Becker's Hospital Review

11 CFO / FINANCE 'It's ridiculous': Why hospitals pay millions to get paid electronically By Giles Bruce H ospitals and physicians are paying millions of dollars for a hidden fee to receive reimbursement from payers electronically, ProPublica reported Aug. 15. Payers and middlemen charge healthcare providers as much as 5 percent to process electronic payments, according to the story. The ACA required payers to offer electronic funds transfers and nudged physicians to take them. CMS at one time prohibited the processing fees before reversing course. Tim Reiner, senior vice president of revenue management of Altamonte Springs, Fla.-based AdventHealth, complained to CMS about the fees in 2020, the news outlet reported. "I have to pay $1.8M in expenses that I could use on PPE for our employees, or setting up testing sites, or providing charity care, or covering other community benefits," he wrote. "It's ridiculous," Karen Jackson, a retired senior CMS official, told the news outlet. The U.S. Department of Veterans of Affairs has declined to pay the fees, declaring them illegal, according to the story. The pushback against the fees has been led by Alex Shteynshlyuger, MD, a private urologist in New York City, while the campaign to keep them has been spearheaded by Matthew Albright, chief lobbyist at payment processing company Zelis, according to the article. Mr. Albright, a former CMS official, had pressed CMS on getting rid of its ban on the fees. The agency told ProPublica it had no legal authority to outlaw the fees, adding that it "receives feedback from a wide range of stakeholders on an ongoing basis." Other electronic payment vendors include UnitedHealth Group subsidiaries Change Healthcare and VPay. UnitedHealth told ProPublica the companies cut down on administrative burden and speed up payments for providers. Zelis told the news outlet that it helps prevent "many of the obstacles that keep providers from efficiently initiating, receiving, and benefitting from electronic payments." n administrative burden is something close to a requirement to prove residency every month to receive electricity or verifying eligibility to work in the U.S. every week for a paycheck — redundant, time- wasting activity for ordinary, essential things. "For our business office to keep up with what I frankly think is mischief by the payers in terms of denials, pre-authorization, DRG downcoding and a completely unengaged experience trying to negotiate — or to have our physicians call in and do a peer-to-peer conferences about clinical necessity — it's demoralizing, frankly," Mr. Johnson said. "Dealing with denial from our payers is one of the biggest dissatisfiers our physicians face." Authors of the 2010 Affordable Care Act worried that provisions to expand health insurance access — such as barring health insurers' refusal to cover patients with preexisting conditions — could cause them to ratchet up other tactics to make up for the change. With this in mind, the law charged HHS with monitoring health plan denial rates, but oversight has been unfulfilled, leaving denials widespread. Data and numbers on denial rates are not easy to find, but some examination paints a picture rich with variation. An analysis of 2021 plans on Healthcare.gov conducted by KFF found nearly 17 percent of in-network claims were denied, with rates varying from 2 percent to 49 percent. e reasons for the bulk of denials are unclear. About 14 percent were attributed to an excluded service, 8 percent to lack of pre-authorization or referral and 2 percent to questions of medical necessity. A whopping 77 percent were classified as "all other reasons." Adding to the inconsistency is the fact that health plan denial rates fluctuate year over year. In 2020, a gold-level health plan offered by Oscar Insurance in Florida denied 66 percent of payment requests; in 2021 it denied 7 percent. ere is much to learn about the ways AI will shape healthcare, and its potential to further expedite and increase denials is concerning. Cigna faces a class-action lawsuit alleging it bypassed requirements for claim review before denial by having an algorithm — dubbed "PXDX" — complete review before having physicians sign off on batches of denied claims. e lawsuit followed a ProPublica report on the practice, which said Cigna physicians denied more than 300,000 claims over two months in 2022 through the system, which equated to 1.2 seconds of review per claim on average. AI is oen touted as a potential, looming replacement to hardworking healthcare professionals, but in the day to day it exacerbates the administrative burdens that already bring them down. "Nobody becomes a physician because they hope to feel like a cog in a factory," Michael Ivy, MD, deputy chief medical officer of Yale New Haven (Conn.) Health, told Becker's. "However, between meeting the demands of payers for referrals, denials of payment and increased documentation requirements in order to assure proper reimbursement and risk adjustment, as well as an increasing number of production metrics, it can be difficult not to feel like a cog." n

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