In healthcare administration, managing money is very important for hospitals and medical practices in the United States. One big problem that can cause lost money is missed charges. Missed charges happen when services given to patients are not recorded or billed correctly. This leads to lost income. For practice owners, administrators, and IT managers, it is important to know what causes missed charges, how to find them, and how to stop losing money from them.
Missed charges happen when medical services or procedures given to patients are not included in the billing process. This can happen because of mistakes in data entry, delays in workflow, or poor communication between clinical and billing teams. When these charges are not included in insurance claims, healthcare groups do not get paid for those services.
According to Becker’s Hospital CFO Report, healthcare groups lose between 2% and 5% of their patient revenue because of underpayments, which includes missed charges. In many places, missed charges make up a large part of this loss. Since many health providers already have small profits, reducing missed charges can really help improve cash flow and money management.
Missed charges also affect important performance measures in the healthcare money process. Organizations that do not fix missed charges usually have more denied claims, longer times to collect money, and lower rates of first-time correct claims. Since these measures are linked to managing the revenue cycle, missed charges affect the whole money process from patient registration to final payment.
The healthcare revenue cycle includes all steps from when a patient arrives to when claims are finally paid. Important steps include registering the patient, checking insurance, coding medical details, sending claims, managing denied claims, and posting payments. Every step must work well to avoid mistakes like missed charges.
Missed charges often start early, during patient registration and clinical documentation. Melissa Scott from Change Healthcare says it is important to see the revenue cycle as one connected process, not just a billing function at the end. Mistakes early on, like missing information or wrong insurance details, cause problems later and increase missed charges.
Two key things to manage missed charges are coding accuracy and charge capture lag time. Coding accuracy means correctly documenting diagnoses and treatments for billing. The goal is usually 95% accuracy or higher. Charge capture lag time means how quickly charges are recorded after the service is given. If it takes too long, charges might be missed or forgotten, meaning no bill is sent.
Another measure, discharged, not final billed (DNFB), tracks cases where patients have finished care but billing is not done. A high DNFB number often means delays or problems in capturing all charges.
Groups that watch these measures closely are better at finding missed charges. Charge reconciliation, which includes checking medical records and billing data, can find patterns where charges are missed repeatedly.
Missed charges cause money loss directly, but they also lead to more claim denials. Claim denials in healthcare usually range from 5% to 10%, which costs providers about 5% of their net revenue, according to Relias data. Missing or wrong charges are one of the main reasons for denied claims. When charges are missing, claims are incomplete, and insurers reject or partially pay them.
The first pass resolution rate shows how many claims are paid on the first try. Missed charges lower this rate. Organizations with low first pass resolution must spend more time fixing and appealing denied claims. This takes more resources and increases the days money is owed (days in receivables outstanding, or DRO). Keeping DRO low, ideally 30 days or less, is important for good money management. Missed charges make collection take longer and hurt cash flow.
To stop missed charges, healthcare groups need good ways to find them. These include:
Melissa Scott says everyone handling data for claims must know how their job affects revenue cycle measures. Whether it is registration staff, coders, or billing clerks, it takes a group effort.
Preventing missed charges means improving workflows, better communication, and stronger billing checks:
New technology like artificial intelligence (AI) and automation offers ways to reduce missed charges in healthcare money cycles. AI tools can look at lots of medical records and billing data to find errors and missing charges that people might miss.
For example, AI can help with:
Simbo AI, a company that automates phone answering for front offices, shows how technology can improve admin tasks in healthcare. Their AI tools handle routine calls, so staff have more time to focus on accurate data entry and billing. This lowers the chance of missed charges caused by rushed or unfinished patient intake.
AI-driven automation in billing also helps watch performance dashboards like first pass resolution and denied claim volume. AI can quickly spot issues in coding or missed charges, letting teams fix problems faster.
Knowing how to manage the revenue cycle well is important to fix missed charge problems. Companies like Revenue Cycle Coding Strategies (RCCS), with over 20 years of experience, offer help with improving charge capture and following rules. Partnerships between healthcare groups and consultants give training, process reviews, and updates on regulations needed for accurate coding and billing.
Organizations with low scores on key performance measures, such as bad debt, charity care, and billing speed, should get outside help. Improving these areas lowers missed charges and improves overall financial health.
In summary, missed charges are a big and avoidable cause of lost money in U.S. healthcare. By regularly watching revenue measures, training staff, using advanced technology, and adding AI tools to automate routine work, medical practice administrators and IT managers can cut missed charges. These actions help improve cash flow, shorten the time it takes to collect money, and support better financial health for healthcare providers serving communities across the country.
The healthcare revenue cycle encompasses all processes from capturing a patient’s information to final billing and payment. It involves accurate coding, registration, insurance verification, and eligibility checks, among other steps, to ensure successful reimbursement.
KPIs are critical indicators that measure progress toward intended results in revenue cycle management. They provide a focus for operational and strategic improvements and help determine areas needing attention or enhancement.
Medical coding accuracy refers to the precision with which coding specialists document patient conditions and care received. An accuracy rate of 95% is often targeted to prevent unfavorable audit outcomes and ensure accurate billing.
The first pass resolution rate measures the percentage of claims paid upon first submission. Higher rates indicate effective revenue cycle processes, while lower rates highlight potential issues needing corrective action.
Missed charges are instances where charges for services rendered are not captured in the billing process. Investigating these occurrences helps prevent revenue loss and improves overall billing efficiency.
Charge capture lag time measures the delay in recording patient information for coding and billing. Tracking this KPI helps identify workflow inefficiencies that may hinder timely revenue collection.
DNFB refers to claims that are completed in terms of patient care but have not yet been finalized for billing. Tracking DNFB helps identify bottlenecks in billing processes.
DRO tracks the average number of days it takes for a healthcare organization to collect payments. A lower DRO is indicative of better revenue cycle performance, with high-performing departments targeting 30 days or less.
Monitoring denial volume helps organizations understand the revenue loss from claim denials. By analyzing patterns, healthcare providers can improve workflows and strategies to reduce the overall denial rates.
Underpayment recoveries refer to the efforts taken to reclaim lost revenue due to underpayments by insurers. Tracking this KPI helps ensure hospitals maximize their revenue potential and recover uncollected funds.
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