Topics
More on Claims Processing

Claims in accounts receivable days vary widely by insurer

Revenue cycle collections has as much to do with insurer inconsistencies as with internal operations, report says.

Susan Morse, Senior Editor

A new analysis of five national commercial payers shows variability in the number of days a claim is in accounts receivable, which has a big impact on hospital payment.

The Nov. 30 report by the accounting, consulting and technology firm, Crowe Horwath, said it found an alarming payment disparity among the five managed care insurers.

[Also: CMS targets providers that have high error rates in new claims processing, fraud reviews]

AR days among the insurers ranged from 52.2 to 67.7 days, according to Crowe Revenue Cycle Analytics. The software captures financial transactions in more than 800 hospitals.

"Many providers focus their attention on their own revenue cycle processes with the idea that better-performing patient financial services will produce fewer payer issues," said Brian Sanderson, managing principal of Crowe healthcare services. "While that is true to a degree, our data shows that major commercial payers appear to have underlying inconsistencies when compared to one another that can greatly impact a hospital's ability to collect revenue."

[Also: Payers look to 3rd parties for claims processing, customer management]

The report did not name the five insurers.

Initial denial rates among them ranged from 7.5 to 11.1 percent of net patient service revenue. This means that about $1 of every $10 is at risk for nonpayment, according to the report.

Denials marked as "additional medical information needed" had the highest disparity of incidence among the five insurers studied. Those that had the highest denial rate used the additional medical information needed more than three times as often as the payer with the lowest rate, the report said.

Final denial rates that were written off as uncollectible, ranged from 0.8 to 2.4 percent.

While government payers tend to have standard submission processes, many non-government national payers have unique conditions tied to contract terms, benefit plan designs or clinical documentation support. Providers that do no follow these specific requirements are at risk for denials, claim corrections and claims that are unpaid or only partially paid.

"Since commercial payers are key to a provider's success, the provider should actively look for payer-by-payer trends," Sanderson said. "Ongoing, detailed managed care payer performance reporting, integrated with managed care contracting, will become even more important as hospital reimbursement tightens."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

Show All Comments