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Payor Contracts: Chargemaster Essentials
27 Plays3 hours ago
Scott Allen is the SVP of Managed Care at nimble, and he’s on today’s show to help us wrap up our Payor Contract series. We have already covered 6 Tips for Effective Management and Leveraging Data for Negotiations, and we’ll finish up the series by doing a deep dive into Chargemaster Essentials. Scott walks us through common issues, making sure your chargemaster is up to date, and how to maintain it effectively.
In our news recap, we’ll cover a kickback lawsuit in New York, potential AI bias, the role of automation in RCM, and, of course, end the news segment with a positive story about a nurse who saved a patient’s life who was having a stroke.
Also – we’re offering a $50 gift card to the first 30 listeners who complete our Podcast Survey! It only takes a few minutes of your time, and you’ll be able to share your feedback and ideas. Start the survey here: https://www.cognitoforms.com/hstpathways1/podcastsurvey
Resources Mentioned:
- The View co-host Sunny Hostin's surgeon husband Emmanuel accused of insurance fraud in bombshell lawsuit
- Hospital evaluation of AI predictive tools for bias is inconsistent, study finds
- How to Make True RCM Automation Work for You: Three Tools Every Organization Needs in Their Toolkit
- Meet Carlee Minyard: The ER Nurse Who Set a Stroke Care Record and Transformed a Life in Just 17 Minutes
Brought to you by HST Pathways.
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Transcript
Introduction to the Podcast
00:00:01
Speaker
Welcome to This Week in Surgery Centers. If you're in the ASC industry, then you're in the right place.
Episode Overview: Guest and News Recap
00:00:07
Speaker
Every week, we'll start the episode off by sharing an interesting conversation we had with our featured guests, and then we'll close the episode by recapping the latest news impacting surgery centers. We're excited to share with you what we have, so let's get started and see what the industry's been up to.
00:00:27
Speaker
Hi, everyone.
Payer Contract Series Conclusion with Scott Allen
00:00:28
Speaker
Here's what you can expect on today's episode. Scott Allen is the SVP of Managed Care at Nimble and he's on today's show to help us wrap up our payer contract series. We have already covered six tips for effective contract management and how to leverage data for negotiations in this series. And we'll finish up by doing a deep dive into Chargemaster essentials today. Scott walks us through common issues, making sure your Chargemaster is up to date and how to maintain it effectively.
Key Discussions: Lawsuit, AI Bias, Automation, Nursing Story
00:00:56
Speaker
In our news recap, we'll cover a kickback lawsuit in New York, potential AI bias, the role of automation in RCM, and of course, end and the new segment with a positive story about a nurse who saved a patient's life who was having a stroke.
00:01:11
Speaker
Before we get to our guest discussion though, I wanted to remind you all again that we are currently offering a $50 gift card to any listener who takes a few minutes out of their day to complete our podcast survey. We would love to hear from you on what you find most valuable, what we could improve on, the segments you like best, what you would like to see us add, and anything else you'd like to share.
00:01:32
Speaker
We are capping it at the first 30 responses though. So if you want that $50 gift card, make sure you move fast and head to the link in the episode notes to get started. And thank you in advance to everyone who takes a few minutes to complete it. And to everyone who already has, I really appreciate it. And with that, hope everyone enjoys the episode and here's what's going on this week in surgery centers.
Understanding the Chargemaster in ASCs
00:01:56
Speaker
Scott, welcome to the show. Welcome. Thank you. Can you give our listeners quick overview of your role and area of expertise at Nimble? Absolutely. Yeah. Scott Allen, SVP of managed care at Nimble. I've been here for 17 years. I handle all aspects of managed care contracting, negotiations, internal strategy, anything you can think of with payers I handle.
00:02:20
Speaker
Great. So I think today within this realm of payers and managed care contracting, we wanted to dive in and talk specifically about the Charge Master.
