Litigation Finance Blog | Revenue Recovery

Revenue Recovery

Healthcare Providers: Is the IDR Process or Litigation the Right Revenue Recovery Strategy for You?

Both the federal Independent Dispute Resolution (IDR) process and litigation are powerful tools in healthcare revenue recovery. In many scenarios, the No Surprises Act (NSA) has exacerbated revenue cycle challenges such as delayed payments and adverse impacts on cash flow and financial stability. Understanding when to use IDR and litigation with personalized guidance from Allia Group can help providers make strategic decisions to maximize revenue recovery from underpaid insurance claims.* Utilizing the IDR Process and Litigation To Solve Healthcare Revenue Recovery Challenges While the NSA aims to protect patients from unexpected bills, it has also introduced complexities for providers seeking fair compensation for out-of-network (OON) services. Terminated contracts, delayed payments, and underpayments have led to significant revenue cycle disruptions, threatening the financial stability of many healthcare providers. These disruptions can have long-term impacts and force providers to explore new avenues for revenue recovery. IDR and litigation present viable options, but knowing when to use each is key to success. When to Use the IDR Process for Healthcare Revenue Recovery The IDR Process is most effective for resolving out-of-network disputes related to recent procedures and surgeries within the last 30 days from receiving the EOB. It offers a structured and relatively accelerated resolution process, ideal for singular procedures or multiple claims in this timeframe that can be batched together. IDR is available when federal or state laws explicitly define the process and types of claims which can use it. Where a state has legislated a state IDR process, it is usually available for disputes related to local state insurance plans versus most federally regulated plans. Federal IDR is available for both federal and state regulated plans, where the state does not have its own IDR process. Limitations of the IDR Process Time Constraints The IDR process operates under strict time limitations, leaving many existing provider claims ineligible. Federal IDR is only available for claims involving services rendered on or after January 1, 2022. The process begins only after a 30-day open negotiation period fails to resolve the payment dispute. Providers then have just four days after the negotiation period ends to initiate IDR, making the timeline tight and challenging for those who may need more time to gather necessary documentation or who manage high claim volumes. Batching Restrictions Batching claims within the IDR process is highly restricted, limiting its effectiveness. The claims must share the same CPT code and dates of service must be within a narrow 30-day window. There is also a maximum number of 25 items allowed per batched dispute. These stringent batching requirements are particularly problematic for providers dealing with claims needing to all be against the same self-funded ERISA plan and the issue of batching “similar” CPT codes. This reduces the efficiency and financial viability of pursuing IDR for batched cases. Insurer Advantage and the Qualifying Payment Amount (QPA) The IDR process has been significantly influenced by powerful insurance lobbies, often skewing the outcomes in favor of insurers. Since the implementation of the NSA, the use of the Qualifying Payment Amount (QPA) has been a contentious point, as the QPA tended to favor insurers by anchoring payment decisions closer to their interests. Although recent legal challenges have led to rule updates involving the QPA, progress is slow and systemic biases remain. Administrative Complexity and Financial Burden Engaging in the IDR process requires thorough preparation, documentation, and procedural compliance. This adds administrative complexity, strains resources, and diverts focus from healthcare delivery. Providers must also pay upfront fees for the administrative costs of initiating the process and the fees of the IDR entity that ultimately decides the appropriate payment amount. The prevailing party in IDR recovers the IDR entity fee. However, if the provider does not prevail in the IDR decision, they are responsible for covering the entire IDR entity fee, compounding the financial risk and burden associated with the IDR process. Allia Group can finance these upfront fees for providers to remove this burden. When to Use Litigation for Healthcare Revenue Recovery Litigation can serve as a robust alternative when IDR constraints impede fair recovery. It is suitable when providers cannot reach an agreement with insurers for OON reimbursements, whether or not such services are covered under the NSA or a state statute. Litigation can also be utilized for in-network disputes when providers face underpayments, downcoded claims, or contractual breaches—subject to the dispute resolution provisions within a provider’s contract. Litigation is particularly advantageous for pursuing older claims and those beyond IDR’s scope, allowing for potential recoveries across multiple years based on each state’s statutes of limitation. With Allia Group’s combination of legal expertise and advanced data analytics, providers can identify the most favorable recovery strategies, ensuring that all potential avenues for adjudicating reimbursement disputes are thoroughly explored and optimized. How Litigation and Litigation Finance Solve IDR Limitations Broader Claim Scope Litigation allows healthcare providers to pursue a broader range of claims, including in many instances those that fall outside the narrow timeframes of IDR. Providers can often include underpaid insurance claims from before the implementation of the NSA in the same lawsuit as those post-NSA, potentially enabling larger recoveries across multiple years. This strategy extends the conventional revenue cycle timeline and recaptures insurance balances by approximately up to six years, depending on the state’s statute of limitations. Flexible Bundling Litigation allows a provider to aggregate many smaller underpayment claims into a single, large-scale lawsuit against payers, maximizing opportunities for recovery. Allia Group’s litigation finance strategy has the ability to aggregate claims from multiple providers into one case, allowing for larger cases and more efficient use of legal resources. Financial Relief from Upfront Costs Allia Group’s litigation model helps alleviate financial pressure on providers by purchasing underpaid insurance claims and covering associated litigation costs. This approach shifts the financial burden away from providers, ensuring they can continue focusing resources on delivering quality healthcare services without financial strain associated with litigation. Reduced Administrative Burden Allia Group also reduces the administrative burden on providers of having to manage the long

