Recent trends in reimbursement haven't been favorable for hospitals. In 2016 alone, $270 billion in hospital claims were initially denied, according to Healthcare Financial Resources, an accounts receivable recovery and resolution services provider.
During a March 5 webinar hosted by Becker's Hospital Review and sponsored by Healthcare Financial Resources, two industry leaders spoke about the significant financial and administrative burdens that claim denials place on hospitals. Each year, hospitals pay $9 billion in administrative costs to rework denials. This is a monstrous cost when 90 percent of denials are preventable, according to Jon Giuliani, vice president-operations of Healthcare Financial Resources.
"With the average hospital operating margin being less than 3 percent, having over 65 percent of denials never getting corrected and resubmitted is a tough pill for many CFOs to swallow," Mr. Giuliani said. "Too many hospitals are using an outdated, traditional approach to handling their claim issues. This is resulting in hospitals routinely leaving large amounts of money on the table."
While the current state of reimbursements may be bleak, hospitals have more ability than ever to reclaim fair payment after a denial, or avoid them altogether, thanks to advancements in technology and artificial intelligence, Mr. Giuliani said. Specifically, robotic process automation and intelligent automation (IA) are emerging as two key technologies aimed at helping hospitals reverse current reimbursement trends and improve AR processes.
"When you take the productivity advantages of robotic process automation and combine them with the machine learning and quality advantage of intelligent automation, hospitals can become equipped with tools that will not only enable them to go after denials, but more importantly, put them in a position to prevent denials in the first place," Mr. Giuliani said. "This frees up time to complete tasks that require more emotional intelligence, such as interactions with patients."
Unlike manual processes, IA and data analytics help hospitals quickly find the root cause of denials, according to Daniel Low, director of operations at Healthcare Financial Resources. IA and data analytics can accelerate the isolation, identification and resolution of the primary causes of rejections while providing a more in-depth understanding of hospitals' AR inventory.
By "understanding these root causes, hospitals can increase cash flows, decrease write offs, decrease bad debt and have less turnover — all of which leads to a positive effect on bottom line," Mr. Low said.
Healthcare Financial Resources' intelligent automation approach can double the amount of cash hospitals recover while reducing resolution cycle time by up to 25 percent. The outsource company, which is headquartered outside of Chicago in Elgin, Ill., facilitates accurate payer reimbursement and assists hospitals with improving their bottom line by providing timely billing processes.
According to Mr. Low, at the heart of Healthcare Financial Resources' processes — and any successful AR improvement initiative — is data.
"Use the data as your starting point. This will help your team narrow your focus and establish your priorities," Mr. Giuliani added. "It's very easy to lose sight of the forest through the trees in this process. There's a lot of potential rabbit holes out there, and that's why a lot of organizations fail — because they don't know where to apply their focus."
Healthcare Financial Resources' data-driven AR recovery and resolution technologies help hospitals direct their focus, resolve and collect more accounts, and ultimately improve their operating margins.
To view a recording of the webinar, click here.
To learn more about Healthcare Financial Resources, click here.