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.
MDaudit, an award-winning provider of technologies and analytics tools that enable premier healthcare organizations to minimize billing risk and maximize revenues, announced today it has elevated the artificial intelligence (AI) and automation capabilities of its industry leading billing compliance and revenue integrity platform with the addition of Insights.ai and SmartScan.ai.
A Generative AI tool, Insights.ai democratizes faster insights in response to natural language questions while SmartScan.ai leverages AI to automate key aspects of the external audit workflow process to efficiently manage payer audits. The MDaudit platform is used for compliance and revenue integrity outcomes by more than 70 of the nation’s top 100 health systems with $1 billion in net patient revenue.
The MDaudit enhancements come at a time when federal and commercial payers are ratcheting up audits to identify and claw back billions in improper payments. Consider that the U.S. Department of Justice (DOJ) collected more than $1.7 billion in improper payments in fiscal year 2022. Further, the Office of the Inspector General (OIG) identified more than $200 million in expected audit recoveries and over $277 million in questioned costs in its 2023 Semi-Annual Report to Congress.
The Centers for Medicare & Medicaid Services (CMS) is also expected to claw back $4.7 billion from Medicare Advantage plans over the next decade thanks to recent adjustments to its risk adjustment data validation (RADV) program.
Ritesh Ramesh
“AI has the potential to transform healthcare and drive sustainable outcomes, but only if we maintain a relentless focus on the human experiences and operational processes it impacts rather than amplifying the technology itself. With this principle in mind, MDaudit continues to innovate and deliver AI solutions in the compliance and revenue integrity space,” said Ritesh Ramesh, CEO of MDaudit. “With Insights.ai and SmartScan.ai, our core mission is to enable healthcare organizations to retain their hard-earned revenue and reduce compliance risks by data-driven decision making and automation.”
Insights.ai makes it fast and easy to access the deep insights needed to drive strategic decision making. Whether it’s information about at-risk facilities, providers, coders or which DRG had the highest number of denials for medical necessity in a specific timeframe, Insights.ai democratizes insights across all levels of a healthcare organization – from billing compliance auditors, revenue cycle analysts, operational leadership and to the C-suite – by responding to questions posed in natural language with precisely the insights being sought. Insights delivered are then tightly integrated with actionable workflows to drive outcomes.
Healthcare revenue integrity refers to ensuring correct and compliant billing, coding, and reimbursement procedures within the healthcare sector. Maximizing revenue and reducing financial risks are the two objectives of healthcare revenue integrity, which leads to guaranteed stability and profitability of the finances of healthcare organizations.
Revenue integrity is absolutely critical in today’s complicated world of healthcare payments. Recognizing and avoiding potential sources of revenue leakage, billing mistakes, fraud, and compliance difficulties helps healthcare providers maximize their revenue streams. Effective revenue integrity procedures guarantee that healthcare organizations are paid fairly for their services while adhering to legal requirements.
The Recovery Audit Contractor (RAC) tracker is a crucial tool in this aspect. A RAC tracker is a program or system created to track and examine information on medical claims, spot errors, and help businesses recover lost income. These monitors are essential for finding coding mistakes, dishonest billing procedures, and documentation gaps that might result in revenue losses or audit risks.
Healthcare Revenue Integrity: Opportunities and Challenges
Healthcare revenue integrity is vital on many levels. First, it immediately affects the viability and financial health of healthcare organizations. Organizations can obtain the funds required to provide high-quality patient care, invest in cutting-edge technologies, and onboard talented resources once they ensure accurate and appropriate reimbursement.
Additionally, revenue integrity helps organizations prevent financial losses brought on by underbilling, coding mistakes, inadequate paperwork, or compliance infractions.
Besides, revenue integrity is intimately related to legal and regulatory issues. Government organizations, including Medicare and Medicaid, and private insurers have different billing and coding requirements that healthcare organizations must abide by. Financial fines, legal punishments, and reputational harm may follow noncompliance with these restrictions.
That said, ensuring revenue integrity presents several difficulties too. The complexity of the billing and coding procedures is a significant obstacle. The reimbursement environment for healthcare is complex, with numerous payment methods, coding systems (such as ICD-10 and CPT), and reimbursement regulations. Staying on top of the continual changes and ensuring appropriate coding and invoicing can be challenging and requires ongoing training and experience.
By Ryan Mooney, general manager, Source Division, HealthEdge.
In our healthcare ecosystem, waste, fraud and abuse run rampant: in 2020 alone, healthcare spending in the U.S. exceeded $4 trillion, and estimates suggest about a quarter of that was attributed to waste. What this tells us is that an increased focus on payment integrity – and in particular, fixing its traditionally disparate practices – has the potential to greatly benefit payers, providers, and ultimately members.
At its core, payment integrity is the process by which stakeholders ensure healthcare claims are paid properly, both pre- and post-pay. It encompasses determining the correct party, membership eligibility, contractual adherence, and fraud, waste and abuse detection and prevention. In recent years, as healthcare spending continues to skyrocket, payment integrity has received more attention – and investment – than ever. And yet, it leaves much to be desired.
The Current State of Payment Integrity
A comprehensive payment integrity strategy is key to lowering costs and achieving higher quality of care for members, but the systems in place are far from perfect. With over 24 years working in payment integrity, throughout this experience I’ve found it nearly impossible not to run into issues within the system. As it stands, many parties focus on enriching the contingency model versus solving the problem. Structurally, the contingency model is flawed: when the vendor gets paid according to the quantity of errors they find, the core problem will continue, as these parties are incentivized to identify what is incorrect rather than why.
Our 2021 Voice of the Market survey of over 200 health insurance executives found that payment accuracy would help reduce administrative costs at their organization, directly impacting savings that can be reallocated for other business priorities such as considering partnerships, acquisitions, or investing in a new geography or line of business. This represents a substantial shift from the past, demonstrating how stakeholders today want to take advantage of all available resources to expand in the current landscape.