November 7, 2024 No Comments

Legal Finance

6 Ways Legal Finance is Transforming Healthcare Provider Reimbursement Strategy

The reduction in healthcare providers margins has become particularly challenging. In large part, these are due to health insurers’ problematic behavior, which is centered around maximizing insurer profits by routinely rationalizing below-market reimbursements or failing to pay providers for their critical services altogether. For example, emergency medicine physician groups are experiencing a 39% reduction in out-of-network reimbursements since the No Surprises Act’’s (NSA) implementation. Meanwhile, insurers are enjoying record profits. Payors wield vast power to make unilateral reimbursement decisions, particularly in out-of-network situations. Providers must implement new creative approaches to their payor reimbursement strategy in order to level the playing field. Legal finance is one of those strategies. Innovative solutions like Allia Group’s litigation model developed specifically for the healthcare sector are starting to revolutionize the healthcare reimbursement industry by providing both essential financial support and its successful litigation platform to providers. Thus, providers are empowered to battle insurance companies for the rightful reimbursement they are entitled. A wide variety of providers can benefit from adding litigation finance to their healthcare revenue recovery and revenue optimization strategy. Here are 6 ways legal finance is transforming provider reimbursement strategy: 1. Financing Variable Costs of Litigation Litigation is extremely costly and involves wide-ranging expenses, including legal fees, court fees, and expert witnesses, as well as all costs associated with data extraction, synthesis, and analysis. This financial burden can deter providers from seeking justice for the fair compensation to which they are entitled. Allia Group’s unique model of financing litigation and managing pursuit of the claims provides a vital solution for healthcare providers. By financing the uncertain expenses of litigation and arbitration against insurers, Allia enables providers to pursue legal action without having to allocate their own capital, alleviating financial pressure. Consequently, providers can focus their resources on the core mission of delivering quality healthcare while Allia Group’s litigation finance ensures that the providers are fairly compensated for those services. 2. Cash Flow Improvement Increasing payer denials and delays are “wreaking havoc on the revenue cycle” of hospitals and healthcare providers, leading to volatile accounts receivable balances and reduced cash reserves. Reports from various sources including the AHA highlight how rising denial rates and billing delays exacerbate financial challenges and impede patient care, with small healthcare providers being hit the hardest. An upfront payment for the disputed claims can be structured into the Allia transaction model. This immediately eases financial pressures. Ongoing payments as claims resolve can continue to fuel provider cash flow. Healthcare legal finance extends the conventional revenue cycle timeline to recapture insurance balances by six years or greater, depending on the state. Therefore, a litigation strategy complements traditional revenue cycle management (RCM) solutions and services and offers a new healthcare revenue optimization strategy. 3. Bundling Claims Levels the Playing Field Health insurance behemoths’ size and resources provide challenges to one-off litigation by a single provider. In fact, UnitedHealthcare has been called “too big to fail” due to its power and rising control over all arms of the healthcare delivery system. Payors also create systemic inequity with bad behavior and underhanded strategies to maximize their own profit. For example, the unraveling MultiPlan scandal illustrates the lengths insurers will go to pay less than their fair share, using illegitimate repricing models to suppress provider payments. This is just one of many examples of payors acting in bad faith at the expense of healthcare providers and patients. Allia Group’s unique litigation finance platform serves as a strategic solution for this inequity. Allia orchestrates an alliance between multiple providers, allowing their claims to be bundled together in a single lawsuit against an insurer. These cases improve litigation economics and demonstrate to a court that the carriers’ behavior is consistent across providers. By implementing this novel approach, healthcare litigation finance specialists can help providers level the playing field. 4. Negotiation Leverage The strain on provider and payer relationships is at an all-time high. The AHA’s 2022 survey found that 78% of hospitals believe their relationships with insurers are getting worse. Negotiations are growing more tense and appear in headlines more often. Payors will stop at nothing to improve their profits, even canceling contracts with providers and then systematically underpaying the now out-of-network claims. Further, with contract negotiation disputes increasing almost 70% between 2022 and 2023, it is challenging for providers to get insurers to comply with contracts that will keep their practices alive. The pressure of ongoing litigation compels payers to reimburse providers fairly for their services. Allia Group’s healthcare litigation finance platform also offers an opportunity for enhanced negotiation leverage, as providers can use pressure from an outside organization to negotiate favorable terms to potentially return in-network or enter for the first time. 5. Resource Allocation Cost is just one resource impacting providers when litigating against health insurance companies. Litigation also requires dedicated workforce resources, often diverting not just operating budget dollars but manpower and labor resources. Successful litigation also requires specialized expertise. While larger providers may have the budget to hire law firms and cover various additional expenses, smaller providers often do not have the resources available to properly leverage this revenue recovery opportunity. By assigning the claims to an organization like Allia Group, who can then bundle and incorporate them into one or more larger lawsuits, providers can continue to focus on delivering quality healthcare rather than the heavy lifting on the legal end. 6. Revenue Opportunity Identification Using proprietary data analysis and multidisciplinary expertise, Allia Group can find unrealized potential in many insurer claim underpayments and denials going back through years of data. Our healthcare litigation and recovery experts provide a comprehensive analysis of insurer receivables to find otherwise missed revenue recovery opportunities. Allia fuses together deep legal, RCM and finance experience in offering a turnkey solution. For example, Allia Group helped NES Health, a multi-state hospital-based emergency physician group, build a data extraction process to identify pursuable underpayments. The process ultimately identified over $100 million in recoverable claims and will continue to do so as new claims appear, extending the revenue cycle

