October 15, 2025 • 40 mins
Join host Chad Mulvany as he shares the latest healthcare policy and legislative updates for the week of October 12, 2025. Later in the episode, Chad is joined by Deb Kozlowski, director in the Healthcare Consulting practice at Forvis Mazars. They discuss the claim denial challenges facing many healthcare providers and explore effective denial management strategies focused on data, technology, people, and processes.
- Washington Watch (0:00)
- Deb Kozlowski Interview (0:00)
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Related content:
- HRSA Announces 340B Rebate Model Pilot Program
- Key Questions for Evaluating the Physician Enterprise
- Denials Management Monitoring
- Medicare Advantage: Provider Strategies for Revenue Cycle Improvement
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
On today's episode of
Achieving Health,I've got the latest policy and legislative
updates from Washington, D.C.,for the week of October 12th, 2025.
Then I'll be joined by my colleague DebKozlowski,
director in the healthcareconsulting practice at Forvis Mazars.
We'll discuss the challengesthat many healthcare providers
(00:21):
are facing with denials, and explorestrategies to build
financial resilience and reduce denialsas they navigate these challenges.
Stay tuned.
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
(00:44):
and achieve health at your organization.
Here's your host, Chad Mulvany.
Welcome to Achieving Health.
I'm Chad Mulvany, director inthe healthcare practice at Forvis Mazars.
Thank you for joining me.
We'll begin today with our WashingtonWatch segment, where I share
updates on the most recent actionsof federal policymakers
(01:04):
and their anticipated impacton healthcare providers and payers.
Today's WashingtonWatch reflects information as of noon
East Coast on Friday, October 10th, 2025.
My comments on these discussions are basedon what's being reported by the D.C.
trade press at the time of theconversation, mixed with a lot of judgment
about where things may gobased on my experience in D.C.,
(01:28):
so today's remarks reflect informationas of this moment and will change.
As far as our agenda is concerned,
the partial shutdownof the federal government is ongoing
and as of this momentwe are still deep in the middle of it,
which is causing some key extendersthat hospitals and other providers
depend on to have lapsed.
(01:50):
Speaking of hospitals, their
margins have been pressuredor continue to be pressured.
The not-for-profit sectoris facing mounting financial pressures
as rising supply and drug costserode already thin margins.
According to a recent HFMAarticle, hospital
margins slipped from 1.2% in June
to 0.9% in July, driven by a 10.6%increase
(02:12):
in supply costs and a 9.5% risein drug costs year over year.
Related to physician comp,according to Modern Healthcare's 2025
Physician Compensation Survey, physiciansincreasingly demand additional benefits
such as reduced on-call requirements,more paid time off,
flexible schedules, and reimbursementfor continuing education.
(02:34):
And so, without further ado,let's get into these issues.
In terms of federal
funding for 2026and also the healthcare extenders,
the Senate, after multiple roundsof voting, still hasn't been able to find
a compromise that unlocks 60 votes neededto clear legislation through the Senate,
and they have recessed for the four-dayholiday weekend.
(02:56):
The three issues
that Senate Democrats have citedthat need to be resolved in order for them
to provide the necessary votesto reopen the government, include
addressing the president's rescissionsof previously appropriated funds,
or putting legislation in placethat would prevent further rescissions,
rolling back the OB3’s Medicaid cuts,
(03:17):
and extending the enhanced insuranceexchange subsidies.
Realistically, I think only the enhancedexchange subsidies are really in play,
and it appears that the presidentand some Republicans
are willing to negotiate on an extensionof the enhanced exchange subsidies.
However, the current talking pointis that they won't do this
while the governmentis currently partially shut down.
(03:39):
And while there are sidebar conversationsthat continue
about what an extension of the enhancedexchange subsidies might look like
amongst rank and filemoderate Republicans and Democrats.
However, as of this morning,neither party's leadership team
in the House or the Senate is involvedin these conversations,
so to say that they are cursoryis probably the best way to describe them.
(04:02):
Pressure to reopen the government willincrease significantly in the coming days.
As of today, Friday, October10th, is the first day
that a paycheckwill be missed by federal workers.
And then on Wednesday, October 15th,our soldiers,
sailors, airmen,and Marines will also miss a paycheck.
I still think it's more likely than notthat whenever the Senate finds
the votes to pass the CR,
(04:23):
that bill will include most of theextender provisions that we care about.
And again, as a reminder, these includea further delay of the Medicaid
DSH pay cuts that were in the ACA,an extension of the low-volume adjustment
in Medicare dependent hospital programs,community health center grant funding,
an extension of the Medicaretelehealth waivers
(04:44):
that were put in place in COVID,as well as the Hospital at Home program,
the Geographic Practice Cost Index floorsfor physicians,
Medicare, rural ambulance add-onpayments, and key workforce extenders
like National Health
Service Corp., teaching health centersand graduate medical education.
In terms of hospital margins,the not-for-profit hospital sector
(05:05):
is facing already mounting
financial challengespushed by supply costs and drug costs.
According to a recent HFMA article,hospital margins slipped from 1.2% in June
to .9% in July, driven by a 10.6% increase
in supply costs and a 9.5% risein drug costs year over year.
(05:25):
Drug prices are expectedto increase further, fueled by inflation,
high-cost new drugs, and potential tariffson imported pharmaceuticals.
Analysts also warnedthat even the threat of tariffs
can disrupt supply chains and drive costshigher.
Hospitals are also grapplingwith rising expenses
and capital investments,IT, and food services.
(05:47):
On the reimbursementfront, hospitals are not yet feeling
the impact of OB3; however,those concerns are looming.
In a new report, the CommonwealthFund projects that hospitals in expansion
states will lose between 11.7%
and 13.3% of their margin on average
after the work requirement for Medicaidexpansion beneficiaries begins in 2027.
(06:10):
Safety net hospitals are set to experiencea margin decrease of
between 25.9% and 29.6%.
One of the things
that we've heard from clients recently isthat, as ratings agencies are considering
organizations ability to weather OB3,they're taking into consideration
(06:30):
hospitals current marginsand certainly that makes sense.
We're also hearing thatsome organizations are already
seeing an uptick in the uninsured,which is certainly piling pressure
on to the trendsthat we've already talked about.
And so,if your margin is deteriorating today,
it certainly doesn't bodewell for what's coming.
(06:51):
Health systems will need to continueto focus on financial discipline
through strategies
such as realizing improvementopportunities in labor and non-labor
costs, leveraging benchmarking datato increase managed care rates,
and increasing revenuecycle efficiency and effectiveness.
Organizations will also need to realizealigned growth
opportunitiesto generate margin accretive revenue.
(07:13):
We've also heard from clients that theybelieve they will need to generate revenue
growth in excess of 11% annuallyin order to continue to be sustainable.
In response to our mindsets survey,which was fielded
late last year, earlythis year, 62% of executives
believe they will primarily achievegrowth targets through organic growth.
(07:34):
However, that will be challengedby continued shortages of labor,
which could be exacerbated in some marketsby changes in immigration policy.
Our OB3 seriesprovides guidance on these actions
and other steps providerscan take to mitigate margin pressure.
To register for the series or to hearepisodes that have already occurred,
(07:54):
there's a linkto sign up in the show notes.
In terms
of 340B rebate model,the American Hospital Association warns
that HRSA’s planned 340B rebatemodel pilot, set to begin January 1st,
will impose nearly $400million in costs and 11.2
million labor hourson more than 2,700 hospitals.
And that impact analysis doesn'tinclude CHCs
(08:16):
and other types of covered entitiesthat aren't hospitals.
I think this is great work by the AHAin that they collaborated
with their members to put a pin inwhat the costs would be
are certainly a great talking point,particularly for advocacy,
because while the eight pageFederal Register notice
that announced the rebate model pilot
(08:38):
certainly says that the planthat different manufacturers
submit for their rebate modelsshould include assurances that all costs
for data submission through an IT platformbe borne by manufacturers,
and no additional
administrative costs of running the modelshall be passed on to covered entities.
I think the AHA analysisjust sort of highlights
(09:00):
what we already know to be true,even though there is no economic impact
analysisin the HRSA notice of the rebate model.
