Survey: Hospitals Spend 33 Percent More Than Estimated Following-up on Insurance Claims Yet Automation Investment Continues to Lag

One-third of hospitals use no exceptions-based claim processing to automate claim follow-up

DENVER – January 12, 2016 – A new survey of healthcare financial professionals reveals that the cost of following-up on late payments from insurance companies is significantly higher than most industry estimates. Yet despite the availability of exception-based processing to automate the resource-intensive claim follow-up process, most hospitals rely on legacy outsourced or employed manual approaches that have generally failed to lower costs.

Recondo Technology (Recondo) surveyed healthcare financial professionals from hospitals, physician groups and consultant organizations. Respondents provided a high-level view of the current state of medical claims follow-up – the process by which hospitals and physician groups query insurers about the disposition of bills submitted for patient services. Claim follow-up is traditionally done over the phone by back-office staff, who can review no more three or four claims at a time, depending on the payer’s rules.

Various industry estimates have pegged the cost of this time-consuming manual process at between $2.75 and $3.25 per claim. However, 70 percent of survey respondents said the actual cost for their organizations is $4 per claim, 33 percent higher than the average $3 estimate. The difference is significant. The nation’s healthcare providers submit an estimated 3.1 billion claims annually, meaning claims follow-up could be costing them $3.1 billion more than is commonly believed.

Even with costs that high, though, survey respondents indicated their organizations are making poor use of exception-based technologies that can streamline claim follow-up by removing claims from the work queue that are already scheduled to be paid.

Over half (53 percent) of respondents said their organization uses manual follow-up efforts directed by the 835 EDI claim payment transaction set to help automate claims follow-up, even though the technology is widely viewed as lacking timeliness and specificity. The remaining respondents use either the 277 EDI transaction set (4 percent); web-sourced data pulled from payer websites (12 percent); or none of these approaches (31 percent).

“Not only is it costing the industry more than is currently believed to find problems within the healthcare revenue cycle and remediate them, but the vast majority of healthcare organizations are relying on outdated means to automate claims follow-up, outsourcing it, or doing nothing at all,” said Jay Deady, CEO of Recondo. “By contrast, exception-based processing that uses web-sourced data can immediately remove over half of soon-to-be-paid claims from the work queue, freeing up staff for more important duties and saving money for the organization.”

The online survey was conducted in November 2015 during a Recondo-sponsored Healthcare Financial Management Association (HFMA) webinar and represents the opinions of nearly 80 healthcare finance professionals.

Recondo Technology
Recondo’s cloud-based solutions deliver financial clarity to all participants within the healthcare revenue cycle. Named the No. 1 hottest company in healthcare by Modern Healthcare in 2013 and a Cool Vendor for Healthcare Providers 2015 by Gartner, Recondo empowers more than 900 hospitals and health systems with solutions that connect providers with over 90% of the nation’s payers and their patients to ensure proper and accelerated payments across the care continuum, at significantly lower costs. The company’s software and expertise streamline operations and achieve efficiencies and cost savings from patient access through claim status to payment processing—a continuum today where inaccuracy and inefficiencies currently cost U.S. healthcare a staggering $480 billion per year. Visit us at



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