Jefferson Health’s Perspective on Strategic Reimbursement

Transcript

CHAD MULVANY

On today's episode of Achieving Health, I'll be joined by special guest Steve Molitoris, Vice President of Reimbursement and Revenue at Jefferson Health in Pennsylvania. We'll discuss his organization's strategic approach to reimbursement and his thoughts on recently proposed and finalized rules from CMS. It's a fantastic conversation, so please stay tuned.

ANNOUNCER

This is Achieving Health, a podcast from Forvis Mazars, where we delve into the topics that matter most to healthcare organizations across the continuum of care. Our goal is to help you navigate the dynamic healthcare landscape and achieve health at your organization. Here's your host, Chad Mulvany.

CHAD MULVANY

Welcome to Achieving Health. I'm Chad Mulvany, director in the Healthcare practice at Forvis Mazars. Thank you for joining me.

I'd like to give you a quick update on our OBBBA Tuesdays webinar series, happening every other Tuesday through November 4th, where we cover the healthcare impact of the One Big Beautiful Bill Act and how providers can prepare. We've hosted two sessions so far, and our next session will focus on improving revenue cycle and managed care performance to help mitigate the anticipated impact of the Medicaid cuts in the bill. We'll have a link in the show notes where you can register for the series and view past sessions. I hope you'll be able to join us for these insightful conversations.

Usually, this is the point in the show where I would share Washington Watch updates on the latest policy and legislation out of D.C., but I want to do things a little differently. For today's episode, we're going to move right into an in-depth conversation with a special guest to explore a provider's perspective on recent CMS rules, including the IPPS final rule for 2026, as well as the proposed rules for OPPS and the physician fee schedule.

So, without further ado, I'd like to welcome our guest, Steve Molitoris. Steve is the Vice President of Reimbursement and Revenue at Jefferson Health, an academically based integrated health system located in Philadelphia. He leads teams that drive the network's payment and pricing strategies and also directs revenue reporting across the enterprise. Steve, thank you for your time today and appreciate you joining us for this conversation.

STEVE MOLITORIS

Thanks, Chad, I appreciate you having me.

CHAD MULVANY

Before we get into the meat of the conversation, would you share with us a little bit about your career path, how you came to the industry, and your current role?

STEVE MOLITORIS

Sure. So, I am a Penn Stater and while I was at Penn State, I was actually a nursing major. And once I got to the blood and the guts and doing anatomy, I figured, you know what? This isn't for me. And I found something that was a little more interesting to me and less scary.

And, again, that's a shout out to all the nurses for what they have to deal with day-to-day. And, I found something that more suited to me, which is I was a Health Policy Administration major, and always wanted to do that. So, I really enjoyed the business side of healthcare. So, I thought that would be a nice segue into that.

So, after school, I found a job at a healthcare consulting firm called McBee Associates, and that's where I really got my feet wet into a lot of things that I do now. And it was a real great start to my career because I did a lot of work in actually calling on claims and working in, actually, the business office.

So, really, and on top of that, also did Medicare cost reporting, the Medicare wage index that we use, actually prepared Medicare cost reports. So, a lot of things I do today, I learned from the ground up.

CHAD MULVANY

That's great. And, you know, I think folks probably don't know, but you and I started together, same firm. And that's how we know each other. So going back to a point where, well, the hair that I had was less gray. But yeah, no, it was a fantastic experience. And even when I tracked into a policy role, that was one of the things that has always separated me from my colleagues is the fact that I have called on claims or that I have had to review contracts to, like, make that argument, or even filed a cost report and understand what it means, at least back in the day, to put together a DSH log or a bad debt log. Just incredible importance.

And then, appreciate you shouting out the challenges of how hard it is to be a nurse. I think the general public underappreciates, first, particularly for an inpatient unit nurse, the IQ and the EQ that you have to have to get through the basic sciences and deal with just the different personality types that you'll encounter, and then also the physical stamina, right? Like you and I are both in pretty good shape, but the idea of having to shadow a nurse for a week—like, I imagine that by the time I got around to Saturday afternoon, I'd be pretty tired.

