According to Becker’s Hospital Review, which referenced Kaufman Hall’s National Hospital Flash Report, hospitals ended 2025 with an adjusted operating margin of only 1.3%.

This number is well below the usual 3 to 4% margin hospitals need to:

• Maintain infrastructure and physical plants.
• Service debt obligations
• Fund baseline technology investments

With a 1.3% margin, hospitals lack financial stability that could lead to a reduction in services or closure.

Kaufman Hall characterizes the financial challenges facing hospitals in 2026 as a “new normal” defined by:

• Rising labor and supply costs
• Increasing bad debt associated with increasing uninsured and underinsured rates
• A deteriorating payer mix with increased payer friction
• A more complex and acute inpatient population
• Persistent margin compression

The Structural Deficit: Service Lines That Lose Money

The American Hospital Association’s (AHA) data show a deeper problem: core hospital services are losing money, regardless of payer.

These aren’t optional services. They are essential for community care. Hospitals can no longer offset these shortfalls with profits from other areas.

The Only Remaining Lever: Revenue Cycle Integrity

When core services lose money, and the payer mix worsens, hospitals have only one thing they can control.

Collect their earned revenue and fight hard to keep it. This shifts the revenue cycle from an administrative task viewed as a cost center to a margin-protection strategy. Payer friction is driving up the cost of healthcare. The AHA estimates that revenue cycle function account for as much as 40% of hospital costs. If current trends continue, the cost of collecting earned revenue could exceed the cost of delivering patient care.

Why Physician Advisors Are Now Mission-Critical

Hospitals are trying a variety of strategies, with the most common being the implementation of technology. However, the complexity of the inpatient revenue cycle is proving beyond the capabilities of many of these tools. Human intervention is still required. The bottom line is that hospitals need to expect more from their revenue cycle departments. In this environment, defensibility of clinical decision-making becomes the core asset.

Physician Advisors play a central role by:

• Educating admitting physicians about how to document to support medical necessity and accurate billing.
• Supporting status determinations (inpatient vs. observation) with clinical judgment.
• Conducting peer-to-peer reviews with payer medical directors to overturn adverse determinations.
• Leading appeals that convert denials into revenue recovery.

Successful status upgrades or appeals can yield thousands per case—critical when margins are 1.3%. This is a tangible, immediate benefit that accumulates over time.

Revenue Cycle as a Clinical Strategy

Hospitals that succeed in this environment share a common approach.

They treat the revenue cycle as:

• A clinical function, not purely administrative
• Real-time discipline and accountability, not retrospective cleanup
• A strategic capability, not a cost center

This includes:

• Embedding Physician Advisors into utilization management workflows
• Aligning utilization review, CDI, coding, and clinical documentation practices by breaking down silos
• Using data to identify denial patterns and problematic payer behaviors

The Bottom Line

The convergence of:

• Structurally negative service line margins
• Sub-2% operating performance
• Increasingly aggressive payer tactics

…creates a healthcare environment where: Revenue cycle performance is the margin.

Hospitals are fighting for financial stability, not just small improvements.

Hospitals that invest in physician advisors will protect their revenue. Those that don’t will see their margins shrink even faster.

Final Thought

The future of hospitals depends on decisive action. As financial pressures grow and essential service lines lose money, investing in efficient and effective physician-led revenue cycle strategies is not optional; it is vital. Hospitals that make revenue cycle integrity a top clinical and strategic priority will define the next era of healthcare. Defending every earned dollar is the difference between stability and decline. Organizations that act with urgency will lead; those that hesitate will fall behind, risking their mission and their communities. Now is the moment to lead. Protect your hospital’s future by investing in revenue cycle excellence.

The post Why Revenue Cycle Performance Is Now a Clinical Imperative appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

Pinellas Park, Fla. – March 25, 2026 

Brundage Group, a physician-led leader in revenue cycle management (RCM) advisory and analytics, has again been recognized on Becker’s Hospital Review’s “385+ Revenue Cycle Management Companies to Know” list for 2026, marking the second consecutive year with this honor.

Becker’s publishes this list each year to highlight organizations nationwide that help healthcare providers manage financial challenges, improve operations, and strengthen revenue integrity. Companies are selected through a nomination process and recognized for making a real difference in the revenue cycle.

