Rising healthcare costs strain health system margins
Systemic challenges are showing few signs of easing in healthcare financial operations. As identified by federal actuaries, increases in the use and intensity of hospital services drove a big recent jump in national healthcare spending. Those volume-based metrics represent a boost for hospital revenues but a roadblock to cost reduction. That dichotomy had a net…
Hospitals mount response as site-neutral payment policy progresses
Hospitals and their advocates think the concept of site-neutral payment is gaining enough traction in policy circles that a strategic response is warranted. One step in attempting to stanch the apparent momentum of site-neutral policies is the release of a new report that finds recommended approaches would cut hospital payments by $182 billion over 10…
CMS provides more leeway to Medicaid state-directed payments before new limits kick in
March 23 update The Committee for a Responsible Federal Budget (CRFB), which advocates for deficit reduction, issued an analysis criticizing the extent to which states are capitalizing on the grandfathering clause to maintain higher rates for state-directed payments (SDPs) through 2027. CRFP reported that Illinois and Texas have increased their SDP rates by 50% since…
Transparency in Coverage proposed rule aims to make price files more usable
HHS’s proposed updates to health plan price transparency files mark a notable step in ensuring the information is useful for providers and other healthcare stakeholders, experts say. The Transparency in Coverage (TiC) proposed rule issued in December would modify requirements for health plans with an eye toward making the massive machine-readable files (MRFs) more navigable…
CMS proposes 2027 ACA marketplace changes to address rising premiums
With few signs of pending relief for increased premiums in the Affordable Care Act (ACA) insurance marketplaces, CMS issued proposals designed to solidify the affordability and availability of coverage next year. In recent weeks, the Senate has made little or no announced progress on agreeing to an extension of the enhanced subsidies for buying ACA…
Capital expenditures surge amid aging facilities
Several health systems and hospitals are boosting capital expenditures amid a long-term aging trend in the physical plant of those organizations. The average age of plant for not-for-profit hospitals and health systems reached 12.7 years in FY24, among organizations rated by Fitch Ratings. That was the oldest average in at least 13 years. The age…
Updated documentation requirements in Medicare could add burden on healthcare providers
Citing concerns about improper payments, CMS issued a regulatory update that expands Medicare prior authorization and other documentation requirements starting April 13. The regulations are most meaningful for vendors of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS), but the operations of hospitals and other front-line providers stand to be affected as well. Increased documentation…
340B watch: HHS cancels immediate plans for a rebate model (updated)
March 9 update Hospitals prevailed in litigation over a 340B mandate that has imposed additional administrative requirements in the program. A federal court ruled that the Health Resources and Services Administration (HRSA) lacked statutory authority to establish that off-campus hospital outpatient departments (HOPDs) are eligible for 340B prices only if they first appear on their…
From back office to balance sheet: Why revenue cycle is becoming strategic AI infrastructure
Healthcare finance leaders are confronting a new reality: Revenue cycle performance now directly influences organizational stability, capital planning and access to care. Rising denial rates, expanding prior authorization requirements and persistent staffing constraints have transformed revenue operations from a transactional function into a strategic enterprise capability. Recent reporting from Kaufman Hall shows denials and revenue…
AI Adoption in denials management lags as other RCM uses expand
Denials management, one of the toughest tasks in hospital revenue cycle management (RCM) deserves more attention from AI experts, but RCM execs are not diving in with AI solutions for multiple reasons. About one in five healthcare providers apply AI to denials management, a 2025 Bain & Co. survey found. Instead, providers have turned more…