More Hospitals Struggle With Unpaid Commercial Health Insurance Claims – But We Have a Solution

Another week and there are more hospitals with financial struggles in the news. This seems to be an increasing trend, as more and more health care centers face financial problems due to unpaid and underpaid claims. This time, it’s a hospital in Vermont. Springfield Hospital lost close to $14 million over the course of the past two years and they were relying on loans in order to keep their doors open. After two of their top executives stepped down and a number of cost-cutting measures were implemented, the current CEO is still predicted losses in the range of $5 to 6 million dollars this year alone. This is problematic, and a sign of the times. Many hospitals nationwide are facing the same struggles, but not all of them fight to stay open as Springfield Hospital has. In fact, here are some of the top options for hospitals like this.

Go Bankrupt and Close the Doors

The number one thing that many of the struggling hospitals do is file for bankruptcy and then go out of business. This is a major problem. Not only do all of the employees who work there lose their jobs, but the area is left without a hospital. If they were located in a rural area, the closest hospital might be as much as 50 to 60 miles away. Should a timely emergency occur, then the patient might not get to the emergency room in time. Even if the hospital is located in a city or very urban area, odds are that many of the frequent patients have a relationship with the doctors, nurses, and other providers that work there. When the hospital closes down, those relationships are lost. While no one likes change, this is the worst type of change of them all.

Why does this seem like the best options for many of these struggling hospitals? It all comes down to their creditors. Hospitals cost a lot of money to run. They require new equipment, plenty of supplies, and hundreds, if not thousands of employees. Once they file for bankruptcy, they can settle with their creditors for pennies on the dollar. It seems like the best option to the ones in charge, who look at the forecasts and know when to cut their losses and close down. The patients and the overall community don’t see it that way though.

unpaid claims
Two Hospital Workers

Merge With an Existing Healthcare Center

Another option for these struggling hospitals is to merge. When they do this, the more successful of the two – the one that normally initiates the merger – take on the debt of the struggling one. In some cases, they make arrangements to pay all of the debt in full, while in others, they make deals with those creditors in order to pay just a portion of the debt in order to satisfy it. This is a good option for many of the players involved. The successful hospital now has more patients under its wing and can offer additional services, and the struggling one gets to stay open and keep operating. The community is happy because their hospital has been saved, while the patients get to continue going to the hospital that they are the most comfortable at. In many cases, the only thing that changes in the name of the hospital, but this is not always true. Sometimes the salaries and titles of the employees change a bit as well. This is usually a good option, however, and is seen as fairly positive for everyone involved.  

Find Ways to Track Unpaid Claims and Use the State Level Appeals Process

Finally, the third main option that many of these centers have is to find ways to get those claims paid. In many cases, the commercial health insurance companies rejected those claims for one reason or another. They might also have short-paid, or underpaid, them for a specific purpose. If the billing center at that hospital has time and the inclination (which is often easier said than done, as many billing center employees are quite busy), they will find a way to track these unpaid and underpaid claims and send them through the state-level appeals process.

Every commercial health insurance claim is allowed to go through the state-level appeals process three times before they can no longer submit it. Why are these claims not paid in full the first time? There are many reasons for this. It might be that the coding was incorrect, or the amount was wrong. Every billing center has a book of codes and amounts that correlate to the contracts that they have in place with the various commercial health insurance companies. If they accidentally submit the claim for the wrong amount, then the claim will automatically be sent back unpaid. The same is true for claims with the wrong code on them.

There are patient-based mistakes that happen as well. For example, the patient may have needed prior authorization for the procedure, but none was obtained. In this case, the claim won’t be paid. Plus, if any of the patient’s identifying information is incorrect, such as their name, date of birth, insurance codes, or social security number, then the company won’t pay the claim. All of this can add up to quite a few unpaid claims if the practice is allowed to go unchecked. The best thing that the billing center can do is keep track of all of those unpaid and underpaid claims. If they need to be adjusted in some way, shape, or form in order to get them paid, then that’s what they must do. Every hospital receives three state-level appeals on these unpaid and underpaid claims and if they are correct before they are sent back to the commercial health insurance company, then the odds are good that they will be paid before those appeals are exhausted. However, this isn’t always the case, which leads to one final option.

unpaid claims
A Hospital

Go Through the ERISA Appeals Process

ERISA, also known as the Employee Retirement Income Security Act, also covers commercial health insurance claims. If the company is refusing to pay those claims and the three state-level appeals are exhausted, then this is the next step in the process. The problem is that many people don’t know how to submit these claims for payment through ERISA. The law and resulting process aren’t taught at many law schools and those billing center employees don’t have time. This type of claim must be handled by a specialist. The best thing is that ERISA practically guarantees that the claims will be paid. This is good news for the hospital.

Contact Us – We Can Help

If your hospital is in financial trouble and has hundreds of thousands of dollars of unpaid commercial health insurance claims, then contact us. We can help. Our highly trained employees know the ERISA Appeals process well and can file claims with them that ensure that those unpaid and underpaid claims are indeed covered. We even have a one million dollar guarantee on our services. If you provide us with all of the necessary information, then we’ll get those claims paid for you. You can contact us on our website or give us a call.