Author: Kelly Wisness

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Highlights of this episode include:

• What the webinar is covering
• Why it is an important topic to cover
• What is a spinal fusion
• Pitfalls in spinal fusion coding
• Documentation’s role in coding accuracy
• What difficulties coders typically face when coding these procedures
• Joint replacement coding
• Actionable tips

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast.  We’re pleased to welcome back Kristen Eglintine, BESLER’s senior manager of revenue integrity services of coding and projects. In this episode, Kristen will provide us with a glimpse into BESLER’s next free Webinar, Advanced Specialty Orthopedic Coding Tips: Spinal Fusions & Joint Replacements, that we’re hosting live on Wednesday, February 4, at 1 PM Eastern Time. Welcome back and thank you for joining us, Kristen.

Kristen Eglintine: Hi, Kelly. Well, and thank you for having me back. I’ve got some good information to share today, so I’m excited to be here.

Kelly: Awesome. Let’s go ahead and jump in then. So BESLER’s upcoming webinar, Advanced Specialty Orthopedic Coding Tips: Spinal Fusions & Joint Replacements, offers an in-depth look at ICD-10 PCS Coding for these complex procedures. Why is this an important topic to cover?

Kristen: So great question. Way to start it off. So orthopedic coding is a top priority for BESLER this year as it was actually driven by listener feedback. Coders and CDI specialists from our recent past webinars asked for more focused orthopedic procedure training. And that’s always something we look to prioritize. Why the strong interest in orthopedics, though? I’d say one of the reasons orthopedics is so engaging is that it really checks all the boxes. Complex anatomy. It has big financial impacts and outcomes that you can clearly see in the patients’ lives. So, when you’re working and coding cases like joint replacements or spinal fusions, it just doesn’t feel routine. It can feel significant and rewarding. There’s also clinical and human impacts. Orthopedic cases often restore mobility and independence. So, coders feel more closely connected to meaningful patient outcomes, whether that just be someone being able to walk again or just experiencing some pain relief. There’s also an intellectual challenge as orthopedics requires strong understanding of detailed anatomy. Orthopedic cases have a financial and compliance impact. Procedures are high-cost, high-volume, and heavily scrutinized, so accurate coding has a big impact on revenue integrity. So, when you put all of that together, it’s a topic that’s well worth exploring in more depth.

Kelly: Yeah. I mean, it sounds intriguing. You know Let’s dive right in with spinal fusions. What exactly is a spinal fusion? And why might a patient need one?

Kristen: Spinal fusion is a surgery that permanently joins two or more vertebrae so that they heal into a single solid bone and no longer move independently. The most common conditions treated with spinal fusions are those that would cause instability, deformities, or ongoing nerve compression, especially when conservative treatments just haven’t worked. In many cases, patients have already tried options like PT, they’ve tried medication or injections without lasting relief. These situations often stem from degenerative changes in the spine. They can stem from traumatic injuries or underlying structural abnormalities. And then over time, these issues lead to pain, loss of function, or neurological symptoms that significantly impact a patient’s quality of life. So, when that happens, a spinal fusion becomes a way to stabilize the spine. It reduces abnormal movement and relieves pressure on the nerves. Coding a spinal fusion is tricky. The code set expects precise detail on anatomy, levels, approach, techniques, and devices. And all of that has to be pulled correctly from the operative note. So then even small misreads can lead to the wrong code, the wrong number of levels, or just missed add-on codes.

Kelly: Can you expand on that last thought? What does a coder need to pay special attention to in an operative note to code a spinal fusion correctly?

Kristen: So great question. Spinal anatomy is complicated, and that’s where a lot of the coding challenges come in. Coders have to clearly understand the difference between vertebral segments versus inner spaces. They have to know how to correctly count levels and recognize when a fusion crosses regions like cervical into thoracic or lumbar. On top of that, there are multiple surgical approaches and techniques. A surgeon might use an anterior, posterior, lateral, or even a combined approach in the same case. And each of those maps to different codes. Depending on which vertebrae are being fused, the patient’s position could vary. Sometimes they’re prone while the surgeon accesses the spine from the back, and other times they’re supine, and the surgeon is working through the neck. Coders also need to pay attention to the devices used, whether that’s cages, interbody fusion devices, or instrumentation versus simple fixation hardware, and make sure the bone graft types and sources are captured accurately.

Kelly: Very interesting. It sounds very intricate and complex. Could you highlight the most common pitfalls in spinal fusion coding?

