ASC Industry Awareness
The Growing Demand for ASCs
Payers are consistently pushing procedures to the ASC setting, where feasible, as a means to provide excellent care at lower cost – which is a mixed blessing for some ASCs. Growth in both numbers and types of procedures available in surgery centers is driving strong demand for ASC real estate and acutely in three particular specialties, where demand is highest. According to the McDermott Health 2023 Annual Report, gastroenterology, cardiology, and orthopedics are the fastest growing specialties, with cardiology leading the pack. Even so, some believe there should be more cardiovascular ASCs but hospital employment of these specialists mitigates against it.
Reimbursements: Issues and Advocates
All of the top eight challenges keeping small business owners up at night apply to ASCs as well. Inflation and the rising costs of supplies and staff paired with reimbursement difficulties are putting some ASCs in a bit of a bind in the short run. Stagnant reimbursements cause some level of reverse migration back to hospital outpatient departments where system and patient costs are higher. Advocacy for better reimbursements for ASCs continues annually on Capitol Hill, with ASC representatives from 31 states meeting with over 100 members of the US Congress this past February. ASC CEOs like this one find the fight for adequate reimbursements at contracting time frustrating. Contego advocates for our clients both to maximize reimbursements and for bargaining leverage at contracting time.
Healthcare Industry/Trends
Large Insurers in the News
In Q1 2023, the newer healthcare conglomerates with health insurers found enhanced revenues and profits from the insurance side of their businesses. UnitedHealth earnings and revenue were up as they added members. Aetna/Cigna continues to expand into primary care as does UHC/Optum, which resulted in double-digit growth for them in Q1. System failures at Anthem left $300 million in unprocessed claims for New Hampshire hospitals over the past two years, which state hospital representatives are seeking to rectify. An independent arbitration panel awarded Envision Healthcare a $91.2 million judgment against UHC for underpayment of claims from 2017-18.
Hospitals Trimming Costs as Expenses Rise
Financial challenges continue for hospitals into 2023 as their expenses rise with cumulative hospital expenses growing at more than double the increases in Medicare reimbursement since 2019. As a means of shaving expenses, to date in 2023, healthcare job cuts are up 83% over the same period in 2022. Healthcare has undertaken the fourth highest number of job cuts so far this year among US industries. Here are 47 known hospitals that are cutting jobs due to financial and operational challenges. Medicaid expansion likely will not stop rural hospitals from closing, due to their ongoing financial difficulties. In a bright spot, nurses that left hospitals during the pandemic are returning to better wages and schedules.
Healthcare Digital Transformation Watch
The Many Faces of AI in Healthcare
Like it, hate it, or not sure what to think about it, there’s no way around the fact of the growing numbers of uses of Artificial Intelligence (AI) in healthcare, whether the model is generative or discriminative. Here is a sampling of what orthopedic neurosurgeons have to say about trusting ChatGPT (for example) as their medical scribe. This is more than an academic question. A few hospitals are piloting AI programs for patient messaging. This raises the natural question whether AI, at this time, has adequate ability to perform like doctors. Many believe that AI can transform medical billing and insurance by reducing errors and costs. The US Congress has given $10 million to the Department of Defense to advance AI-driven disease prediction. The many faces of healthcare AI demonstrate a real need for near-term oversight.
Healthcare M&A, Valuation, Revenue Cycle
M&A Activity Strong with Renewed Focus on Value-Based Care
Six revenue cycle management (RCM) mergers and acquisitions are being reported by Becker’s so far in 2023. In a related RCM play, Availity has purchased Olive AI’s payer-facing business for a growing automation focus in their RCM solutions. On the pharma front, Merck is in late stage talks to acquire Prometheus Biosciences. Several moves are deepening the consolidation of primary care practices, in an effort to advance value-based care. Amazon’s One Medical and Hartford Healthcare entered an exclusive partnership to open five new Connecticut primary care offices. Kaiser Permanente has purchased Geisinger Healthcare to become the new nonprofit, Risant Health.