Chargemaster Update Challenges
00:02:31
Speaker
So as a level set for our listeners, can you just give a basic overview of and what is a Charge Master and why is it important? Yeah, absolutely. I think today I was interested in this topic, you know Charge Master is something that You know, we hear a lot about, I think a lot of ASCs, as you know, they have to deal with it day to day. it's It's a patient facing aspect as well too. So very important, but I still see it just a lot of variation on on how ASC set their charge master, how they understand their charge master and then tying into managed care contracting, you know, you know, why is it important to my managed care contracts? So I think, you know, today on this podcast, hoping just to kind of get some information to the, to the group that they can take back to their,
00:03:12
Speaker
their ASCs today and and really apply ah to hopefully make some, make some change. Fantastic. Yeah. So, so for some of our listeners that may not be as familiar, you know, what is this charge master that we hear about? Yeah. Great question. So charge master is essentially what is hard loaded in the software system set to be billed to that payer. So for example, you may have a code in the system that code sets a bill $3,000 full bill charge.
00:03:39
Speaker
That is the the gross ah charge going to the payer. And so we say charge master essentially is the grouping of all of your codes that you may bill frequently tied in with your revenue and then anything that may apply to to how that is billed out to that particular payer. Great. So essentially we can kind of think of this as, you know, any service that the ASC would provide or charge for is going to be, you know, loaded there in that charge master, right?
00:04:08
Speaker
Yeah. And it's, it's a little bit more complex
Accuracy in Chargemaster for Contracts
00:04:10
Speaker
too. So you have, you know, searchable codes. So codes that represent searchable cases and surgery, and you have implant codes, you know, drugs, all types of different codes that are loaded in there that may have different revenue codes, but also different ways to think about how you would charge for those. So for example, as you probably know, implantable devices have more of a soft charge, right? You may have, you know, one hip pit code representing multiple types of implant sizes, shapes, or forms. So. you know, that code has to be set in the system. So it recognizes, you know, that this particular implant ah is this cost and this is the bill charge going out. And then on the managed care side, you have to make sure you understand how that payer is going to interact with.
Consequences of Mismanaged Chargemaster
00:04:50
Speaker
And just listening to some of your podcasts, it sounds like your audience is well aware of, you know, those contract allowed amounts and how the payer is going to handle them. But that charge amount is very important.
00:05:00
Speaker
In some cases, if you have a cost plus, you may have situations where that payer is regulating the exact charge going out to that to that claim. So you may you know they may say you have to bill two times or you have to bill invoice costs to regulate what that bill charge is going out. And you know just a ah little story here, you know working in this industry for so long, you know we encountered a client that needed help in getting in there, finding out that they had some charge master issues. and This relates to not only the updating the charge master, but how you notify the payer as well. But they had contracts that were, that were tied to a percentage of bill charge, meaning, you know, they had language in there, unlisted codes, you know, direct language that's tied to what you bill and what you're paid. So in that case, you know, typically that payer would always have, you know, a pretty strict language written in that contract to regulate any sort of situation where you may want to overbill. So of course that was in there.
00:05:58
Speaker
The situation was the client did not have the contracts organized previously to understand those regulations in updating the you know payer, proper notification. So what ended up happening was you know they went through a couple of years of just making charge master increases, adjusting the way that they were billing implants, right just not really understanding the game and end up, they received a letter from that payer you know with you know wanting oh a whole lot of money because they were overcharging, essentially getting paid ah double and triple the amounts. And so just kind of you know falls back to standard 101 managed care practice. you know Have your managed care contracts, have them organized where you understand the ins and outs because you know that notice is is key. What would happen if you did notify that payer correctly, they would properly adjust your contract to account for anything over what was in the contract. so if it said
00:06:54
Speaker
You can only increase 5% annually and you send them 20%. They would just adjust that contract typically to then align with what your increase was. So, you know, very regulated situations, but you know, we find, you know, stores like this every day where, you know, ASC just, they they don't have the
Coding and Billing Challenges for Implantable Devices
00:07:11
Speaker
contracts. One, they're not organized too. And then they're just making changes and business changes, you know, to multiple million dollar centers without, without having the rules. So very dangerous game.