August 20, 2024 No Comments

The Effects of the UnitedHealthcare Cyber Attack – What Providers Need to Know

Payers

The Effects of the UnitedHealthcare Cyber Attack – What Providers Need to Know

On February 21, 2024, UnitedHealth Group reported that a threat actor had unauthorized access to one of its Change Healthcare environments. The reported hack impacted billing and care authorization portals, causing prescription backlogs and revenue losses for providers. This situation poses potential threats to worker paychecks and patient care. The devastating consequences of the biggest cyberattack on healthcare have reverberated throughout the industry and raised questions about how the massive insurer is handling the fallout. How United Healthcare is Exploiting “An Emergency They Created” Furthermore, UnitedHealth’s exploitation of the crisis, an “emergency it created” raises serious ethical concerns. The recent ransomware attack left an Oregon medical practice in dire straits, with UnitedHealth swooping in for an emergency takeover. This move, amidst the chaos caused by the weeks-long outage of UnitedHealth’s Change Healthcare systems, seems opportunistic and callous. Instead of proactively assisting struggling healthcare providers, UnitedHealth has seemingly profited from the situation. This underscores the troubling power dynamics in healthcare, where a massive insurer with extensive resources can pressure struggling providers into selling. It’s a reminder of the need for transparency and accountability in the healthcare industry. Patients and providers alike deserve better than to be at the mercy of big insurance and its profit-driven interests. For example, providers like Dr. Margaret Parsons in Sacramento, California, are facing serious challenges after the cyberattack. Since the attack, Parsons and her colleagues have been unable to bill for their services electronically, leading to financial strain and uncertainty. This situation highlights the potential risks of consolidating vast amounts of sensitive information under a single entity. The attack has exposed the fragility of relying on a single company to manage such critical systems and underscores the danger of UnitedHealth’s power. Senate Will Investigate The Senate’s set to “grill” UnitedHealth over the recent cyberattack on Change Healthcare. The fallout from this attack is clearly tragic and its significance cannot be ignored. Providers struggle with copious delayed payments and patients cannot obtain the medications they need. “I’m hundreds of hours unpaid at this time,” Amy Zelidman, a private practice psychologist wrote. “It feels as though people in my field with smaller practices have been put on the back burner while they prioritize larger health care organizations, which is disheartening and maddening because the damage is so immediate.” This scenario underscores a larger damaging trend of providers being at the mercy of behemoth providers like UnitedHealth, absorbing the consequences of UH’s carelessness. Using Litigation to Recover Funds Litigation is being used as a strategy for providers to regain funds after one of the biggest healthcare cyber attacks in history. Provider lawsuits are piling up against UnitedHealth and Change Healthcare following the February 21 attack that disrupted operations nationwide. In fact, at least six federal lawsuits were filed between March 14 and 20, with practices citing financial losses from missing payments and service disruptions. For example, Advanced Obstetrics & Gynecology in Mississippi, the first to file, alleged that Change Healthcare’s actions led to a cutoff from vital services and impacted payment for patient care. Bay Area Therapy Group in California also had to resort to emergency loans at 50% interest to maintain operations. This different form of litigation aims to hold UnitedHealthcare accountable for their mishandling of the devastating attack.

March 30, 2024 No Comments