Furthermore, this recognition shows how Brundage Group stands out by combining physician expertise with advanced analytics to solve financial and operational challenges in healthcare.

“Being recognized by Becker’s for the second year in a row is a meaningful validation of the work our team does every day,” said Dr. Tim Brundage, Founder and CEO of Brundage Group. Hospitals are facing mounting pressure from reimbursement changes, regulatory complexity, and increasing denials. Our mission is to bring clinical credibility and actionable insights to help our partners protect revenue while maintaining the highest standards of patient care.”

Brundage Group’s solutions focus on the mid-revenue cycle, where clinical and financial performance come together. Moreover, the company offers Physician Advisor services, DRG validation, clinical documentation integrity, coding and audit support, and denial management strategies to help hospitals stay compliant, lower risk, and receive proper reimbursement for the care they provide.

Brundage Group takes a different approach from traditional RCM vendors by using a physician-led model that connects clinical teams with revenue cycle operations. As a result, this leads to more accurate documentation, better resource management, and stronger coding practices, which help reduce denials and improve outcomes.

Being included on Becker’s 2026 list confirms Brundage Group as a trusted partner for hospitals and health systems looking for lasting revenue cycle results in today’s complex healthcare environment.

About Brundage Group
Brundage Group is the trusted choice of hospital systems for revenue cycle management solutions. We support hospitals nationwide with customized solutions, including a full suite of physician advisory services, proprietary level of care analytics, and physician-led education to relay quality care. Our programs help hospital organizations break down departmental silos by unifying all departments in the mid-revenue cycle. Learn more at brundagegroup.com.

Media Contact:
Lacey Thompson
Senior Director of Marketing, Brundage Group
lthompson@brundagegroup.com

The post Brundage Group Named Becker’s Top RCM Company 2026 appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

Dr. Patel’s Career Journey and Path to Leadership

Dr. Patel’s passion for medicine began early, inspired by a blend of scientific curiosity and a desire to serve his community. After medical school at the American University of the Caribbean and clinical rotations in New York, he completed his residency in Chicago, where he first assumed a leadership role as chief resident. His career then took him to New England, where he practiced as a hospitalist before being tapped for a dual clinical and administrative role. The shift to physician advisory work was motivated by a need for stability as he started a family, but also by recognition of his strong interpersonal skills and attention to detail. As Dr. Patel shares, “It worked out perfectly cause my wife and I were expecting our first child later that year. So that was more stability, and that was one of the primary reasons that I took it.” Eventually, Dr. Patel joined Brundage Group, seeking broader exposure to healthcare systems and the flexibility of remote work.

The Role and Impact of Physician Advisors

Physician Advisors serve as the essential bridge between clinical teams and hospital administration. Dr. Patel describes their role as translating the realities of bedside care into actionable insights for the C-suite, ensuring that both patient care and financial sustainability are prioritized. As Dr. Patel puts it, “The importance of why we need to document this way, and the connection between the clinical side and the financial side is lacking.” Their work impacts everything from documentation practices to regulatory compliance and revenue cycle management. By speaking the language of both clinicians and administrators, Physician Advisors help align hospital operations with the realities of patient care, reducing denials and improving outcomes.

Collaboration Between Physician Advisors and Executive Leadership

A central theme in Dr. Patel’s journey is the importance of strong alignment between Physician Advisors and hospital executives, particularly the Chief Medical Officer. Dr. Patel emphasizes that “when leadership delivers unified messages, physicians benefit from clear and consistent direction, minimizing confusion and allowing them to prioritize patient care.” Productive partnerships are rooted in transparent communication, reliance on data-driven strategies, and mutual respect. Dr. Patel believes, “hospitals that empower Physician Advisors and involve them in strategic planning see measurable gains in critical metrics such as length of stay and denial rates, resulting in positive outcomes for both patients and the organization.” This collaborative approach nurtures a culture of shared responsibility and informed decision-making, ultimately elevating both patient care and overall hospital performance.