Kristen: Yeah, there definitely are some. A few coding challenges that we will really try to address in the webinar are– the first one I’d say is around device selection. Expanding on what I just mentioned, coders sometimes confuse the internal fixation hardware, like plates and screws with the true fusion device, such as the interbody fusion device, a cage, or the bone graft itself. That distinction matters in ICD-10-PCS, and it’s not always obvious in the operative note. Another big pitfall has to do with coexisting procedures performed during a spinal fusion. So, fusions are often done alongside a laminectomy or a diskectomy or an osteotomy or deformity corrections. And coders have to know which of these services are considered part of the fusion and which ones can be reported separately. And again, this is not always a clear line. One reason it’s so challenging is that multiple procedures often happen in the same anatomical region. When several spine procedures take place at the same operative site, coders have to carefully interpret the operative note to understand exactly what was done, why it was done, and whether it meets the definition of a separate PCS route operation. Another challenge is that some procedures are actually inherent to the fusion itself. So, for example, let’s look at decompressive work.

So that may simply be part of the surgical exposure needed to complete the fusion, or in other cases, that decompression is a separate, clinically necessary service. And knowing the difference requires close reading and a solid understanding of PCS definitions. And then there’s the surgical approach. So, the approach used to reach the vertebrae, again, so whether that’s anterior or posterior or lateral or combined, it can be tricky to identify and does have a direct impact on the code selection. That means coders really have to slow down and carefully read the operative note to make sure they’re interpreting it correctly.

Kelly: Wow, thank you for sharing those pitfalls with us. We emphasize documentation’s role in coding accuracy in many of our webinars. Would you say that’s especially true for spinal fusions as well?

Kristen: Absolutely. Documentation variability is another big challenge. Surgeons don’t all describe levels, approaches, and devices the same way. So, coders have to translate that narrative language the surgeon would use into very specific code terms. And when those details aren’t clearly there or documented, clarification becomes critical, such as a query. Otherwise, you’re risking denials, audits, or just inaccurate data.

Kelly: So let’s go ahead and turn into joint replacements. What difficulties do coders typically face when coding these procedures?

Kristen: So joint replacement coding can be tricky, just as spinal fusions, because there are so many code options, a lot of documentation detail to capture, and even small mistakes here can have a big financial impact too. Hip and knee arthroplasties in particular come with dozens of possible ICD-10 PCS codes and related billing combinations. So, translating the operative no into the most accurate set of codes isn’t always straightforward. Let me give you a few examples of the level of detail coders really have to capture when it comes to joint replacements, because this is where it can get tricky.

So, first, there’s the anatomic and procedural detail. Coders need to know the exact side, so right or left. They need to know the specific joint involved. So, it could be hip, it could be a knee, sometimes even a shoulder. And whether the procedure was partial or total or a revision, every one of those details changes the code. Revision surgeries add another layer of complexity. That documentation has to be clearly spelled out, including which components were removed, which were left in place, and which were replaced. So, things like the femoral or tibial component, the liner, or the patella, different combinations of those actions can point to entirely different codes. And then on top of that, there’s a lot of code choices that sound very similar.

So, in ICD-10 PCS, a joint replacement can translate into hundreds of possible options based on body part, approach, device, and material. That really increases the risk of inconsistency or miscoding if the documentation isn’t crystal clear. For revisions in particular, coders are often deciding between codes that seem almost interchangeable, like removal, replacement, or revision of a synthetic substitute. But, really, each represents a distinct root operation. Understanding those subtle differences is critical because it directly affects the PCS code and how the procedure is ultimately reported.

Kelly: Wow, so it seems joint replacement coding is every bit as challenging as spinal fusion coding. Can you tell us a little bit more?

Kristen: Oh, yes, it definitely is every bit as challenging. When it comes to total hip and knee replacements, the documentation really matters. Coders need clear details on laterality and the joint involved. Again, right versus left, hip versus knee, and then whether it’s total or partial they also need to know the type of material of the prosthetic. So, whether it’s cemented or uncemented, they need to know whether it’s metal or ceramic and whether it is an initial replacement or a subsequent procedure. Another big distinction is whether the surgery is a true replacement or a revision in ICD-10 PCS. So, a revision usually means adjusting or correcting part of an existing prosthesis, like swapping out a liner or repositioning a component. A replacement, on the other hand, involves removing the old prosthesis and putting a new one in. And that distinction drives the root operation and ultimately, again, affects what code we report.

Kelly: Thank you for explaining that for us a little bit more. So, if listeners want to walk away with just one actionable tip from our conversation today, what should it be?