You know, while
I hope this analysis will encourage HRSA
to reconsider its approach to implementinga 340B rebate model, I don't anticipate
that this projection of administrativeburden will slow HRSA down.
(09:22):
Therefore, covered entities,if they haven't already,
will need to start thinkingthrough their rebate cycles to capture
and submit the necessary data elementswithin the timely filing requirements.
And in addition to the data management
capabilities,covered entities will also need experience
in setting up systems of controlto manage those workflows.
(09:43):
As part of setting up the rebate cycle,covered entities should also establish
infrastructure to capture data relatedto performance for each manufacturer
related to timely processing.So, how often
the manufacturer pays rebates or providesan answer within ten days.
Denial rates.
So, how many claimsthe manufacturer denies by claims count,
dollar value, and percentageof both dollars and claims count.
(10:06):
Certainly, if there's an avenue,there are avenues to flag to HRSA
where manufacturers may not be adheringto the requirements.
And so, certainly having that datain pocket will certainly bolster
your case that maybe the manufacturersaren't behaving as HRSA had intended
through the rebate model.
And then also administrative expense,
how much the covered entityspends on staffing, legal,
(10:28):
IT support, and other costsnecessary to manage the rebate cycle.
And then, you know, in additionto using this data
to improve the performance of the rebatecycle, covered entities should be prepared
to share it with HRSAand other elected officials to support
an accurate,data-informed evaluation of the pilot.
I think providing HRSAand other policymakers
(10:49):
a full picture of the costsassociated with this pilot program
will help them understandhow rebate models may reduce covered
entities funds available to expand accessfor safety net populations,
which is really contrato the purpose of the 340B program.
For additional details on the 340Brebate model,
we have a link to a FORsighton it in the show notes.
(11:13):
In terms of physician comp
trends,according to Modern Healthcare's 2025
Physician Compensation Survey, physiciansincreasingly demand additional benefits
such as reduced on-call requirements,more paid time off,
flexible schedules, and reimbursementfor continuing education.
Advanced technology has also emergedas a major recruitment tool,
(11:35):
with candidates prioritizing hospitalsthat offer AI-driven tools
and telehealth options to reduce adminburden and support work-life balance.
These trends reflect a shift in physicianleverage, as employers must compete
not only on pay but also onworkplace conditions and resources.
The same time that physiciansare looking for more out of an employer,
(11:56):
hospitals and health systems are facingmounting financial pressures
from rising operational costs,staffing shortages, and in some states
already Medicaid funding cuts and otherslooming through OB3,
making it difficult to sustainboth the compensation packages
and the additional benefits or tools
that make an organizationan employer of choice for physicians.
(12:20):
As a result, hospitalsand other employers of physicians
are becoming more selectivein targeting specialties for recruitment.
And certainly while
rural hospitals remain at a disadvantage,they are struggling to match
urban salariesand also face new challenges,
such as higher visa feesfor international positions.
Given the financial difficultiesthat many hospitals and health
(12:42):
systems are facing and the challengerelated to securing physicians,
it may be time to rethink approachesto physician compensation,
the service linesthey offer and their workforce strategy.
A couple of questions that hospitalsshould consider in each area.
So, for physician compensation,
you know, some organizations are adjustingtheir comp models
(13:05):
and leveraging recent changesin Stark regulations that allow physicians
to renumerate positions for improvingtriple-aim or quadruple-aim outcomes.
And so when you think about leveling up
under this umbrella,a couple of things to think about.
How does the organization define value?
What changes need to be madeto the compensation model to align it
(13:27):
with the organization's goalsrelated to this definition of value?
And then, what is the plan to modifythe comp model as the organization's
definition of value and related goalsevolves?
In terms of service line strategy,
we all knownot all referrals are good referrals.
However, unfortunately,
some service line leaderslack insight into net profitability.
(13:50):
So, as they're thinking about this
and kind of what type of analysisthey might want to conduct,
I think it's (13:55):
does your organization track and make business decisions
around service line profitability?
How strong are the incentivesin the physician comp model
to help the service lines
that they are associated with achievefinancial and strategic goals?
And then in terms of workforce strategy,due to a continuing workforce shortage,
many organizations
(14:16):
are experiencing challengesthat are limiting growth opportunities.
And so, it's going to becomeincreasingly important, despite the cost,
for healthcare organizationsto become an employer of choice.
And so,a couple of key questions in this space.
Does your organization understandthe key attributes of being
an employer of choice for physiciansand advanced practice providers?
(14:38):
What is the planto meet these requirements?
And what are the polarizing featuresof working for our organization?
And so, the other thingto think about as you conduct this
analysis is physiciansobviously aren't a homogenous block.
So it's important to understand the valuethat key segments
of the provider community placeon the different attributes
(14:59):
ascribed to being an employer of choice.
If your organization is wrestlingwith this issue, we have a great FORsight
that provides more detail on this topic that we've also included in the show notes.
And then finally, states cutting Medicaid.
We are seeing some states beginto cut Medicaid reimbursement rates
(15:20):
as they grapple with risinghealthcare costs and budget problems.
And this is obviously occurringbefore any of the OB3 coverage
provisionstake effect December 31st of ‘26.
And the financing provisions like providertaxes, reduction of grandfathered
state-directed payments, kick in in FY2028and state plan year 2028, respectively.
(15:44):
Idaho and North Carolina
are two examples of states that havealready reduced payments to providers,
and it is anticipatedthat other states may follow.
These cuts are coming as demand
for healthcare servicesand costly medications continues to grow,
leaving concerns that reducedreimbursement will limit access to care
and ultimately drive patientsinto emergency rooms.
(16:05):
While OB3 is occasionally citedas a driver of the Medicaid cuts
in the various states mentioned,I think more of the blame
should be allocated to state-specificeconomic conditions and/or budget factors,
and these pre-OB3 cutscould become more widespread
if we should see a broadereconomic turndown.
I think it's important to note thatthe timeline of the OB3 cuts could leave
(16:29):
one with the idea that providershave some time before they kick in.
However, I think it's importantto realize that states, in their next
legislative session, will likely startmaking changes to their Medicaid programs
to prepare for these cuts
that will impact both providerpayments and Medicaid coverage sooner.
So, I think the runway for providers
(16:50):
to prepare is shorterthan some might initially think.
This concludes today's Washington Watch.
Up next, I'll be joined by my colleagueDeb Kozlowski to talk
about denial management challenges andstrategies to build financial resilience.
(17:13):
I'd like to welcome our
guest for today's episode, Deb Kozlowski.
Deb is a director on our HealthcareConsulting Performance Improvement team
at Forvis Mazars.
Her work focuses on helping clientswith denial management
and other end-to-endrevenue cycle improvement strategies.
Deb, thank you for joining us today.
Looking forward to this conversation.
(17:33):
Thank you. I'mlooking forward to being here.
I guess let's maybe start with the basics.
Could you share with our listeners
a little bit about your backgroundand how you came to healthcare?
Yeah.So let's start back when I was a baby.
Just kidding.
I tended as a child to have a lot of orthoinjuries.
So, I had a lot of very positiveexperiences in the healthcare setting.
(17:55):
Coming from a family of nursesand not being good with blood,
I knew I always wantedto stay around the healthcare field.
Luckily for me, my first job out ofcollege was with a health system
in Chicago, so they did a wonderful jobteaching me the industry
and been in it for about 15 years nowand loving every day
helping providers out therereally serve the communities they’re in.
(18:17):
That's, you
know, it's a very common story for folksthat come to healthcare.
First, it's the, considereda clinical track, but for one reason
or another, particularly being squeamish,you don't get into it.
Then, too, though,that call to mission, that call to serve
and to really make sure that the resourcesare there for the caregivers
at the front line to make surethat communities are taking care of
(18:38):
the people's healthcare needs, can be metin a convenient and timely manner.
So that's,you know, fantastic and appreciate that.
Our topic for today'sconversation is reimbursement denials,
which are a serious challengefor many of today's healthcare providers.
In our Mindsets2025 Executive Leadership Report,
we found that 76% of executivescited denials management
(19:00):
as one of their most concerningaspects of the revenue cycle.
