Extended Time-to-Cash from High Denial and Resubmission Rates
Definition
Claim errors such as invalid codes, missing PDPM codes, incomplete documentation, and duplicate submissions routinely delay payment from Medicare and Medicaid for nursing home services. Each denial or return kicks off a cycle of corrections and resubmissions, lengthening accounts receivable days and straining cash flow.
Key Findings
- Financial Impact: $50,000–$200,000 in cash at risk at any time for a mid‑size facility due to delayed reimbursement tied to denials
- Frequency: Daily
- Root Cause: Complex rules, high claim volumes, and insufficient front‑end validation cause frequent coding errors, missing information, and duplicate claims. Industry billing experts report that invalid codes, incorrect patient information, failure to document medical necessity, incorrect PDPM codes, wrong census, and duplicate services are common reasons Medicare and Medicaid deny or delay claims, directly slowing revenue cycle throughput.
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Nursing Homes and Residential Care Facilities.
Affected Stakeholders
Revenue cycle managers, Billing and collections staff, Controllers and CFOs, Administrators, Admissions and intake staff capturing demographics
Deep Analysis (Premium)
Financial Impact
$10,000–$25,000/month. MCO activity claim denials take 30–45 days to resolve. Manual resubmissions add 15–20 days. Incorrect bundling coding causes 25–30% of MCO activity claims to be flagged for review. • $10,000–$50,000 in delayed Medicare reimbursement from late MDS assessments caused by incomplete hospital referrals • $10,000–$50,000 in unrecoverable Medicaid revenue loss per quarter; compounds annually to $40,000–$200,000+
Current Workarounds
Administrator relies on manual discharge checklist; nursing staff completes discharge summary; billing staff submits claim within 2-3 days; if documentation incomplete, claim held and resubmitted later (causing delay) • Administrator requests manual report from Billing Manager; reviews aging report in Excel; holds meetings to discuss 'why denials are up'; no systematic root cause analysis; reactive firefighting when cash gets tight • Administrator requests reconciliation from Billing Manager; discovers errors were corrected 'too late'; no mechanism to recoup underpayment from state; accepts loss and moves on
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Chronic Medicare Part A SNF Denials From PDPM Coding and Documentation Errors
Medicaid Revenue Loss From Unit, Census, and Eligibility Errors
Operational Cost Overruns from Rework on Denied and Audited Claims
Cost of Poor Quality Documentation Leading to Repayments and Revenue Loss
Billing and Clinical Staff Capacity Consumed by Documentation and Audit Burden
OIG and CMS Overpayment Recoveries and Sanctions for Noncompliant SNF Billing
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