If a hospital makes an error when submitting a claim to Medicare, there’s a limited amount of time available to file corrections for unreimbursed or under-reimbursed claims. Every year, failure to meet these deadlines results in a substantial amount of lost revenue for U.S. hospitals.
For different types of claims, hospitals face different timelines for re-submission. In some cases, Medicare rules dictate you can only correct a claim within 60 days from the first payment of that claim. In other cases, you have a year to re-bill, taking into consideration that state-specific rules can also apply.
These varying deadlines can produce unfortunate situations where, by the time hospitals audit their reimbursements and identify large amounts of money they could have received, it’s already too late — the funds are permanently lost.
Below are two common scenarios where hospitals don’t receive the full reimbursement they’ve earned:
Example #1: Medicaid denials secondary to Medicare
One common example of a “point of no return” in healthcare billing involves situations where a hospital is receiving denials from Medicaid that are secondary to Medicare, and the hospital never corrected those denials. After a certain amount of time has passed, the hospital cannot bill Medicaid.
In addition to missing out on the reimbursement dollars, the hospital’s inability to re-bill Medicaid means the unpaid claims will not be eligible for the Medicare Bad Debt (MBD) program — which would pay 65% of the lost revenue.
Example #2: Medicare billing errors not corrected within 60 days
Errors can occur during the process of translating a patient’s medical record into a bill.
A coder might inadvertently assign a diagnosis code that’s not as specific as it should have been. On paper, this looks like a small mistake, but it can have a significant impact.
Assigning a less-specific diagnosis code can result in the hospital being reimbursed at a lower rate than they would’ve received if the precise ICD-10 code had been used. In this case, you only have 60 days after the initial payment from Medicare to correct the claim and receive the full reimbursement.
Identifying process improvements to eliminate missed reimbursements
It’s up to hospitals and their partners to identify missed reimbursements and optimize their billing practices. Unfortunately, it remains difficult for hospitals to devote sufficient in-house resources to re-reviewing large volumes of Medicare claims — even when there’s a sense that dollars are being left on the table.
Learn how TransUnion Healthcare can help your organization receive more reimbursement for future Medicare claims.