An ominous question for a title with no clear answer without data and investigations through dependent eligibility audits. The Office of the Inspector General (OIG) regularly conducts investigations regarding payments by law. In turn, there is some slight assurance that CMS operates in good faith and to their best effort. However, mistakes do occur such as Texas and numerous other large hospitals have been owed dollars after contract changes, regardless of their revenue cycle management program(s). Fortunately, the government provides oversight and is compelled to ensure correctness of compensation through frequent and regular audits. Is there such confidence on the commercial side?
CMS regularly uses Recovery Audit Contractors (RAC) to review all claims paid through Medicare. Because of the federal origination, there is heavy regulation to ensure that payments amongst payer and provider are accurate. Even with the RAC audits for CMS in place, this only identifies issues for hospitals within the Medicare space. What mechanism is used for hospitals or physician practice to review their underpayments for their commercial partners? Commercial payers routinely use overpayment and credit balance audits to ensure they are not over paying hospitals and physicians. With the number of appeals, CMS determined it was cheaper just to settle a payout rather than arbitrate every case. Will your commercial payer partners be willing to do the same?
What mechanisms do hospitals and physicians use to ensure they are being compensated appropriately? Coder quality control is a major practice, and there are firms that focus on revenue cycle management. However, unless there is consistent maintenance and discipline, organization entropy exists as constant looming threat. This windfall is for the hospitals are great, but they’re unpredictable. For any business, especially health delivery, unpredictability keeps every hospital CFO up every night. One of the best ways to ensure revenue predictability is to have a great revenue cycle management program and active monitoring that feeds data into the program. That data needs to be curated for relevancy with business logic algorithm to look for claims that essentially underpaid. What program(s) does your organization have in place to ensure this does not happen for your commercial payers?