Hospitals and Health Systems Face ‘Dire’ Financial Situations
By Amy Baxter | November 15, 2022
Financial operations have turned dire for hospitals and health systems, according to a recent report that reviewed significant revenue losses and rising costs.
The new report, Hospital Double Whammy: Less Cash In, More Cash Out, was compiled by the Crowe Revenue Cycle Analytics (Crowe RCA) platform. It examined challenges healthcare providers are currently facing, with mounting cost pressures and declining revenue.
The report underscores other recent findings that hospitals are likely to report billions in losses by the end of the year thanks to a combination of environmental factors.
Healthcare revenue slashed
One of the biggest concerns for hospitals and health systems is a decline in revenue. That is partly due to the six-month lag in getting paid, a measurement of the expected case a healthcare provider collects within six months of the date of service. Since the onset of the COVID-19 pandemic, providers are seeing less revenue collection in a six-month period.
In the summer of 2021, hospitals collected on average 97% of their expected cash within six months. In the same period in 2022, that dropped to 94%, and that 3% drop, coupled with a 9% increase in expenses, has led to a 12% negative impact on a health system’s finances, the report found.
“Even if a medical claim isn’t denied by payors, hospitals are struggling to collect expected revenue months after a service is provided,” Colleen Hall, managing principal of the healthcare services group at Crowe, said in a statement. “Between increasing pressures and mounting expenses, including rising employee costs brought about by inflation and staffing shortages, hospitals’ finances are taking a hit.”
Crowe also measured open accounts receivable (AR) to see how long claims are remaining open––and how long providers are waiting to get paid. The total proportion of receivables that have aged more than 90 days has grown to 37% in August 2022, up from 32% in January 2021.
“Imagine the frustration of calling to check on the status of 37% of a paycheck and then waiting more than 90 days to receive it,” the report stated. “This 5-percentage-point jump directly affects the cost of care, but none of the cost is related to the actual cost of caring for the patient.”
In addition, healthcare providers are seeing higher rates of claims denials, when payors are processing claims, but not providing payment. In 2021, Crowe found an initial denial rate of 10.2%. That figure has reached 11% in 2022, which translates to 11,000 unpaid claims for an average size health system. Even a small increase in claims denials can increase the burdens on providers to resolve the denial and get paid. One of the biggest reasons for more denials is an increase of prior authorization requirements. Prior authorizations have increased from 1.5% of gross revenue in January 2021 to 2.5% in August 2022.
To read more, go to Health Exec.
Amazon Launches New Virtual Health Service
By Brock Turner | November 15, 2022
As Amazon waits for federal approval of its $3.9 billion One Medical acquisition, the tech giant is furthering its investment in healthcare with the launch of Amazon Clinic.
Amazon launched Amazon Clinic on Tuesday. The clinic will operate as a “virtual health storefront” offering users access to third-party telehealth providers.
Tuesday’s announcement comes on the heels of broader restructuring within the company.
Nathan Ray, a partner in consultancy West Monroe’s healthcare and life sciences practice, said Amazon’s big plans for healthcare are still unclear.
“It’s yet to be seen,” he said. “Are they just dabbling or is all of this going to be connected into something larger?”
Ray said large tech players that rely on cloud data for profit will each attempt to fold healthcare services into businesses differently.
Multiple outlets reported Amazon is planning to trim its workforce by 10,000 as early as this week. The layoffs—which would be the largest in the tech and e-commerce giant’s history—translate to roughly 3% of its corporate workforce.
Corporate layoffs, according to The New York Times, are targeted on the company’s Alexa and retail products, as well as human resources.
Amazon has been persistent in its healthcare push even after the company’s joint healthcare-specific venture with J.P. Morgan Chase and Berkshire Hathaway disbanded last year.
The results have been mixed. One month after the July acquisition of One Medical, Amazon announced it was shutting down its Amazon Care service at the end of the year. Amazon Health Services also comprises Amazon’s diagnostics business and pharmacy service, which includes an online pharmacy it launched in 2020 that grew out of the company’s acquisition of PillPack.
