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The Impact of Healthcare Reforms on Medical Billing

Healthcare practitioners are habitual of starting a new year with changes to coding and medical billing services policies. However, this year, many providers find specific healthcare reforms challenging and need some extra clarity. Clear and explanatory guidelines on the recent updates will assist providers in understanding and thus create consistent processes for reducing errors and reimbursement delays.

Impact of Recent Healthcare Reforms on Medical Billing

Some recent healthcare reforms in coding and medical billing have brought confusion for providers and suppliers alike. A detailed breakdown of these changes shall help healthcare practitioners in navigating the new policies – let’s get down to it:

1. Changes in Medicare Fee Schedules

Clinicians saw a nearly $1 decrease in the conversion factor per the 2023 MPFS (Medicare Physician Fee Schedule). Initially, physicians were to face a 4.5 percent reduction to Medicare Physician Fee Schedule payments this year; however, the healthcare groups collaborated to ask Congress to stop cuts, reiterating the difficulties of the ongoing financial challenges due to the pandemic. The goal was to avert almost half the expected reductions to Medicare reimbursements for the coming two years. However, Congress lowered the 4.5 percent reduction to a 2 percent cut for this year and a 3.5 percent for 2024.

Consequences and Projections

The 2 percent reduction follows 2 decades of flat payment rates; hence, this might seem like a short-term win, and however, in the longer run, further cuts of the conversion factor can lower the practice’s bottom lines. Furthermore, it could also reduce the access of older Americans to healthcare services. Additionally, due to the decreasing reimbursements, some practices might decide not to take new Medicare patients.

2. Two-Reductions in MACRA Program

Physicians are also facing subsequent reductions in the MACRA program, including:

  1. Ending of 5 Percent Value-based incentive payment for participating in Advanced Alternative Payment Models
  2. Elimination of MIPS exceptional performance bonus.

Historically, many practices and hospitals have remained varied in participating in alternative models, taking into account the downsides and risks. Furthermore, considering the latest healthcare reforms, many are still determining how the loss of these incentives will further impact the programs’ participation.

3. Documentation Guidelines in Healthcare Reforms

The latest American Medical Association Guidelines have effectively cut down on administrative burdens by consolidating, revising, and deleting the unnecessary complex documentation guidelines.

These healthcare reforms in documentation guidelines intend to:

  • Simplify documentation, and make it practical and even clinically relevant
  • Diminish the need for audits
  • Limit extra or unnecessary coding documentation, which is essentially not related to clinical care

The reasonable reduction in documentation complexity benefits medical practices and hospitals by reducing workforce burnouts, consequently expanding provider capacity to focus better on patient care.

4. Time Extension for GFE - Good Faith Estimate Requirements

Furthermore, another vital healthcare reform impacting the hospital based billing is HHS’s (Department of Health & Human Services) extension of discretion enforcement for delivering specific components of GFEs, all under the No Surprises Act.

The Department of health & human services’ goal for extending enforcement discretion is to:

  • Encourage additional interoperability across the healthcare industry.
  • Inspire facilities, providers, and other industry stakeholders to focus more on adopting interoperable processes to exchange information.

What this healthcare reform has done is offer practice breathing spaces, especially practices that were drowning in the administrative burden. Now, these practices will have a time window for building processes and infrastructure to provide GFEs.

Changes to the No Surprises Act

Since its inception in 2022, the well-intended No Surprises Act has been a reason for many surprises to clinicians. One of these surprises is the tedious impact of the independent dispute resolution or IDR process. With the IDR process, groups need to dedicate resources to negotiating rates when an out-of-network rate is not set and payers and providers have not agreed upon a rate previously. The entire process has been rather pricey, additionally challenging for operations, and has cut off the provider group negotiation influence with the payers.

Final Words

The ever-changing landscape of healthcare reforms has brought a series of transformative changes across the medical billing industry. Each change in 2023 and its facets present a newer challenge and an opportunity for growth. Traversing through these reforms requires a strategic approach that can balance the short-term gains with the long-term consequences. All of this while simultaneously upholding the noble aim of offering top-quality healthcare services to patients.

Frequently Asked Questions

The healthcare industry is reeling from numerous shocks in 2023, including: Recessionary pressure Higher inflation rates Labor shortages Covid-19 Pandemic
CMS modifiers come with additional information in regards to medical procedures, services, and supplies involved without ever changing the codes’ meaning.

The significant changes of 2023 are in regards to:

  • Evaluation and management (E/M)
  • Covid-19 vaccination codes
  • Hernia repair codes
  • Percutaneous pulmonary artery revascularization codes
  • Lab and pathology codes, etc.

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