It is important for healthcare practices to consider how regulatory changes will mold RCM. In this article, we explore the impacts of these changes.
As we reach the midpoint of 2023, revenue cycle management has been thrust into the spotlight. After many healthcare organizations experienced financial difficulty in 2022, with hospitals enduring 11 straight months of negative operating margins, these same organizations are now struggling to understand how recent regulatory changes will affect RCM. Healthcare systems, both big and small, are evaluating whether they have enough resources to survive.
Healthcare leaders now face a range of obstacles and unpredictabilities—from changing reimbursement models to evolving regulatory requirements. If healthcare systems want to continue to provide the very best quality of treatment to all patients, we can no longer see healthcare through the same lenses we used a decade ago.
We must also ensure we won't be standing in the same position a decade (or a few years) from now. With so many regulatory changes that will impact healthcare systems of all sizes, healthcare facilities must dial-in RCM processes to ensure financial stability. One of the best ways to achieve this is by being aware of the latest regulatory changes and learning how these changes can impact your revenue cycle management.
Medicare Fee Schedule adjustments will decrease payments for physician services, and MACRA program reductions are happening, including axing the value-based incentive payment and exceptional performance bonus. CMS is also putting off its split/shared visit policy rules until 2024. However, that doesn't mean there's no documentation relief in sight! In fact, the Good Faith Estimate requirement has been extended so that certain components of the No Surprises Act can be delivered with less hassle than before.
These new regulations may appear as if they will only present challenges that will be incredibly difficult to overcome. However, they also offer some opportunities to stay ahead of the curve.
Overview of Regulatory Changes in RCM
Changes to the Medicare Fee Schedule
Starting on January 1, 2023, healthcare providers experienced a notable decrease in the conversion factor from $34.6062 to $33.0607, according to the Medicare Physician Fee Schedule (MPFS). Initially, this reduction threatened providers with an alarming 4.5% drop in MPFS payments due for that year. Thus, leading healthcare organizations and advocacy groups to reach out to Congress for relief.
In response, legislators passed an end-of-year spending package that will ultimately reduce anticipated cuts by two percent in 2023. This gives some much-needed relief following years of static payment rates across the board within Medicare reimbursements. However, there are still potential long-term implications such as lower practice revenue and reduced access to healthcare services among older citizens. Some practices may feel forced into stopping new enrollment of patients covered under Medicare insurance plans altogether.
Documentation Changes
The 2021 reforms for E/M documentation had an impact on all healthcare environments since the start of 2023. The AMA Guidelines simplify the process by revising, consolidating, and eliminating unnecessary complications. These changes will make it easier to choose a service level based on the complexity of MDM or the time spent with patients.
Delaying of Split/Shared Visit Policy Rules
One of the most important RCM regulatory changes is the rollout of the split/shared visit policy rules. The impending implementation of the CMS split/shared visits policy had hospitals across the country scrambling for more information. In response, several physician organizations wrote to CMS—asking them to delay its rollout until 2024. This is due to concerns that it could have a negative effect on collaborative care models and patient satisfaction. After some consideration, CMS pushed back the rule's adoption by two years.
In 2022, when seeking reimbursement for shared services provided by both Advanced Practice Providers and a doctor under one NPI number was allowed—as long as they either documented the support or spent at least 50% of their time working with the patient. However, this will not be the case in 2024. What will happen in 2024? Doctors must bill using their own individual provider identification numbers if they spend over half of the total visit time with patients.
Postponing of Good Faith Estimate Requirements
The Department of Health and Human Services (HHS) has decided to postpone enforcing the Good Faith Estimates (GFEs) requirement under the No Surprises Act until they can create new rules for it. If the rule had gone into effect this year, hospitals, medical practices, and other healthcare providers would have been struggling with tight timelines and coordination chaos. This extension gives providers more time to create an infrastructure that'll make Good Faith Estimates a little easier. Let's face it, collecting accurate info from co-providers isn't easy!