Kristen: If there’s one takeaway from today’s discussion, it’s this. Solid, precise documentation is the foundation of accurate and compliant orthopedic coding. Whether you’re coding a spinal fusion or a joint replacement, the level of detail in the operative note. So, anatomy, approach, devices, levels, and intent directly determines coding accuracy. It directly determines reimbursement integrity and your audit risk. Clear documentation empowers coders to choose the correct route operations, capture all clinically significant procedures, and avoid denials or data errors. And that’s exactly why training, like our upcoming webinar, is so valuable. So, I highly recommend please take an hour. Join us Wednesday, February 4, 1 PM Eastern Standard Time. I promise you won’t regret it. Thanks again for listening and being part of our audience today.

Kelly: Thank you so much for joining us, Kristen, and for giving us this sneak peek into BESLER’s upcoming webinar, Advanced Specialty Orthopedic Coding Tips: Spinal Fusions & Joint Replacements, that you’re presenting live on Wednesday, February 4, at 1 PM Eastern time. And as a bonus, you can earn CEU. Thanks again, Kristen.

Kristen: Thank you. Have a great day, everybody.

Kelly: And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

If you have a topic that you’d like us to discuss on The Hospital Finance Podcast or if you’d like to be a guest, drop us a line at update@besler.com.

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Highlights of this episode include:

• How Glass Raven started
• Connecting patient access directly to the bottom line
• How data-driven staffing models can improve revenue capture/reduce leakage
• How right-sizing staffing led to measurable financial improvement
• Where hospitals are leaving the most money on the table
• How finance and operations leaders can partner more effectively
• First steps hospitals can take to use its existing data more strategically

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast.  We’re pleased to welcome Peyton Fry. Labor is a hospital’s largest expense and one of its biggest opportunities for financial improvement. In this episode, Peyton, founder of Glass Raven, explains how leading hospitals are using data science and staffing analytics to improve patient access, reduce leakage, and boost revenue capture. Discover how hospitals can make better workforce planning decisions using analytics that link operations directly to financial performance. Welcome, and thank you for joining us, Peyton.

Peyton Fry: Yeah, thanks, Kelly. Happy to be here.

Kelly: We’re glad to have you. Well, let’s go ahead and jump in. So, Peyton, can you tell us how Glass Raven started and what problem in healthcare operations you set out to solve?

Peyton: Yeah, so Glass Raven was founded to– really what it boils down to is moving the needle meaningfully in patient access spaces for hospitals, healthcare systems, and outpatient groups. And it kind of emerged from my early days as a data analyst working for a healthcare system, working with ACOs, central scheduling, call centers, really just broadly working in operation spaces centered on patient access. And I think I didn’t really understand why I was successful as an analyst until I started going out on my own and having to sell myself as this consulting group, and discovering that even though our biggest tool set and kind of what we bring to the table for organizations is advanced data analytics, really, I think the value is in how it gets applied and adopted by an organization to not just automate some steps, remove some reporting problems, but really, really change the culture of an organization to really having executives down to line-level employees centered around the metrics we’re trying to move and understanding the decisions that they can individually make to really improve those pieces week over week. Because I think without that kind of vertical integration, you really don’t adopt a process. I think you just kind of talk about it.

Kelly: Well, thank you for sharing that about Glass Raven and your experience there. Many hospital finance teams don’t always connect patient access directly to the bottom line. Can you explain that connection?

Peyton: Yeah, so the connection between patient access and finance, I think, is normally talked about in a healthcare system once a year around budget cycles whether that be April or November for your team. Typically, when we work with organizations, we’re working with the operational group and how they’re going to change processes. And we talk about finance when it becomes pertinent for how are we going to incorporate new additions or programs or staffing into a budget cycle. So, I think a lot of the problem is that finance and operations don’t really talk to each other around patient access unless budgets involved. A lot of this is, I think, because there is really, really poor benchmarking availability for operational groups to kind of point to and say, “This is what our peers are doing,” or, “This is what we should be doing instead,” which makes it difficult, I think, for finance teams to decide whether to apply capital to a situation, whether to pull capital away into different directions. And patient access kind of has a– it’s a known paradox, but it’s hard to put a finger on it, which is we know that without patient access, we don’t see patients. But it’s hard to say how much money are we spending to get some sort of a return. And this is because, I think, between different organizations, you’ve got different payer mixes. Some people are trying to bring in revenue through commercial groups, and some groups are trying to manage costs for their capitated populations. So, I think it’s really difficult that I think you almost have to reinvent the wheel for every healthcare system based off your operations mix and your payer mix, to really have meaningful conversations between those two groups.

Kelly: Yeah, that makes a lot of sense. There’s a lot of moving parts there. How can data-driven staffing models or access analytics improve revenue capture or reduce leakage?

