News: Claims appeals cost hospitals up to 8.6 billion annually

Appeals cost providers roughly $118 per claim—extrapolated nationwide that amounts to as much as $8.6 billion in administrative costs necessary to recover initially denied claims, according to a new report from Change Healthcare, HealthLeaders Media reported.

Change Healthcare, a claims processing software company, leveraged inpatient and outpatient claims data it processed in 2016 to compile its first Healthy Hospital Revenue Cycle Index for the 724 hospitals included in the sample. Although the numbers in the Index may not be representative of the more than 5,500 hospitals in the nation, as much as $4.9 million per hospital could be at risk due to denials, HealthLeaders Media reported.

A number of culprits were responsible for the denials. Front-end processes such as registration/eligibility accounted for 23.9%; back-end processes such as missing or invalid claims data at 14.6%; authorization and pre-certification problems resulted in 12.4% of denials; and medical documentation issues caused 10.8% of denials.

Editor’s note: To read the original HealthLeaders Media, click here. To view a presentation on a Recovery Auditor’s perspective on denials, click here. To view a presentation about defending against denials, click here. To listen to an ACDIS Radio show about denials and education, click here, and an accompanying Q&A, click here.