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HomeRCMHospitals are leaving money on the table with zero balance accounts

Hospitals are leaving money on the table with zero balance accounts

By Rick Louie, Managing Director, Hospital Pricing Specialists LLC

As the healthcare industry grows more complicated, providers face challenges in maintaining revenue integrity. Underpayments, caused by the complexity of payer contracts, can account for up to 10% of claims. Providers often rely on spreadsheets and manual reporting tools, which are insufficient for the many payer fee schedules and rules involved in claims adjudication.

To tackle this issue, providers should invest in a contract management system (CMS) that includes auditing zero-balance accounts. Auditing zero-balance accounts is essential to help providers recover revenue owed to them, but at risk of expiring. Providers can achieve significant returns on investment by using technology that replicates the complete adjudication process, using a payer’s contract parameters to pinpoint payment errors.

Once underpayments are identified, providers need efficient workflows to appeal them. Providers must decide whether to use internal staff or outsource this function to a company that works on a contingency basis. Real-time operations are also necessary to ensure accurate snapshots of cash flow and accounts receivable.

Providers should estimate the total amount of underpayments and apply 20% for zero-balance accounts that are 180 days and older. For instance, if there are $1,000,000 in projected underpayments, then 20% or $200,000 is the number to beat. Providers should decide whether they have faith that $200,000 in salaries and benefits can capture all the projected underpayments. If not, then they should outsource the task to a specialized company. The contingency rate ranges from 15% – 50%, depending on the average age of the accounts.

In conclusion, auditing zero-balance accounts is a crucial aspect of a comprehensive revenue integrity program. By investing in auditing technology and establishing an internal or outsourced strategy for underpayment recovery, providers can recoup revenue owed to them and strengthen their financial positions.


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