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2021 Revenue Cycle Challenges - Beyond the Pandemic

By Richard Parker, Executive Director and Brian S. Herdman, Operations Manager - Financial Reimbursement

Heading into 2021 hospitals and physician practices continue to battle the COVID-19 pandemic and its financial effects on the industry. However, there are many other issues to grapple with as the new year unfolds.

1. Price Transparency Regulations – as of January 1, 2021, hospitals are required to comply with the new transparency regulations. These onerous regulations require hospitals to post their charges, self-pay prices, negotiated charges and payer-specific minimum and maximum negotiated charges for all services rendered. In addition, hospitals must post up to 300 “shoppable” services that are grouped with ancillary services provided. This process will be time-consuming and will require constant adjustments as changes in charges and contracts occur.  The impact on payer negotiations is unknown but will clearly change the face of future contracts.   

2. Medicare Physician Fee Schedule Changes – the Centers for Medicare and Medicaid Services (CMS) has issued major changes to the office visit work Relative Value Units (RVUs) and partially redefined the billing codes used for Evaluation and Management (E/M) office visits. The increase in RVUs is offset by a corresponding decrease in the Conversion Factor of over 10%. Physicians billing for many office/outpatient E/M services should realize increases from RVU-based payments. However, surgeons and other procedure-dependent physicians will have decreases in payments as the overall changes are budget-neutral.  Hospitals and physicians will need to work hand-in-hand to renegotiate their own agreements, as well as payer contracts since wRVU changes could affect productivity measures.  

3. Physician Drug Payment Final Rule – this new rule effective January 1, 2021 reduces drug prices for 50 drugs to “most favored nation” (MFN) pricing. This new rule also eliminates the 6% cost “dose add-on.” This impact will be most severe for oncology drugs and other specialty drugs. A quick look suggests that international pricing is about a quarter of the U.S. price. Although significant, this new rule will be phased-in over four years, 25% in 2021.

4. Ongoing Self-Pay Management – the ever-growing self-pay population is more problematic than ever, especially since the onset of the COVID-19 pandemic. It is imperative that hospitals stay informed regarding state and federal insurance assistance in order to properly communicate with patients that present as uninsured or underinsured. Providers must provide clear options on pricing and payment options for all self-pay patients to ensure patient satisfaction and optimal reimbursement.

5. Telehealth – regardless of how long the pandemic lasts it is clear that telehealth is here to stay! Providers must stay on top of the billing and coding requirements as the changes are very fluid. The pandemic has shown that effective and efficient processes can be employed remotely; however, much like concerns over working at home, these processes should be reviewed for ongoing compliance.

These are just a few of the ongoing 2021 challenges and while more changes are likely sooner than later, these are ones you can count on impacting your providers. 

For more information, please contact Richard Parker, Executive Director at 609-918-0990 or

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