Hospital bills that remain unpaid for over 90 days often stem from claims that were initially rejected by payers. Additionally, the longer a bill is initially declined, the greater the likelihood that it will take more than 90 days to be resolved. These discoveries are highlighted in a recent report by Healthcare Consulting Company, which utilizes revenue cycle analytics software to track patient financial activities across over 1,800 hospitals and 200,000 physicians.
The quarterly benchmarking analysis in the report illustrates a significant increase in the value of claims awaiting payment for over 90 days across various sectors. Specifically, for commercial insurers, there has been a 33% rise in this value from 2020 until the present quarter. Moreover, slow claims directed towards Medicare Advantage have surged by over 40%. Additionally, the initial claim denial rate, measured as a percentage of claim value, has seen an 18% increase, rising from 10% to 12% between 2020 and the third quarter of 2023.
Other Key Findings from the Report:
- • Up until the third quarter of 2023, approximately 23% of medical expenses, encompassing both inpatient and outpatient care, have been shouldered by patients with commercial insurance.
- • Accounts receivable aged over 90 days, relative to claim value, for patients under commercial insurance escalated to 36% by the end of the third quarter in 2023, a notable increase from 27% in 2020.
- • The proportion for patients covered by Medicare Advantage saw an increase to 27% by the end of the third quarter of 2023, a rise from 19% in 2020.
- • As of the third quarter of 2023, the rate of self-pay after insurance collections for patients with commercial insurance amounted to 36.1% of the claim value.
The Senior VP and leader of the revenue cycle emphasize that pursuing denied claims consumes significant time, resources, and mental energy within revenue cycle departments. “The initial denials result in delays in sending bills to patients, and the more delayed the patient billing is following a procedure or hospital stay, the lower the collection rate becomes for providers,” stated the revenue cycle leader in a news release. “This intensifies the financial strain on provider organizations, particularly at a time when they are already facing immense financial pressures.”
She recommends that providers can decrease the likelihood of encountering prolonged delays in claims by “improving their communication with patients starting from the date of service until the billing date.”
“When patients receive timely and transparent updates from providers, it minimizes the chances of missed medical bills and can boost the probability of receiving payments on time,” emphasized the revenue cycle leader.