Payers

The Imbalance of Healthcare Consolidation: Payers’ Influence on Providers

Healthcare payers, including giants like UnitedHealthcare and its subsidiary Optum, are increasingly expanding their influence into the provider side of healthcare. This trend raises significant questions about competition and ethics within the industry. With UnitedHealth Group’s Optum now the largest employer of physicians in the U.S., there is a growing concern that payers are aiming to control healthcare delivery, potentially to prioritize their own profits over patient care. This level of consolidation could lead to reduced competition, limiting choice for patients and potentially driving up costs. It also raises ethical concerns about conflicts of interest, as payers may prioritize their own provider networks in contract pricing, potentially at the expense of independent providers. The balance of power in healthcare is shifting, and it’s crucial to ensure that patient care remains the top priority amidst these changing dynamics. The Trend: Providers Buying Payers Payers continue to acquire providers in an alarming trend. This may be an attempt to control the entire healthcare system for their own profit. In fact, according to Becker’s Payer, UnitedHealth Group’s Optum is the largest employer of physicians in the U.S. In the first five days of 2024, three deals were already pending. Now, Optum is attempting to buy an Oregon physician group, but is experiencing major pushback. In a report from Oregon Health Authority, Oregon Senate Majority Whip Sara Gelser Blouin pointed out that Optum is “a massive organization that is not shy about repeatedly cutting corners, skirting the law, and putting patients at risk.” It is important these deals remain in the spotlight to curb harmful consolidation trends. Are Insurers Favoring Their Own Groups in Contract Pricing to Limit Competition? The Justice Department is investigating United Health Group for potential antitrust violations, according to The Wall Street Journal. Investigators are examining whether UnitedHealthcare has favored their Optum-owned groups in contract pricing, potentially limiting competition. This investigation comes amid broader antitrust efforts by the Biden administration, which views the healthcare industry as a significant focus area. A lawsuit by Emanate Health has also accused Optum of anti-competitive behavior, alleging efforts to prevent patients from contacting doctors who joined competing medical groups. The outcome of this probe could have significant implications for competition within the healthcare industry. United Health Bought Providers and Exploited An Emergency They Created UnitedHealth’s exploitation of an “emergency it created” raises serious ethical concerns. The recent ransomware attack left an Oregon medical practice in dire straits, with UnitedHealth swooping in for an emergency takeover. This move, amidst the chaos caused by the weeks-long outage of UnitedHealth’s Change Healthcare systems, seems opportunistic and callous. Instead of proactively assisting struggling healthcare providers, UnitedHealth has seemingly profited from the situation. This underscores the troubling power dynamics in healthcare, where a massive insurer with extensive resources can pressure struggling providers into selling. It’s a reminder of the need for transparency and accountability in the healthcare industry. Patients and providers alike deserve better than to be at the mercy of big insurance and its profit-driven interests. There is Power in Numbers What can you do when insurers continue to amass power? Providers must also find strength in numbers themselves. Along with collaborative conversations to share best practices and strategies, healthcare providers, physician groups, hospitals, EMS specialists, and more can join forces by accessing Allia Group’s bundled litigation model to recover withheld revenue from insurers. Contact us for more information.

