September 17, 2025 • 40 mins
Join host Chad Mulvany and special guest Steve Molitoris, vice president of reimbursement & revenue at Jefferson Health in Pennsylvania. They discuss implications of recent federal policies and legislation, including the Inpatient Prospective Payment System (IPPS) final rule, the Outpatient Prospective Payment System (OPPS) proposed rule, and the One Big Beautiful Bill Act (OBBBA). Steve also shares how his organization is navigating some of the biggest changes.
- Molitoris Interview (2:02)
Learn more about the show at forvismazars.us/AchievingHealthPodcast. Subscribe to Healthcare FORsights™ to receive tailored insights on the healthcare sector directly to your inbox.
Learn more about the IPPS and OPPS rules for 2026.
Register for OBBBA Tuesdays, our biweekly webinar series covering the healthcare implications of the One Big Beautiful Bill Act.
Download our Healthcare Market Point of View: Achieving Health.
Download our Mindsets 2025 Healthcare Executive Leadership Report.
Questions? Contact us.
Connect on LinkedIn:
Healthcare Practice at Forvis Mazars
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:04):
On today's episode of Achieving
Health, I'll be joined by special guestSteve Molitoris, Vice
President of Reimbursement and Revenueat Jefferson Health in Pennsylvania.
We'll discuss his organization'sstrategic approach to reimbursement
and his thoughts on recentlyproposed and finalized rules from CMS.
It's a fantastic conversation,so please stay tuned.
(00:25):
This is AchievingHealth, a podcast from Forvis Mazars,
where we delve into the topicsthat matter most to healthcare
organizationsacross the continuum of care.
Our goal is to help younavigate the dynamic healthcare landscape
and achieve health at your organization.
Here's your host, Chad Mulvany.
(00:46):
Welcome to Achieving Health.
I'm Chad Mulvany, director inthe Healthcare practice at Forvis Mazars.
Thank you for joining me.
I'd like to give you a quick updateon our OBBBA Tuesdays webinar series,
happening every other Tuesdaythrough November 4th, where we cover
the healthcare impact
of the One Big Beautiful Bill Actand how providers can prepare.
(01:07):
We've hosted two sessions so far,and our next session will focus
on improving revenue cycleand managed care performance
to help mitigate the anticipated impactof the Medicaid cuts in the bill.
We'll have a link in the show noteswhere you can register for the series
and view past sessions.
I hope you'll be able to join usfor these insightful conversations.
(01:27):
Usually, this is the point in the showwhere I would share Washington
Watch updates on the latest policyand legislation out of D.C.,
but I want to do thingsa little differently.
For today's episode, we're going to moveright into an in-depth conversation
with a special guest to explorea provider's perspective on recent
CMS rules,including the IPPS final rule for 2026,
(01:48):
as well as the proposed rules for OPPSand the physician fee schedule.
So, without further
ado, I'd like to welcome our guest,Steve Molitoris.
Steve is the Vice Presidentof Reimbursement and Revenue at Jefferson
(02:10):
Health, an academically based integratedhealth system located in Philadelphia.
He leads teams that drivethe network's payment
and pricing strategies and also directsrevenue reporting across the enterprise.
Steve, thank you for your time today
and appreciate youjoining us for this conversation.
Thanks Chad, I appreciate you having me.
Beforewe get into the meat of the conversation,
(02:30):
would you share with usa little bit about your career path,
how you came to the industry,and your current role?
Sure.
So, I am a Penn Stater
and while I was at Penn State,I was actually a nursing major.
And once I got to the bloodand the guts and doing anatomy,
I figured, you know what?
This isn't for me. And I
(02:53):
found something that was a
little more interesting to meand less scary.
And, again,that's a shout out to all the nurses
for whatthey have to deal with day-to-day.
And, I found something that more suited to me,
which is I was a Health PolicyAdministration major,
and always wanted to do that.
So, I really enjoyed the business sideof healthcare.
(03:13):
So, I thought that would be a nice segueinto that.
So, after school,
I found a job at a healthcareconsulting firm called McBee Associates,
and that's where I really got my feetwet into a lot of things that I do now.
And it was a real great start to my careerbecause I did a lot of work
in actually calling on claims and
(03:36):
working in, actually, the business office.
So really, and on top of that, also did Medicare cost reporting,
the Medicare wage index that we use,actually prepared Medicare cost reports.
So a lot of things I do today,I learned from the ground up.
That's great.
And, you know,
I think folks probably don't know,but you and I started together same firm.
(03:58):
And that's how we know each other.
So going back to a point where, well,the hair that I had was less gray.
But yeah, no,it was a fantastic experience.
And even when I tracked into a policyrole,
that was one of the thingsthat has always separated me from
my colleaguesis the fact that I have called on claims
or that I have had to review contractsto like, make that argument, or even filed
a cost reportand understand what it means,
(04:19):
at least back in the day, to put togethera DSH log or a bad debt log.
Just incredible importance.
And then,
appreciate you shouting out the challengesof how hard it is to be a nurse.
I think the general public
underappreciates first,particularly for an inpatient unit nurse,
the IQ and the EQthat you have to have to get through
the basic sciences and dealwith just the different personality types
(04:40):
that you'll encounter,and then also the physical stamina, right?
Like you and Iare both in pretty good shape,
but the idea of having to shadow a nursefor a week—like, I imagine that
by the time I got around to Saturdayafternoon, I'd be pretty tired.
Yeah, it's just unreal.
Like what our clinical staff does.
And I always defer to them
on a lot of the day-to-day things because,you know, we're in the finance world.
(05:02):
So in our finance world,we're trying to provide,
you know, our viewsand we see the results.
But we always have to be very carefulas from on the finance side,
providing that, you know,because we don't understand,
we got to put ourselves in the shoesof the actual clinicians.
So there's always that delicate balanceof what we're always doing, on
(05:24):
a day-to-day basis, from a reimbursement
strategy standpoint to the cost cutting,to everything
that we do in the financeworld, it's really important
that we're definitely mindful
and sensitive to the clinical scope.
Yeah,I mean, it's a delicate balance, right?
Because you've got to make sure
(05:45):
that the resources are there for themto provide high-quality, efficient care
today and, you know, into the future,into perpetuity.
So, really appreciate that.
For those who may not be familiarwith Jefferson Health,
would you please tell us a little bitabout the system?
Yeah, sure.
So, Jefferson Healthis about a 32-hospital system located
(06:06):
in the eastern part of Pennsylvania.
So we run from all the way
down in Philadelphia, urbanhospital, downtown Philly, all the way up
to, for example,northeast Pennsylvania, Dickson City,
and across state lines into New Jersey.
The clinical enterprise,I believe, is about
(06:28):
$12 billion in revenue.
Again,
we have a
university and also a health plan arm.
So we're a truly academically integratedhealth system,
across the eastern side of PAand New Jersey.
When combined, LVHN and Jefferson
(06:53):
combined, I believe it's the top-15,
or it's a top-15not-for-profit health system in the U.S.
Sizable system, diverse set of businesses.
Because you've got the plan,
you've got the hospitals,you've got the physicians,
and you've got a diverse mix of hospitalsunder that umbrella.
Yeah, it's a great system.
We've—kind of getting to that pointabout the diversity
(07:15):
of reimbursement issues that you'refacing—we've seen a lot of activity
in the CMS rulemaking cycle, includingfinal rules for Medicare Advantage,
inpatient rule, proposedphysician fee schedule and OPPS.
When you think about Jefferson,what are the two or three most interesting
either proposed or final changesfrom this CMS rulemaking cycle?
(07:40):
So a couple things.
You know, one of the thingsthat they put out there in the latest
proposed OPPS rule was aroundthe new survey for drug acquisition costs.
It looks as though there, you know,we saw the intention there
several years backwhere the feds cut our payments
for 340B acquired drugs.
(08:04):
And then, obviously the district court
had since figured out that policy bythe original administration was illegal.
And they went ahead and that refunded allof those back payments for the discounts.
