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5 Key Challenges in Medical Billing Industry

5 Key Challenges in Medical Billing Industry

5 Key Challenges in Medical Billing Industry

The healthcare industry is quite different from other businesses as clinical treatment is not a succinct or lone transaction, but subjects to complex procedures starting from a patient’s appointment and ending with his/her account closure. It involves a planning of inventory and requisites that need experienced hands and minds. However, managing a healthcare facility drains a lot of resources and often leads to lapses in insurance verification, medical billing, follow-up, collections, and payments.

Here are a few statistical analysis of Medical Billing that a healthcare facility can refer to for evaluating the challenges in the current Medical Billing Process and look for alternatives to improve their financial health:-

  • 22% Claims are Rejected: 

    Researchers from California Nurse Association found that 22% of the claims submitted were rejected. And almost 40% of the rejected claim is never resubmitted. Various reasons are claims being lost or missed or not meeting the time deadline, callous attitude, etc.
    Two primary reasons a claim doesn’t result in a payment are:

    • Claim is not received by the payer
    • Payer denies payment due to a defect in the claim, whether incomplete or incorrect demographic data or lack of proof supporting the services billed.
  • 65% Denials Never Re-Appealed: 

    The necessary work to submit the claim is done, but an administrative error dooms the healthcare provider to non-payment. When a claim is denied, it is often far too costly and time-consuming for a practice to do the necessary follow up and appeals to ultimately secure payment.

  • $400 Billion Spent On Non-Core Medical Activities 

    Of the $2.7 trillion the USA spends annually on healthcare, $400 billion (~14%) goes to Claims processing, Payments, Medical Billing, Revenue Cycle Management (RCM), and bad debt—in part because half of all payer-provider transactions involve outdated manual methods, such as phone calls and mailings.

  • 10% Claims Incorrect: 

    According to the American Medical Association, up to 10% of claims are not paid correctly and commercial payers on average underpay on 7% of their claim adjudication. This can add up to significant revenue loss for your practice.

  • 11% Revenue Loss: 

    It is estimated that the average medical practice loses as much as 11% of its revenue due to underpayments each year. Also, According to the American Medical Association (AMA), 20% error rate among health insurers represents an intolerable level of inefficiency that causes a loss of around US$ 17 billion each year.

The above financial losses can be countered by taking the professional help of a Medical Billing Service Provider; an effective Revenue Cycle streamlines the claim processing and minimizes the claim rejection/denial.

For more information on how Invensis Technologies will deliver value to your business through our Healthcare Business Process Outsourcing (BPO) Services please contact our team on US +1-302-261-9036; UK +44-203-411-0183; AUS +61-3-8820-5183; IND +91-80-4115-5233; or write to us at sales {at} invensis {dot} net

Posted in: Infographics

About the Author: Gopinadh Gulipalli, Operations Manager – DPA, Logistics and Payment Solutions, Invensis Technologies

Gopinadh brings 10+ years of experience in the outsourcing/off-shoring domain, and has effectively handled data capture, document management, exception management, payment processing, contract management, and audit and analysis for companies in various verticals. He is also proficient in the efficient delivery of insurance BPO services for clients in the sector. For more information on how Invensis’ services can add value to your business, please contact Gopinadh at sales {at} Invensis {dot} net today.

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