It’s no secret that claim denials cost healthcare organizations. They take about 16 more days to pay out than claims that have not been denied. On average, this delay in payment equates to one percent of a healthcare organization’s cost structure.
Final claim denials — or claims in which the payer never pays the provider — lowers a typical hospital’s annual net revenue by 1.9 percent. These tack on additional administrative costs because of the work it takes to close them.
The good news is that 76 percent of claim denials are eventually paid off — but the staff time it takes to get the payments can be costly.
Experian Health recently worked with a large healthcare organization that manages more than 200,000 claims per month, which exceeds $1 billion in claims dollars. The organization has almost 50 hospitals in its network, as well as urgent care and cancer care centers, which creates a large number of transactions and claims to process. This includes Medicare, Medicaid, private insurance, worker’s compensation, managed care, and more.
Before partnering with Experian Health, a number of errors were leading to denied claims, including discharge-not-final-billed errors, claims errors, stop bills, late charges, clearinghouse edits, and other factors that created roadblocks. But claims automation helped turn things around.
Automation reduces errors
Automation provides benefits to healthcare organizations and patients because it speeds up evaluation, ensures correct and timely billing, and reduces the number of manual touches needed for each claim.
According to the Council for Affordable Quality Healthcare, manual processes slow down claim reimbursement. People take an average of four minutes to process claims, but automation reduces this to three minutes.
Although a minute doesn’t sound like much, it translates to thousands of hours saved for a healthcare organization that processes 200,000 claims each month. Automation also frees up time for billing teams to focus on more pressing tasks.
How organizations can benefit
By automating, this healthcare organization could ensure clean claims by utilizing an expansive library of national payer edits and implementing custom edits. This eased the follow-up process because teams had detailed insight into claims status, an analysis of denial reasons to efficiently process them, and automated workflow and payment posting to handle splits and contractual adjustments.
One of the biggest reasons this healthcare organization partnered with Experian Health was the ease of implementation with its medical records system, Epic. For example, ClaimSource easily loaded customized edits and the edits library into Epic, tracked and corrected claims, found and repaired issues with the system build, and created opportunities for cross-training and centralized reporting.
Through this automated process, the healthcare organization now has detailed insight into its claims management process and can monitor rejections data, review effectiveness, and find ideas for even more system automation.
Through its partnership with Experian Health, this healthcare organization has improved its claims metrics across the board. It improved its acceptance rate by 10 percent, and it became an Epic top performer for claims acceptance, averaging a 99 percent acceptance rate. It has also increased its clean, paid claims percentage by over 10 percent.
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