Strategies to Mitigate Shrinking Reimbursement in Emergency Medicine

Reimbursement Loss Emergency departments are under intense pressure to do more with less, and drilling down into clinical and operational data can provide opportunities to offset decreasing revenues

Many emergency providers are starting to find themselves caught within a perfect storm, with pressure from reduced reimbursements building steadily across all payer types.

  • Medicare payments for emergency care have effectively decreased by 53% between 1992 and 2016, because the allowed amounts were dictated by the Balanced Budget Act and did not keep pace with inflation.
  • The mean reimbursement for privately insured patients see in the emergency department has also declined from 77.7% to 65.7% during this same period. And losses continue to worsen, as commercial payers implement policies that push more of the cost onto the patient.

“Emergency departments need to dive deeper into their data to mitigate reimbursement losses,” explains Dr. Andrea Brault, President and CEO of Brault Practice Solutions. “ED providers are being asked to do more with less, and the challenge is in figuring out where the opportunities exist.”

Granular Metrics Can Result in Actionable Insights.

Most emergency departments are already taking a look at their data; for example, they are measuring average RVU per patient, and average RVU per hour per provider, and ensuring every clinical event makes it into the revenue cycle process in a timely fashion (note: many Payers have shortened their timely filing window to 90 days).

While monitoring these metrics can produce results, there are also more granular adjustments that can have a positive impact on overall reimbursement.

“The key is to develop a data analytics strategy that helps you understand the metrics in terms of actionable insights,” explains Dr. Brault. “Emergency departments should be looking at things such as CPTs by diagnosis or type of service rendered. They should also be tracking the average number of procedures for these same diagnosis groups to identify missed opportunities for documentation or coding.  They should also be tracking both the group and provider trends over time, making sure they understand any sudden variations, especially payment per RVU by payer.  When possible look at this data by major diagnosis groups (chest pain, abdominal pain, fever, etc.) as well.”

This level of analysis not only helps emergency departments manage reimbursement loss, but it can also help uncover operational or process issues that can have an impact on the group’s revenue.

Account For Patient Financial Responsibility

It’s not just shrinking payer rates that are contributing to reimbursement loss. Another major contributor are the high-deductible health plans that many payers are rolling out – where a more significant portion of the total cost gets shifted toward the patient.

Not only are emergency providers earning less for services rendered, but the payer’s portion of the bill might now only cover 60-70% of the total cost. The remaining cost is the patient’s responsibility.

From 2017-2018, the patient’s financial responsibility increased by 12% on average, according to a recent analysis from TransUnion Healthcare and Healthcare Financial Management Association (HFMA).

This trend is forcing providers to retool their patient collection strategies.

“For some emergency groups, this might require providing education to patients about their insurance product, establishing options for payment plans, and making sure that billing statements are clear and easy to understand,” explains Dr. Brault. “ED providers should also be using this information on patient financial responsibility in their payer negotiations. An otherwise favorable reimbursement loss rate may turn out to be much less attractive when you weigh the final experienced reimbursement loss rate against the resources needed to collect from that payer.”

It’s All About Documentation, Especially With Third-Party Liability

Payers have gotten more aggressive about analyzing claims with injury codes. They want to understand the whole story in order to determine who’s responsible for the injury and whether another party should be liable for the cost.

“Providers should always be documenting as if third-party liability applies. Otherwise, a delay in reimbursement is almost guaranteed, while the payer stops the process to ask more questions,” explains Dr. Brault. “Payers are particularly focused on the date-of-injury, how it happened, and where it happened. If these details aren’t in the provider’s documentation, then that claim will get stuck in the billing process and it will eventually start to drain resources that could instead be going toward more productive efforts.”

Find The Right Partner To Help Bring All These Pieces Together

Technology will play a major role in managing reimbursement losses for emergency providers, and building the right partnerships is the key to success. For some emergency groups, it may be a matter of strengthening their relationship with hospital partners in order to more accurately capture patient (guarantor) demographic data. For other ED groups, it’ll involve working with their vendor partners to develop strategies for data analysis and operational process improvements.

“We now have more tools and technology at our disposal,” explains Dr. Brault. “We can now look at data in a much bigger way, and it’s important for ED groups to find the right partner that will help stay on top of the numbers and identify actionable insights. Groups should have a key indicator (KI) dashboard and monitor it every month for opportunities and progress toward their quarterly or annual goals.”

Dr. Brault emphasizes that the emergency medicine industry is changing around us, and emergency medicine providers must be proactive about keeping up with changes that can have an impact on their reimbursement.

For More Information: