February 3, 2025: Sarah and Kate analyze key insights from CommonSpirit Health’s CFO, who exposes systemic issues in payer-provider relationships. How can CIOs use technology to combat revenue loss, optimize billing, and improve contract negotiations? We explore automation, AI-driven analytics, interoperability, and real-time dashboards as essential tools for financial stability.
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Today in Health IT, we are discussing there's something wrong with the system. This is from Common Spirits CFO.
My name is Sarah Richardson. I'm a former CIO for several healthcare systems, most notably within HC and Optum, and now President of Community Development at This Week Health, where we host a set of channels and events dedicated to transforming healthcare, one connection at a time. Today's episode is brought to you by Chrome OS.
Imagine a healthcare system where technology works seamlessly in the background, keeping your data secure, your teams connected, and your patients at the center of care. Visit ThisWeekHealth. com slash Google Chrome OS to learn more. And I am joined by Kate Gamble, managing editor here at This Week Health.
Kate, welcome to the show. Thank you, Sarah. Looking forward to this discussion. I am too because we got a CFO saying there's something wrong with the system. This is really in a recent discussion at the JP Morgan Healthcare Conference. Common Spirit Health CFO, Dan Morissette, highlighted significant challenges in the healthcare payment system.
particularly concerning payer denials. He emphasized that despite rigorous appeals processes, the health system often prevails in disputes, indicating systemic issues within pair provider relationships. Common Spirit is actively working to strengthen its revenue cycle and is adopting a more assertive stance with payers to ensure appropriate compensation for services rendered.
This touches on a few key points. Okay. And then I want to really just dive into what healthcare CIOs need to be thinking about. But CommonSpirit has high volume of payer denials. They have won those appeals suggesting fundamental problems in the payment system. Efforts are underway to enhance the revenue cycle, including the clinical documentation.
And what I appreciated was the underpayment reviews. They are taking a firmer approach to negotiations and contract renewals with payers. And finally, Challenges are particularly pronounced with Medicare Advantage plans, leading some hospitals to reconsider their participation in certain contracts. What are the CIOs supposed to do in this situation?
That's the big question, right? This is so important, and the fact that it's being discussed at J. P. Morgan conference is really telling. One of the things that Morrison was quoted as saying was, Rarely, if ever, have I seen the kind of payer behavior we're seeing recently. Deniers, denials that are absolutely not in accordance with the contracts we have, delayed payments where we need to go to arbitration and or litigation to try to get paid for work we're clearly entitled to.
The behavior overall has been egregious. And clearly he's not alone in that thinking. What you're talking about, Medicare Advantage is there's 21 health systems dropping Medicare Advantage plans. So what does this all mean for the CIO? And these challenges really do underscore the importance of robust health information systems that can manage complex billing processes, track denials, and support comprehensive appeals and implementing advanced data analytics can help identify patterns in payer denials.
Enabling proactive strategies to mitigate revenue loss and additionally ensuring that clinical documentation systems are optimized can reduce the likelihood of denials and streamline the appeals process. And this, these things are becoming so important and they'll continue to be as the industry evolves.
And so often we talk about the C. I. O. Is so much more than the technologists today. You have to understand operations. You have to understand finance and myriad other components that go into that. But the financial strain that's caused by pair denials. It is not just a revenue cycle issue. It affects patient care.
It affects I. T. Infrastructure. And operational efficiencies. I want to dive in a bit and think about how technology analytics, this cross functional collaboration we have to talk about, can help these healthcare organizations mitigate financial losses, optimize revenue cycle, and improve payer negotiations.
So Kate, thinking about these technological solutions to payer denials. How does IT use it to prevent revenue leakage? Let's start with things like robotic process automation, which a lot of CIOs are talking about. Can that pre screen claims to ensure they meet payer requirements before submission and, get ahead of this?
And, of course, AI, our favorite topic, but are the AI driven tools improving claims accuracy? How can hospitals leverage natural language processing and AI powered Coding assistance to reduce errors in billing, interoperability, where, does that come in? Can better integration between EHRs and revenue cycle platforms decrease the likelihood of denials?
And also looking at real time eligibility verification. So how do API driven Payor provider integrations help identify coverage gaps before services are rendered. So a lot of potential with what technology can do if leveraged in the right way. Absolutely. And I love the whole, if you're using APIs, you are using NLP and you've got some.
Process automation in front of these processes, for lack of a better term, it's a win. You allow people to then go focus on the other aspects of these workflows that are not what our day to day routine items, and they have a better outcome. They literally can get these things done so much faster than you can focus on other aspects of what's happening in your Payor denials and your revenue leakage spaces, but then you bring in the data analytics layer.
If you can identify payer trends and the proactive strategies, consider predicting analytics to reduce the claims denials, like how to use historical payer data to predict high risk denials. And then thinking about the KPIs, the revenue cycle teams can track. If an organization is leveraging real time dashboards.