February 28, 2024 No Comments

Providers

The NSA’s Damaging Effect to Radiology

The No Surprises Act (NSA) has introduced significant challenges for radiologists, as insurance companies wield increasing power in payment disputes. Recent research sheds light on the financial struggles faced by radiologists under the NSA, highlighting the broader implications for the industry. This blog explores the impact of the NSA on radiology, including its effect on in-network rates and administrative fees, as well as the concerns raised by stakeholders. Join us as we delve into the evolving landscape of radiology finance and the implications of the NSA’s implementation, and discuss paths to radiology revenue recovery. Insurers Have the Power According to Radiology Business, Insurance companies continue to wield power over radiologists. A new study reveals their financial challenges in NSA-related payment disputes: Radiologists break even in 11-27% of disputes, leaving insurers wielding much of the power Published in the American Journal of Roentgenology, the study shows that radiologists rarely break even in disputes initiated under the NSA, limiting their bargaining power and favoring insurers. The study concluded that it is “financially inviable to use the [No Surprises Act independent dispute resolution] process to resolve reimbursement disputes with payers.” In-Network Rates are At Risk Radiologists’ in-network rates are at risk. A recent study reveals that, despite being nearly 99% in-network before the No Surprises Act, health insurers’ misuse of the law could undermine this progress. The study, analyzing 15 years of data, notes that effective negotiations, provider consolidation, and state-level legislation led to a decline in the out-of-network rate from nearly 13% in 2007 to 1% in 2021. However, the NSA’s implementation is impacting these gains as insurers leverage the law to pressure in-network physicians to accept lower payments. According to industry watchers quoted in Radiology Business, “Commercial insurers are using the legislation as a cudgel, forcing in-network physicians to accept lower payment or risk being carved out of crucial commercial contracts.” The Dangerous IDR Access Administrative Fee Hike The final ruling for NSA administrative fees is damaging to radiologists. A “significant victory” came earlier this year from TMA’s prior lawsuit, leading to the successful strikedown of a proposed 600% fee hike. However, the lawsuit was for naught. Starting in 2024, the fee to initiate the IDR process will more than double, from $50 to $115. The new fee disproportionately impacts radiology, and the American College of Radiology remains committed to addressing concerns around access to IDR for the specialty. Radiologists Experiencing Cash Flow Issues 61% of NSA IDR disputes still remain unresolved, causing major cash flow issues for providers, according to a new report from the U.S. Government Accountability Office released last Tuesday. In an article from Radiology Business, stakeholders express concern over poor responses and hefty fees for providers, hindering enforcement efforts. Further, it’s been found that over 75% of out-of-network disputes involve emergency services while “ancillary” services like radiology contribute to the rest. With consensus emerging from Congress, the courts, and now the GAO, there is a shared agreement that the implementation of the NSA requires further attention and correction. UnitedHealthcare Demands Radiologists Accept Lower Payments Payers continue to take advantage of radiologists, as UnitedHealthcare demands they accept “significantly decreased payments for providing care” to remain in-network. UnitedHealthcare is threatening to knock all Medical Imaging of Fredericksburg centers out of its network in Virginia as of December 31st if an agreement isn’t reached. That also means patients will have to pay higher, out-of-network costs if they require an X-ray, ultrasound, or other services. Further, patient access to necessary care is jeopardized as these medical imaging facilities are the only local providers to offer crucial cancer treatment services like PET/CT. Thus, it is evident radiologists remain undercompensated and patient well-being is less important to UnitedHealthcare than profits. The NSA is Pushing Radiologists to the Brink Concerns regarding the No Surprises Act’s influence on healthcare finance are now unfolding just as anticipated, as the act continues to cause ripples in the healthcare sector and “pushes providers to the brink.” This has already led to significant bankruptcies, including Envision Healthcare and American Physician Partners. Radiology Partners, with $2 billion in debts due, is highlighted as potentially vulnerable. Other groups on the radar include ambulance company Global Medical Response and staffing firm TeamHealth. The NSA’s impact on out-of-network exposure continues to pressure healthcare companies, potentially leading to financial strain. The IDR process, taking over 250 days, is causing cash flow delays and heavily impacting liquidity. What can Radiologists Do to Level the Playing Field? Radiologists play a crucial role in the larger battle against payers’ unfair practices. The American College of Radiology is calling on providers to report incidents where insurance companies misuse the No Surprises Act, threatening exclusion from their networks unless lower reimbursements are accepted. “The problem with medical billing law is really in many ways a Trojan horse. The law is being used by some insurers to push through some policies that allow them to reduce reimbursement to hospitals and physicians benefiting the insurance company, but at the expense of the hospitals, physicians and the patients they take care of. This is completely unrelated to the issue of surprise medical billing,” explained Dr. Richard E. Heller, III, MD, MBA, FACR, RSNA Board member, associate CMO for health policy and communications, and national director of pediatric radiology at Radiology Partners. By documenting these cases, radiologists contribute to building a case against these payer practices, ultimately protecting providers and patients. Radiologists who cannot reasonably utilize the IDR process can find a more effective path to reimbursement with Allia Group’s unique bundled litigation model. Reach out to schedule a consultation.

