Crowe report ranks the best and worst states for healthcare claims payment

Crowe RCA software monitors every patient financial transaction from more than 1,800 hospitals and 200,000 physicians nationwide to assist providers in managing their net revenue and monitoring their revenue cycle performance. The latest report uses six revenue cycle key performance indicators (KPIs) to assess payors' claims-paying behaviors in three domains – speed of payment, total payment for services rendered, and payment by a single payor. Crowe observes how health systems performed in each domain and then ranks the 10 best and 10 worst states to operate in for providers collecting healthcare claims.

To evaluate total payment providers are receiving from payors for services rendered, Crowe measures two KPIs: six months' lagged cash to net revenue (percentage of claim value payors paid within six months after a provider rendered services) and final denials (percentage of claims value payors never paid and a provider had to write off). When it came to collecting payment within six months after the service was performed, there was a difference between the best- and worst-performing states of more than 20 percentage points. The top five states with the lowest final denial rate – Hawaii (0.4%), Connecticut (1.0%), Utah (1.1%), Minnesota (1.2%), Louisiana (1.3%) – had a weighted average of 1.0%, a stark contrast to the weighted average of 7.0% for the bottom five states – Georgia (10.4%), Missouri (10.3%), South Carolina (8.6%), Michigan (5.7%), and Pennsylvania (5.4%).

"It is alarming that in the worst-performing states for final denials, healthcare claims were more than five times more likely to not get paid at all," said Colleen Hall, managing principal of the healthcare group at Crowe. "Final denial rates have been rising nationwide, but this data helps us zero in on the states where payors consistently refused to pay claims during the first half of 2023. This ongoing issue is plaguing the industry because it puts an immense strain on health systems' revenue. Providers' financial health is inextricably tied to the quality of care they can provide, so this has a direct impact on patients as well."

Other KPIs examined in the report include initial denial rate, accounts receivable aging greater than 90 days, patient responsibility as a percentage of total allowable, and bad debt as a percentage of gross patient service revenue (GPSR). To identify the best and worst claims-paying states, Crowe came up with a simple scoring system, outlined in the full report. Here are the 10 best and 10 worst states based on claims-paying performance by payors to providers:

"This data paints a picture of how payor claims-paying behaviors vary significantly by state and helps us identify trends by region. It is interesting to see the regional disparity of the data, especially the lowest ranking states, where seven out of ten are in the southern part of the country," added Hall. "Providers can utilize this data to have meaningful conversations with payors to correct systemic and chronic problems."

To download a copy of the latest Crowe RCA KPI benchmarking report, please view "10 Best and Worst States for Provider Claims Payment."

About Crowe Revenue Cycle Analytics benchmarking data
Over 1,800 hospitals and more than 200,000 physicians use the Crowe RCA solution to capture every patient transaction for purposes of automating hindsight, providing accounts receivable valuations and analyzing net revenue. Crowe developed this proprietary benchmarking solution that monitors revenue cycle performance through normalized key performance indicators at healthcare organizations across 47 states and tracks over $800 billion in combined annual gross revenue. To evaluate the overall 10 best and 10 worst claims-paying states in the September 2023 report, Crowe created a simple scoring system. A state that finished in the top five for a specific KPI received 10 points. A state that finished in the bottom five for a specific KPI received two points. A state that finished in between the top five and bottom five on any specific KPI received three to nine points, depending on where it fell in the ranking. The 10 states with the highest point totals make up the top 10. The 10 states with the lowest point totals make up the bottom 10. 

About Crowe 
Crowe LLP is a public accounting, consulting and technology firm with offices around the world. Crowe uses its deep industry expertise to provide audit services to public and private entities. The firm and its subsidiaries also help clients make smart decisions that lead to lasting value with its tax, advisory and consulting services, helping businesses uncover hidden opportunities in the market – no matter what challenges the markets present. Crowe is recognized by many organizations as one of the best places to work in the U.S. As an independent member of Crowe Global, one of the largest global accounting networks in the world, Crowe serves clients worldwide. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world. 

SOURCE Crowe LLP