It's no secret that the fiscal environment for hospitals and health systems has been uniquely challenging in recent years. For example, in 2022, hospitals faced what was possibly the "worst operating year we've every seen," which positions 2023 as a "make-or-break year" for many healthcare organizations, according to comments made by a senior director at Fitch Ratings during a presentation in April.
While labor costs, staff shortages and inflation — among other factors — all contribute significantly to the challenging financial environment faced by hospitals right now, some healthcare revenue cycle leaders say the biggest challenge for their teams is the ever-changing complexities of getting reimbursed for the services their organizations provided. Dealing with complex claims, such as those related to automobile accidents or worker's compensation situations, can be particularly difficult.
As hospitals and health systems try to stay afloat during these financially challenging times, revenue cycle teams are looking for any and all pathways to drive efficiency and cost savings.
Becker's Healthcare recently spoke with Don Hahn, industry expert, healthcare analytics at Verisk — a data analytics and risk assessment firm — to learn how automation and technologies like artificial intelligence (AI) can be applied to the revenue cycle to increase reimbursements for healthcare organizations.
Complex claims are often extremely time consuming — and the payoff is often minimal
Hospitals and health systems have extensive knowledge and experience in billing standard commercial or government payers. Even with this wealth of knowledge and experience, achieving adequate reimbursement for relatively standard claims can present numerous challenges. Complex claims present an even greater challenge. For example, when a person is in an accident, hospitals often struggle to identify the appropriate payer and to effectively pursue reimbursement. It's not always clear who is legally responsible for paying worker's compensation claims or for the medical care related to injuries resulting from a motor vehicle accident.
"Contacting patients directly through phone calls or letters to obtain information about an accident and the patients' insurance is usually fruitless," Mr. Hahn said. "The response rates on these outreach programs aren't good at all, especially if the patient has retained legal representation."
As a result, revenue cycle management (RCM) teams must pull accident reports and try to identify open third-party liability claims, medical payments claims or personal injury protection claims that could be used to pay a patient's hospital bill. If an insurance carrier can't be identified, the hospital or health system essentially has no way to collect.
Additionally, every state has unique laws and requirements regarding which parties are responsible for accident-related financial liabilities. Healthcare organizations usually don't have the legal and regulatory expertise in-house to deal with these complexities.
In Tennessee, for example, a hospital has a right to settlement funds if they file a lien. In that situation, the third-party liability carrier can't resolve an account and give money to a patient's attorney without paying the hospital that treated the patient.
When it comes to complex claims, hospitals and health systems must decide whether to invest the time and resources needed to obtain reimbursement or simply write off those claims.
Leading revenue cycle teams are using technology to increase recoveries for complex claims
To deal more effectively with complex claims, revenue cycle management teams must pull ahead of their competitors in terms of talent retention and reimbursement rates. The key is finding the sweet spot between hyper-efficiency and significant cost savings. This means replacing cumbersome, time-consuming manual efforts with automated data feeds that provide more accurate insurance, coverage and demographic information.
"When an organization moves from manual processes to accurate, automated processes, the cost savings and efficiency boost is apparent almost immediately," Mr. Hahn said. "Our partners see an increase in their recoveries right away. The number of opportunities to recover grows and the number of FTEs required to obtain the data needed decreases dramatically."
Verisk ClaimSearch is a robust claims intelligence platform that includes the world's largest database of property and casualty claims. It serves more than 93 percent of the property/casualty industry by direct written premium, as well as state worker's compensation insurance funds, self-insureds, third-party administrators, the National Insurance Crime Bureau (NICB), state fraud bureaus and law enforcement entities.
ClaimSearch provides RCM specialists with seamless access to investigative analysis tools. As a result, RCM teams can bypass patient contact and instantly access digital accident and insurance information. ClaimSearch provides everything teams may need to move complex claims forward, including the names of adjusters and attorneys who are involved.
Resolving claims more rapidly gives organizations a major advantage over competitors who are still dialing the phone, sending envelopes and hoping for a response from patients. To automate claims research processes, ClaimSearch supports XML integration. This reduces the amount of labor required and it also results in fewer human errors.
"ClaimSearch helps teams significantly increase identifiable opportunities to pursue and recover," Mr. Hahn said. "That translates into more revenue for hospitals and health systems."
One of Verisk's partners recently approached a healthcare provider that had a longstanding relationship with another RCM vendor. They asked if they could work on any complex claims that the incumbent RCM couldn't recover on.
