Category: Clinics

Because hospital emergency departments (ED) serve as important gateways for inpatient admissions, it is essential that patient information, especially insurance data, is captured accurately at the time of service.

Unfortunately, the hectic pace and critical nature of ED services often means that confirming coverage takes a back seat to more pressing concerns. But with emergency volume rising and two-thirds of all admissions coming through the ED,[1] hospitals risk growing denials and write-offs if they can’t effectively collect payment information at the outset of the care event.

Mistakes or omissions that occur during the initial encounter affect not only payment for emergent services, but also can flow downstream to impact reimbursement opportunities along the entire continuum of care.

ED denial causes

ParaRev works with a range of hospital clients to identify and mitigate the root cause issues that trigger denials for emergent, inpatient, outpatient and ancillary services. From this experience, we’ve determined that inaccurate or invalid insurance information is the most common cause of denials in the ED.

The problem is extensive: Internal analysis has shown that around 40 percent of ED patients have invalid insurance or no insurance when they present for care. In one case, almost 75 percent of patients who presented at a hospital emergency room had expired or non-existent insurance.

Changing payer policies also are contributing to ED denials. In 2015, one major payer began retrospectively denying ED claims it deemed unnecessary based on a prespecified list of nonemergent conditions. A subsequent study concluded that as many as one in six adults could face denials for ED coverage if similar policies were adopted by other insurers.[2]

Given the financial risk denials present for hospitals, it is imperative that accurate information about that patient’s coverage, or lack thereof, be obtained as soon as possible and before any claims are submitted.

After-care meetings

Specifically, hospitals should implement edits in their intake systems that can block claims submissions if there is no active insurance. Staff also needs to be trained in the appropriate steps to take. Too often, we’ve seen hospital personnel submit claims to the insurance company on record, even if an automated rejection has already indicated that the coverage is no longer in force.

A second important step is to create an intervention process that allows staff to discuss the issue of payment with patients who do not have appropriate insurance. This can be impractical and even ill-advised before coverage is provided. But it should be undertaken as soon as possible once the patient is stable or discharged.

A brief post-care meeting allows hospital staff to inform the patient that their coverage isn’t valid and to ask for their assistance in determining if another policy might be available. If there is no other insurance, a payment plan can be discussed.

When post-care meetings are not practical or the opportunity to meet passes, the hospital may need to balance-bill the patient if there isn’t an accurate insurance policy on record. This is something many facilities don’t like to do. However, when practical, it should gain the patient’s attention and potentially compel them to seek out their existing insurance, if available. If there is no insurance, the invoice again creates an opportunity for the hospital and patient to jointly discuss a reasonable plan for payment.

Return on investment

Ultimately, reducing denials in the ED comes down to developing systems that immediately flag expired or non-existent coverage and then establishing a process to identify available insurance or develop alternative payment plans. Supporting this approach requires appropriately trained and motivated intake personnel.

In our experience, many hospitals seem inclined to view registration staff as lower-level employees and therefore pay them accordingly. But the reality is that a hospital’s health and survival depend on how effectively these employees perform. As a result, investments in both human and technological resources that streamline the intake process inevitably produce a worthwhile return on investment.

ParaRev capabilities

ParaRev specializes in AR recovery and resolution. We work as a virtual extension of your hospital central billing office to help you resolve and collect more of your insurance accounts receivable faster and improve operating margins through a seamless and collaborative partnership with your internal team.

ParaRev utilizes proprietary intelligent automation and staff specialization to efficiently process all claims regardless of size or age. Clients can gain a 25 percent improvement in resolution cycle time and cash recovery rates that often exceed 75 percent on problematic AR claims ̶ double the performance of most legacy AR management vendors.

In addition to our resolution capabilities, ParaRev also can provide denial management assistance by conducting root cause analysis and recommending process improvements to help decrease aged and denied claims going forward. Importantly, ParaRev is HITRUST CSF-certified to help ensure the highest levels of protected health information (PHI) security and compliance.

