When it comes to hospital billing priorities, workers’ compensation (workers’ comp) is often the last kid in line … with good reason. Workers’ comp billing is complex, ever-changing, and it’s only a fraction of your overall revenue.
But successful workers’ comp billing for hospitals is possible. Understanding how to bill for workers’ comp – and knowing when to outsource – is key. It can be done and done well by any hospital by following these fundamental workers’ comp billing strategies.
Where do I send the bill?
65% of all workers’ comp bills are sent to the wrong payer, resulting in payment delays of up to 90 days. Why?
When insurance companies return denied claims that were never theirs to begin with, hospitals are forced to spend time investigating who the right payer may be, tracking down the address, rebilling, and hoping they haven’t violated any timely state billing laws. At best, the hospital gets paid much later than it should. At worst, it gets a complete denial.
Bill the right payer the first time
Solving this problem starts with patient intake. Work with your Registration department to identify two key pieces of information:
- Did this injury happen on the job?
- Who is the employer?
If the injury happened on the job, you need to get the correct payer information to send the bill. You may also need to authorize the procedure if your state requires you to do so.
Injured workers don’t typically know who their work comp carrier is. Asking for their employer information allows you to search for the carrier on your state’s workers’ comp database to ensure correct payer information.
Most State Boards of Worker’s Compensation maintain a free database for you to use on their website. This is a useful tool – use it often!
How much am I owed?
Insurance companies pay hospitals the correct fee schedule amount only 32% of the time. If you don’t know what payment to expect, you’ll spin your wheels appealing payments and will miss other opportunities in the process.
Don’t guess what you are owed
While some portion of your workers’ comp patients will have claim jurisdictions outside of your state – along with Federal employees and other anomalies – most of your workers’ comp claim load should be paid pursuant to the fee schedule or Usual and Customary procedures in your state.
Most states publish this rate information on their website free of charge, or it can be purchased from a data supplier.
Modeling the correct amount for your state’s fee schedule on the front end is well worth the time to ensure accurate payment and help appeal the correct claims on the back end.
How should I send the bill?
Almost every state allows payers to deny medical bills that are sent without supporting documentation. Unlike Group or Commercial carriers that focus on eligibility, workers’ comp claims are all about compensability and relevant treatment.
Sending appropriate records and cost documentation along with the bill will drastically improve your chances of getting paid correctly and quickly. Don’t just wait for a denial, most payers will ALWAYS deny bills for not including the right documentation.
Send the bill the right way
If you’re unwilling to send implant invoices, there may be a situation where payment on implants is unlikely. Develop an internal policy on how to deal with implant cost documents. Our experience is that the payer community is moving faster toward universally requesting cost documentation to make payments.
Electronic submission of medical bills is quickly becoming a requirement in the workers’ comp industry. Over 60% of all workers’ comp payers now accept claim information electronically, and many can pay claims via electronic means as well.
Some states now require hospitals to submit claims electronically, so if the fear of non-compliance isn’t enough to motivate you, maybe the 20% reduction in days-to-payment will.
How do I measure success?
Most revenue cycle teams set billing and collection goals for their larger pay classes, but just because workers’ comp is the small piece of the pie doesn’t mean it should be free of scrutiny and suffer the fate of mismanagement.
Set goals and measure success
Here are a few basic principles that every business office should adhere to when billing and collecting for workers’ comp claims:
- Days to payment in full. Determine what timeframe is reasonable for you to get paid 100% of what is owed and measure your team to that standard. 90 days is average. 60 days is admirable for workers’ comp.
- Accounts receivables. Without a plan, workers’ comp claims love to head to the over-90-day AR in a hurry. Set some boundaries on what you will allow in the over-90 group and limit that percentage to less than 30%.
Should I outsource my workers’ comp claims?
Some revenue cycle experts say that workers’ comp takes as much as 10% of an entire CBO’s resources to handle while only delivering 2-3% of the revenue.
When one pay class represents such a small amount of revenue versus the time and expense it takes to manage it properly, it’s easy to see why so many billing offices choose to outsource workers’ comp to companies that specialize in complex claims.
Before you make the call, consider:
- Who is handling my workers’ comp now?
- Are they my best collectors?
- Would I be better served if they were going after my large commercial claims?
- Does my system allow me to build and model my state’s workers’ comp fee schedule easily?
- Can I price claims and apply PPO discounts with a high level of confidence?
- Am I compliant with state laws regarding workers’ comp (e-billing, authorization, etc.)?
- Do I get the level of reporting I need to ensure my work comp business is meeting and exceeding my revenue cycle goals?
If the answer to most of these questions is “no”, then bringing in an outside partner to take workers’ comp off your plate might be the best way for you to maximize your hospital’s work comp revenue stream.
For hospitals, understanding how to bill for workers’ comp – and knowing when to outsource – is crucial to getting paid for the work you do. EnableComp’s expertise in workers’ comp billing strategies help you streamline and optimize workers’ comp claims so you can stay focused on higher-priority claim categories.