And then Clarivatealso released a report in 2024
which found that denials now affect,on average, 12% of hospital claims,
or in other words, $1 out of every ninebilled is initially denied by insurers.
These statistics are alarming.
And Deb, you recently shared a scenariowith me that I think really illustrates
(19:24):
the impact of denials on hospitalsand their patients.
Could you share that examplewith our listeners?
Yeah. Of course.
So again, for those of youthat may not be as familiar with denials,
this is just one of many storieshappening across the country today.
So a patient arrivesto the ER with chest pain.
The care team acts quickly, runningtests, images, monitoring, and a short
(19:46):
inpatient stay before the patientcan safely be discharged back to home.
Everything was done by the books.
Weeks later, the hospital receivesa denial from the insurance:
services not medically necessary.
The payer flaggedthe visit as potentially avoidable,
despite the patient's symptomsand history of risk factors.
(20:08):
Now, the burden is placed on the hospital.
After already providing excellent care,they now have to fight for payment,
gathering documentation, filing an appeal,
and waiting and hoping insuranceswill pay.
This process delays reimbursementand adds administrative burden.
In 2024 alone, med necessitydenials rose by 5%,
(20:30):
especially in emergency and telehealthsettings.
You know,thank you for sharing that anecdote.
And certainlythe issue of denials has been one
that has been on people's radaras long as I've been in the industry.
And it was certainly, when I was at HFMA,one of the things that we frequently
talked aboutand worked with our members to address.
(20:50):
I guess the other thing that I'd add is,you know,
you think about one in every ninedollars billed is denied.
You couldn't afford that in the worldthat we're in today, but
you really can't afford that in a worldwhen the OBBBA cuts start to kick in.
And so, you know,I fliply joked that an underperforming
revenue cycle is a luxury itemthat we can no longer afford.
(21:10):
What are the most
surprising denials trends that you've seenthis year?
Two recent trends that have stood out, one being a significant volume of denials
requesting additional information.
That was historically reservedfor high-dollar claims or specialized
services.
But now we're seeing it on low-dollarclaims as well.
(21:32):
Second would be some of thosepayer-initiated reductions.
Do you think the moving of requests
for documentation in the lower dollarclaims is more technology driven?
Is this something
that's being driven by AI,or do you think it's just more of a, as
plans are looking to manage margin,they're sort of pushing down
the dollar threshold at which they startto send out med record requests.
(21:55):
Personal opinion it is very AI driven.
I also think there's a lot of concernsthat providers,
historically,and I'm talking 15, 20 years ago, back
when I started and just before,there was advantages
being taken by providers that they wantedthe med records to support.
There were knowledge gaps of servicesbeing billed that were deemed unnecessary.
(22:17):
And that really snowballedinto the problems we're seeing today.
No, and appreciateyour perspective on that.
When you think about the two challenges,the trends you've teed up,
what are some of the waysthat providers can respond?
Yeah. Great question.
So let's startwith the additional information requests.
First, you really need to understandthe patterns of the payers
(22:38):
and the services being denied.
Most importantly, get on the phoneand speak to your payer reps directly.
There are often criteriathey can share for when they want records
such as if we have a surgerythat's greater than $10,000,
we want to see history and physical,an operative report.
Use that information.
Streamline the processfor similar situations moving forward.
(23:02):
There's often ways in your EHRthat you can automate that
through, at the time you send a claimto insurance, providing those records or
immediately after the claim is received,sending it through a payer portal.
If your EHR doesn't have those tools,there's vendors that have created bots
to automate that processfor a fraction of the cost and time.
(23:25):
And, you know, I think that's
great advice.
And the analogy that I would use for itis, you know, you think about it, everyone
that you've ever worked for, whether it'sa client, a boss, etc., has had certain
preferences for how things are sentand you pretty quickly in your career
in working with that in a workingrelationship, figure out what they want
and you use that
to kind of proactively meet their needsso as to avoid rework or frustration.
(23:49):
And I think that, what you just suggested
there, is just kind of another exampleof how one does that.
Yeah, exactly.
And I think you said it very well.
And that's somethingthat's been around forever.
So as you stated,
if you're not already doing it,you don't have a luxury of waiting.
The opposite is true for some of thosepayer-initiated reductions.
There's been some new languagecoming out this year
(24:09):
for a few of the payersthat they are downgrading your E&M levels.
One thing that organizationsreally need to be aware of
is what is built in your systemdictionary.
These are often coming throughwith a very specific payer-initiated code,
not the traditional contractualor other adjustment.
So, oftentimes organizationsdon't even realize
(24:32):
they're getting downgradedfor these E&M levels.
So really understanding that,making sure you have that information,
and then appealing
that successfully with your coding teamand using CMS regulation.
And I think that's just
another good example of whyyou have to be on top of trends.
Because if you're not watchingthat, it's months later
and you start to see a dip in cashand you're like, why is that happening?
(24:53):
Exactly. Very well said.
What are some of the biggest challenges
when it comes to how health planshandle denials?
So this one has been,I would say, the fun game.
So payers have always createdthe playbook,
challenging providers to learn the rules.
And then once they learn the rules,they're changing them as they go.
(25:16):
So, as you stated before,with some of the additional information
requests, with the introduction of theAI tools, even the most experienced
teams are challengedby the rapid pace of change.
Often when working with payerson those denial reasons,
their own reps may not have a clearunderstanding of the denial root cause.
(25:37):
So it often feels like providersare throwing darts on the board,
hoping to hit any numberbefore the clock runs out.
So, and I'm probably going to date myself
with this reference, was a hugeCalvin and Hobbes fan, and still am.
But we're playing a game of Calvin Ball.
How do you stay on top of these changes?
How do you identify them,and how do you even potentially help
(26:00):
educate the payers rep when they maynot know why these things are going on?
Oh, very good question.
So really it all starts with understandingthe complete
denial reason and reviewing the account thoroughly.
So, a big thing that providers tend to dois they think they have to chase
after every dollar.
But really, being able to quicklymake the determination of should my team
(26:22):
be spending time on thisor should they move on to another account?
So that's critical.
Once you understand it's something you canand should fight because again,
you did everything by the book.
You followed the rulesthat were given to you.
Then it's really importantto establish templates and workflows.
So, making sure that the processis as streamlined as possible.
(26:44):
Getting an appeal in a standard template,referencing the medical record,
referencing CMS guidancewhere you can and following up on that.
Most importantly is making surethat the claim is getting paid.
And if it isn't, take that to payermeetings.
Work with them directlyto create that accountability between
what your team is doing to the bestof their ability and good faith,
(27:08):
and what the payer is doingto compensate you for that.
Yeah.
You know, I think you
tee up a really important point therethat the most effective, efficient revenue
cycles are the ones where they are workingvery closely with their managed care
contracting teams.
And to your point,taking that real-time data
and one of the trends
that they're seeing so that they can sitacross the table with the payer rep,
(27:30):
they can hopefully addressthe issue in real time.
And if they can't, they can get it fixed
in the next round of contractnegotiations.
Exactly.And you touched on a very key point.
So, these are some additional areas
for organizations to really consider: What is in your payer contract? (27:41):
undefined
Have you read through it?
There's often areas in therethat say we have the right
as a payer to change your policiesevery 90 days.
We'll build language in thereto try to change that to 180.
You can add net neutrality as well,to protect the provider
(28:01):
from any policy changesthat had a negative financial impact.
And boyoh boy, are there a lot of policy changes.
So, Chad, I know our managed care
team is going to be coming ona future episode to discuss more on that.
Yeah,absolutely. And, you know, to your point,
don't make it
easy for the plansto play Calvin Ball, essentially.
(28:21):
So, we talked a lot about the importanceof, kind of,
monitoring and trending And
there are a whole sort of sea of metricsthat you could possibly chase.
What are the ones that you considerto be most critical for denial management?
Yeah, I'll start with the twomost critical, is every organization
needs to know their initial denial rateand their denial write-offs.
(28:44):
Now, just with those two metrics alone,you should have the ability
to split it into many different anglessuch as denial reason category,
payers,service type, even down to providers.
Our ForvisMazars team has built a denials tool
that helps trend those metricsfor that insight and action.