Future of the Physician Advisor Role

Looking ahead, Dr. Patel envisions the Physician Advisor role as an evolving career path within the medical profession. As he reflects, “I think that it will possibly become a new career path. You go through your medical schooling, you do your training, some bedside rounds or bedside years and then maybe even during your training there’s some portion incorporated, but I see it almost as a dual business administrative and medical degree. This perspective underscores a future where advisory experience is integrated earlier in training, blending clinical expertise with business acumen to prepare future leaders who can navigate both patient care and hospital operations effectively.

Dr. Patel’s journey illustrates the profound impact Physician Advisors can have, not just on individual patients, but on entire hospital systems. His advice to healthcare leaders is clear: prioritize alignment and collaboration between Physician Advisors and the C-suite to drive better outcomes for all. In Dr. Patel’s words, “the true value of this role lies in helping hundreds or thousands of patients by ensuring hospitals remain strong, sustainable, and patient-focused.”

The post Spotlight: Dr. Dhaval Patel—Bridging Clinical Excellence and Healthcare Leadership appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

By Robin Sewell, CDIP, CCS, CIC, CPC, CCDS

In our last Query IQ article, we borrowed a line from The Princess Bride, when the character finally tells Inigo Montoya, “Stop saying that!” after hearing the same phrase repeatedly.

Apparently, we are continuing the Princess Bride theme this month. 

There is another famous line in the movie when Inigo tells Vizzini regarding his constant use of the term “Inconceivable!” 

“You keep using that word. I do not think it means what you think it means.” 

That’s often how CDI specialists and coders feel when a provider documents “sharp debridement.”

In the world of CDI and coding, “sharp” debridement does not necessarily mean that an “excisional” debridement was performed. 

Excisional Debridement 

Inpatient coding guidance has long been clear that describing a debridement as “sharp” or documenting the use of scissors, curettes, or other sharp instruments does not automatically qualify the procedure as “excisional” debridement. The documentation must include an “excisional” tissue removal  to code the root accurately as “excision.”  In the absence of such documentation, the procedure, if coded, is at high risk of denial and DRG downgrade. 

Over the years, CDI specialists and coders have become very good at querying providers to clarify the distinction between excisional and non-excisional debridement.

Identifying the Body Part and Layers Debrided 

However, even when the “excisional” question is resolved, another documentation detail can still create problems: The deepest anatomic layer debrided.

To be fair, documenting the depth of debridement has always been considered best practice. Under ICD-9-CM, however, coders often arrived at the appropriate procedure code through the Alphabetic Index and its sub-terms, where the available codes did not always require the same level of anatomic specificity.

ICD-10-PCS changed that. The coding construct requires coders to select the specific body system and body part directly from the PCS tables, making documentation of the deepest anatomic layer involved critical for accurate code assignment. 

The Payer Denial 

And this is exactly where a recent denial we reviewed came into play. 

In this case, the provider documented that the wound was debrided “down to healthy tissue.”  Well, that doesn’t translate to ICD-10-PCS coding. Therefore, a query for anatomic depth was submitted and answered as “down to fascia”. The payer denied the PCS code, reasoning that since the documentation did not explicitly state that the fascia itself was debrided, the procedure should not be coded at that level, and the DRG should be downgraded. 

Not so fast… 

In ICD-10-PCS, subcutaneous tissue and fascia are grouped under the same body system in the table below. Because these structures share the same body system construct, documentation supporting debridement to either level leads the coder to the same PCS table and body system, meaning the code assignment would not change even if debridement included only subcutaneous tissue. 

The coding is further supported by PCS guideline A10, which states: “And” when used in a code description, means “and/or” except when used to describe a combination of multiple body parts for which values exist for each body part.

Additionally, the phrase “down to” generally implies that the preceding tissue layers were debrided to reach that level. For example, to expose or reach the fascia, subcutaneous tissue would also be debrided, rendering the payer’s rationale for the denied questionable from both clinical and coding perspectives.

While this particular denial may have been a stretch, it highlights an important opportunity for documentation.

Querying for Debridement Procedures in ICD-10-PCS 

When querying providers regarding debridement procedures, it is helpful and compliant to include answer options that clearly identify the deepest anatomic layer debrided, such as: 

• Skin 
• Subcutaneous tissue 
• Fascia
• Muscle
• Bone

Using phrasing such as “down to and including” the specified anatomic layer can eliminate ambiguity and better align the documentation with the ICD-10-PCS coding structure. And of course, don’t forget the other words that still matter: “Excisional.” 

