Hospital billing systems are complicated. There’s a reason why billing employees go through plenty of training. Between the various doctor fees, medication costs, room charges, and procedure costs, there’s a lot to deal with. Each of these items has its own code. And then, if the charge isn’t sent properly to the commercial insurance company, all of those codes need to be assessed. The claim denials process is incredibly time-consuming. This is why hospitals have entire billing departments – but even they sometimes fail to get the commercial insurance company to pay up in the end.
The Importance Of Chargemaster Rates In Preventing Claim Denials
Let’s start with a brief overview of chargemaster rates. The main chargemaster document is a very complicated thing. These are the main cost sheets for everything in the hospital. All of those costs and fees described above are listed here. Each document consists of a number of different things, including item numbers, department numbers, and procedure codes. There are also charge amounts for every possible procedure, as well as ledger numbers to help keep track of everything. Some hospitals can have hundreds of these line items. It’s no wonder that things get confused every so often.
In order to keep the billing process as efficient and accurate as possible, these chargemaster documents need to be regularly updated. Since they are what the hospitals use to negotiate prices with the commercial insurance companies (creating yet another set of documents), they’re a crucial part of the process. Without them, inaccurate bills would be sent out to these insurance companies, and the reimbursement process would take even longer. This is why hospitals spend so much time keeping these chargemasters up to date. But even with them, many commercial insurance company claim denials still occur. It’s a never-ending cycle that ends with the hospital losing money.
Even With Updated Rates, You’ll Still Get Claim Denials
Yes, hospitals can update their chargemaster documents, code everything properly, employ a skilled billing staff, and yet their commercial insurance claim denials still occur. There are several reasons for this. One, despite all of the billing employee efforts, the coding and charges may be incorrect. Two, the payment request wasn’t submitted in time. (There’s a tight turnaround when it comes to getting these things sent in for payment.) Three, the preapproval for the procedure or service may not have come through properly. These are just some of the most common reasons – there are many others. Plus, besides the total claim denials, there are also underpayments.
An underpayment occurs when the commercial insurance company fails to pay for the entire amount. They might pay for half of it, one-third of it, or an even smaller percentage. The reasons for this vary just as much as those explaining the total claim denials. It could be that the commercial insurance company just didn’t think that the charge should’ve been so high. They might believe that they agreed to a different price. It could also be that the code didn’t quite match the service or procedure level. Really, the reasons are extremely varied and may not make sense to the hospital billing service employees. In some cases, they may never be able to determine what the issue was. All that matters is that the total amount wasn’t paid the first time that the bill was sent out.
Whether there’s a series of total claim denials or underpayments, this doesn’t mean that the fight is over. The hospital’s billing and claims departments need to accurately track these denials and underpayments in order to take the next step in the process – the appeals process.
The Appeals Process
When the initial claim denials come through, it isn’t the end of the road. Hospitals still can appeal the claim denials up to three times at the state level. This takes time and must be done by a certain deadline. That deadline was moved up when the Affordable Care Act was put into place, so the timeline is even tighter now than it was before. The main issue here is time, and we’re not referring to those deadlines. Instead, we’re talking about the time that your hospital’s billing employee have to spare. They need to stay on top of the new bills that need to be sent out, while at the same time dealing with these appeals. It’s no wonder that many of the state level appeals are denied three times by the commercial insurance companies. The paperwork involved in the appeals process isn’t easy to wade through. Plus, in the end, you just end up with more underpayments or outright claim denials. It may seem as though all of the work that went into keeping the chargemaster rates updated was all for nothing. Thankfully, there’s one more step that you can take in order to collect this money.
What Comes Next
Once a hospital has gone through their three state-level appeals and the commercial insurance company is still denying the claims, there’s still hope. Yes, most hospitals simply drop those unpaid claim denials and underpayments into what is known as a “debt bucket.” This is a unique term for the debt that ends up on the wrong end of the hospital’s financial balance sheet. If this amount adds up, your hospital might find itself insolvent and about to go under. Hospitals go bankrupt consistently in this country for that very reason.
Rather than give up and writing off the costs, you need to find a company that knows the ins and outs of Federal ERISA appeals. What are these? Well, the Federal ERISA law (Employee Retirement Income Security Act, for the record) states that those unpaid commercial insurance claims need to be paid. It’s a federal law that was put into place back in 1974. When the Affordable Care Act was designed, it adopted all of the ERISA rules. Those insurance companies do need to pay your claims – you need just a company, such as ERISA Recovery – that know how to navigate the process and collect your money.
And yes, having up to date chargemaster documents that you can give us will help, even though all that we really need to get started is a simple list.
Conclusion
Are you ready to empty that “debt bucket” and find a way to keep your hospital in good financial standing? Maybe you’re tired of watching your accountants shuffle those commercial insurance claim denials onto the bad side of the balance sheet. You might also be frustrated with the fact that you spend all of the time keeping your chargemaster documents updated – only to be hit with claim denials and a lot of bad debt. What you need to do is call ERISA Recovery. We offer a contingency-based service, so we don’t get paid unless you do. We also know how to file Federal ERISA Appeals in order to get those claim denials reversed. On top of that, we have a $1,000,000 guarantee – that’s the amount of money that we’ll be able to recover for you through the Federal ERISA appeals process. It’s time to stop playing games with your commercial insurance company debt and start getting those claims paid. Call us today at (972) 331-4140.
