Underpayments in Healthcare: A major loss

• • Let’s understand Underpayment

  • Underpayment: It is a major challenge of the revenue cycle management process for many healthcare organizations in today’s time, as facilities or hospitals are grappling with it, as they are not getting reimbursed with the full eligible amount for services they provided.
    
  • Inappropriately denied claims, which in the future, if gotten reimbursed, generally lead to partial payment or underpayment. 
  • Coding Errors: If coding is not done properly, like inappropriate coding of DRGs or missing diagnoses, then there are high chances of underpayments. Also, undercoding can lead to underpayment.

  Solution

  • If you want to avoid this scenario, then focus on the data management and make your medical billing company aware of the existing contracts, so shift to the better software that can keep you updated.
  • Always be informed of the updates to the contract.
  • Ensure underpayments are appealed timely, as the payer may take 30-45 business days to reprocess the claims, so appeal with supporting documents.

  • Post you may like:  About Medicare and its Parts.

1. Major reasons are mentioned below.

• Misinterpretation of contract terms between healthcare organizations and payers.
  
• lack of skillset to understand denials root causes, which hamper in achieving desired overall reimbursement as per contract rates.
• Many healthcare organizations often deprioritized the less payment at the start as they did not have clear data on the contract terms.
  
• Pricing issue: Payers may price claims incorrectly by using outdated or inaccurate contract terms.

• Incorrect bundling: Incorrect bundling of services can cause healthcare organizations to miss out on reimbursement.
  

• Inappropriately denied claims, which in the future, if gotten reimbursed, generally lead to partial payment or underpayment. 
• Coding Errors: If coding is not done properly, like inappropriate coding of DRGs or missing diagnoses, then there are high chances of underpayments. Also, undercoding can lead to underpayment.

Solution

• If you want to avoid this scenario, then focus on the data management and make your medical billing company aware of the existing contracts, so shift to the better software that can keep you updated.
• Always be informed of the updates to the contract.
• Ensure underpayments are appealed timely, as the payer may take 30-45 business days to reprocess the claims, so appeal with supporting documents.

• Post you may like:  About Medicare and its Parts.