This same principle applies to procedures such as incision and drainage, where the deepest anatomic layer, i.e., the most specific body part, may be distinguished from an anatomic region, thus supplying the most specific code from the PCS coding table. 

Yes, providers may dislike these queries—and frankly, we don’t love sending them either. But when the coding system requires this level of specificity, CDI specialists and coders are simply translating the clinical documentation into the language required by ICD-10-PCS. 

So, the next time a procedure note reads “sharp debridement” and/or “down to” a particular layer, remember the immortal wisdom of The Princess Bride:  “You keep using that word. I do not think it means what you think it means.”

The post Query IQ: “You Keep Saying that Word…” appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

For those in revenue cycle management, clinical documentation integrity, utilization management, and compliance, conferences go beyond education by enabling professionals to connect, share challenges such as denials and reimbursement issues, and learn from peers facing similar issues.

Learning from Real-World Healthcare Revenue Cycle Challenges

At healthcare conferences, professionals discover how organizations address complex operational challenges.

Educational sessions often cover topics such as:

• Denial management strategies
• Clinical documentation improvement (CDI) best practices
• Physician Advisor support
• Utilization management optimization
• DRG Integrity

Exploring the Future of Healthcare Revenue Cycle Management

Healthcare conferences offer insight into industry trends. As technology, data analytics, and AI advance rapidly, organizations need to continually update their strategies.

Conference discussions often highlight emerging trends such as:

• AI-powered revenue cycle analytics
• Automation in utilization management
• Data-driven denial prevention strategies
• Physician-led revenue cycle advisory models

Understanding these trends helps healthcare organizations make informed decisions about modernizing operations and improving financial sustainability.

Continue the Conversation

At Brundage Group, we value the opportunity to meet with healthcare leaders, share insights, and learn directly from the professionals navigating today’s most complex revenue cycle challenges. Interested in engaging with our experts? Visit our conference and events page to schedule a meeting with us at an upcoming event.

The post Why Healthcare Conferences Matter for Revenue Cycle Leaders appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

Pinellas Park, Fla. – March 4, 2026 

Brundage Group, a physician-led leader in revenue cycle management (RCM) consulting and Physician Advisor services, has been recognized by Healthcare Business Outlook as one of the Top 10 RCM Solution Providers in 2025. Additionally, the recognition highlights the firm’s continued leadership in delivering strategic, data-driven solutions that help hospitals and health systems optimize financial performance and revenue integrity.

This acknowledgement shows Brundage Group’s strength in physician advisory services, clinical documentation integrity, coding and auditing, mid-revenue-cycle optimization, denial management, and analytics. By working closely with healthcare organizations and using forward-thinking strategies, the company helps improve compliance, secure earned revenue for care already provided, and better connect clinical and financial operations.

“In today’s environment, healthcare organizations face mounting pressure from regulatory complexity, reimbursement changes, and increasing financial scrutiny,” said Tim Brundage, MD, Founder and CEO of Brundage Group. “Being named one of the Top 10 RCM Solution Providers for 2025 is a meaningful acknowledgment of our team’s commitment to helping our clients achieve sustainable revenue integrity.”

Brundage Group is physician-led, has strong clinical expertise, and is tech-enabled. Furthermore, this approach helps connect providers, coding professionals, and revenue cycle leaders. For instance, by offering hands-on support and leveraging advanced analytics, Brundage Group delivers practical solutions that drive real results in the mid-revenue cycle.

The Healthcare Business Outlook Top 10 RCM Solution Providers list honors organizations that demonstrate innovation, deliver measurable results, and have a proven track record of helping healthcare providers manage financial and operational challenges in a changing industry.

About Brundage Group
Brundage Group is the trusted choice of hospital systems for revenue cycle management solutions. We support hospitals nationwide with customized solutions, including a full suite of physician advisory services, proprietary level of care analytics, and physician-led education to relay quality care. Our programs help hospital organizations break down departmental silos by unifying all departments in the mid-revenue cycle. Learn more at brundagegroup.com.