You know,I think you, especially the cut by payers,
(29:06):
I think is an important onebecause you really want to understand
which of them are behaving moreaggressively than others, shall we say.
And again,I think that knowledge goes in and informs
those conversations and the tone and tenorwith the managed care team.
Exactly.
And I would say a big trendwe've been seeing in
the industry is really developingpayer scorecards.
So, additional metrics to considerif you have the ability
to get the analytics: What is your overturn rate by payer? (29:29):
undefined
What is your days to denial resolution?
How many numbers of appealsdid it take you to resolve to payment?
All of those things are timevalue of money.
And how are you spending
the limited resources you have to getthe money or make the decision
(29:51):
that you have to move onand adjust off a denial and move forward.
That overturn rate is somethingthat’s important
not just for your your revenue cycleand your cash flow management,
but also from a policy perspective,particularly for your governmental payers.
There are a lot of conversationsgoing on at the state level
about managed care plans, and certainlyabout your governmental payers
(30:14):
at the federal level.
And so the ability to share that datawith both your state hospital associations
to inform advocacy,with your national hospital associations
to be able to inform advocacyand highlight
that there may be some issues that we needlegislative or regulatory changes for.
And so I think that's a great reasonwhy you want to collect that data as well.
(30:36):
So, Deb, what's
one of the biggest misconceptionsabout denials that you'd like to debunk?
That's such a great question.
And honestly,one of the biggest misconceptions is
that denials are a back-end problem.
So often, organizations focus downstream
in the appeals, the rework, write-offs.
(30:58):
It's like standing at the bottomof a waterfall with a bucket,
trying to catch the wateras it crashes down.
By that time, it's already too late.
The denial happened,costing time and money.
The real issue starts upstream.
So imagine the revenue cycle like a river.
It's calm and controlled at the top withscheduling, eligibility and authorization.
(31:23):
If there's a leak, say,a missed authorization,
a tiny eligibility error, that error flows
downstream, gaining force and momentum,eventually becoming
a waterfall (31:34):
loud, messy, and difficult to control.
So, a lot of the misconceptionis that the solution’s at the bottom
of the waterfall, when in realitythe opportunity is at the top.
It's about prevention, not cleanup.
Organizations have to move upstreamto tighten the process,
(31:55):
invest in their analytics, in the teamtraining, build collaboration
between groups and stop those leaksbefore it becomes a waterfall.
So once you start thinkingthis way, denials stop being a crisis
and start becoming a systemyou can actually control.
You know, Deb, that's a great point.
And it's kind of the ounce of preventionis worth a pound of cure.
(32:18):
And I do think,
you know, the analytics, the tools,the ability to kind of do QA is important.
But also when you thinkabout the registration department
or the registration departments
in your organization, they typically havea fairly high degree of turnover.
And so whatever expertise peoplebuild, you lose.
So I think the emphasis on trainingand making sure that either
a) you're retaining the people you've gotor, as new people are coming
(32:41):
in, they have the skills and the toolsthey need to catch those things,
to get the right auth number in,or to know
that they need to put an auth in,
or to make sure they've got
the right insurance information
entered in with all the pieces,like that's just so key and so important.
And it's simple to say,but really hard for organizations to do.
And I think that's a place that reallymerits more time and attention.
(33:02):
Yeah, you said it very well.
And I think a lot of organizationsstruggle
with understanding the three pillarsof technology, process, and people.
So in an area like registration, wherethe people tend to have a high turnover,
you really have to have your technologyand process locked in,
where in other areasyou might have really strong people
and they can overcompensate for weaknessesin the technology or the process.
(33:24):
So understanding
where you have your strengthsand weaknesses to really lean into that.
Yeah. No, that's a great point.
I really appreciate that.
Can you share a quick win or success
story from an organizationthat turned its denial rates around?
Yeah, I would love to.
Recently, we supported an organizationwith developing a denial steering
committee due to many factors,including an EHR conversion.
(33:48):
The denial rate was 24%.
Within a year, though, they were ableto turn it around and get it down to 14%.
The first objectivewas to get all of the denial data
and understand where the true problemswere, silencing the noise of the waterfall
to really focus on the facts of theissues occurring upstream.
(34:09):
Our next objective was workingwith leadership,
understanding the true denial rootcauses and gathering support
to form a denial steering committeeand who should be included.
Specifically, we went beyond the revenuecycle and included IT, chargemaster,
some operations, and even clinical areasfor their specific issues.
(34:30):
Finally,we were able to establish expectations
with a committee charter,standing agendas, trending metrics,
and really aligningthe team members to appropriate
subcommittee groupsto meet and solve problems monthly.
We were really able to focus onchanging the narrative
for that organization,that it was a quote “back end problem”
(34:52):
by providing really specific exampleswithin the larger denial patterns.
And we were able to take itone by one with each leak identified.
In some of the areas,we focused on technology optimization
and others, it was process improvementthrough training sessions,
and throughout it all developedaccountability checks and trended metrics.
(35:14):
So they had sustained efforts.
I'm really proud of everythingthat organization put in.
It was a lot of hard workfor them to achieve that success.
I love the anecdoteand what I think I like about it so much
is it really underpinsa lot of what we've been talking about.
And specifically, you know, there weremultiple points which needed to be fixed.
(35:34):
The organization had the dataor was able to get the data to do
the root cause analysis.
And I think it all starts with, you know,what are you monitoring or what
can you start monitoringto fix those issues?
Absolutely.
And I feel like a lot of organizationstoday, and, you know, you hear the AI
and the RPAs of the world and,
you know, you think you need to spendall of this money to get it done.
And, hey, do not get me wrong,the technology out
(35:56):
there is great and there are hugevalue adds that it can provide.
But a lot of the problems are truly simplyon the people and the process.
And the more you can lean into that,the more you can even lean into your EHR
systems to build criteriaand requirements and stops,
the more you can really manageaddressing this
without having to take on additionalcosts at this time.
(36:19):
You know, I think you raise a great point.
The tools are fantastic,but you have to deploy
the tools in an environmentwhere the processes are tight.
So that way the tools are able to be mostleveraged and create the efficiencies.
Otherwise,you're just automating broken processes.
Exactly.
And I think the message that I'd like,you know, the listeners and everyone
(36:42):
to hear is,you know, automation is wonderful.
It helps improve consistency and earlydetection, but it's not a cure-all.
So, technology is only effectiveas the process train behind it.
So, successful organizations really pairautomation with human oversight
and using the analyticsto pinpoint patterns, reallocate teams,
(37:03):
and really continually educateto prevent repeat denials.
Yeah, no, I think great points,great advice.
Let's wrap up with somesome actionable takeaways.
What advice would you give a healthcareleader facing rising denial rates?
As we've stated, the first thingyou have to do is get your data.
(37:24):
You're going to get a lot of noise, and,you know, it's going to be hard
to really distinguishwhere the leaks are coming from or,
you know, where it mightjust be some mist going on.
So really being able to understandyour performance against those industry
benchmarks we've discussed todayand ultimately start with one problem.
Do not try to bite them all off there.
(37:44):
Often when you can focus your resourceson one big issue,
that is where you can build the momentumfor future ones to come.
And if you don't already have it,you have to get a denial steering
committee together.
Have it cross-functional.
Make sure you have
the right people in the roomso that you're not wasting anyone's time.
It's direct, specific, and actionableto get to the real problems
(38:08):
and solutions needed.
You know, I
think that point about the denial steeringcommittee is an important one, right?
Because, I mean, the revenue cycleis a team sport, but it really underpins
the fact that denials are,given how multifactoral they are.
So I appreciate you calling that out.
Well, Deb, it’s been a great conversation.
I really appreciate you taking the timeand sharing your insights
(38:30):
with us and want to thank our listenersfor tuning in.
If you're looking for more insightson denial management and revenue cycle
improvement strategies, we have linksto related content in the show notes.
I hope you'll join me on November 5thfor the next episode of Achieving Health.
You can follow Achieving Healthon your favorite podcast platform or visit
(38:51):
forvismazars.us/AchievingHealthPodcastto learn more.
New episodes are released the firstand third Wednesday of each month.
