When healthcare providers outsource their revenue cycle management (RCM) operations, they typically expect improved efficiency, faster payments and reduced administrative burdens. However, when it comes to managing Workers’ Compensation claims, traditional RCM vendors often fall short.

These vendors frequently encounter billing errors, which complicate the process further. Additionally, the unique complexities of Workers’ Compensation claims lead to increased claim denials, impacting the efficiency of payment cycles and the overall financial health of healthcare practices. The unique complexities of Workers’ Compensation claims require specialized knowledge, workflows and technologies that many general RCM vendors simply do not offer.

In this blog, we’ll explore why traditional RCM vendors struggle with Workers’ Compensation claims and how partnering with a specialized vendor like Unified Health Services (UHS) can help healthcare providers overcome these challenges.

The Unique Challenges of Workers’ Compensation Claims

Workers’ Compensation claims are fundamentally different from other financial classes due to:

• State-Specific Regulations: Each state has its own set of rules and timelines for claims.
• Payer-Specific Requirements: Claims often involve employers, insurance adjusters and third-party administrators, making the process more complex.
• Manual Processes: Many claims require additional documentation and manual intervention, increasing the risk of errors and delays.

These factors make claims harder to manage and more prone to denials compared to other claim types.

Why Revenue Cycle Management Vendors Struggle

Most traditional RCM vendors are designed to handle high-volume claims for commercial payers, Medicare and Medicaid. While these vendors excel at managing straightforward claim types, they often lack the specialized expertise and RCM software required for Workers’ Compensation claims.

Here’s why.

Lack of State and Payer Expertise

Workers’ Compensation claims require an in-depth understanding of state-specific regulations and payer-specific requirements. Traditional RCM vendors often use a one-size-fits-all approach that doesn’t account for the specific needs of the insurance provider and these nuances.

Example:

• Filing deadlines for Workers’ Compensation claims vary by state. A missed deadline can result in a denied claim.
• Some payers require additional documentation, such as employer incident reports, which traditional RCM vendors may overlook.

RCM systems are crucial tools for healthcare organizations. Selecting comprehensive and customizable RCM systems that integrate seamlessly with clinical workflows can enhance billing efficiency and ultimately improve patient care and satisfaction.

Limited Technology for Claims

Traditional RCM vendors rely on general-purpose RCM platforms that aren’t designed to handle the complexities of claims. These platforms often lack features such as:

• Automated Eligibility Verification: Ensuring that claims are submitted with accurate employer and payer details.
• Document Management: Collecting and attaching required documentation to claims.
• Denial Prevention Tools: Identifying potential issues before claims are submitted.

Without the right technology, traditional vendors struggle to process claims efficiently, leading to higher denial rates and longer payment cycles.

Manual Processes and Increased Administrative Burden

Workers’ Compensation claims often require manual intervention, such as calling payers to verify claim status or gathering additional documentation. Traditional RCM vendors may not have the resources or workflows in place to handle these tasks effectively.

Impact:

• Higher administrative costs for healthcare providers
• Increased risk of errors and delays
• Longer days in accounts receivable (AR)

The Financial Impact of Poor Workers’ Compensation Claims Management

When traditional RCM vendors fail to manage claims effectively, healthcare providers experience:

• High Denial Rates: Workers’ Compensation denial rates can range from 15% to 30%. Accurate billing is crucial in ensuring timely payments and reducing denied claims.
• Extended Days in AR: Claims often remain unpaid for 45+ days, impacting cash flow.
• Lost Revenue: Denied and delayed claims result in lost revenue and increased rework costs.

Efficient claims processing is essential to minimize claim denials and enhance the overall financial health of healthcare organizations.

For example, a healthcare provider managing 1,000 Workers’ Compensation claims annually at an average claim value of $4,500 could lose $675,000 in revenue if their denial rate is 15%.

How Unified Health Services Solves the Problem

Unified Health Services (UHS) specializes in managing complex Workers’ Compensation claims. Here’s how UHS addresses the challenges that traditional RCM vendors struggle with.

State and Payer Expertise

UHS has a deep understanding of state-specific regulations and payer requirements, ensuring that claims are filed correctly and on time.

What We Do

• Proactively track state filing deadlines
• Maintain up-to-date payer requirements
• Verify employer and payer details before submitting claims

Advanced Technology for Claims

UHS uses specialized technology to streamline claims management, including:

• Automated eligibility verification
• Document management and attachment tools
• Denial prevention analytics

The impact technology has:

• Denial rates reduced to under 2%
• First-pass rates of over 95%
• Days in AR reduced to an average of 33 days

Comprehensive Denial Management

UHS takes a proactive approach to denial management, addressing potential issues before they result in a denial. For denied claims, UHS has a proven track record of successfully managing appeals.

We offer:

• Denial tracking and root cause analysis
• Payer communication and follow-up
• Appeals management and redeterminations

Optimized Revenue Cycle Management Processes

UHS optimizes RCM processes to enhance financial stability and patient experience. By focusing on effective management of patient-related RCM processes, UHS ensures that reimbursement is maximized and patient satisfaction is prioritized. This approach helps mitigate the risk of losing reimbursement and supports the financial viability of healthcare organizations while aligning with volume trends and differences in reimbursement between commercial insurers and Medicare.

Real-World Impact: UHS Case Study

A Midwest health system switched from a traditional RCM vendor to UHS for their claims management. The results were transformative:

• Denial Rate Reduction: From 15% to under 2%.
• Cash Flow Increase: Collections increased from $6.9 million to $10.9 million annually.
• Days in AR: Reduced to 37 days, improving financial predictability.

These results highlight the significant financial benefits of working with a specialized Workers’ Compensation claims partner like UHS.

Traditional revenue cycle management vendors are not equipped to handle the complexities of Workers’ Compensation claims. Healthcare organizations can reduce denial rates, improve cash flow, and achieve better financial outcomes by partnering with a specialized provider like Unified Health Services.

Effective RCM practices not only enhance financial performance but also play a significant role in improving patient satisfaction, which is increasingly important in the value-based care model.

If your current revenue cycle management vendor struggles with Workers’ Compensation claims, it’s time to make a change. Contact Unified Health Services today for a free claims assessment and learn how we can help you achieve better results.