Small differences between payers have significant affect on hospitals' AR, Crowe Horwath finds

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A number of factors affect hospital revenue, and one of those is small disparities between commercial insurers, according to a Crowe Horwath analysis.

For the analysis, researchers used Crowe Revenue Cycle Analytics software to collect accounts receivable and denials data on five unnamed major national commercial managed care payers.

The analysis found true AR days among the five studied payers ranged from 52.2 days to 67.7 days. 

As far as denials, researchers said initial denial rates among the studied payers range from 7.5 percent to 11.1 percent of net patient service revenue.

"This means that approximately one of every 10 dollars of revenue is at risk for nonpayment. Denials marked as 'additional medical information needed,' (for example, medical record requests) exhibit the highest disparity of incidence," the study states.

The study found final denial write-offs among studied payers ranged from 0.8 percent to 2.4 percent of NPSR.

"Since commercial payers are key to a provider's success, the provider should actively look for payer-by-payer trends," Brian Sanderson, managing principal of Crowe healthcare services, said in a statement. "Ongoing, detailed managed care payer performance reporting, integrated with managed care contracting, will become even more important as hospital reimbursement tightens." 

Read more about the analysis here.



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