Why is Revenue Cycle Management Important in Healthcare?
Revenue Cycle Management (RCM) is vital for a thriving healthcare organization. Balancing exceptional care with financial steadiness can be...
Medicare offers important financial protection by providing health insurance coverage to 67 million people in the U.S., including adults age 65 or older and younger adults with long-term disabilities.
Unsurprisingly, Medicare and Medicaid reimbursements are crucial, comprising about 32% of hospital revenue.
As healthcare organizations face the challenge of narrowing margins and decreasing government reimbursement rates, exploring shadow billing presents a promising opportunity for additional reimbursements.
What is shadow billing?
Medicare Advantage (MA) plans don't cover costs for indirect graduate medical education or nursing/allied health education. Hospitals must submit a separate "shadow bill" to the Medicare administrative contractor to receive reimbursement from the Medicare program. Shadow billing is also known as “no pay” or “information only” claims.
Shadow billing claims are important for Indirect Medical Education (IME) and Graduate Medical Education (GME) reimbursements, as well as to ensure compliance with the HITECH Act. With over 50% of Medicare beneficiaries enrolled in MA plans, it’s critical for reimbursement teams to ensure every dollar is captured before the deadline. Accurate billing and diligent data management are essential to securing the full spectrum of available IME and GME funds.
RELATED: How to Maximize Medicare and Medicaid Reimbursements
What is the current challenge for finance leaders?
Shadow billing poses a considerable challenge for teaching hospitals, particularly because it's linked to the financial demands of graduate medical education and health education costs.
For hospitals to submit shadow bills for their MA patients, they must submit a claim to their Medicare Administrative Contractor (MAC) rather than the MA plan. Hospitals face significant pressure to accurately collect all necessary information from beneficiaries during the registration process.
Collecting all the right information can be tricky, and missing out on key details often means claims don't get submitted. Even small slip-ups can really impact a hospital's bottom line, showing how important it is to get it right from the start.
RELATED: 4 Ways to Maximize Government Reimbursements
How can finance leaders solve the common challenges associated with shadow billing reimbursement?
Hospitals must invest in resources to make sure they capture eligible accounts. This allows them to maximize GME reimbursement through their cost report and collect the most IME revenue.
DID YOU KNOW?
Uncovering just 5% more billable days from hidden MA enrollees could boost annual revenue for a typical mid-size academic medical center by over $385,000.
Teaching hospitals can enhance their shadow billing process by implementing a solution with advanced processing and data integration capabilities to optimize IME/GME reimbursement.
Such a solution can help healthcare finance leaders:
- Identify all MA patients who may have been overlooked during registration.
- Connect with the Medicare Common Working File across various regions and suffixes to accurately identify members.
- Verify shadow bill claims through the Medicare Direct Data Entry system.
- Review claims to ensure precision and correctness.
By adopting a solution with these capabilities, hospitals can streamline their billing operations and enhance financial outcomes.
Accurately identifying Shadow Billing opportunities represents a significant revenue opportunity for hospitals. By recognizing the hurdles and implementing appropriate solutions, such as partnering with a third party, providers can optimize their reimbursement outcomes.
Learn how to untangle complex government reimbursement challenges or read our guide to see how FinThrive’s unique processing and data integration capabilities can help you accurately and efficiently improve your shadow billing process.
