Hey, it’s Athena,
If you only have a minute, here's this issue. Initial denials are falling, but the money is still stuck. Payers are taking back more after claims pay, and contesting a single claim now costs about $57, which is why our two new reads focus on where the friction went.
The deals this month point the same way. A Blue Cross plan now co-owns surgery centers, a Brentwood GI platform landed with its lenders, and Surgery Partners and Intermountain are expanding together. Payers, providers and investors are all betting on outpatient care.
After that, What to Watch Next covers CMS's AI prior auth pilot, Elevance, and the Oct 15 DME prior auth deadline. We also answer a reader question on modifier 91 and list two Nashville events coming up this month.
One more thing before we dive in: Exactrx won the 3686 Pitch Competition, sponsored by Amazon and Launch Tennessee! We started Exactrx because the biggest barrier to care we kept running into was financial, not clinical. It means a lot to have Tennessee's healthcare and startup community get behind the idea that getting paid for care shouldn't take a fight. Thank you to everyone who cheered us on.
Let's get into it.
This Week's Reads
The Real Cost of Contesting a Claim: When $57 Chases $100. Kodiak's data from more than 2,300 hospitals shows initial denials falling while takebacks on paid claims rose to 1.57% of accounts receivable from 1.38%. Premier puts the average cost of contesting a denied claim at $57.23, so fighting back eats into what you recover.
The Denial Economy in 2026. One in five providers now report final denial rates above 5%, up from 12% a year earlier. That's the backdrop to UnitedHealthcare's prior auth cut on roughly 1,700 codes, which took effect Oct. 1.
Deals Tracker
Penn Medicine, Independence Blue Cross and Regent Surgical launched a jointly owned ASC company, which plans to develop at least 18 ASCs across Pennsylvania, New Jersey and Delaware, with Tennessee-based Regent as the development and operating partner. A dominant regional payer holding equity in surgery centers changes the site-of-service math, and these centers are worth watching as a steering and rate benchmark for every other ASC contracting with IBX. Terms undisclosed. (Sept 24)
MRO acquired Vyne Medical, a data intake vendor serving more than 800 hospitals that converts fax, voice, paper and image inputs into structured data. Referrals, orders and clinicals still arrive by fax at plenty of outpatient front desks, and every hand-keyed field is a chance for an eligibility or authorization miss that shows up weeks later as a denial. Terms undisclosed. (Sept 16)
Surgery Partners completed the sale of its interests in its two Idaho Falls hospitals to Intermountain Health, receiving $797M in gross proceeds and $587M in net cash, mostly earmarked for debt paydown. The Brentwood-based operator says the exit cuts its Medicaid mix in half, to under 2% of revenue, a plain statement of which payer mix and service lines public surgical operators want to own. (Sept 17)
Goldman Sachs affiliates took control of One GI, the Brentwood-based gastroenterology MSO, after sponsor Webster Equity Partners handed control to lenders, Mergermarket reported, citing people familiar with the situation. Sources pointed to overpaying for acquisitions, operational challenges and physician-owner unrest, a reminder close to home that roll-up returns depend on the integration work after each tuck-in. (Sept 25)
What to Watch Next
Medicare's AI prior auth pilot. Two vendors in CMS's WISeR model denied 5,944 requests in its first three months, according to records obtained by the EFF. A CMS plan calls the model "intentionally designed for expansion," Bloomberg Law reported, and a six-month analysis is due in the months ahead. It already screens knee surgeries and steroid injections in six states.
Elevance's site-neutral move. Elevance will push off-campus outpatient services toward non-facility rates across its commercial, MA and Medicaid plans, using automated address checks, HFMA reported. Rollout runs into 2027.
Bots on both sides. Cognizant launched AI agents that work pended claims on TriZetto platforms covering more than 200 million members, while the BCBSA's $942 million AI coding estimate reached CNBC. More in Bots vs. Bots.
Oct. 15 DME prior auth. Newly enrolled DME suppliers face probationary prior auth starting Oct. 15, which could slow post-surgical equipment orders.
Ask Exactrx:
Q. "Our lab reran a test because the first specimen was hemolyzed. Can we bill the second run with modifier 91?"
A. No. Modifier 91 is for a medically necessary repeat of the same test on the same day. It can't be used when a test is rerun because of specimen or equipment problems. CMS just reminded providers in its Oct. 1 MLN newsletter that duplicate tests will be denied. A rerun is not a repeat.
Upcoming Events
Nashville Health Care Council, Crucial Conversations: After the Deal, Oct 8, Brentwood, TN. A breakfast on protecting clinical culture under PE ownership, with speakers from TeamHealth, USHV and Holland & Knight.
AI for Hospitals & Health Plans Congress, Oct 15 to 16, Loews Vanderbilt Hotel, Nashville. Sessions include AI in revenue cycle management and billing call centers.
One question to leave you with: how many of your small-balance denials did you write off last quarter, and how many did you fight? If the $57 math has changed how your team decides, I'd love to hear how. Hit reply.
This newsletter goes out to a focused group of operators, finance leaders, and revenue cycle professionals working in ambulatory and outpatient settings. If someone forwarded this to you and it felt relevant, it probably was.