Achieving Health
is produced by Forvis Mazars LLP,an independent member
of Forvis Mazars global, a leading globalprofessional services network.
Ranked among the largest publicaccounting firms in the United States,
(39:13):
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,
(39:34):
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.
(39:56):
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've got the latest policy and legislative
updates from Washington, D.C.,for the week of October 12th, 2025.
Then I'll be joined by my colleague DebKozlowski,
director in the healthcareconsulting practice at Forvis Mazars.
We'll discuss the challengesthat many healthcare providers
(00:21):
are facing with denials, and explorestrategies to build
financial resilience and reduce denialsas they navigate these challenges.
Stay tuned.
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
(00:44):
and achieve health at your organization.
Here's your host, Chad Mulvany.
Welcome to Achieving Health.
I'm Chad Mulvany, director inthe healthcare practice at Forvis Mazars.
Thank you for joining me.
We'll begin today with our WashingtonWatch segment, where I share
updates on the most recent actionsof federal policymakers
(01:04):
and their anticipated impacton healthcare providers and payers.
Today's WashingtonWatch reflects information as of noon
East Coast on Friday, October 10th, 2025.
My comments on these discussions are basedon what's being reported by the D.C.
trade press at the time of theconversation, mixed with a lot of judgment
about where things may gobased on my experience in D.C.,
(01:28):
so today's remarks reflect informationas of this moment and will change.
As far as our agenda is concerned,
the partial shutdownof the federal government is ongoing
and as of this momentwe are still deep in the middle of it,
which is causing some key extendersthat hospitals and other providers
depend on to have lapsed.
(01:50):
Speaking of hospitals, their
margins have been pressuredor continue to be pressured.
The not-for-profit sectoris facing mounting financial pressures
as rising supply and drug costserode already thin margins.
According to a recent HFMAarticle, hospital
margins slipped from 1.2% in June
to 0.9% in July, driven by a 10.6%increase
(02:12):
in supply costs and a 9.5% risein drug costs year over year.
Related to physician comp,according to Modern Healthcare's 2025
Physician Compensation Survey, physiciansincreasingly demand additional benefits
such as reduced on-call requirements,more paid time off,
flexible schedules, and reimbursementfor continuing education.
(02:34):
And so, without further ado,let's get into these issues.
In terms of federal
funding for 2026and also the healthcare extenders,
the Senate, after multiple roundsof voting, still hasn't been able to find
a compromise that unlocks 60 votes neededto clear legislation through the Senate,
and they have recessed for the four-dayholiday weekend.
(02:56):
The three issues
that Senate Democrats have citedthat need to be resolved in order for them
to provide the necessary votesto reopen the government, include
addressing the president's rescissionsof previously appropriated funds,
or putting legislation in placethat would prevent further rescissions,
rolling back the OB3’s Medicaid cuts,
(03:17):
and extending the enhanced insuranceexchange subsidies.
Realistically, I think only the enhancedexchange subsidies are really in play,
and it appears that the presidentand some Republicans
are willing to negotiate on an extensionof the enhanced exchange subsidies.
However, the current talking pointis that they won't do this
while the governmentis currently partially shut down.
(03:39):
And while there are sidebar conversationsthat continue
about what an extension of the enhancedexchange subsidies might look like
amongst rank and filemoderate Republicans and Democrats.
However, as of this morning,neither party's leadership team
in the House or the Senate is involvedin these conversations,
so to say that they are cursoryis probably the best way to describe them.
(04:02):
Pressure to reopen the government willincrease significantly in the coming days.
As of today, Friday, October10th, is the first day
that a paycheckwill be missed by federal workers.
And then on Wednesday, October 15th,our soldiers,
sailors, airmen,and Marines will also miss a paycheck.
I still think it's more likely than notthat whenever the Senate finds
the votes to pass the CR,
(04:23):
that bill will include most of theextender provisions that we care about.
And again, as a reminder, these includea further delay of the Medicaid
DSH pay cuts that were in the ACA,an extension of the low-volume adjustment
in Medicare dependent hospital programs,community health center grant funding,
an extension of the Medicaretelehealth waivers
(04:44):
that were put in place in COVID,as well as the Hospital at Home program,
the Geographic Practice Cost Index floorsfor physicians,
Medicare, rural ambulance add-onpayments, and key workforce extenders
like National Health
Service Corp., teaching health centersand graduate medical education.
In terms of hospital margins,the not-for-profit hospital sector
(05:05):
is facing already mounting
financial challengespushed by supply costs and drug costs.
According to a recent HFMA article,hospital margins slipped from 1.2% in June
to .9% in July, driven by a 10.6% increase
in supply costs and a 9.5% risein drug costs year over year.
(05:25):
Drug prices are expectedto increase further, fueled by inflation,
high-cost new drugs, and potential tariffson imported pharmaceuticals.
Analysts also warnedthat even the threat of tariffs
can disrupt supply chains and drive costshigher.
Hospitals are also grapplingwith rising expenses
and capital investments,IT, and food services.
(05:47):
On the reimbursementfront, hospitals are not yet feeling
the impact of OB3; however,those concerns are looming.
In a new report, the CommonwealthFund projects that hospitals in expansion
states will lose between 11.7%
and 13.3% of their margin on average
after the work requirement for Medicaidexpansion beneficiaries begins in 2027.
(06:10):
Safety net hospitals are set to experiencea margin decrease of
between 25.9% and 29.6%.
One of the things
that we've heard from clients recently isthat, as ratings agencies are considering
organizations ability to weather OB3,they're taking into consideration
(06:30):
hospitals current marginsand certainly that makes sense.
We're also hearing thatsome organizations are already
seeing an uptick in the uninsured,which is certainly piling pressure
on to the trendsthat we've already talked about.
And so,if your margin is deteriorating today,
it certainly doesn't bodewell for what's coming.
(06:51):
Health systems will need to continueto focus on financial discipline
through strategies
such as realizing improvementopportunities in labor and non-labor
costs, leveraging benchmarking datato increase managed care rates,
and increasing revenuecycle efficiency and effectiveness.
Organizations will also need to realizealigned growth
opportunitiesto generate margin accretive revenue.
(07:13):
We've also heard from clients that theybelieve they will need to generate revenue
growth in excess of 11% annuallyin order to continue to be sustainable.
In response to our mindsets survey,which was fielded
late last year, earlythis year, 62% of executives
believe they will primarily achievegrowth targets through organic growth.
(07:34):
However, that will be challengedby continued shortages of labor,
which could be exacerbated in some marketsby changes in immigration policy.
Our OB3 seriesprovides guidance on these actions
and other steps providerscan take to mitigate margin pressure.
To register for the series or to hearepisodes that have already occurred,
(07:54):
there's a linkto sign up in the show notes.
In terms
of 340B rebate model,the American Hospital Association warns
that HRSA’s planned 340B rebatemodel pilot, set to begin January 1st,
will impose nearly $400million in costs and 11.2
million labor hourson more than 2,700 hospitals.
And that impact analysis doesn'tinclude CHCs
(08:16):
and other types of covered entitiesthat aren't hospitals.
I think this is great work by the AHAin that they collaborated
with their members to put a pin inwhat the costs would be
are certainly a great talking point,particularly for advocacy,
because while the eight pageFederal Register notice
that announced the rebate model pilot
(08:38):
certainly says that the planthat different manufacturers
submit for their rebate modelsshould include assurances that all costs
for data submission through an IT platformbe borne by manufacturers,
and no additional
administrative costs of running the modelshall be passed on to covered entities.
I think the AHA analysisjust sort of highlights
(09:00):
what we already know to be true,even though there is no economic impact
analysisin the HRSA notice of the rebate model.
You know, while
I hope this analysis will encourage HRSA
to reconsider its approach to implementinga 340B rebate model, I don't anticipate
that this projection of administrativeburden will slow HRSA down.
(09:22):
Therefore, covered entities,if they haven't already,
will need to start thinkingthrough their rebate cycles to capture
and submit the necessary data elementswithin the timely filing requirements.
And in addition to the data management
capabilities,covered entities will also need experience
in setting up systems of controlto manage those workflows.