So, with the administrationcoming back in to play,
they obviously areputting the survey out there
(08:26):
because they need to do this surveyin order
to actually apply these discountsin a lawful way.
So, obviously that's going to becoming down the pipeline.
That's a significant impact.
And when you're talking about, you know, I think it's
AWP minus 6% in terms of what it wasbefore.
In terms of what the payment (is).
(08:48):
That's going to be a significant impact
to our Medicare,I would say, drug reimbursement.
So, that's obviously a significantconcern coming down the pipeline.
The other thing
was the site neutrality paymentsfor drug administration.
Well, granted, drug administration
(09:08):
alone for siteneutrality is not a huge dollar impact.
However, I foresee that expanding.
That's just, you know, they've alreadyput their foot in the door with site
neutrality payments for E&Ms,
now it's drug administration.
And obviously there's a lot of rumblings
around expansion into all services,
(09:32):
you know, via having an understandingof putting certain modifiers
on off-campus procedures that arebeing done for outpatient services.
To me, that's the pathwaythey're going to claw back to next.
I really perceive that as, you know,that's
just a start into the world of,yeah, they're going to start clawing
(09:53):
back on the off-campus,outpatient payments
and it's going to go back to the siteneutrality.
Again, that's our next big opportunity.
And again,significant dollars across the U.S.
in terms of clawback for that.
So those are,
you know, two major headwinds,I would say.
(10:13):
And probably
I would say around the implementationof the TEAM models
and the bundled payments, and that'swhere surgical procedures, especially in
the lower extremity, are goingto be subject to a bundled payment.
Obviously, the feds are continuing,you know, we're already in
(10:34):
ACOs, MSSP program, where, you know,
they're looking at the total paymentfor providing services.
And, you know,there's some redundancy there.
But again, they're going to continue downthis path of shifting the burden
(10:55):
further on to the health systems
of providing the care—and at the cost.
So, you know, we're only going to get paid
a lump sum paymentto provide these procedures.
And in the past, it was more,you know, granted, it is APCs,
it just further bundlesthe payment and puts the onus
(11:16):
back on the health system to do itmore quickly, more efficiently.
And I expect those bundles to, again,continue to expand.
Right now, it’sonly to a select number of hospitals.
But ultimately that should expand to,
I expect, more scope, in other words,more procedures
and then also across more hospitalsand health systems.
(11:40):
Yeah, no, and I think that's a, you know,that's a great list.
And when I think about 340B, the survey,
you know, they tried to do this,and you remember this, back
in, I think it was eitherApril or May of 2020.
And they got a low response ratebecause we were all,
you know, doing something elseat the time, a little pandemic,
and so there was a lot of commentary
(12:02):
in the ruleabout addressing that lower response rate.
And there was,
you know, language in there about, well,you know, if there's a low response rate,
we might interpret the hospitalsin certain classes don't have
enough cost to report the survey.
So we might start rethinking yourpackaging policy, so that's concerning.
(12:23):
The other sort of piece of it, you know,you mentioned the discount part of it.
You know, as I was thinking about,if I were sitting in your seat,
how I'd model it.
And I think the discount
that from the first time aroundis probably kind of the starting point,
maybe not the endpoint,because there's discussion in there about,
well, where we have non-responseswe're just going to look at the hospital
based on some type of segmentation,and we're going to say
(12:46):
they probably didn't have significant costreports.
So, we're going to assign them
the lowest cost based on their,acquisition cost based on their cohort.
Right. Yeah, I mean,
you look at the current payment levels,
it's not even adequate in termsof what our cost is.
So, to further dilute or further make cuts in our payments,
(13:10):
obviously it'll hurt our missionbeing a not-for-profit health system.
The margins we get aroundthe drugs are used for patients
to fund all the uncompensated carewe provide, to fund
being a large academic medical centerwith a trauma center.
You know, we have trauma surgeonsthat are sitting on standby 24 hours,
(13:34):
seven days a week.
Those are significant costs that we have.
And this is to provide access, timely
access, high-qualityaccess to our patients in the community.
And, you know, just beyond the traumasurgeons, you've got the teams.
Those are highly skilled nurses.
Those are highly skilled techsthat support those surgeons.
So it's, you know,the cost goes on and on.
(13:57):
On the site-neutral piece for the drug
administration,I share your concerns there as well.
Right.
It's like I think it was 280 millionfor the year estimated.
But then there's, you know,there's a discussion in there,
there's a request for feedback,not a proposal, about well,
what happensif we were to bring, and this is CMS,
you know,
(14:18):
apply our clinic visit policythat is only right now for exempted
HOPDs on to the main campus.
And it's like,oh, you're thinking about that in 2027.
So you're right.
That's where they're going there.
And then there's languagein the rule about, you know,
what type of systematic frameworkcould we use to identify services
(14:39):
where we could expand site neutrality,just to your point.
So I think this is, you know, regardlessof whether Congress picks this up
in some future billand tries to use it as a pay for,
you know, I think CMS is giving themthat space to maybe do something
later this fall if they can get,if Congress can get their act together.
If not, we're going to see more of this inthe ‘27 proposed OPPS rule.
(15:03):
And then on TEAM, you know, completelyshare your thinking around
not only are they going to expandthe number of episodes,
but they're also going to expandthe number of hospitals.
And the other piece kind of pullingthat site-neutral thread through,
you know, you've got the LEJR in thespinal fusion bundles that are already,
you know, the lowest acuity
(15:23):
bundle, or pricedbundle, is inpatient-outpatient.
So, whatever shift of low acuity serviceshasn't already occurred,
that's to then just encouragethat in those hospitals further.
And I would expect that not only will theepisodes, if I were CMS looking at this,
not only would I be looking formore episodes where this would make sense,
but more episodes that I could pricesite-neutral.
(15:44):
Yep. And on top of that,they continue to shift,
and look for us to shiftin terms of more of the efficiency, around
moving more services to off,
well, they're actually they're goingto remove the inpatient-only list.
Yeah. They're phased.
It's similar what they tried to dowith the first administration.
They're phasing it out in three tranches.
The first trancheis mainly orthopedic services.
(16:06):
And many of those servicesare going from the, coming off
the inpatient-only list and going straightto the ASC covered procedure list.
That's the other piece on TEAMthat would be kind of a logical next step,
but I don't know how you would do it,which is to bring in the ASC
setting, given that, you know,you're holding the hospital at risk.
But not all hospitals own ASCs, or notall ASCs are owned by – in a market
(16:29):
– are owned by a hospital.
So I don't know howCMMI could square that circle,
but if they could figure it out,
that would be kind of a logical next stepas well.
Absolutely.
Out of this proposed rulemaking cycleor out of this final rulemaking cycle,
is there anything in there that you thinkthe industry is under appreciating?
I don't know if
it fits really under the proposed rules.
And I don't know if we wantto get into the Big Beautiful Bill yet,
(16:53):
but one of the things is aroundthe Big Beautiful Bill is
the Medicaid eligibility pieceswhere the retro day,
I think they're going from like 90,
or I should say your lookbackperiod is going from like 90 to 60 days.
You add in the work requirements.
(17:14):
So you have all those headwinds
around the Medicaid eligibility,which parlays.
And Medicaid eligibility
feeds directly into your DSH percentage,
and your DSH percentage is used
for a 340B eligibility.
There's many health systemsacross the U.S.
(17:35):
that are at the cusp of qualifying,or I should say, hospitals
at the cusp of qualifyingfor 340B, whether that be the
full DSH
340B percentage, which includesall your orphan drugs,
which is your high-cost cancer drugs,or your lower RRC at 8%.
(17:56):
There's many hospitalsthat are sitting at those cliffs,
and any disruption to,
further disruption, in additionto Medicaid redetermination
that we've all recently experiencedlast two years
will further erode our Medicaideligible base
(18:16):
to be included in this calculation.
And therefore,
many hospitals are at risk of losing tens,hundreds of millions of dollars,
related to the savingsin the 340B program.
