Challenge
A large regional health system with $1.8 billion in net patient revenue partnered with R1 to ensure they receive the revenue they are contractually due. The health system suspected they were being underpaid, but needed support identifying areas for improvement and a safety net to ensure maximum recovery of underpayments.
Solution
Through analysis of payer agreements, use of proprietary contract modeling technology and root cause analysis, R1’s subject matter experts uncovered millions of underpaid dollars across the health system.
R1 Underpayment Recovery identified a subtle readmission billing process error for state Medicaid claims that had significant impact on revenue. R1 obtained a timely filing waiver from the payer to capture the historical loss and redesigned the billing process at the health system to prevent the issue from occurring going forward.
R1 Underpayment Recovery also identified a substantial payer’s payment policy that conflicted with the health system’s payer agreement. R1 worked directly with the managed care payer to correct their system to prevent future underpayments and secured a timely filing waiver to recover the historical loss.
Results
By implementing R1 Underpayment Recovery, the health system currently benefits from a 99.7% revenue capture rate. In the first six years, over $45 million in revenue was recovered. Through partnering with R1 and implementing root-cause recommendations, the health system’s underpayment exposure rate has reduced by 45%.
Ongoing engagement with R1’s underpayment experts ensures compliance with complex reimbursement structures and continued process improvement.
$45M
identified over six years
45%
reduced underpayment exposure
$7M
benefit from root cause analysis
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