"The provider sent a file of 300 records to our partner," Mr. Hahn said. "[Our partner] used ClaimSearch and within a week, they had initiated recoveries on 25 percent of the claims that the incumbent RCM had missed. And they didn't have to contact a single patient to obtain insurance information."
Automating complex claims research is also a way to attract and retain RCM talent
While labor shortages are affecting every aspect of healthcare operations, they are especially pronounced in the revenue cycle. In a 2022 survey of more than 200 CFOs and vice presidents of revenue cycle, nearly half said their RCM/billing department was experiencing a severe labor shortage. An additional 34 percent of respondents said their organizations faced a moderate shortage of RCM staff.
Given the labor shortages currently plaguing RCM teams — and projected to continue in the future — using revenue cycle talent as efficiently and effectively as possible is essential. Revenue cycle management isn't a discipline people typically study in school. In fact, in the current environment, many RCM organizations find themselves competing with fast food and big retail for the same employees.
In response, many healthcare leaders are seeking new approaches to make RCM work less mundane and labor intensive. They view automation tools like ClaimSearch as a promising way to help recruit and retain high-quality staff members.
"How can we use technology to improve RCM jobs, so people focus more on things they are good at, like settling complex claims?" Mr. Hahn asked. "ClaimSearch puts the right information at their fingertips and then they can decide how to apply the data to the patients' accounts."
ClaimSearch generates higher levels of patient satisfaction and revenue
Removing revenue-cycle-related administrative tasks from patient interactions is valuable both at the time of hospital discharge and after patients return home. When RCM teams use ClaimSearch, the last person patients speak to during discharge is their physician or nurse. Once they have left the hospital, they aren't bombarded with letters and phone calls from companies they may have never heard of before.
"In complex claims, one of the leading contributors to negative patient reviews of providers stems from the follow-ups regarding insurance and billing," Mr. Hahn said. "Those calls come from RCMs, not the provider. If an RCM employee can take themselves out of the patient contact equation, provider review scores increase. And increased provider scores mean increased revenue for healthcare organizations."
A better financial experience can also result in greater patient loyalty. For example, a 2021 study conducted by The Economist Group's custom division found that 93 percent of consumers say the quality of their payment and billing experience has a significant influence on their decision to return to a healthcare provider in the future.
The power of the ClaimSearch solution to positively influence the care experience extends beyond more streamlined financial interactions for patients. ClaimSearch also reduces some of the financial burden for patients involved in complex claims. "If the law says that the person who hit you should pay for your hospital bills, rather than your health insurance, you no longer have to cover co-pays or deductibles," Mr. Hahn said. "By identifying the appropriate payer, ClaimSearch relieves patients of unexpected financial responsibilities."
4 best practices for applying technology to complex patient claims
To derive the greatest benefit from ClaimSearch, Mr. Hahn recommends that hospitals and health systems adopt four best practices:
- Develop a complex claims strategy. It can be helpful to work first on the inventory of high dollar value claims. For auto accident situations, it's also advisable to focus on the at-fault driver. Information about the other party won't be as valuable from a reimbursement perspective.
- Analyze and score complex claims. Research suggests, for example, that individuals who live in certain ZIP codes are more likely to have better insurance coverage. It may be worth broadening the net and looking more closely at lower-balance claims, if the likelihood of insurance reimbursement is high.
- Create a budget to cover automated claims research. ClaimSearch's per-search fee structure makes it easy for revenue cycle management teams to budget for automation as they pursue accident details and payer information.
- Automate administrative tasks and reduce human error. The ClaimSearch platform offers an intuitive user interface. To eliminate double keying of information and user error, however, XML APIs can be used to seamlessly integrate ClaimSearch with other RCM systems. Using this approach, teams can automatically send batches of account information to ClaimSearch and claim results will be auto loaded into the right systems.
It's time to turn complex claims into a viable source of revenue instead of an administrative burden
The hospitals and health systems that survive (and thrive) beyond this era of fiscal hardship will be those that adapt and innovate. The healthcare revenue cycle is currently rife with inefficiencies and unnecessary administrative burdens. It is a prime target for innovation and transformation — and making complex claims easier to process might be the low-hanging fruit every forward-looking health system should be reaching for.
With advances in AI and automation, hospitals and health systems can mitigate the burden created by complex claims and tap into new revenue.
To learn more about how Verisk can help healthcare organizations achieve RCM goals, click here. Please reach out to Don Hahn at Donald.Hahn@verisk.com with any additional questions.