Peyton: Yeah, so having a strong data-driven process really comes down to how are you looking at staff productivity? Especially with referral management groups is where you’re going to really focus on capturing revenue from those high dollar specialties, or reducing patients from leaking out of your system to your competitors or local groups, because they just can’t get in contact with you, or they can’t find an appointment that works for them. So, making sure that you have strong trained agents on that referral team that know how to get the right patient to the right place at the right time, and then mapping that to a provider network that has capacity for those appointments that you’re trying to schedule for. So, you really need to look at it from both sides. You could have the best central scheduling referral management group in the world, but if you don’t have any provider capacity left, there’s nowhere to put them. It’s no longer worth spending money on your call center. You should be focusing on hiring more providers if you’re really trying to capture those commercial patients. On the flip side, if you’re trying to really control your managed population, if you’re doing Medicare Advantage or you’ve got an HMO, making sure that you get people into their appointments quickly to check off their measures, reach compliance with whatever government programs you’re participating in, making sure that it’s probably not necessarily capturing revenue for you, but it is protecting your margins because you are going to check all those boxes and get the maximum reimbursement you can for those groups.

Kelly: Well, thank you for sharing that with us. Can you share an example where right-sizing staffing led to measurable financial improvement?

Peyton: Yeah. For Glass Raven, our bread and butter normally is working with call center groups and central scheduling because it’s don’t have to worry so much about HIPAA compliance or getting into EHR data work, but it’s a space that a lot of healthcare professionals don’t like to work. So, there’s not a lot of expertise that sits in those spaces. It’s just a special place that’s near and dear to my heart. And working with groups and kind of getting them up to kind of industry standard basics for a call center really helps with staffing models. And focusing on the right metrics, abandonment rate, service level, and throwing out a lot of noisy metrics that are all related to those pieces can really help people focus and dial in what they truly need to handle a central scheduling call volume. And we work with groups and swiftly over like a period of six months to a year saw FTE reductions of like 40 to 50, numbers that even I wasn’t expecting going into it. But it was just having people at the wrong place at the wrong time, changing schedules around, and showing like, “We can do more with the same,” or, “We can do more in a lot of cases with less.” And so doing better staffing on call centers is often an easy place for healthcare systems that haven’t given it a lot of attention to optimize that workforce and get a lot of those dollars back.

Kelly: I love what you said about noisy analytics. That was a really good call out and I love the example. In your experience, Peyton, where are hospitals leaving the most money on the table when it comes to patient access?

Peyton: I think where a lot of the money gets left on the table is not understanding what dials they’re trying to move left, right, because often they just don’t have a lot of metrics to focus on. And so, they end up kind of doing whatever’s shiny. I think it’s really easy– in patient access spaces, I don’t know if it really necessarily looks like money left on the table because patient access by itself isn’t what’s creating your dollar revenues. Unless you’re seeing a provider, you’re not creating money as a healthcare system. You’re not getting reimbursed by the programs you participate in. So, I think a lot of the money is in cost control in patient access spaces that result in clinical work that gets done. So, I think focusing on kind of shiny technologies that maybe aren’t attached to a return on investment on the finance side, can lead to vendor agreements that don’t solve problems. They might look shiny, they might have AI in there and sound agentic, but they don’t necessarily result in more provider visits or more efficient provider visits because that’s really what you’re trying to get down to for revenue. So, I think there’s a lot of interplay with vendors and technology that don’t create returns. And again, it kind of goes back to the question you asked earlier is finance and operations, talk about it more than once a year and figure out on the revenue capture side and the cost control side for our populations, are the changes we’re making in patient access moving those needles in a way that we can track?

Kelly: Definitely. I mean, I love what you were saying about the new shiny technology and tools. I know so often we do get caught up in that and I completely agree with you. We were kind of heading with that. You talked about this a little bit. How can finance and operations leaders partner more effectively to make these improvements stick? And like I said, you did mention this, so I’d love to hear more about this.

Peyton: Yeah, so I think the way you make an improvement stick– I’ll probably answer this in two parts. There’s improvement sticking and there’s finance and operations leaders working together. When it comes to getting an improvement to stick, I think a great example is probably everyone that’s listening to this podcast has had an organizational venture on we’re going to totally revamp and send everyone to training for something like Six Sigma or Lean or we’re going to do a Myers-Briggs personality test and talk about how we do communication. And you do it, the training is exciting for like three, four weeks, and then it kind of fades. And it’s never mentioned again. Six Sigma doesn’t really take root because it’s really hard to kind of be accountable to it because there’s not a way– we didn’t measure going into it, how Six Sigma was going to move the needle. Therefore, we didn’t know how to apply it meaningfully later to get returns on the investment of these programs. And that’s a broad example that probably everyone’s experienced, but I think this is where people get in trouble when they engage with vendors and they don’t know what needle they were trying to move in the first place meaningfully. I think part of that is also there’s a lack of accountability by the vendor or the service group or the consultant around being transparent around what they expected to change and then what they changed at the end.

