Knowtion Health
Combating Hospital Claims Denials With Innovation

Jayson Yardley, CEO, Knowtion Health

Getting these areas of the revenue cycle resolved quickly and successfully is becoming a high priority these days, as healthcare providers face significant financial pressures and growing urgency to improve denials management. When payment for services is delayed or denied, it can make it more difficult for healthcare providers to fund labor and other operational expenses, make needed investments in facilities and technology, and maintain sufficient cash reserves to weather market shifts and emergencies, such as natural disasters or mass casualty events.

“For hospitals and health systems, denials can easily account for millions of dollars that are being lost,” says Knowtion Health CEO Jayson Yardley.

A Changing Denials Landscape

Much of this revenue loss comes down to the sheer volume of denied claims hospitals are facing. “Denial rates are at the highest that they’ve ever been and continue to grow,” Yardley says.

The average inpatient denial rate has jumped from 11% to 14% from 2020 to Q3 2023, according to the latest data from industry advisor Kodiak (formerly Crowe), which tracks data from more than 1,800 hospitals and 200,000 physicians. For a typical hospital, an 11% rate can equate to more than 110,000 unpaid claims.

What’s more, the future of reimbursement is poised to become even more challenging. Payer capabilities are ramping up. Many private payers have acquired artificial intelligence companies in recent years, with the potential to use automated decision-making to increase denial rates even further.

At the same time, hospital resources to combat denials are challenged. Revenue cycle staffing shortages continue to test many organizations, particularly for those business office positions requiring specialized skills or experience. Hospitals and health systems increasingly rely on partners such as Knowtion Health to manage the nuances of time-intensive eligibility issues and to access legal and clinical expertise to tackle denials stemming from medical necessity or utilization issues.

Knowtion Health’s team comprises experienced nurses, attorneys, and coordination of benefits and appeals experts, many of whom have come from the payer side. With a bird’s eye view of payment trends and performance data to recognize best practices, they enable hospitals to recover more revenue from insurers and achieve faster resolution.

“To access labor with the right skillset at the right cost, whether it’s for denial analysis, utilization review, appeal writing, payer contracting, or any number of these really important roles, it’s just becoming increasingly hard for hospitals and health systems to find and grow the right talent in-house,” says Yardley.

“Focusing on staff alone isn’t enough,” he adds. “Hospitals also need to examine opportunities to drive greater efficiency and effectiveness utilizing technology.”

Keeping up with changing denial trends requires proper tools. Insufficient technology has been a challenge across the industry. Increasingly, new solutions and insights are needed to address today’s complex payment environment, keep up with payer changes, and combat the current wave of denials.

The work we do is so meaningful. The more we succeed at helping hospitals and health systems address their denials, problem and complex claims, and challenging payer classes, the more we support their work in advancing healthcare and the health of communities across America

Knowtion Health’s award-recognized services, supported by its proprietary Claimbrain® technology, works differently in that workflows become pattern-based. Denials management teams benefit from workflows independent from one another, where technology supports “do this, for every type of claim with that.” This approach enables segmenting and prioritizing workflows based on the patterns identified using insurer trends, claims and payment history, and resolution probability to address denials at scale. Machine learning-backed systems automate the most likely next step in the claims process and steer only a limited portion of claims requiring manual intervention to Knowtion Health’s skilled staff to review and complete.

“Payers are investing heavily in new types of technology, especially AI, to support their clinical and technical claim review protocols that trigger claim denials, and organizations like ours are making these same types of investments to keep pace and respond to denials with technology-driven appeals and resolutions,” Yardley says. “We’re constantly building and iterating our technology to meet the payers where they are moving. We’re not only shaping successful appeals and getting claims paid but also predicting the next important tactics to pursue.”

Changes in the use of analytics also are occurring. Because Knowtion Health can work within an organization’s system, for example, working directly in Epic®, it’s easier for hospital leaders to drill down into underpayments and denials issues and garner insights across payment processes. Knowtion Health’s key performance indicator tracking and benchmarking, paired with support from its revenue cycle experts, helps organizations better identify payment opportunities with insurers, address root- cause issues, and use evidence-based insights to guide performance improvements.

Containing Aging A/R

Another critical area of focus for hospitals is managing aging accounts receivable. Payment delays are a growing concern across the industry. A recent study published by the American Hospital Association shows nearly one in three inpatient claims submitted by providers to commercial insurers aren’t paid for over three months.

Against these headwinds, Knowtion Health is playing a major role in helping hospitals reduce aging A/R and improve insurance claim recovery and speed of payment. Typically, healthcare providers have focused their in-house talent on areas with the greatest ROI opportunity: high-dollar, high-volume claims denials. Limited reach means a large percentage of receivables inventory involving low-balance claims isn’t worked as much as desired, leading to lost revenue and the potential for a financial burden to be passed on to patients.

Knowtion Health’s team is able to tackle a hospital’s receivables en masse and achieve higher levels of account resolution. Using technology to identify claim payment probability, its proprietary workflows based on pattern matching, and its team of resolution experts, the company can bring scale to low-balance recovery.

This work can be very rewarding. “For every dollar that we can help collect from the insurance companies on behalf of a hospital or health system, it allows the organization to focus those dollars on the clinical care they’re providing,” says Yardley.

With increased dollars and cash flow at stake, effective revenue cycle management is taking on greater organizational importance. “Historically, hospital leaders have leaned mostly on expense management, new service revenue generation, and debt management to drive cash and address capital needs during tough times. These days, CFOs are paying more attention to underpayments and denials,” says Yardley.

The industry is recognizing denials management efforts play a vital role in an organization’s financial stewardship. “Every day, we’re showing hospitals and health systems across the country how they can minimize their revenue loss and improve cash on hand by getting paid promptly and accurately for the services they have delivered.”