January 30, 2024 No Comments

Revenue Recovery

Harnessing the Power of Payer Litigation to Empower Revenue Recovery

Harnessing the Power of Payer Litigation to Empower Revenue Recovery Payer litigation is becoming a potent force as healthcare providers increasingly stand up against health insurance payers to demand fair compensation for their vital services. In this blog, we delve into impactful lawsuits, highlighting the need for accountability and how Allia Group empowers healthcare providers in their fight for revenue recovery. 1. Arkansas ASCs Demand Fair Reimbursement Little Rock ASCs, Freeway Surgery Center, and Centerview Surgery Center, are seeking millions in unpaid reimbursements from Arkansas Blue Cross and Blue Shield. Despite serving as temporary hospitals during the pandemic, these ASCs claim they weren’t properly reimbursed at hospital rates. Lawsuits against insurers should persist until fair reimbursement is ensured for all providers. Read about the Arkansas ASCs lawsuit on Becker’s Payer 2. Healthcare Justice Coalition vs. UnitedHealth Group The Healthcare Justice Coalition (HJC) takes legal action against UnitedHealth Group, seeking over $2.5 million in damages for the underpayment of emergency physicians. The lawsuit highlights the threat to healthcare stability and advocates for fair compensation. Systemic underpayments jeopardize emergency physician groups and impact patient care. Allia Group supports the pursuit of justice for under-reimbursed healthcare providers. Learn more about the HJC lawsuit 3. Arizona Healthcare Groups Challenge BCBS In Arizona, a legal battle unfolds as healthcare groups representing over 300 doctors take on BCBS, the state’s largest medical insurer. Allegations include pressuring providers into accepting lower reimbursements and paying terminated contracts as if they were still in-network. The lawsuit seeks justice against unfair practices, emphasizing the importance of legal action to halt problematic behavior from insurers. Discover more about the Arizona lawsuit in the comments section 4. Cigna’s $172.3 Million Settlement Litigation works! Cigna faces accountability for fraudulent behavior, agreeing to disperse $172.3 million to settle False Claims Act violation accusations. The payer allegedly submitted incorrect Medicare Advantage patient data to secure higher payments. This case underscores litigation’s power against payers. Explore Cigna’s settlement details Empower Your Revenue Recovery with Allia Group Healthcare providers, don’t let unfair reimbursement practices hinder your financial stability. Explore how Allia Group’s bundled case model and litigation finance platform can assist you in recovering withheld revenue and contact us for a consultation

December 29, 2023 No Comments

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