How to Solve the Most Common Workers’ Compensation Billing and Collections Problems

Managing Workers’ Compensation claims presents unique challenges for healthcare providers. Unlike other financial classes, Workers’ Compensation claims often involve more manual processes, state-specific regulations and payer rules that can vary widely. These complexities can lead to common billing problems, resulting in delays, denials and lost revenue.

This blog will explore the most common billing problems healthcare providers face with Workers’ Compensation claims and provide actionable solutions to streamline the process, reduce errors and improve cash flow.

Manual Processes Associated with Workers’ Compensation Claims

One of the biggest challenges in Workers’ Compensation billing is that most providers are submitting claims on paper which requires multiple steps that are manual and expensive. Mailing paper claims increases the probability that delays in payment will occur.

Solution: Submit Claims with Attachments Electronically

• Use Electronic Data Interchange (EDI): Transitioning to EDI for claims submissions can significantly reduce processing times and errors. Traditional clearinghouses will offer some connections to payers where the claim can be submitted electronically. Consider alternative EDI connections as you can increase your connectivity by using multiple connections.

Key Metric: UHS clients have achieved an EDI submission rate greater than 75%, reducing delays and improving payment accuracy, which increases cash flow.

Slow Down to Move Faster by Completing Front-End Workflows

Many billing issues stem from incomplete or skipped workflows during the registration process for patients. Missing or incorrect information can cause claims to be rejected or denied which increases your accounts receivable days and lost revenue.

Solution: Implement Proactive Eligibility Verification

• Verify Eligibility & Benefits at Registration: Ensure that patient, employer, payer name, “pay to address”, and jurisdiction are confirmed before submitting a claim.
• Automate Claim Status Checks: Use technology to verify whether the payer has received the claim, and whether it’s progressing through the payers adjudication process.

Impact: According to UHS data, proactive eligibility verification can reduce denial rates from 15% to less than 2%.

Incorrect Payer Identification

Identifying the correct payer for Workers’ Compensation claims can be more complicated than with traditional health insurance claims. This stems from a lack of clarity regarding whether a diagnosis is work related, whether benefits exist through an employer, and regarding where to send the claims. Misidentifying the payer can lead to a claim submission to the wrong payer, where the claim is never loaded in a payers system, resulting in either a lost or denied claim all of which create delays in payment.

Solution: Maintain a Comprehensive Payer Database

• Develop a Screening Process: Establish a systematic screening protocol to accurately determine if the injury or illness is work-related, verify Workers’ Compensation coverage with employers, and proactively confirm the appropriate payer before claim submission.

Use Updated Payer Information: Ensure that your system has the most current payer details, including employer names, key contacts like claim adjusters, billing addresses, payer-specific submission requirements, and the networks utilized by payers for payment discounts.

Utilize a Specialized RCM Partner: Partnering with an experienced RCM provider like UHS, which leverages advanced technology tailored specifically for Workers’ Compensation claims, significantly enhances accuracy in payer identification, streamlines the claims process, and ensures that all payer information remains accurate and up to date.

Late Claim Submission

Timely billing is crucial in Workers’ Compensation claims management to comply with strict legislative requirements. Each state, payer, and employer may have distinct deadlines for claim submission and appeal windows. Missing these critical deadlines can lead to claim denials, lost reimbursement opportunities, and prolonged revenue cycle disruptions. 

Solution: Monitor Filing Deadlines and Automate Submission

Proactively Verify Eligibility: Confirm each patient’s Workers’ Compensation coverage, payer details, and available benefits prior to claim submission. Although this may initially extend the billing timeline by several days, it substantially reduces prolonged delays, appeals, and disputes, ultimately speeding up revenue recovery. 

Track State-Specific Rules: Maintain an updated and detailed reference of filing deadlines specific to each state and payer. Providers situated near jurisdictional boundaries should adopt compliance measures aligned with the shortest applicable deadlines, simplifying administrative oversight and reducing risk. 

Develop a Document Library: Create and manage a centralized document library containing current versions of payer-specific forms, accessible by your Accounts Receivable (AR) team. This practice reduces the time spent locating forms required for claim submission and dispute processes. Establish an annual validation process to confirm that all stored forms are current and accurately reflect any recent changes by payers. 

Automate Claim Submission: Leverage technology to automate claim submission processes and ensure timely filing. Expanding Electronic Data Interchange (EDI) capabilities accelerates claims processing and significantly reduces AR days by creating trackable digital documentation for payment compliance. When traditional claim-status transactions aren’t supported by certain Workers’ Compensation payers, implement Robotic Process Automation (RPA) to interact with payer self-service portals and automate claim status inquiries. 

Best Practice: Unified Health Services (UHS) clients have experienced a notable decrease in claim denials and accelerated revenue cycles by implementing automated workflows for claim submission and status verification. On average, UHS maintains AR days below 33 across all states, significantly outperforming the industry benchmark, where AR days frequently exceed 90 for this financial class.

Incomplete or Missing Claim Documentation

Workers’ Compensation claims frequently require supplemental information, including prior authorization numbers, detailed injury descriptions, and supporting documentation such as medical records, itemized invoices, and state-specific or payer-required forms. This information is typically submitted to payers via attachments. Failure to provide accurate, complete, or timely documentation can result in claim denials, extended payment delays, and increased administrative workload for appeals and corrections.

Solution: Streamline Documentation Processes

• Automate Documentation Collection: Leverage automated workflows to efficiently gather, verify, and attach required documentation before claim submission. Maintain payer- and state-specific checklists to ensure compliance with jurisdictional requirements, which will significantly reduce claim errors and omissions. 
• Ensure Compliance: Assign dedicated internal staff to build and maintain a comprehensive knowledge base of Workers’ Compensation billing requirements. For organizations needing fractional support, partnering with a specialized RCM provider such as UHS can effectively ensure documentation aligns accurately with evolving state and payer standards. 
• Impact: Streamlining documentation processes can elevate first-pass acceptance rates to over 95%, drastically reducing rework, administrative burden, and accelerating payments. A recent national survey of revenue cycle executives indicates that more than two-thirds of hospital providers plan to evaluate outsourcing complex claims management to third-party specialists. 

Effectively managing Workers’ Compensation claims can be challenging, but addressing these common billing pitfalls can significantly enhance your revenue cycle performance. By automating critical processes, proactively verifying patient eligibility, maintaining accurate payer information, and ensuring timely and complete claim submissions, healthcare providers can significantly reduce claim denials, optimize cash flow, and boost operational efficiency.

Are you experiencing persistent challenges in managing Workers’ Compensation claims?
Partnering with a specialized RCM provider such as Unified Health Services (UHS) can further streamline your claims management operations, delivering measurable improvements in financial performance.

Contact Unified Health Services today for a complimentary analysis to determine whether outsourcing your Workers’ Compensation financial class claims is the right move for your organization. At a minimum, you’ll gain valuable insights into how UHS can solve your complex billing issues and enhance your overall revenue cycle performance. Additionally, ask about our special project options to efficiently resolve your aged accounts receivable claims.