A lot of folks, I think, focused
on, in a lot of the publicationsand a lot of things
I've read about the Medicaid eligibilitypieces, folks are focusing more on,
(18:41):
oh, you'll loseperhaps, Medicaid payments and all.
Well, yeah, of course we'll losefee-for-service Medicaid payments.
But, you know, look,they might find it different
and they might go uncompensated care.
But to me, the real focus should be on
the potential losses the 340B eligibility.
That's where the systemsare really going to suffer.
(19:05):
Yeah.
No, I think that's exactly right.
And you, I think you teed up the trifectanicely, you know, for the redeter,
or for that, you know,you've got the moving from once a year
redetermination to twice a yearfor your expansion population.
You got the work requirementsfor 19 to 64 with some carveouts
where you've got to work 80 hoursa month, or engage in certain activities,
(19:25):
and then you've got the lookback periodwhere it's, you know,
today it's 90 days for the expansionpopulation.
It'll be 30 for the non-expansion,it'll be 60.
All of that together. You're right.
And you know, even though some of thesethings are only focused on the population
that you would generally tendto think are not high
utilizers, you know your expansionpop typically isn't.
(19:46):
Although there are a lot of peoplethat are near retirement age
that could possibly fall into that.
That might be a little bit more.
You put it all together.
And for those cliff hospitals or for thoseon the bubbles, it is a huge deal.
And we're, you know, even prior to OBBBAwe were having conversations with clients
that we help with DPI and 340 B aroundhow to deal with that.
(20:09):
And I think particularlyfor the uninsured, where you see
individuals that end up needing to come inand get care, end up getting admitted,
the insidious thing about it
is not only dothey fall out of the numerator,
but they get addedthat they're still in the denominator
and they're uncompensated,so it's really just diluting everything.
Yeah.
So that's the real underappreciated thingthat folks didn't really focus on.
(20:30):
It was more around the coverage.
Yeah.
I'm more worried about the cliffhospitals.
So given all these issues we've talked
about, how is Jefferson Healthpreparing for these changes?
So I mean, so right now with so we are
we're alreadyin a transformative state given
LVHN merged into
(20:52):
Jeffersonofficially back in August of 2024.
So it's been one year.
So we were truly trying to become onehealth system,
through integration of
finance, accounting, clinical leadership,
physician leadership,
(21:12):
so our entire health system is mergingand transforming as it was.
But given these headwinds,we have already had,
I would say the tea leaves that
the government or I should say the
Medicare Medicaid payments,which, you know,
are a significant part of our payer mix,have declined and continue to decline.
(21:37):
We're going to continue to see this shift,like many other health systems,
from commercial payersto government payers,
and obviously that presentsfinancial challenges to us.
So we were already on a path
of making sure our operationswere efficient as possible:
(21:59):
becoming one, corporatizing, leveraging,I would say, system-ness,
and becoming a single system, so
in termsof all of our corporate functionality.
So we're right nowin that journey now to do that
and to become a more efficient system thatprovides quality care to our community.
And obviously that's,you know, our top priority.
(22:22):
And obviouslyquality is very important to us.
So as
we've been in this journey, LVHN
and quality for yearsand so has the Jefferson side of it.
And it's really come together beautifully
between the two health systemsin terms of the learnings from each other,
and we foresee, obviously,
(22:45):
quality value-based paymentscontinue to be even larger.
I would say, more significantin the future
in terms of the significance to us.
So we've been going down that journey,and that's how we're preparing for it.
Yeah. No, I think that makes sense.
And it's,
you know, it's exciting to hear thatboth organizations,
were bringing something to the table,were learning from each other.
(23:08):
And I do think you're rightthat as part of the payer mix,
one way or another, organizationsare going to be at
greater riskfor both quality and financial outcomes.
You know, we're still kind of waitingto see
how the private sector rolls this in,but it is coming.
You know, the other interesting pieceabout your comment
about the growing part of the governmentalcomponent of the payer mix.
(23:29):
I'm assuming that what you're seeing is,like everybody else across the country
is it's not only just a growth
in your Medicare population,but it's a growth
in your Medicare Advantage populationthat, beyond being an adequate payer,
brings unique and distinct challengesbeyond what you would get if it was just
traditional fee-for-service,
where if you bill a clean claim,you can expect in 30 days to get paid.
Yeah.
What we're, I mean we are seeing thatespecially the last three to four years.
(23:54):
I mean, I watched my Medicarefee-for-service shift
over to the Medicare manage side.
And obviously, to your point,
the challenges that come with working with
and submitting claimsto a Medicare managed care company
versus Medicare fee-for-serviceis they're quite different.
(24:16):
You know, some of the
policies they deploy, generally,they're supposed to follow Medicare.
However, sometimes, they have differentinterpretations of what.
Created creative interpretations.
Yeah.
So they definitely havetheir own interpretations
that present challenges,
that we’re
(24:36):
constantly facingand that are immediate to us today.
I mean, there are ones that we just talkedabout this past week that we're trying
to work with, and trying to work directlywith this payer
on their interpretation and,
you know, we have the same goalsas they do to treat patients,
treat them fairly and give themthe best outcomes as possible.
(25:00):
Yeah, make sure they've got good access,make sure
that the outcomes are,the quality is high,
and then it's done in a cost-efficientmanner based on the condition.
And one real aspect,exciting aspect that I
didn’t probably touch on enough is,you know,
Jefferson Health Plan has its own
Medicaid managed care productand also Medicare Advantage Plan.
(25:24):
So, having
that in-house and being ableto work with that population,
I think we're in an excellent position
to serve that population
and to treat the patient holistically as
at that point,we're working with the premium dollar
(25:44):
as opposed to the fee-for-service dollar.
So I think with
LVHN, you know, Jefferson has for years
had the health plan, LVHN
is just learninghow to work closer with the health plan.
So I think there's, it's excitingfrom that standpoint.
(26:06):
And also for me,just joining the Jefferson world,
being able to work closelywith the health plan that we have,
we haven't had that experiencebefore in the past.
Yeah.
Well,and to your point about value-based care
becoming a growing part of the pie,it gives you a nice place,
kind of a laboratory to work with, again,the premium dollar that you're collecting
for both your aligned MCOpatients, your aligned
(26:27):
MA patients, to get that experienceto figure out how to do it.
So then you can take it outto other places.
And you're right, it does, withinwhat's allowable under both programs,
you can start to usesome of that premium dollar to address
some of the social determinantsthat result in unnecessary utilization
that you absolutelyjust don't have in fee-for-service.
And so, it does give youa great opportunity where the care is
(26:48):
aligned, integrated and everybody'srolling in the right direction.
You know, we've covered a lotaside from the payment rules and OBBBA;
what else is keeping you up at nighton the regulatory or legislative front?
It's, you know, all the headwinds that
we have when you combine
the federal position of the future,
(27:10):
and also I don't think we touched on yet,
and I know it's part of the Big BeautifulBill was,
the cut in payments related to hospitalprovider taxes, those programs.
In Pennsylvania, we have what's calledthe Medicaid Modernization Program,
typical provider tax program
where we are taxed for,
(27:33):
we tax ourselvesand the funds are matched by the feds
and then redistributedto all the hospitals.
And it's really just the, it’sa mechanism, self-funded
through the hospitals in our state, matched by the feds,
to help with the shortfallsfrom the Medicaid fee-for-service
(27:54):
program.
The Medicaid fee-for-service program,in Pennsylvania,
since I remember, probably 10-15 years,has not increased its rates for years.
And it's because the state legislaturehasn’t allowed it.
So this is the onlymeans that we've had really to increase
our rates,you know, depends on who you talk to.
But generally
we get paid$0.65-$0.70 on the dollar of the cost
(28:18):
of treating these Medicaid populations.
We have hospitals in downtown Philadelphia
that treat a super high numberof these patients.
It's our mission.
We will always treat patientsregardless of their ability to pay.
And that'swhat our role is in the community.
However,
without getting adequate payment for that,
(28:41):
it's hard to keep the doors open.
It's hard to replace the hospital bed.
