Becker's Hospital Review

10 CFO / FINANCE Quorum's net loss swells to $76M in Q3 amid revenue cycle troubles By Ayla Ellison Q uorum Health's revenue increased year over year in the third quarter of 2019, but the Brentwood, Tenn.-based hospital operator ended the quarter with a net loss. The 24-hospital system, a spinoff of Franklin, Tenn.-based Community Health Systems, said operating revenues declined 8.8 percent year over year to $419.9 million. Same-facility net patient revenues declined 2.5 percent year over year. Quorum said the decrease in same-facility patient reve- nues was partially attributable to a decline in collectability on self-pay accounts receivable due to deterioration of rev- enue cycle activities before transitioning those functions to R1 RCM. Quorum announced May 8 that it had tapped R1 RCM to provide end-to-end revenue cycle management services at its hospitals and outpatient centers in 14 states. "The transition of our back-office functions to R1 RCM be- gan October 1, 2019, and we have already begun to see improvement in many aspects of our revenue cycle activi- ties," Quorum President and CEO Bob Fish said in an earn- ings release. "Going forward, we remain confident that R1 RCM will have a transformative impact on our business and the communities we serve." Quorum recorded a 5.9 percent decrease in same-facili- ty admissions in the third quarter of 2019, and reported $6.6 million in costs associated with the closure of Metro- South Medical Center in Blue Island, Ill. Quorum closed MetroSouth Sept. 30. After factoring in operating expenses and one-time charges, Quorum ended the third quarter of 2019 with a net loss of $76 million, compared to a net loss of $54 mil- lion in the same period a year earlier. n CMS' final outpatient, physician payment rules for 2020: 9 things to know By Ayla Ellison C MS released final rules Nov. 2, which include payment updates for outpatient and physician services and delay action on a proposed price transparency initiative. Nine takeaways from the final rules: Medicare Outpatient Prospective Payment System 1. Payment update. CMS is increasing OPPS rates by 2.6 percent in 2020 compared to 2019. 2. Site-neutral payments. CMS will finish phasing in a policy adopted in 2018 to make payments for clinic visits site-neutral by re- ducing the payment rate for hospital outpa- tient clinic visits provided at off-campus pro- vider-based departments. ese off-campus departments will be paid at a rate of 40 per- cent of the OPPS rate in 2020. CMS moved forward with the cuts aer a Washington, D.C., federal court ruled Sept. 17 that CMS overstepped its authority when it expanded the site-neutral pay policy. CMS said it is considering "whether to appeal from the final judgment." Regarding the changes, AHA Executive Vice President Tom Nickels said: "e final rule's continued payment cuts for hospital outpa- tient clinic visits not only threatens access to care, especially in rural and other vulnerable communities, but it goes against clear congres- sional intent to protect the majority of clinic services." He continued, "Now that a federal court has sided with the AHA and found that these cuts exceed the Administration's author- ity, CMS should abandon further illegal cuts." 3. 340B program. CMS will continue its pol- icy of paying hospitals 22.5 percent less than the average sales price for certain drugs pur- chased through the 340B program. e AHA, other hospital associations and several hospi- tals successfully challenged previous cuts to the 340B program in court. 4. Prior authorization. Beginning July 1, 2020, CMS will implement a prior authorization process for the following categories of hospital outpatient department services: blepharoplas- ty, botulinum toxin injections, panniculecto- my, rhinoplasty and vein ablation. 5. Price transparency. CMS said it will issue a separate final rule regarding a proposal that hospitals disclose payer-specific negotiated rates. e proposal, issued in July 2019, would require hospitals to publish payer-specific negotiated rates for 300 services consumers are likely to shop for, including 70 defined by CMS, in a searchable and consumer-friend- ly manner. Hospitals that fail to publish the prices could be fined up to $300 a day. Medicare Physician Fee Schedule 6. Payment update. Aer applying the bud- get-neutrality adjustment required by law, the 2020 Physician Fee Schedule conversion fac- tor is $36.09, up from $36.04 in 2019. 7. Evaluation and management coding and payment. e final rule sets separate pay- ment rates for all five levels of coding for eval- uation and management visits. 8. Medical record documentation. e final rule allows physicians, physician assistants, and advanced practice registered nurses to re- view and verify information in a patient's med- ical record that is entered by other clinicians, rather than re-entering the information. 9. Telehealth services. CMS will add a set of codes, which describe a bundled epi- sode of care for treatment of opioid use disorders, to the list of telehealth services covered by Medicare. n

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