Reduce Denials + Underpayments​ Archives – Spark Health Partners https://www.sparkxgroup.cloud/blog/category/reduce-denials-underpayments/ Your modern revenue cycle solution Wed, 27 Nov 2024 13:25:09 +0000 en-US hourly 1 ../../../../wp-content/uploads/2023/10/Logo-Chevron-80x80.png Reduce Denials + Underpayments​ Archives – Spark Health Partners https://www.sparkxgroup.cloud/blog/category/reduce-denials-underpayments/ 32 32 Examining the Decision to Outsource​ ../../../../wp-content/uploads/2024/11/EBook_Why-RCM-Partnerships-Matter.pdf#new_tab Tue, 18 Jun 2024 13:05:52 +0000 https://www.sparkxgroup.cloud/?p=13457 See why future-focused healthcare leaders view the revenue cycle as a value driver, not a cost center. … Read More

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]]> How to determine if outsourcing is right for you and how to select the right partner

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]]> RCM Outsourcing Guide: Choosing the Right Partner Is Vital to Your Bottom Line https://www.sparkxgroup.cloud/blog/revenue-cycle-outsourcing-guide/ Wed, 14 Jun 2023 16:36:29 +0000 https://www.sparkxgroup.cloud/?p=10845 The right RCM outsourcing partner can impact your bottom line, optimize revenue streams and streamline operations for your organization. … Read More

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When it comes to revenue cycle management (RCM) outsourcing, the process of selecting the right partner for your organization’s financial success is crucial. In the ever-evolving healthcare landscape, managing revenue cycles efficiently has become more challenging than ever. Thanks to increasing complexities, stringent regulations and mounting administrative burdens, many healthcare providers are turning to outsourcing as a strategic solution. However, the key to reaping the benefits of RCM outsourcing lies in selecting the right partner. In this revenue cycle outsourcing guide, we’ll delve into the significance of choosing the right RCM outsourcing partner and how it can significantly impact your bottom line, ensuring optimized revenue streams and streamlined operations for your healthcare organization.

What is Revenue Cycle Management Outsourcing?

RCM outsourcing is the practice of entrusting the management of revenue cycles to external service providers. It involves delegating critical financial tasks and responsibilities to specialized professionals who possess expertise in handling billing, coding, claims processing and other revenue-related functions. RCM outsourcing holds particular significance in the healthcare industry as dedicated firms or vendors can help handle tasks such as patient registration, insurance verification, coding, billing, collections and payment posting. By leveraging the knowledge and resources of an outsourced partner, healthcare organizations can streamline their revenue cycles, enhance financial performance, reduce operational costs and ensure compliance with complex billing and regulatory requirements.

RCM outsourcing enables healthcare providers to focus on delivering quality care while entrusting the intricate financial aspects to experienced professionals, ultimately leading to improved efficiency, increased revenue and enhanced patient satisfaction.

What Are the Benefits of Outsourcing Your RCM?

Outsourcing RCM offers numerous advantages that significantly benefit healthcare organizations.

Ensuring the accurate transmission of data across disparate systems and different departments, without losing anything in translation, is crucial for precise reimbursement and a positive patient experience. RCM leaders must adapt to constant changes and nuanced requirements for how data should be shared, through which systems, and at what time to comply with thousands of intricate rules that vary between payors and service types. 

Bringing in individual vendors and systems to manage different aspects of the RCM process demands meticulous orchestration and oversight to prevent gaps between steps or vendors. This task becomes particularly challenging due to the multitude of ways information and performance are captured and shared. Each vendor introduces their own reporting variation, calculating metrics differently or utilizing specific subsets of data. This leads to discrepancies between vendor reports and the provider’s host system, making it exceedingly difficult to obtain a comprehensive overview of RCM performance and verify it through transparent access to the data and calculations.

“Revenue cycle has its own black box,” explains Marty Bonick, president and CEO of Ardent Health Services, a 30-hospital system in the southeast. “There wasn’t visibility at an executive level to see underlying subcategories within the revenue cycle where we were leaving dollars on the table or what was really happening with denials or underpayments or recoveries. I would ask our vendors to provide an overview of our performance I would get spreadsheets with a bunch of data but no insights.”

