Most hospitals would likely benefit from third-party liability insurance coverage, says ERI

By | January 25, 2019

Citing dramatically increased costs and concurrent drops in insurance reimbursement, an article published by Emergency Recovery Inc. in its Rev Cycle Quarterly publication laid out a case for most U.S. hospitals to secure third party liability coverage, or TPL, describing what Celler Organization and Celler Law founder Bobbie Celler called the “genesis of a perfect financial storm.”

TPL reimbursements can recoup as much as 100 percent of charges levied, if handled correctly. And they pay double commercial rates and more than triple governmental plan rates.

It’s an alternate reimbursement stream that would seem to be a bulwark against bankruptcy and financial ruin.

IMPACT

Despite the broad nature of TPL coverage, it’s not the same as traditional insurance. TPL coverage is notoriously nuanced and complicated, specifically requiring both a legal education and experience working in the field to successfully navigate the system.

It’s becoming more popular with hospitals, but a lack of expert TPL representation can quickly cost those same hospitals revenue. Considering the amount of time and consult fees as well as legal fees from possible lawsuits, hospitals have little wiggle room for mistakes.

TPL insurance can cover virtually any type of accident, from health to motor vehicle accidents as well as “slip-and-fall” accidents and workers’ compensation claims.

Across the nation, missing revenue from internal processes, venders, adjustments and write-offs can easily reach into the billions of dollars annually for hospitals and other reimbursement seekers. The article concludes that it’s an unaffordable and unsustainable model.

THEIR TAKE

“It’s no wonder why hospitals are always being sued for balance-billing issues,” said Celler. “Most of the ‘MVA specialist’ vendors they use are really just glorified billing companies.”

THE TREND

The suggestion to hospitals to tap TPL expertise was framed as a potential strategy for tightening up a hospital’s revenue cycle. Reigning in revenue cycle losses has long been a focus at U.S. hospitals.

Even though hospitals have benefitted from a cost focus over the past few years in terms of having healthy margins — despite cuts to reimbursement — revenue cycle performance has lagged across key areas and it now costs more just to achieve flat performance.

This cost focus has cost hospitals, according to a 2017 Advisory Board analysis, with the average 350-bed hospital missing $ 22 million in revenue capture opportunities.

President Donald Trump on Wednesday said he wants to take action on balance billing to protect Americans against surprise healthcare bills caused when they inadvertently see an out-of-network provider, according to ThinkAdvisor. Trump made his comments during a roundtable discussion on transparency in healthcare pricing.

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com

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