Health Plan Weekly

The growth of outpatient facility fees “derives from the intersection of the United States’ increasingly consolidated health care provider market, highly complex health care billing systems, and frequently inadequate health insurance coverage,” according to a new study from the Georgetown University Center on Health Insurance Reforms (CHIR). The study’s authors and managed care experts tell AIS Health, a division of MMIT, that unless regulators and policymakers act, the trend that serves as a tool for maximizing hospital revenue is likely to intensify. 

Facility fees are charges assessed by hospital systems for care delivered in an outpatient setting “that ostensibly cover the institution’s operational expenses for providing care,” the report says. They are separate from the professional claims that physicians, nurse practitioners, and other health care professionals submit [to insurers] for reimbursement for their services and expenses.” The practice of charging those fees is likely to happen whenever an independent practice is acquired by a health system — a frequent occurrence in recent years. 

In recent days, health plan members and the U.S. Dept. of Labor (DOL) filed lawsuits against The Cigna Group and UnitedHealth Group, respectively, over what they call unfair, systematic patterns of claims denials. Experts tell AIS Health, a division of MMIT, that the processes behind claims denials in the commercial space — and the purpose-built software that carriers use to adjudicate those claims — are likely to be the subject of intense legal and political scrutiny in coming years. 

Plan members seeking to form a legal class filed a suit against Cigna in a California federal district court on July 24. The complaint centers on what it calls an “illegal scheme to systematically, wrongfully, and automatically deny” claims using “an algorithm known as PxDx” that Cigna “relies on…to automatically deny payments in batches.” 

CVS Health Corp. beat Wall Street’s consensus second-quarter earnings projections, but it raised concerns among analysts by lowering its earnings guidance for 2024. Humana Inc., meanwhile, also beat the Street’s second-quarter earnings estimate. Both firms reported that this year’s high utilization levels in Medicare Advantage — a source of consternation for investors — persisted. 

Overall, CVS took in $88.9 billion in the second quarter, up $8.2 billion year over year. However, its quarterly, year-over-year operating income decreased by $521 million to $4.48 billion; adjusted earnings per share (EPS) amounted to $2.21, down from the second quarter of 2022’s $2.53. CVS confirmed its full-year EPS guidance of $8.50 to $8.70.