HCM 345 Module 7 Final Project White Paper example

Getting Paid for the Care We Give: A Reimbursement White Paper for a Composite Regional Health System

[Student Name]

Southern New Hampshire University

HCM 345: Healthcare Reimbursement

Module Seven Final Project

[Instructor Name]

[Date]

The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.

Getting Paid for the Care We Give: A Reimbursement White Paper for a Composite Regional Health System

Executive Summary

Lakemont Regional Health (a composite of a 210-bed hospital plus 14 clinics) earned 412 million dollars in net patient revenue in fiscal year 2025 but lost a significant share of what it was owed through preventable denials, incomplete documentation, slow billing and weak collection of patient balances. This paper recommends six changes: automate eligibility and authorization checks, collect patient responsibility at the time of service with financial counseling, expand clinical documentation review, set deadlines that cut the backlog of unbilled accounts, build a dedicated appeals program for Medicare Advantage denials, and align published prices, estimates and bills. Together the changes are estimated to add about 7.4 million dollars in recurring annual revenue for about 880,000 dollars in yearly cost, a net gain near 6.5 million dollars,, and to accelerate about 3.8 million dollars in cash once.

Findings

The revenue cycle loses money early. Registration and eligibility errors account for 38 percent of Lakemont's initial denials and missing prior authorizations for another 17 percent, and only 22 percent of what patients owe is collected before they leave. The system's initial denial rate is 11.8 percent against a target of 6 percent, and just 86 percent of claims pass payer edits the first time they are sent.

Documentation and coding set both the level and the speed of payment. Under Medicare's per-admission payment, the specificity of documented diagnoses decides the payment group, yet the documentation team reviews only about 60 percent of Medicare inpatient cases and none of the Medicare Advantage cases paid on the same basis. Unsigned discharge summaries and unanswered queries keep 7.4 days of revenue in discharged not final billed status.

Medicare Advantage has become the main source of medical necessity denials. Plans have been reclassifying short inpatient stays as observation, and Lakemont appeals only about 30 percent of these denials. Federal reviewers have reported that a share of such plan denials concerned care that met Medicare coverage rules (U.S. Department of Health and Human Services, Office of Inspector General [OIG], 2022), and since 2024 plans must follow Medicare's two-midnight inpatient criteria (Centers for Medicare & Medicaid Services [CMS], 2023).

Billing complexity is costly in its own right. Processing the claim for a general medicine inpatient stay was estimated at about 124 dollars at one academic system (Tseng et al., 2018), and a cross-national comparison traced much of the American excess over peer nations to coding (Richman et al., 2022). Payer rules vary widely; fee-for-service Medicaid claims have been found to be denied far more often than Medicare claims (Gottlieb et al., 2018). Finally, prices are now public. Lakemont must post its negotiated rates and give self-pay patients good faith estimates, so inconsistencies between its website, its estimates and its bills are visible and, in the case of estimates, disputable.

The common thread is that Lakemont's reimbursement problems are made at registration and in the chart and discovered in the billing office. The recommendations therefore aim upstream.

Recommendations

First, automate eligibility verification and create an authorization work queue. Real-time eligibility checks at scheduling and again two days before service, with a queue that blocks scheduled imaging and procedures until authorization is confirmed, target the two largest denial categories. The goal is to halve registration and authorization denials within a year.

Second, collect at the point of service and screen for coverage. Front-desk staff should present each patient's estimated responsibility using the same figures as the good faith estimate and offer payment plans, while two added financial counselors screen uninsured and underinsured patients for Medicaid and the financial assistance policy. The target is to raise point-of-service collection from 22 to 35 percent of patient responsibility, and to reduce bad debt from patients who were eligible for assistance they never received.

Third, expand clinical documentation review. Three additional documentation specialists would extend concurrent review to all Medicare and Medicare Advantage inpatient cases, using query practices that present clinical indicators without leading the provider (Casto & White, 2021).

