Report: 2023 billing, revenue integrity, and coding trends

MDaudit released the latest edition of its Annual Benchmark Report to reveal significant trends that impacted billing compliance, revenue integrity, and HIM/coding programs in 2023. Of note, the report includes data on denials and audits for both commercial payers and Medicare Parts A and B.

MDaudit used data collected from more than 650,000 providers and 2,200 facilities in the first three quarters of 2023 for this report.

External payer audits quadrupled in volume in 2023, and they often had tight timelines for initial response and appeals, according to the report. These audits mainly stemmed from payer questions on illness severity, medical necessity, cost outliers, diagnosis, and treatment protocols, said the report.

Auditors focused on high-cost diagnosis-related group (DRG) treatment related to sepsis and major head, neck, and mouth, as well as ear, nose, and throat, procedures for inpatient claims, according to the report. For outpatient claims, the focus was on durable medical equipment related to cardiac and neurological conditions, spinal cord procedures, cancer drugs, and kidney treatments.

Healthcare providers experienced sizeable increases in several audit categories last year, according to the report. DRG code audits increased by 300%, hierarchical conditions coding audits by 170%, and risk-based audits by 50%.

Average dollars per initially denied claim increased by 15% in the professional office setting in 2023, according to the report. However, this figure increased by 30% for commercial payers and 16% for Medicare Parts A and B, the report said.

Commercial payers took longer to respond to inpatient and outpatient claims last year, according to the report. These payers’ initial response time increased to 35 days for inpatient claims and 29 days for outpatient claims. In comparison, the report determined that the initial response times of Medicare Parts A and B remained at 18 and 15 days for inpatient and outpatient claims in 2023, respectively.

Medicare Parts A and B initially denied 34% of inpatient claims and 16% of outpatient claims in 2023, the report said. Commercial payers had an initial denial rate of 31% for inpatient services and 38% for outpatient services, according to the report.

The report also revealed the following top five denial reasons for professional, inpatient, and outpatient claims in 2023:

• Professional
  
  • Documentation request: 23%
  • Eligibility: 17%
  • Duplicate (billing errors): 12%
  • Prior authorization: 10%
  • Non-covered: 9%
• Inpatient
  
  • Bundling: 40%
  • Eligibility: 17%
  • Documentation request: 13%
  • Prior authorization: 11%
  • Duplicate (billing errors): 6%
• Outpatient
  
  • Bundling: 62%
  • Documentation request: 9%
  • Prior authorization: 6%
  • Eligibility: 6%
  • Duplicate (billing errors): 5%

The report also details the top denied codes of 2023, as well as the most frequently overcoded and undercoded service and procedure codes.

Editor’s note: Find more NAHRI resources on denials here.