Faced with shrinking reimbursements and admissions, mid-sized hospitals can recover $500,000 over three years by identifying dual-eligible patients in their revenue cycle, according to a new report.
TransUnion Healthcare found that Medicaid is a "significant source of untapped reimbursements" and unknown dual eligibles could help hospitals recover up to 10% of Medicare bad debt.
- The report confirmed previous TransUnion Healthcare research that between 1% and 5% of bad debt associated with self-pay accounts have billable insurance coverage.
TransUnion analyzed more than 50,000 cost reports from more than 100 mid-sized hospitals over a 10-year period. The analysis considered mid-sized hospitals those with between 250 and 350 beds.
The research found that 63% of Medicare bad debt recoveries involve dual-eligible patients. Dave Wojczynski, president of TransUnion Healthcare, said hospitals miss a chance to "maximize reimbursements from other payment sources" when they limit "their discovery strategy to self-pay patients."
"A complete revenue recovery approach that looks for additional combined coverage for Medicaid, Medicare and commercially insured patients can increase revenue, decrease costs and prevent bad debt," Wojczynski said.
Medicaid plays a larger role in health insurance than a decade ago. Before the Affordable Care Act, Medicaid was viewed as only a safety-net program that helped the poorest Americans. However, the ACA allowed states to expand Medicaid to lower-middle-class Americans, which has added millions to Medicaid plans. Three dozen states have expanded Medicaid and more plan to follow suit.
Medicaid has become a critical piece of a hospital's bottom line, especially in Medicaid expansion states. Those states have seen less uncompensated care as more patients have moved into the program.
Revenue cycle departments in hospitals large and small have needed to shift emphasis on patient billing, as health insurance moves costs away from payers and onto patients. Community hospitals, struggling to reach 1% to 2% margins, are finding it especially problematic.
Bigger systems like Intermountain Healthcare and Geisinger Health System are two examples of those that have shifted focus as patients themselves have become the third largest payer behind only Medicare and Medicaid.
One reason for more patient financial responsibility is high-deductible plans that require people to pay more out of pocket. A Connance report found that 70% of providers said it takes more than a month to collect from patients. Chasing down those payments makes it harder for hospitals than dealing directly with a limited number of payers.
In response, health systems and providers are offering payment plans to improve the revenue cycle. Hospitals are also finding that patient financing programs can help with patient satisfaction.