STEVE MOLITORIS

Yeah, it's just unreal. Like what our clinical staff does. And I always defer to them on a lot of the day-to-day things because, you know, we're in the finance world. So, in our finance world, we're trying to provide, you know, our views and we see the results. But we always have to be very careful as from on the finance side, providing that, you know, because we don't understand, we got to put ourselves in the shoes of the actual clinicians.

So, there's always that delicate balance of what we're always doing, on a day-to-day basis, from a reimbursement strategy standpoint to the cost cutting, to everything that we do in the finance world, it's really important that we're definitely mindful and sensitive to the clinical scope.

CHAD MULVANY

Yeah, I mean, it's a delicate balance, right? Because you've got to make sure that the resources are there for them to provide high-quality, efficient care today and, you know, into the future, into perpetuity. So, really appreciate that. For those who may not be familiar with Jefferson Health, would you please tell us a little bit about the system?

STEVE MOLITORIS

Yeah, sure. So, Jefferson Health is about a 32-hospital system located in the eastern part of Pennsylvania. So, we run from all the way down in Philadelphia, urban hospital, downtown Philly, all the way up to, for example, northeast Pennsylvania, Dickson City, and across state lines into New Jersey. The clinical enterprise, I believe, is about $12 billion in revenue.

Again, we have a university and also a health plan arm. So, we're a truly academically integrated health system, across the eastern side of PA and New Jersey. When combined, LVHN and Jefferson combined, I believe it's the top-15, or it's a top-15 not-for-profit health system in the U.S.

CHAD MULVANY

Sizable system, diverse set of businesses. Because you've got the plan, you've got the hospitals, you've got the physicians, and you've got a diverse mix of hospitals under that umbrella. Yeah, it's a great system. We've—kind of getting to that point about the diversity of reimbursement issues that you're facing—we've seen a lot of activity in the CMS rulemaking cycle, including final rules for Medicare Advantage, inpatient rule, proposed physician fee schedule and OPPS.

When you think about Jefferson, what are the two or three most interesting either proposed or final changes from this CMS rulemaking cycle?

STEVE MOLITORIS

So, a couple things. You know, one of the things that they put out there in the latest proposed OPPS rule was around the new survey for drug acquisition costs. It looks as though there, you know, we saw the intention there several years back where the feds cut our payments for 340B acquired drugs.

And then, obviously the district court had since figured out that policy by the original administration was illegal. And they went ahead and that refunded all of those back payments for the discounts. So, with the administration coming back in to play, they obviously are putting the survey out there because they need to do this survey in order to actually apply these discounts in a lawful way.

So, obviously that's going to be coming down the pipeline. That's a significant impact. And when you're talking about, you know, I think it's AWP minus 6% in terms of what it was before. In terms of what the payment (is). That's going to be a significant impact to our Medicare, I would say, drug reimbursement. So, that's obviously a significant concern coming down the pipeline.

The other thing was the site neutrality payments for drug administration. Well, granted, drug administration alone for site neutrality is not a huge dollar impact. However, I foresee that expanding. That's just, you know, they've already put their foot in the door with site neutrality payments for E&Ms, now it's drug administration.

And obviously there's a lot of rumblings around expansion into all services, you know, via having an understanding of putting certain modifiers on off-campus procedures that are being done for outpatient services. To me, that's the pathway they're going to claw back to next. I really perceive that as, you know, that's just a start into the world of, yeah, they're going to start clawing back on the off-campus, outpatient payments and it's going to go back to the site neutrality.

Again, that's our next big opportunity. And again, significant dollars across the U.S. in terms of clawback for that. So those are, you know, two major headwinds, I would say. And probably I would say around the implementation of the TEAM models and the bundled payments, and that's where surgical procedures, especially in the lower extremity, are going to be subject to a bundled payment.

Obviously, the feds are continuing, you know, we're already in ACOs, MSSP program, where, you know, they're looking at the total payment for providing services. And, you know, there's some redundancy there. But again, they're going to continue down this path of shifting the burden further on to the health systems of providing the care—and at the cost.