So, making sure that we have something that we’re going to agree on early and then we’re going to follow it from the executive level down to the people that have the day-to-day process changes, those agents, providers, front desk staff, making sure that they’re all talking about the same thing. We’re not just going to send our executives to training. We’re going to make sure that everyone, top to bottom, understands what service level is, understands what abandonment is, and then mapping that to the decisions that they can make. And then seeing that change week over week and talking about it. So, kind of having a vertical way to talk about a change that we’re trying to make and then watching it longitudinally and watching it weekly, especially early on. And ultimately, it becomes something you look at less and less because it sticks. But that’s where I would start there. Popping back to the first part of the question, how do finance and operations leaders partner more effectively. It’s kind of the same thing that we just talked about, but horizontally. Let’s agree upon a metric that’s important and that we’re both accountable for. And we both understands what decisions that we can make. Finance understands that this is our jurisdiction, operations. This is our jurisdiction. And then talking about the data and the kind of the turning points on when they’ll make different decisions one way or the other. If you don’t understand what decisions your partners can make and how they impact your operation or your day-to-day, you’re not going to talk to them. And you’re going to talk to them once a year when it’s mission critical and the house is on fire.

Kelly: Right. No, I mean, I love what you were pulling out, the accountability and the transparency between the groups. That makes a lot of sense. So, what are some first steps hospitals can take to use its existing data more strategically for access optimization?

Peyton: First steps I would say are take a look at all of your dashboards and decide if that dashboard ceased to exist. If I no longer had access to this data point or this metric, does anything in my day-to-day change? Does anything in my week-to-week, month-to-month change? If the answer is no, you have a fun fact dashboard that you should get rid of. And I think a lot of it comes down to hospitals have an overwhelming amount of data availability. EHRs are built to manage data clinically. I think I’m going to say I haven’t seen an EHR where I’ve been happy with the way that their business analytics is set up out of the box. This is where hospitals kind of have to invent it themselves. And they are handed a lot of stuff that they’re told is the tool of the trade, but it doesn’t apply to their problems. Leaders oftentimes, they have fun fact dashboards and then they just start making decisions based off their gut because leaders do know what’s important to them in their organization and they do know how to move the needle. But they end up having to kind of do it as a gut reaction, which makes it really hard to sell change because you can’t convince your peers of the same thing. So taking a look at what data is important to us really, what do we use to make decisions and just starting to strip out the rest so that you can focus on only what you’re actually going to use to make decisions and kind of identify these are the areas where we’re making our decisions off our gut and we do need data-driven decision ways to make this.

Kelly: Right, no, I love that. I mean, I think that a lot of us make decisions from our gut, but we kind of do need that data to back it up. Well, thank you, Peyton, for sharing your insights with us from wait times to revenue wins, how operational analytics are transforming patient access. If a listener wants to learn more or contact you to discuss this topic further, how best can they do that?

Peyton: Yeah, so easy way to find me is on LinkedIn. I’m at my desk most of the time working with data one way or the other, so I’ll get those notifications quickly. You can also reach out to us over our website. That’s at glassraven.health, spelled just like it sounds. You can check out kind of some of our past projects, how we do work, what we do for partnerships, easy way to find us there as well.

Kelly: Awesome. Thanks for providing that. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

[music] This concludes today’s episode of The Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.com/podcasts. The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.

If you have a topic that you’d like us to discuss on The Hospital Finance Podcast or if you’d like to be a guest, drop us a line at update@besler.com.

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Highlights of this episode include:

• What the webinar is about
• Target audience for this webinar
• Topics that will be covered
• Disproportionate share adjustment
• Supplemental payments

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast.  We’re pleased to welcome back Christina Brown, BESLER’s Vice President of Reimbursement Services. In this episode, Christina will provide us with a glimpse into BESLER’s next free Webinar, Uncompensated Care Series – Overview, that we’re hosting live on Wednesday, January 21, at 1 PM Eastern Time. Welcome back and thanks for joining us, Christina.

Christina Brown: Thanks so much, Kelly. It’s always a pleasure.

Kelly: Yes, it is. So, let’s go ahead and jump in. So, we’ve seen a number of webinars on this topic. Can you give us a little bit of insight as to what this webinar is all about?

