More Hospitals Are Filing For Bankruptcy Or Closing Their Doors For Good – How This could’ve Been Prevented

Hospital closures are never good news. They tend to make headlines for all of the wrong reasons. These closed hospitals can leave entire regions without access to proper medical care and can be dangerous for people with severe conditions who need to travel additional time to get to an emergency room. Fifteen extra minutes can sometimes make the difference between having their lives saved or dying en route. The main issue with these hospital closures is the fact that many of them could have been prevented had their administrators sent their unpaid claims through the Federal ERISA appeals process.

Closing and Bankrupt Hospitals Occur Throughout the Country

Two of the most recent issues happened in very different places – Miami, FL, and Webster, TX. In March of this year, the Miami Medical Center, which had already stopped providing services to its patients, filed for bankruptcy. This hospital was owned by a Kansas based group that purchased it in 2014. As of the time of the bankruptcy filing, the Miami Medical Center had twice as many (if not more) liabilities than assets. The other hospital here, the Bay Area Medical Center, based in Webster, TX, closed for good on May 10, 2018. Not only did it leave 900 people without jobs, but it also left patients without a local, nearby hospital. The Bay Area Medical Center had 191 beds and had recently renovated its facility. The administrator blamed the closing on “significant hurdles with managed-care companies.”

These closings might be blamed on things like managed-care companies, but for the most part, the real blame lies in cash flow problems. When you look at all of the things that hospitals have to pay for, including payroll, maintenance, new technology, parking and infrastructure, and even simple things like bandages, it becomes very clear that the administrators have to keep enough money rolling in, or they won’t be able to pay their bills. When that happens, these hospitals end up filing for bankruptcy and closing, in either order.

Unpaid Claims Lead To State-Level Appeals

In order to maintain a positive cash flow, hospitals need commercial health insurance companies to pay their bills. These bills are sent out daily, usually immediately after a procedure or hospital stay has been completed. The billing employees are responsible for coding the bills (there are numerous codes, depending on the contracts set into place with the insurance companies), ensuring that the patient’s identifying information and amounts are correct.

This process doesn’t always go as smoothly as possible. The commercial insurance companies can refuse to pay the hospital’s claims, sending them back for a number of reasons that vary from wrong amounts to incorrect codes. Once they are sent back, the billing employees can send them out again up to three times. These are called state-level appeals. Every insurance company handles them differently. This means that the employees might have to fill out a different form, send them to a completely new address, and jump through a number of virtual hoops – after they’ve confirmed that all of the claim information is correct. (And if it isn’t, they need to correct it before sending it back for appeals.) Even after going through this process, the claim might still remain unpaid.

What Happens After The State-Level Appeals

After the three state-level appeals are completed, there are several outcomes. Either the claim has been paid, which makes the hospital board or its overseers happy. If this happens, then nothing else needs to be done. More often than not, this isn’t the case. The claim usually ends up being denied outright or underpaid. A denied claim is one that the commercial insurance company refuses to pay. On the other hand, an underpaid claim is slightly different. This occurs when the hospital recovers only part of what’s owed. Again, the reasons for this vary. The percentage of these denied or underpaid claims depend on the hospital and the commercial insurance company. It’s hard to cite a specific percentage. However, it is possible for them to make the difference between a financially healthy hospital and one that’s on the brink of bankruptcy. For most hospitals, these unpaid or underpaid claims might be the beginning of the end.

Hospitals Usually Don’t Do Much With Those Unpaid Claims

Once your hospital has exhausted its state-level appeals, most uncollected claims end up in a file with all of the others. It’s the virtual end of the road for them, as the accountants place them on the wrong end of the balance sheet. However, this isn’t the only option – you can file a Federal ERISA appeal.

How does this work? Well, the process of filing an ERISA (Employee Retirement Income Security Act) appeal is somewhat complicated. Even if it were taught in medical billing and coding courses, those employees are too busy filing new claims and dealing with the state-level appeals to file these ERISA appeals for their hospitals. In fact, information on ERISA, which was initially created to protect employee retirement accounts and then expanded to health care, isn’t taught in most law schools either. You need to find a specialist who can handle them for you. You need a company like us, ERISA Recovery.

We Can Help

When you contact ERISA Recovery, you receive two things – appeals filed through ERISA on your behalf, and a handy guarantee. Yes, we offer a guarantee. We guarantee that as long as we have access to your records and other documentation, in a 12-month period, we’ll recover $1,000,000 worth of these claims. It all starts with some basic paperwork. Those commercial health insurance companies need to pay you.

Why call us? Well, we know the ins and outs of the law. Although there are a few health care plans that are exempt from the law, including those that are administered by a church or the government, the majority of them are covered. This means that those unpaid and underpaid amounts can be collected. It all starts when you contact us. We don’t even charge up front since we operate on a contingency basis.  We’ll get paid when you do. All that we need to get started is a set of reports showing the amounts still owed to you. We’ll go through them, ask you for supporting documents (if necessary), and file your ERISA appeals. Our experts have the time, knowledge, and access to forms that your hospital billing employees don’t.

Call Us Today

We speak with representatives from struggling hospitals every day. Don’t wait until it’s too late to reach to us. One phone call or filled out contact form can prevent your hospital from ending up in financial distress or even bankruptcy. You don’t want to end up with the Miami Medical Center, the Bay Area Medical Center, or one of the other hospitals in this country that are operating on razor thin margins. Please call us at (972) 331-4140 or fill out the contact form on our website. One of our experts will call you back.