So, you know, we're only going to get paid a lump sum payment to provide these procedures. And in the past, it was more, you know, granted, it is APCs, it just further bundles the payment and puts the onus back on the health system to do it more quickly, more efficiently. And I expect those bundles to, again, continue to expand. Right now, it’s only to a select number of hospitals. But ultimately that should expand to, I expect, more scope, in other words, more procedures and then also across more hospitals and health systems.

CHAD MULVANY

Yeah, no, and I think that's a, you know, that's a great list. And when I think about 340B, the survey, you know, they tried to do this, and you remember this, back in, I think it was either April or May of 2020. And they got a low response rate because we were all, you know, doing something else at the time, a little pandemic, and so there was a lot of commentary in the rule about addressing that lower response rate. And there was, you know, language in there about, well, you know, if there's a low response rate, we might interpret the hospitals in certain classes don't have enough cost to report the survey.

So, we might start rethinking your packaging policy, so that's concerning. The other sort of piece of it, you know, you mentioned the discount part of it.

You know, as I was thinking about, if I were sitting in your seat, how I'd model it. And I think the discount that from the first time around is probably kind of the starting point, maybe not the endpoint, because there's discussion in there about, well, where we have non-responses we're just going to look at the hospital based on some type of segmentation, and we're going to say they probably didn't have significant cost reports. So, we're going to assign them the lowest cost based on their acquisition cost based on their cohort.

STEVE MOLITORIS

Right. Yeah, I mean, you look at the current payment levels, it's not even adequate in terms of what our cost is. So, to further dilute or further make cuts in our payments, obviously it'll hurt our mission being a not-for-profit health system. The margins we get around the drugs are used for patients to fund all the uncompensated care we provide, to fund being a large academic medical center with a trauma center.

You know, we have trauma surgeons that are sitting on standby 24 hours, seven days a week. Those are significant costs that we have. And this is to provide access, timely access, high-quality access to our patients in the community.

CHAD MULVANY

And, you know, just beyond the trauma surgeons, you've got the teams. Those are highly skilled nurses. Those are highly skilled techs that support those surgeons. So, it's, you know, the cost goes on and on. On the site-neutral piece for the drug administration, I share your concerns there as well. Right. It's like I think it was 280 million for the year estimated.

But then there's, you know, there's a discussion in there, there's a request for feedback, not a proposal, about well, what happens if we were to bring, and this is CMS, you know, apply our clinic visit policy that is only right now for exempted HOPDs on to the main campus. And it's like, oh, you're thinking about that in 2027.

So, you're right. That's where they're going there. And then there's language in the rule about, you know, what type of systematic framework could we use to identify services where we could expand site neutrality, just to your point. So, I think this is, you know, regardless of whether Congress picks this up in some future bill and tries to use it as a pay for, you know, I think CMS is giving them that space to maybe do something later this fall if they can get, if Congress can get their act together.

If not, we're going to see more of this in the ‘27 proposed OPPS rule. And then on TEAM, you know, completely share your thinking around not only are they going to expand the number of episodes, but they're also going to expand the number of hospitals. And the other piece, kind of pulling that site-neutral thread through, you know, you've got the LEJR in the spinal fusion bundles that are already, you know, the lowest acuity bundle, or priced bundle, is inpatient-outpatient.

So, whatever shift of low acuity services hasn't already occurred, that's to then just encourage that in those hospitals further. And I would expect that not only will the episodes, if I were CMS looking at this, not only would I be looking for more episodes where this would make sense, but more episodes that I could price site-neutral.

STEVE MOLITORIS

Yep. And on top of that, they continue to shift and look for us to shift in terms of more of the efficiency, around moving more services to off, well, they're actually they're going to remove the inpatient-only list.

CHAD MULVANY

Yeah. They're phased. It's similar what they tried to do with the first administration. They're phasing it out in three tranches. The first tranche is mainly orthopedic services. And many of those services are going from the, coming off the inpatient-only list and going straight to the ASC covered procedure list.

