Health insurance companies are increasingly delaying payments to healthcare providers by requesting more detailed information about submitted claims (Photo: Business Wire)
Kodiak Solutions' new Revenue Cycle Benchmark Report details payer behavior on requests for information by payer type, care setting and state.
INDIANAPOLIS, Aug. 8, 2024–( BUSINESS WIRE )–Health insurers are increasingly using requests for more information to initially deny claims from hospitals, health systems and clinics, causing billions of dollars in delays in payments, according to Kodiak Solutions’ quarterly revenue cycle benchmark report.
According to data analysis from Kodiak Solutions' Revenue Cycle Analytics, the rate of request for initial information (RFI) denials as a percentage of total billings will increase by nearly 9 percentage points from 2022 to 2024, from 3.51% to 3.82% of total billings. The 2024 rates cover the period from Jan. 1 to May 31.
These initial denials delay payment on claims until provider organizations can collect the information requested by payers. In the first five months of 2024, $6 billion in claims were delayed across Kodiak's RCA benchmark community of more than 1,900 hospitals and 250,000 practitioners. Prorated over the course of the year, this increases to $14.4 billion from $11 billion in 2022.
Additionally, initial RFI rejections are not an indication that insurers are receiving more fraudulent claims: According to Kodiak Solutions data analysis, in 2023, approximately 88% of total RFI rejected claims were ultimately paid by insurers. This is a 35% increase from 2022, when insurers paid approximately 65% of total RFI rejected claims.
“Our analysis indicates that health insurers appear to be using RFI denials to delay claims they will ultimately pay, simply because they profit from delaying payment,” said Colleen Hall, senior vice president and revenue cycle leader at Kodiak Solutions. “Health systems and practices must pay the costs associated with these claims, such as wages and benefits for medical staff, well before they receive payment for the care they provided, plus they incur the additional costs of fulfilling these requests for information.”
The report also outlines steps provider organizations can take to mitigate the impact of RFI rejections, including developing a formal and ongoing strategy for addressing initial RFI claim rejections, quantifying the cost of each payer's RFI actions to inform contract negotiations, and creating a data community with peers to better understand payer behavior.
The August 2024 Kodiak RCA benchmark analysis provides additional data on early RFI denials by payer type and care setting, as well as early RFI denial rates by state.
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To see the full report, visit “Death by a thousand requests.”
About Kodiak Solutions
Kodiak Solutions is a leading technology and technology-enabled services company that simplifies complex business problems for healthcare provider organizations. As part of Crowe LLP for nearly 20 years, Kodiak developed its proprietary net revenue reporting solution, Revenue Cycle Analytics. Kodiak also offers a wide range of software and services to support CFOs seeking financial reporting, revenue cycle, risk and compliance, and unclaimed asset solutions. Kodiak's 400 employees work with more than 1,900 hospitals and 250,000 practitioners across all 50 states and serve as the unclaimed asset outsourcing provider of choice for more than 2,000 companies. For more information, please visit our website.
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