1. James J. Augustine, MD, “Long-Term Trends in Emergency Department Visits, Patient Care Highlighted in National Reports,” ACEP Now, Jan. 11, 2017
2. Gina Shaw, “Studies Rebut Anthem’s Retrospective ED Denials,” Emergency Medicine News, February 2019

Related Posts

None found

Despite a high probability for success, just one percent of Medicare Advantage (MA) reimbursement and pre-authorization denials were appealed by providers and beneficiaries between 2014 and 2016, a recent federal report stated.

During that same time period, 75 percent of the denials that were appealed were overturned by payers themselves, according to a report produced by the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) and released in September 2018.
“The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided,” the report states.

To ensure providers receive every dollar they’re entitled to, hospitals and other organizations may wish to partner with a qualified accounts receivable (AR) recovery and resolution firm for assistance in pursuing the four-level MA appeal process.

Rapid growth of MA plans

MA plans have surged in popularity in recent years by offering relatively low-cost coverage that includes hospitalization and prescription drug benefits, as well as coverage options not provided with original Medicare, such as dental, fitness and vision.

About 34 percent of all Medicare beneficiaries, or about 20 million people, currently are enrolled in MA plans, nearly double the number enrolled 10 years ago, according to the Kaiser Family Foundation.[1] The Congressional Budget Office (CBO) projects that MA enrollment will exceed 40 percent of all Medicare beneficiaries by 2028.[2] At the state level, MA penetration currently is as high as 56 percent in Minnesota and 40 percent or more in five other states: California, Florida, Michigan, Pennsylvania and Oregon.[3]

According to the OIG report, “a central concern about the capitated payment model used in Medicare Advantage (also known as Medicare Part C) is the potential incentive for insurers to inappropriately deny access to services and payment in an attempt to increase their profits.”

Appeals confusion

The OIG examined 448 million requests to payers made in 2016: 24 million preauthorization requests and 424 million payment requests for service already provided. Of these, about one million preauthorization requests and 36 million payment requests were denied, equating to denial rates of four percent and eight percent, respectively.

“Because Medicare Advantage covers so many beneficiaries (more than 20 million in 2018), even low rates of inappropriately denied services or payments can create significant problems for many Medicare beneficiaries and their providers,” the report states.

The report noted that while beneficiaries receive notice with denials that they have a right to appeal and request that the denial be overturned, confusion often surrounds the process.

“Although there are resources available to help beneficiaries navigate the appeals process, advocacy groups report that the process is often confusing and overwhelming for beneficiaries, particularly those struggling with critical medical issues,” the report states.

Nor is it just beneficiaries that are evidently confused about appeals, given the low appeal rate by providers. The MA appeals procedure includes initial review by the managed care organization, then subsequent administrative reviews by independent review entities, administrative law judges and ultimately, the Medicare Appeals Council.

“When beneficiaries and providers chose not to appeal denials, the beneficiary may have gone without the requested service, the beneficiary may have paid for the service out of pocket, or the provider may not have been paid for the service,” the report notes.

Audits raise red flags

Of the 75 percent of denials overturned on appeal between 2014-16, 82 percent were for services already delivered and 18 percent were for preauthorizations, the report states.

“Although overturned denials do not necessarily mean that [Medicare Advantage organizations] inappropriately denied the initial request, each overturned denial represents a case in which beneficiaries or providers had to file an appeal to receive services or payment that are covered by Medicare,” the report states. “This extra step creates friction in the program and may create an administrative burden for beneficiaries, providers and [Medicare Advantage organizations].”

The findings of the OIG report dovetail with results from the Center for Medicare and Medicaid Services’ (CMS) annual program audits of Medicare Advantage plans. In 2015, CMS cited 56 percent of 140 audited Medicare Advantage organizations for two types of violations related to inappropriate denials of preauthorizations and/or payments. These included making the wrong clinical decision based on available information and/or not conducting appropriate outreach before making clinical decisions.

