More on Billing and Collections

Technology key to curbing rate of claims denials for hospitals, health systems

Some providers see nine percent of their claims denied, and with each costing as much as $118, better processes can help realize cost savings.

Jeff Lagasse, Associate Editor

Hospitals and health systems have a denied claims problem. A 2017 analysis by Change Healthcare found that out of roughly $3 trillion in medical claims submitted by U.S. hospitals in the prior year, almost 9 percent of those charges were initially denied.

Such a high rate of denials creates challenges for maximizing revenue, so it's important to have the right tools and processes in place. Enter technology, which can play a key role in curbing the denials issue.


HIMSS20 Digital

Learn on-demand, earn credit, find products and solutions. Get Started >>

Tom Romeo, general manager of healthcare IT at Quest Diagnostics, advocates for technology that can do eligibility checking. It's also important for any approach, whether technological or process-focused, to curb duplicate billing, as well as improper CPT codes.

"If you have a system that's automated and updating those CPT codes, you're making sure you're getting the right codes on those claims," said Romeo.

Having good tech in place can also occasionally help with prior authorization, although as Romeo points out, it's not solely about the tools. It's about providing adequate training and education to the people who are processing the claims, so each claim contains the right information before it's submitted. That's half the battle.

And if a claim with the wrong information happens to slip through the cracks, tech can step in and identify what happened, and what the health system need to know before they can re-submit it.

Better if it doesn't get to that point, though. The same Change analysis found that some claims cost as much as $118 to recover them, which is a number that can certainly add up over time.

"When you think about health systems specifically, they're absolutely challenged," Romeo said. "They're getting lower reimbursements from payers and from the federal government … and when you think about the drive toward quality metrics and meaningful use, when you're driving better patient care, you're keeping (people) out of the hospital, which means lower admissions. So hospitals are really challenged."


There's no shortage of tech solutions that can help a provider with its claims. PMCS Advance, Duck Creek Technologies, Fineos and Systema are all players in the space. Unsurprisingly, Romeo prefers Quest's Quanum RCM solution, and the company has drafted some case studies that speak to its efficacy.

One involved Dr. Harry Mayer's practice in Attleboro, Massachusetts, a five-employee outfit that sees between six and 15 patients daily, half of whom are Medicare patients. The office was looking to replace its billing service in 2016; oftentimes, claims would be written off after several denials, and the team wouldn't find out about it until after the 90-day deadline, which made it too late to re-submit the claims. It was costing the practice thousands.

After implementing the new technology, which synched up seamlessly with the EHR, the practice was able to reduce denials before they occurred by pre-determining eligibility and practicing time-of-service collections.

Staff at the front desk verify patient eligibility with the insurance company the day before the appointment, and then scan the patient's insurance card and ID when they check in. If there's an issue with ineligibility, they may ask the patient to call the insurance company right then, have them pay their copay or deposit up front, or reschedule as necessary.

Similar improvements occurred at the practice of Dr. Dennis Boyle Jr., a five-employee practice in Upper Darby, Pennsylvania which sees about 20 patients per day, 57 percent on Medicaid and 25 percent on Medicare.

Taking the technological route helped the practice meet the requirements for submitting quality-of care measures, and also helped it avoid Medicare penalties. Perhaps one of the biggest benefits the practice has seen since adopting the approach is that reimbursements have increased and denials have decreased.

If a change needs to be made after the claim is submitted to insurance, it can be done and re-filed directly. There's no need to pull a paper chart or to recheck patient profiles or insurance.

"This really cuts down on time," said office manager Alison Boyle in the case study. "It is so much more efficient having all our claims in one place and for us to have the ability to file them electronically for faster reimbursement. … We have cut our Medicaid reimbursement time in half. With 57 percent of our patients on Medicaid, this is a big deal for our practice."

Another benefit? Streamlining the patient check-in process.

"It allows patients to check in and pre-register, check the insurance they've provided, and it ensures you've got all the right pieces of information," said Romeo. "This happens before they walk into the office, so when you don't have the patient in front of you, you can identify the gaps they need."


Such automated approaches are the way of the future, said Romeo, and he sees more and more hospitals trending in the direction of implementing some of these technological solutions. Any health system, hospital or practice would do well to get a handle on their claims, both for the smoothness and efficiency of their business but for the considerable cost savings that can result.

"More and more hospitals are looking to revenue cycle management companies to help them," said Romeo.

Twitter: @JELagasse

Email the writer: