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5 Top Healthcare Reimbursement Issues (And How to Fix Them)


The healthcare industry has long been plagued with reimbursement issues. These problems can have a significant impact on the financial stability and sustainability of healthcare providers.

Plenty of changes in 2023 are seriously affecting reimbursement, from rising claim denials and changing medical codes to lowered Medicare reimbursements. How providers respond and mitigate these issues enormously impacts their bottom line.

Here are some of the top reimbursement issues providers are facing and how they can fix them to improve their organization’s financial stability.

Claims Denials are Rising

A recent survey found that nearly three-quarters of the health professionals surveyed said that their claims denials were increasing between 5-15% of the time, and a third were denied by payers 10-15%. This level represents billions of dollars in lost reimbursements across U.S. healthcare providers.

Several internal challenges cause these denials:

  • Lack of resources. Staff shortages and insufficient clinical experience are impacting the quality of claims and management of denials.
  • Growing backlogs. Staffing challenges intensify denial backlogs and meet filing deadlines. Without denial prevention strategies and addressing the root cause of denials, providers face continuous challenges with denials.
  • Insufficient technology. Without the right tools to fill in the staffing shortages and experience gaps, providers lack automation for documentation and workflow optimization.

Thankfully, there are practical ways to address these challenges. The first step is getting an overall picture of denials and finding gaps and errors leading to errors and preventable mistakes. The right tools can help provide this vital picture. Providers can leverage artificial intelligence (AI) and natural language processing (NLP) solutions to identify and fix the root causes of denials.

AI/NLP technology can analyze large volumes of data, such as claims data, patient records, and payer policies, to identify patterns and trends contributing to denials. Using this information, providers can prevent denials from occurring.

Medical Codes are Changing Dramatically

Understanding medical and procedure coding is already a long process, but keeping track of changes can be time-consuming. However, it’s vital to understand these changes to avoid claim denials. There are nearly 400 changes to Current Procedural Terminology (CPT) in 2023, including:

  • 225 completely new codes,
  • 75 deleted codes, and
  • 93 revisions

Some of the key changes include:

  • New coding for remote cognitive behavior therapy monitoring
  • New coding for prolonged services
  • Observation coding is now merged with inpatient
  • A new appendix with taxonomy can be used for AI applications

Providers must keep on top of these changes to ensure no reimbursement denials or delays. The American Medical Association’s manual CPT Changes 2023: an Insider’s View is one way to keep track. It provides all the valuable information regarding medical coding changes.

The right tools can also help providers react quickly to coding changes. Solutions can automate updating codes in electronic health records (EHR) systems and billing software. It not only eliminates errors but reduces the administrative burden of updating codes.

Medicare Reimbursements are Taking a Hit

Physicians were shocked to hear in November 2022 that Medicare would institute a nearly 4.5% reduction across the board. Because Medicare acts as a harbinger for private payer reimbursement, many professionals became concerned. In the end, advocacy groups managed to get Medicare to lower the cuts to 2%.

While physicians can do little to stave off the cuts, they can work to reduce the inefficiencies that hurt their revenue. Some of the best ways to improve efficiency include:

  • Automate processes, such as medical  billing and coding, and claims management.
  • Streamline workflows and implement process improvements. For example, they can redesign workflows to eliminate bottlenecks and delays, reduce duplication, and optimize resource utilization.
  • Optimize staffing levels and roles by aligning them with workflow needs. This includes cross-training staff when necessary and implementing flexible scheduling to optimize staff resources.
  • Data analytics help providers monitor performance and identify areas for improvement.

When reimbursements dip, improving efficiency is essential to help providers optimize their revenue cycle management.

Low Collections Recovery Rates

Rising high-deductible health insurance coverage means that patients are taking on bigger payments for care. In fact, out-of-pocket healthcare costs are expected to reach $491.6 billion by 2025. However, most patients struggle to pay their portion: the average American household has $5,000 in medical debt.

These bigger bills require more transparent explanations, more financing options, and increased follow-up. Providers need to offer patients greater support to overcome this reimbursement issue. Some ways include:

  • Flexible payment options
  • Transparent pricing
  • Streamlined billing and payment process
  • Effective communication
  • Prompt patient follow-up

To improve collections, healthcare providers need to focus on the needs and preferences of their patients and take steps to make the payment process as easy and transparent as possible.

Payer Underpayments

For many providers, underpayments and missed payments stress their revenue cycle. Payer contract issues can be a source of these problems.

Tackling payer contracts and underpayments requires a proactive approach. The first step is analyzing current payer contracts and ensuring that payers pay according to the agreed-upon terms. This includes reviewing fee schedules, payment methodologies, and reimbursement rates to identify areas where underpayment may occur.

If payment contracts are low, providers must negotiate with payers to improve contract terms and increase reimbursement rates. This includes providing data on the cost of delivering services and demonstrating the quality of care provided. Use benchmark data to compare their reimbursement rates with other providers in their areas or specialty. It is valuable data to identify underpayments and provide data to support negotiations with payers.

Once favorable contracts are in place, monitor payments from payers to ensure they’re being paid accurately and on time. Monitoring can include tracking the payments received, identifying underpayments, and appealing denials. Many providers use revenue cycle management (RCM) tools like contract management systems and claims management software to track and manage payer contracts, claims, and payments.

Navigating Reimbursement Issues

Reimbursement issues remain a significant challenge for healthcare providers and will likely continue. To combat many of the problems in reimbursement, providers need to optimize their revenue cycle management and improve their financial stability. Leveraging technology and outsourcing services can help them improve efficiency, optimize staffing, improve communication, and implement RCM best practices. To see how GeBBS Healthcare Solutions can help you overcome your top reimbursement challenges, contact one of our experts today at gebbs.com.

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