00:07:22
Speaker
you know and And the other thing too is we still have to be aware a lot of lot of centers are just using a multiple of Medicare blindly setting charges based off of three or four or five times Medicare and not understanding device intensive codes. And you know if you have a code in there that may be 20 or $30,000 per Medicare and you multiply that times five and you have three or four codes on that claim, you quickly have a you know half a million dollar claim. and that's that's sometimes off-putting to the patients, but also maybe a situation when building those payers, you could end up in a high dollar bill bill review or some situation like
Setting Up a New Chargemaster
00:08:01
Speaker
that. so yeah Yeah. I think that's a good example of the complexity coming into play because it's you know on the surface, the Charge Master is kind of you know a basic concept of you know your services.
00:08:15
Speaker
procedures and and list price for that. But I think it's the way that that Chargemaster interacts with the payers, interacts with the contracts, as you said, that can introduce the complexity. what you know Question for you is, how does the accuracy of that Chargemaster impact overall reimbursements. And I think you gave, you know, one example where, you know, it's not even that it was inaccurate. It's kind of the way that it was managed from a price increase perspective, didn't align with the way that the contracts are written. But have you also seen in examples where charge masters just become inaccurate over time and that impacts reimbursements as well? Absolutely. Yeah. So we'll, we'll get in there and take over client. And the first thing we do is we do a charge master analysis to understand, you know, what the current
00:09:00
Speaker
Charges are in the system and what the allowed amounts are, right? But if you don't have the contracts, you can't perform that. So really the first step is maintain those complete files. And then to your point, applying those rates to make sure that you have an accurate charge master, meaning there's no lost revenue. You're not under billing any, any claims. You know, typically the payer may or may not pay lesser of, but you still do have a lot of contract language out there where the payer wills. Absolutely. If you bill under.
00:09:27
Speaker
they're going to pay you that that lesser amount. So it's it's an important exercise to to do and we recommend you do it every year due to you know changes in your contracts, new codes that you may want to add, just a lot of so changes within healthcare care happened quickly. So that annual checkup is something that's really important to have. Got it. So that best practice you recommend is checkup on it once a year. What about an ASC that may be building this out
Claims Processing and Chargemaster Accuracy
00:09:53
Speaker
from scratch? How how do you avoid kind of the under reimbursement scenario that you mentioned?
00:09:59
Speaker
Yeah. And I'm not, I guess not discounting the use of Medicare. I think it's a great benchmark, but I think using other tools to make sure that, you know, uh, you know, what the, what the area looks like. So what the market is kind of calling for, you don't want to, you know, go in at 25 times Medicare for everybody else's at seven. Um, you know, and you can get that data through third party resources, right. That may have access to, to regional charge amounts by, by providers. So there's a lot of activity.
00:10:27
Speaker
as you probably know, out there with price transparency, you know there's published payer rates provided on the websites of those larger payers. A lot of AI companies offering services to help you understand the region. So I think we're at a point now in the ASE world more than ever where you have the data to make a really good decision on it. It's it's just, do you want to access it? you know If you're just one ASE, the cost is really not all not a whole lot. And you can really get a good idea about you know where you should be within that market.
00:10:57
Speaker
you know We had a paper article published in the St. Louis Post Dispatch here a couple of years ago and they were analyzing hospital charges for a particular procedure. and they were just you know They had one procedure and they took it to four different hospitals and they the article was about how how different the charges were. right One was 30,000, one was 200,000. To the public, when we see gross bill charged, we don't understand. That's not what we're getting paid. It's a different story. so You know, that's an important area to manage. I think going, moving towards, you know, more patient, you know, provider transparency, we're going to get, you know, more areas where, you know, maybe that charges looked at, you know, twice and third time. and Yeah. Yeah. So that's interesting. So it's not just, cause I feel like.
