I'm excited to keep rolling with our Payer Playbook series…and this topic will be a two-part post because of how big of an issue this is (and really could be three or four parts). In healthcare payment, it is standard practice for payers to request additional information from providers to review, approve, and pay medical claims. In some cases it's a valid request. In many others…the "additional info required" request gets abused, to the detriment of physicians and health systems. In this two-part playbook, I'll show how certain payers abuse information requests to hold up enormous amounts of money, create unnecessary complexity and burden, and quietly chip away at what they owe providers.
Across all our clients, “Additional Information Request” is the number one denial reason by both volume and dollars. For some payers, we've seen 10%+ of every dollar owed held up for additional information reviews.
It's fair to ask for additional information, within reason. But even the most valid information request puts undue burden on a health system, thanks to the volume, the vagueness, the delays, and the archaic ways payers request and receive information.
Time to payment. We've seen payers take 30+ days to even respond to the initial claim submission to only then ask for additional information. On average, it takes approximately 40-60 days to get paid, versus 10-15 for a “clean claim”. That's roughly 3 to 6x longer to collect money you're already owed, for care you've already delivered. In many cases, these are long-stay encounters…the health system has been paying for doctors, nurses, cleaning crews, supplies, devices, rent, etc for months without getting paid a dime.
Staff burden. The death by a thousand information requests starts before a provider even sends a page. There is no standard process for sharing the information back with the payer. Electronically through an EDI? By fax? Through a payer portal? Epic Payer Platform? The answer changes from payer to payer, and sometimes even from request to request. And if you get it wrong, they won't accept it. Even if you send it in their preferred format, they may lose it. Or they may want more. Multiply that by thousands of requests a year and it's a standing tax on your team.
These requests break down into three main buckets.
This series focuses on the first two, where the real volume and dollars are. In this piece, we're digging into itemized bill requests and what payers do with the bill once they have it in hand.
An itemized bill is exactly what it sounds like, a full line-by-line breakdown of everything billed on a claim, every drug, supply, code, and unit. The claim itself shows the payer the totals.
The payer, or in many cases the payment integrity vendor working on their behalf, won't pay the claim until the provider hands it over, and sometimes takes back money that was already paid.
At one major health system, we saw over $140MM denied for itemized-bill review in a single year, not counting any of the other information requests. Payers’ use of itemized bill request denials varies greatly, from as low as 0% all the way up to nearly 10% of all billed charges being held up for itemized bill requests.
But even if providers filled every single information request with perfect accuracy, it doesn’t end there. When we look at payer responses to itemized bills, we see a much bigger picture. They use the itemized bills and additional information to quietly bundle, underpay for services, and deny line items in small, barely visible ways that often don't raise flags on their own but add up to substantial amounts of money. We have seen payers use a variety of codes to bundle or deny valid charges. We have also seen payers reduce the billed amount on the 835 and then pay the negotiated rate on the lower amount…without any explanation.
On high-cost claims, the stakes are even higher. Many payer-provider contracts carve out expensive cases. Below a certain charge threshold, the payer owes a flat negotiated rate. Above it, the claim flips to a percentage of total charges, which usually costs them far more. So when a bill lands just over that line, they're incentivized to cut enough line items to drag it back under, and pay the flat rate instead of the larger amount they'd otherwise owe under the contract they agreed to.
So why are payers doing this? Well, there are a lot of reasons. The main reasons are:
It’s fair to want to perform itemized bill review, especially with percent of charge contracts, carve outs or outlier/stop-loss cases. The problem is asking providers and health systems to deliver care, sometimes for months in high cost settings, and then saying “I’m not paying you anything until you send me a slightly more detailed bill”.
Through the scale and the burden I outlined above, claims are bound to fall through the cracks, it is inevitable. When a request goes unanswered for any number of reasons: the provider never received it; it wasn't sent back through the channel the payer accepts; the information shared wasn't the exact piece they wanted; the payer says it never arrived. When that happens, the claim just dies. Entire claims quietly pass the timely filing limit and never get paid.
Get seamless at delivering additional information electronically. Some health systems are against this approach because they feel payers will abuse the access to this information. It’s best to have tight processes and confidence in your billing and put the ball in their court. If they have access to the records, they can’t deem a claim “not clean” for lack of an itemized bill. They must review and respond to the claim within prompt pay contractual or state law provisions and your team doesn’t have to manually follow up on thousands of requests, loading thousands of pages onto payer portals, faxes, etc.
Either automate the process of sending documentation immediately upon denial, or give payers access through the Epic Payer Platform or other record sharing services that clearinghouses may offer. Payers may tell you they can't take it that way, or point you back to a fax number, or say “my payment integrity vendor doesn’t have access to that”. Push back. That’s their problem.
Once your processes are airtight and the payer has all available information, they can still ask for more, deny the claim, bundle it, or quietly apply line item edits to pay less than they owe. You have to strictly monitor what actually comes back. A short payment can look like a clean one, so if you're not watching the outcome of every one of these, you won't catch it. Build the monitoring to make sure that once you've sent everything, you're actually getting paid, and getting paid right. That's one of the things we help with at Anomaly.
Finally, step back from the day to day and tackle it at the contract level. Your contract terms can go far beyond rates. You can negotiate terms up front, including a fair exchange of medical records, limits on how long they can hold payment, requirements for specificity on information requests, fees for paper or manual requests, and timely payments once you’ve sent the requested documentation.
A lot of this is being driven by payer payment integrity vendors, and unless your contract limits what they're allowed to do, they'll keep doing it. You have tools at your disposal to make this less of a financial burden to your organization.
Check out Payer Playbook #1: The Weaponization of Policy here and stay tuned for Part 2, where I'll be talking about medical record requests.
