The number of inpatient claims denied by payers is on the rise, with Medicare Advantage (MA) plans rejecting more claims than any other type of coverage, according to a new analysis.
Analysts at Crowe LLP, a global public accounting, consulting and technology firm, dug into claims data from 1,700 hospitals that use its Revenue Cycle Analytics tool and found that while traditional Medicare is one of the most straightforward payer categories for determining the appropriate level of care, MA plans use more restrictive methodology common in commercial plans.
Across all types of payers, the inpatient claim denial rate ticked up in 2022, representing 4.2% of billed inpatient dollars. That is an increase of 18.5% compared to 2021. Through November 2022, MA plans specifically denied 5.8% of inpatient claims based on level-of-care restrictions, compared to 3.7% for all other payer categories.
“Given the immense popularity of these plans, healthcare providers will have to adjust their clinical operations and should ensure their revenue cycle and care management teams are in alignment on which denied claims should be prioritized when managing appeals," Colleen Hall, managing principal of the healthcare group at Crowe, said in a release.
Providers were also more likely to write off reimbursements from MA plans, according to the analysis. When the researchers isolated the MA population, they found that providers wrote off 8.5% of inpatient revenue through November, compared to 4.7% in 2021.
Through November 2022, providers wrote off 5.9% of their inpatient revenue as unable to be collected, up 64% from 3.6% of inpatient revenue in 2021.
The Crowe team recommends that providers looking to buck this trend home in on preventive care and track data on which payers are responsible for the most claims denials with the goal of working with them to resolve these challenges. Keeping patients in the loop so they're aware of the status of their medical bills is also crucial, the analysts said in the report.
“One step that providers can take to try to prevent these reimbursement issues is to implement a physician adviser program to verify patient status and allow for peer-to-peer reviews to be completed when payors offer them,” said Hall. “This could help alleviate the administrative burden placed on them to defend the level of care, so hospitals can allocate more of their resources to caring for their patients.”