That's the other piece on TEAM that would be kind of a logical next step, but I don't know how you would do it, which is to bring in the ASC setting, given that, you know, you're holding the hospital at risk. But not all hospitals own ASCs, or not all ASCs are owned by “in a market” are owned by a hospital. So, I don't know how CMMI could square that circle, but if they could figure it out, that would be kind of a logical next step as well.

STEVE MOLITORIS

Absolutely.

CHAD MULVANY

Out of this proposed rulemaking cycle or out of this final rulemaking cycle, is there anything in there that you think the industry is under appreciating?

STEVE MOLITORIS

I don't know if it fits really under the proposed rules. And I don't know if we want to get into the Big Beautiful Bill yet, but one of the things is, around the Big Beautiful Bill, is the Medicaid eligibility pieces where the retro day, I think they're going from like 90, or I should say your lookback period is going from like 90 to 60 days.

You add in the work requirements. So, you have all those headwinds around the Medicaid eligibility, which parlays. And Medicaid eligibility feeds directly into your DSH percentage, and your DSH percentage is used for a 340B eligibility. There's many health systems across the U.S. that are at the cusp of qualifying, or I should say, hospitals at the cusp of qualifying for 340B, whether that be the full DSH 340B percentage, which includes all your orphan drugs, which is your high-cost cancer drugs, or your lower RRC at 8%.

There's many hospitals that are sitting at those cliffs, and any disruption to, further disruption, in addition to Medicaid redetermination that we've all recently experienced last two years will further erode our Medicaid eligible base to be included in this calculation. And, therefore, many hospitals are at risk of losing tens, hundreds of millions of dollars, related to the savings in the 340B program.

A lot of folks, I think, focused on, in a lot of the publications and a lot of things I've read about the Medicaid eligibility pieces, folks are focusing more on, oh, you'll lose perhaps, Medicaid payments and all. Well, yeah, of course we'll lose fee-for-service Medicaid payments. But, you know, look, they might find it different and they might go uncompensated care. But to me, the real focus should be on the potential losses the 340B eligibility. That's where the systems are really going to suffer.

CHAD MULVANY

Yeah. No, I think that's exactly right. And you, I think you teed up the trifecta nicely, you know, for the redeter, or for that, you know, you've got the moving from once-a-year redetermination to twice a year for your expansion population. You got the work requirements for 19 to 64 with some carveouts where you've got to work 80 hours a month, or engage in certain activities, and then you've got the lookback period where it's, you know, today it's 90 days for the expansion population.

It'll be 30 for the non-expansion, it'll be 60. All of that together. You're right. And you know, even though some of these things are only focused on the population that you would generally tend to think are not high utilizers, you know your expansion pop typically isn't. Although there are a lot of people that are near retirement age that could possibly fall into that. That might be a little bit more. You put it all together.

And for those cliff hospitals or for those on the bubbles, it is a huge deal. And we're, you know, even prior to OBBBA we were having conversations with clients that we help with DPI and 340 B around how to deal with that. And I think particularly for the uninsured, where you see individuals that end up needing to come in and get care, end up getting admitted, the insidious thing about it is not only do they fall out of the numerator, but they get added that they're still in the denominator and they're uncompensated, so it's really just diluting everything.

STEVE MOLITORIS

Yeah. So that's the real underappreciated thing that folks didn't really focus on. It was more around the coverage.

CHAD MULVANY

Yeah.

STEVE MOLITORIS

I'm more worried about the cliff hospitals.

CHAD MULVANY

So, given all these issues we've talked about, how is Jefferson Health preparing for these changes?

STEVE MOLITORIS

So, I mean, so right now with so we are, we're already in a transformative state given LVHN merged into Jefferson officially back in August of 2024. So, it's been one year. So, we were truly trying to become one health system, through integration of finance, accounting, clinical leadership, physician leadership, so our entire health system is merging and transforming as it was.

