolution could have a significant impact on collections.

How Quadax Can Help

Quadax maintains a Corrective and Preventative Action (CAPA) document that is distributed to impacted clients when a service is disrupted. This document outlines why an issue occurred, the timeline of the issue, and what measures Quadax has taken to resolve and prevent it from happening again. Since January 2019, Quadax has only experienced a few interruptions which were fixed in a very timely manner.

3) Monitor Claim Volumes

Hospital payer mix may shift rapidly as a growing number of individuals suddenly find themselves out of work. Organizations should monitor claims frequently to determine if Medicare and Medicaid volume is increasing and/ or commercial reimbursement is falling. Significant changes could have a major impact on budget projections.

How Quadax Can Help

Decision Intelligence by Quadax can provide the tools you need to determine if your Medicare and Medicaid volume is increasing and/or commercial reimbursement is declining.  

4) Automatic Claim Resolution 

Payer hold times for hospital staff working denials in many instances have increased due to limited staff availability at insurance company call centers. As a result, any automation processes that allow claims to be resolved without direct payer-provider interaction should be brought to bear.

How Quadax Can Help

Our workflows quickly route claims to each biller based on client-defined criteria, and when necessary, route claims internally to maintain an accurate audit trail to reduce the need to communicate through an external environment. Workflow automation between Claims Management and EHRs/billing applications result in streamlined processes that improve clean claim rates, reduce administrative costs and provide the insight and control to recover expected reimbursement with speed and efficiency.

5) Automatic Claim Status 

If they haven’t done so already, hospitals should work with payers to enable the receipt of 276/277 claim status files from clearinghouses to ensure up-to-date information regarding the status of unpaid claims. Payer portals should also be used to monitor and track unpaid claims.

How Quadax Can Help

Advanced Claim Status™ (ACS™) by Quadax automates costly, manual and unnecessary follow-up tasks related to the status of claims as they move through the adjudication process. Using client-defined business rules, the Advanced Claim Status engine will query a claim’s status by polling the payer’s web portal, using advanced screen-scraping technology to ensure the most up-to-date and actionable payer responses. Based on the responses, claims that require immediate action can be routed to the responsible party to accelerate claim follow-up. Comment records are delivered back to the EHR/billing application sooner, so staff can work smarter.  We can also integrate with EHRs, including Epic.

We work hard to provide the perfect blend of sophisticated technology with reliable, expert, personal support. Let’s take on the revenue cycle together!

Ken Magness is a focused healthcare professional with more than a decade of experience in helping clients understand the true value of automation in the revenue cycle management process. As the Strategic Initiatives Leader at Quadax, Ken and his team are passionate about connecting with healthcare providers to help them create and leverage the appropriate technology solutions to optimize the revenue cycle process and improve the experience of their patients and staff.

Two pieces of legislation were passed that will provide reimbursement for testing and treatment of uninsured COVID-19 patients. Families First Coronavirus Response Act or FFCRA and the Paycheck Protection Program and Health Care Enhancement Act which each appropriate $1 billion to reimburse providers for conducting COVID-19 testing for the uninsured.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides $100 billion in relief funds for hospitals and other health care providers on the front lines of the COVID-19 response. Within the Provider Relief Fund, a portion of the funding will be used to support healthcare-related expenses attributable to the treatment of uninsured individuals with COVID-19.

The projected implications

Researchers from the Kaiser Family Foundation estimated total hospital reimbursement to range from $13.9 billion to $41.8 billion depending on the rate of and severity of COVID-19 hospitalizations among the uninsured population.

Researchers also estimated that up to 2 million uninsured individuals could require hospitalization for COVID-19. Although, that number could be as low as 670,000 hospitalizations.

Total hospital reimbursement for the treatment of uninsured COVID-19 patients would come from the billions in dollars in emergency spending for hospitals included in the coronavirus stimulus package.