(09:43):
As part of setting up the rebate cycle,covered entities should also establish
infrastructure to capture data relatedto performance for each manufacturer
related to timely processing.So, how often
the manufacturer pays rebates or providesan answer within ten days.
Denial rates.
So, how many claimsthe manufacturer denies by claims count,
dollar value, and percentageof both dollars and claims count.
(10:06):
Certainly, if there's an avenue,there are avenues to flag to HRSA
where manufacturers may not be adheringto the requirements.
And so, certainly having that datain pocket will certainly bolster
your case that maybe the manufacturersaren't behaving as HRSA had intended
through the rebate model.
And then also administrative expense,
how much the covered entityspends on staffing, legal,
(10:28):
IT support, and other costsnecessary to manage the rebate cycle.
And then, you know, in additionto using this data
to improve the performance of the rebatecycle, covered entities should be prepared
to share it with HRSAand other elected officials to support
an accurate,data-informed evaluation of the pilot.
I think providing HRSAand other policymakers
(10:49):
a full picture of the costsassociated with this pilot program
will help them understandhow rebate models may reduce covered
entities funds available to expand accessfor safety net populations,
which is really contrato the purpose of the 340B program.
For additional details on the 340Brebate model,
we have a link to a FORsighton it in the show notes.
(11:13):
In terms of physician comp
trends,according to Modern Healthcare's 2025
Physician Compensation Survey, physiciansincreasingly demand additional benefits
such as reduced on-call requirements,more paid time off,
flexible schedules, and reimbursementfor continuing education.
Advanced technology has also emergedas a major recruitment tool,
(11:35):
with candidates prioritizing hospitalsthat offer AI-driven tools
and telehealth options to reduce adminburden and support work-life balance.
These trends reflect a shift in physicianleverage, as employers must compete
not only on pay but also onworkplace conditions and resources.
The same time that physiciansare looking for more out of an employer,
(11:56):
hospitals and health systems are facingmounting financial pressures
from rising operational costs,staffing shortages, and in some states
already Medicaid funding cuts and otherslooming through OB3,
making it difficult to sustainboth the compensation packages
and the additional benefits or tools
that make an organizationan employer of choice for physicians.
(12:20):
As a result, hospitalsand other employers of physicians
are becoming more selectivein targeting specialties for recruitment.
And certainly while
rural hospitals remain at a disadvantage,they are struggling to match
urban salariesand also face new challenges,
such as higher visa feesfor international positions.
Given the financial difficultiesthat many hospitals and health
(12:42):
systems are facing and the challengerelated to securing physicians,
it may be time to rethink approachesto physician compensation,
the service linesthey offer and their workforce strategy.
A couple of questions that hospitalsshould consider in each area.
So, for physician compensation,
you know, some organizations are adjustingtheir comp models
(13:05):
and leveraging recent changesin Stark regulations that allow physicians
to renumerate positions for improvingtriple-aim or quadruple-aim outcomes.
And so when you think about leveling up
under this umbrella,a couple of things to think about.
How does the organization define value?
What changes need to be madeto the compensation model to align it
(13:27):
with the organization's goalsrelated to this definition of value?
And then, what is the plan to modifythe comp model as the organization's
definition of value and related goalsevolves?
In terms of service line strategy,
we all knownot all referrals are good referrals.
However, unfortunately,
some service line leaderslack insight into net profitability.
(13:50):
So, as they're thinking about this
and kind of what type of analysisthey might want to conduct,
I think it's (13:55):
does your organization track and make business decisions
around service line profitability?
How strong are the incentivesin the physician comp model
to help the service lines
that they are associated with achievefinancial and strategic goals?
And then in terms of workforce strategy,due to a continuing workforce shortage,
many organizations
(14:16):
are experiencing challengesthat are limiting growth opportunities.
And so, it's going to becomeincreasingly important, despite the cost,
for healthcare organizationsto become an employer of choice.
And so,a couple of key questions in this space.
Does your organization understandthe key attributes of being
an employer of choice for physiciansand advanced practice providers?
(14:38):
What is the planto meet these requirements?
And what are the polarizing featuresof working for our organization?
And so, the other thingto think about as you conduct this
analysis is physiciansobviously aren't a homogenous block.
So it's important to understand the valuethat key segments
of the provider community placeon the different attributes
(14:59):
ascribed to being an employer of choice.
If your organization is wrestlingwith this issue, we have a great FORsight
that provides more detail on this topic that we've also included in the show notes.
And then finally, states cutting Medicaid.
We are seeing some states beginto cut Medicaid reimbursement rates
(15:20):
as they grapple with risinghealthcare costs and budget problems.
And this is obviously occurringbefore any of the OB3 coverage
provisionstake effect December 31st of ‘26.
And the financing provisions like providertaxes, reduction of grandfathered
state-directed payments, kick in in FY2028and state plan year 2028, respectively.
(15:44):
Idaho and North Carolina
are two examples of states that havealready reduced payments to providers,
and it is anticipatedthat other states may follow.
These cuts are coming as demand
for healthcare servicesand costly medications continues to grow,
leaving concerns that reducedreimbursement will limit access to care
and ultimately drive patientsinto emergency rooms.
(16:05):
While OB3 is occasionally citedas a driver of the Medicaid cuts
in the various states mentioned,I think more of the blame
should be allocated to state-specificeconomic conditions and/or budget factors,
and these pre-OB3 cutscould become more widespread
if we should see a broadereconomic turndown.
I think it's important to note thatthe timeline of the OB3 cuts could leave
(16:29):
one with the idea that providershave some time before they kick in.
However, I think it's importantto realize that states, in their next
legislative session, will likely startmaking changes to their Medicaid programs
to prepare for these cuts
that will impact both providerpayments and Medicaid coverage sooner.
So, I think the runway for providers
(16:50):
to prepare is shorterthan some might initially think.
This concludes today's Washington Watch.
Up next, I'll be joined by my colleagueDeb Kozlowski to talk
about denial management challenges andstrategies to build financial resilience.
(17:13):
I'd like to welcome our
guest for today's episode, Deb Kozlowski.
Deb is a director on our HealthcareConsulting Performance Improvement team
at Forvis Mazars.
Her work focuses on helping clientswith denial management
and other end-to-endrevenue cycle improvement strategies.
Deb, thank you for joining us today.
Looking forward to this conversation.
(17:33):
Thank you. I'mlooking forward to being here.
I guess let's maybe start with the basics.
Could you share with our listeners
a little bit about your backgroundand how you came to healthcare?
Yeah.So let's start back when I was a baby.
Just kidding.
I tended as a child to have a lot of orthoinjuries.
So, I had a lot of very positiveexperiences in the healthcare setting.
(17:55):
Coming from a family of nursesand not being good with blood,
I knew I always wantedto stay around the healthcare field.
Luckily for me, my first job out ofcollege was with a health system
in Chicago, so they did a wonderful jobteaching me the industry
and been in it for about 15 years nowand loving every day
helping providers out therereally serve the communities they’re in.
(18:17):
That's, you
know, it's a very common story for folksthat come to healthcare.
First, it's the, considereda clinical track, but for one reason
or another, particularly being squeamish,you don't get into it.
Then, too, though,that call to mission, that call to serve
and to really make sure that the resourcesare there for the caregivers
at the front line to make surethat communities are taking care of
(18:38):
the people's healthcare needs, can be metin a convenient and timely manner.
So that's,you know, fantastic and appreciate that.
Our topic for today'sconversation is reimbursement denials,
which are a serious challengefor many of today's healthcare providers.
In our Mindsets2025 Executive Leadership Report,
we found that 76% of executivescited denials management
(19:00):
as one of their most concerningaspects of the revenue cycle.
And then Clarivatealso released a report in 2024
which found that denials now affect,on average, 12% of hospital claims,
or in other words, $1 out of every ninebilled is initially denied by insurers.
These statistics are alarming.
And Deb, you recently shared a scenariowith me that I think really illustrates
(19:24):
the impact of denials on hospitalsand their patients.
Could you share that examplewith our listeners?
Yeah. Of course.
So again, for those of youthat may not be as familiar with denials,
this is just one of many storieshappening across the country today.
So a patient arrivesto the ER with chest pain.
