What's Happening?
A recent report highlights a significant rise in the average amounts of denied inpatient and outpatient claims for hospitals, with increases of 12% and 14% respectively. This trend is accompanied by a notable
uptick in payer audits, as detailed by MDaudit's analysis of data from over 1.2 million providers and 4,500 facilities. The report indicates a 30% year-over-year increase in total at-risk amounts due to external payer audits. The average amount per claim rose by 18%, with commercial payers accounting for 45% of the at-risk amount. Hospitals face challenges with coding errors, medical necessity, and billing errors as primary reasons for audit requests. The report suggests that provider organizations need to adopt proactive measures to maintain revenue integrity.
Why It's Important?
The increase in payer audits and denials poses a significant financial challenge for healthcare providers, impacting their revenue streams. As denial rates continue to rise, providers must navigate complex billing and coding requirements to avoid financial losses. The trend underscores the need for improved compliance and revenue cycle management strategies. Healthcare systems like Ardent Health have already reported earnings misses due to persistent payer denials, highlighting the broader economic impact on the industry. Providers must adapt to these changes to ensure financial stability and compliance with evolving healthcare regulations.
What's Next?
Healthcare providers are likely to implement more robust revenue cycle management practices to mitigate the impact of increased payer audits and denials. This may involve investing in technology solutions for better billing compliance and audit management. Providers might also engage in advocacy efforts to address payer pushback and seek regulatory changes to streamline claims processes. As the trend continues, collaboration between providers and payers could become essential to resolve disputes and improve the efficiency of claims management.