Christina: Sure thing. Yeah, that’s a true statement. So uncompensated care is a pretty hot topic when it comes to reimbursement. It makes sense that there’s a ton of interest and coverage on this particular topic. And we do like to discuss this one regularly as there are new people that enter the reimbursement profession. And that’s just really due to leading industry experts that are exiting the workforce. I think a lot of areas are saying that. It’s also imperative to cover this topic as this area has really evolved over recent years. But basically, uncompensated care is defined by CMS as care that is provided for which no payment is received or expected to be received from a patient or insurer. Specifically, what I’m referring to is really bad debt and charity care. However, uncompensated care also relates to another area worth mentioning, and that is the effect that it has on Disproportionate Share Hospital payments as the DSH hospitals have a high volume of Medicaid patients in proportion to total payer volume.

And if you’re aware, that’s really because Medicaid has a lower reimbursement rate than other payers do. So now I’m going to cover this relationship for those who may not understand that connection. And while I will touch on the basics of uncompensated care, things like where it’s reported on the cost report and how the payments work, I will save the deep dive into processing specifics for other webinars in the series.

Kelly: Right. Yeah. I know this is always a very popular topic. So, who do you feel would be the target audience of this webinar?

Christina: Yeah. And that’s a great question, and I’m happy to address that. So, I believe this webinar would be great for those that are new to reimbursement or may not fully understand uncompensated care. I’m going to provide some general terms used when discussing uncompensated care as well as some basic need-to-know items to understand its impact. And in addition to reimbursement professionals, I also feel this would also be a good webinar for those that may not need to know all of the details of uncompensated care and goes into preparing it for the cost report, but perhaps would like to have some basic knowledge on the topic.

Kelly: Awesome. Yeah. I know there’s a lot of people who would benefit from this. And we’ve discussed that we’ve done a few webinars on this topic, you and the team around the topic of uncompensated care. Can you go into a little bit more detail as to some of the topics that you’re going to be covering?

Christina: Yeah. And you’re absolutely right again. So, we do touch on this topic in a variety of ways due to its complexity, importance, and reimbursement. So, there is really so much to cover on this topic. So, we really want to ensure that we address this often in order to cover any updates as well as present it in a multitude of ways in hopes that information will connect with our attendees. That being said, for the basis of this webinar, it will be more broad than the ones that we’ve done in the past. So, for example, we have done specifically ones related disproportionate share, where we talked about how it’s related to uncompensated care. Then we went more in depth on how hospitals qualify for DSH and how to process the data needed for the cost report. We’ve also done webinars where we went in depth on Worksheet S-10, which is where the uncompensated care is reported. This webinar, as I mentioned, is going to be more broad in content and really less specific on the granular details of processing the data for the cost report.

However, no need to worry. We will get into those specifics with other ones in the series as we want to ensure we cover any new developments since our last webinars on this topic as we have seen some evolution in the S-10 audits as well as some legislative updates impacting DSH.

Kelly: I mean, things are definitely always changing, that’s for sure. You mentioned the disproportionate share adjustment. Will you be going into any detail around those payments and how to process the data?

Christina: Yeah. So unfortunately, I would need a lot more than the allotted hour to cover the basics as well as all the processing data elements necessary to file the cost report. So, for this one, I’m really just, as I said, touch on the basics of the Disproportionate Share Hospital adjustment and its relationship to uncompensated care, and how what’s filed on the cost report for uncompensated care on Worksheet S-10 impacts payments for hospitals that are eligible for that Disproportionate Share Hospital adjustment payment.

Kelly: Great. Looking forward to that. So, since you’re going to be talking about uncompensated care and how it relates to the supplemental payments, will you also be spending time talking about Worksheet S-10?

Christina: Sure. So yeah, that’s another great question, Kelly. So, if you know anything about uncompensated care and cost reporting, you probably already know and understand the importance of the exhibits that must be filed with the Medicare cost report. However, as with DSH, there’s simply not enough time in the allotted hour or with this webinar to go into all of the processing and data elements for the exhibits. So that’s really why we made this a series. So later, we do plan to do a deeper dive into Worksheet S-10 as well as the Disproportionate Share Hospital or DSH. And for purposes of this webinar, I am really going to only touch on the exhibits, and we’ll not go into any detail on all the various data components and how to process it and all those things. But I do encourage you to stay tuned for our other webinars in this series that will provide that level of detail. But that’s not to say to skip on this one, as you will obtain not only the CPE credit early in the year, but perhaps hopefully gain some additional insight on uncompensated care.

