How Hospitals Can Avoid Permanently Missed Reimbursements
This blog recently examined some of the most critical moments in the patient bill lifecycle and related best practices for hospitals.
In this follow-up article, we’ll take a closer look at two common scenarios where hospitals don’t receive the full reimbursement they’ve earned—and only have a limited time to adjust and re-submit claims. Past this “point of no return” hospitals permanently miss out on any additional reimbursement dollars for which they would have been eligible.
Overview: How Medicare Deadlines Affect Hospitals
If a hospital makes an error when submitting a claim to Medicare, there is only a limited amount of time available to file corrections for any unreimbursed or under-reimbursed claims. Failure to meet these deadlines results in a substantial amount of lost revenue for U.S. hospitals every year.
For different types of claims, hospitals face different timelines for re-submission. In some cases, Medicare rules dictate that you can only correct a claim within sixty days from the first payment of that claim. In other cases, you have a year to re-bill, taking into consideration that state-specific rules can also apply.
These varying deadlines can produce heartbreak situations where, by the time hospitals get around to auditing their reimbursements and identify large amounts of money that they could have received—it’s already too late, and the funds are permanently lost.
Example #1: Medicaid Denials Secondary to Medicare
One common example of a “point of no return” in healthcare billing involves situations where a hospital is receiving denials from Medicaid that are secondary to Medicare, and the hospital never corrected those denials. After a certain amount of time has passed, the hospital cannot bill Medicaid for those claims.
In addition to missing out on the reimbursement dollars, the hospital’s inability to re-bill Medicaid means that the unpaid claims will not be eligible for the Medicare Bad Debt (MBD) program—which would pay 65% of the lost revenue. Due to the lack of eligibility for MBD, these reimbursements are completely lost.
Example #2: Medicare Billing Errors Not Corrected Within 60 Days
Another example is when errors occur during the process of translating a patient’s medical record into a bill. For instance, a coder might inadvertently assign a diagnosis code that is not as specific as it should have been. On paper, this looks like a small mistake, but in reality it can have a significant impact.
Assigning a less-specific diagnosis code can result in the hospital being reimbursed at a lower rate than they would have received if the precise ICD-10 code had been used. This is an example where you would only have sixty days after the initial payment from Medicare to correct the claim and receive the full reimbursement.
Identifying Process Improvements to Eliminate Missed Reimbursements
Within a busy hospital environment, it’s often difficult to invest time in initiatives such as improving billing practices. While this is clearly a value-adding project, it may not necessarily seem “urgent” in a facility that deals daily with life and death. If claims are regularly being reimbursed, it may be difficult to notice under-payments in a timely manner. But over time, even small amounts of lost revenue add up to major losses, given the volume of claims submitted to Medicare and Medicaid.
CMS isn’t looking for ways to increase payments to providers. It’s up to hospitals and their partners to identify missed reimbursements and optimize their billing practices. Unfortunately, it remains difficult for hospitals to devote sufficient in-house resources to re-reviewing large volumes of Medicare claims—even when there’s a feeling that dollars are being left on the table.
Hospitals engage with Healthcare Payment Specialists (HPS) to overcome this challenge by using specialized technology to analyze reimbursement data. Our powerful proprietary STINGRAY™ platform provides superior speed and visibility—enabling hospitals not only to identify missed reimbursements, but also to take corrective action.
By leveraging the power of STINGRAY through HPS consulting services or as a software-as-a-service (SaaS) solution, you’ll have a greater opportunity to receive the full reimbursement for every future Medicare claim.
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