Out-of-Network Watch
2023 Contracting Resolutions and Moves
The article, “Why 60,000 Central Texans Could Lose Access to Ascension Hospitals without BCBS Contract,” appeared in mid-January and the parties reached an agreement later that month. More difficult was the past due payment lawsuit and contracting challenges between Winchester, Virginia’s, Valley Health and Anthem. After several months, the suit and contract have been resolved. Not all have fared so well. The Austin (Texas) Radiological Association is no longer in-network with UHC, an insurer that is increasingly narrowing its slate of non-network providers. Twelve thousand UHC subscribers living in Northeast Georgia are now out-of-network with their largest regional provider, Northeast Georgia Hospital. UHC cites a 25% price hike demand over three years and the sides are nowhere close to consent, even on basic details.
Legal
On ERISA and the Assignment of Benefits
From the office of Jon Sistare, JD, Attorney at Law
Despite the common (and often humorous) banter about attorneys and the trouble we cause, there are times when attorneys push for reforms and revisions in the law that can be helpful for everyone. In the Employee Retirement Income Security Act (ERISA), there are many opportunities for refinements and clarity in the 48 year-old law. As the economic or technological changes take place in our society, they naturally affect the issues that are governed by ERISA. When ERISA was originally signed into law in 1974, most of the technology we use today was not available, or even conceived. In our times it has become increasingly important for every medical provider to be aware of the good business practices which can help us to get paid. Awareness of the following should assist you in that endeavor. Two issues were recently suggested by attorneys for the Congress, Department of Labor (DOL), or the courts to clarify if and when the opportunity arises.
Where an ERISA Case Is Filed
First, the issue of where an ERISA case is filed can be in dispute. Is it from where the health plan is administered? Is it where the medical procedures were provided? Or, is it where the patient lives? All three of these options can be considered when a plaintiff seeks to file suit. Attorneys for the plaintiff will look for the most friendly plaintiff court to file the suit, while the defendant’s attorney will seek to have the case moved to a defendant friendly court. In other areas of the law, such as contracts, the issue of where any legal dispute between the parties will be held can be included in the contract. Health plans could include such language in the plan documents; however, if the plan members are forced to file in a defendant friendly court, this is clearly unfair to the plan members. It is important for a medical provider to get copies of the patient’s Summary Plan Document prior to the medical service to be provided so the provider understands the patient’s benefits, but also what other requirements the plan may contain that are not going to be friendly to the patient/provider if a claim is denied. As an advocate for providers and patients, we prefer the current flexibility to file the case wherever it is most advantageous to the provider/plaintiff. If language were to be included in a health plan on where a case can be filed, it should provide the greatest flexibility for the plan member (the patient or the provider on the patient’s behalf).
Assignment of Benefits
The other issue for Out-of-Network (OON) providers to keep up to date on is the Assignment of Benefit (AOB) forms that any OON provider should have a patient execute prior to the medical services. The AOB form allows the provider to receive payment from the patient’s plan as the assignee of the patient’s plan benefits. An AOB also should allow the provider to appeal and bring suit against the plan if the patient’s claim is denied. If the AOB is not used, the provider has no legal standing against the patient’s health plan, and thus has to deal directly with the patient to get paid. The deep pockets are with the health plan, so it is far more beneficial for a medical provider to have the ability to create standing by way of an AOB against the health plan. Some plans have anti-assignment language, which creates further headaches for the providers as this will prevent the patient from assignment of his/her benefits to the provider. Any provider should have an Irrevocable Assignment of Benefits executed by each patient prior to the medical services. Otherwise, the provider may be left out in the cold. Again, as an advocate for providers and patients, the issue of the validity of an AOB should not be diminished, but enhanced. Patients have the right to the benefits under a health plan and the ability to assign those rights to the provider provides the patients with more freedom to choose the right provider for their needs.
At a Glance
The COVID-19 Public Health Emergency Is Officially Over
Testing and Surveillance Lose Support as Pandemic Fades
How the End of PHE Will Effect Healthcare
Winding Down Blanket Waivers for Hospitals
Envision Healthcare Likely to File Chapter 11
$7B in Outstanding Debt and Costly Legal Spat with UHC
Shooting Highlights Increasing Violence at Medical Facilities
States Aiming to Reduce Attacks
Ever Wonder How to Choose a Medicare Plan?
Understanding the Parts (A, B, C, D, & Medigap) a Good Place to Start
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