00:11:46
Speaker
The concern that's obvious about Chargemaster accuracy is, hey, I don't want to have something in there where you know I might come up with an underbilling situation, like you mentioned earlier, but you can actually have the opposite issue too, or if your Chargemaster has a listing that's it's too high, you've got, even though it may be adjusted and oftentimes will be adjusted, you've got this perception issue within yeah within the markets based on what that gross value might be. Yeah. And and typically we see people will just like,
00:12:15
Speaker
You know, that multiple device intensive Medicare is really the, the most where we see people, you know, kind of overcharging, right? Cause it's just so easy to do if you just blanket, you know, five times yeah and just so, yeah. So I think part of, you know, to your point, part of it's looking at, you know, the undercharges, but also the overcharges and it's like a kind of a PR regulation issue, right? Where are you from the market? Yeah. Yeah. Yeah. Is there a best practice for those, those codes that they can get pretty high?
00:12:44
Speaker
Yeah, just break them down. You know, look at, look at what your costs are. You you don know, use third party resources. I think when you think of device intensive codes, as you know, as you may know, that essentially is, you know, a Medicare code that includes device portion. So think of it as you're getting the surgery code with the implant included, you know, like a total knee, for example, how Medicare pays that you're you're getting, you're getting everything combined. So if you take a multiple of that, you know, and then you're adding your implant cost to a commercial payer,
00:13:13
Speaker
You know, that's where you get in those situations where you may, you know, have an inflated charge based on what you're really doing. Right. And so I, I just think it's important to understand what your costs are, what your overhead is, and then, you know, maybe using that to kind of set some of those charges the right way. But there's also, and this is maybe getting next level, but we also have situations where there's unlisted codes for Medicare and we don't have a benchmark to set those codes. So how do we, how do we organize that? Right. Yeah. Yeah. Okay.
00:13:42
Speaker
Scott, can you walk me through when the when the payer receives the charge, the claim that's submitted, how they go about their adjustment process? Yeah. I mean, typically, you know, I'm sure when the payer receives a claim, they're going to look at that charge amount by line. And they typically look at the revenue code, place of service, you know, different variables to make sure they understand how to adjudicate that claim, tax number,
Organizing Insurance Payer Profiles
00:14:08
Speaker
multiple facets.
00:14:10
Speaker
But you know they're they're going to look at that and but what's in the contract says, you know typically we'll see something like a payer will allow you know lesser of 80% of billed charge or the allowed amount. So they're they're going to weigh that right away and and understand that by code. And the language is such that it may be blanketed for the claim, may be by exact code, it changes, right? So the payer is going to look at that charge and then you know critically understand it to see if it's enough to get paid. and then I think the other part of it, if it's too high, it may be put into a situation where therere they're looking to see why your claim is a half million dollars, right? Like what's what's the deal here? And then they'll put that into an extra review as well too. So I'm not saying every payer is doing that, but they're you know I think anytime that you're inflating are your you know cost that much, you you could get into situations where you or you may be you know looked at a second time, if you will.
00:15:05
Speaker
So, so there's some nuances here, you know, I'm sure we'll have listeners that want to go into more detail in certain areas. Uh, for our listeners that want to do a double click with you on some of these topics, what's a good way to hear, hear more? Yeah. No, great question. I think we're going to be at actually an ASCA in Colorado come April. So if you want to come out and check us out, we'll be there.
00:15:29
Speaker
Should be fun. Looking forward to the Gaylord Hotel out there. I've been bird this year, right? Yeah. has't been and I don't think it hasn't been in Colorado. I can't think of a year it's been in Colorado and I've been going to every everyone since last 17 years. Wow. That's fantastic. Hopefully you know everybody by name by now. It's got one final question. We do this each week with our guests. What's one thing our listeners can do this week to improve their surgery centers?