Media Contact:
Lacey Thompson
Senior Director of Marketing, Brundage Group
lthompson@brundagegroup.com

The post Brundage Group Recognized as a Top 10 RCM Provider appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

In today’s everchanging healthcare environment, internal hospital resources are insufficient to meet growing payer demands. Hospital leadership is realizing the importance of incorporating expert external Physician Advisors to help protect clinical decisions, remain compliant, and reduce payer-related financial risks. 

The Reality of Inpatient Practice Under Payer Oversight 

Hospitalists make important decisions quickly, often with limited information and changing patient needs. Meanwhile, payers review these cases later, using strict and inflexible criteria. 

Common inpatient payer challenges include: 

• Patient status disputes (inpatient vs. observation) 
• Medical necessity denials for inpatient admissions 
• Payment reductions from DRG downgrades or unauthorized days 
• Retrospective audits disconnected from bedside realities

These challenges put pressure on clinical judgment often leaving hospital physicians feeling like they must defend their treatment decisions as they address the needs of an increasingly older and complex healthcare population. 

Why Internal Resources Are Often Not Enough 

Many hospitals depend on internal utilization review or case management teams. While these teams are helpful, they often face limits such as: 

• Limited physician-level payer expertise 
• High patient volume and staffing constraints 
• Lack of authority in payer escalation pathways 
• Reactive rather than strategic denial management 

Without Physician Advisor-level expertise, hospital hospitals may fail to realize earned revenue for medical necessity decisions based on physician judgment.  

The Critical Role of Physician Advisors in Inpatient Care 

Expert Physician Advisors offer clinical credibility along with strong knowledge of utilization management, payer policies, and regulatory rules. Their job is not to second guess patient status orders, but to help explain clinical complexity in a way payers recognize as medically necessary. 

Expert Physician Advisors provide: 

• Real-time guidance to utilization review staff on inpatient admission decisions
• Credible defense of medical necessity decisions during concurrent payer reviews
• Documentation strategies aligned with inpatient medical necessity criteria
• Physician-to-physician advocacy during escalations and appeals
• Clinical bandwidth that allows hospital physicians to remain at the bedside

For hospitals, this guidance helps reduce uncertainty and protects their earned revenue from unfair payer challenges. 

Why External Physician Advisor Expertise Matters 

External Physician Advisors bring objectivity and a deep understanding of payer rules that internal teams may not have. They see payer practices across many hospitals, regions, and contracts. They often have relationships with payer physician advisors  

This external perspective allows Physician Advisors to: 

• Identify payer trends and emerging denial tactics
• Apply best practices across inpatient settings
• Provide consistent, defensible guidance independent of local pressure
• Strengthen hospital positioning during disputes and audits

This leads to fewer surprises and better support when payer issues come up. 

How Brundage Group Supports Physicians and Hospitalists 

Brundage Group provides expert Physician Advisor guidance tailored for hospital settings. Our Physician Advisors work with hospitalists, utilization management, and revenue cycle teams to support care decisions at every stage of payer review. 

Brundage Group’s Physician Advisor services include: 

• Inpatient admission and medical necessity guidance 
• Concurrent review and payer escalation support 
• Denial prevention and appeal strategy 
• Feedback to providers to strengthen their understanding of medical necessity 

With external Physician Advisor expertise, Brundage Group helps hospital physicians focus on patient care and makes sure patient status decisions are well supported and defended. 

Physician Advisor Support as Clinical Protection 

For hospital physicians, Physician Advisors act as an important layer of protection. They help maintain clinical independence, reduce administrative hassles, and ensure payer demands do not affect patient care. 

Hospitals that leverage expert external Physician Advisors experience: 

• Reduced inpatient denials and patient status downgrades 
• Improved alignment between clinical care and payer criteria 
• Less administrative burden on hospitalists 
• Greater financial and operational stability 

In today’s inpatient environment, payer oversight is not going away; in fact, it is increasing. Hospitalists and utilization management teams should not have to handle this complexity on their own. 

Expert external Physician Advisor guidance gives the experience, perspective, and support needed to handle payer scrutiny and keep clinical standards high.

The post Why Hospital Physicians Need Expert Physician Advisor Guidance  appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

Have you seen the scene in The Princess Bride where Inigo Montoya spends his entire life hunting the six-fingered man who killed his father? When he finally confronts him, he repeats, “Hello. My name is Inigo Montoya…” 

Eventually, the six-fingered man snaps back: “Stop saying that!”