But given these headwinds, we have already had, I would say the tea leaves that the government or I should say the Medicare Medicaid payments, which, you know, are a significant part of our payer mix, have declined and continue to decline. We're going to continue to see this shift, like many other health systems, from commercial payers to government payers, and obviously that presents financial challenges to us. So, we were already on a path of making sure our operations were efficient as possible: becoming one, corporatizing, leveraging, I would say, system-ness, and becoming a single system, so in terms of all of our corporate functionality. So, we're right now in that journey now to do that and to become a more efficient system that provides quality care to our community.

And obviously that's, you know, our top priority. And obviously quality is very important to us. So, as we've been in this journey, LVHN and quality for years and so has the Jefferson side of it. And it's really come together beautifully between the two health systems in terms of the learnings from each other, and we foresee, obviously, quality value-based payments continue to be even larger. I would say, more significant in the future in terms of the significance to us. So, we've been going down that journey, and that's how we're preparing for it.

CHAD MULVANY

Yeah. No, I think that makes sense. And it's, you know, it's exciting to hear that both organizations, were bringing something to the table, we’re learning from each other. And I do think you're right that as part of the payer mix, one way or another, organizations are going to be at greater risk for both quality and financial outcomes.

You know, we're still kind of waiting to see how the private sector rolls this in, but it is coming. You know, the other interesting piece about your comment about the growing part of the governmental component of the payer mix. I'm assuming that what you're seeing is, like everybody else across the country is it's not only just a growth in your Medicare population, but it's a growth in your Medicare Advantage population that, beyond being an adequate payer, brings unique and distinct challenges beyond what you would get if it was just traditional fee-for-service, where if you bill a clean claim, you can expect in 30 days to get paid.

STEVE MOLITORIS

Yeah. What we're, I mean we are seeing that especially the last three to four years. I mean, I watched my Medicare fee-for-service shift over to the Medicare manage side. And obviously, to your point, the challenges that come with working with and submitting claims to a Medicare managed care company versus Medicare fee-for-service is they're quite different.

You know, some of the policies they deploy, generally, they're supposed to follow Medicare. However, sometimes, they have different interpretations of what.

CHAD MULVANY

Created creative interpretations.

STEVE MOLITORIS

Yeah. So, they definitely have their own interpretations that present challenges, that we’re constantly facing and that are immediate to us today. I mean, there are ones that we just talked about this past week that we're trying to work with, and trying to work directly with this payer on their interpretation and, you know, we have the same goals as they do to treat patients, treat them fairly, and give them the best outcomes as possible.

CHAD MULVANY

Yeah, make sure they've got good access, make sure that the outcomes are, the quality is high, and then it's done in a cost-efficient manner based on the condition.

STEVE MOLITORIS

And one real aspect, exciting aspect that I didn’t probably touch on enough is, you know, Jefferson Health Plan has its own Medicaid managed care product and also Medicare Advantage Plan. So, having that in-house and being able to work with that population, I think we're in an excellent position to serve that population and to treat the patient holistically as at that point, we're working with the premium dollar as opposed to the fee-for-service dollar.

So, I think with LVHN, you know, Jefferson has for years had the health plan, LVHN is just learning how to work closer with the health plan. So, I think there's, it's exciting from that standpoint. And also for me, just joining the Jefferson world, being able to work closely with the health plan that we have, we haven't had that experience before in the past.

CHAD MULVANY

Yeah. Well, and to your point about value-based care becoming a growing part of the pie, it gives you a nice place, kind of a laboratory to work with, again, the premium dollar that you're collecting for both your aligned MCO patients, your aligned MA patients, to get that experience to figure out how to do it. So, then you can take it out to other places.

And you're right, it does, within what's allowable under both programs, you can start to use some of that premium dollar to address some of the social determinants that result in unnecessary utilization that you absolutely just don't have in fee-for-service. And so, it does give you a great opportunity where the care is aligned, integrated and everybody's rolling in the right direction.

You know, we've covered a lot aside from the payment rules and OBBBA; what else is keeping you up at night on the regulatory or legislative front?