The care team acts quickly, runningtests, images, monitoring, and a short
(19:46):
inpatient stay before the patientcan safely be discharged back to home.
Everything was done by the books.
Weeks later, the hospital receivesa denial from the insurance:
services not medically necessary.
The payer flaggedthe visit as potentially avoidable,
despite the patient's symptomsand history of risk factors.
(20:08):
Now, the burden is placed on the hospital.
After already providing excellent care,they now have to fight for payment,
gathering documentation, filing an appeal,
and waiting and hoping insuranceswill pay.
This process delays reimbursementand adds administrative burden.
In 2024 alone, med necessitydenials rose by 5%,
(20:30):
especially in emergency and telehealthsettings.
You know,thank you for sharing that anecdote.
And certainlythe issue of denials has been one
that has been on people's radaras long as I've been in the industry.
And it was certainly, when I was at HFMA,one of the things that we frequently
talked aboutand worked with our members to address.
(20:50):
I guess the other thing that I'd add is,you know,
you think about one in every ninedollars billed is denied.
You couldn't afford that in the worldthat we're in today, but
you really can't afford that in a worldwhen the OBBBA cuts start to kick in.
And so, you know,I fliply joked that an underperforming
revenue cycle is a luxury itemthat we can no longer afford.
(21:10):
What are the most
surprising denials trends that you've seenthis year?
Two recent trends that have stood out, one being a significant volume of denials
requesting additional information.
That was historically reservedfor high-dollar claims or specialized
services.
But now we're seeing it on low-dollarclaims as well.
(21:32):
Second would be some of thosepayer-initiated reductions.
Do you think the moving of requests
for documentation in the lower dollarclaims is more technology driven?
Is this something
that's being driven by AI,or do you think it's just more of a, as
plans are looking to manage margin,they're sort of pushing down
the dollar threshold at which they startto send out med record requests.
(21:55):
Personal opinion it is very AI driven.
I also think there's a lot of concernsthat providers,
historically,and I'm talking 15, 20 years ago, back
when I started and just before,there was advantages
being taken by providers that they wantedthe med records to support.
There were knowledge gaps of servicesbeing billed that were deemed unnecessary.
(22:17):
And that really snowballedinto the problems we're seeing today.
No, and appreciateyour perspective on that.
When you think about the two challenges,the trends you've teed up,
what are some of the waysthat providers can respond?
Yeah. Great question.
So let's startwith the additional information requests.
First, you really need to understandthe patterns of the payers
(22:38):
and the services being denied.
Most importantly, get on the phoneand speak to your payer reps directly.
There are often criteriathey can share for when they want records
such as if we have a surgerythat's greater than $10,000,
we want to see history and physical,an operative report.
Use that information.
Streamline the processfor similar situations moving forward.
(23:02):
There's often ways in your EHRthat you can automate that
through, at the time you send a claimto insurance, providing those records or
immediately after the claim is received,sending it through a payer portal.
If your EHR doesn't have those tools,there's vendors that have created bots
to automate that processfor a fraction of the cost and time.
(23:25):
And, you know, I think that's
great advice.
And the analogy that I would use for itis, you know, you think about it, everyone
that you've ever worked for, whether it'sa client, a boss, etc., has had certain
preferences for how things are sentand you pretty quickly in your career
in working with that in a workingrelationship, figure out what they want
and you use that
to kind of proactively meet their needsso as to avoid rework or frustration.
(23:49):
And I think that, what you just suggested
there, is just kind of another exampleof how one does that.
Yeah, exactly.
And I think you said it very well.
And that's somethingthat's been around forever.
So as you stated,
if you're not already doing it,you don't have a luxury of waiting.
The opposite is true for some of thosepayer-initiated reductions.
There's been some new languagecoming out this year
(24:09):
for a few of the payersthat they are downgrading your E&M levels.
One thing that organizationsreally need to be aware of
is what is built in your systemdictionary.
These are often coming throughwith a very specific payer-initiated code,
not the traditional contractualor other adjustment.
So, oftentimes organizationsdon't even realize
(24:32):
they're getting downgradedfor these E&M levels.
So really understanding that,making sure you have that information,
and then appealing
that successfully with your coding teamand using CMS regulation.
And I think that's just
another good example of whyyou have to be on top of trends.
Because if you're not watchingthat, it's months later
and you start to see a dip in cashand you're like, why is that happening?
(24:53):
Exactly. Very well said.
What are some of the biggest challenges
when it comes to how health planshandle denials?
So this one has been,I would say, the fun game.
So payers have always createdthe playbook,
challenging providers to learn the rules.
And then once they learn the rules,they're changing them as they go.
(25:16):
So, as you stated before,with some of the additional information
requests, with the introduction of theAI tools, even the most experienced
teams are challengedby the rapid pace of change.
Often when working with payerson those denial reasons,
their own reps may not have a clearunderstanding of the denial root cause.
(25:37):
So it often feels like providersare throwing darts on the board,
hoping to hit any numberbefore the clock runs out.
So, and I'm probably going to date myself
with this reference, was a hugeCalvin and Hobbes fan, and still am.
But we're playing a game of Calvin Ball.
How do you stay on top of these changes?
How do you identify them,and how do you even potentially help
(26:00):
educate the payers rep when they maynot know why these things are going on?
Oh, very good question.
So really it all starts with understandingthe complete
denial reason and reviewing the account thoroughly.
So, a big thing that providers tend to dois they think they have to chase
after every dollar.
But really, being able to quicklymake the determination of should my team
(26:22):
be spending time on thisor should they move on to another account?
So that's critical.
Once you understand it's something you canand should fight because again,
you did everything by the book.
You followed the rulesthat were given to you.
Then it's really importantto establish templates and workflows.
So, making sure that the processis as streamlined as possible.
(26:44):
Getting an appeal in a standard template,referencing the medical record,
referencing CMS guidancewhere you can and following up on that.
Most importantly is making surethat the claim is getting paid.
And if it isn't, take that to payermeetings.
Work with them directlyto create that accountability between
what your team is doing to the bestof their ability and good faith,
(27:08):
and what the payer is doingto compensate you for that.
Yeah.
You know, I think you
tee up a really important point therethat the most effective, efficient revenue
cycles are the ones where they are workingvery closely with their managed care
contracting teams.
And to your point,taking that real-time data
and one of the trends
that they're seeing so that they can sitacross the table with the payer rep,
(27:30):
they can hopefully addressthe issue in real time.
And if they can't, they can get it fixed
in the next round of contractnegotiations.
Exactly.And you touched on a very key point.
So, these are some additional areas
for organizations to really consider: What is in your payer contract? (27:41):
undefined
Have you read through it?
There's often areas in therethat say we have the right
as a payer to change your policiesevery 90 days.
We'll build language in thereto try to change that to 180.
You can add net neutrality as well,to protect the provider
(28:01):
from any policy changesthat had a negative financial impact.
And boyoh boy, are there a lot of policy changes.
So, Chad, I know our managed care
team is going to be coming ona future episode to discuss more on that.
Yeah,absolutely. And, you know, to your point,
don't make it
easy for the plansto play Calvin Ball, essentially.
(28:21):
So, we talked a lot about the importanceof, kind of,
monitoring and trending And
there are a whole sort of sea of metricsthat you could possibly chase.
What are the ones that you considerto be most critical for denial management?
Yeah, I'll start with the twomost critical, is every organization
needs to know their initial denial rateand their denial write-offs.
(28:44):
Now, just with those two metrics alone,you should have the ability
to split it into many different anglessuch as denial reason category,
payers,service type, even down to providers.
Our ForvisMazars team has built a denials tool
that helps trend those metricsfor that insight and action.
You know,I think you, especially the cut by payers,
(29:06):
I think is an important onebecause you really want to understand
which of them are behaving moreaggressively than others, shall we say.
And again,I think that knowledge goes in and informs
those conversations and the tone and tenorwith the managed care team.
Exactly.
And I would say a big trendwe've been seeing in
the industry is really developingpayer scorecards.
So, additional metrics to considerif you have the ability
to get the analytics: What is your overturn rate by payer? (29:29):
undefined
What is your days to denial resolution?
How many numbers of appealsdid it take you to resolve to payment?
