About our customer
Our customer in this case study is a 299-licensed bed hospital with a mission is to provide compassionate medical and nursing care as well as advanced diagnostic and treatment services. The hospital provides the highest quality of healthcare to a densely populated community which includes industry leading spine and orthopedic practices, a radiology center, and an extensive outpatient services center.
Getting started
To analyze underpayments, we first analyzed the payer mix and then focused on top payers – BCBS, Humana, United, Cigna, Aetna & Meridian. We zeroed in on $25.7M in payer payments for underpayment analysis.
Health Sigma then analyzed a pool of $26M of payer payments. Less than 1% of claims had underpayments. However, those underpaid claims accounted for $291K in underpayments.
Underpayments Analysis
What we found:
- Accuracy of payments varied significantly
- UHC, BCBS and Meridian had low underpayment rate (~0.2%)
- Humana had 1% underpayment primarily due to erroneous DRG downgrades
- Cigna had most egregious rate – primary root cause was due to continuing to apply special discount clause that termed 5 years ago
In addition to incremental revenues, Health Sigma’s analysis identified
- Coding best practices that would generate incremental revenues
- Contract issues including:
- Products that did not have rate increases for last 5 years
- Rate comparisons across payers – so the hospital could renegotiate with payers paying significantly lower than other payers
- Process to track DRG downgrades – so they can be appealed, and correct payment realized
- Understanding and interpretation of Experience Files from BCBS – a unique payment process Blues apply in certain markets