It's hard to get the latest and greatestda Vinci robot that the community demands.
We want to provide the highest levelof care to our community.
So, that money
that we receive that
(29:02):
exceeds our expensesgets, as part of our mission,
gets pushed right back into the hospitalto care for the community.
So without covering our costs
under these programs, it'sjust going to make it that much harder
for us to provide that high-qualitycare and access to patients.
Yeah, you know, you're spot on there.
(29:23):
And you know,
I know this is going to shock you,but the 15 years without an increase
in your fee-for-service rates,which then influences
your managed care rates, like that'sobviously not an uncommon story.
And certainly when I was at the CaliforniaHospital
Association,we were dealing with the exact same thing.
And you're right, the provider taxeswere a way to take federal funds
and make up for an unwillingnessat the state level
(29:45):
to fund the Medicaid programappropriately.
And I'll, you know, 49states were doing it, minus Alaska.
And what I don't thinkpeople fully appreciate,
when I say people, not this audience, but,you know,
our fellow Americans writ large,
is that while they may not care
about Medicaid rates,they should, because to your point,
(30:08):
that trauma center downtown,that's probably 80% governmental payer.
If it doesn't have that supplementalor doesn't have the provider tax
that funds the supplemental paymentor the UPL payment,
may not be available when they need it.
Right?
And that's when
obviously at that point,
(30:30):
that'swhen it becomes an issue with access.
Yeah.
And in not just in access for certainindividuals but for the broader
population.
Because, you know,you guys are a regional referral center.
Nah, it's a great call out.
It's a great call out.
All right,switching gears to happier topics.
I don't know how much happier topicsthere are in healthcare finance, but...
(30:53):
We're getting into leadership, man.
You've been in leadership rolesfor a while.
What's one piece of advice
you'd give to someone who just movedinto a formal leadership role?
Wow. I would say remain open,
remain agile, and be ready for change.
Always be willing to change.
We will never stay steady or stagnant.
(31:15):
Always look for ways to improve,
and also
put yourselves in someone else's shoes.
When anybody ever asks you something,step back.
Before reacting,
put yourself in their shoes
(31:35):
and try to get an understanding
of why they're asking the question.
And so, for example,someone in the clinical world,
which we work closely with,
may not understand how we get paid.
So please, just be understanding
(31:57):
because you don't knowwhat their background is.
And put yourself in their shoes.
That's what I, typically,
what I use on a day-to-day-basis.
I think that's spot on.
When I think about the peoplethat I've worked with over the years,
the ones that I've learned the most fromand enjoyed the most from,
(32:18):
and I've been very fortunate to workwith a number of leaders who are just
the most humble individuals,and to your point, would be willing to
listen, would be willing to answerquestions, wouldn't automatically sort of
have a reflexive response and encourageboth, you know, an open environment
where you would have that great dialogthat gets to better places.
So it is just,I think it's a great call out.
(32:40):
What's something that youand your colleagues or you and your team
have recently accomplished that you'reproud of, that you think moved the needle?
I would say a lot of my focus
through my careerand a lot of things I learned along
the way, you know, after
I left, you know, maybe I went to Ernst
(33:01):
and Young, PriceWaterhouseCoopers, so
I've always kept that consulting mindset.
So, stepping into leaving the consulting world
and going into the hospital world,
I deployed
a number of reimbursement strategiesthat I would say effectually, say,
(33:25):
at least $150-$200 million in accretive
bottom line impact,
in ways that strategically
place all of our hospitalsand health systems
and to best align themfrom geographic reclass
situations to improving our wage index
(33:48):
in order for us to achieve the revenuesthat you know, that we deserve.
That reflectsthe actual attributes of our hospital.
Yeah, and I thinkthat's an important thing to call out.
We just talked about the inadequacy
of Medicaid rates.
But when you look at,you know, you pull the Medpac data down
and you chart it out overbasically the course of our career,
(34:10):
the slope on the operating marginfor Medicare for hospitals is just headed
downward, downward, downward to the pointwhere even Medpac’s
cohort of quote unquote “efficienthospitals,” the thing that they set
policy to, they're nowsitting around at a -2% operating margin.
So if you're not thinkingabout those opportunities that you have
to improve allowable reimbursement,
(34:34):
you're losing ground. Right?
If we're not thinking ofhow do we position ourselves
from a wage index reclass.
There's only onepool of dollars out there,
you know?
They set the market,the fed set a market basket,
and everything gets allocatedto the hospitals
(34:55):
on a budget-neutral basis.
If we’re not properly
aligning ourselvesor properly designating ourselves,
based off the attributes of our hospitalsthat currently exist
or actually reflect them, it's important
that we,
(35:17):
for our health system and our bottom line.
So, going back to my points earlier of,
without creating revenuesand positioning ourselves,
we wouldn't have the money to reinvestin our hospitals and our buildings
and just the maintenance, day-to-daymaintenance to
(35:37):
keep the doors open of our hospitals,
let alone invest in new technologies.
Yeah. That's absolutely right.
So those are, I would say,the biggest accomplishments, everything
from the hospital reclassificationsto the hospital mergers we've done,
to gainingeligibility for the 340B program.
(35:58):
Those are the areas that we've donea lot of focus on.
And then secondarily,
we spent a lot of timewith our, for example,
so I oversee both the reimbursement teamsand then also the revenue accounting.
Revenue accounting shouldn't just be hey,we're here to produce
financial statements.
(36:19):
Our goal is not only to producethe financials,
the revenues and the financial statements,but also to open up a window
to the operators and to the how, what,and why
our hospital performance is
and how do we work with them more closely.
And I would say in the last,
I joined LVHN back in 2017.
(36:42):
I would say the last three or four years,
we've made significant stridesworking closer with our operators
and to give them a lensinto the financial world and the aspect
of financial performance.
So I think we've actually,from that aspect,
I think providing
(37:06):
the detail and information to showhow they can improve their performance
the last couple yearsis significantly improved.
That's another area I'm very proud of.
Yeah.
No, and you should bebecause you're right.
That sort of alignmentbetween finance and clinical, you know?
Once, generally my experience has been,
(37:26):
once the clinicians understandthe drivers of performance,
you know, as long as,you know, it's not directly,
as long as it's not impactingpatient care,
they're happy to sort of
improve efficiencies, make sure,because they understand that, you know,
everything that they touch to providehigh-quality care has a cost to it.
It's not an insignificant cost.
And so they're looking for ways toand they want to help improve.
(37:49):
But you're right.It takes that partnership.
It takes that transparency
into what drives the financialsto build that relationship and that trust.
Yeah.
That's one of the key aspects of,finance has historically been sort of,
you know,
in my experience,been siloed away from operations.
We've brought them togethernot only through
(38:10):
our initial reporting, but then through
monthly operating meetingsthat we meet with the operators.
And we explain in detail as far as,
okay, your volumes were maybe
10% of our budget this month.
And then they will ask, well,why is my revenue not up?
(38:30):
Well, those volumes were more inlow-cost areas versus high-cost areas.
And we give that, we’llprovide that explanation
so they understandwhat type of volumes came in the door.
Yeah. No, that's great.
That's absolutely great.
Steve, thanks again for joining us todayand sharing your insights
with our listeners.
(38:51):
And thank you to our listenersfor tuning in.
If you'd like to learn more about
the CMS rules we discussed todayand strategies to navigate them,
we have links to relatedcontent in the show notes.
I hope you'll join me again in two weeksfor the next episode of Achieving Health.
You can follow
Achieving Healthon your favorite podcast platform or visit
(39:12):
forvismazars.us/AchievingHealthPodcastto learn more.
New episodes are released the firstand third Wednesday of each month.
Achieving Health is produced by ForvisMazars LLP, an independent member
of Forvis Mazars Global, a leading globalprofessional services network.
Ranked among the largest publicaccounting firms in the United States,
(39:34):
the firm's 7,000 dedicated team membersprovide an Unmatched Client Experience
through the delivery of assurance, taxand consulting services for clients
in all 50 states and internationallythrough the Global Network.
