- To stay in the black, hospitals need to capitalize on every opportunity to capture hidden revenue on the back end. The traditional method for identifying insurance coverage missed at the point-of-service involves using internal resources to track down revenue that would have otherwise been lost to bad debt. Now, many are taking their bad debt recovery and reimbursement efforts one step further by using external vendors that specialize in uncovering missed insurance on their self-pay patients — those which must pay the full balance for services rendered. They also give proper attention to self-pay after insurance patients who owe money to a provider after a plan pays its portion of the bill. Yet, this still isn’t enough.
“Hospitals are missing an opportunity to truly maximize reimbursements by limiting their insurance discovery strategy to their self-pay population,” explains Jeff Farmer, a Solutions Consultant with TransUnion Healthcare. “Instead of just finding coverage on self-pay accounts, take a holistic approach. Look at all insurance eligibility that can provide cash value to your hospital,” he advises.
A complete insurance discovery approach involves searching beyond the self-pay population to find additional coverage for Medicaid, Medicare and commercially insured patients. The task may seem futile because patients are already covered by a payer, but proactively identifying primary coverage sources for all patient populations can increase revenue, decrease costs, and help prevent bad debt.
“Hospitals need to be aware of solutions that will aid their Medicaid population and notify them if they are covered by Medicare—or commercial,” Farmer states. “That way, the hospital bills the appropriate primary payer and gets the correct payment right away. What you don’t want to happen is Medicaid calling to recoup their payment three years down the road when it discovers a patient had other insurance.”
“And if Medicaid learns that the primary payer's timely filing deadline has passed, the hospital will lose all the money they recovered on that account and they have no mechanism to bill the payer,” he adds.
Another key component of a full insurance discovery strategy is identifying secondary coverage for your patient population. Ascertaining if a patient is covered by another health plan not only guarantees hospitals receive their exact payment for services, it benefits them from a cost reporting perspective.
“When hospitals think about Medicaid discovery, they're typically focused on the self-pay population without really thinking through the whole problem,” Farmer explains. “For patients with Medicare and Medicaid, the federal government allows the co-insurance or deductible amounts not paid by Medicaid, to be claimed on the hospital's cost report. Hospitals get 65 cents on the dollar for the patient balance remaining on those accounts. Hospitals won’t realize that reimbursement, if they fail to look for missed Medicaid Secondary coverage,” he stresses.
Hospitals can build their own insurance discovery solutions, but they need access to various databases. Also, to realize the full revenue potential from a holistic insurance discovery approach, hospitals need the ability to filter through non-valuable coverage information.
“Payers often don't provide tools for hospitals to easily find coverage a patient may have,” Farmer says. “A lot of payer systems are set up so they won't allow you to query based on demographic information. Hospitals are at a loss when they get to that point. How do I query with a policy ID if the patient didn’t provide one?”
“Hospitals may also struggle to develop the type of technology necessary to do this on their own,” Farmer remarks. “When hospitals try to build their own solution or when they go out to the market with a less-than-ideal solution, they can also get inundated with coverage information that may not be valuable. Most solutions that exist in the market today are able to go up against 600 to 800 different payers. When you picture an individual hospital, setting up that type of environment is very challenging.”
Luckily, hospitals can turn to insurance discovery solutions from third-party specialists like TransUnion Healthcare. About 36% of hospitals use an external partner to implement a bad debt recovery solution that may include insurance eligibility verification. However, Farmer warns the insurance discovery market is still maturing. Vendors may offer solutions that only check eligibility for self-pay patients and others may not properly filter coverage information.
Therefore, it’s important each hospital thoughtfully explores their options to ensure they adopt a fully holistic approach to insurance discovery — to identify the most appropriate coverage for all patients. As a result, hospitals won’t only recover revenue, but maximize reimbursements as well.
About TransUnion Healthcare
TransUnion Healthcare, a wholly owned subsidiary of credit, risk and information management company TransUnion, is a trusted provider of Healthcare Revenue Protection™ solutions for maximizing reimbursement opportunities, improving patient engagement, and preventing revenue leakage. We deliver this by leveraging our data assets, market-leading revenue cycle management technologies, and deep insights into consumer financial behavior and reimbursement methodologies, to help providers reduce uncompensated care and maximize revenue with one of the most effective revenue protection solutions on the market today. Click Here to Learn More