Fourth, set and enforce deadlines for unbilled accounts. Discharge summaries should be signed within 48 hours and queries answered within two business days, with medical staff rules that make persistent delinquency a matter for the credentials committee. The target is to reduce discharged not final billed from 7.4 to 4 days.

Fifth, build a Medicare Advantage appeals program. Two appeal nurses should review every inpatient-to-observation downgrade against the two-midnight rule and appeal those the record supports, while managed care contracting uses denial data to negotiate contract language on timely determinations and adherence to Medicare criteria.

Sixth, align prices, estimates and bills. A single owner in revenue integrity should reconcile the price transparency file, the estimate tool and the chargemaster each quarter, so that what patients see online, what they are told and what they are billed agree.

Estimated Financial Effect

Table 1 estimates the annual effect of each recommendation, with assumptions stated so that finance can test them.

Table 1

Estimated Effect and Cost of the Recommendations

Note. Composite estimates for illustration. Recurring effects total about $7.4 million against about $0.88 million in added cost.

Risks and Compliance Safeguards

Revenue improvement must not create compliance exposure. Expanded documentation review will be audited quarterly by an external firm, with a specific check on whether queries disproportionately move cases into higher-paying groups. Appeals will be filed only where the record supports inpatient status. Point-of-service collection will never delay emergency care, which federal law protects, and financial counselors will offer assistance screening before requesting payment from patients who may qualify. Finally, the gains depend on staff adopting new workflows, so each recommendation has a named owner and a monthly measure reported to the revenue cycle steering committee.

Implementation Timeline

In the first quarter, Lakemont should select the eligibility software, hire the counselors and appeal nurses and adopt the medical staff documentation deadlines. In the second quarter, the software goes live, the documentation team expands and the appeals program begins. In the third quarter, point-of-service collection launches with new estimate scripts and the first quarterly price reconciliation is completed. By the fourth quarter, leadership should review results against the targets in this paper and decide which programs to expand.

Conclusion

Lakemont does not need higher prices to improve its reimbursement; it needs to be paid fully and promptly for the care it already provides. The largest opportunities lie at the start of the revenue cycle and in the medical record, and the most important new threat lies in Medicare Advantage denials. The six recommendations address both at a cost that is small relative to their expected return, with safeguards that protect the organization's integrity as well as its revenue.

References

Casto, A. B., & White, S. (2021). Principles of healthcare reimbursement and revenue cycle management (7th ed.). AHIMA Press.

Centers for Medicare & Medicaid Services. (2023). Medicare program; contract year 2024 policy and technical changes to the Medicare Advantage program, Medicare prescription drug benefit program, Medicare cost plan program, and programs of all-inclusive care for the elderly. Federal Register, 88, 22120.

Gottlieb, J. D., Shapiro, A. H., & Dunn, A. (2018). The complexity of billing and paying for physician care. Health Affairs, 37(4), 619-626. https://doi.org/10.1377/hlthaff.2017.1325

Richman, B. D., Kaplan, R. S., Kohli, J., Purcell, D., Shah, M., Bonfrer, I., Golden, B., Hannam, R., Mitchell, W., Cehic, D., Crispin, G., & Schulman, K. A. (2022). Billing and insurance-related administrative costs: A cross-national analysis. Health Affairs, 41(8), 1098-1106. https://doi.org/10.1377/hlthaff.2022.00241

Tseng, P., Kaplan, R. S., Richman, B. D., Shah, M. A., & Schulman, K. A. (2018). Administrative costs associated with physician billing and insurance-related activities at an academic health care system. JAMA, 319(7), 691-697. https://doi.org/10.1001/jama.2017.19148

U.S. Department of Health and Human Services, Office of Inspector General. (2022). Some Medicare Advantage organization denials of prior authorization requests raise concerns about beneficiary access to medically necessary care (OEI-09-18-00260). https://oig.hhs.gov/oei/reports/OEI-09-18-00260.asp