The information set forth in this podcastcontains
the analysis and conclusionsof the panelists based upon his, her,
(39:54):
or their research and analysis of industryinformation and legal authorities.
Such analysis and conclusionsshould not be deemed
opinions or conclusions by Forvis Mazarsor the panelists
as to any individual situationas situations are fact-specific.
The listener should performtheir own analysis
and form their own conclusionsregarding any specific situation.
(40:17):
Further, the panelists conclusionsmay be revised without notice,
with or without changes in industryinformation and legal authorities.
On today's episode of Achieving
Health, I'll be joined by special guestSteve Molitoris, Vice
President of Reimbursement and Revenueat Jefferson Health in Pennsylvania.
We'll discuss his organization'sstrategic approach to reimbursement
and his thoughts on recentlyproposed and finalized rules from CMS.
It's a fantastic conversation,so please stay tuned.
(00:25):
This is AchievingHealth, a podcast from Forvis Mazars,
where we delve into the topicsthat matter most to healthcare
organizationsacross the continuum of care.
Our goal is to help younavigate the dynamic healthcare landscape
and achieve health at your organization.
Here's your host, Chad Mulvany.
(00:46):
Welcome to Achieving Health.
I'm Chad Mulvany, director inthe Healthcare practice at Forvis Mazars.
Thank you for joining me.
I'd like to give you a quick updateon our OBBBA Tuesdays webinar series,
happening every other Tuesdaythrough November 4th, where we cover
the healthcare impact
of the One Big Beautiful Bill Actand how providers can prepare.
(01:07):
We've hosted two sessions so far,and our next session will focus
on improving revenue cycleand managed care performance
to help mitigate the anticipated impactof the Medicaid cuts in the bill.
We'll have a link in the show noteswhere you can register for the series
and view past sessions.
I hope you'll be able to join usfor these insightful conversations.
(01:27):
Usually, this is the point in the showwhere I would share Washington
Watch updates on the latest policyand legislation out of D.C.,
but I want to do thingsa little differently.
For today's episode, we're going to moveright into an in-depth conversation
with a special guest to explorea provider's perspective on recent
CMS rules,including the IPPS final rule for 2026,
(01:48):
as well as the proposed rules for OPPSand the physician fee schedule.
So, without further
ado, I'd like to welcome our guest,Steve Molitoris.
Steve is the Vice Presidentof Reimbursement and Revenue at Jefferson
(02:10):
Health, an academically based integratedhealth system located in Philadelphia.
He leads teams that drivethe network's payment
and pricing strategies and also directsrevenue reporting across the enterprise.
Steve, thank you for your time today
and appreciate youjoining us for this conversation.
Thanks Chad, I appreciate you having me.
Beforewe get into the meat of the conversation,
(02:30):
would you share with usa little bit about your career path,
how you came to the industry,and your current role?
Sure.
So, I am a Penn Stater
and while I was at Penn State,I was actually a nursing major.
And once I got to the bloodand the guts and doing anatomy,
I figured, you know what?
This isn't for me. And I
(02:53):
found something that was a
little more interesting to meand less scary.
And, again,that's a shout out to all the nurses
for whatthey have to deal with day-to-day.
And, I found something that more suited to me,
which is I was a Health PolicyAdministration major,
and always wanted to do that.
So, I really enjoyed the business sideof healthcare.
(03:13):
So, I thought that would be a nice segueinto that.
So, after school,
I found a job at a healthcareconsulting firm called McBee Associates,
and that's where I really got my feetwet into a lot of things that I do now.
And it was a real great start to my careerbecause I did a lot of work
in actually calling on claims and
(03:36):
working in, actually, the business office.
So really, and on top of that, also did Medicare cost reporting,
the Medicare wage index that we use,actually prepared Medicare cost reports.
So a lot of things I do today,I learned from the ground up.
That's great.
And, you know,
I think folks probably don't know,but you and I started together same firm.
(03:58):
And that's how we know each other.
So going back to a point where, well,the hair that I had was less gray.
But yeah, no,it was a fantastic experience.
And even when I tracked into a policyrole,
that was one of the thingsthat has always separated me from
my colleaguesis the fact that I have called on claims
or that I have had to review contractsto like, make that argument, or even filed
a cost reportand understand what it means,
(04:19):
at least back in the day, to put togethera DSH log or a bad debt log.
Just incredible importance.
And then,
appreciate you shouting out the challengesof how hard it is to be a nurse.
I think the general public
underappreciates first,particularly for an inpatient unit nurse,
the IQ and the EQthat you have to have to get through
the basic sciences and dealwith just the different personality types
(04:40):
that you'll encounter,and then also the physical stamina, right?
Like you and Iare both in pretty good shape,
but the idea of having to shadow a nursefor a week—like, I imagine that
by the time I got around to Saturdayafternoon, I'd be pretty tired.
Yeah, it's just unreal.
Like what our clinical staff does.
And I always defer to them
on a lot of the day-to-day things because,you know, we're in the finance world.
(05:02):
So in our finance world,we're trying to provide,
you know, our viewsand we see the results.
But we always have to be very carefulas from on the finance side,
providing that, you know,because we don't understand,
we got to put ourselves in the shoesof the actual clinicians.
So there's always that delicate balanceof what we're always doing, on
(05:24):
a day-to-day basis, from a reimbursement
strategy standpoint to the cost cutting,to everything
that we do in the financeworld, it's really important
that we're definitely mindful
and sensitive to the clinical scope.
Yeah,I mean, it's a delicate balance, right?
Because you've got to make sure
(05:45):
that the resources are there for themto provide high-quality, efficient care
today and, you know, into the future,into perpetuity.
So, really appreciate that.
For those who may not be familiarwith Jefferson Health,
would you please tell us a little bitabout the system?
Yeah, sure.
So, Jefferson Healthis about a 32-hospital system located
(06:06):
in the eastern part of Pennsylvania.
So we run from all the way
down in Philadelphia, urbanhospital, downtown Philly, all the way up
to, for example,northeast Pennsylvania, Dickson City,
and across state lines into New Jersey.
The clinical enterprise,I believe, is about
(06:28):
$12 billion in revenue.
Again,
we have a
university and also a health plan arm.
So we're a truly academically integratedhealth system,
across the eastern side of PAand New Jersey.
When combined, LVHN and Jefferson
(06:53):
combined, I believe it's the top-15,
or it's a top-15not-for-profit health system in the U.S.
Sizable system, diverse set of businesses.
Because you've got the plan,
you've got the hospitals,you've got the physicians,
and you've got a diverse mix of hospitalsunder that umbrella.
Yeah, it's a great system.
We've—kind of getting to that pointabout the diversity
(07:15):
of reimbursement issues that you'refacing—we've seen a lot of activity
in the CMS rulemaking cycle, includingfinal rules for Medicare Advantage,
inpatient rule, proposedphysician fee schedule and OPPS.
When you think about Jefferson,what are the two or three most interesting
either proposed or final changesfrom this CMS rulemaking cycle?
(07:40):
So a couple things.
You know, one of the thingsthat they put out there in the latest
proposed OPPS rule was aroundthe new survey for drug acquisition costs.
It looks as though there, you know,we saw the intention there
several years backwhere the feds cut our payments
for 340B acquired drugs.
(08:04):
And then, obviously the district court
had since figured out that policy bythe original administration was illegal.
And they went ahead and that refunded allof those back payments for the discounts.
So, with the administrationcoming back in to play,
they obviously areputting the survey out there
(08:26):
because they need to do this surveyin order
to actually apply these discountsin a lawful way.
So, obviously that's going to becoming down the pipeline.
That's a significant impact.
And when you're talking about, you know, I think it's
AWP minus 6% in terms of what it wasbefore.
In terms of what the payment (is).
(08:48):
That's going to be a significant impact
to our Medicare,I would say, drug reimbursement.
So, that's obviously a significantconcern coming down the pipeline.
The other thing
was the site neutrality paymentsfor drug administration.