RCM outsourcing is a holistic solution that offers a comprehensive approach to revenue management, eliminating the challenges associated with coordinating multiple vendors and ensuring a unified, streamlined process.

Through RCM outsourcing, you can unlock benefits including improving your revenue cycle performance, reducing the burden on administration, cost-effectiveness, enhancing the patient experience and achieving better financial forecasting and management.

Improved Revenue Cycle Performance

By partnering with experienced outsourcing providers, healthcare providers can tap into a wealth of industry knowledge, specialized expertise and advanced technological resources. These partners can implement accurate coding practices, effective claims management strategies and efficient billing processes to optimize revenue streams. By conducting thorough audits, they can identify areas for improvement and implement revenue-enhancing initiatives. Outsourcing partners will also stay up to date with evolving regulations, compliance requirements and industry trends to ensure adherence to billing guidelines, mitigate the risk of penalties and reduce rejections and denials.

With streamlined revenue cycles, healthcare organizations can maximize revenue collection, minimize revenue leakage and ultimately improve financial performance. Outsourcing revenue cycle management empowers healthcare providers to focus on core competencies so experts can handle the intricate aspects of revenue management, resulting in improved revenue cycle performance.

Reduced Administrative Burden + Costs

Trying to manage revenue cycle management in-house can be resource-intensive and result in a financial burden. With RCM outsourcing, you eliminate the need for extensive infrastructure, technology investments and dedicated staff, resulting in significant cost savings. Outsourcing partners operate at scale, spreading costs across multiple clients, enabling them to offer services at a lower cost than if you were to maintain an in-house revenue cycle management team.

Outsourcing can alleviate the stress and administrative burden of keeping up with ever-changing regulations, compliance requirements and industry trends. Through a managed services partnership, you can benefit from the expertise of specialized professionals who are well-equipped to adapt to the dynamic nature of these rules. This ensures your RCM processes remain accurate, efficient and compliant, allowing your internal teams to focus on other critical tasks.

Enhanced Patient Experience

Entrusting revenue cycle management tasks to a dedicated outsourcing partner ensures healthcare providers can allocate more time and resources to patient care. Streamlined revenue cycles allow providers and healthcare professionals to focus on delivering quality treatments, enhancing patient satisfaction and improving overall healthcare outcomes.

An inefficient or poorly run revenue cycle can negatively impact patient satisfaction in several ways. Delays and errors in billing and insurance processing can result in confusion and frustration for patients, whether due to receiving unexpected bills or difficulties understanding financial obligations. This stress can ultimately erode their trust in the healthcare provider.

A disorganized revenue cycle can also lead to longer wait times for appointments or procedures. The scheduling and pre-authorization process needs to be optimized to prevent these unnecessary delays before receiving care to prevent dissatisfaction and the perception the patient’s time and needs are not being prioritized.

Optimizing the revenue cycle through a dedicated outsourcing partner can elevate the patient experience. By leveraging the expertise and technology of a specialized partner, healthcare providers can streamline billing, coding and claims management processes, resulting in faster and more accurate billing, reduced billing errors and enhanced transparency in financial transactions. 

When processes related to financial obligations are smooth and efficient, the patient can focus more on their healthcare journey for a more positive perception of the provider. Reducing the administrative burden on healthcare professionals will also allow them to dedicate more time and attention to patient care, fostering better communication, empathy and personalized treatment plans.

Better Financial Forecasting + Management

Through the expertise of outsourcing partners, healthcare providers and organizations gain access to comprehensive financial reporting and analysis. A good outsourcing partner will generate detailed reports on key performance indicators, revenue trends and financial metrics, providing valuable insights into your organization’s financial health.

This accurate, timely financial data helps healthcare providers make informed decisions, identify potential bottlenecks and implement proactive measures to optimize revenue streams. Revenue cycle management outsourcing also offers robust revenue cycle analytics and predictive modeling capabilities to enable organizations to forecast revenue, identify revenue leakage points and strategize for future growth. Outsourcing partners will utilize advanced technologies and industry best practices to improve revenue capture, reduce bad debt and enhance cash flow management.

Relying on the expertise of an outsourcing partner helps your organization achieve better financial forecasting and management, leading to increased revenue, improved financial stability and long-term sustainability.

