Overaged Claims

December 3, 2022 Brian Keller0
overaged claims
Overaged Claims are one of the major reasons behind revenue leakage in the healthcare industry. Overaged claims can be defined as claims in the healthcare industry that remain unpaid for a significant period. These claims go beyond the statute of limitation and cause major damage to the revenues of a healthcare organization.
Overaged claims make a huge impact not only on the healthcare organization but also on all parties involved in the revenue cycle of the healthcare industry, including patients, providers, and insurance companies. The parties that get affected by overaged claims often face long-term financial and legal consequences. It is thus important for the healthcare organization to understand the impacts of overaged claims and how these can be handled.
Factors Contributing to Overages Claims
Before moving on to find a solution to the problem of overaged claims in the healthcare industry, it is important to assess the causes of the same. One of the most common factors of rising overaged claims is the complexity of medical billings and coding. Apart from the other processes in the healthcare organization, billing and coding remain the most complex process as it is not the primary service for the organization. 
Medical billing and coding require the processing of large amounts of data including medical procedures and services offered by the organization to develop or create standardized codes that can be utilized to process insurance claims. The process of billing and coding can be time-consuming and needs a lot of resources to handle. Being from a medical profession, the billing and coding part of the organization surely becomes complex for healthcare organizations. Any error or issue in the process can further lead to delays in payments adding to the overaged claims. Further, the longer time an amount remains unpaid for the organization becomes more challenging to collect. Based on a report published by the Medical Group Management Association (MGMA), it is estimated that on average it takes around 70 days to collect payments for medical services. In half of the cases, the claims can remain unpaid for more than 70 days. 
The higher cost of medical services has also been a reason for the increase in overaged claims. Healthcare services in the USA can be categorized as one of the most expensive in the whole world. Being expensive, the healthcare services are out of reach for many patients, or in some cases, they struggle to pay for the same once the service is provided resulting in overaged claims. 
To add to the woes of rising overaged claims in the healthcare industry, in many cases the insurance companies deny the claims or delay them based on any cited reasons. The burden of this action by the insurance companies falls on the healthcare organization. The longer these claims are delayed there is more the chance of them becoming overaged claims. A survey report by the Medical Group Management Association (MGMA) shows that missing or incorrect information about demography and insurance also contributes to overaged claims.

Overaged Claims – Impact on Healthcare Organization

Healthcare organizations have been feeling the severe impact of overaged claims for many years now. It has become a huge revenue leakage source for organizations. Adding to this, it has become a problem for which even the in-house solutions have become costlier. Managing the overaged claims inside the organization requires an investment of time, hiring of staff, and management of processes, etc which further adds to the costs. 
If the claim remains unpaid for a longer time, it gets difficult with time to recover the same. On the other hand, unpaid claims damage the credit ratings of the patients, and they can face legal action for the non-payment adding to their financial instability.
How to Avoid Overaged Claims
Although overaged claims are considered a part of the healthcare business, there are ways in which they can be controlled and minimized. 
To begin with, healthcare providers have the option to build and implement a robust billing and coding procedure. This procedure must be divided into teams of personnel who would thereafter work on the same. This will enable the organization to have better control over the accuracy of the process resulting in a reduction in the denial of claims. To lower the cost of this option, outsourcing is always a better option. 
Having a professional partner on your side can always help in dealing with the situation of overaged claims. At CIVXDATA, we always try to get the best resources to offer to our clients, which can reduce the ratio of overaged claims with time will less investment in comparison to having an in-house team.
Another option for reducing the impact of overaged claims for a healthcare organization is to develop good communication channels. This will develop a better and more reliable link between patients, insurance companies, and healthcare organizations. A communication channel will enable the healthcare provider to send outstanding bills to clients regularly ensuring that revenues are constantly generated. Getting a faster response from the insurance provider will also help in reducing the likelihood of overaged payments.
In addition to all the options mentioned above, healthcare providers can also develop and implement debt collection procedures. This can include establishing policies for following up on overaged claims and engaging with debt collection agencies to recover unpaid debts. 
One more option can be to consider offering payment plans or other financial assistance to patients who are struggling to pay outstanding balances. This will increase the probability of receiving the payments, not immediately but over some time.
Want to get assistance in understanding the benefits of our solutions for the overaged claims problem? Get in touch here.

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