Large health systems across the U.S. have had contentious payer negotiations over the last two years, and Medicare Advantage plans have been a point of contention.
Twenty-seven health systems have dropped Medicare Advantage plans this year amid denial increases, prior authorization issues and slow payments. Dropping the plans could lower access to care for beneficiaries while accepting the plans challenges hospital finances.
The federal government is examining Medicare Advantage plans, which many companies are planning to expand in coming years. While the investigation is ongoing, health systems have to decide whether to negotiate or drop the plans moving forward.
"Medicare Advantage is a problem for everybody, and it may never get better no matter what gets promised with this, that or the other," said Chris Spady, division vice president of revenue cycle, southeast for Chicago-based CommonSpirit Health, during a panel at the Becker's Health IT + Digital Health + Revenue Cycle Conference in early October.
That's why CommonSpirit is tackling the problem strategically. Mr. Spady said each divisional leader must know what's going on systemwide at CommonSpirit to inform decision-making. Mr. Spady's team spends three hours per week going through the root cause analysis to identify billing issues to challenge. They bring physician advisors to the table alongside revenue cycle staff and others to examine denials and understand where they are on track, off track and where a different decision should be made.
"It's a very, very detailed process," said Mr. Spady. "Fifteen or 20 years ago, 85% of our denials were technical. That's just not the case anymore. More than half are on the clinical side and it is just so much more complicated. I think Medicare Advantage has done a good job on their side of taking advantage of the complication; [they] play in the Medicare side, play in the commercial side, and it takes a cross-functional team and a lot of work to be on top of it."
For payer negotiations, health systems have to understand their position within the market. Mr. Spady and his team take time to review claims in each market and pinpoint trends.
"It's really easy to hide metrics sometimes in the revenue cycle," said Mr. Spady. "We like to do that and say there's an easy way to cut down on initial denials, there's an easy way to cut down fatal denials, and that's the rollover and pick observation on everything. They'll pay you very quickly. It's knowing what you can fight and then utilizing that data and taking it back to the payers."
The data is particularly useful in peer-to-peer conversations. Mr. Spady said hospitals and health systems have a good case to overturn denials with the right data, as long as win rates are up. The health system also keeps an eye on the percent of patients in observation greater than 48 hours.
"That's not always the greatest metric, but something certainly to trend and through those RCAs we decide as we are going through the account whether the account is worth fighting for through legal?" he said. "If we lose our appeals, is there another step to that? So all of that ties into the negotiations."