Billing, coding woes among leading cause of healthcare waste, JAMA study says

October 9, 2019

According to a recent study on healthcare spending published by JAMA, nearly a quarter of all healthcare spending in the U.S. is waste, with administrative complexity such as billing and coding making up the largest portion of the waste.

The analysis pegs the total amount of annual healthcare waste in the U.S. at a figure ranging from $760 to $935 billion, an imposing total to be sure. However, the largest contributor to that waste is what the study’s authors term “administrative complexity,” which the study estimates totals nearly $257 billion annually. This includes billing and coding waste in addition to hours physicians commit to quality reporting requirements, such as CMS’s Quality Reporting Program.

Of that total, $230.7 billion to $240.5 billion can be attributed to pricing failure, according to the study.

While the study’s authors suggested this waste could be mitigated by implementing value-based payment models, there’s also a great deal of savings that could be realized simply through routine billing and coding audits.

With the rapidly evolving payer landscape, there are simply too many changes being implemented for billers and coding teams alone to stay on top of. This is why routine quarterly billing audits offer a safeguard against changes and errors that generate claim denials — and often offer a way to appeal these denials prior to timely filing deadlines.

You’re not alone if you’re not currently auditing or putting processes in place to identify and reduce waste. According to the study, employers acknowledge waste is an issue, however, roughly 60 percent do nothing to manage the issue.

So, why not be proactive and stop contributing to the status quo? At Vachette, we specialize in billing and coding audits for labs, practices and hospitals that are specifically designed to identify and reduce the issues directly adding to this waste total.

Give us a call 517-486-4262 to discuss in detail what this process would look like for your lab or group.

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