This echoes the sentiment CDI and coding professionals sometimes feel when providers repeatedly document phrases such as “elevated troponin” or “demand ischemia” instead of the terms “myocardial injury” or “myocardial infarction” (MI). This clinical and documentation specificity is needed for accurate  coding appropriate reimbursement and accurate tracking of quality measures. 

Why “Elevated Troponin” and “Demand Ischemia” Are Problematic  

The Fourth Universal Definition of Myocardial Infarction clearly differentiates these conditions, which are also amenable to ICD-10 code assignment: 

• Non-ischemic Myocardial injury 
• Type 2 myocardial infarction (T2MI) 
• Type 1 myocardial infarction (AMI) 

When providers document using vague or outdated terminology, they unintentionally create ambiguity – remember urosepsis? Phrases like “elevated troponin” or “demand ischemia” often lead to mischaracterization of the patient’s condition, a lack of specificity and/or unnecessary documentation queries.  

Elevated troponin is an observation and not a diagnosis. Providers may use this term initially until a definitive diagnosis of myocardial injury or infarction is identified. Elevated troponin should never be listed as a final diagnosis.  

Demand ischemia represents the pathophysiologic mechanism for an elevated troponin and should not be used as a standalone diagnosis. If an elevated troponin is due to demand ischemia, the provider should then consider if there are signs/symptoms of ischemia. If yes, the diagnosis should be Type 2 MI. If no, myocardial injury would be most appropriate. Using the term “demand ischemia” alone may result in confusion and a lack of specificity requiring a potential query.  

Recent Documentation Example 

Revisiting the Clinical Criteria… 

According to the Fourth Universal Definition of Myocardial Infarction, Type 2 MI requires: 

1. A rise and/or fall of cardiac troponin with at least one value above the 99th percentile AND 

2. Evidence of myocardial oxygen supply-demand imbalance unrelated to coronary thrombosis, plus at least one of the following: 
   • Symptoms of acute myocardial ischemia
   • New ischemic ECG changes
   • Development of pathological Q waves
   • Imaging evidence of new loss of viable myocardium or new regional wall-motion abnormality consistent with ischemia

By contrast, myocardial injury is defined simply as: 

“Detection of an elevated cardiac troponin value above the 99th percentile upper reference limit.” 

In the above case, the patient had echocardiographic evidence of anteroseptal hypokinesis—a regional wall-motion abnormality consistent with ischemia. Even in the absence of chest pain or ECG changes, this finding supports a diagnosis of Type 2 MI in the setting of elevated troponin levels. However, the query provided options that led to an inappropriate diagnosis of demand ischemia. 

The Ineffective Query

According to the H&P, the patient was noted to have elevated troponin levels up to 1000 in the setting of sepsis. Additional documentation includes: “possible demand ischemia” in a progress note, “myocardial injury” in the discharge summary, and echocardiogram findings of “anteroseptal hypokinesis.” 

Can this clinical evidence and documentation be further clarified as:  

By adding options for “demand ischemia” and “myocardial injury,” the CDI or Coding Professional may  have unintentionally led the provider away from the most clinically accurate diagnosis. 

Query Tip 

Remember, the Query Practice Brief instructs us to add only clinically relevant options and to exclude all clinically irrelevant options. 

Coding Tip 

Type 2 MIs and Myocardial Injury should generally not be coded as principal diagnosis due to the instructional note indicating to “Code first, if applicable, the underlying cause” 

Here’s a practical reference to assist in query construction. 

The Takeaway

When you see “elevated troponin” or “demand ischemia,” pause. Review the record. Look for imaging, ECG changes, hemodynamic stressors, and clinical context. 

Educate your providers on key points:   

• “Elevated troponin” should never be a final diagnosis.  
• The term “demand ischemia” should not be a standalone diagnosis. Demand ischemia should be further specified as a definitive diagnosis of myocardial injury or type 2 myocardial infarction .  
• Use the 4^th Universal Definition of MI when applying the diagnosis of myocardial injury or type 2 MI  

Through education and effective queries, eventually, they will, “Stop documenting that!” 