Well, granted, drug administration
(09:08):
alone for siteneutrality is not a huge dollar impact.
However, I foresee that expanding.
That's just, you know, they've alreadyput their foot in the door with site
neutrality payments for E&Ms,
now it's drug administration.
And obviously there's a lot of rumblings
around expansion into all services,
(09:32):
you know, via having an understandingof putting certain modifiers
on off-campus procedures that arebeing done for outpatient services.
To me, that's the pathwaythey're going to claw back to next.
I really perceive that as, you know,that's
just a start into the world of,yeah, they're going to start clawing
(09:53):
back on the off-campus,outpatient payments
and it's going to go back to the siteneutrality.
Again, that's our next big opportunity.
And again,significant dollars across the U.S.
in terms of clawback for that.
So those are,
you know, two major headwinds,I would say.
(10:13):
And probably
I would say around the implementationof the TEAM models
and the bundled payments, and that'swhere surgical procedures, especially in
the lower extremity, are goingto be subject to a bundled payment.
Obviously, the feds are continuing,you know, we're already in
(10:34):
ACOs, MSSP program, where, you know,
they're looking at the total paymentfor providing services.
And, you know,there's some redundancy there.
But again, they're going to continue downthis path of shifting the burden
(10:55):
further on to the health systems
of providing the care—and at the cost.
So, you know, we're only going to get paid
a lump sum paymentto provide these procedures.
And in the past, it was more,you know, granted, it is APCs,
it just further bundlesthe payment and puts the onus
(11:16):
back on the health system to do itmore quickly, more efficiently.
And I expect those bundles to, again,continue to expand.
Right now, it’sonly to a select number of hospitals.
But ultimately that should expand to,
I expect, more scope, in other words,more procedures
and then also across more hospitalsand health systems.
(11:40):
Yeah, no, and I think that's a, you know,that's a great list.
And when I think about 340B, the survey,
you know, they tried to do this,and you remember this, back
in, I think it was eitherApril or May of 2020.
And they got a low response ratebecause we were all,
you know, doing something elseat the time, a little pandemic,
and so there was a lot of commentary
(12:02):
in the ruleabout addressing that lower response rate.
And there was,
you know, language in there about, well,you know, if there's a low response rate,
we might interpret the hospitalsin certain classes don't have
enough cost to report the survey.
So we might start rethinking yourpackaging policy, so that's concerning.
(12:23):
The other sort of piece of it, you know,you mentioned the discount part of it.
You know, as I was thinking about,if I were sitting in your seat,
how I'd model it.
And I think the discount
that from the first time aroundis probably kind of the starting point,
maybe not the endpoint,because there's discussion in there about,
well, where we have non-responseswe're just going to look at the hospital
based on some type of segmentation,and we're going to say
(12:46):
they probably didn't have significant costreports.
So, we're going to assign them
the lowest cost based on their,acquisition cost based on their cohort.
Right. Yeah, I mean,
you look at the current payment levels,
it's not even adequate in termsof what our cost is.
So, to further dilute or further make cuts in our payments,
(13:10):
obviously it'll hurt our missionbeing a not-for-profit health system.
The margins we get aroundthe drugs are used for patients
to fund all the uncompensated carewe provide, to fund
being a large academic medical centerwith a trauma center.
You know, we have trauma surgeonsthat are sitting on standby 24 hours,
(13:34):
seven days a week.
Those are significant costs that we have.
And this is to provide access, timely
access, high-qualityaccess to our patients in the community.
And, you know, just beyond the traumasurgeons, you've got the teams.
Those are highly skilled nurses.
Those are highly skilled techsthat support those surgeons.
So it's, you know,the cost goes on and on.
(13:57):
On the site-neutral piece for the drug
administration,I share your concerns there as well.
Right.
It's like I think it was 280 millionfor the year estimated.
But then there's, you know,there's a discussion in there,
there's a request for feedback,not a proposal, about well,
what happensif we were to bring, and this is CMS,
you know,
(14:18):
apply our clinic visit policythat is only right now for exempted
HOPDs on to the main campus.
And it's like,oh, you're thinking about that in 2027.
So you're right.
That's where they're going there.
And then there's languagein the rule about, you know,
what type of systematic frameworkcould we use to identify services
(14:39):
where we could expand site neutrality,just to your point.
So I think this is, you know, regardlessof whether Congress picks this up
in some future billand tries to use it as a pay for,
you know, I think CMS is giving themthat space to maybe do something
later this fall if they can get,if Congress can get their act together.
If not, we're going to see more of this inthe ‘27 proposed OPPS rule.
(15:03):
And then on TEAM, you know, completelyshare your thinking around
not only are they going to expandthe number of episodes,
but they're also going to expandthe number of hospitals.
And the other piece kind of pullingthat site-neutral thread through,
you know, you've got the LEJR in thespinal fusion bundles that are already,
you know, the lowest acuity
(15:23):
bundle, or pricedbundle, is inpatient-outpatient.
So, whatever shift of low acuity serviceshasn't already occurred,
that's to then just encouragethat in those hospitals further.
And I would expect that not only will theepisodes, if I were CMS looking at this,
not only would I be looking formore episodes where this would make sense,
but more episodes that I could pricesite-neutral.
(15:44):
Yep. And on top of that,they continue to shift,
and look for us to shiftin terms of more of the efficiency, around
moving more services to off,
well, they're actually they're goingto remove the inpatient-only list.
Yeah. They're phased.
It's similar what they tried to dowith the first administration.
They're phasing it out in three tranches.
The first trancheis mainly orthopedic services.
(16:06):
And many of those servicesare going from the, coming off
the inpatient-only list and going straightto the ASC covered procedure list.
That's the other piece on TEAMthat would be kind of a logical next step,
but I don't know how you would do it,which is to bring in the ASC
setting, given that, you know,you're holding the hospital at risk.
But not all hospitals own ASCs, or notall ASCs are owned by – in a market
(16:29):
– are owned by a hospital.
So I don't know howCMMI could square that circle,
but if they could figure it out,
that would be kind of a logical next stepas well.
Absolutely.
Out of this proposed rulemaking cycleor out of this final rulemaking cycle,
is there anything in there that you thinkthe industry is under appreciating?
I don't know if
it fits really under the proposed rules.
And I don't know if we wantto get into the Big Beautiful Bill yet,
(16:53):
but one of the things is aroundthe Big Beautiful Bill is
the Medicaid eligibility pieceswhere the retro day,
I think they're going from like 90,
or I should say your lookbackperiod is going from like 90 to 60 days.
You add in the work requirements.
(17:14):
So you have all those headwinds
around the Medicaid eligibility,which parlays.
And Medicaid eligibility
feeds directly into your DSH percentage,
and your DSH percentage is used
for a 340B eligibility.
There's many health systemsacross the U.S.
(17:35):
that are at the cusp of qualifying,or I should say, hospitals
at the cusp of qualifyingfor 340B, whether that be the
full DSH
340B percentage, which includesall your orphan drugs,
which is your high-cost cancer drugs,or your lower RRC at 8%.
(17:56):
There's many hospitalsthat are sitting at those cliffs,
and any disruption to,
further disruption, in additionto Medicaid redetermination
that we've all recently experiencedlast two years
will further erode our Medicaideligible base
(18:16):
to be included in this calculation.
And therefore,
many hospitals are at risk of losing tens,hundreds of millions of dollars,
related to the savingsin the 340B program.
A lot of folks, I think, focused
on, in a lot of the publicationsand a lot of things
I've read about the Medicaid eligibilitypieces, folks are focusing more on,
(18:41):
oh, you'll loseperhaps, Medicaid payments and all.
Well, yeah, of course we'll losefee-for-service Medicaid payments.
But, you know, look,they might find it different
and they might go uncompensated care.
But to me, the real focus should be on
the potential losses the 340B eligibility.
That's where the systemsare really going to suffer.
(19:05):
Yeah.
No, I think that's exactly right.
