"Bundling errors continue to wreak havoc on hospital bottom lines in 2021, causing 34% of inpatient charge denials with an average value of $5,300 each," the report said. (Photo: Shutterstock)
Billing errors are causing a high rate of insurance claims denials, hurting the finances of hospitals, a new report from Hayes Management has found.
The "Health Care Auditing and Revenue Integrity—2021 Benchmarking and Trends Report" is an insider's look at billing and claims issues but reveals insights into health care costs trends and why administrative issues continue to play an outsize role in the nation's high costs in this area.
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The report finds that in the first 10 months of 2021, 40% of COVID-19 related charges were denied, and that relatively high rates of errors were found with "bundling," of claims, usually because one benefit in the claim had already been adjudicated.
"Bundling errors continue to wreak havoc on hospital bottom lines in 2021, causing 34% of inpatient charge denials with an average value of $5,300 each," the report said.
Top issues: COVID and telehealth
The COVID-19 pandemic continued to cause financial pressures for health systems in 2021, the report said. The report found that not only were 40% of COVID-related charges were denied, but health systems and other providers saw relatively high rates of failed audits: 40% when outpatient billing was audited, 20% when inpatient billing was audited.
Noting the growth of telehealth services, the report also saw issues with billing in that area, with 13% of telehealth charges denied and a 17% failure rate for telehealth provider audits. The report also found that although telehealth volume has been decreasing slightly in 2021, virtual care is still being used in a significant way.
Other findings
The report said that problems exist with both undercoding and overcoding of claims. It noted that Medicare Advantage plans continue to be under scrutiny for possible overcharges. The report suggested that health systems combine efforts of their auditing, coding, and denial management teams to build a cohesive approach, rather than risk duplicating efforts by separately training providers and coders.
"With the pandemic driving projected losses over $100 billion this year, hospitals and health care organizations are under intense pressure to optimize revenue flow and reduce compliance risk," said Peter Butler, CEO of Hayes. "Gaining control over denials by focusing on both auditing and training providers and coders to improve documentation is a logical first step – particularly given that 43% of rendering providers and 27% of hospital coders fail internal audits and auditors have 'disagree' findings about 33% of the time. Left unaddressed, this is a huge revenue and compliance risk for organizations."
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