The post Query IQ: “Stop Saying That!” appeared first on Physician-Led Advisory & Revenue Cycle Analytics.

The Program for Evaluating Payment Patterns Electronic Report (PEPPER) was on hiatus for over a year, but it is finally available again to short-term acute care (STACs) hospitals. Versions for other facility types are expected to be released in the coming months.  PEPPER is a comparative report that summarizes paid Medicare Fee-for-Service (FFS) claims by Medicare fiscal year (FY) quarter that may be at-risk for improper payment.  

Medicare Billing Compliance:

General Guidance 

Medicare has a couple of different Medicare FFS compliance tools. The Comprehensive Error Rate Testing (CERT), a program implemented in 1996 to estimate the national Medicare FFS improper payment rate, establishes target areas for all other Medicare FFS audit programs  (e.g., Medicare contractors such as Medicare Administrative Contractors and Recovery auditors). It is the only program in which Medicare contractors may randomly select claims for audit. Audited STAC claims are classified as a hospital outpatient (Part B), Part A (excluding hospital inpatient prospective payment system – IPPS), and Part A (hospital IPPS). CERT findings are published annually.  

To determine the improper payment rate for Medicare Part A in 2025, 18,041 claims were sampled, and 8,750 were reviewed, resulting in an improper payment rate of 3.1% (Table A1). Currently, Medicare Part A has the lowest improper payment rate of all claim types audited by CERT. Medical necessity errors accounted for the largest share of improper Part A payments at $2.9 billion (Table A5). As expected, the improper payment rate is higher for shorter inpatient admissions stays (zero to one day) with a rate of 17.8% of claims billed to Medicare Part A. This is somewhat surprising since the Medicare Two-Midnight Rule has been in use since 2013 with limited modifications since that time.  

Medical necessity denials can have a greater impact on revenue than coding errors. When an inpatient claim is denied payment under Medicare Part A, how quickly the organization corrects the patient’s status determines the extent of the revenue leakage. If patient status is corrected quickly, the hospital may be able to bill observation services in addition to separately billable Medicare Part B services, if an order is placed and at least eight hours of observation care is provided.  

Unfortunately, due to limited utilization review (UR) staffing, antiquated UR workflows, lack of Physician Advisor support and other factors, medical necessity errors usually are not caught until the patient has been discharged, preventing the hospital from the ability to bill observation services.  

Medicare Billing Compliance:

Hospital Specific Guidance 

Where CERT provides general information for all hospitals, PEPPER provides hospital-specific information. The format and structure of PEPPER allow a hospital to easily identify specific MS-DRGs that may be vulnerable to improper payment due to medical necessity errors.   

PEPPER Methodology: 

PEPPER is designed to highlight specific target areas that are vulnerable to medical necessity or coding errors that can contribute to improper Medicare payments.  In this blog, the focus is on medical necessity target areas, but there is overlap between these areas as some are the result of both medical necessity and coding errors. These include: 

• Percutaneous cardiovascular (CV) procedures 
• Knee Replacement
• Syncope
• Digestive System Diagnoses
• Medical Back
• Spinal Fusion
• 3-Day Skilled Nursing Facility (SNF)
• 2-Day Medical MS-DRGs
• 2-Day Surgical MS-DRGs
• 1-Day Medical MS-DRGs
• 1-Day Surgical MS-DRGs

What sets PEPPER apart from other Medicare audit tools is that hospitals are compared against their peers at the state, jurisdiction, and national level. This comparison allows Medicare to identify hospitals that are outliers, defined as those in the top or bottom 20 percentiles within each comparison group. Medicare recommends that hospitals are outliers confirm that their revenue cycle practices are compliant with Medicare billing requirements.  

Compare target reports (Table 2) can be extremely helpful for hospital leadership to understand the relationship between medical necessity denials and hospital revenue. This table includes a column for the sum of payments. In the sample ST-PEPPER 2025 Q3 report available on the PEPPER website, the dummy data reveals the hospital as a high outlier for the target areas of Percutaneous CV procedures and medical back.  

Specifically, the hospital had 23 Medicare Part A claims that generated $349,280 in payments. Because this is a quarterly report when multiplied by four, this provides an estimate of annual dollars at risk within this one target area: $1,397,120. It is unlikely that all these claims will be denied. Still, even if a fraction of them could have a detrimental impact on hospital finances, especially if the hospital has a low or negative operating margin.  

