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Wednesday, February 21, 2024
HomeHealthcareRCMRegulatory Impacts on Healthcare’s Revenue Cycle

Regulatory Impacts on Healthcare’s Revenue Cycle

By Rodney Adams, Vice President of Research and Reimbursement, Tennessee Hospital Association

The past few years have been filled with regulatory changes that have had dramatic impacts on healthcare’s revenue cycle.

From pricing transparency to the No Surprises Act (NSA) to new Medicare Advantage (MA) rules to the recently released prior authorization rules, our industry has experienced sweeping changes since Jan. 1, 2021. There are many articles that go into depth about the impacts of pricing transparency and the NSA. There also will be articles that go into depth about the impacts of the new MA rules that took effect on Jan. 1, 2024, and yet more articles that discuss the impacts of the prior authorization rules that were finalized on Jan. 17, 2024. Those details are not the goal of this article.

We will briefly explore some of the impacts of these regulations and how revenue cycle professionals can engage in regulatory matters, whether it be legislation or rulemaking.

First, it is important to understand that regulatory matters typically occur in two primary ways: 1) legislation; and 2) rulemaking. Legislative solutions require a bill to be introduced, passed and allowed to become law. Rulemaking is an entirely different process and usually occurs when a proposed rule is released by a governmental entity, i.e., CMS, HHS, etc., and is opened for comment. The governmental entity then reviews the comments and later issues a final rule.

While these two processes are quite different, the impacts of them on daily processes in revenue cycles are often similar, and require adjustments to processes, new technologies and validation of compliance.

Pricing transparency and the NSA have required revenue cycles to rethink processes and invest in technologies. Pricing transparency has resulted in the requirement to post charges and negotiated rates online, and in a machine-readable format, resulting in some new companies that focus solely on this work as well as others that have entered this space as an ancillary product line. Revenue cycle staff have had to become versed in charges so they can explain how healthcare charges and reimbursements work, which is no small task for frontline staff.

The NSA has had a profound impact on the revenue cycle. This law requires staff to issue good faith estimates (GFEs) to many scheduled patients and has specific requirements for out-of-network providers. Revenue cycle staff have been forced to learn more about coding, billing, contracts and reimbursement than ever before. There also have been significant impacts to the back end of the revenue cycle as staff works to appeal claims through the federal independent dispute resolution (IDR) process.

The Centers for Medicare & Medicaid Services (CMS) also finalized new MA rules on April 5, 2023, that became effective Jan. 1, 2024, and revenue cycle staff will not be exempt from impacts here either. These changes include updates to medical necessity, which could result in changes in denial patterns, along with the need to collect and monitor data associated with prior authorizations, denials, patient status (inpatient vs. observation) and length of stay more closely.

Finally, CMS recently finalized new prior authorization rules that will become effective over the next two years. There will be requirements for payers to provide denial notices, process normal prior authorization requests within 14 days and urgent requests within 72 hours, and publicly report prior authorization metrics. There also are requirements in this final rule for providers to electronically submit, and payers to electronically process requests for prior authorization, which could require investments in innovative technologies for both parties.

If you are a revenue cycle professional reading this article, you are all too familiar with the impact on your teams and operations, and you may be frustrated since changes have been coming in succession at a record pace. So, what can you do? Can you provide input in the legislative and/or rulemaking process? YOU CAN, and YOU SHOULD!

First, we will tackle the legislative process. There are two avenues for legislation: state and federal. Developing a relationship with your government affairs team or your state hospital association can be productive ways to remain informed about proposed legislation, at either level, which may impact you and your team. You may also be able to provide your insights regarding the impacts of proposed legislation and provide thoughtful ways to improve a proposed bill. It is common for bills to be “negotiated” during the legislative process, so providing input and assisting those who are advocating on your behalf is not only helpful, but also necessary as lawmakers ponder the impacts and consequences of the proposed legislation.

Next is rulemaking, which offers an open comment period for feedback about proposed rules. During the comment period, which is typically open for 60-90 days, anyone may provide comments regarding the proposed rule. However, it is important to keep in mind that comments are open for anyone to read, and you should consult leadership before posting comments on behalf of your organization. Many state hospital associations, as well as the American Hospital Association (AHA), provide summaries of proposed rules and enter formal comments, so developing relationships with these entities can prove beneficial for rulemaking as well.

I worked in healthcare revenue cycle within provider organizations for 17 years before joining a state hospital association, and candidly, I never knew the extent to which I could (and should) engage in either of these processes. So, whether you choose to directly engage or choose to provide feedback to an association, you have a voice, and your expertise is needed as legislation and rules that impact healthcare’s revenue cycle are crafted.

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