What To Look for in an RCM Outsourcing Partner

Choosing the right RCM outsourcing partner is crucial for the success of your healthcare organization. It’s important to apply careful evaluation and consideration of various factors. Your ultimate goal is to select a reliable, capable RCM outsourcing partner with a track record of delivering consistent results for organizations like yours. 

Below are the top considerations when looking for an RCM outsourcing partner.

Understanding Your Organization’s Needs

Every healthcare organization has unique requirements, challenges and goals within its revenue cycle operations. By thoroughly understanding your organization’s needs, you can find an outsourcing partner that aligns with your specific objectives and can effectively address your pain points.

Comprehending your organization’s needs can help a partner tailor their services and solutions accordingly. They’ll take the time to analyze your existing revenue cycle processes, identify areas for improvement and customize their approach to meet your specific requirements. A higher level of understanding ensures a more seamless integration of their services with your existing systems and workflows to minimize disruptions and maximize efficiency.

In addition, working with a partner who understands your organization’s needs can provide proactive solutions, offer valuable insights and adapt their services as your needs evolve.

Experience + Expertise

Having a revenue cycle management outsourcing partner with extensive experience means you immediately get industry-specific knowledge and insights brought to the table. They already understand the complexities of healthcare reimbursement, coding standards, billing regulations and payor requirements.

Their experience and expertise can help you navigate the intricacies of revenue cycle processes, identify potential challenges and implement best practices to optimize reimbursement. Additionally, an experienced outsourcing partner has likely encountered a wide range of revenue cycle scenarios and has developed effective strategies to overcome them. Their track record should demonstrate their ability to deliver results and meet or exceed expectations. You want to ensure your revenue cycle operations are placed in capable hands to stay ahead in the ever-evolving healthcare landscape.

Technology + Infrastructure

Working with a technologically advanced outsource partner means you can leverage state-of-the-art software solutions, automation tools and electronic health record (EHR) systems. These solutions will help streamline billing, coding, claims processing and other revenue-related tasks. A competent partner should have the capability to integrate seamlessly with your existing systems for smooth data exchange and to minimize disruptions.

Having a robust infrastructure is essential for handling the volume and complexity of your organization’s revenue cycle, so working with a partner that has strong infrastructure ensures you’re able to handle high transaction volumes, maintain data security and privacy and ensure business continuity. Technological proficiency contributes to efficient revenue cycle management, enhanced data security and scalability.

Reputation + References

The reputation of a potential outsourcing partner reflects their reliability, trustworthiness and the quality of services they provide. A reputable partner will have a positive track record, demonstrated by satisfied clients and successful partnerships. When evaluating the credentials of a potential partner, it’s beneficial to consider rankings and recognition from esteemed industry organizations. For example, HFMA recognizes healthcare organizations that meet industry standard revenue cycle benchmarks each year. Ask your potential partner how many of their clients have received this designation.

Check references and seek feedback from current or past clients to gain insights into the potential partner’s performance, responsiveness and ability to meet expectations.

It’s also important to inquire about their level of customer support, deadline adherence, billing and coding accuracy and overall client satisfaction. Having a revenue cycle management partner with a strong reputation and positive references instills confidence in their ability to deliver results and establishes a foundation for a reliable long-term partnership.

Additionally, third-party organizations like KLAS Research and Black Book Research release annual rankings of firms across a variety of categories, including RCM outsourcing. It’s essential to gain a clear understanding of the criteria employed by these organizations in formulating their rankings, including how client feedback is obtained and how performance is evaluated.

Communication + Transparency

A revenue cycle management outsourcing partner that provides clear and open communication channels ensures there’s a seamless flow of information between your organization and the partner. Regular, timely communication allows for addressing concerns, providing feedback and sharing updates. It fosters a collaborative relationship where both parties are on the same page regarding expectations, goals and project timelines.

The number one thing is communication. Not everything is going to go perfectly, and the key is how the customer and vendor react.

– Health System CFO

Transparency is equally as important as it promotes trust and accountability. An outsourcing partner who values transparency will provide clear visibility into their processes, performance metrics and financial reporting. They should be open about their pricing structure, contractual terms and any potential risks or challenges. Transparent communication helps build a strong working relationship based on trust and enables you to make informed decisions and monitor the progress of your revenue cycle management effectively.

