With one in three hospitals expected to continue operating with a negative margin, leaving money on the table is not an option, but it’s a billion-dollar issue.
We’ve found more than $1.1B left on the table across 36 healthcare organizations in the past four years alone through in-depth assessments of revenue cycle operations.
Here’s where we typically find the biggest financial impact, regardless of the organization’s size:
01 Denial Recovery
Every organization is faced with denials but not many have mastered the art of identification, recovery and prevention. The result? Avoidable lost revenue.
Problem: Lack of visibility, expertise and specificity.
Some organizations lack the ability to map denials and separate them from contractual adjustments, preventing them from being tracked and trended. We see organizations where the biller is responsible for denial follow-up, where clinical teams are not engaged to support appeals, where appeal letters are written globally instead of specifically addressing a denial reason — the list goes on.
Without fundamental visibility into denial volume and specificity in the appeal process, avoidable write-offs keep piling up and potential revenue keeps getting missed.
What it was costing our clients: >$400M each year
Solution: Dig into the details.
The first thing to do is make sure you are accurately mapping and tracking denials instead of masking them as contractual write-offs. Does the 835 match up to the contractual adjustment?
Once you’re confident you know where your denials are coming from, ensure you have dedicated resources in place to properly monitor and appeal them. Engage the right clinical experts to increase your overturn rate and provide upstream teams with training on denial trends to prevent future issues.
02 Unbilled Management
Decentralized unbilled management leads to costly delays in revenue and is a problem that starts the minute the patient walks in the door.
Problem: Decentralized ownership.
We often find providers don’t have centralized management of their unbilled accounts. The billing team thinks it’s a coding responsibility, the coding team thinks it’s a registration issue, and so on.
No centralized ownership of unbilled management means no centralized visibility into unbilled edits needing resolution and no shared accountability to get them resolved.
What it was costing our clients: >$290M
Solution: Collaborative unbilled management.
Ensuring claims go out accurately and on time is the responsibility of the entire revenue cycle team and requires collaborative management of the whole process.
A registration error can lead to a coding edit, which can lead to system edits, all of which have the potential to delay the bill. Establishing a multidisciplinary team to monitor all unbilled accounts, assign ownership and accountability for resolution, and track action items drastically accelerates revenue.
03 Pre-service Collections
Research shows providers only have a 30% chance of collecting on a patient balance after the patient walks out the door1. So why is it so difficult for providers to collect upfront? Many hospitals struggle with the myth that discussing patient financial responsibility prior to service diminishes the patient experience. But, in fact, it has the opposite effect.
Problem: Unequipped patient access staff.
We work with clients who believe pre-service collections aren’t possible because of the type of facility or service they provide, like long-term care or pediatric oncology, or because it doesn’t align with their culture. Combined with the misconception that asking for money is a bad thing, many hospitals fail to equip their front-office staff with the tools and training needed to effectively talk with patients about financial responsibility and offer ways to collect a balance.
What it was costing our clients: >$250M
Solution: Tools + training to collect with empathy.
The reality is 80% of patients want their doctors to help them manage financial responsibilities by clearly communicating what insurance covers versus what they owe. Equip your patient access staff with scripts, job aids and software to adequately support these conversations without diminishing the patient experience.
Discussing financial liability upfront helps patients feel more informed about their financial responsibility. It creates opportunity to connect to financial aid, determine eligibility for discounts and set up payment plans, if needed. It can add certainty and peace of mind in an otherwise uncertain circumstance, which can be a huge relief to patients regardless of the facility they’re in or the type of care they’re receiving.
04 Coding Validation
A recent study showed one-third of healthcare reimbursement experts report coding as the major concern for denials2. One wrong code could lead to significant delays in revenue, missed opportunity for reimbursement or risk for overpayment recoupment.
Problem: Manual coding review.
Either no internal audit team is in place (yikes!) or a small group of coders and CDI specialists are tasked with selecting a certain sample of accounts, reviewing the coding and documentation, flagging any errors and extrapolating results.
So why is manual review an issue? Because nearly 40,000 individual codes would need to be reviewed each month for a hospital seeing 900 inpatients and 4,250 outpatients. That volume alone would require six skilled auditors performing nothing but reviews every month to validate the accuracy of 100% of accounts. Even if a hospital could staff a team of experienced auditors solely focused on account review (which most can’t), human error would still be an issue.
What it was costing our clients: $132M each year
Solution: Automate your audit.
Leveraging technology to audit 100% of accounts and validate all codes eliminates human error and prevents the risk of undercoding or overcoding. This ensures the associated revenue is accurate and the claim has a higher likelihood of being paid on time.
Think your metrics are stable? Suspect you may have a performance gap? Or maybe your root cause issues are unknown? An operational assessment every few years can help pinpoint areas of strengths and weakness across your revenue cycle to prevent costly mistakes and alleviate margin pressure.
Remember, just because your KPIs are green doesn’t mean there isn’t an underlying issue costing you money you probably can’t afford to lose.
If you’re ready for a thorough assessment and detailed action plan for resolution, contact our team today.