What is Revenue Leakage?
Defined: Revenue Leakage is the unintended and unnoticed loss of revenue from an organization. Leaking revenue can occur through expenditures such as overpayments, duplicate payments and other instances where there is a responsible party who is not being pursued. Revenue Leakage also occurs from under-billing on the AR side of an organization.
Is Your Health Plan Leaking Revenue?
First, let’s consider if your CFO would notice if your Health Plan saved 1% of total annual spend? How about 10%? Preventing waste is preferable to recovery considering the cost of money over time. The cost of inaction really adds up quick.
Now, why does waste become such a major issue for Self Funded Health Plans? Plainly put, it’s often because organizations primarily use internal metrics to gauge the performance of their plan. In a situation like this, real performance is skewed and perpetuates the status quo, continuously leaking revenue year-over-year.
Why is Addressing Revenue Leakage Important?
Next, let’s consider a recent report by the American Medical Association that revealed that 1 in 5 medical claims submitted to health insurance companies are processed incorrectly. Health care is highly complex, error-prone system. Knowing this, why don’t more organizations have a safety net in place to mitigate the effect of these errors on their health plans?
The answer is straight forward. Primary because they’ve never used one in the past.
Advocacy for Health Plans
Stop revenue leakage and help make a Health Plan healthy.
To do so, implement a form of independent oversight. This will help eliminate improper Coordination of Benefits payment from being made. These payments are the legitimate responsibility of another party and must not be fulfilled by your organization. Halt overpayments and duplicate payments. When overpayment and duplicate payments are made, your organization is being taken advantage of due to pour oversight. Any self-funded ERISA health plan could use a proper assessment. Having oversight on these payments has been shown to significantly reduce the amount of waste and the need for attempted recovery of those funds. Consider a Health Plan Health Check.
Who’s Looking Out for Your Health Plan?
Brace yourself, according to the American Medical Association’s most recent report card in which the accuracy of claim payments was addressed, $600 – $850 billion is wasted annually due to claims related mistakes. Yet only 10% of self-funded plans perform audits on their administrators. Plans across the country are hemorrhaging resources and so few organizations are taking action. Don’t be one of them.
What are the Options?
Mitigating revenue leakage is possible. Some options include, continuous monitoring, bi-annual audits, industry benchmarking and other improvement are key to excelling beyond the fray.
Become a Top Performing Health Plan
In conclusion, in the complex error-prone system that is the US Health care industry, it is imperative that all involved progress as new solutions become available. A healthy plan improves member moral, and also significantly contribute to your organization’s bottom line.
- Preventing Overpayments
- Identifying Duplicates
- Recognizing Ineligible Dependents
- Detect unauthorized Treatments
You can make your health plan a winner and improve employee satisfaction, reduce plan expenses and see a huge reduction in the number of phone calls and emails you receive from confused plan members. You can do it, and if you need assistance we are always here to help. Call us to day. 1-800-813-4054
Vengroff Williams is an industry-leading Health Plan subrogation provider for Fortune 500 and Global 2000 firms.