Hospital bill audit programs can make a difference

Many health and workers compensation insurers are now using hospital bill audit services. The Washington State Fund, which provides workers compensation insurance to 120,000 employers and 1.3 million workers in the state, implemented a statewide hospital bill audit program after conducting a 6-month...

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Bibliographic Details
Published in:Risk management 1989-01, Vol.36 (1), p.34-38
Main Authors: Dennen, T, Zell, M, Arnis, M
Format: Magazinearticle
Language:English
Subjects:
Accounting
Accounting and auditing
Audits
Bills
Case studies
Control
Cost control
Cost Control - methods
Cost reduction
Finance
Health administration
Health Benefit Plans, Employee - economics
Health insurance
Hospital costs
Hospitals
Industry
Insurance Claim Review
Insurance industry
Insurance, Health - economics
Insurers
Medical care, Cost of
Patient Credit and Collection
Washington
Workers compensation
Workers' Compensation - economics
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Summary:Many health and workers compensation insurers are now using hospital bill audit services. The Washington State Fund, which provides workers compensation insurance to 120,000 employers and 1.3 million workers in the state, implemented a statewide hospital bill audit program after conducting a 6-month pilot program. August International was chosen to operate the expanded program. During its first 10 months, this audit program recovered $2,167,547 on billed charges of $24,146,563, a return of 9%. Billing errors and lack of documentation accounted for less than 2% of recovery. By type of denial, the major reasons for recovery were: 1. bed rest stays for back injuries, 2. treatment unrelated to industrial injury, and 3. services not medically necessary. Backed by rules on allowed services and appropriate appeal procedures, a hospital bill audit program can be an effective component of a strategy to control health care costs. Certain areas are more productive for audit activities; the audit should be targeted to where the payoff is the highest.
ISSN:0035-5593