Improperly declaring Medicaid as the primary payer when other coverage exists is a seemingly small error that has widespread implications for the healthcare ecosystem.
When an individual is covered by Medicaid as well as one or more third-party payers, identifying third-party liability (TPL) — the legal responsibility of other payers to contribute before Medicaid, the payer of last resort — has historically been easier said than done. Omissions in patient-self reporting, administrative errors and technological deficiencies have long contributed to resource-draining cost recovery efforts and the loss of higher commercial reimbursement rates for providers.
Advances in the coordination of benefits (COB) process are enabling providers to identify and match coverage information to the correct individual before care is rendered, facilitating right-first-time billing and ensuring accurate reimbursement rates for future instances of care. Cutting-edge COB solutions are helping to uncover TPL sources at the earliest stages of the revenue cycle and increasing efficiencies across the care continuum.
Maximizing initial patient touch points
The earlier the revenue cycle third-party coverage is identified, the more accurate future billing and claims activity will be — and less staff time spent on cost recovery activities. Making COB a principal focus of the scheduling or pre-registration process helps to ensure coverage information is verified before a patient enters the clinical setting.
Validating patient eligibility at this critical stage of the revenue cycle not only helps guarantee accurate capitation rates, but also reduces the need for claims rework, resubmission and pay and chase activities associated with "unclean claims" — a systemic issue that could be costing healthcare providers thousands of dollars each month.
Bringing prior authorizations into the 21st century
In principle, prior authorizations are a way to improve the efficiency of care by ensuring recommended services, procedures, drugs and devices are medically necessary to treat the diagnosed condition. In practice, however, prior authorizations have been met with controversy due to their tendency to delay and even inhibit access to care.
Understanding an individual's full range of benefits from the start allows providers to secure prior authorizations from the appropriate commercial payer, reducing treatment delays and providing patients with the care they need faster. Identifying liable third-party payers prior to pre-authorization also helps to alleviate the administrative burden associated with the process — with coverage reconciled before care is rendered, the risk of claims denials and resulting rework becomes much lower.
The earlier TPL is identified, the more comprehensive the care plan
If patients have third-party coverage in addition to Medicaid, neglecting to identify that coverage may limit access to all of the benefits — and health services — to which they are entitled. This is especially relevant in a value-based care setting wherein providers are incentivized to deliver the highest quality care at the lowest cost. In this environment, having complete health information, including health coverage, is essential to developing treatment plans that maximize use of all available healthcare resources and fully address the individual’s needs — medical, behavioral, social and economic.
COB innovation: A catalyst for healthcare cost containment
Identifying Medicaid TPL early in the revenue cycle is a critical step in the effort to reduce healthcare spending and the billions of dollars in erroneous Medicaid payments made each year.
Predictive analytics, artificial intelligence and robust patient matching systems are transforming COB from an administrative burden to a streamlined solution, allowing payers and providers to securely identify, verify and communicate coverage information prior to claims submission.
Technologies that integrate seamlessly with revenue cycle management (RCM) systems are facilitating the rapid exchange of healthcare data in compliance with HIPAA and PHI regulations, creating efficient and secure process flows that deliver value to all stakeholders along the care continuum.
How are you currently managing third-party liability in your healthcare organization?
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