STEVE MOLITORIS

It's, you know, all the headwinds that we have when you combine the federal position of the future, and also I don't think we touched on yet, and I know it's part of the Big Beautiful Bill was, the cut in payments related to hospital provider taxes, those programs. In Pennsylvania, we have what's called the Medicaid Modernization Program, typical provider tax program where we are taxed for, we tax ourselves, and the funds are matched by the feds and then redistributed to all the hospitals. And it's really just the, it’s a mechanism, self-funded through the hospitals in our state, matched by the feds, to help with the shortfalls from the Medicaid fee-for-service program.

The Medicaid fee-for-service program, in Pennsylvania, since I remember, probably 10-15 years, has not increased its rates for years. And it's because the state legislature hasn’t allowed it. So, this is the only means that we've had really to increase our rates, you know, depends on who you talk to. But generally we get paid $0.65-$0.70 on the dollar of the cost of treating these Medicaid populations.

We have hospitals in downtown Philadelphia that treat a super high number of these patients. It's our mission. We will always treat patients regardless of their ability to pay. And that's what our role is in the community. However, without getting adequate payment for that, it's hard to keep the doors open. It's hard to replace the hospital bed. It's hard to get the latest and greatest da Vinci robot that the community demands.

We want to provide the highest level of care to our community. So, that money that we receive that exceeds our expenses gets, as part of our mission, gets pushed right back into the hospital to care for the community. So, without covering our costs under these programs, it's just going to make it that much harder for us to provide that high-quality care and access to patients.

CHAD MULVANY

Yeah, you know, you're spot on there. And you know, I know this is going to shock you, but the 15 years without an increase in your fee-for-service rates, which then influences your managed care rates, like that's obviously not an uncommon story. And certainly when I was at the California Hospital Association, we were dealing with the exact same thing.

And you're right, the provider taxes were a way to take federal funds and make up for an unwillingness at the state level to fund the Medicaid program appropriately. And I'll, you know, 49 states were doing it, minus Alaska. And what I don't think people fully appreciate, when I say people, not this audience, but, you know, our fellow Americans writ large, is that while they may not care about Medicaid rates, they should, because to your point, that trauma center downtown, that's probably 80% governmental payer. If it doesn't have that supplemental or doesn't have the provider tax that funds the supplemental payment or the UPL payment, may not be available when they need it.

STEVE MOLITORIS

Right? And that's when obviously at that point, that's when it becomes an issue with access.

CHAD MULVANY

Yeah. And in not, just in access for certain individuals but for the broader population. Because, you know, you guys are a regional referral center. Nah, it's a great call out. It's a great call out. All right, switching gears to happier topics.

STEVE MOLITORIS

I don't know how much happier topics there are in healthcare finance, but ...

CHAD MULVANY

We're getting into leadership, man. You've been in leadership roles for a while. What's one piece of advice you'd give to someone who just moved into a formal leadership role?

STEVE MOLITORIS

Wow. I would say remain open, remain agile, and be ready for change. Always be willing to change. We will never stay steady or stagnant. Always look for ways to improve, and also put yourselves in someone else's shoes. When anybody ever asks you something, step back. Before reacting, put yourself in their shoes and try to get an understanding of why they're asking the question.

And so, for example, someone in the clinical world, which we work closely with, may not understand how we get paid. So please, just be understanding because you don't know what their background is. And put yourself in their shoes. That's what I, typically, what I use on a day-to-day basis.

CHAD MULVANY

I think that's spot on. When I think about the people that I've worked with over the years, the ones that I've learned the most from and enjoyed the most from, and I've been very fortunate to work with a number of leaders who are just the most humble individuals, and to your point, would be willing to listen, would be willing to answer questions, wouldn't automatically sort of have a reflexive response and encourage both, you know, an open environment where you would have that great dialog that gets to better places.

So, it is just, I think it's a great call out. What's something that you and your colleagues or you and your team have recently accomplished that you're proud of, that you think moved the needle?

