HealthLeaders’ new series highlights five essential governing updates that cover every aspect of the revenue cycle that leaders need to know. Check back in each month for more regulatory updates.
The revenue cycle is complex, detailed, and always changing, so staying on top of regulatory updates and latest best practices requires revenue cycle leaders’ constant attention in this ever-changing industry. In this revenue cycle regulatory roundup, there was an ample number of updates published by CMS and the OIG in May, including studies on prior authorization requests and patient harm.
Here are the five updates you need to know.
1. Even the OIG has prior authorizations on the mind.
The OIG published a report regarding whether Medicare Advantage Organizations (MAO) are appropriately approving or denying services which require prior authorizations: What it found was not great and has even set off the American Hospital Association (AHA).
The OIG looked at a stratified random sample of 250 denials of prior authorization requests and 250 payment denials issued by 15 of the largest MAOs in June 2019.
It found that 13% of the prior authorization requests that the MAOs denied actually met Medicare coverage rules. The two common causes of those denials were MAOs using clinical criteria for medical necessity beyond what Medicare has in its coverage rules and MAOs stating that prior authorization requests did not have sufficient documentation to support approval when the OIG’s reviewers said the documentation provided was more than sufficient to support the request.
The OIG also found that 18% of the payment request denials met Medicare coverage rules and MAO billing rules. The OIG attributed most of these denials to human error and system processing error.
The OIG recommends CMS issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews, update its audit protocols to address issues identified in this report, and direct MAOs to take steps to identify and address vulnerabilities that can lead to manual review errors and system errors. CMS agreed with all recommendations.
Because of this, the AHA is calling on the Department of Justice (DOJ) to establish a task force to conduct investigations into health insurance companies that routinely deny patients access to care and payments to providers.
In a letter to acting assistant attorney general Brian Boynton, the AHA states that it is time for the DOJ to exercise its False Claims Act authority to penalize MAOs that restrict services to beneficiaries, citing this OIG report.
Related: Department of Justice Asked to Investigate False Claims Act Violations
2. Patient safety for the Medicare population is in the spotlight.
The OIG published a report regarding adverse events in hospitals in October 2018. The report is a repeat of one that was published in 2010 that looked at patient harm in October 2008.
In this newer report, the OIG found that 25% of Medicare patients experienced patient harm during their hospital stays in October 2018.
Physician reviewers determined that 43% of these harm events could have been prevented if patients had been provided better care. Of the 25% of patients who experienced harm, 12% of patients experienced adverse events that led to longer hospital stays, permanent harm, life-saving intervention, or death. The other 13% of patients experienced types of harm that were temporary and required intervention but did not have longer-lasting effects. The most common types of harm events were related to medication (43%) and patient-care issues (23%).
The OIG noted that while HHS has taken steps in the past to improve patient safety in hospitals, it must do more. The OIG issued seven recommendations, three of which applied to CMS.
Those included recommendations that CMS update and broaden its lists of hospital-acquired conditions to capture common, preventable, and high-cost harm events; explore expanding the use of patient safety metrics in pilots and demonstrations for health care payment and service delivery; and develop and release interpretive guidance to surveyors for assessing hospital compliance with requirements to track and monitor patient harm.
Related: Quarter of Hospitalized Medicare Patients Experienced Harm in October 2018
3. Be on the lookout for potential hospital outpatient payment changes.
CMS published a transmittal regarding the July 2022 updates to the hospital outpatient prospective payment system. Updates include a new code for the over-the-counter COVID-19 test demonstration, four new procedures assigned to new technology ambulatory payment classifications, and more.
It’s important for revenue cycle leaders to keep an eye on the OPPS as it’s also tied to price transparency regulations. For example, in the 2022 OPPS final rule, CMS has increased price transparency penalties.
Related: 3 Issues that Defined 2021 for the Revenue Cycle
4. The Joint Commission will continue to be the CMS’ hospital accreditation program of choice.
CMS published a final notice in the Federal Register to announce its decision to approve The Joint Commission for continued recognition as a national accrediting organization for hospitals that wish to participate in Medicare or Medicaid.
5. You may be off the hook from a full-scale emergency exercise.
CMS revised a memorandum to state survey agency directors regarding clarifications on testing exercise requirements in light of the COVID-19 public health emergency (PHE).
Due to the continued PHE and the number of facilities still operating under disaster/emergency conditions, CMS is exempting any inpatient or outpatient facility still operating under an emergency from the full-scale exercise requirement for specified 12-month cycles of testing exercises. Revisions add information for outpatient providers and revised the information on individual facility-based exercises and important reminders.
Amanda Norris is the Revenue Cycle Editor for HealthLeaders.