Many hospital revenue cycle teams are focused on helping their organizations regain financial footing after sustaining revenue losses amid the COVID-19 pandemic.
One way hospitals can recoup money owed to them and improve financial stability is by pursuing underpayments from insurers and correcting undercharges.
During a March 16 webinar, sponsored by ABBYY and hosted by Becker's Hospital Review, industry experts discussed how hospitals are leaving millions of dollars on the table from underpayments and undercharging and offered solutions to help providers recover money owed to them.
The panelists were:
- Paul Buonopane, performance improvement expert, ABBYY
- Nate Pluke, head of products, SwitchRCM
- Renat Zalov, solutions consultant, ABBYY
Matt Williams, lead healthcare business development manager at ABBYY, moderated the discussion.
Five takeaways from the webinar:
1. One common root cause of underpayments: New contracts. When a provider's new contract starts with an insurer, often the new rates are not loaded in a timely manner, or the payer doesn't make the new rates effective right away, Mr. Pluke said. "This is probably the most common one that providers see across the board," Mr. Pluke said.
2. Undercharges are "the most painful" underpayment. "I describe undercharges as the most painful type of underpayment from a provider standpoint because it is often self-inflicted leakage," Mr. Pluke said. There is a chance that providers are charging less than what they are entitled to collect based on the terms of the insurance contract, especially if they do not know what the highest contracted rate is while setting fees, Mr. Pluke explained. When undercharging occurs, it is unlikely that providers will recover this lost revenue.
3. Several characteristics make an organization more susceptible to underpayments. Organizations that may be at a higher risk for underpayments negotiate their own rates with commercial insurers; have a high number of commercial claims; have many physical locations; or have grown through acquisitions and need to integrate new locations, Mr. Pluke said.
4. Linking disparate data is key to solving underpayments and undercharges. Data from sources such as the EMR, contracts and outsourcing or collection agencies are typically not linked, which makes it hard to solve or predict underpayments and undercharges, Mr. Buonopane said. "Bringing that data together, we can finally look at that end-to-end story, from scheduling to payment to write-off, and start to discover and analyze where the bottlenecks are, why this is happening," Mr. Buonopane said.
5. Building a business case to address underpayments and undercharges can be easy. With the right technology, revenue cycle staff can easily build a business case to address underpayments and undercharges, Mr. Zalov explained. For example, ABBYY's technology brings together disparate data sources to quickly find how many patient visits resulted in underpayments, the payer that had the most underpayments and the money the health system could recoup. "What we can start to do is create a business case to say 'Hey, if we address these underpayments, and we go back and rebill these underpayments, what could that bring us as an organization?" Mr. Zalov said. What ABBYY has found is health systems are leaving millions of dollars on the table from recoverable underpayments and under charges that shouldn't happen.
To learn more about underpayments and undercharges and walk through a demo of ABBYY's solution, listen to the full webinar here.