“It’s clear that … they’re not giving up on healthcare,” said Nathan Ray, a partner in consultancy West Monroe’s healthcare and life sciences practice after the company purchased One Medical in July. “They’re picking their points and they’re continuing to extend their fence-line.”
HealthTap, a virtual primary care provider, and SteadyMD, a telehealth provider operating in all 50 states, have listed services in several states and conditions.
Amazon said it will treat 20 non-urgent health conditions, ranging from sinusitis and urinary tract infections to acne, hair loss and birth control.
The cost of each consultation will vary, but many conditions have quoted prices around $40.
To read more, go to Modern Healthcare.
Anthem Blue Cross Axes $40K Bill After Patient Appeals on TikTok
By Rylee Wilson | November 15, 2022
Anthem Blue Cross originally denied a member’s appeal of a $40,000 bill for a tumor removal surgery — but the payer reversed course when the patient took to TikTok to dispute the bill, CBS Chicago reported Nov. 14.
Aaron McManus had surgery to remove a tumor from his kidney earlier this year. He received a $40,000 bill from Anthem for the cost of the surgery and hospital stay.
After his first appeal was denied, the Oak Park, Ill.-resident posted a video to TikTok Sept. 8 titled “Anthem refused to pay for my cancer surgery while making billions in profit.” In the video, Mr. McManus said coverage for his surgery was deemed “not medically necessary” by the company, even though it was preapproved.
In his video, Mr. McManus said he wanted to hear from Gail Boudreaux, CEO of Anthem’s parent company Elevance Health, about what she was doing to fix coverage denials.
“I need to get a lot more cancer preventive care, so I don’t get other types of cancer, because I need to be here for my child,” he said in his video. “This is unacceptable and this coverage denial needs to stop.”
His TikTok has garnered nearly 69,000 views as of Nov. 15.
After posting the video, Mr. McManus received a call from Anthem, he told CBS. The company told him they had received hundreds of calls from viewers of the TikTok video. He then received a letter informing him his bill had been reversed from $40,000 to $61.
To read more, go to Becker’s Payer Issues.
ASA Urges Key Federal Agency to Fix No Surprises Act Implementation
November 14, 2022
The American Society of Anesthesiologists (ASA) is urging the Center for Consumer Information and Insurance Oversight (CCIIO) to address an imbalance in the implementation of the No Surprises Act (NSA), the federal surprise medical bill law. The imbalance has emboldened health insurance companies to push anesthesiology practices out-of-network and into a dysfunctional dispute resolution system.
In its formal communication to CCIIO, ASA described existing implementation challenges and recommended changes to address the behavior of insurance companies and to improve anesthesiologists’ ability to successfully obtain reasonable payments.
ASA has been in frequent contact with CCIIO leadership and staff regarding problems with NSA implementation. Additionally, ASA had previously joined with the American College of Emergency Physician (ACEP) and the American College of Radiology (ACR) to file a federal lawsuit in Chicago, IL challenging the government’s unlawful implementation of parts of the NSA. Most recently, ASA, again jointly with ACEP and ACR, filed an amicus brief in support of pending Texas Medical Association litigation regarding the implementation.
To read more, go to ASA’s website.
Congressional Committee Calls for Hospital Price Transparency Compliance Investigation
By Andrew Cass | November 10, 2022
The House Committee on Energy and Commerce is asking the Government Accountability Office to open an investigation into hospitals’ compliance with the federal price transparency rules that went into effect Jan. 1, 2021.
“We are concerned with continuing reports of low hospital compliance and some hospitals’ complete lack of compliance,” Reps. Frank Pallone Jr. and Cathy McMorris Rodgers wrote in the Nov. 4 letter. “We are also troubled by reports that some hospitals disclosing their prices are making it difficult for consumers to access the price information.”
