Becker's Hospital Review

26 CFO / FINANCE Medical costs to rise by 6.5% in 2022, report predicts By Katie Adams T he cost of treating patients will rise 6.5 percent above 2021 next year, according to a report published June 9 from PricewaterhouseCoopers' Health Re- search Institute. Fifteen percent of Americans with employer-sponsored health insur- ance said they deferred medical care between March and Septem- ber 2020, according to the PwC sur- vey. The report predicts more Amer- icans will seek routine care and elective surgeries in 2022, which could drive up medical costs. The report estimates that other pan- demic trends, such as patients living with long COVID-19 and the exac- erbated opioid and mental health crises, will increase costs. It also pre- dicted some pandemic-era habits, such as not exercising, poor nutri- tion and substance use, could raise costs as well. n Anthem received millions in overpayments from CMS, inspector general says By Alia Paavola H ealth insurer Anthem failed to comply with some federal coding require- ments, resulting in overpayments of $3.47 million, according to a May 24 inspector general report. Under the Medicare Advantage program, CMS makes monthly payments to or- ganizations according to a system of risk adjustment determined by the health status of each enrollee. CMS relies on Medicare Advantage insurers to collect diagnosis codes from providers and submit them to CMS. Some of the diagno- ses are at a higher risk of being miscoded. For the audit, CMS sampled 203 unique enrollee-years from Anthem and fo- cused on seven groups of high-risk diagnosis codes to determine if the codes Anthem submitted to CMS for the risk-adjusted payment program complied with federal requirements. According to the federal audit, for 123 of the 203 enrollee-years sampled, the diagnosis codes Anthem submitted to CMS were not supported in the medical records and resulted in $354,016 in overpayments. Based on the sample size, the inspector general estimated that Anthem received at least $3.47 million of overpayments for miscoding these high-risk diagnosis codes during the audit period of 2015 and 2016. The inspector general recommended that Anthem refund $3.47 million in over- payments to CMS, identify similar instances of noncompliance and improve its policies to ensure compliance with federal requirements for diagnosis codes. Anthem disagreed with the inspector general's findings and recommendations. In particular, Anthem disagreed with the findings for two enrollee-years and with the inspector general's methodology. Anthem also said an audit reflected misunderstandings of legal and regulatory requirements underlying the Medi- care Advantage organization. Despite Anthem's objections, the inspector general maintained its findings and recommendations. n Ascension posts $957M net income in Q3, says pandemic caused $1.9B hit By Alia Paavola A lthough St. Louis-based Ascension ended the third quarter of fiscal year 2021 with an operating loss, non- operating gains pushed the health system to record a sizable net income in the peri- od, according to financial results released in late May. e 146-hospital system saw its revenue in- crease to $6.6 billion in the quarter ending March 31, up from $6.4 billion recorded in the same period one year prior. Ascension's expenses also increased year over year by 2.4 percent to $6.6 billion. Ascension posted an operating loss of $16.7 million in the third quarter of fiscal 2021, com- pared to an operating loss of $429.4 million re- corded in the same quarter of fiscal 2020. Ascension said it recognized $110 million in grants from the Provider Relief Fund during the quarter, and, without the aid, it would have had an operating loss of nearly $138 million. e health system said the pandemic has result- ed in $1.9 billion in lost revenue and pandem- ic-related expenses as of March 31 of this year. "Although the Provider Relief Funds do not fully cover this negative impact, consistent with our mission to serve patients and com- munities and because of strong stewardship, Ascension was able to absorb the remaining negative financial impact through other op- erations," the health system said. Aer factoring in nonoperating items, in- cluding a more than $1 billion investment gain, Ascension ended the third quarter of fiscal 2021 with a net income of $957.3 mil- lion. Last year in the same quarter, Ascension posted a $2.7 billion net loss. n

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