STEVE MOLITORIS

I would say a lot of my focus through my career and a lot of things I learned along the way, you know, after I left, you know, maybe I went to Ernst and Young, PriceWaterhouseCoopers, so I've always kept that consulting mindset. So, stepping into leaving the consulting world and going into the hospital world, I deployed a number of reimbursement strategies that I would say effectually, say, at least $150-$200 million in accretive bottom line impact, in ways that strategically place all of our hospitals and health systems and to best align them from geographic reclass situations to improving our wage index in order for us to achieve the revenues that, you know, that we deserve. That reflects the actual attributes of our hospital.

CHAD MULVANY

Yeah, and I think that's an important thing to call out. We just talked about the inadequacy of Medicaid rates. But when you look at, you know, you pull the Medpac data down and you chart it out over basically the course of our career, the slope on the operating margin for Medicare for hospitals is just headed downward, downward, downward to the point where even Medpac’s cohort of quote unquote “efficient hospitals,” the thing that they set policy to, they're now sitting around at a -2% operating margin. So, if you're not thinking about those opportunities that you have to improve allowable reimbursement, you're losing ground.

STEVE MOLITORIS

Right? If we're not thinking of how do we position ourselves from a wage index reclass. There's only one pool of dollars out there, you know? They set the market, the fed set a market basket, and everything gets allocated to the hospitals on a budget-neutral basis. If we’re not properly aligning ourselves or properly designating ourselves, based off the attributes of our hospitals that currently exist or actually reflect them, it's important that we, for our health system and our bottom line. So, going back to my points earlier of, without creating revenues and positioning ourselves, we wouldn't have the money to reinvest in our hospitals and our buildings and just the maintenance, day-to-day maintenance to keep the doors open of our hospitals, let alone invest in new technologies.

CHAD MULVANY

Yeah. That's absolutely right.

STEVE MOLITORIS

So those are, I would say, the biggest accomplishments, everything from the hospital reclassifications to the hospital mergers we've done, to gaining eligibility for the 340B program. Those are the areas that we've done a lot of focus on. And then, secondarily, we spent a lot of time with our, for example, so I oversee both the reimbursement teams and then also the revenue accounting. Revenue accounting shouldn't just be, hey, we're here to produce financial statements. Our goal is not only to produce the financials, the revenues, and the financial statements, but also to open up a window to the operators and to the how, what, and why our hospital performance is and how do we work with them more closely.

And I would say in the last, I joined LVHN back in 2017. I would say the last three or four years, we've made significant strides working closer with our operators and to give them a lens into the financial world and the aspect of financial performance. So, I think we've actually, from that aspect, I think providing the detail and information to show how they can improve their performance the last couple years is significantly improved. That's another area I'm very proud of.

CHAD MULVANY

Yeah. No, and you should be because you're right. That sort of alignment between finance and clinical, you know? Once, generally my experience has been, once the clinicians understand the drivers of performance, you know, as long as, you know, it's not directly, as long as it's not impacting patient care, they're happy to sort of improve efficiencies, make sure, because they understand that, you know, everything that they touch to provide high-quality care has a cost to it. It's not an insignificant cost. And, so, they're looking for ways to and they want to help improve. But you're right. It takes that partnership. It takes that transparency into what drives the financials to build that relationship and that trust.

STEVE MOLITORIS

Yeah. That's one of the key aspects of, finance has historically been sort of, you know, in my experience, been siloed away from operations. We've brought them together not only through our initial reporting, but then through monthly operating meetings that we meet with the operators. And we explain in detail as far as, okay, your volumes were maybe 10% of our budget this month.

And then they will ask, well, why is my revenue not up? Well, those volumes were more in low-cost areas versus high-cost areas. And we give that, we’ll provide that explanation so they understand what type of volumes came in the door.

CHAD MULVANY

Yeah. No, that's great. That's absolutely great. Steve, thanks again for joining us today and sharing your insights with our listeners. And thank you to our listeners for tuning in. If you'd like to learn more about the CMS rules we discussed today and strategies to navigate them, we have links to related content in the show notes. I hope you'll join me again in two weeks for the next episode of Achieving Health.

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