Additionally, nearly half of audited Medicare Advantage contracts were cited for sending incorrect or incomplete denial letters, which may inhibit the ability of beneficiaries and providers to appeal.
The OIG report recommended increased oversight of Medicare Advantage contracts, particularly those with high overturn rates and/or low appeal rates. They also suggested that CMS address persistent problems related to inappropriate denials and insufficient denial letters. Finally, the OIG recommended providing beneficiaries with clear, easily accessible information about serious violations by Medicare Advantage organizations.

ParaRev can help you appeal MA denials

Although MA policies are structured and marketed differently than original Medicare, they must still follow Medicare rules and guidelines when it comes to minimum benefits, medical necessity, denials and appeals. Monitoring payer performance and making sure these rules are followed is essential to ensure providers are fully and properly reimbursed for the services they provide.

Partnering with a firm that that understands the MA payment, denial and appeals process can be enormously beneficial, not only to help address denials when they occur but equally important, to analyze the entire coding, claims and billing cycle to prevent denials in the first place.

ParaRev has determined that most MA denials stem from coding and billing-related problems, such as crosswalks that haven’t been set up correctly to bill the appropriate codes. Other factors that trigger denials include incorrectly loaded contract details and failure to pre-certify patients across the care continuum. Incorrectly classifying patients as original Medicare beneficiaries and not MA enrollees also is a common source of denials.

Because MA accounts frequently represent a significant portion of a hospital’s Medicare volume, it is important to partner with a vendor that not only understands MA denials but also can process high numbers of claims quickly and consistently. ParaRev can help you in these areas by providing denial management assistance as well assistance with all your AR recovery and resolution needs.

Contact HFRI today to learn more about how we can help you defeat denials.

1. Gretchen Jacobson, et al, “A Dozen Facts About Medicare Advantage“, Kaiser Family Foundation, Nov. 12, 2018
2. Ibid.
3. Ibid.

Related Posts

None found

Like an injury that won’t heal, claim denials represent a chronic and growing financial problem for hospitals and other providers, both in terms of lost revenue and the ongoing costs of remediation.

Approximately 9 percent of $3 trillion in U.S. hospital claims were initially denied in 2016, with the administrative costs of denial rework and appeal now estimated at nearly $9 billion annually.[1] Moreover, denial volume keeps increasing: The average 350-bed hospital saw denial write-offs jump by 79 percent between 2011 and 2017, from $3.9 million to $7 million.[2]

Most denials are preventable

The enormous numbers underscore the challenges providers face both in preventing denials and handling the rework and appeals process efficiently and successfully. Despite available technology that can automate and expedite denial management, it is telling that nearly one-third of providers continue to rely on labor-intensive manual denial remediation, according to a HIMSS survey from 2016.[3]

With the average cost of reworking a claim at $25, administrative expenses can multiply quickly if denials continue to pile up. As it stands, 65 percent of payer rejections are never reworked and resubmitted to begin with.[4]

Fortunately, about 90 percent of denials are preventable, and two-thirds are recoverable, according to a 2014 Advisory Board study.[5] So how can intelligent automation help prevent denials in the first place while expediting the successful recovery of payments when denials do occur?

Intelligent automation and root cause analysis

Root cause analysis is essential for identifying denial causes and what changes are necessary to prevent them from occurring again. However, it takes more than just a spreadsheet to obtain this critical information. Digging deep to retrieve meaningful data in a timely manner requires intelligent automation (IA), an essential component in the most effective denial management programs.

ParaRev is a leading accounts receivable (AR) resolution and recovery firm with more than 20 years’ experience helping hospitals address rejected and aging AR. Through a significant investment of time and resources, we’ve developed advanced IA capabilities that help us quickly understand how, why and where payment delays are occurring.

Here’s how IA works: Bot applications are programed via proprietary software to scrape denied claims, hospital billing systems, EDI applications and other transactional data for all available information relating to a specific account. This can include everything from denial codes and payment and service history to contractual information and filing deadlines.

