Money is flowing heavily into the business of medical billing as hospitals and doctors – whose revenue was disrupted by the coronavirus – focus on maximizing every dollar they can collect from patients and insurers.
big picture: The rise and existence of the billing industry is the result of a fragmented system designed around multiple types of insurance plans and a system that has forced patients to bear the higher costs of their care.
state of play: Billing and collection companies, called “revenue cycle management” in industry jargon, increasingly advertise themselves as a one-stop shop for health care providers for all things related to payments.
- They verify patients’ insurance, help hospitals update their price lists, code medical claims sent to insurers and government programs, and do battle with insurance companies. rebuttal, and collect payment from patients before and after receiving care.
running news: The pandemic drastically reduced revenue among hospitals and other providers, and although the decline was relatively short-lived, it spurred even more revenue cycle activity.
- Involve health partners filed to be made public Last week. The company stood up to investors by saying, “Coding standards are constantly evolving … it is often difficult for providers to adapt to these changes in a timely manner.”
- Trying to Buy UnitedHealth Group change healthcare for $8 billion, though the Federal Trade Commission has asked for more information.
- Publicly traded R1 RCM has spent $800 million to buy since 2018 three Separate revenue cycle firm. R1 changed its name from Accretive Health in 2017 after the company settled charges That it harassed patients to pay in emergency rooms.
- private equity firms have always interested in the revenue cycle, and owns a large stake in Ensemble and R1. Welsh, Carson, Anderson & Stowe recently acquired Argos Health, and the four separate companies merged health, which is backed by the Carlyle Group.
- there are many more revenue cycle deal within the last year.
Between the lines: Lawsuits against patients over medical bills aren’t the only controversial industry strategy. Billing for services more expensive than what is actually provided, a practice called upcoding has raised major concerns.
- A hospital executive told the head of Massachusetts’ health policy agency, David Seltz, that his system hired more people specifically to work on the coding.
- “more [people] You’re hired, the more revenue you can generate,” Seltz said, modern healthcare. “Their analysis was that there was no peak.”
One Step Deeper: Hospitals are not just customers of revenue cycle firms. They are also investors in some cases.
- R1 is partially owned by the hospital systems Ascension and Intermountain, and the Ensemble Catholic hospital system is owned by Bon Secours Mercy Health. Those tax-exempt systems operate as both owners and prime customers, meaning they benefit twice as much from any payments they collect.
- Tenet Healthcare recently sold five of its hospitals, and to decide Those hospitals were to continue using Tenet’s revenue cycle firm, Conifer Health Solutions. HCA Healthcare also owns Parallon, one of the largest billing firms in the country.
Bottom-line: The “revenue cycle frenzy” is the result of providers trying to win as much revenue as possible, said Ge Bai, a health policy and accounting professor at Johns Hopkins. But it also means that “patients are being treated as a greater revenue-generating product.”