Third-party liability (TPL) claims can be one of the most difficult tasks for a hospital to properly navigate. The time and costs involved can be substantial, and many hospitals lack the required expertise. Still, the reimbursement returns for TPL claims are extremely high and holds significant weight to the overall revenue health of the hospital. Here are a few things you should know:
What are Third-Party Liability Claims?
A third-party liability claim refers to a claim made with a party other than the patient or their health insurance. Typical third parties may include:
- Auto insurance
- Workers’ compensation
- Premises liability insurance
- Product liability insurance
- PIP or medical payments coverage
- State Workers’ Compensation Insurance
- Federal Workers’ Compensation Programs
What Does Mis-Identifying These Claims Cost You?
There are several consequences in failing to identify all possible TPL avenues. A few examples include:
- Many uninsured patients are unable to pay off their bills without financial help. This means that your hospital may have to write off the debt instead of having it reimbursed. In addition, patients who don’t qualify for charity assistance may have to go to collections, which often leads to patient stress and dissatisfaction.
- Medicaid will often not pay out until all possible TPL has been exhausted. In other words, Medicaid may refuse to pay if somebody else was liable for the accident.
- Health insurers may also deny or delay claims if there is the possibility of recouping the money from another source. As a result, this can also cause a significant delay in reimbursement.
Given the weight of third-party liability claims, it is important for hospitals to take the appropriate steps to identify any possible third party liability. While TPL claims typically account for only 5 percent of your accounts receivable, TPL claims hold an extremely large potential of financial reimbursement and positive patient experience .
How Do You Identify Third-Party Liability?
So, what steps can your hospital take to identify third-party liability? Several ways to approach the situation include:
- Make sure that your hospital’s first line personnel properly records the details of an accident. Further, identify and confirm the details of the accident by checking other credible sources, such as with the ambulance workers.
- Have protocols in place for asking the right questions to patients and their families. For example, if a patient comes in with a dog bite, the hospital should ask the patient if they can provide information about who owns the dog. The questions should be designed to determine if third-party liability applies and whether a claim can be processed.
- Ask patients and families not just about health insurance but about other coverage as well. For example, patients with sports injuries may be covered through the coach’s liability insurance. Recreational facilities may also have liability insurance. Additionally, patients who are from out of town may have travel insurance that could potentially cover their hospital charges. Know the different TPL sources available, such as PIP and MedPay, and take advantage of their reimbursement potential
- Be aware of all the rules that apply to each specific claim.
In any case, it is important to determine whether third-party liability is in context and whether a claim should be pursued. Several factors affect the decision to pursue a claim, such as probability of winning the claim, size of bill, expertise, and resources availability.
What are the Obstacles When Trying to Claim TPL?
There are several common obstacles in handling third-party liability claims. While these obstacles are typical, not handling them correctly could deny or delay reimbursement for months.
- Uncooperative payer sources: Insurance companies, attorneys, and other TPL sources are often resistant and may try to avoid paying out on a claim. For example, when dealing with an auto accident, there may be a lengthy legal battle between the two drivers as to who is at fault. In addition, uncooperative payer sources may draw out the process too long to the point where your hospital’s billing staff may accept a lower settlement or even give up on the process.
- Inaccurate information: In the heat of the moment, patients may give inaccurate or even false information, either to protect a friend or family member, or because they are simply not thinking straight. Furthermore, confirming the facts is often a difficult process without designating a specialist to reach out to different entities due to the level of detailed commitment necessary to follow through.
- Lack of necessary resources: Highly specialized knowledge is required to understand benefits coordination and how third-party payer sources operate.
- Complex regulation: There are lots of rules and requirements, many of them state specific. Some states may have specific liability limitation laws that cover specific industries. Different states may also have different negligence rules.
- Length of Process Time: The time it takes a claim to process can be lengthy. Some hospitals lose out on reimbursement because they miss a filing deadline.
Although time-consuming and seemingly-daunting, the rewards to pursuing third-party liability claims are high. When submitted and processed correctly, such claims provide valuable revenue for the hospital, cut down on the patient’s out-of-pocket liability, and improve the overall patient experience. This makes it a win-win for both the hospital and the patient.
As a third-party billing specialist, The Midland Group will help you identify all TPL claims and follow through with the process of submitting, processing, and collecting the claims. Our trained medical billing professionals are familiar with all the tools, rules, and documents needed to submit a successful third-party liability claim. Please contact us today to see how we can help your facility increase your revenue and improve the patient experience.