From this data aggregation, common, relatively simple barriers to account resolution, such as misallocated remittances, can be identified and addressed automatically through automated applications, thereby dramatically reducing cycle time. Once these areas are identified, corrective action can take place to help keep the denial from happening again.

Here are some of the most common denial causes we’ve identified:

• Utilization: This category includes the clinical areas of medical necessity, pre-authorization, DRG downgrades and experimental treatments. Insurance companies will often challenge whether a specific treatment was medically required, whether the level of care provided corresponded to the underlying morbidity, or whether the length of stay was justified.
• Coverage: Unresolved claims due to coverage issues make up about 21% of denied charges for ParaRev clients. As the name implies, coverage denials involve real or perceived errors or omissions surrounding health plan coverage limits.
• Contractual: Payment delays and rejections stemming from contractual issues make up the third-largest category of denied charges. Contractual denials can involve a wide range of issues, but one of the most common entails payer underpayments for specific services like surgery, emergency department, laboratory, radiology, therapies and observation.
• Coding and Billing: Coding and billing issues result in about 15% of all denied charges among HFRI’s client base. A common problem involves Reason Code 97 rejections triggered by the failure of hospital coders to properly include National Correct Coding Initiative (NCCI) edits.
• Submission/Re-billing: Denials triggered by submission problems are responsible for about 15% of all denied charges. Failure to include the primary EOB, crossovers between supplemental and primary insurance and missing medical records are common rejection reasons.
• Cash Posting: This category of issues produces about 4% of denied charges and frequently involves determining the appropriate allocation of unapplied cash.
• Process Delays: Process issues account for 3% of denied charges and usually involve payers taking an excessive amount of time to process a claim for reasons unrelated to the claim itself.

Automated resolution

In addition to automating root cause analysis, ParaRev uses IA – along with robotic process automation (RPA) and staff specialization — to streamline and accelerate the AR recovery and resolution process.

RPA software replicates manual human activity through easily programmed bots that can accomplish basic tasks across a range of areas. IA takes these capabilities a step further by incorporating decision-making logic into the process.

IA also categorizes denials by root cause into separate buckets or work queues and produces succinct summaries of all relevant information for each denied, delayed or underpaid claim.

Working from category-specific, prioritized work queues, ParaRev remediation specialists access the claim summaries, which include recommended actions for each denied or delayed claim. The detailed information provided by our IA process, combined with the specialist’s knowledge about how best to resolve a specific type of issue, allows the specialist to expedite rework and secure resolution for both low- and high-value claims much more quickly and accurately.

Automating root cause analysis and the accounts receivable recovery and resolution process through AI represents the cutting edge in denial prevention and management. Given the ongoing revenue loss and administrative expense associated with denials, deploying these tools through an experienced partner can produce a rapid return on investment. Contact HFRI today to learn more about how we can help you defeat denials.

1. Philip Betbeze, “Claims Appeals Cost Hospitals Up to $8.6B Annually,” HealthLeaders, June 26, 2017
2. Kelly Gooch, “4 ways hospitals can lower claim denial rates,” Becker’s Hospital CFO Report, Jan. 5, 2018
3. Jacqueline LaPointe, “31% of Providers Still Use Manual Claims Denial Management,” RevCycle Intelligence, July 5, 2016
4. Chris Wyatt, “Optimizing the Revenue Cycle Requires a Financially Integrated Network,” HFMA, July 7, 2015
5. “An ounce of prevention pays off: 90% of denials are preventable,” Advisory Board Research, Dec.11, 2014

Related Posts

None found

Like costly home improvement projects gone awry, electronic health record (EHR) and revenue cycle management software implementations don’t always pan out as intended for hospitals and health systems. But with the right tools and proper planning, potential issues can be minimized.

Several troubled EHR or revenue cycle software installations have recently underscored the enormous financial risks hospitals face when deploying information systems that generate mission-critical claims and billing data.

