Health systems across the country have experienced a significant increase in denied claims over the past year, resulting in more administrative work for providers, less cash flow for hospitals and, In some cases, patient care is delayed.
According to a report by Kaufman Hall, about 67% of healthcare leaders have seen an increase in claim denials in the past year. In 2021, 33% of executives reported an increase.
While claim denials increased in the years leading up to 2020, navigating the surge amid the pandemic has put additional strain on patients and hospitals, requiring health systems to fund rotations and staff additions to seek payment for claims.
Dennis Shirley, vice president of health systems revenue cycles, said UnityPoint Health has seen a number of denials from people paying for commercial care and under management increased from 50% to 200% in the last 15 months.
During the same time period, the system was based on Des Moines, Iowa Medicare’s request denial rate has remained flat, about four to 10 times lower than denial rates from commercial and managed care plans, he said.
“These denials typically do not result in write-off or loss or eventual denial payout, but they do require additional employee work and processing effort, and denials,” Shirley said. This also invalidates the timely payment terms in our contract with the payer,” Shirley said.
At Rush University Medical Center in Chicago, rising denial rates have forced the hospital to devote extra resources to complaints and claims processes, hiring more staff to try to make sure providers his services are paid, said Dr. Brian Stein, the center’s quality director. office staff.
“[Insurers] are tightening screws everywhere to try to keep costs down,” says Stein. “We leave them to what they decide.”
The increase in rejections did not occur throughout the pandemic. Colleen Hall, managing partner of healthcare services and revenue cycle practice lead at Crowe, a consulting firm, said that initially, infrequent payers turned down claims , partly because not many requests are processed.
With premiums holding steady as patients seek less care due to contract concerns With COVID-19, insurers have made unparalleled profits, said Hall.
But as more and more patients start looking for elective procedures and other care they’ve been putting off, insurers are playing catch-up and paying more than expected, she said. .
Initial claim denial rates for hospitals have increased from 10.2% in 2021 to 11% in 2022, according to Crowe’s revenue cycle analytics system, which collects data from 1,700 hospitals across the country. That equates to about 11,000 denied requests for a medium-sized hospital.
The value of denials increased to 2.5% of total health system revenue in August, from 1.5% in January 2021, mainly due to pre-authorization denials for inpatient accounts.
“Payer resistance to service usage and prices often stems from insurers and consumers,” said Konstantine Costalas, senior vice president of managed care contracts at Northwell Health. Employers are struggling with rising healthcare costs.
“From the hospital’s point of view, it’s just a payment delay,” Costalas said. “We’re already offering service, it’s just a delay tactic that we’re seeing an increase in.”
Insurers will take up to seven days to decide on post-acute care requirements, denying or substantially delaying patient authorization for subacute facility or home care.
Costalas said the denial added an additional burden and stress to both the hospital and the patient.
In addition to the higher number of denials, providers are waiting longer to be paid by insurance companies. Crowe found that the percentage of claims paid more than 90 days after receipt rose to 37% in August, compared with 32% in January 2021.
The longer a claim goes unpaid, the more it affects hospital operations.
“We are seeing our clients really struggle with reduced cash flow,” says Hall. “If they are having an increased administrative burden and all those additional costs, that could affect the amount of charity care and the number of special programs that [hospitals] can provide their communities with benefits for patients.”
Another problem for hospitals, Hall said, is the increasing frequency of “recalls,” in which insurers take back part of their reimbursements after claiming a fair claim. must be assigned a lower diagnostic-related group payment, Hall said.
Glenn Melnick, a professor at the University of Southern California’s Sol Price School of Public Policy, said that while opt-out is necessary to manage the use of low-value services and reduce costs, it is important that Providers and patients must know how insurance companies are making these decisions.
The Centers for Medicare and Medicaid Services should follow the recommendation of the Department of Health and Human Services to provide more specific guidance on when and how insurers should use the criteria, Melnick said. themselves to decide whether to pay for the care.
As an example, Shirley of UnityPoint Health notes that some commercial payers use a different clinical criterion definition for sepsis than CMS, resulting in higher levels of denial for related care. to sepsis in their facilities.
“We understand that payers have the right to make their own guidelines, but that makes it difficult for hospitals to choose between the standards of care when CMS and the care plans are different,” he said. Commercial and regulatory care use different standards.
Governments need to do more with the data and resources they have access to, to create a more centralized system for tracking and regulating request denials, Melnick said.
“If you have these risk-based organizations where they are managing care and claims, is that data reported to CMS in a timely manner so Medicare can track whether their members Are you getting the right care? If the data gets stuck at a lower level, it’s a giant black hole for CMS,” he said.
In the meantime, systems like Northwell Health are working with insurers to identify problems with prepayment claims, submit benefits coordination requests before care is delivered. provide and find a process to facilitate post-acute permission more promptly, Costalas said.
“Some of them have a really good relationship with some of these schemes, and sometimes it enforces your contract through a variety of means, such as letters of request and measures,” he said. other fix.
