Healthcare Revenue Integrity is More Important than Ever

In the last few years, the healthcare industry's budget was stretched thin, as incoming revenue fell while the cost of care rose. Due to the COVID-19 pandemic, people have canceled healthcare appointments, specifically elective surgeries, wellness procedures and exams, and non-emergency visits. This created financial challenges that the healthcare industry continues to face, making revenue integrity more important now than ever before.

Looking Into Healthcare Revenue Integrity

In a nutshell, the goal of revenue integrity is to ensure clinical encounters lead to revenue, using methods that maximize operational efficiency and compliance. Even though revenue integrity is so important in the healthcare industry, not many health system executives have a program in place to ensure efficient review processing. A survey by HFMA/Navigant Consulting found that out of 125 health system executives, 22% cited revenue integrity as a top priority while 44% have established programs to help increase revenue collection.

The pandemic shone a light on revenue leakage, which needs to be pushed to the forefront of industry leaders’ minds. While elective visits and procedures were reduced, hospitalization rates spiked, which worsened many existing challenges faced by the healthcare industry, including increasing billing complexity and the rising cost of care. According to the U.S. Chamber of Commerce, spending on healthcare in the U.S. declined by 18% in the first three months of the pandemic which is the steepest drop since 1959.

It didn’t end in 2020. Financial struggles continued into 2021 with hospitals nationwide losing an estimated 54 billion in net income over the course of the year even when factoring in federal Coronavirus Aid, Relief, and Economic Security (Cares) Act funding. Now more than ever, providers must navigate slim margins of error to protect their profits when various leaks can account for up to 20% of revenue loss .

Where Revenue Leakage Happens

To prioritize a plan for revenue integrity, it’s imperative to know where revenue leakage occurs. While revenue leakage can happen for a myriad of reasons, three main reasons can be attributed to revenue losses in the healthcare industry.

Manual Processing

First, inefficiencies in processing easily lead to revenue loss, particularly with manual processing. Between the providers and payers, manual processing costs more than electronic transactions due to the additional time and resources needed. It can cost $3.59 more per claim for each claim processed manually.

Underpayment & Overpayment

Even after claims have gone into processing, providers often need to handle underpayments or overpayments. Insurance companies’ payment rate accuracy has dropped to as low as 77% , meaning 23% of payments to providers were inaccurate. Determining what the accurate payment should be and ensuring that each payment is correct after processing eats up time and revenue.

Denied Healthcare Claims

Denied healthcare claims are one of the largest sources of revenue leakage, with 11% routinely denied upon first submission, according to a 2020 study . That study also found that hospitals have been receiving 23% more claims denials in 2020 compared to 2016.

Unfortunately, it's not difficult to get a claim denied as even minor medical coding and billing errors can lead to a claim being rejected. Claims can be appealed by providers to attempt to recover the payment. However, many organizations lack the resources to stay on top of appeals. On top of that, the Healthcare Business Management Association (HBMA) points out that 60% of denied claims are never appealed which further lowers the chance that the healthcare provider will be paid the correct amount owed.

Finding Solutions that Prioritize Revenue Integrity

Manual processing, inaccuracies, and denied healthcare claims account for a significant amount of lost revenue for healthcare providers. However, the process of correcting and resending denied claims can be costly and time-consuming for both providers and payers, especially if the claims are processed manually. The logical solution here would be for healthcare providers to take steps to prevent their claims from being denied in the first place, using efficient automated tools.

One way to do this is by partnering with claims processing companies like Exela. Exela’s Global PCH solution is designed to reduce the number of denied claims by correcting errors before the claim is submitted. With Global PCH, healthcare companies can submit “clean claims” (claims that have no errors) that are more likely to be accepted by insurance companies. Global PCH automatically identifies claims that are likely to be denied and edits these claims before they’re submitted.

Global PCH increases first-time billing accuracy by an average of 24 to 31%, decreasing the need to submit appeals. Exela’s edit engines have more than 119 million edit recommendations and validate all SNIP edits and clinical edits based on general care guidelines for commercial, Medicare and Medicaid processing. So not only are healthcare providers seeing fewer first-time denials, but they can trust Global PCH to significantly accelerate the revenue cycle time, ensuring more prompt payments.

As vaccination rates continue to climb and COVID-19 cases continue to fall, the healthcare industry is heading into a “new normal” and efficient revenue collecting has become a major priority for decision-makers across the industry. Many medical care providers would benefit from a more thorough review and overhaul of the entire revenue cycle with the help of an experienced partner. Not only would such a partnership leverage industry-specific expertise, but it would also allow providers to spend more time on core competencies such as patient care.

Learn more in the latest edition of PluggedIN: Revenue Integrity in the Healthcare Industry .