Payer tech is putting administrative pressure on providers.
Despite being an evergreen issue in revenue cycle operations, denials management issues seem to have reached a new level.
Payers are embracing new technology fare more quickly than health systems or hospitals, and that’s putting pressure on providers to handle an influx of denials.
“Payers rely on technology solutions just like we do to manage processes on their side,” Aron Klein, vice president of finance operations and supply chain, previously told HealthLeaders. “Which, ultimately, if something [happens] on their side, it takes time to resolve, which ultimately delays processing or receipt of payment on our side.”
Illinois-based Carle Health has seen a 22% increase in denials year-over-year, many of which ask for additional documentation or information. While the system uses RCM solutions to aggregate data and populate forms, their revenue cycle partners are still pulling a significant amount of weight.
The partners meet monthly to review prior authorization and denials, to monitor the progress of working through them and make note of any trends. System leaders and the operation teams are also included in the process so they can assist in the resolution of denials.
A recent report by Strata Decision Technology found that administrative costs make up more than 40% of a hospital’s total expenses when delivering care to patients. Denials from commercial insurers have seen an average increase of 20.2%, and those for Medicare Advantage claims have seen an average increase of 55.7%.
The reason for these increases? Machine learning algorithms and AI tools.
As more RCM products enter the market and become more accessible to hospitals and health systems, payers may lose their edge.
“I think it will level the playing field and there will come an equilibrium where the payers and the hospitals are keeping each other in check so no one is out of bounds,” said Bill Arneson, director of business operational transformation for Moffitt Cancer Center.
Jasmyne Ray is the revenue cycle editor at HealthLeaders.
KEY TAKEAWAYS
Denials from commercial insurers have seen an average increase of 20.2%, and those for Medicare Advantage claims have seen an average increase of 55.7%.
A report by Strata Decision Technology found that over 40% of a hospital's total expenses when delivering care to patients is from administrative costs.