Top 5 Mistakes in Claims Management – And How to Avoid Them
Claims management accuracy and efficiency are crucial for hospital billing, accounting and finance professionals. However, common missteps can cause...
Hospitals grapple with many complex issues that impact their financial health—staffing shortages, policy changes, retail competitors. However, one of the top financial impacts is fairly simple: missed insurance reimbursement due to eligibility denials.
According to this recent survey, nearly 27% of claim denials happen at registration, when patient intake processes fail to identify accurate insurance information and properly coordinate benefits. In fact, registration/eligibility has been the top reason for claims denial since 2016.
Based on our own estimates, the financial impact is significant. The average large hospital (500+ beds) is missing $3.7 million in unbilled or incorrectly billed revenue, which equates to approximately $2,087 per account. Mid-sized hospitals are missing an average of $1 million.
With the release of their survey data, research executives advocated for “the use of advanced technology” as part of a denials-prevention strategy. By using automated insurance discovery software, hospitals can identify coverage missed during registration. As a result, they can increase revenue without changing registration and pre-service processes.
Here’s how it works.
Automated insurance discovery technology
Insurance discovery software serves two critical functions: It helps hospitals confirm that patients’ reported insurance is correct, and it uncovers additional insurance coverage that should be billed for reimbursement.
Together, both functions help hospitals avoid billing mistakes that lead to denials, as well as generate sources for additional reimbursement revenue. Working with an insurance discovery partner can help hospitals find additional payment opportunities for up to 7% of their accounts.
Automation and machine learning increases the impact even further. They optimize collection efforts by sorting the most valuable accounts based on payment likelihood. This allows hospital finance teams to work more efficiently without increasing labor costs. By improving claims accuracy, and by reducing the amount of time and resources required for manual claims processing, hospitals see faster reimbursement times and improved cash flow.
In fact, in-house teams couldn’t achieve the same results, even if they were optimally staffed. Proprietary databases and patented technology enable hospitals to recover more money with insurance discovery software than if they were to search for unbilled coverage on their own. From an investment standpoint, no-risk contingency pricing means there’s never a financial downside to implementing the technology.
Did you know the average large hospital is missing $3.7 million in unbilled revenue?
FinThrive’s results
Recognized as Best in KLAS for 2024 &2023, FinThrive’s Insurance Discover software is used in 36% of all hospitals and recovers the most revenue compared to any other insurance discovery solution.
Our results are highly accurate:
- Consistently improves existing coverage discovery rates by up to 43%.
- On average, 60% of the coverage we find is net new for the client.
- Our years of expertise enable us to filter out ancillary coverages, such as dental or pharmacy, and exclude them from our results.
- Our patient identification is 99.9% accurate.
Automation and machine learning optimize collection efforts by sorting the most valuable accounts so finance teams can work more efficiently.
Improved patient outcomes
Uncovering missed health insurance coverage is not just a revenue issue—it also improves patient care. Patients who are uninsured or underinsured may delay or forego necessary medical treatment. In fact, nearly 40% of Americans delayed care in 2022 due to fears about health care costs.
Delayed care leads to poor health outcomes and increased long-term medical costs. For example, a JAMA report found that nearly 60% of adults in the U.S. who delayed care during the pandemic experienced negative health consequences as a result.
Further, insurance discovery technology removes friction for patients, serving a critical role in improving the patient experience. More than 30% of patients are frustrated and confused at having to serve as a liaison between payers and providers as they sort out coverage issues. Insurance discovery eliminates the back and forth, helping to ensure bills are submitted to the correct payer and facilitating timely authorizations.
According to FinThrive research, more than 90% of CFOs surveyed will be investing in technology solutions in 2023 that will improve patient experience.
In short, identifying missed insurance coverage is good for everyone—hospitals, patients, and payers. By using automated insurance discovery and verification software, hospitals can identify coverage for previously uninsured or underinsured patients, resulting in increased revenue and improved patient outcomes.
Learn more: Download our Buyer’s Guide for help choosing the right insurance discovery solution for your organization.
