No Risk, High Reward: Making the Case for Contingency-Based Lookbacks
“Found money” sounds like luck. Like spotting a $20 bill on the ground while you’re walking the dog.
“Found” Medicare Bad Debt reimbursement is not that. It only happens when a hospital purposefully reviews and confirms it has captured all the reimbursement revenue it’s owed from previous years.
That takes a process. One that brings technology, timing, and expertise together. That’s because Medicare Bad Debt doesn’t go missing in a big, loud way. It slips through the cracks without fanfare. It could be a reporting gap created by staff turnover or a system upgrade. It could be misaligned S-10 reporting. Or it could be a failure to adapt to a new regulation. Whatever the case, it’s usually nothing that raises a red flag right away. But later, when healthcare leaders discover how much revenue has been left behind, the alarm bells go off loud and clear.
This is what a Medicare Bad Debt lookback is for.
What’s a Lookback?
A Medicare Bad Debt lookback is a comprehensive review of already-filed annual cost reports. It’s designed to reveal whether an organization claimed and captured all the Medicare Bad Debt reimbursement it was owed, so it can address any shortfall while those years are still actionable.
Why Hospitals Miss Medicare Bad Debt
Most hospitals rely on a patchwork of revenue cycle tools and processes. Multiple teams, outside vendors, and outdated technologies that usually get reporting right can also easily miss claimable opportunities. As a result, Medicare Bad Debt reimbursement that was earned throughout the year can be underreported or missed on an annual cost report, leaving value on the table.
• Dated Technology
Internal teams and even many third-party vendors often don’t have the sophisticated technology needed to find every dollar of Medicare Bad Debt, leading to missed reimbursement opportunities.
• Inexperience
With an industry-wide shortage of experienced RCM employees, internal teams are already stretched thin. It’s difficult to find enough people with the specialized knowledge to find and file for missed Medicare Bad Debt reimbursement.
• Complex Regulations
The guidelines for what qualifies as reimbursable bad debt are difficult to navigate, increasing the risk for underreporting and omissions.
Meduit’s team has found missed Medicare Bad Debt reimbursement in 100% of its lookback reviews. That statistic alone indicates how common it is for hospitals to leave Medicare Bad Debt reimbursement behind. Unfortunately, most hospitals don’t have the time, technology, or expertise to go back and track every dollar. A contingency-based lookback provides them with a second chance to capture what’s rightfully theirs.
Reclaiming What’s Yours
This snapshot of two recent Meduit lookbacks shows just how much can go unclaimed, even in well-run organizations with reliable cost-reporting infrastructures.
|
Hospital A (Central CA) |
Hospital B (Western NC) |
|
Type |
Short-term Acute Care |
Short-term Acute Care |
|
# Beds |
873 |
396 |
|
Patient Revenue |
$6.5B |
$2.5B |
|
Years Reviewed |
FY 2019 – FY 2022 |
FY 2016 – FY 2021 |
|
Recovered Value |
$4.4M |
$1.4M (Traditional) Additionally, as part of the engagement, Meduit filed a Humana Medicare Advantage bad debt lookback for FY2016-FY2022, which returned $3.4M. |
In both cases, the hospitals submitted their annual cost reports believing they had captured everything owed. Clearly, they had not. Without a review, they would have missed out on millions.
These cases aren’t outliers. Far from it. Instead, they reflect how commonplace it is for hospitals to miss out on reimbursement revenue, and their opportunity to go back and collect it. That’s what makes the lookback such a powerful RCM tool.
Why Lookbacks Make Sense
No upfront cost
No risk – (if Meduit’s team doesn’t find missed value, there’s no fee)
Minimal disruption to existing teams and workflows
Fast ROI – When missed claims are identified, an amended cost report or reopening request is filed. After the Medicare Administrative Contractor (MAC) determines the submission is acceptable, a tentative settlement is issued in a relatively short timeframe.
Collecting What’s Been Missed: Tentative Settlements
After a lookback reveals missed value, the next phase is collection. That’s where tentative settlements come into play.
Tentative settlements allow providers to receive payment from the Centers for Medicare & Medicaid Services (CMS) for Medicare Bad Debt that was mistakenly omitted, misclassified, or underreported from previously filed cost reports.
When missed claims are identified during a lookback, hospitals can file an amended cost report and receive a tentative settlement to recoup the reimbursement they’re owed.
The Tentative Settlement Timeline
On Purpose, With Purpose.
The only way to find missed Medicare Bad Debt reimbursement is to look for it on purpose, with the technology and experience that tells you where missed value tends to hide. Most hospitals don’t have the time, tools, or specialized expertise to execute their own lookbacks effectively while keeping up with day-to-day priorities.
That’s why a contingency-based lookback makes so much sense for healthcare organizations. It’s an opportunity for significant revenue recovery, with minimal lift, and no upfront fee. Meduit clients only pay when missed value is recovered, and to date, Meduit has identified missed value in every one of its lookback reviews.
“Found money” has nothing to do with luck in the Medicare Bad Debt reimbursement space. Every dollar recovered is earned reimbursement that wasn’t captured during a previous reporting cycle.
Unless you’re absolutely certain you’ve recovered all the Medicare Bad Debt reimbursement your organization is owed, reach out to learn more about what a lookback entails, which years are still eligible to pursue, and what your recovery opportunity looks like. You’ve got little to lose, and a significant amount of Medicare Bad Debt reimbursement to potentially gain.
Email contactus@meduitrcm.com to take the first step toward a lookback.