Emergency medicine has experienced a systematic onslaught against its’ finances for decades. This has resulted in revenue loss and practice restructuring, particularly among independent and hospital-employed groups. Today, outside industry factors also threaten the clinical structure of emergency medicine practices.
These disruptors must be understood to ensure the future of the specialty, or they will cause a fundamental loss of control, opening the doors for others to determine the fate and future of our specialty.
The Economic Threat:
The “economic threat” to emergency medicine began with the managed care era. Payers developed numerous ways to delay and/or deny payments. Additionally, there were incessant demands for medical records before making a final payment determination. These requests were made in questioning the documentation, coding of the charts, and the diagnosis(es) of patients.
The landscape changed when Sally Richardson, the director of HHS’ Center for Medicaid and State Operations, issued her letter [1] defining the “prudent layperson definition of an emergency.” This unfortunately remains today a battleground with payers, as they have stretched the nuances of the definition to avoid paying for services.
There are other issues as well impacting our specialty. Payers use diagnoses lists in adjudicating claims. It is rare that these lists are published, however, it is common for practices to have to defend claims by challenging the lists. Class action settlements against major payers hold a special place in the history of emergency medicine, as well. These settlements involved virtually all major payers.
Where are we today? The records requests continue with payers demanding records to support diagnoses and the visit itself. More recently, denials mirrored those of the managed care era almost exactly.
Decreased payments today result from down-grading visits to a lower level of service. These down codes and denials are sometimes determined by proprietary software and algorithms insurers typically refuse to share with practices and revenue cycle management (RCM) companies.
Enter the No Surprises Act (NSA) and the Independent Dispute Resolution (IDR) processes of today. As legal efforts move forward a brief update is below.
- Contract terminations along with rate reductions to lower the Qualifying Payment Amount (QPA) for like visits.
- Usage of “ghost rates” in IDR contracting negotiations.
- Lobbying to force the issue of a QPA that effectively becomes the median, in-network rate. If legislated into law, this will become a continuous, downward spiral of rates.
- Outright denials of claims resulting in no payment
The situation with Medicare is also noteworthy. Unfortunately, payers commonly seek to drive reimbursement down to these rates or some multiple of the rates. The Medicare program does not come close to keeping up with inflation.
Comparing Medicare payments to inflation, between the start of the RBRVS system of reimbursement in 1992 and 2016, Medicare rates have decreased by 53%. [2]
It is an annual process for emergency medicine to position itself to stave off cuts knowing full well the process is a zero-sum game since the reimbursement pie must be divided among all medical specialties, due to the budget neutrality requirement.
The Clinical Theft:
The specialty is also at risk for the clinical theft of potentially a significant percentage of patients. A consistent theme in healthcare literature is the targeting of patients, others deem to not belong in our emergency departments, due to cost and perceived acuity. These are low acuity patients, however, some patients with multiple co-morbidities and chronic diseases are creeping into these discussions.
Additionally, patients face pressure of determining if their complaint is serious enough to warrant an emergency department visit, an issue seen by many as a prudent layperson violation. Board certified/board eligible emergency medicine physicians are medical experts in the first 15 minutes of the undifferentiated patient, and this is essential in that 90% of symptoms between urgent and non-urgent complaints overlap and it takes a skilled BC/BE emergency physician to separate the wheat from the chaff.
The targeting of these patients to keep them away from our emergency departments is not solely done by payers. It is a common mantra of the emerging retail healthcare giants. It is becoming obvious there may be serious patient volume leakage away from our emergency departments. The persistent focus has become moving patients to lower cost sites of care.
For emergency medicine, it is critical to recognize the brilliance of these maneuvers by payers and the retail healthcare industry. These moves are aimed at redefining our primary care system. These moves are unfolding as well in the development of new models of primary care.
These organizations are attempting to efficiently move and effectively manage the care of patients and especially where they will seek care. From a cost perspective, the emergency department is viewed as enormously costly, hence we must be informed and prepared to deal with a possible significant loss in patient volumes.
Let us examine the potential impact using annual visits to our emergency departments at a rate of 150,000,000 patients. Of note, acuities are increasing plus the new 2023 documentation regulations are resulting in practices experiencing significant shifts in their patient acuities. For purposes of this analysis the focus is on 99281 through 99283.
1. Total Emergency Medicine volume- 150,000,000 patients
2. Incidence of 99281- Negligible with $0 financial impact
3. Incidence of 99282- 1% of mix- 1,500,000 patients
4. Incidence of 99283- 10% of mix- 15,000,000
a. Many practices are migrating toward this level
5. Reimbursement for 99282 at hypothetical rate of $35/patient
6. Reimbursement for 99283 at hypothetical rate of $56/patient
7. Hypothetical loss of 99281- No financial impact, as above
8. Hypothetical loss of 99282- $52,500,000
9. Hypothetical loss of 99283- $840,000,000
10. Total hypothetical lost reimbursement to emergency medicine- $892,500,000
The specialty is in no position to absorb a financial loss of this magnitude; it would be devastating. The purpose of focusing on this hypothetical scenario is to emphasize how the payers and retail disruptors are redefining primary care. This will have an impact on our specialty; it is a matter of degree and how/if our specialty chooses to respond.
The above analysis focused on the lower acuity patients, i.e., 99281 through 99283, however, this may very well “not” be the only subset of patients lost to the specialty. Horowitz reports half of Medicare patients are now enrolled in Medicare Advantage programs. This market is being strongly moved in the direction of value-based care; an environment emergency medicine has been slow to embrace.
