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News | Denials Management

Healthcare News of Note: National index shows denials are up 11% since the onset of COVID-19

News | Denials Management

Healthcare News of Note: National index shows denials are up 11% since the onset of COVID-19

  • The Change Healthcare 2020 Revenue Cycle Denials Index states that the average denials rate is up 23% since 2016, topping 11.1% of claims denied upon initial submission through the third quarter of 2020.
  • Many nonprofit hospitals fail to make commensurate investments in community health, according to an analysis by the Lown Institute.
  • Pediatric clinicians spent significantly less total and after-hours time actively using the EHR compared with general medicine and family medicine clinicians, according to results of a new study.

Over the last few weeks, I’ve found these industry news stories that should be of interest to healthcare finance professionals. 

1. Change Healthcare 2020 Revenue Cycle Denials Index: The total denials rate is up 23% since 2016

The Change Healthcare 2020 Denials Index states, “The national denials rate topped 11% of claims denied upon initial submission in Q3 2020 — bringing the total increase to 23% since 2016.”

Most (86%) of these denials are potentially avoidable, with 24% of that group not recoverable, according to index results.

“Revenue loss is occurring that is preventable,” the index authors concluded.

Other index highlights

The summary of the Change Healthcare index also highlighted these key insights:

  • Since the onset of COVID-19, denials have risen 11% nationally.
  • The highest denial rates are in regions with the highest first wave of COVID-19 outbreaks: The Pacific Coast and the Northeast both topped 13% of claims denied on initial submission in 2020. 
  • Half of denials are caused by front-end revenue cycle issues, such as registration/eligibility, authorization and service not covered.
  • The top denials cause — registration/eligibility — has remained constant since 2016 and is approaching 27% of denials.

Tips for denials reduction

The Change Healthcare report also provided tips for denials reduction, including:

  • Determine where denials are originating and their root causes.
  • Prioritize remediation based on where and what actions will have the greatest impact.
  • Utilize advanced analytics and AI.

The index is an analysis of 102 million transactions valued at $407 billion in total charges across more than 1,500 U.S. hospitals, and the research insights were drawn from Change Healthcare’s data network, with more than 1 million physicians, 6,000 hospitals and 2,400 payer connections.

2.  Lown Institute: Nonprofit hospitals collectively failed to invest nearly $17 billion in their communities

An analysis on community benefit findings released July 11 by the Lown Institute, a healthcare think tank, stated, “Though all nonprofit hospitals enjoy big tax breaks, many fail to make commensurate investments in community health.” The findings are from the institute’s 2021 Hospitals Index, showing “nonprofit hospitals collectively failed to invest nearly $17 billion in their communities.”

The index “examined 3,641 hospitals based on their Medicaid revenue, charity care spending, and other investments that have direct benefit to the community — like health clinics, housing, and food security.” Data sources included 2018 hospital cost reports filed with CMS and 2018 IRS 990 forms.

Key takeaways

A couple of key takeaways from the analysis include:

  • The 10 hospitals with the largest “fair share deficits” accounted for more than 10% ($1.8 billion) of the nation’s total.
  • Public hospitals, which are tasked with caring for all regardless of ability to pay, are well-represented on the list of the best hospitals for community health investment.

Deficits for private nonprofit hospitals

“For the first time, the Institute calculated 'fair share deficits' for private nonprofit hospitals, by comparing each hospital’s spending to the value of its tax exemption,” the analysis states.

For the 2,391 hospitals included in this part of the study, here are the findings:

  • Hospitals that dedicated at least 5.9% of overall expenditures to charity care and meaningful community investment were considered to have spent their fair share.
  • 72% were found to have a fair-share deficit, ranging from a few thousand dollars to $261 million.

3. Study: Pediatric clinicians spent significantly less time actively using the EHR than general and family medicine clinicians

A research letter published July 9 in JAMA Network Open “found that pediatric clinicians spent significantly less total and after-hours time actively using the EHR compared with general medicine and family medicine clinicians, even after adjusting for organizational characteristics and clinical volume.”

From their analysis of 349 U.S. outpatient provider groups that used Epic’s  EHR platform in 2019, study authors, including Lisa S. Rotenstein, MD, MBA, of Brigham and Women’s Hospital, stated they “found significant differences in EHR use across primary care specialties.”

Total active EHR time per specialty

According to the study, mean daily total active EHR time per specialty was:

  • 1.57 hours among general pediatrics clinicians
  •  2.025 hours among general internal medicine clinicians
  •  2.13 hours among family medicine clinicians

Total after-hours time per specialty

According to the study, mean daily total after-hours time per specialty was:

  • 23.6 minutes among general pediatrics clinicians
  • 34.4 minutes among general internal medicine clinicians
  • 31.2 minutes among family medicine clinicians

“Some differences may be attributed to the lesser medical complexity of pediatric patients. It is also possible that pediatricians are spending more time on clinical care outside of the EHR. However, it is notable that time spent on notes was similar across specialties, suggesting that documentation burdens may be driven by factors beyond patient complexity.”

HFMA bonus content

  • For insight and takeaways on the new rule on surprise billing, see the July 19 analysis by Shawn Stack, HFMA's director of perspectives and analysis, who’s based in Washington, D.C.
  • Read the July 19 article, “CMS is preparing to make noncompliance with price transparency much more expensive,” by Nick Hut, senior editor.

About the Author

Deborah Filipek

is a senior editor at HFMA in Westchester, Ill. 

Sign up for a free guest account and get access to five free articles every month.

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