And you, I think you teed up the trifectanicely, you know, for the redeter,
or for that, you know,you've got the moving from once a year
redetermination to twice a yearfor your expansion population.
You got the work requirementsfor 19 to 64 with some carveouts
where you've got to work 80 hoursa month, or engage in certain activities,
(19:25):
and then you've got the lookback periodwhere it's, you know,
today it's 90 days for the expansionpopulation.
It'll be 30 for the non-expansion,it'll be 60.
All of that together. You're right.
And you know, even though some of thesethings are only focused on the population
that you would generally tendto think are not high
utilizers, you know your expansionpop typically isn't.
(19:46):
Although there are a lot of peoplethat are near retirement age
that could possibly fall into that.
That might be a little bit more.
You put it all together.
And for those cliff hospitals or for thoseon the bubbles, it is a huge deal.
And we're, you know, even prior to OBBBAwe were having conversations with clients
that we help with DPI and 340 B aroundhow to deal with that.
(20:09):
And I think particularlyfor the uninsured, where you see
individuals that end up needing to come inand get care, end up getting admitted,
the insidious thing about it
is not only dothey fall out of the numerator,
but they get addedthat they're still in the denominator
and they're uncompensated,so it's really just diluting everything.
Yeah.
So that's the real underappreciated thingthat folks didn't really focus on.
(20:30):
It was more around the coverage.
Yeah.
I'm more worried about the cliffhospitals.
So given all these issues we've talked
about, how is Jefferson Healthpreparing for these changes?
So I mean, so right now with so we are
we're alreadyin a transformative state given
LVHN merged into
(20:52):
Jeffersonofficially back in August of 2024.
So it's been one year.
So we were truly trying to become onehealth system,
through integration of
finance, accounting, clinical leadership,
physician leadership,
(21:12):
so our entire health system is mergingand transforming as it was.
But given these headwinds,we have already had,
I would say the tea leaves that
the government or I should say the
Medicare Medicaid payments,which, you know,
are a significant part of our payer mix,have declined and continue to decline.
(21:37):
We're going to continue to see this shift,like many other health systems,
from commercial payersto government payers,
and obviously that presentsfinancial challenges to us.
So we were already on a path
of making sure our operationswere efficient as possible:
(21:59):
becoming one, corporatizing, leveraging,I would say, system-ness,
and becoming a single system, so
in termsof all of our corporate functionality.
So we're right nowin that journey now to do that
and to become a more efficient system thatprovides quality care to our community.
And obviously that's,you know, our top priority.
(22:22):
And obviouslyquality is very important to us.
So as
we've been in this journey, LVHN
and quality for yearsand so has the Jefferson side of it.
And it's really come together beautifully
between the two health systemsin terms of the learnings from each other,
and we foresee, obviously,
(22:45):
quality value-based paymentscontinue to be even larger.
I would say, more significantin the future
in terms of the significance to us.
So we've been going down that journey,and that's how we're preparing for it.
Yeah. No, I think that makes sense.
And it's,
you know, it's exciting to hear thatboth organizations,
were bringing something to the table,were learning from each other.
(23:08):
And I do think you're rightthat as part of the payer mix,
one way or another, organizationsare going to be at
greater riskfor both quality and financial outcomes.
You know, we're still kind of waitingto see
how the private sector rolls this in,but it is coming.
You know, the other interesting pieceabout your comment
about the growing part of the governmentalcomponent of the payer mix.
(23:29):
I'm assuming that what you're seeing is,like everybody else across the country
is it's not only just a growth
in your Medicare population,but it's a growth
in your Medicare Advantage populationthat, beyond being an adequate payer,
brings unique and distinct challengesbeyond what you would get if it was just
traditional fee-for-service,
where if you bill a clean claim,you can expect in 30 days to get paid.
Yeah.
What we're, I mean we are seeing thatespecially the last three to four years.
(23:54):
I mean, I watched my Medicarefee-for-service shift
over to the Medicare manage side.
And obviously, to your point,
the challenges that come with working with
and submitting claimsto a Medicare managed care company
versus Medicare fee-for-serviceis they're quite different.
(24:16):
You know, some of the
policies they deploy, generally,they're supposed to follow Medicare.
However, sometimes, they have differentinterpretations of what.
Created creative interpretations.
Yeah.
So they definitely havetheir own interpretations
that present challenges,
that we’re
(24:36):
constantly facingand that are immediate to us today.
I mean, there are ones that we just talkedabout this past week that we're trying
to work with, and trying to work directlywith this payer
on their interpretation and,
you know, we have the same goalsas they do to treat patients,
treat them fairly and give themthe best outcomes as possible.
(25:00):
Yeah, make sure they've got good access,make sure
that the outcomes are,the quality is high,
and then it's done in a cost-efficientmanner based on the condition.
And one real aspect,exciting aspect that I
didn’t probably touch on enough is,you know,
Jefferson Health Plan has its own
Medicaid managed care productand also Medicare Advantage Plan.
(25:24):
So, having
that in-house and being ableto work with that population,
I think we're in an excellent position
to serve that population
and to treat the patient holistically as
at that point,we're working with the premium dollar
(25:44):
as opposed to the fee-for-service dollar.
So I think with
LVHN, you know, Jefferson has for years
had the health plan, LVHN
is just learninghow to work closer with the health plan.
So I think there's, it's excitingfrom that standpoint.
(26:06):
And also for me,just joining the Jefferson world,
being able to work closelywith the health plan that we have,
we haven't had that experiencebefore in the past.
Yeah.
Well,and to your point about value-based care
becoming a growing part of the pie,it gives you a nice place,
kind of a laboratory to work with, again,the premium dollar that you're collecting
for both your aligned MCOpatients, your aligned
(26:27):
MA patients, to get that experienceto figure out how to do it.
So then you can take it outto other places.
And you're right, it does, withinwhat's allowable under both programs,
you can start to usesome of that premium dollar to address
some of the social determinantsthat result in unnecessary utilization
that you absolutelyjust don't have in fee-for-service.
And so, it does give youa great opportunity where the care is
(26:48):
aligned, integrated and everybody'srolling in the right direction.
You know, we've covered a lotaside from the payment rules and OBBBA;
what else is keeping you up at nighton the regulatory or legislative front?
It's, you know, all the headwinds that
we have when you combine
the federal position of the future,
(27:10):
and also I don't think we touched on yet,
and I know it's part of the Big BeautifulBill was,
the cut in payments related to hospitalprovider taxes, those programs.
In Pennsylvania, we have what's calledthe Medicaid Modernization Program,
typical provider tax program
where we are taxed for,
(27:33):
we tax ourselvesand the funds are matched by the feds
and then redistributedto all the hospitals.
And it's really just the, it’sa mechanism, self-funded
through the hospitals in our state, matched by the feds,
to help with the shortfallsfrom the Medicaid fee-for-service
(27:54):
program.
The Medicaid fee-for-service program,in Pennsylvania,
since I remember, probably 10-15 years,has not increased its rates for years.
And it's because the state legislaturehasn’t allowed it.
So this is the onlymeans that we've had really to increase
our rates,you know, depends on who you talk to.
But generally
we get paid$0.65-$0.70 on the dollar of the cost
(28:18):
of treating these Medicaid populations.
We have hospitals in downtown Philadelphia
that treat a super high numberof these patients.
It's our mission.
We will always treat patientsregardless of their ability to pay.
And that'swhat our role is in the community.
However,
without getting adequate payment for that,
(28:41):
it's hard to keep the doors open.
It's hard to replace the hospital bed.
It's hard to get the latest and greatestda Vinci robot that the community demands.
We want to provide the highest levelof care to our community.
So, that money
that we receive that
(29:02):
exceeds our expensesgets, as part of our mission,
gets pushed right back into the hospitalto care for the community.
So without covering our costs
under these programs, it'sjust going to make it that much harder
for us to provide that high-qualitycare and access to patients.
Yeah, you know, you're spot on there.
(29:23):
And you know,
I know this is going to shock you,but the 15 years without an increase
in your fee-for-service rates,which then influences
your managed care rates, like that'sobviously not an uncommon story.
