Complex claims typically have multiple stakeholders and a high degree of uncertainty. The reimbursement rates for these cases, however, can be very attractive.
Becker's Healthcare recently spoke with Reid Zeising, founder and CEO of Gain, about how complex claims can help healthcare organizations improve their financial well-being and enhance access to care for community members, especially in today's challenging healthcare landscape, where rising costs, low reimbursements and high denial rates from commercial payors are prevalent.
Mr. Zeising discussed the benefits of working with an outsourcing partner to streamline revenue cycle processes surrounding complex claims, increase reimbursements, and the inefficiencies of self-servicing
Question: Healthcare organizations continue to grapple with rising costs, low reimbursements and high denial rates. How do complex claims factor into this challenging landscape? What barriers and opportunities do they represent?
Reid Zeising: Complex claims include claims with longer duration and intricate reimbursement processes. These include personal injury claims, third-party liability claims, litigated workers' compensation claims, post-insurance denial claims and more.
Personal injury claims are the largest opportunity for providers willing to see patients on lien or a Letter of Protection (LOP). More than 25 million Americans do not have health insurance, and over 100 million Americans have less than $1,000 in their savings account. If these individuals are injured, through no fault of their own, they have almost no chance of receiving high-quality care. With these complex claims, clinicians can provide quality care to individuals without commercial or government insurance and or with high deductible plans. The reimbursements on these claims are significantly higher than either Commercial or Government payor sources, as they should be, to offset the risk of litigation and the longer duration until reimbursement.
Additional opportunities arise if workers' compensation claims or commercial insurance claims involving third-party liability are denied. Patients can continue to see providers on LOP. While those claims take longer to resolve, they also result in higher average reimbursements.
These complex claims can help offset declining reimbursements from Government and Commercial payors and give providers the opportunity to serve more people.
Q: How can healthcare organizations effectively navigate Revenue Cycle Management (RCM) for complex claims? What are essential best practices and tools?
RZ: Initially, healthcare providers often meet attorneys they know and trust in their local markets. If attorneys have clients who need care, doctors can perform those services on LOP and the provider is then reimbursed at settlement by the attorney. While this model can work with a small network of law firms whose patients need care, it isn't scalable.
Over time, healthcare providers either sell those complex claims into the medical funding market or they try to self-service the claims. The medical funding market gives providers immediate cash, but it offers the lowest level of reimbursement due to the risk and duration associated with complex claims.
If providers self-service complex claims, they may hire a call center or track claims on a spreadsheet but this is an inefficient, unscalable solution. No EMR, billing company software or RCM solution other than Gain tracks and manages complex litigated claims.
Gain has found that self-servicing the receivables associated with complex litigated claims results in 7% to 12% write-offs on average. With Gain, write-offs average 2%. Overall, Gain collects 900-basis points more as a percentage of invoice versus healthcare providers that self-service complex claims.
Best practices for managing complex claims include utilizing a platform like Gain that is specifically designed to handle the intricacies of complex claims. Gain's platform manages bills, notes and records, provides access to healthcare providers willing to see patients on lien, letters for protection, provides real-time case updates and helps determine case values and the probability of reimbursement. In addition, Gain’s managed services provide payoffs, reduction requests, negotiations, collections and final reimbursements. Artificial intelligence-driven tools are also essential to help predict settlement values and optimize reimbursement probabilities.
Since 2016, Gain has used AI to develop predictive analytics based on case characteristics, jurisdiction and third-party liability carriers to understand case values across the country. As an outsourced service, Gain also provides robust reporting capabilities and full-time employees who are well versed in the nuances of complex, litigated claims.
Ensuring staff are well-trained in the nuances of complex claims is also essential. Outsourcing RCM functions to specialized companies like Gain provides more full-time employees, superior training and gives providers greater leverage to enhance operational efficiency. This approach ensures scalability and reduces the burden on healthcare providers, allowing them to focus on core competencies, including the delivery of quality care to those in need.
Q: With this approach, what improvements or outcomes have you seen healthcare organizations achieve? Can you share some examples?
RZ: On average, healthcare providers working with Gain see a 900-basis point increase in collections versus self-servicing these receivables. This increase isn't from demanding more at settlement — 500 basis points of that 900 is simply a reduction in write-offs.
In one example, at an orthopedic practice, 15% of the business was personal injury patients and the remainder was patients with government and commercial insurance or workers' compensation patients. Among the personal injury patients, they averaged only 7% write-offs and 55% for collections. With Gain, their write-offs dropped to less than 2% and their average collections rose to 63% of invoice. On an adjusted basis, that's a 23% lift in cash flow.
Another example is a pain management practice with significant receivables on its balance sheet. This practice didn't use RCM tracking and had limited case updates. When Gain analyzed these aged receivables, we found that almost 40% of the receivables no longer existed. This was due to a lack of an active, automated case update process. Once that was cleaned up and Gain started managing the LOP process, write-offs dropped to less than 2% and the average percentage of charges collected improved to 51%, resulting in an 80% increase in cash flow.
Q: What is one piece of actionable advice you'd give to healthcare leaders looking to streamline RCM processes surrounding complex claims?
RZ: Healthcare providers need to outsource these processes.
Providing quality care is a provider's core strength, not managing call centers or spreadsheets. Specialized RCM platforms like Gain offer expertise, advanced technologies, and operational efficiencies that are difficult to achieve in-house. More than 3,500 providers in the U.S. use Gain, and they are connected to more than 17,000 law firms. Gain streamlines their operations, optimizes their reimbursements and enables them to see more patients in need. The combination of seeing more patients and higher reimbursements is beneficial to all involved.