The No Surprises Act
Since the federal No Surprises Act took effect in 2022, it's quite ironic that many healthcare providers have actually experienced quite a number of surprises! One of those surprises is the Independent Dispute Resolution (IDR) process. This is a costly and time-consuming negotiation between payers and providers to set out-of-network rates when no agreement exists beforehand. This has led to some provider groups losing their leverage with payers. The situation worsened in December 2022, when CMS raised administrative fees to $350 per party.
For some organizations, this made an already difficult process financially unsupportable. Adding more aggravation to the situation are technical errors that cause more than half of disputed claims to be thrown out as ineligible under the No Surprises Act—leaving providers with less reimbursement than they would normally expect!
Impacts of Regulatory Changes on RCM
The unpredictable nature of the revenue cycle makes reallocating staff a tough but needed task. Payer rules frequently change which adds another layer of difficulty when determining what requires authorization on any given day. With cost containment, value-based care, and pricing transparency rapidly gaining momentum, staying agile is a necessity.
The No Surprises Act and other new audits can quickly lead to distress for healthcare organizations if not managed properly. To keep up with the competition while meeting compliance requirements, healthcare organizations must integrate technologies into their management systems. This, in turn, will help minimize costs and maximize profits. Your practice's RCM may face several unique challenges that make it difficult for it to maintain a solid financial standing.
Revenue cycle management plays a major role in the financial health of healthcare organizations, impacting reimbursement and revenue collection processes, as well as changing coding and documentation requirements—all while increasing compliance with reporting obligations. This presents both significant challenges for healthcare facilities and fresh opportunities for growth that can be seized by those who are better prepared.
Financial Implications
Regulatory changes can have a lasting impact on RCM. Potential financial implications must be carefully considered in order to fully maximize income and minimize risk. Healthcare organizations should assess the possible revenue losses or gains associated with these new RCM regulatory changes. They should also assess any cost implications that are part of adapting to newer operations.
Healthcare leaders must make sure they implement effective cost-control strategies throughout their practice to help manage costs. This means ensuring there are no billing and coding errors and providing seamless ways to approve services and treatments. If there are any issues following the RCM regulatory changes, it can quickly lead to revenue loss. Thankfully, the adoption of data and analytics strategies and technology will allow providers to evolve and meet each patient's needs.
Operational Changes and Technology Adoption
Making operational changes and adopting new technology can help streamline administrative processes for revenue cycle management. This includes optimizing workflow, integrating systems, automating manual tasks, and making data more accessible to those who require it. Healthcare organizations must embrace the latest technologies to keep up with demanding regulatory changes.
To experience the successful implementation of any new system or software solution related to revenue cycle management, practices should consider implementing thorough onboarding training programs as well as ongoing education initiatives for staff members involved in this process—from front-end billing team members to back-office operations teams handling insurance claims processing activities.
Best Practices for Successful Revenue Cycle Management
Healthcare organizations looking to stay up-to-date with their regulatory compliance must remain proactive. They should consistently monitor the latest rules and regulations in order to ensure they are following all protocols properly. In addition, having teams determined to stay current on these requirements can help ensure no important details are missed.
For ideal results in 2023, the connection between various departments associated with the implementation of RCM procedures is key. This includes personnel who have oversight over financial facets and external parties, such as insurance coverage service providers or suppliers that may need access to specific information points throughout payment processing.
By establishing crystal clear communication, practices can guarantee that smoother transactions will occur without hurdles triggered by a lack of information sharing.
Future Outlook and Predictions
With the current state of healthcare in 2023, it is important to consider how future regulatory changes may mold RCM. New rules will significantly influence any practice, whether positively or negatively. More practices will have to adjust their strategies in the years ahead. Therefore, we all need to prepare for any and all possibilities. This way, we can anticipate disruption from any upcoming healthcare-related initiatives.
It's clear that staying up to date with the latest technologies can make a big difference when striving for optimal efficiency and cost savings for healthcare facilities. To be prepared for any changes in the latter parts of 2023 and the years ahead, we must understand where our effort and attention should be focused.
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