Potential Risks + Challenges of RCM Outsourcing

Revenue cycle management outsourcing can undoubtedly bring several benefits, but it does come with potential risks and challenges to be aware of. One of the main risks is the potential loss of control and oversight over revenue cycle operations. Depending on a partner for performance can raise concerns about their ability to deliver and prevent financial disruption, ensuring they adhere to agreed-upon service levels. There may also be concerns surrounding data security and privacy as sensitive patient information is shared. 

Additionally, there’s a risk of communication gaps or misalignment of goals between your organization and the outsourcing partner. A lack of clear communication and collaboration can result in misunderstandings and potential errors in revenue cycle management processes, which can negatively impact revenue. It’s also crucial to consider the financial implications as outsourcing does come with associated costs. Evaluate financial feasibility and be sure the potential benefits outweigh the expenses.

Lastly, the transition phase from in-house to outsourced RCM can present challenges like staff training, data migration and adjusting to new processes. Your organization will need to have a well-defined transition plan and effective change management strategies to address these challenges.

While these are very real risks to consider, considering what to look for in a revenue cycle management outsourcing partner upfront can help mitigate these risks to ensure you have a positive experience.

Ensure Less Worry About Your Outsourced RCM With the Right Partner

Partnering with an experienced revenue cycle management outsourcing partner is of the utmost importance for healthcare organizations seeking to optimize revenue cycle processes. At Spark, we offer a wealth of healthcare industry-specific knowledge, expertise and a proven track record to ensure a successful partnership. Through this experience, we can help your organization navigate the complexities of patient engagement, coding, billing regulations and payor requirements to ensure accurate and efficient revenue cycle management. With Spark’s outsourcing solution, we can help you streamline operations, enhance data security and achieve scalability. If you’re ready to improve financial forecasting, achieve better revenue cycle performance, and allow your team to focus on core competencies, contact us today.

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]]> How to Identify, Recover + Resolve Underpayments in Healthcare https://www.sparkxgroup.cloud/blog/underpayments-are-undermining-your-revenue-learn-how-to-identify-recover-resolve-them/ Tue, 16 May 2023 10:49:00 +0000 https://www.sparkxgroup.cloud/?p=10224 Hospitals will leave money on the table if they don’t think holistically about identifying, recovering and resolving underpayments. … Read More

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As hospitals continue to face unprecedented levels of financial pressure, leaving money on the table isn’t an option. Yet too many hospitals continue to lose anywhere from 1% to 10% of net revenue on underpaid claims each year – money they are contractually owed. Below, we’ll cover how to identify underpayments in healthcare so your organization can recover and resolve these monetary issues.

What are Underpayments?

An underpayment is just what it sounds like – a partial payment. Underpayments occur for healthcare providers when payors don’t reimburse the full amount owed for services rendered to their beneficiaries and when providers don’t fully bill for the care delivered.

Common Issues Causing Underpayments

The common causes of underpayments fall into two categories: payor-related issues and revenue cycle management-related issues.

Payor-related causes for underpayments include:

  • Contractual underpayments, where the payor doesn’t fully pay per the terms outlined in their contract, especially related to complex terms like high-dollar stop-loss, carve outs, escalators and lessor-of language

  • Processing errors, where the payor makes mistakes calculating the owed amount or processing the claim for payment

Preventable revenue cycle causes for underpayments include:

  • Charge capture-related issues including CDM inaccuracy, charges related to lessor-of language and pharmacy multiplier errors

  • Coding-related issues including inappropriate coding of DRGs, missing diagnosis, inaccurate procedure order and transfer DRG errors

  • Medical billing-related issues including alternate revenue code logic, payor-specific edits and appropriate capture of specialty payments like IMEs (indirect medical education payments)

How to Identify Underpayments

A payment variance report is a standard report produced by an electronic health record or provider’s host system that shows discrepancies between estimated and received payments. This report typically feeds the work queue of underpayments for review and resolution.

What the Payment Variance Report Can Tell You

Two important things to note about the standard variance report are that it’s only as good as the information put into it, and there’s a lot of noise that doesn’t add much value.
What you can see on a payment variance report:

  • Payment variances
  • Stoploss
  • Carveouts
  • Annual escalators
  • Processing errors
  • Bundling issues

Unfortunately, you can also see a lot of false variances related to:

  • Contract load issues
  • Registration issues
  • Late charges
  • Posting errors
  • Denials

What the Payment Variance Report Can’t Tell You

Contract management systems, which house payor contracts, will price exactly what you put into them. Basically, you get what you built and billed.

