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How One Healthcare System Recovers Underpaid Claims

Karen Minich-Pourshadi, for HealthLeaders Media, March 16, 2011
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Adams and his team were able to see which clinicians were missing opportunities to code additional procedures that had been performed. For instance, the system flagged specific diagnoses that usually have lab tests associated with them if the lab test codes were missing. In doing so, the system was able to capture all the charges associated with a diagnosis and then alert clinicians to be aware of their mistakes.

The data also helped spot $8.5 million in underpayments. ?You have continually updated contract terms, so your technology has to progress to keep up,? he adds.

Productivity and contract leverage

Since its system was put into action, Presbyterian has identified nearly $1 million every month in underpaid claims. In the past, billing staff was able to resolve about 20 claims per day, but with the new technology, that has increase to 40 to 50 claims per day. Moreover, Hennigan says, the data has allowed staff to readily spot and understand the origins of their claims problems, and make improvements.

?We use this data and we meet with the payer and we can correct the problems at the source and eliminate the problem from happening in the future,? he says. ?When it comes to contract interpretation, there needs to be a consensus, and this technology helps achieve it.?

Another benefit enables staff to spot overpayments made by the insurers. This allows Presbyterian to send this money back to the insurer with an explanation and keep its side of the balance sheet accurate.

?Certainly collecting money is a greater priority than returning it, but returning it helps with the bookkeeping,? Hennigan says. ?A lot of times the vendors would send the checks back and say we didn?t owe them any money, even with the explanation. The inefficiency in the healthcare system, even when you automate things, is amazing. You still have money being left behind on both sides of the
payment transaction.?

Additionally, Hennigan explains, the data has helped Presbyterian negotiate more favorable rates with insurers as well as expedite overall reimbursements. Adams also has found the technology has helped MultiCare with this process.

By using predictive analytic technology, hospitals and health systems can automate the process of sifting through all the historical billing and account and clinical data to identify and flag underpaid claims, detect payment variances, automate batch appeals, and improve administration of contracts.

Although the technology doesn?t come cheap, adding it can yield an immediate return on investment in both dollars and staff productivity, and in the long-term it can improve the administration of payer contracts and lead to more favorable contract terms. Not bad for a technology that takes just a few months, can work with existing technology, and can, within just a few hours, produce the low-hanging fruit hospitals have been missing for years.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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