According to HFMA, 7-11% of claims are underpaid according to the terms of their payer contracts. Payer denials total another 5-10% of medical facilities claims, with 65% of denials going unresolved and 35% of medical facilities not appealing any denied or underpaid claims. Some of the problems that lead to this missed revenue are:
Per HFMA, every denial processed costs an average of $25 and it needs to be correctly identified as a wrongful denial in order to be successful in the appeal process.
Manual systems of documents and spreadsheets to check claims payment accuracy are frustrating and take countless hours every week.
Spot check auditing has inconsistent results and doesn't recover timed-out claims.
If billing is outsourced you have no idea how the third party is handling your denials and underpayments to check every single claim; in essence, you have handed them a receivables open checkbook.
Adjudication - Inaccurate Contractual Write-offs: If you are outsourcing your claims collections it is highly likely that the outsourcing company doesn’t utilize a contract management software. Many only work higher flagged remit denials and don’t have the resources to check every claim for underpayments. Their manual processes don’t allow them to model payer specific contractual rates to know exactly what should be paid per claim. This can lead to unidentified underpaid claims and those claims being written off as a contractual adjustment, resulting in uncollected revenue. Many outsourced billing companies assume full payment unless there is a specific remit denial code, which can leave you with significant revenue leakage of unidentified denials and underpayments.
Accounts Receivable Write-offs: Whether working in-house or outsourcing claims collections, often times the provider is not aware of why claims are truly written off. Claim balances can sometimes be written off because of the need to move the claim to collections, to keep AR days down, or simply because the outstanding dollar amount of the claim is considered too small by billers and collectors. They typically only get paid a percentage on what they collect. If the balance is at or below a certain dollar amount they might not touch the claim for additional recovery as they can lose time and money each time the claim is touched.
True denials identification is often missed as providers only focus on CARC/RARC codes. Many payers use their own denial code crosswalk with different denial reasons as well as down-coding DRG or LOC, which are called invisible denials. Providers often appeal for the wrong denial reason as they are focused only on CARC/RARC codes.
Your revenues are lost if you cannot identify unresolved or invisible denials and underpayments and collect them. So how do you avoid all of these issues, identify your missed revenue and assure that you collect it?
Contract management software solutions that model each contract inside the software are your best bet. A denials and underpayments management process will not fully work and will not recover 100% without a contract management system. Your contract management system should be able to handle today's complex payer contracts while at the same time remaining affordable to your facility. A denials and underpayments management process that includes a contract management system will let you know what you should get paid with combined payer contracted rates, contractual language, EDI billing data, and remit data to determine if every single claim was paid the correct amount.
A good contract management system for denials and underpayments management should have all your contracts modeled in the software, rather than relying on 835 remits like most systems.
The 835 remits reflect the Payer’s decision to pay or not to pay. Since Payers use incorrect and dated rates, don’t update renegotiated rates, apply inappropriate discounts, downcode claims inappropriately, or simply don’t follow their contractual agreement, the 835 remits reflect incorrect data. You should be able to see exactly why it was denied or underpaid and what to do next to successfully overturn your denials and underpayments. No longer spend time researching claim by claim looking for denials and underpayments or using clunky legacy systems, subscribe to a contract management system that will actually work.
Find gold by identifying and overturning your unresolved denials & underpayments with Revenue Masters
Revenue Masters’ proprietary contract modeling software, RMReimbursement Maximizer helps you automate the process of denials and underpayments management. Since we have all types of contracts calculators built in the system we easily identify claims that are paid incorrectly and help you overturn them.Contact Us
CVC VISIBILITY - For an improved denials and underpayments management process, you need to know your CVC (collected vs. collectable).
By using a little known metric, collected versus collectable (CVC), revenue cycle leaders can monitor the medical practice revenue cycle, manage practice performance, and communicate outcomes. CVC is cash actually collected compared to cash that should have been collected based on payer contracts. CVC allows revenue cycle staff to monitor high-level outcomes while managing performance at a detailed level. In addition, CVC is easy for providers to understand, so it is a useful tool for engaging providers in financial goals. Contract management software that offers a quick dashboard or a mobile app where you can view your CVC progress is your best bet. Revenue Masters offers a quickcharts dashboard and a mobile app where you can see your CVC 24/7.
PAYER CONTRACT NEGOTIATIONS - Negotiating the best contract can be simpler
When it is time to negotiate with a new Payer or re-negotiate an existing agreement, you find it near impossible to compare new and old plans without tedious scrutiny of every plan detail, or creating a complete side-by-side matrix--and even then you may still miss critical details. Contract management software solutions like Revenue Master’s can help you solve this problem. With Revenue Masters, your payer contracts are modeled inside the system along with the ability to display historical financials.
MANAGING YOUR PAYER CONTRACTS - Manage all the updates and keep all your contracts within one system
With different Payers, complex contracts, and ever changing policies and procedures, it is almost impossible to keep track of each contract, let alone meet the requirements and time frames in time to get paid 100%. Updating reimbursement tables, checking new Medicare rates, etc. can be a challenge. Keeping personnel continuity for managing the facility’s payer contracts can also be a problem when key staff members leave. Contract management software solutions like Revenue Masters are the best bet to manage all the updates and keep all your contracts within one system.
Revenue Masters products increase healthcare providers’ revenue by identifying every dollar that should have been paid per provider contracts
We supply the data for contract negotiations, powering accurate revenue forecasting, and decreasing manual work hours dealing with contracts while automating underpayments and denials to help you achieve 100% collectability. We work with any HIS system, offer contract negotiation, payer revenue forecast, a mobile app to see your CvC and much more! Also ask about our zero balance review and recovery option and let us find the revenue that you have been missing and show you what the future growth of revenue can look like for you as a Healthcare Provider. Call us at (877) 591- 2590 or book your demo today!