The variance report is a logical first step but provides only surface-level insights. A holistic strategy goes well beyond the variance report and takes a critical look at your revenue cycle processes. The value chain of every step in the billing process from registration to working edits is only as good as its weakest link (and you will find multiple weak links).

What you can’t see on a payment variance report:

  • Missing charges
  • Implant and supply definition errors
  • Pharmacy multipliers
  • New/deleted codes
  • Missing diagnosis
  • Inaccurate procedure order
  • Transfer errors
  • Modifiers
  • Revenue code alternate logic
  • Payor-specific edits

3 Steps to Successful Underpayment Recovery

The goal of any underpayment recovery program is to identify and resolve issues preventing your organization from being paid optimally and compliantly per your established contracts. Managing underpaid claims requires analysis and understanding of revenue cycle processes and how they impact reimbursement from registration to final payment.

Follow these three steps for successful underpayment recovery:

1. Identify: Gain a True Picture of Recovery Opportunities

  • Leverage seasoned experts who understand reimbursement to create necessary rules. It’s important to invest in a good team who is talented and knowledgeable.

  • Start (but don’t end with) the variance report, eliminate false variances and build your “black book” of rule sets and queries.

  • Use machine learning technology to support workflow and anomaly detection, harnessing the power of underpayment experts and their critical thinking capability.

  • Deploy dedicated analysts to thoroughly review all revenue issues.

2. Recover: Prioritize, Escalate + Act

  • Dedicate resources to specifically collect on underpaid accounts.

  • Group and prioritize accounts to streamline efforts. Automate appeals to expedite recovery workflow.

  • Identify and escalate payor issues automatically.

3. Resolve: Focus on Prevention

  • Analyze root cause reporting and trending to learn from issues and improve processes to prevent future underpayments.

  • Provide direct feedback to revenue cycle teams to fix errors where they are happening.

  • Partner with managed care teams, share trending reports and review opportunities and escalations to help with future contract negotiations.

What's the Impact?

Revenue cycle-related issues have big impacts to your bottom line. In 2022, Spark recovered more than $200 million in underpayments for clients, of which 70% were identified beyond the variance report.

Go Beyond the Variance Report to Yield Substantial Gains in Revenue

In one example, we recovered more than $55 million in underpayments from alternate revenue code logic issues at one hospital alone. 

What we discovered:

  • They were using revenue code 250, a standard pharmacy code, to represent a high-cost drug to insurance carriers. While not inaccurate, it wasn’t as specific as it could be.

  • Revenue code 636 was more appropriate and was reimbursed at 60% of charges by one payor, compared to $0 for revenue code 250.

  • This contract term nuance equated to a $30,000 difference in reimbursement on a single claim.

A discrepancy like this is often overlooked because it is not technically an error and is not visible on a variance report. If left unidentified and unaddressed, this single instance of oversight would have continued to cause tens of millions of dollars in missed revenue for this hospital each year.

Key Takeaways

A Holistic Approach to Your Underpayment Strategy = More Revenue Recovered

Hospitals and healthcare providers will continue leaving money on the table if they aren’t thinking holistically about identifying, recovering and resolving underpayments. The amount of net revenue lost to underpayments varies by provider based on its complexity of payor contracts, efficacy of underpayment management efforts and health of revenue cycle operations. Thinking beyond payment variances will help ensure costly underpayments are identified and resolved to prevent future missed revenue.

Learn more about how to establish a successful underpayment program with this on-demand webinar hosted by Becker’s Healthcare and Spark Health Partners.

Lane Rosenthal has more than 20 years of experience specializing in managed care financial analysis, hospital contract management and underpayment recovery strategy. Lane serves as the senior vice president of revenue recovery for Spark Health Partners where he leads a team of more than 200 certified revenue cycle operators focused on effectively identifying, recovering and resolving underpayments for hospitals, health systems and affiliated physician groups across the country.

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Spark Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.