Kelly: Yeah. It’s sure to be a great webinar as well as the future ones we’re going to have this year. Well, thank you so much for joining us, Christina, and for giving us this sneak peek into BESLER’s upcoming webinar, Uncompensated Care Series – Overview, that you’re presenting live on Wednesday, January 21, at 1 PM Eastern Time. And as a bonus, you can earn CPE. Thanks again, Christina.

Christina: Thank you so much, Kelly.

Kelly: And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

[music] This concludes today’s episode of The Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.com/podcasts. The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.

If you have a topic that you’d like us to discuss on The Hospital Finance Podcast or if you’d like to be a guest, drop us a line at update@besler.com.

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Highlights of this episode include:

• Acumens on the outpatient updates for calendar year 2026
• Changes CMS has made to outpatient payment in the 2026 OPPS final rule
• 340B program updates
• The inpatient-only list

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast.  We’re pleased to welcome back Bob McDowell, BESLER’s Senior Reimbursement Consultant. In this episode, Bob will provide us with a glimpse into BESLER’s next free Webinar, CY 2026 OPPS Final Rule Summary, that we’re hosting live on Wednesday, January 14^th, at 1 PM eastern time. Welcome back and thanks for joining us, Bob.

Bob McDowell: Well, thank you, Kelly. It’s a pleasure to be with you today.

Kelly: It’s a pleasure to have you on. Well, let’s go ahead and jump in. So, in the final rules, CMS updates the payment rates for covered services. Can you give us some acumens on the outpatient updates for calendar year 2026?

Bob: Absolutely. For calendar year 2026, outpatient payment rates for hospitals that meet the quality reporting requirements will increase 2.6%. This increase is based on the market basket increase of 3.3% and reduced by a 0.7% or 7/10 of a percent productivity adjustment. Once the budget neutrality factors are applied, we see the conversion factor increase from $89.17 for calendar year 2025 to $91.42 for calendar year 2026 for facilities that are not affected by the 340B remedy offset. For hospitals affected by the 340B remedy offset, they will see an increase to $90. 97. These conversion factor updates result in a net increases of 2.519% and 2.017% respectively. CMS estimates that the calendar year 2026 OPPS total payments to providers to be $101 billion, an increase of approximately $8 billion compared to estimated calendar year 2025 OPPS payments. CMS is continuing the policy for hospitals that do not meet the outpatient quality reporting requirements to experience a 2% reduction in payments using a reporting factor of 0.9805 applied to OPPS payments and copayments. CMS has extended the 7.1% adjustment for rural sole community hospitals and essential access community hospitals for calendar year 2026.

Kelly: Thank you for those updates, Bob. So, the wage index has received a lot of attention in recent years. Can you elaborate on any changes CMS has made to outpatient payment in the 2026 OPPS final rule?

Bob: Sure. If you remember back in the federal fiscal year 2025 inpatient final rule presentation that we did, CMS had finalized the inclusion of the 25th percentile rule, otherwise known as a low wage index hospital policy. A couple of days after that presentation, CMS came out with an interim final rule with comment period, removing the low wage index hospital policy from the federal fiscal year 2025 inpatient prospective payment system regulations in response to ongoing litigation. Now, in the calendar year 2025 OPPS final rule, CMS had once again finalized the inclusion of the low wage index policy to be applied to OPPS payments. CMS recognized that that would mean that some hospital facilities would have a different wage index for calculating their outpatient claims than they had for calculating their inpatient claims. So, in the calendar year 2026 OPPS final rule, CMS has implemented the realignment by eliminating the low wage index policy from the OPPS payments. CMS is using the same methodology they did in the federal fiscal year 2026 IPPS final rule, utilizing the 5% cap and wage index reduction from the prior year for those hospitals affected by this policy change.

Kelly: Thank you, Bob. That’s very interesting. Another major program for hospitals is the 340B program. Can you tell us about the changes in the coming year triggered by the program?

Bob: Sure. There are two major changes to reimbursement relating to the 340B program starting in calendar year 2026. The first is the 340B remedy recruitment fix, which is related to the conversion factor that we just mentioned. It’s for the conversion factor increase for calendar years 2018 through 2022. CMS had previously, in the proposed rule, stated a 2% decrease in the calendar year 2026 conversion factor in order to accelerate the recoupment of the $7.8 billion in additional payments to hospital facilities. In the calendar year 2026 final rule, CMS did not finalize the 2% reduction, but decided to stay with the original 0.5% or half percent decrease in the calendar year 2026 conversion factor as originally stated in the remedy document published on November 8th, 2023. CMS also reserved the right to increase this reduction in future years. Now, the second change to the 340B program for calendar year 2026 was published on August 7th, 2025, by HHS and HRSA and involves a shift in funds for providers by moving to a backend rebate-style pilot program instead of an upfront discount program for 10 drugs that are listed on the CMS Medicare drug price negotiation selected drug list.