With the acuity curve shifting significantly toward increasing numbers of 99284, 99285 and 99291 cases, the specialty will have a new issue to address. In particular, the above predictions suggest an ever-increasing loss of lower acuity patients, plus the potential leakage of Medicare Advantage patients to a new primary care world, our emergency departments are edging toward looking more and more like critical care departments. Agrawal [4] makes the following points:
“…The total addressable market for senior-oriented, value-based care primary care is upward OF $700 billion. I don’t think we should be surprised many different organizations are looking to capture a share of that. The typical senior-focused primary care doctor influences about $10 million of medical expense. There is a growing recognition that primary care, coupled with a delegated risk model-like what you often see with Medicare Advantage-makes that $10 million of spending per doctor more effective…”
Many have complained about the incidence of patients who do not belong in our departments. The stage is being set for payers and retail disruptors to make significant inroads into this subset of patients, via a thorough redefinition of primary care.
Payers and retail disruptors both have very, very deep pockets and particularly the retail disruptors are moving very fast.
Where are we and what is to be done? In developing our strategy and response it is imperative to understand several factors intertwined with these issues.
First, financially, there is a significant change in a core emergency patient subset, i.e. the self-pay patient. Historically, self-pay patients effectively had no and/or little ability to pay. A significant percentage of them were turned over to collection agencies. It was routine for emergency medicine practices to collect, at best, $10 per visit from these patients. This is the core tenet of the unfunded mandate of our specialty.
Today’s self-pay patient population has been split into fundamentally different categories. The traditional self-pay patient continues to be part of virtually every emergency practice. The incidence of these patients has been impacted by the expansion of Medicaid, which itself is continually an evolutionary process, state-by-state.
The self-pay patient of today, however, has expanded to include patients covered with high deductible insurance coverage, as the healthcare insurers have strategically shifted more of the cost-sharing burden to patients.
As insurance plan deductibles continue to rise, so has the incidence of patients who year-over-year simply may never reach their deductible ceiling, effectively creating a new type of self-pay patient. It is imperative to engage these patients as soon as possible, respecting their preferred mode of communication.
A multi-channel approach is critical for maintaining financially healthy physician practices and hospitals today. The options of texting, emailing, phone calls, patient-friendly portals, statements, correspondence, and easily understandable payment options are all necessary.
It is critical to monitor patient preferences closely with data and analytics as these preferences are malleable and may change throughout the course of the patient’s care journey. The full complement of technologically sophisticated tools and analytics, offered from RCMs, coupled with experienced and knowledgeable personnel is a clear and evident necessity today. Sophisticated algorithms, combining various demographic characteristics and metrics of our patients are necessary to focus the patient engagement protocols and processes to produce positive collections.
These solutions must deliver a positive billing experience, which is then reflected in positive reputation management of practices, and our hospitals. These types of solutions are far superior to dated, traditional approaches to RCM which lack the technological expertise as well as the resultant metrics to support today’s practices. Failure to adapt is not an option.
Regarding payers, there are similarities today with tactics used by payers historically, however, the stakes are higher today. Practices must be equipped and supported with the proper mix of people, processes and, advanced, technological solutions to efficiently manage practice finances.
This brings into focus the RCM team. First, people who are experienced in emergency medicine RCM is key, in being able to recognize today’s issues and patterns of payer behaviors. Processes to include timely reporting of all data and practice analytics are required as time is of the essence in identifying problems coupled with actionable metrics to address the issues.
The significance of 24/7/365 reporting, available in formats and layouts easily used and interpreted by emergency physicians and their administrative staffs are critical. The pandemic taught us much, with the significance of predictive analytics being of major significance.
Timely predictive analytics have come front-and-center for both managing staffing requirements as well as strong, future financial projecting. Additionally, there are millions of people who may at least temporarily lose their health insurance coverage once the pandemic is fully in our rear-view mirror.
Practices must be poised to experience payer mix shifts, which have always been a constant, stable metric, but not today. This is occurring when volumes and acuities are simultaneously increasing. The stage is set for a different set of characteristics for another category of self-pay patients necessitating scrutiny, at the very least until they can secure some type of insurance coverage. This is the emerging result of the Medicaid redetermination process.
It is evident today that efficiently managing an emergency practice is fundamentally different than yesterday. Legacy revenue cycle billing engines do not produce the data nor analytics required to effectively manage a practice. Reporting on legacy systems is annoyingly slow and often lacks actionable reporting data and actionable metrics.
Last, it is unfortunately commonplace today to read of cyber-attacks in healthcare, with hospitals and physician practices being held hostage. It has become imperative for emergency practices to insure their practices are protected with the highest levels of privacy and security.
The highest industry standard today is HITRUST certification by your revenue cycle partner. Having this level of security not only protects our practices, it is also very important to our c-suite, hospital partners.
In summary it is important to understand the issues, and headwinds we are facing, to enable our specialty to better address the recurring historical issues, as well as new evolving issues. We must continue developing and using new advocacy efforts, innovative revenue cycle and clinical analytics, metrics and technological patient engagement tools to address these issues.
New models of care and payment methodologies must be explored which may very well expand the scope of emergency medicine. Above all, the message is one of urgency to firmly maintain the specialty’s strong position at all regulatory and reimbursement tables as well as all discussions expanding the scope of the care continuum.
The emerging era must be embraced with an openness and willingness to engage in new dialogues, with potentially totally new partners in the evolving healthcare landscape. Let us in emergency medicine assertively engage in these dialogues. Let us be prepared, ready and let us act!!!
References
1. 2/20/1998 “Dear State Medical Director” Letter from Sally Richardson
2. Fact Sheet: Medicare Inflation Adjustment. ACEP document
3. Half of all Medicare beneficiaries are now enrolled in MA plans, May 3, 2023
4. Agrawal, Vishal, MD. “The Provider’s Patient and the Payer’s member are really the same Customer.” Modern Healthcare 4/3/2023