The costly missteps highlight the importance of adopting a two-prong approach for handling accounts receivable (AR) during and after a system conversion. By assigning internal staff with just new system billing activities, provider organizations allow in-house personnel to more quickly develop the skills required to submit claims in an accurate and timely manner.

Legacy accounts, meanwhile, can be outsourced to a qualified, third-party AR recovery and resolution vendor that specializes in AR conversion projects. This approach not only reduces the burden on internal staff, but also helps ensure aging denials will be worked thoroughly and consistently to resolution.

AR Financial Issues

Hospitals can easily encounter financial challenges if major problems surround the implementation of systems that collect not only clinical information but billing and financial data as well. Consider these recent situations:

• Glen Falls Hospital, in Glen Falls, New York, lost $38 million in 2017 as the direct result of problems surrounding an EHR deployed in August 2016. The new system replaced several legacy EHR platforms.[1]
• The former management company of Tulare Regional Medical Center in Tulare, California, cited problems with the hospital’s EHR implementation as partly responsible for ongoing cashflow problems that led the medical center to file for bankruptcy in 2017.[2]
• An EHR implemented at Western Missouri Medical Center in Warrensburg, Missouri, in 2016 “created a multitude of issues,” including the inability to bill patients in a timely manner. The hospital hired a third-party firm to help overcome its billing problems in 2018 and said it would likely write off several hundred thousand dollars in aging, unsubmitted patient bills.[3]
• In Tennessee, Vanderbilt University Medical Center said an EHR implementation “put pressure on clinical volumes in the post-live period” that contributed to a $66 million reduction in operating income in fiscal 2018.[4]
• Agnesian Healthcare Inc. in Wisconsin sued an EHR vendor in 2017, alleging the company’s scheduling, billing and claims software was responsible for “pervasive errors” that led to more than $16 million in losses.[5]

Reducing risk

The success of a major IT implementation obviously is contingent on a multitude of factors, some of which may be beyond the control of the hospital. Nonetheless, hospitals can take steps to reduce their exposure by tasking a third-party with legacy AR accounts ahead of the deployment.

ParaRev specializes in legacy AR recovery and resolution. HFRI, a leader in accounts receivable recovery and resolution, works as a virtual extension of your hospital central billing office to help you resolve and collect more of your insurance accounts receivable faster and improves operating margins through a seamless and collaborative partnership with your internal team.

ParaRev utilizes proprietary intelligent automation and staff specialization to efficiently process all claims regardless of size or age. Clients can gain a 25% improvement in resolution cycle time and cash recovery rates that often exceed 75% on problematic AR claims — double the performance of most legacy AR management vendors.

In addition to our resolution capabilities, ParaRev also can provide denial management assistance by conducting root cause analysis and recommending process improvements to help decrease aged and denied claims going forward. Importantly, ParaRev is HITRUST CSF-certified to help ensure the highest levels of protected health information (PHI) security and compliance.

Hospitals and health systems need to do whatever is necessary to reduce financial risk ahead of major EHR or revenue cycle system implementation projects. By partnering with ParaRev for AR conversion projects, you’ll be able to focus on the new deployment, confident in the fact that legacy AR accounts will be resolved fully and effectively.

1. Kate Monica, “Billing Problems Caused By Cerner EHR Costs NY Hospital $38M,” EHR Intelligence, March 18, 2019.
2. Kate Monica, “Cerner EHR Partly Blamed for Hospital Billing Issues, Bankruptcy,,” EHR Intelligence, April 20, 2018.
3. Kate Monica, “Cerner Implementation at MO Hospital Causing Billing Problems,,” EHR Intelligence, Feb. 28, 2018.
4. Jacqueline LaPointe, “VUMC Sees Operating Income Decrease After EHR Implementation, RevCycle Intelligence, May 30, 2018.
5. Kate Monica, “WI Health System Suing Cerner for $16M for Faulty Software,” EHR Intelligence, Sept. 25, 2017.

Related Posts

None found