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]]> 3 Tips to Successfully Negotiate Your Next Payer Contract https://www.sparkxgroup.cloud/blog/3-tips-to-successfully-negotiate-your-next-payor-contract/ Mon, 27 Feb 2023 20:57:23 +0000 https://www.sparkxgroup.cloud/?p=10537 Providers must leverage what's in their payer contract, comparative data and price transparency rules to level the playing field with payers. … Read More

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As hospitals and health systems continue to face financial headwinds from rapidly rising expenses, workforce challenges and stagnant reimbursement rates, healthcare leaders are turning to their managed care departments as a critical line of defense against avoidable payer pressure.

Historically, market share has dictated authority during contract negotiations between payers and providers, often giving payers the upper hand. So how can providers of any size level the playing field? They must know what provisions to include in their contracts, leverage comparative data to change payer behavior and use price transparency rules to their advantage.

Here are three tips to help improve your next payer contract negotiation.

1. Find the gaps in your current contracts.

Rates are only as good as the payment terms supporting them, so make sure managed care leaders have a strong understanding of existing contract terms as well as the best practice language required to drive proper reimbursement.

For example, do you have provisions that require the payer to pay, deny or dispute a claim within 30 days or remit payment with interest on day 31? Are you preventing pre-payment review on claims not disputed within 30 days? How are you limiting requests for information, audit volumes and appeal response timelines? Are you restricting bundling of charges and limiting “lessor of” language? How are you protecting yourself against recoupments?

Tracking and maintaining a list of managed care contract provisions and recommendations gives providers a path to increase reimbursement rates and ease costly administrative burdens.

2. Compare payer performance.

Make sure you’re tracking and comparing payer trends across your organization. Build a payer scorecard to analyze performance across your commercial payers and identify trends that need to be addressed during your next negotiation. Focus on metrics like clean claim rate, payment as a percent of charges, denial rates and reasons, underpayments, appeal volumes and win rates and other year-over-year net reimbursement changes.

Illustrative example of a payer scorecard used to track and compare payer trends.
Tracking regional and national payer trends outside of your organization can also help inform your payer strategy. Aggregate payment trends, claim resolution rate and denial information to determine if patterns within your organization are part of national or regional trends. If your average days to first payment are significantly higher than the national average, for example, strengthen provisions that limit claim resolution delays and determine how to reinforce compliance with these terms.  

Showing the total revenue impact of a payer’s behavior and comparing trends with other payers can help influence negotiations and accelerate issue resolution.

3. Use payer price transparency requirements to your advantage.

Research and download corresponding in-network rates for each commercial payer with an upcoming negotiation. The size and scale of the available machine-readable files makes this a labor-intensive project, so create a project plan with enough lead time to download and review potentially thousands of files.

Compare your existing contracted rates with publicly available rates for the same payer across other providers. Look for any large variances between what your facility is paid and what other facilities in your geographic area have contracted for. Focus on high-dollar procedures, items and services, especially those aligned with the unique specialties or credentials of your organization. Consider current and expected patient volumes to accurately estimate the revenue impact of any current rate discrepancies or future adjustments.

And don’t overlook out-of-network payers. Review their payment rates and examine the revenue impact of bringing an out-of-network payor into your network.

Key Takeaways

With razor-thin operating margins, healthcare providers can’t afford to lose precious revenue due to unfavorable contract terms, inadequate protections or unknown contract loopholes. Ensure your organization has a strong managed care team equipped with the necessary data, contract language and negotiating strategy to even the playing field between you and your commercial payers so your organization can improve financial health and continue to navigate industry headwinds.

____

Andrew Bess leads Spark Health Partners’ payer strategy team, helping healthcare clients across the U.S. improve managed care strategies, negotiate favorable payer contracts, analyze national payer trends and successfully resolve issues by working side-by-side with national payers.

 

 

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Spark Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.

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]]> 3 Ways to Dramatically Reduce Denials https://www.sparkxgroup.cloud/blog/stop-doing-these-3-things-to-dramatically-reduce-medical-claim-denials/ Sat, 28 Jan 2023 15:53:59 +0000 https://www.sparkxgroup.cloud/?p=10212 With financial pressures increasing, providers can’t afford not to implement effective denial management and prevention strategies. … Read More

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Insurance companies are increasingly denying payment of medical claims received from healthcare providers. A recent report found that 11% of claims were denied in 2022, which equates to 110,000 denied claims for the average-size health system. The rate of prior-authorization denials doubled in the past year alone and request-for-information denials, which essentially serve as pre-pay audits for payers, are increasing rapidly.