00:15:56
Speaker
i think you could go I think this week you can probably go in and print out your current insurance payer profile list. So this is every insurance that you have loaded into your software system, right? Put that out and go through it and organize it to make sure that you have a good naming convention, meaning you want to make sure that you know You know that the front desk is always naming the payer the same way. You're, you know, productizing the payer, meaning that you're distinguishing between HMO, PPO, Medicare Advantage. Because I see a lot of issue with that, right? You know, we have a situation where, you know, I pulled one last week and we may, I may have had 200 different insurance profiles and in this system. Half of them were inactive, half of them were double. And, you know, the other thing is, If you're not properly understanding the frequency of insurance product type, what if you're sending an offer from a payer and they're offering you different rates for HMO or PPO, how are you understanding that frequency difference? right So I think what I would do is you know print out that insurance list of all of your active insurances and go through and organize it, clean it up, and and that's and also a recommended annual practice as well, because I think that front desk is really
00:17:10
Speaker
so important to not only operation of the ASC, RCM, but considering managed care contracting, you know our data is only as good as what's in the system.
Insurance Fraud Allegations against Dr. Hostin
00:17:19
Speaker
So you know that management at that front end is key to make sure that that I can look at your data on the back and properly understand different different things. So I hope that was helpful. It was. Scott, thanks for joining us today. Appreciate it. No, thank you for having me. Appreciate it.
00:17:38
Speaker
As always, it has been a busy week in healthcare, so let's jump right in. Dr. Emanuel Hostin, a prominent orthopedic surgeon and husband of Sonny Hostin, who you may know from The View, is facing serious allegations of insurance fraud as part of one of New York's largest ever RICO cases.
00:17:58
Speaker
So the federal lawsuit filed by insurer American Transit accuses Hostin and nearly 200 other defendants of engaging in fraudulent medical practices. So according to the suit, Hostin allegedly performed unnecessary surgeries and accepted kickbacks disguised as dividends. The damages saw exceed $450 million. dollars The allegations focus on New York's and no-fault law, which requires insurers to cover accident-related medical expenses up to 50 grand with higher limits for taxis and rideshare vehicles. The insurer claims Austin used his position at Empire State Ambulatory Surgery Center to illegally profit through patient referrals.
00:18:44
Speaker
Austin's attorney though has completely dismissed the lawsuit as baseless and an attempt by the struggling insurer to intimidate doctors while dodging payment obligations. And also wanted to share that critics have also questioned the legitimacy of the case, calling it a desperate move.
00:19:00
Speaker
Now, given his wife's stature, people are waiting for a comment from her as well, but of course she has not said anything yet, which is the right thing to do. But anyway, for ASC leaders, this case really underscores the importance of compliance and transparency and referral and billing practices.
00:19:19
Speaker
Whether this case specifically is legitimate or not, there are tons of boundaries and rules when it comes to these types of things. With increased scrutiny on fraud, particularly under state laws like New York's no-fault law, centers must prioritize adhering to regulations to avoid any legal risk. This case also highlights the potential reputational impact of such lawsuits even before they're resolved.
AI Bias Concerns in Healthcare
00:19:43
Speaker
So to avoid something like this, you could always invest in robust auditing systems, and ensure clear documentation, and educate staff on ethical practices. Trends toward stricter reinforcement signal that ASCs must be proactive in managing these relationships with insurers and referral sources in order to maintain credibility and trust in the industry.
00:20:05
Speaker
All right, switching gears, a recent health affairs study reveals that while most US hospitals are adopting predictive AI tools, fewer than half are testing them for bias, which is, of course, raising concerns about equity and safety in patient care. So the study surveyed over 2,400 hospitals and found that 65% are using predictive models for tasks such as identifying high-risk patients and managing appointment scheduling.
00:20:34
Speaker
However, only 61% tested these tools for accuracy first using their own data, and just 44% evaluated them for bias. So the study highlights these growing concerns of the digital divide between high resource hospitals, which are more likely to develop and test their own models, versus lower resource hospitals that will rely on these off-the-shelf solutions.
00:20:58
Speaker
This gap could exacerbate already existing health disparities if biases and AI models go unchecked. Hospitals serving rural or socially disadvantaged areas were less likely to adopt predictive tools altogether.
