The healthcare industry is changing rapidly.
Regulations like the Affordable Care Act (ACA) and ICD-10 coding, as well as increased patient responsibility add challenges to an already low profit margin industry.
Here are some of the hottest issues facing the healthcare industry that we are helping our clients address:
Unpaid Accounts Receivables
Hospitals must deal with unpaid receivables and get more aggressive than any other time. Hospitals must build measures into existing work flows to increase income while reducing unpaid or delayed payments.
The key to success involves making payments simpler for patients and more efficient. Additionally, more revenue sources need to be explored to make up for declining reimbursement from insurances and patients.
Increasing Insurance Denials
Even though a delay in switching from ICD-9 to ICD-10 codes allows payers and providers more time to prep, adding 55,000 fresh codes will nonetheless raise coding complexity and most likely denials and rejections. Refiling declined claims not just uses important management time, it also hurts net income. Each percent of claims rejected costs an institution $50,000 to $250,000 in yearly revenue.
An Emdeon study shows that it will cost you around $6.50 to prepare a primary claim, as opposed to $25 to resubmit a declined claim This makes the combined expense of filing and resubmitting a rejected claim to well over $30.
Based on research performed via the Centers for Medicare and Medicaid Services, 60% of rejected claims will not be paid in full. The most effective way to prevent the damages related to rejected claims is to obviously raise the amount of claims that will be accepted in the first place.
Underpayment by Insurers and Government Payors
Collecting timely and full payment from commercial and government payers has never been easy. This has become an increasing concern for healthcare providers, as 91 percent in 2014 said decreased payments were the biggest risk they are facing.
Medical Group Management Association (MGMA) reports that insurers underpay between 7 to 11 percent. Underpaid and unsettled claims create $125 billion in total losses to providers each year. Making sure payers are paying the correct amounts and finding non-traditional approaches to file medical claims can help healthcare providers generate maximum reimbursement.
As the amount of Americans without insurance is declining, self-pay individuals continue to be a significant source of risk in healthcare. The most up-to-date statistics show that 13.4 %, or about 40 million Americans, still don’t have insurance coverage.
Plus, the shift to more patient responsibility and higher deductibles in insurance coverage adds to the uncompensated care potential. Forty-four percent of employers stated they can offer only very high deductible insurance plans, and Eighty seven percent of those that signed up for health plans from the health insurance exchanges selected plans with the highest deductibles.
Today, 1 in 5 Americans has difficulties paying their medical bills. A change from conventional preferred provider organization (PPO) plans signifies healthcare providers can’t depend exclusively on insurance policies to pay for services.
A rise in patient deductibles also increases the period of time where claims remain in accounts receivable. Forty five percent of patients typically wait greater than a month to invest medical bills.
If you’re looking for a partner to help with the increasing challenges facing the healthcare industry, please contact Alacrity for the latest best practices and solutions we are implementing with our clients.
Also, stay tuned to our blog for future articles addressing each of these hot issues in more detail.