How to participate in the COVID-19 Uninsured Program

Health care providers who have conducted COVID-19 testing or provided treatment for uninsured individuals with a COVID-19 diagnosis on or after February 4, 2020, can electronically request claims reimbursement through the program and will be reimbursed generally at Medicare rates, subject to available funding. Steps will involve: enrolling as a provider participant, checking patient eligibility, submitting patient information, submitting claims electronically, and receiving payment via direct deposit.

Beginning on May 6, 2020, providers can start submitting patient information and claims for reimbursement through this Health Resources & Services Administration portal. The following information is required when signing up for the program.

Provider Information:

• Taxpayer Identification Number (TIN) Validation, which can take 1-2 business days to process.
• Optum Pay Direct Deposit/ACH, which can take 7-10 business days to process.
• Provider Roster, which can take 1-3 business days to process.

Patient Information:

• Uninsured Individual Information: patient information needs to be submitted individually or through a batch upload.
• Attestation: Provider must attest that the patient does not qualify for any healthcare including Medicare or Medicaid.
• Temporary Member ID: This is needed before a claim can be submitted. It takes less than 24 hours to be received and is valid for 30 days.

Claim Information:

• For dates of service or admittance on or after February 4, 2020, providers will be eligible to seek reimbursement for COVID-19 testing and testing-related visits for uninsured individuals, as well as treatment for uninsured individuals with a COVID-19 diagnosis.
• Claims must be submitted electronically through a clearinghouse. No paper claims will be accepted.

The HRSA COVID-19 Uninsured Program is using a unique version of Smart Edits (i.e., edits created by the HRSA payer), which is an EDI capability that detects electronic claims with potential errors. When a claim is submitted with a potential error, Smart Edits sends a message back to the submitting care provider to explain why the claim was rejected and provides direction on how to resolve as part of the X12 277CA claim level response. Repaired claims should be sent with the original frequency code of 1, not with a replacement or voided claim indicator of 7 or 8.

The submitting care provider is responsible for working their 277CA and resolving rejections as applicable to avoid denials. The HRSA has established this process to help our clients catch claim billing errors and correct them because all claims submitted will be complete and final. Interim bills, corrected claims, late charges, voided claim transactions and appeals will not be accepted.

Quadax is more than a clearinghouse. Claims Management by Quadax allows for the creation of user-defined rules, including: provider-specific edits, auto-correct or suppress edits and custom converts. Easily stop a claim, change, leave blank or move field data, auto correct to modify data based on a particular error, or suppress an error on a claim. Our Edits and Documentation (EDG) team is dedicated to staying on top of the latest developments for submitting COVID-19 claims.

Payer Information:

• Claims should be submitted through your clearinghouse using the Payer ID 95964 (Payer Name: COVID19 HRSA Uninsured Testing and Treatment Fund) using claim type NACO12, NACO34, or NACO64.
• Clearinghouses will receive a 999 file level acknowledgement and 277CA claim level report to include HIPAA and ACE rejections which will be passed to the provider. 835s will not be delivered via the clearinghouse connectivity; providers will be required to access via OptumPay.  EOBs will not be issued to patients.

Reimbursement Information:

• Reimbursement will be based on current year Medicare fee schedule rates (except where otherwise noted) and on the incurred date of service.
• Publication of new codes and updates to existing codes will be made in accordance with CMS. And, for any new codes where a CMS published rate does not exist, claims will be held until CMS publishes corresponding reimbursement information.

For more information about eligibility, what’s covered, important dates and to sign up for the program, visit https://coviduninsuredclaim.linkhealth.com/.

We hope you stay healthy and well.

Ken Magness is a focused healthcare professional with more than a decade of experience in helping clients understand the true value of automation in the revenue cycle management process. As the Strategic Initiatives Leader at Quadax, Ken and his team are passionate about connecting with healthcare providers to help them create and leverage the appropriate technology solutions to optimize the revenue cycle process and improve the experience of their patients and staff.