Good faith estimate requirement lays bare revenue cycle woes

Wednesday, March 23, 2022

The requirement is exacerbating problems that revenue cycles have been trying to solve for years, and the American Hospital Association (AHA) is pleading to CMS for changes, HealthLeaders reported.

A lack of automation and an extremely labor-intensive process is not only making it hard for revenue cycles to fulfill the No Surprises Act's good faith estimate requirement, but it's also delaying other parts of the patient experience and putting a heavy burden on front-end employees.

That's according to a letter from the AHA asking CMS to "revise its estimates based on the actual experience of providers since implementation on Jan. 1, 2022."

The letter says that "the government has substantially underestimated the burden associated with implementing the good faith estimates and patient-provider dispute resolution process.” The letter also highlighted the strain it's placing on many areas of the revenue cycle.

In fact, the requirement is highlighting and exacerbating problems that revenue cycles have been trying to solve for years, such as:

  • A lack of automation and reliance on manual processes: The AHA notes that "the lack of currently available automated solutions strongly indicates that this process will require a significant manual effort by providers when enforcement begins" on January 1, 2023, as CMS is currently utilizing enforcement discretion regarding the collection and compilation of good faith estimates. It also points out that "there is currently no method for unaffiliated providers or facilities to share good faith estimates with a convening provider or facility in an automated manner."
  • Long patient wait times: Revenue cycles have worked diligently over the years to reduce patient wait times, but the current requirement adds a step backwards. The AHA writes that "estimates regularly take between 10-15 minutes to produce." According to the AHA, "one member hospital reports that their staff can only process 75 estimates per day, which is barely meeting demand at this point. A member health system with several locations reports needing to do 1,500 per day across the system."
  • Snags in the pre-registration and check in/check out processes: Because of this long, manual procedure, other elements of the front-end process are being delayed, such as completing the pre-registration process and sharing pre-care materials with patients.
  • Difficulty in guaranteeing price accuracy: Accurately estimating the price and scope of medical care is inherently tricky because "slight changes in medically necessary care can increase the overall cost, leaving even the most diligent patients and transparent providers with unexpected changes in the cost of care," AHA notes.
  • Burnout and workforce shortages: So much price estimate work falls to the front-end staff, which already has a lot of responsibilities to ensure a smooth and accurate registration process. The current pandemic burnout and workforce shortages are only making it harder.

Here's what the AHA is asking for:

  • Delay in enforcing the good faith estimate requirement until after an automated standard for exchanging this information is developed and implemented across all providers
  • Remove the need for procedure-specific insurance verification and enable providers to treat patients with "group health insurance"
  • Require a final bill to be at least 10% more than the good faith estimate (instead of $400 more) for it to be eligible for the dispute resolution process
  • Fully align No Surprises Act and federal price transparency requirements

The AHA’s approach to asking for changes after gaining firsthand experience with the rule as it's written is a wise move. This echoes the approach Eric D. Hargan, former deputy secretary of the U.S. Department of Health and Human Services, recommends for price transparency.

"You can't act until you know what the problem is. And the problem doesn't show up until there's an attempt to implement," he told HealthLeaders last year. "That's where you get credibility in re-approaching this rule."

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Compliance, News, Revenue Integrity