In an executive-level discussion at the Becker's 14th Annual Meeting, Xtend Healthcare CEO Mike Morris explored the increasing challenges that health systems are facing related to claim denials.
Mr. Morris noted that 90% of providers have reported a spike in denials over the last couple of years, which has adversely impacted reimbursement and increased the cost to collect for providers nationwide.
In the April 2024 discussion, Mr. Morris and more than two dozen senior leaders at hospitals and health systems nationwide discussed the direct and indirect effects of the surge in denials.
Here are four key takeaways and excerpts from the conversation:
1. Denials management is increasingly time-consuming for health system employees. Mr. Morris noted that addressing a claim, appealing it effectively, and ultimately overturning it requires, on average, at least one hour of manual intervention by revenue cycle management personnel. "That hour of time dramatically drives up the cost to collect," Mr. Morris said.
2. Insurers are a contributing factor to denial trends. A leader from an academic health system on the East Coast suggested that the reduced volume of claims processed by health insurers during the COVID-19 pandemic might have resulted in the current high rates of denials for health systems. The executive highlighted the possibility that insurers, aiming to preserve their low medical loss ratios and high profits, may have intensified their denial practices, making it increasingly challenging for health systems to collect what they are owed.
3. Denial patterns are impacting team morale. "From an experience perspective, it's a very global impact," said one health system participant. She noted that denials are a hit to clinician time, productivity, and morale, and this comes at a time when health systems are already concerned about the wellbeing and retention of their clinical workforce. Moreover, denials can spark discord within teams, permeating throughout the organization and impeding effective time management and morale. "It kind of snowballs, because then [the denial] goes into the conversations about how the charting impacted the claim," said the same health system participant. "Then quality gets involved and nursing gets involved. So, the impact is really felt so much farther along than just at the moment of that denial."
4. Challenges carry on well past the initial denial. There are numerous hurdles faced in health systems' pursuit of timely reimbursement. "The other thing we're experiencing is, we'll come to an agreement with [the insurer] that they actually owe us a material amount of money, and it takes them months to pay us," one health system executive said. "And then there's no interest payment. So, then you have to go back, and if you want to really exercise your legal right on that, it's another administrative cost and more administrative fees."