January 23, 2025
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Navigating the complexities of healthcare reform requires a proactive approach. As the landscape continues to evolve, revenue cycle leaders must prepare for upcoming policy changes while mitigating potential financial risks. At UASI, we focus on equipping providers with strategies to manage these challenges effectively and ensure long-term success.
Navigating the complexities of healthcare reform requires a proactive approach. As the landscape continues to evolve, revenue cycle leaders must prepare for upcoming policy changes while mitigating potential financial risks. At UASI, we focus on equipping providers with strategies to manage these challenges effectively and ensure long-term success.
Here are four critical areas of change and how to prepare:
1. The Expiration of ACA Subsidies
Enhanced subsidies under the Affordable Care Act (ACA) are set to expire at the end of 2025. If Congress does not extend these subsidies, premiums for many enrollees could surge by more than 75%,
leading to a significant rise in uninsured patients. For healthcare organizations, this could mean a decrease in commercially insured patients and an increase in Medicaid or uninsured populations, driving up uncompensated care and bad debt.
Steps to Prepare:
- Identify Revenue Impact: Conduct financial modeling to assess the potential impact of payer mix shifts on your revenue.
- Optimize Medicaid Processes: Strengthen Medicaid eligibility and enrollment workflows to reduce gaps in reimbursement.
- Enhance Financial Counseling: Train staff to assist patients in exploring available insurance options and payment plans.
By proactively addressing these areas, organizations can minimize revenue leakage and maintain financial stability.
2. Potential Changes to Medicare’s Inpatient Only List
Efforts to phase out Medicare’s Inpatient Only (IPO) list have been a contentious topic. While earlier attempts to eliminate the list were reversed, a renewed focus on reducing covered inpatient procedures
is possible. Hospitals may face increased pressure to justify inpatient admissions to ensure proper reimbursement.
Steps to Prepare:
- Review Care Protocols: Ensure inpatient admissions align with Medicare guidelines by conducting regular audits.
- Strengthen Documentation: Partner with CDI experts to bolster clinical documentation supporting medical necessity.
- Develop Training Programs: Educate care teams on evolving regulations and documentation best practices.
3. Medicare Advantage Expansion
The growth of Medicare Advantage plans continues to raise concerns for providers. These plans often deny claims at twice the rate of commercial insurance, adding administrative burdens that strain resources. Any expansion of these plans could significantly affect hospital cash flow and operational efficiency.
Steps to Prepare:
- Conduct a Denials Assessment: Identify root causes of denials and implement corrective action plans.
- Automate Claims Processes: Leverage technology to streamline workflows and improve claims accuracy.
- Partner with Experts: Collaborate with a third-party partner like UASI to manage denials efficiently and reduce administrative strain.
By taking these steps, healthcare organizations can mitigate the impact of Medicare Advantage expansion on revenue cycles.
4. The Rise of Site-Neutral Payment Policies
Site-neutral payment policies—requiring Medicare to reimburse services equally across care settings—pose another potential challenge. While aimed at cost savings, these policies often overlook the higher operating costs of hospitals, which provide 24/7 care and meet rigorous regulatory requirements. A mid-sized health system, for example, could lose upwards of $5 million annually under expanded site-neutral rules.
Steps to Prepare:
- Analyze Service Lines: Evaluate which services are most vulnerable to site-neutral payment changes and adjust strategies accordingly.
- Advocate for Fair Reimbursement: Join industry groups to advocate for policies that reflect the higher costs of hospital-based care.
- Diversify Revenue Streams: Explore alternative revenue opportunities, such as outpatient services and partnerships.
Preparing for these changes will position providers to adapt to regulatory shifts and safeguard financial health.
Leveraging Industry Insights for Better Outcomes
Industry trends highlight the critical importance of reducing revenue leakage through proactive strategies. These include improving documentation accuracy, conducting denial program assessments, and leveraging innovative technologies like AI. By aligning your organization with these approaches, you can address common challenges such as rising denial rates, compliance risks, and inefficiencies in revenue cycle management.
UASI’s expertise supports these priorities by helping providers strengthen their financial and operational performance. Whether it’s addressing the impact of payer mix changes, improving claims accuracy, or mitigating regulatory risks, our tailored solutions empower organizations to navigate an increasingly complex healthcare environment.
UASI remains a trusted partner through change and uncertainty, offering the expertise and support needed to navigate these challenges while driving financial and operational success for healthcare organizations.
References:
- ACA Subsidies Impact: https://www.kff.org/interactive/how-much-more-would-people-pay-in-premiums-if-the-acas-enhanced-subsidies-expired/
- Medicare Inpatient Only List Updates: https://www.findacode.com/newsletters/aha-coding-clinic/hcpcs/cy2024-changes-medicares-inpatient-list-H241004.html
- Medicare Advantage Expansion Concerns: https://jamanetwork.com/journals/jama-health-forum/fullarticle/2815743
- Site-Neutral Payment Policy Analysis: https://www.aha.org/fact-sheets/2023-03-21-fact-sheet-medicare-hospital-outpatient-site-neutral-payment-policies
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