With financial pressures continuing to increase and operating margins continuing to compress, providers can’t afford not to implement effective denial management and prevention strategies.

To stay ahead of increasing denial trends and ultimately reduce claim denials, here are three things to stop doing now:

1. Stop Downplaying the Importance of Scheduling

Historically, the scheduling function was primarily focused on ensuring a provider had enough time booked and was maximizing a “blocked schedule”. Now, scheduling is gateway into reimbursement. Without the right information captured and right steps taken, we can be certain of medical necessity and authorization-related denials before the patient is even treated. You should be obtaining prior authorization when necessary. Establish and maintain authorization requirement policies to make scheduling the right way the easy way.

Pro tip: Train front-end teams on the financial impact denials and claims resubmissions have on the organization so they understand the implications and importance of their roles. Ensure all teams involved understand the amount of rework their efforts will decrease by preventing denials from occurring.

2. Stop Being Blindsided by Payer Behavior

The lack of transparency in payor behavior and inconsistency in their processes continue to drive significant claim denials and make it incredibly challenging for providers to keep up. Some insurance companies, for example, use third-party vendors to issue prior authorizations but don’t inform providers of these partnerships or their requirements. This can lead to services being denied even though they appear as “no auth required” by the insurance company because the third-party itself requires an authorization – a requirement providers often don’t learn about until after the claim is denied. The amount of payor policy updates and unilateral rule changes can also make it difficult for providers to know what to expect from payers and stay compliant with their requirements beyond authorizations.

Pro tip: Engage with your payers. Ask them to outline their own processes for using third-party authorizers so your teams can appropriately manage the requirements and prevent unnecessary denials. Leverage managed care partnerships to hold payors accountable for improper authorization denials. Thoroughly review and understand the ins and outs of your payer contracts to ensure all requirements, even beyond authorizations, are met. Establish a mechanism to continually monitor for payor policy updates and contract changes to ensure your teams stay ahead, stay compliant and avoid delayed or lost revenue.

3. Stop Addressing Denials After They Occur

Develop processes and establish a strong denial prevention program that is data-based and process-minded. Data collected over time is just the starting point. Leverage initial denial and final denial data to thoroughly research accounts and look at them holistically, function by function, to identify risk areas and real root causes.

Form a hypothesis. Engage other departments to test it. Ask questions like “What is documented? What do we not see? Where are the gaps?” True root cause resolution not only requires an understanding of the actual source of denials, but also an ability to connect the right dots across the revenue cycle, clinical departments and various stakeholder groups to resolve the identified issues.

Pro tip: Make sure you’re solving the right problem, not just the perceived problem. Combine technology with expertise to build necessary logic to flag accounts with certain risk factors and build rules-based work queues to address specific issues. Form a denials prevention committee capable of analyzing denial trends, sharing results with various stakeholders and holding parties accountable for upstream issue resolution.

Key Takeaways

Merely monitoring denials is not enough.

The rate payers are denying claims continues to increase, putting millions of dollars at risk for providers each year. Providers need effective denial prevention strategies to combat these trends. As payor tactics continue to change, providers must quickly adapt to prevent unnecessary lost revenue and ensure they can continue delivering on their missions in their communities. Addressing these three critical areas will strengthen the foundation of your prevention and reimbursement program.

Are you confident in your denial prevention strategy? If not, there’s no time to waste.

Find out how Spark can help assess your current denial prevention capabilities and implement a sustainable program for continued success.

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Spark Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.

Spark’s monthly newsletter keeps you ahead of the curve with unique perspectives and actionable insights about the issues at the top of your agenda.

Get the latest insights

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]]> Beyond the Payment Variance Report https://solutions.ensemblehp.com/beyond-the-variance-report#new_tab Tue, 10 Jan 2023 23:38:48 +0000 https://www.sparkxgroup.cloud/?p=13436 Experts share common issues that lead to costly underpayments as well as effective resolution strategies leveraged across 200+ hospitals nationwide. … Read More

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]]> Why effective underpayment resolution requires more than a variance report review​

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