All of those things are timevalue of money.
And how are you spending
the limited resources you have to getthe money or make the decision
(29:51):
that you have to move onand adjust off a denial and move forward.
That overturn rate is somethingthat’s important
not just for your your revenue cycleand your cash flow management,
but also from a policy perspective,particularly for your governmental payers.
There are a lot of conversationsgoing on at the state level
about managed care plans, and certainlyabout your governmental payers
(30:14):
at the federal level.
And so the ability to share that datawith both your state hospital associations
to inform advocacy,with your national hospital associations
to be able to inform advocacyand highlight
that there may be some issues that we needlegislative or regulatory changes for.
And so I think that's a great reasonwhy you want to collect that data as well.
(30:36):
So, Deb, what's
one of the biggest misconceptionsabout denials that you'd like to debunk?
That's such a great question.
And honestly,one of the biggest misconceptions is
that denials are a back-end problem.
So often, organizations focus downstream
in the appeals, the rework, write-offs.
(30:58):
It's like standing at the bottomof a waterfall with a bucket,
trying to catch the wateras it crashes down.
By that time, it's already too late.
The denial happened,costing time and money.
The real issue starts upstream.
So imagine the revenue cycle like a river.
It's calm and controlled at the top withscheduling, eligibility and authorization.
(31:23):
If there's a leak, say,a missed authorization,
a tiny eligibility error, that error flows
downstream, gaining force and momentum,eventually becoming
a waterfall (31:34):
loud, messy, and difficult to control.
So, a lot of the misconceptionis that the solution’s at the bottom
of the waterfall, when in realitythe opportunity is at the top.
It's about prevention, not cleanup.
Organizations have to move upstreamto tighten the process,
(31:55):
invest in their analytics, in the teamtraining, build collaboration
between groups and stop those leaksbefore it becomes a waterfall.
So once you start thinkingthis way, denials stop being a crisis
and start becoming a systemyou can actually control.
You know, Deb, that's a great point.
And it's kind of the ounce of preventionis worth a pound of cure.
(32:18):
And I do think,
you know, the analytics, the tools,the ability to kind of do QA is important.
But also when you thinkabout the registration department
or the registration departments
in your organization, they typically havea fairly high degree of turnover.
And so whatever expertise peoplebuild, you lose.
So I think the emphasis on trainingand making sure that either
a) you're retaining the people you've gotor, as new people are coming
(32:41):
in, they have the skills and the toolsthey need to catch those things,
to get the right auth number in,or to know
that they need to put an auth in,
or to make sure they've got
the right insurance information
entered in with all the pieces,like that's just so key and so important.
And it's simple to say,but really hard for organizations to do.
And I think that's a place that reallymerits more time and attention.
(33:02):
Yeah, you said it very well.
And I think a lot of organizationsstruggle
with understanding the three pillarsof technology, process, and people.
So in an area like registration, wherethe people tend to have a high turnover,
you really have to have your technologyand process locked in,
where in other areasyou might have really strong people
and they can overcompensate for weaknessesin the technology or the process.
(33:24):
So understanding
where you have your strengthsand weaknesses to really lean into that.
Yeah. No, that's a great point.
I really appreciate that.
Can you share a quick win or success
story from an organizationthat turned its denial rates around?
Yeah, I would love to.
Recently, we supported an organizationwith developing a denial steering
committee due to many factors,including an EHR conversion.
(33:48):
The denial rate was 24%.
Within a year, though, they were ableto turn it around and get it down to 14%.
The first objectivewas to get all of the denial data
and understand where the true problemswere, silencing the noise of the waterfall
to really focus on the facts of theissues occurring upstream.
(34:09):
Our next objective was workingwith leadership,
understanding the true denial rootcauses and gathering support
to form a denial steering committeeand who should be included.
Specifically, we went beyond the revenuecycle and included IT, chargemaster,
some operations, and even clinical areasfor their specific issues.
(34:30):
Finally,we were able to establish expectations
with a committee charter,standing agendas, trending metrics,
and really aligningthe team members to appropriate
subcommittee groupsto meet and solve problems monthly.
We were really able to focus onchanging the narrative
for that organization,that it was a quote “back end problem”
(34:52):
by providing really specific exampleswithin the larger denial patterns.
And we were able to take itone by one with each leak identified.
In some of the areas,we focused on technology optimization
and others, it was process improvementthrough training sessions,
and throughout it all developedaccountability checks and trended metrics.
(35:14):
So they had sustained efforts.
I'm really proud of everythingthat organization put in.
It was a lot of hard workfor them to achieve that success.
I love the anecdoteand what I think I like about it so much
is it really underpinsa lot of what we've been talking about.
And specifically, you know, there weremultiple points which needed to be fixed.
(35:34):
The organization had the dataor was able to get the data to do
the root cause analysis.
And I think it all starts with, you know,what are you monitoring or what
can you start monitoringto fix those issues?
Absolutely.
And I feel like a lot of organizationstoday, and, you know, you hear the AI
and the RPAs of the world and,
you know, you think you need to spendall of this money to get it done.
And, hey, do not get me wrong,the technology out
(35:56):
there is great and there are hugevalue adds that it can provide.
But a lot of the problems are truly simplyon the people and the process.
And the more you can lean into that,the more you can even lean into your EHR
systems to build criteriaand requirements and stops,
the more you can really manageaddressing this
without having to take on additionalcosts at this time.
(36:19):
You know, I think you raise a great point.
The tools are fantastic,but you have to deploy
the tools in an environmentwhere the processes are tight.
So that way the tools are able to be mostleveraged and create the efficiencies.
Otherwise,you're just automating broken processes.
Exactly.
And I think the message that I'd like,you know, the listeners and everyone
(36:42):
to hear is,you know, automation is wonderful.
It helps improve consistency and earlydetection, but it's not a cure-all.
So, technology is only effectiveas the process train behind it.
So, successful organizations really pairautomation with human oversight
and using the analyticsto pinpoint patterns, reallocate teams,
(37:03):
and really continually educateto prevent repeat denials.
Yeah, no, I think great points,great advice.
Let's wrap up with somesome actionable takeaways.
What advice would you give a healthcareleader facing rising denial rates?
As we've stated, the first thingyou have to do is get your data.
(37:24):
You're going to get a lot of noise, and,you know, it's going to be hard
to really distinguishwhere the leaks are coming from or,
you know, where it mightjust be some mist going on.
So really being able to understandyour performance against those industry
benchmarks we've discussed todayand ultimately start with one problem.
Do not try to bite them all off there.
(37:44):
Often when you can focus your resourceson one big issue,
that is where you can build the momentumfor future ones to come.
And if you don't already have it,you have to get a denial steering
committee together.
Have it cross-functional.
Make sure you have
the right people in the roomso that you're not wasting anyone's time.
It's direct, specific, and actionableto get to the real problems
(38:08):
and solutions needed.
You know, I
think that point about the denial steeringcommittee is an important one, right?
Because, I mean, the revenue cycleis a team sport, but it really underpins
the fact that denials are,given how multifactoral they are.
So I appreciate you calling that out.
Well, Deb, it’s been a great conversation.
I really appreciate you taking the timeand sharing your insights
(38:30):
with us and want to thank our listenersfor tuning in.
If you're looking for more insightson denial management and revenue cycle
improvement strategies, we have linksto related content in the show notes.
I hope you'll join me on November 5thfor the next episode of Achieving Health.
You can follow Achieving Healthon your favorite podcast platform or visit
(38:51):
forvismazars.us/AchievingHealthPodcastto learn more.
New episodes are released the firstand third Wednesday of each month.
Achieving Health
is produced by Forvis Mazars LLP,an independent member
of Forvis Mazars global, a leading globalprofessional services network.
Ranked among the largest publicaccounting firms in the United States,
(39:13):
the firm's 7,000 dedicated team membersprovide an Unmatched Client Experience
through the delivery of assurance, taxand consulting services for clients
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The information set forth in this podcastcontains
the analysis and conclusionsof the panelists based upon his, her,
(39:34):
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.
(39:56):
Further, the panelists’ conclusionsmay be revised without notice,
with or without changes in industryinformation and legal authorities.
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