An American Hospital Association post highlighted findings from a Crowe Research report (“the Report”) showing that one in three inpatient claims submitted by providers to commercial insurers was not paid for over three months and that 15% of inpatient and outpatient claims were initially denied. The AHA post also highlighted the Report’s findings that: claims submitted to commercial insurers were delayed nearly three times longer than claims submitted to traditional Medicare; that claims submitted to commercial insurers were four times more likely to be denied than claims submitted to traditional Medicare; and that providers will never be paid 8 cents out of every dollar they bill to commercial insurers either because the insurers deny payment or they take money back that they’ve already paid.
The Report, entitled “Time for a commercial break,” analyzed data from Crowe Revenue Cycle Analytics of over 1,800 hospitals and over 200,000 physicians for the first quarter of 2023. In addition to the findings highlighted in the AHA post, the Report found that the trend of increased rates of medical necessity denials by commercial insurers continued in the first quarter of 2023, with 3.2% of commercial claims denied for lack of medical necessity as compared to a .2% denial rate for traditional Medicare. Claims denied for lack of medical necessity included claims denied for failure to obtain prior authorization and inpatient claims denied because the commercial insurers asserted that patients should have been treated as outpatients under observation.
The Report pointed out that providers have to expend scarce time and resources appealing commercial payers’ claim denials. In releasing the Report, Crowe’s managing principal of its healthcare group, Colleen Hall stated:
Providers feel that they are being forced to jump through hoops and undergo labor-intensive processes in order to receive payment, especially from commercial payers. During a time when labor shortages persist and expenses continue to rise, hospitals believe that their time and resources should be spent directly on patient care rather than managing increasingly bureaucratic reimbursement issues with insurers.
The Report concluded by recommending that providers verify that commercial payers are complying with their contract terms and that providers should “fight for every dollar that they’re entitled to receive,” and hold commercial payers accountable.
The attorneys at Whatley Kallas, LLP have found that commercial payers frequently inappropriately deny providers’ claims for payment, inter alia by overturning physicians’ determinations that inpatient treatment is medically necessary, and that commercial payers inappropriately delay payment in violation of their contracts and prompt pay laws.
The AHA’s post is linked here and the Report is linked here.