Using Recovery Services to Increase Collections and Improve Reimbursement

The Challenge

With almost 60% of Americans covered by some type of managed care plan it is essential for community-based hospitals and health systems to monitor the reimbursement associated with their managed care contracts. Nationally, it is estimated that incorrectly managed care reimbursement occurs in up to 10% of all claims processed, leading to unrecognized and incorrect reimbursement.

With limited staffing time to review claims and variances occurring due to complexity and ongoing changes in contractual rates and terms, a hospital in the Midwest sought to increase cash flow through a retrospective recovery engagement. This would build on their successful internal review process and their current contract management system.

The Solution

This hospital initially began working with PMMC after licensing and installing its contract management system: PMMC Contract PRO.

While interior efforts had been successful in utilizing the application, PMMC was later contracted for a complementary retrospective recovery engagement in order to realize gaps due to lack of available staff and pre-existing workloads in the hospital. PMMC reviewsed managed care claims to identify and collect underpayments based on the payer contract terms.

PMMC began by gathering and reviewing data for identification of contractual underpayments. The Revenue Recovery service focuses on closed accounts and accounts where previous follow-up attempts proved unsuccessful.

Reviews combine automated calculations using PMMC’s contract management software coupled with analysts’ reviews of the reimbursement variance reports. After systematically validating and identifying underpaid accounts, payers are contacted for collection of insufficient funds. “While our staff had been very successful using PMMC Contract PRO, PMMC’s recovery team identified additional recovery opportunities," said the Chief Financial Officer.

The Results

PMMC was selected due to their solid track record in this area. Working closely with the hospital’s staff, PMMC has become an integral part of the organization’s team.

The retrospective recovery service achieved impressive results with PMMC’s recovery team having identified more than $2.1 million for recovery from managed care claims, of which more than $1.6 million was collected. PMMC was able to accelerate cash recovery, improve contract performance and reimbursement process and aid with negotiations.