00:21:13
Speaker
So AI models from EHR vendors are currently dominating the market with 80% of hospitals relying on these tools, while others use third party or in-house solutions. Tools used for inpatient risk prediction were more likely to be tested locally than outpatient or billing focused models, which it could also perpetuate bias.
00:21:32
Speaker
So what does this insight mean for the ASE industry? This study really highlights the importance of scrutinizing AI tools for both bias and accuracy, particularly as adoption of predictive technologies grow.
Enhancing RCM Efficiency with AI
00:21:46
Speaker
So ASE should really consider locally evaluating these AI models. It'll just make sure that they're aligned with their specific patient populations and workflows.
00:21:55
Speaker
And I just saw Aska sent out an email highlighting some of their sessions for their 2025 conference in Denver in May. And one of those sessions is ah all about AI. So I'm super interested to hear what we're going to hear from Aska about AI in general. And just hopefully there's a few sessions on it. We could see what everybody else is up to so far as well.
00:22:16
Speaker
All right, in our third story, we're going to stick to that same AI trend and theme, but let's talk about automation specifically around revenue cycle management. So MedCity News published an article laying out three reminders for RCM leaders embracing automation and considering the story I just previously shared, I think it's a great refresher for everybody. So here were their three pieces of advice.
00:22:40
Speaker
The first is education. Make sure leaders and staff understand the capabilities, differences, and nuances of AI, which will help make sure they make informed decisions and just make them more comfortable in general.
00:22:52
Speaker
The second is strategy. So this will provide a roadmap that is tailored to your specific organizational goals and will help you stay focused on what you're actually trying to accomplish. There's a lot of shiny new tools, a lot of conversation going on around AI right now. So if you have your strategy doc, let's say all you want to do is work on reducing claims or minimizing manual workloads, having that laid out will help you stay focused.
00:23:17
Speaker
And lastly, effective change management. So introducing AI is obviously a huge deal. Making sure you properly communicate with your team will help them kind of embrace automation as a tool and make sure that they understand that AI is just here to enhance their role, not replace.
Nursing Achievement in Stroke Care
00:23:32
Speaker
So really quickly, those three tips were education, strategy, and effective change management. And at the end of the day, when rolled out correctly, automation can be low risk and high reward in the RCM world.
00:23:45
Speaker
You could lower costs, increase productivity, reduce errors, especially around those mundane, tricky tasks like prior auths or claim followups. And by starting small and scaling up, you'll reinforce a sustainable approach and allow your team members to grow with you and ultimately get buy-in from everyone. And if you are using AI at your at all at your ASC, please head to HSC's LinkedIn or YouTube pages to share how. I would love to hear from you.
00:24:15
Speaker
And to end our new segment on a positive note, ER nurse Carly Minyard achieved a remarkable 17 minute door to treatment time for stroke care at St. Mary's regional health system in Russellville, Arkansas, setting a new hospital record and saving a patient's life. Her decisive action, clinical expertise and commitment earned her the title of nurse of the week by the daily nurse.
00:24:42
Speaker
A patient arrived at the ER with slurred speech, facial droop, and one-sided weakness. Thanks to Minyard's swift response and the teamwork of her night shift colleagues, the patient experienced a dramatic recovery, regaining strength and clear speech. She credits her success to effective communication and collaboration, showcasing what nursing excellence is really all about. And as a reminder, you can recognize stroke symptoms using the Be Fast acronym.
00:25:11
Speaker
So it's balance issues, eye changes, face drooping, arm weakness, speech difficulties, and the urgency of time.
Closing Remarks and Call for Engagement
00:25:19
Speaker
So excellent work by Carly and the rest of her team at St. Mary's Regional Health System. And that officially wraps up this week's podcast. Thank you as always for spending a few minutes of your week with us. Make sure to subscribe or leave a review on whichever platform you're listening from. I hope you have a great day and we will see you again next week.