Podcast Excerpt

The Deep Dive explores the “hidden drain” of unpaid claims and insurance denials that costs U.S. hospitals billions annually, significantly increasing Accounts Receivable (AR) days and straining financial health. The problem is complex, stemming from diverse issues like incorrect authorization, payer adjudication problems, pervasive coding issues (e.g., wrong CPT/HCPCS codes), and basic registration errors. Specialized services offered by Sherlock tackle this through a two-pronged strategy: reactive resolution (using certified specialists for appeals management and diligently tracking existing denials) and, more powerfully, a proactive approach. This proactive front uses root cause analysis and trending data to identify and address systemic issues—such as where payments weren’t posted correctly or where carriers wrongly denied authorization—to prevent future revenue loss. This strategic intervention yields tangible financial results, dramatically decreasing AR days and potentially unlocking millions in revenue for hospitals, shifting them from a reactive to a resilient, strategically managed financial position.

Main Points Summary

  • The Core Problem: Unpaid Claims and Insurance Denials Cost Hospitals Billions. Hospitals lose billions annually due to unpaid claims and denials, which significantly increase Accounts Receivable (AR) days and strain financial health. The root causes are complex and technical, involving everything from authorization and adjudication failures to widespread coding errors (e.g., CPT/HCPCS mistakes) and patient registration issues.
  • Sherlock’s Strategy is Two-Fold: Reactive Recovery and Proactive Prevention. Sherlock’s approach combines reactive resolution, diligently appealing and following up on existing denials using highly certified specialists (like AHAM and ICD 9/10 certified individuals), with a crucial proactive element. Their team’s effectiveness is boosted by established, daily working relationships with national and local payers.
  • The Real Game Changer is Root Cause Analysis to Stop Denials at the Source. The proactive strategy focuses on robust root cause analysis and trending to identify the systemic issues causing denial patterns, not just fixing individual claims. They uncover deep-seated issues like specific carriers denying authorization that was clearly on file, payments that were received but incorrectly recorded (unposted voucher issues), and pervasive front-end trends.
  • Actionable Intelligence and Tangible Financial Impact. Sherlock translates its findings into concrete, actionable steps for hospitals, such as advising on verifying plan years or checking payer websites for updates, to prevent future denials. This approach drives dramatic results, including decreased AR days and achieving historically high cash collection months for clients, with one analysis suggesting a potential annual net recovery of over $11.6 million for a similar hospital.
  • The Broader Value is Financial Resilience, Efficiency, and Compliance. Beyond just recovered cash, Sherlock provides hospitals with critical resources and analytical reports (like the Denial Trending Report) without the overhead of hiring and training new staff. This service fundamentally improves a hospital’s financial resilience and operational efficiency while ensuring adherence to complex, constantly changing regulatory compliance.
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