To monitor denial rates under payments and trends across different payers, you're going to start to see a space where you can lean in and have different conversations and then CIOs and finance teams can collaborate to analyze payer reimbursement timeliness. Appeal success rate and compliance trends, all of these start to mold into if one payer consistently denies claims at a higher rate than competitors, what legal, contractual or negotiation strategies can you work through as a hospital system or beyond to get through some of these inconsistencies?
And you mentioned revenue cycle management, and those teams need to work more closely with I. T. to help leaders automate, optimize, and streamline revenue processes. You also need to look at, what are those biggest tech related pain points for the revenue cycle teams, and address that, whether it's the billing platforms being too fragmented or outdated, or other issues that arise.
And then, you need to look at how payer denials Can impact cashflow and hospital financial planning could better it and finance collaboration, help anticipate and mitigate revenue shortfalls, something to look into. And of course, CIO how CIOs can empower RCM teams with self service analytics, providing things like custom dashboards and AI driven insights.
For revenue cycle leaders, and those dashboards can be used for spaces beyond just what we're seeing from the revenue cycle component. There's going to be the paired analysis, and there's also going to be so many other ways you can start to use some of these KPIs and insights. When you have that real time information to break down different sales for financial success, that's going to layer in those data analytics.
And it's also going to have a component of technology that's allowing you to see it more. Holistically across what's happening in your organization, and then we always go back to what's the impact of the pair relations either on the I. T. Strategy or how we're adapting to the health care landscape. Some hospitals may drop certain pairs.
If a health system is re evaluating Medicare Advantage, as an example, or other high denial contracts, then your patient population will be affected. There's going to be patients who can't come see you because you don't have their insurance anymore. And when you consider IT investments, they may change when pay relations are unstable.
How do hospitals increase their focus on financial risk modeling, contract and analytics? Contract analytics and compliance tracking. It will affect how you're investing and other opportunities within the organization. A big one for all CIOs. We worried about it late last year are the value based care models.
Then are they helping or hurting payer provider dynamics? And is that shift towards quality based reimbursement leading to more transparency or is just a whole new kettle of forms of denials start over or a whole new form of denials that The organization has to deal with, and CIOs want to be prepared for increased payer scrutiny.
Are you audit ready? Is the documentation ready in all your compliance tracking systems? What necessities are going to be there to have the appropriate conversations so that the payer relations component is adapting appropriately and your organization can literally find the answers they need to have the right conversations.
And last but not least, at all, obviously, the impact on the patient. Claims are denied and patients are experiencing delayed in treatment, increased out of pocket costs, or that is the last thing anyone wants. And we talk about trust. The insurance disputes can erode trust in healthcare and patients, we could see patients start to lose faith in hospitals and insurers due to constant claim rejections.
And if patients aren't going to hospitals, obviously that's not a good thing. How are they providing, sorry, how are they approaching their care? So hospitals need to look at improving that transparency with patients. Maybe it's patient portals that provide real time claim status updates to help them understand their obligations.
And then patient financial assistance. Are hospitals leveraging IT to automate eligibility screenings and streamline financial aid applications? This is a lot. There is so much here, but this is such a critical topic. And it's becoming clear that the CIOs really need to carry that torch and move this forward.
Especially on the patient impact. You and I have discussed both having our insurance changed mid year for, myriad reasons. And I can't go see my primary care provider anymore. You can't go see one of your core physicians anymore, or a claim gets stuck in the system and you're having to fight a diagnostic versus a preventative billing that came through on the claim.
When you have a relationship. With your physician or with your facility, it may be very different than the relationship you have with your insurer and there can be ways to work around it. And that happened recently with me with my PCP. I'm like, Hey, I don't think I'm able to come see you anymore. And they were like here's somebody else that we can work with.
More importantly, here's how you can still get prescriptions, et cetera. So it takes advocacy on the part of the patient, takes advocacy on the part of the health system, because you may be able to, in some cases, retain some of that patient loyalty, especially in an area where maybe you're the only game in town.
And now the insurance is going to be one of the hurdles to providing effective care. For the CIO, the payer landscape is becoming more and more complex and Aligning with finance, operations, clinical leadership to really ensure your organization remains financially sustainable is going to be huge and the denial rates increase, revenue pressure mounting, contract negotiations becoming more intense.
Hospitals need technology driven approaches to revenue cycle management, payer analytics, claims optimization. Most CIOs are pretty steeped in this today. It's a reminder of why it's a space you always want to lean into most effectively and with some really strong efficiency ideas so that reputationally all the way down through the quality aspect of the carrier delivering isn't compromised.
Absolutely. And as we say often, and it's true, we're all patients. So this is, this helps every single one of us and we will definitely keep an eye on where this goes in the future. Agree. Remember to share this podcast with a friend or a colleague. Use it as a foundation for daily or weekly 📍 discussions on the topics that are relevant to you in the industry.
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