Whitepaper | Kara Carpenter
Vice President of Client Engagement and Third-Party Claims
Kara leads a team that works closely with clients to grow revenue and foster patient satisfaction via Third-Party Coverage services.
Even though motor vehicle accident (MVA) and workers’ compensation claims comprise only a small percentage of an organization’s total claims, they have a higher reimbursement rate than other claim types and can be worth millions of dollars in annual revenue for many hospitals. For example, while a hospital may realize a 40% reimbursement rate for commercial insurance and a 25% reimbursement rate for Medicare, it can reap a 70% reimbursement rate for MVA and workers’ compensation claims. Moreover, with the right approach, 30% to 40% of these claims may be paid at 100% of billed charges. 1
Given the favorable reimbursement rates, it makes sense for hospitals to devote resources where the return on investment is likely to be high.
Compared to traditional claims, MVA and workers’ compensation claims can be far more complex to prepare and manage. Much of the process remains manual, so automated workflows used to streamline submission for other types of claims do not often apply. In addition, auto insurance carriers are primarily focused on processing property claims. Their systems aren’t designed to support healthcare transactions, and their staff are often not as adept at processing these claims, which can make navigating the workflow difficult for providers.
On the other end of the spectrum are workers’ comp staff, who must carefully balance the interests of employers and employees and thus have a rigorous process for verifying the need for healthcare services and approving claims. This wide spectrum of challenges creates numerous pitfalls; provider staff can easily miss key steps, which in turn can lead to underpayments or denials.
While the complexity of submitting and managing these claims can be overwhelming for hospitals, given their financial value, they deserve specialized attention.
To manage third-party claims, hospitals must collect a range of information from disparate sources, then closely monitor submission activities and regularly check in with payers to make sure claims remain on track. Staff managing traditional government and commercial claims have neither the expertise nor time to provide this level of attention, which means dedicated resources are needed.
Obtaining complete insurance information—not only health plan coverage, but also motor vehicle and workers’ compensation coverage—at the point of service is essential for all third-party claims. After a patient is discharged from the hospital, the chances of getting information to file proper paperwork and secure coverage rapidly diminish.
Of course, acquiring insurance information at the point of service is not necessarily straightforward. Patients in motor vehicle accidents often don’t fully understand how their coverage works, and they may fear insurance rate hikes. This lack of clarity can make patients reluctant to share information, especially when they believe an accident was not their fault. Many, if not most, are also unaware that their auto insurance carrier will cover some or all their out-of-pocket expenses.
Many hospitals have found that patient liaisons can overcome patient reluctance, minimize confusion, and increase the likelihood of collecting the right information. There are several touchpoints during the eligibility and coverage phase where a liaison can help:
Just as having a patient liaison is helpful for expediting the front-end of the process, it can also be beneficial to engage a specialist in the back office to oversee the billing, claims follow-up, and resolution workflows. This individual can check that claims are compliant and meet state and federal regulations. Requirements may vary depending on the state. For example, in Virginia, hospitals must bill a patient’s commercial insurance as the primary insurance, whereas in most states, the auto insurance is primary.
A third-party billing specialist can also help ensure claims are properly paid in a timely fashion. When possible, claims should be submitted electronically to reduce the risk of error and accelerate payment; however, there are still situations where paper and fax submissions are required, so being able to deal with all modalities is critical. Once a claim is submitted, the specialist can monitor its progress through the system, frequently following up to make sure nothing is amiss and promptly addressing any delays or denials.
Hospitals that dedicate staff to manage specialty claims typically realize a tremendous benefit to their bottom line. Another option, which is often even more cost-effective and lucrative, is to leverage a third-party coverage expert with indepth experience in this area. A skilled vendor will bring added value, for example, by using technology to access national property and casualty claims databases to identify auto, liability, and workers’ compensation eligibility.
A knowledgeable vendor can also engage in retrospective reviews to assess motor vehicle claims to determine if revenue was missed/claims were underpaid. In these reviews, accounts are selected based on qualifying diagnosis codes, then highlighted to indicate potential revenue opportunities.
By working with an outside expert to implement consistent, compassionate, and comprehensive third-party coverage services, a hospital can optimize reimbursement for these types of claims while streamlining workflow and resolution. Depending on the organization, third-party services can reduce the billing cycle by days and generate significant revenue—sometimes millions of dollars. This approach also helps patients, as it potentially reduces their out-of-pocket costs while making the insurance claims process easier to navigate.
Our Third-Party Coverage Services help hospitals achieve fast, full reimbursement of MVA and workers’ comp claims. Using our expansive payer connectivity, we identify auto (personal injury protection), liability, and workers’ compensation eligibility for 93% of all Property and Casualty claims our customers file. On average, our customers increase reimbursement for third-party claims from 40% to 70%, and collect 100% of gross charges on 35% of MVA claims.
Learn more about how we can help your organization drive reimbursement and improve patient satisfaction.
1 Change Healthcare 2019 internal analysis of 340 customers using Financial Clearance Services/Third-Party Coverage Services in 2018.