Electronic Health Reporter

Revenue integrity has become harder to maintain as audits grow in volume and complexity. Payers are increasing scrutiny and regulatory agencies are reinforcing fraud mitigation. Navigating this evolving terrain requires a reimagined, automated approach to billing compliance, coding, and HIM, optimizing accuracy and efficiency to protect revenue.

We sat down with Dana Finnegan, Director of Market Strategy with MDaudit, to discuss what’s behind the scenes of reimagining revenue integrity and the role automation can play in achieving success.

EHR: What is driving the need for hospitals and other healthcare organizations to reimagine their approach to revenue integrity?

DF: We’ve identified four trends that are influencing the need for healthcare organizations to take a fresh approach to revenue integrity, maximize reimbursement and compliance outcomes, and optimize operational efficiency—all of which are critical to sustaining long-term results.

First, the average denied dollars per claim continues to rise. MDaudit data shows an overall increase in denied dollars per claim of more than 19% between 2023 and 2024 and a whopping 62% increase in Medicare Part A and B denials during that same period. At the same time, initial response times to claim submissions are also trending up and, once again, Medicare is the driver. Professional response time has increased by nine days, from 15 in 2023 to 24 this year, while hospital outpatient response days increased from 15 to 19 and hospital inpatient increased from 18 to 22 days.

A third trend we’re seeing is in denial rates, which were 21% for hospital outpatient and 27% for hospital inpatient segments. Finally, dollars at risk from external payer audits have doubled, with hospital billing driving most of the external audits in terms of risky dollars and commercial payers and RAC driving most external audits in terms of volume.

The good news is that we are also seeing an increase in technology investments among healthcare provider organizations, especially AI and automation, to push back against these trends and gain a competitive advantage in terms of revenue integrity.

EHR: How can automation provide a competitive edge in terms of revenue integrity?

DF: Manual healthcare billing audits are resource-intensive and prone to human error. The intricate nature of billing compliance, revenue integrity, and coding demands meticulous attention to detail, which makes it susceptible to oversights and discrepancies.

Consider that the 40 largest U.S. health systems average just under 55 hospitals per system, and bill to a wide mix of government and commercial insurance plans. Commercial, private and self-pay represent the largest payer group for U.S. hospitals with net patient revenue of nearly $689 billion, or just over 69% of the average payer mix. Clearly, billing compliance is a complex, high-stakes game even without the added scrutiny from payers and regulators.

Automating manual processes is a pivotal advancement during what is a very challenging time for the industry. Automated audit processes help billing compliance teams locate the proverbial “needle in the haystack” by identifying the highest billing risk patterns and mitigating risk while maximizing revenue—and it does so faster and more accurately than any human could manage. This lets providers stay on top of the rising flood of demand letters that regularly flow through their doors and leverage the power of data analytics to drive meaningful audit outcomes.

EHR: What aspects of automation and technology integration are most important when seeking to reimagine revenue integrity? What capabilities and functions should healthcare organizations look for in automation tools?

DF: AI and benchmarking capabilities take center stage when automating the audit process, whether you’re looking at prospective audits, retrospective audits, or both. That’s why it is important to look for solutions that enhance accuracy, particularly given how susceptible manual billing audits are to human error and, subsequently, compliance issues, and revenue leakage.

1. Look for automation solutions that leverage advanced algorithms and AI to ensure a level of accuracy unattainable through traditional methods, thereby eliminating the margin for error and instilling greater confidence in the integrity of billing processes.  

2. Ensuring that the automation implemented will streamline processes is also imperative. Manual audits often entail time-consuming and repetitive tasks, which divert valuable resources from more strategic initiatives—resources that automation allows to be reclaimed for higher-value activities. Doing so enhances operational efficiency and contributes to a healthier bottom line for healthcare organizations.

3. A third must-have capability involves data analytics. Automation enables the collection and analysis of vast amounts of data, offering insights that were previously inaccessible. The selected technology’s data analytic capabilities should empower healthcare professionals with actionable intelligence and facilitate informed decision-making on everything from identifying revenue leakage to optimizing coding practices. This goes together with real-time compliance monitoring of billing activities to ensure the organization remains compliant with the latest regulations through a proactive approach designed to mitigate the risk of audits and penalties and foster a culture of continuous improvement.  

4. Finally, benchmarking. The ability to benchmark an organization’s data to a variety of different sources is hands-down one of the most important facets of a risk-based approach to revenue integrity. One of the fastest ways to identify habitual overcoding and undercoding is the ability to compare physician billing patterns to others—internal and external—within the same specialties and service lines. Data analytics and benchmarking will easily unearth those whose billing patterns are outside of normative ranges.

Together with automation, benchmarking allows for the optimization of billing, coding, and revenue outcomes.