Conclusion 

Far too often, hospital leadership views UR as a cost center and is reluctant to invest in resources to optimize accurate Medicare billing, including the use of external vendors. In a healthcare environment where payer denials are increasing year-over-year, it is not only the payments at risk, but the cost associated with appealing denials that must be considered. American Hospital Association Report found, “administrative costs now account for more than 40% of total expenses hospital incur in delivering care to patients.” Furthermore, they argue, “hospital staff must expend valuable time and resources to overturn inappropriate denials, adding unnecessary cost and burden to the health system.”    

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Breaking Barriers and Leading by Example

Entering medicine in the 1990s, Dr. Geoffrion faced a workforce dominated by men. She quickly learned that respect and equal pay were not freely given to women physicians. Her promotion to chief resident marked a pivotal moment, affirming her place in the field and her ability to lead. Dr. Geoffrion recalls confronting sexism directly, including a memorable incident in which she challenged a colleague’s dismissive nickname in the operating room, earning applause from peers. Throughout her career, she has consistently demonstrated the importance of setting a high standard for others to follow. “I like to be an example. I like to be the person who’s doing the job better than everybody and lead by example,” Dr. Geoffrion said. Her commitment to excellence and leadership has paved the way for others, inspiring colleagues and mentees to strive for their best.

Balancing Career and Family

Balancing a demanding career with family life, Dr. Geoffrion became one of the country’s first hospitalists, working night shifts for 15 years so she could raise her three children. Reflecting on the experience, she said, “I had three children under the age of five, and I was able to work nights and then still be, you know, like a stay-at-home mom for them with a lot of help, family support. So, for me it was a career where I could do two things that I love the most, right? To be a mom and a doctor. As a matter of fact, my license plate is ‘Doctor Mom.’ I just wanted to be able to have a family, but at the same time have a career that was challenging.” Dr. Geoffrion credits her supportive spouse and careful planning to help her prioritize quality family time, even when quantity was limited.

Meaningful Impact and Continued Advocacy

Throughout her career, Dr. Geoffrion found profound meaning in caring for patients during their most vulnerable moments, cherishing the opportunity to comfort families, advocate for patients, and make a difference in critical times. As her journey progressed, she transitioned into the role of Physician Advisor and expanded her advocacy by helping hospitals navigate complex systems and ensuring patients receive the care they needed. Joining Brundage Group in 2022, marked a new chapter, bringing renewed inspiration through collaboration with passionate colleagues. On this environment, Dr. Geoffrion said, “I think it’s great to be around people that all have the same passion to, you know, help hospitals. You know, I think I would say that it inspires me every day. We just learn something new every day at this job.” The intellectual stimulation and sense of shared purpose at Brundage Group continue to motivate her each day.

Progress for Women in Medicine

Dr. Geoffrion has witnessed significant progress for women in medicine, noting that women now outnumber men in medical school classes and are increasingly taking on leadership roles. She has played an active part in building supportive communities, from organizing networking groups to mentoring young physicians. Dr. Geoffrion believes women physicians excel at networking and supporting one another, creating spaces for growth and shared success. She fondly recalls, “We started a women physicians potluck and we did it every other week, and we would all meet and just talk about the challenges of medicine and leadership.” These gatherings offered camaraderie and a valuable space for sharing experiences and supporting one another, helping female physicians navigate the unique obstacles they faced in the medical field.

Advice for Future Generations

Her advice to future generations is clear: pursue medicine with empathy, passion and perseverance. Dr. Geoffrion encourages women not to take shortcuts, and to embrace the challenges and rewards of a fulfilling career. “I love teaching, and so I always encourage women to go into medicine. I don’t tell people not to do it. I think it’s a fantastic career.” Dr. Geoffrion believes medicine is a calling, and those who feel drawn to it will find satisfaction and purpose.

A Lasting Legacy

Dr. Cheryl Geoffrion’s legacy is one of resilience, leadership and unwavering commitment to her patients, colleagues and family. As we celebrate National Women Physicians Day, Dr. Geoffrion stands as a role model and inspiration — showing what is possible when determination meets compassion in the world of medicine.

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