The committee is asking the Government Accountability Office to report on the following questions:
To what extent are hospitals complying with the requirement to make public a machine-readable file containing a list of all the standard charges for all items and services?To what extent are hospitals complying with the requirements regarding the online posting of a machine-readable list of hospital standards and charges, as well as a consumer-friendly list of the 300 shoppable services and their prices?To what extent is the price information easily accessible for consumers, including whether the price information is readily displayed? How is CMS monitoring and enforcing hospitals’ compliance with the rule, including what steps is CMS taking to ensure compliance? To what extent has CMS taken action against hospitals noncompliant with the final rule?To read more, go to Becker’s Hospital Review.
Leaked Amazon Video Shows New Telehealth Offering
By Noah Schwartz | November 9, 2022
Amazon quickly deleted a video posted on their YouTube channel that described Amazon Clinic, a potential new Amazon telehealth service focused on treating common conditions, like acne and allergies, The Verge reported Nov. 9.
The video described a telehealth service where patients could fill out a questionnaire about their symptoms and meet virtually with a clinician for a fee. Clinicians could diagnose the patient and provide prescriptions as necessary.
The video directed viewers to amazon.com/clinic, a website that is not yet live at the time of publication.
According to the video, the potential telehealth services would be offered through “third-party healthcare provider groups.”
The news comes as Amazon’s planned purchase of One Medical is set to disrupt the healthcare sector. Amazon’s previous telehealth offering for employees, Amazon Care, plans to cease operations at the end of this year.
Amazon declined The Verge’s request for comment.
To read more, go to Becker’s Hospital Review.
ASA Shares Feedback with CMS on Support Member Well-bing and Advance Health Equity
November 8, 2022
Last Friday, ASA submitted comments in response to the Centers for Medicare & Medicaid Services’ (CMS) “Make Your Voice Heard” Request for Information (RFI). The wide-ranging RFI solicited recommendations on how CMS can best address factors impacting the well-being of health care professionals, advance health equity, and sunset waivers issued during the COVID-19 Public Health Emergency (PHE).
In comments to CMS, ASA noted how insufficient payments from Medicare to physicians affect the ability of anesthesiologists to maintain staff, deliver care, and implement quality improvement initiatives. Fixing the broken Medicare physician payment system, including the potential payment cuts of over 10% facing anesthesiologists next year, is just one of many considerations ASA also shared in our letter to Congress earlier in the week. ASA urged CMS to coordinate with Congress on patching cuts within the Medicare Physician Fee Schedule and help physicians and their groups avoid significant payment reductions in 2023.
On the goal of advancing health equity, ASA pointed to the success of delivery-of-care models like the Perioperative Surgical Home in screening and appropriately addressing social determinants of health. ASA encouraged CMS to focus on maternal morbidity and mortality, as well as pain medicine and substance use disorders in future initiatives.
SA also recommended that CMS commission a study on patient access to specialists to better understand disparities affecting patient populations and communities.
Our submitted comments reaffirmed ASA’s call to ensure that every patient has access to anesthesiologist-led care. ASA again reiterated our position that PHE waivers to anesthesiologist-led care should be retired at the end of the PHE.
ASA also proposed that anesthesiologist well-being and patient safety initiatives could also be improved by CMS taking a critical look at several Quality Payment Program (QPP) policies. ASA recommended actions to encourage participation in the QPP through the establishment of targeted financial incentives for performers who exceed the performance threshold, the easing of annual measure implementation burdens, and greater access to Advanced Alternative Payment Models (APMs) for specialists.
To read more, go to ASA’s website.
What a Divided Congress Could Mean for Healthcare in the Next Year
By Robert King | November 8, 2022
As voters head to the polls, several prognosticators believe Republicans have a solid chance of flipping control of the House, with the race for the Senate a toss-up.
Such a change could bring some major shifts in healthcare policy. In the current Congress, Democrats were able to expand Affordable Care Act (ACA) subsidies and introduce drug price reforms, but experts say there could still be some progress on areas of common ground if Republicans take one or both chambers of Congress.