And certainly when I was at the CaliforniaHospital
Association,we were dealing with the exact same thing.
And you're right, the provider taxeswere a way to take federal funds
and make up for an unwillingnessat the state level
(29:45):
to fund the Medicaid programappropriately.
And I'll, you know, 49states were doing it, minus Alaska.
And what I don't thinkpeople fully appreciate,
when I say people, not this audience, but,you know,
our fellow Americans writ large,
is that while they may not care
about Medicaid rates,they should, because to your point,
(30:08):
that trauma center downtown,that's probably 80% governmental payer.
If it doesn't have that supplementalor doesn't have the provider tax
that funds the supplemental paymentor the UPL payment,
may not be available when they need it.
Right?
And that's when
obviously at that point,
(30:30):
that'swhen it becomes an issue with access.
Yeah.
And in not just in access for certainindividuals but for the broader
population.
Because, you know,you guys are a regional referral center.
Nah, it's a great call out.
It's a great call out.
All right,switching gears to happier topics.
I don't know how much happier topicsthere are in healthcare finance, but...
(30:53):
We're getting into leadership, man.
You've been in leadership rolesfor a while.
What's one piece of advice
you'd give to someone who just movedinto a formal leadership role?
Wow. I would say remain open,
remain agile, and be ready for change.
Always be willing to change.
We will never stay steady or stagnant.
(31:15):
Always look for ways to improve,
and also
put yourselves in someone else's shoes.
When anybody ever asks you something,step back.
Before reacting,
put yourself in their shoes
(31:35):
and try to get an understanding
of why they're asking the question.
And so, for example,someone in the clinical world,
which we work closely with,
may not understand how we get paid.
So please, just be understanding
(31:57):
because you don't knowwhat their background is.
And put yourself in their shoes.
That's what I, typically,
what I use on a day-to-day-basis.
I think that's spot on.
When I think about the peoplethat I've worked with over the years,
the ones that I've learned the most fromand enjoyed the most from,
(32:18):
and I've been very fortunate to workwith a number of leaders who are just
the most humble individuals,and to your point, would be willing to
listen, would be willing to answerquestions, wouldn't automatically sort of
have a reflexive response and encourageboth, you know, an open environment
where you would have that great dialogthat gets to better places.
So it is just,I think it's a great call out.
(32:40):
What's something that youand your colleagues or you and your team
have recently accomplished that you'reproud of, that you think moved the needle?
I would say a lot of my focus
through my careerand a lot of things I learned along
the way, you know, after
I left, you know, maybe I went to Ernst
(33:01):
and Young, PriceWaterhouseCoopers, so
I've always kept that consulting mindset.
So, stepping into leaving the consulting world
and going into the hospital world,
I deployed
a number of reimbursement strategiesthat I would say effectually, say,
(33:25):
at least $150-$200 million in accretive
bottom line impact,
in ways that strategically
place all of our hospitalsand health systems
and to best align themfrom geographic reclass
situations to improving our wage index
(33:48):
in order for us to achieve the revenuesthat you know, that we deserve.
That reflectsthe actual attributes of our hospital.
Yeah, and I thinkthat's an important thing to call out.
We just talked about the inadequacy
of Medicaid rates.
But when you look at,you know, you pull the Medpac data down
and you chart it out overbasically the course of our career,
(34:10):
the slope on the operating marginfor Medicare for hospitals is just headed
downward, downward, downward to the pointwhere even Medpac’s
cohort of quote unquote “efficienthospitals,” the thing that they set
policy to, they're nowsitting around at a -2% operating margin.
So if you're not thinkingabout those opportunities that you have
to improve allowable reimbursement,
(34:34):
you're losing ground. Right?
If we're not thinking ofhow do we position ourselves
from a wage index reclass.
There's only onepool of dollars out there,
you know?
They set the market,the fed set a market basket,
and everything gets allocatedto the hospitals
(34:55):
on a budget-neutral basis.
If we’re not properly
aligning ourselvesor properly designating ourselves,
based off the attributes of our hospitalsthat currently exist
or actually reflect them, it's important
that we,
(35:17):
for our health system and our bottom line.
So, going back to my points earlier of,
without creating revenuesand positioning ourselves,
we wouldn't have the money to reinvestin our hospitals and our buildings
and just the maintenance, day-to-daymaintenance to
(35:37):
keep the doors open of our hospitals,
let alone invest in new technologies.
Yeah. That's absolutely right.
So those are, I would say,the biggest accomplishments, everything
from the hospital reclassificationsto the hospital mergers we've done,
to gainingeligibility for the 340B program.
(35:58):
Those are the areas that we've donea lot of focus on.
And then secondarily,
we spent a lot of timewith our, for example,
so I oversee both the reimbursement teamsand then also the revenue accounting.
Revenue accounting shouldn't just be hey,we're here to produce
financial statements.
(36:19):
Our goal is not only to producethe financials,
the revenues and the financial statements,but also to open up a window
to the operators and to the how, what,and why
our hospital performance is
and how do we work with them more closely.
And I would say in the last,
I joined LVHN back in 2017.
(36:42):
I would say the last three or four years,
we've made significant stridesworking closer with our operators
and to give them a lensinto the financial world and the aspect
of financial performance.
So I think we've actually,from that aspect,
I think providing
(37:06):
the detail and information to showhow they can improve their performance
the last couple yearsis significantly improved.
That's another area I'm very proud of.
Yeah.
No, and you should bebecause you're right.
That sort of alignmentbetween finance and clinical, you know?
Once, generally my experience has been,
(37:26):
once the clinicians understandthe drivers of performance,
you know, as long as,you know, it's not directly,
as long as it's not impactingpatient care,
they're happy to sort of
improve efficiencies, make sure,because they understand that, you know,
everything that they touch to providehigh-quality care has a cost to it.
It's not an insignificant cost.
And so they're looking for ways toand they want to help improve.
(37:49):
But you're right.It takes that partnership.
It takes that transparency
into what drives the financialsto build that relationship and that trust.
Yeah.
That's one of the key aspects of,finance has historically been sort of,
you know,
in my experience,been siloed away from operations.
We've brought them togethernot only through
(38:10):
our initial reporting, but then through
monthly operating meetingsthat we meet with the operators.
And we explain in detail as far as,
okay, your volumes were maybe
10% of our budget this month.
And then they will ask, well,why is my revenue not up?
(38:30):
Well, those volumes were more inlow-cost areas versus high-cost areas.
And we give that, we’llprovide that explanation
so they understandwhat type of volumes came in the door.
Yeah. No, that's great.
That's absolutely great.
Steve, thanks again for joining us todayand sharing your insights
with our listeners.
(38:51):
And thank you to our listenersfor tuning in.
If you'd like to learn more about
the CMS rules we discussed todayand strategies to navigate them,
we have links to relatedcontent in the show notes.
I hope you'll join me again in two weeksfor the next episode of Achieving Health.
You can follow
Achieving Healthon your favorite podcast platform or visit
(39:12):
forvismazars.us/AchievingHealthPodcastto learn more.
New episodes are released the firstand third Wednesday of each month.
Achieving Health is produced by ForvisMazars LLP, an independent member
of Forvis Mazars Global, a leading globalprofessional services network.
Ranked among the largest publicaccounting firms in the United States,
(39:34):
the firm's 7,000 dedicated team membersprovide an Unmatched Client Experience
through the delivery of assurance, taxand consulting services for clients
in all 50 states and internationallythrough the Global Network.
The information set forth in this podcastcontains
the analysis and conclusionsof the panelists based upon his, her,
(39:54):
or their research and analysis of industryinformation and legal authorities.
Such analysis and conclusionsshould not be deemed
opinions or conclusions by Forvis Mazarsor the panelists
as to any individual situationas situations are fact-specific.
The listener should performtheir own analysis
and form their own conclusionsregarding any specific situation.
(40:17):
Further, the panelists conclusionsmay be revised without notice,
with or without changes in industryinformation and legal authorities.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com