The future of hospital reimbursement and revenue integrity advocacy
Editor’s note: Ensuring accurate, appropriate reimbursement isn’t simply a financial function—it’s fundamental to supporting patient care. NAHRI Advisory Board member Jugna Shah, MPH, CHRI, president of Nimitt Consulting, Inc., in Spicer, Minnesota, discusses how advocating for fair reimbursement and payment systems and raising awareness of the rules governing hospital pricing is fundamental to revenue integrity.
NAHRI: What is the most rewarding aspect of your work in the revenue integrity field?
Shah: Being able to support the people that are the boots on the ground. [Sometimes] they’re doing everything they think is correct, following all of the rules and keeping up with the regulations, and then they still end up getting denials or rejections and are mystified by why. It’s really rewarding for me to be able to be a source people can reach out to and help uncover what’s going on. [And] also to be a conduit between providers and Medicare and advocate for change whether that’s helping to untangle operational glitches or improving the Medicare payment rates for hospital services.
It’s been gratifying to know that you can make practical, rational, data-driven arguments to Medicare and the agency will listen. That’s been a longstanding passion of mine all the way back to the first years of the Outpatient Prospective Payment System (OPPS)/Ambulatory Payment Classifications (APC) and getting CMS to recognize its rate-setting methodology relying on only single procedure claims was have a systematically negative effect on drug administration (injection and infusion) services and that a fundamental shift in rate-setting had to occur. Next was tackling outpatient drug reimbursement and highlighting for CMS how its flawed charges reduced to cost methodology was underpaying providers, especially those providing cancer drugs, and was not in sync with what CMS paid doctors in their office practices. We were able to show Medicare, using claims data and its own rate-setting methodology where the flaws were. And they listened and understood. [They agreed] if they didn’t fix it providers wouldn’t be adequately and accurately reimbursed and ultimately patients would not receive the cancer care they need in hospitals. Since then, we’ve been able to get changes to evaluation and management (E/M) services, observation, and most recently in the cell therapy space where I was part of a team that was able to get CMS to make an unprecedented change to its inpatient rate-setting methodology resulting in a better than expected MS-DRG payment for chimeric antigen receptor (CAR) T-cell therapy.
NAHRI: How has revenue integrity evolved over the years?
Shah: One way that I’ve seen it evolve are the people. I think that [revenue integrity professionals] have gotten more involved in reading the rules, in really parsing the transmittals, in checking whether their MACs are doing things correctly and processing their payments right. I think people in the traditional roles of chargemaster, and even billing and coding, have taken on additional responsibilities and had to get out of their comfort zone. [They’ve learned] from colleagues in different departments and have developed an intense focus on ensuring claims going out the door are as clean and accurate as possible to minimize the work that has to be done on the back end. I think hopefully in a lot of institutions things are less siloed. Revenue integrity professionals are working together more.
I’ve seen more individuals get out of their comfort zone and send comments to Medicare or speak out publicly. The great news is that their voices are heard, even if it feels like the movie Groundhog Day where we repeat ourselves year after year. Eventually someone gets it.
NAHRI: What are the top issues facing revenue integrity professionals this year?
Shah: I think everyone will say COVID has been rough and that there is a huge disconnect between the reality of what hospitals are facing vs. what people may think they’re facing.
Aside from this, I think a broader issue that hospitals, including their finance and revenue integrity professionals have been facing since price transparency went into effect in 2019, is trying to explain to the press and others that the charges they are forced to post publicly are at best interesting and at worst meaningless. The sad reality is that hospitals continue to be maligned in the press based on what their charges are without anyone really stopping to ask why the charges are the way they are. What drives how charges are set? Are the charges truly based on realistic costs, or externally driven by payer rules and requirements? If people would simply be willing to go deeper and understand, they would recognize that for hospitals to be compliant with Medicare rules, they have to charge all patient and all payers the same (which is not the same as what they bill or what they get paid). When Medicare bases its new technology add-on payments (NTAP) and outlier payment formulas on charges reduced to cost using the hospital’s overall cost-to-charge ratio (CCR), what are hospitals to do but reverse engineer CMS’ formula?
In plain English this means hospitals have no choice but to apply a mark-up. Yet when they do, simply to get paid properly per the Medicare payment system, they are dragged through the mud. It’s hugely frustrating.
Although this isn’t a new issue, it has come to the forefront as more cell and gene therapies with price tags over $400,000 are hitting the market. On the one hand, clinicians and hospitals are excited to treat patients with potentially curative, certainly life-altering, therapies, yet to break even or not incur a significant loss, hospitals have no choice but to set their charges in accordance with their CCR. Hospitals already struggle today to set their charges appropriately for new, high-cost biologics, such as CAR-T, for a variety of reasons: fear of being on the front page of the paper, lack of knowledge of how CMS calculates reimbursement, disbelief that this is how they’re expected to set their charges, etc. Yet if they don’t set their charges per Medicare’s rules, they leave NTAP and outlier dollars on the table.
It’s one thing when we are talking about $400,000–$500,000 therapies, but what happens when we start seeing potentially curative gene therapies available to hospital inpatients that are $1.5–$2 million? What kind of pressure will hospitals, including revenue integrity professionals, face as they contemplate applying a mark-up in accordance with their CCR as Medicare tells them to? Imagine if a hospital’s CCR was .2 and they just onboarded a new gene therapy that their clinicians were excited about, but the therapy costs about $2 million. Unless the hospital reverse engineers Medicare’s formulas and charges $10 million, they will lose their shirts. The unfortunate truth is that even if they do everything correctly, they still stand to lose hundreds of thousands of dollars per case. So what keeps me up at night is standing on the cusp of radical medical and scientific innovation, having potentially curative, life-saving, and certainly life-changing therapies reaching the market and knowing that all of the patients who need them simply will not be able to get them because our existing government payment models are not designed to handle the cost. We’re rapidly approaching a tipping point and unfortunately it will be patients who suffer by not getting these new therapies. The industry needs to have an honest conversation about how payers, providers, patients, and the pioneers of these therapies are going to make our payment systems work better so that patient access is not compromised.
NAHRI: Do you have any creative hobbies?
Shah: I love to cook. I love yoga. I love to paint, especially with my son. I don’t get to do any of these often enough. My latest is learning golf, which my five-year-old is far better at than me and tells me, “Mama, just do the opposite of what you are doing and the ball will go farther.” And you know what… he’s right. The challenge of course, that I and everyone around me seems to be facing, is prioritizing life outside of the daily grind.