The Reimbursement Crunch

Strategies | Business strategy and the bottom line

The Reimbursement Crunch

What the declining reimbursement trend could mean for your practice or ASC

If you’re finding that your practice or ambulatory surgery center (ASC) is getting paid less by commercial insurers or spending much more time trying to collect what you’re contractually owed, you have plenty of company. GI practices and surgery centers nationwide are feeling a reimbursement crunch—and one that’s been building over the past several years. Whether that crunch is caused by reduced payment rates or increased expenses associated with collections, the impact is the same: a potentially weaker bottom line.

PE GI JournalOctober 2022

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What Is Contributing to These Trends?

A host of factors are responsible for the declining reimbursement trends, says Sharon Hohlfeld, Vice President of Payor Contracting, and Ellen Coffee, Vice President of Revenue Cycle Management (RCM), for PE GI Solutions. Much of it boils down to the fact that most commercial payors are forprofit organizations that often use various tactics to increase or at least preserve their profitability.

As of late, there are a few significant developments spurring commercial payors to step up their efforts to protect their own bottom line, often at the expense of their contracted providers, Hohlfeld says. One trend concerns a growing number of employer groups moving to self-funded arrangements in an effort to spend less on claims than what they were spending on premiums across their employee group.

“For the most part, the strategy works out for these groups, which is why we continue to see this sector grow,” Hohlfeld says. “But this causes a trickle-down effect. Insurance companies are losing those premiums, sothey are focused on ways to maintain the revenue generated from the premiums that still exist. The best way to do so is slash reimbursement rates to providers or make it incredibly frustrating and difficult for providers to get paid because of the hoops needed to jump through pre- and post-claim submission.”

Another development is the recently revised colorectal cancer screening recommendation that those at average risk should start screening at age 45 instead of the traditional 50. The good news here is that the federal government and commercial insurers are following the recommendation and covering screening at 45, increasing access to this potentially lifesaving service to millions of additional people.

“From a business perspective, that’s good news for GI physicians since they are in the business of providing screenings and preventing colon cancer,” Hohlfeld says. “But this expansion of coverage is costing the insurance industry more money, so they’re trying to make it a little more difficult for us to get paid.”

A third noteworthy development concerns staffing. Like most industries, insurance is struggling with staff recruit-

“[Commercial payors] would previously pay a claim in 15 days, it might now be 20 or 30 days. The delays could be caused by … any number of reasons. The result is the same: slower payments.”

— Ellen Coffee

ment and retention. It doesn’t help that some payors are making decisions leading to self-inflicted problems in these areas. New hires aren’t getting the type of training they used to, which is leading to lengthy delays in getting issues resolved or issuing responses to rate proposals.

Getting in touch with a live person at a commercial payor these days is a challenge all its own, Coffee says. “We are finding that we often need to wait on the phone for multiple hours to try and get a single or a few claims paid, depending on how many we are allowed to ask about on any given call. Where before we might have waited half an hour to speak with someone, it’s not unusual for us to experience wait times of two hours or more. While our staff can do other work as they wait, it’s still a struggle and a frustrating experience, and one that gets magnified as your number of claims grow.”

Payor Considerations

Payors are also creating more issues for GI providers that need follow-up, such as increasing the number of claims denials. Contributing factors here include requiring authorizations and medical records where they were not mandated before.

“They are making policies stating that if they perform a certain procedure code, they now require prior authorization or copies of medical records,” Coffee says. “That’s extra work that must be done; more touches to a claim to get it paid. If you don’t include those documents, now you’re getting denials that cause a lot more work on the back end and often require multiple appeals.”

Unfortunately, payors don’t always make it easy for providers to learn about policy updates. While payors typically send out newsletters highlighting policy changes, these publications do not always cover every change, Hohlfeld says. The information on all changes is typically published to payors’ websites, but navigating those aren’t easy either. “If you miss a policy update that affects one of your codes, you can start seeing a surge in denials,” Coffee says. “That’s how providers often learn of policy changes.”

Finally, Coffee says she’s seeing commercial payors increasingly leverage a simple tactic that’s keeping cash out of providers’ accounts for longer: delaying payments. “Whereas they would previously pay a claim in 15 days, it might now be 20 or 30 days. The delays could be caused by staffing issue, claims volume, new systems—any number of reasons. The result is the same: slower payments.”

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PE GI Journal

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