If we look at healthcare as a three-legged stool, we have the three P’s – payers, providers, and patients. The power of the patient has grown over the last decade as the high deductible health plan has become the norm. All three of the actors in the healthcare play have adapted and changed in various ways to the reality this has brought. Ultimately what they all want is the patient to be provided the right level of care in the right location.
As an example, in early June of 2021, UnitedHealthcare (UHC) announced that they would not cover member Emergency Department (ED) visits that they determined to be non-emergent. This new policy is not unique as Anthem, the nation’s largest insurer led the charge back in 2015. Initially introduced in the state of Kentucky, one of their legacy health plans (and subsequently implemented in Georgia, Indiana, Missouri, Ohio, and New Hampshire), Anthem’s approach was similar to UHC’s approach, as was their motivation. The purpose was not to create a draconian punishment for their members but is an effort to drive them to the best level of care appropriate for their specific illness. Both hospitals, health systems and payers have an interest in having patients treated in the most appropriate service location.
The objection that is consistent with both the Anthem and United policies is driven by the seeming basis of denial on the diagnostic code at the conclusion of service rather than the symptoms when the patient arrives at the Emergency Department.
A 2010 New England Health Insurance (NEHI) publication showed that, based on 2007 figures, $38 billion was wasted by overuse of the ED. To translate that into 2022 U.S. healthcare spending, that figure represents almost $60 billion today based on the same 1.65% wasteful spending rate and the most recent annual spend of $3.6 trillion. Overuse not only is impactful to the bottom line of the payers but also to that of hospitals and health systems. The ED is the most expensive department operationally within a hospital and when overuse is in excess of 25% (which it was prior to the pandemic), there is incentive on the hospital to have those patients treated in a more appropriate setting. An ED visit is as much as 10x the cost of an Urgent Care Center visit, for both the ED and the patient. When digging into the definitions of waste and overuse, it can generally be pared down to the use of an ED as a primary care physician. One could speculate that with the postponement of physician visits in 2020, that this type of ED overuse would at least remain steady if not rise.
Now enters the motivation behind the rapid rise of Urgent Care Sites or Immediate Care Facilities. Private companies began this trend primarily with hospitals entering the fray soon after. They are now familiar sights when we visit a Walgreens or CVS. We are also seeing a new model emerge with Walmart offering many types of non-emergent healthcare services at almost 40 locations in Texas, Georgia, Arkansas, and Illinois. Dollar General seemed poised to enter this market as well as signaled by the recent hire of a Chief Medical Officer. In 2014, there were roughly 6,400 urgent care facilities in the country. That grew to 8,100 in 2018, over 9,600 in 2020, and 10,436 as of May 2021 according to the Urgent Care Association’s quarterly report. A 63% growth in seven years’ time would be a growth trajectory any business or industry would be proud to claim.
This changes the way we look at the incentive to deny claims deemed non-emergent in the ED. Both payers and providers want patients to access care at a cheaper, likely faster, and more appropriate level of care for the health of the patient along with the cost associated for treatment. The goal shared by both the payer and provider is to impact patient behavior using the financial stick as the incentive to do so. CMS however, just announced that payers will not be able to deny these claims as part of the No Surprises Act passed at the end of 2020. It is quite possible that an unintended consequence of the new CMS guidance will make it more difficult to affect patient behavior if they continue to treat the ED as their primary care facility.
Obviously with the proliferation of urgent care facilities, walk-in clinics, free-standing emergency rooms, and other similar treatment facilities, there is a patient appetite. For those integrated delivery networks (IDN), the competition to create another access point of care for a patient or customer is important to their sustainability.
Before the alarm bell is sounded by payers wanting to deny claims deemed non-emergent in the ED or that CMS will negatively impact the ability of payers or health systems to change patient behavior, it is important to understand there is a lot of unnecessary waste. Getting patients to an appropriate level of care if the ED is not the right option, is an incentive that helps the whole system.
So how are hospitals and health systems going to adjust to an already growing and more complex problem of denials? Any adjustment will be a strain on existing resources to appeal claims that did not require any additional review in the past. Patient care is still the priority. If an internal solution is not practical, finding a partner may prove the best option.
That partner should understand that today’s billing complexities have made denials one of the biggest challenges hospitals face on a daily basis. Whether it is decentralized revenue cycle functions, manual workflows, or understanding the constantly changing payer policies required to comprehensively address denials, our team can leverage our extensive knowledge network to maximize your revenue opportunity for all payer classes: private, government, and complex. We apply our proven model of intelligent technology to improve collections, decrease days to payment, and provide valuable analytics with root cause feedback in order to successfully appeal denied claims. So, when you’re ready, we’ll be here.