With President Joe Biden still in the White House, Republicans could primarily use their new majority to hold oversight hearings.
“If Republicans win control of the House or the Senate, expect gridlock, lots of executive actions by President Biden to advance his agenda without Congress, and lots of congressional oversight hearings,” tweeted Larry Levitt, executive vice president for health policy for the Kaiser Family Foundation.
Republicans could use their oversight tools to scrutinize the implementation of the Inflation Reduction Act that gave Medicare the power to negotiate for lower drug prices for a small subset of Medicare Part B drugs, said Joel White, CEO of consulting firm Horizon Government Affairs and a former hill staffer.
“This is a sea change in how drug pricing works in America,” White said in an interview with Fierce Healthcare. “The law basically says for four years you get to do this without issuing formal regulations.”
There could be some areas of common ground Republicans could find with Democrats, especially in areas like telehealth. A bill to extend telehealth flexibilities for Medicare beneficiaries through December 2024 overwhelmingly passed the House and awaits consideration in the Senate.
White added that Republicans are likely to look at affordability and coverage issues, especially in the small group market, as small businesses have been hit hard by the pandemic and inflation.
To read more, go to Fierce Healthcare.
ASA Reviewing the Newly Updated CDC Guideline
November 4, 2022
The Centers for Disease Control and Prevention (CDC) has announced the availability of the new clinical practice guideline, titled CDC Clinical Practice Guideline for Prescribing Opioids for Pain — United States, 2022 that updates and expands the CDC Guideline for Prescribing Opioids for Chronic Pain—United States, 2016. The updated guideline provides evidence-based recommendations for clinicians who provide pain care to patients with subacute, acute, or chronic pain.
ASA is reviewing the revised guidelines, which you can read here.
CMS Provides Little Relief for Anesthesia Groups in Release of 2023 Payment Rules
November 2, 2022
On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) released its Calendar Year (CY) 2023 Medicare Physician Fee Schedule (PFS) final rule, which includes finalized policies related to Medicare physician payment and the Quality Payment Program (QPP). Unless otherwise noted, finalized policies, including changes to the Anesthesia Conversion Factor, work Relative Value Units (RVUs) for several pain medicine codes, and policy updates for the 2023 QPP performance year will be effective January 1, 2023. Absent Congressional action, all physician practices – including anesthesiologists and their groups – will face significant Medicare payments cuts next year.
Within the fee schedule, CMS finalized Medicare payment cuts to the Anesthesia Conversion Factor and the bundling of certain procedure codes that will only compound the financial strain that anesthesia groups are already facing. The final rule underscores how the Medicare payment system is broken, especially during a time when anesthesia groups are faced with inflation pressures and the COVID-19 pandemic. ASA has urged and will continue to advocate to legislative stakeholders and regulatory agencies to minimize and reverse these cuts that negatively impact anesthesiologists.
CMS has finalized significant cuts to the anesthesia and RBRVS conversion factors (CF) for CY 2023. The 2023 finalized anesthesia CF is $20.6097, representing a decrease of 4.42% from the 2022 anesthesia CF of $21.5623. The 2023 finalized RBRVS CF is $33.0607, representing a decrease of 4.47% from the 2022 RBRVS CF of $34.6062.
Initially, CMS had proposed a 3.91% reduction from the final 2022 anesthesia CF and a 4.42% reduction from the final 2022 RBRVS CF. While this finalized conversion factor represents a reduction over the proposed rule, Congress is still considering potential relief in an end-of-year legislative package. In addition, physicians and other health care professionals are facing reinstatement of a 2% sequestration cut plus a 4% PAYGO cut that is part of the American Rescue Plan. ASA is working with other specialties on a comprehensive approach to patching these cuts for 2023.
As published in the 2023 Final Rule, anesthesiologists can expect these conversion factor payments:
Conversion Factor (CF)
As published in the 2023 Final Rule*
To read more, go to ASA’s website.