For these 10 pharmaceuticals, providers will have to pay full WAC or wholesale acquisition costs pricing when purchasing these drugs. Once the product is sold and the provider applies for the rebate, the drug costs will be reduced to the lower cost of the 340B ceiling price or the Medicare maximum fare price. If the model is fully implemented at a 340B program, it could mean millions of dollars being postponed to 340B providers. The rationale for this program is the adage from the manufacturers about duplicate discounts and diversion that is happening in the program.

Kelly: Well, thank you for sharing that with us. I know the 340B program, there’s always something going on with that. There’s some discussion on changes to the way hospital outpatient departments are being paid in calendar year 2026. Do you have any details on those changes?

Bob: Well, I believe you’re referring to what is called the method to control unnecessary increases in volume of outpatient services furnished and accepted off-campus provider-based departments, which we have shortened to simply site-neutral payments. CMS has stated in the final rule that there was evidence that increased volume and intensity of certain covered outpatient department services, which was likely driven by financial incentives to furnish services in hospitals in order to receive higher reimbursement than making site of service decisions based on medical necessity. For calendar year 2026, CMS decided to pay accepted hospital outpatient departments as if they were non-accepted or freestanding clinics at the Medicare physician fee schedule reimbursement rates instead of the OPPS rates for anti-HCPCS codes assigned to drug administration services, AAPCs. CMS published the specific APCs affected in table 121 of the final rule. And something else to watch here is that there is discussion in the final rule of applying this provision to on-campus hospital outpatient department.

Kelly: Okay. But isn’t CMS doing away with the inpatient-only list? How is that going to affect the outpatient volumes and inpatient services?

Bob: Well, that’s a good point. In the calendar year 2026 OPPS final rule, CMS finalized the elimination of the inpatient-only list over the next three years. This means that more procedures will be done in an outpatient setting, increasing volumes. It will be interesting to watch and see how payments made to hospitals, outpatient departments, and ambulatory surgical centers evolve over time, and whether site neutrality will eventually be implemented in some form to ASCs. And I want to shift gears there for a second, but there’s another aspect with the elimination of the inpatient-only list. And that is the indefinite exemption of site of service claim denials due to the two-midnight rule. As procedures migrate to the outpatient setting, CMS is relying on the physician’s determination as to whether a procedure removed from the inpatient-only list should be done in an inpatient or outpatient setting. If done in an inpatient setting, auditors are not to use the two-midnight rule as a determination for denial of payment at this time. Once CMS determines the procedure to be an outpatient procedure, they will communicate the reinstatement of the rule towards that procedure.

Kelly: So, kind of switching gears a bit here. So, in some of your previous webinars, you discussed up-and-coming activities that could be changing and items we need to keep an eye on. So can you share any areas our audience may need or want to watch?

Bob: First, I would say we should keep an eye on the 340B remedy reduction amount. CMS has given us warning they could increase the reduction of the conversion factor in later years. Next, I would watch for additional site-neutral payment policies. As they have progressed to the excluded provider-based sites for drug administrative services, CMS may choose to apply that policy to other services or to on-campus clinic sites. And lastly, we visit this every year, and that’s pay-go sequestration. The additional Medicare 4% statutory pay-as-you-go sequestration was scheduled to go into effect in January of 2026. Congress has, over the years, continued to keep this program from going into effect, either by wiping the scorecard clean or by using other devices to avoid triggering the sequester. In the continuing resolution that passed in November of 2025, the current administration followed the same practice as the prior administration and wiped the scorecard clean of the $3.4 trillion of deficit spending over the next 10 years. And so it will not go into effect in January of 2026. The reason we need to continue to watch this is twofold. First, it is potentially a drastic cut to Medicare spending as long as the provision remains in the regulations. And second, that Congress could at some point implement it to control over spending.

Kelly: That makes sense. Well, thanks so much for sharing that with us. And thanks for joining us, Bob, today, and for giving us this sneak peek into BESLER’s upcoming webinar, 2026 OPPS Final Rule Summary, that you’re presenting live on Wednesday, January 14^th, at 1 PM eastern time. And as a bonus, you can earn CPE. Thanks again, Bob.

Bob: Thank you, Kelly. Have a great day.

Kelly: Thank you. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

If you have a topic that you’d like us to discuss on The Hospital Finance Podcast or if you’d like to be a guest, drop us a line at update@besler.com.

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