As someone who has spent considerable time in the healthcare industry, I’ve come face to face with an alarming issue draining billions of dollars from hospitals nationwide. It’s an issue hidden in plain sight, yet its impact is massive. I’m talking about the strategy employed by insurance companies centered around denying claims based on the coordination of benefits.
According to the Centers for Medicare and Medicaid Services, “Coordination of Benefits (COB), allows plans that provide health and/or prescription coverage for a person with Medicare to determine their respective payment responsibilities (i.e., determine which insurance plan has the primary payment responsibility and the extent to which the other plans will contribute when an individual is covered by more than one plan)”. This seemingly innocent concept is causing a financial hemorrhage in the healthcare sector, and it’s high time we shed light on this matter.
You might think that insurance companies exist to provide financial assistance and ensure patient healthcare coverage. However, a darker side to their practices often goes unnoticed. Coordination of benefits is a tactic where insurance companies deny claims by suggesting that another insurance plan could cover the patient. They offer no concrete information about this alternative coverage, leaving patients and hospitals bewildered.
This issue hit close to home when I experienced it firsthand. Even as someone deeply rooted in the industry, I received an insurance letter hinting that there might be another insurance plan to cover a recent injury. Parents have experienced coordination of benefits denials with their newborns, and even Consumer Reports offers advice on making sure your medical bills are paid.
Receiving my letter after a visit to the Emergency Department was perplexing and frustrating, prompting me to dig deeper. I discovered a vast, intricate web of lost revenue that affected not just me but patients and hospitals all around the country. In 2022, around 67% of healthcare leaders have seen an increase in claim denials, according to a Kaufman Hall report. In 2021, 33% of executives reported a rise.
One of the most disheartening aspects of this issue is the lack of an effective appeal process. Hospitals are caught in the middle, expected to mediate between patients and insurance companies. We’re tasked with resolving an issue that should be solely between insurers and the insured to help patients resolve their medical bills. This complex cycle results in lost revenue as claims get buried and outdated due to endless back-and-forth.
More Than A Financial Drain
My passion for addressing this issue stems from a desire to see change take place – for patients. Hospitals, industry professionals, and the wider community must rise and demand accountability. I urge hospitals to engage with state insurance divisions and elected representatives, advocating for a system overhaul. With billions at stake, this is not just a financial matter—it’s a matter of fairness and integrity.
This predicament is more than just a financial drain; it exemplifies how complexity and opacity can foster injustice. Insurance companies operate in a way that hampers hospitals from receiving rightful compensation, making insurance coverage even more confusing for patients.
It’s time we came together and demanded change.
Leading The Charge
Addressing this issue might seem daunting, but there are steps we can take. I propose categorizing and tracking denials to identify patterns and the worst offenders among payers. With this knowledge, hospitals can proactively protect their revenue by obtaining signed documents from patients acknowledging their lack of alternative coverage.
However, innovation is critical, and Revenue Cycle Management companies can lead the charge by developing solutions that combat coordination of benefits denials. Here at Acclara, we analyze payer-specific codes, and by adopting a strategic approach, we prevent issues from escalating into massive revenue losses.
Preparation Is Key
Think about the way a well-prepared chef works in the kitchen. Just as a chef gathers all the necessary ingredients and tools before cooking, hospitals should prepare their resources.
Just as a chef’s preparedness ensures a smooth cooking process, hospitals’ proactive approach to coordinating benefits denials ensures their financial well-being. Careful planning prevents chaotic and inefficient cooking, just as a hospital’s proactive measures can avoid financial complications and uncertainties down the line.
A Journey Of Change
This issue transcends immediate financial considerations; it embodies a commitment to ethical conduct, transparency, and the resilience of the healthcare domain. The call for change signals us to unite, steering the industry toward a future characterized by equity, accountability, and transparency.
Although the path ahead may be difficult, the transformative potential is immeasurable.
Together, let us embark on this journey of change.
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