Getting Paid Faster: Cutting Claim Settlement Time

A hospital's receivables ageing report tells a story that most boards read incorrectly. The story they read is that payers are slow. The story in the data is usually that a large share of the delay happened inside the hospital, before the claim was ever submitted, and a further share happened because the claim was submitted incomplete and came back.

Payer processing time is real and it is largely outside your control. Everything either side of it is not.

What does claim settlement time actually consist of?

Four intervals, and only one of them belongs to the payer.

• Discharge to claim submission. The hospital's own preparation time.
• Payer processing to first response. The payer's clock.
• Query or rejection to resubmission. The hospital's again, and usually the worst of the four.
• Approval to money received and reconciled. Shared, and frequently untracked.

Hospitals that measure only the total, or only "days in receivables", cannot tell which of these is hurting them. The first step is always to split the number.

In most hospitals the first interval is several days and the third is several weeks, because a rejected claim goes into a pile that nobody owns.

Why do claims take days to leave the hospital after discharge?

Because the claim needs documents that were created during the stay but were not collected as they were created.

A scheme or insurance claim typically needs the discharge summary, investigation reports, the itemised bill, the pre-authorisation and any enhancements, implant stickers and invoices where relevant, operative notes, and in some schemes photographs at defined stages. Every one of those existed before discharge. Almost none of them is assembled before discharge.

So a clerk spends two days after discharge collecting documents from the ward, the theatre, the lab and the medical records department. This is not a claims problem. It is a document-capture problem wearing a claims costume.

The fix is to make the claim file assemble itself during the stay: each required document attached to the admission as it is produced, with a checklist showing what is still missing while the patient is still in the building and the people who created the documents are still available.

The cheapest week you can take out of your receivables cycle is the week between discharge and submission, and you take it out by collecting documents during the stay rather than after it.

Why do so many claims come back?

Because the error was made at registration or at the point of clinical documentation, and nobody checked before submission.

The recurring causes are consistent across payers and schemes:

• Identity and eligibility errors made at the counter: a mismatched name, an unverified card, a policy that had lapsed
• The wrong package selected, or a package whose inclusions do not match what was actually done
• Missing pre-authorisation, or a final bill exceeding the sanctioned amount with no enhancement on record
• Documentation that does not support the claim: a discharge summary that omits the procedure, missing implant invoices, absent photographs where the scheme requires them
• Submission after the payer's time limit, which converts a valid claim into nothing

Every one of these is detectable before submission by a rules check. Most hospitals do the check after rejection instead. The specific mechanics for scheme claims are in why PM-JAY claims get rejected, and the first-pass discipline in raising first-pass claim rates.

What happens to rejected claims, and why is that the biggest leak?

They sit in a queue that has no owner, and a meaningful share of them are eventually written off unworked.

This is the least glamorous and most expensive failure in hospital revenue. A rejection is not a loss; it is a task. But a task without an owner, a due date and a visible queue becomes a loss by default, usually silently, and usually discovered at the year-end audit.

What fixes it is unremarkable and effective: every rejection or query becomes a work item with an owner, a reason code, an age and an escalation. Reason codes are the important part, because they turn a pile of individual failures into a pattern. When forty percent of your rejections share one reason code, you have found a process to fix rather than forty claims to chase.

What should the hospital measure?

Seven numbers, split by payer and by scheme, because the payers behave differently and an aggregate hides that.

• Days from discharge to claim submission
• First-pass acceptance rate
• Days from submission to first payer response
• Days from query to resubmission
• Rejection reasons, ranked by count and by value
• Claims approaching the payer's submission deadline, as a live list
• Days in receivables, split by payer and by age bucket

The sixth is the one to build first. A live list of claims about to time out prevents the most avoidable loss in the entire cycle.

How Kōami shortens claim settlement time

Kōami Hospital treats the claim as something that accumulates during the admission rather than something assembled after it.

• Billing, TPA and insurance run on the same record as the care. The tariff and package engine prices against the payer's rate card, and sponsor, TPA and corporate arrangements are configured rather than remembered.
• Approximate and pre-authorisation bills stay live as charges accrue, so an enhancement request goes when the amount moves past the sanctioned limit rather than at discharge.
• Clinical documents produced during the stay — discharge summary, investigation reports, operative notes, implant and consumable records from theatre — are attached to the admission as they are created, because they are created in the same system.
• Charges are captured at the point of care through pharmacy, inventory, lab and imaging, so the itemised bill supporting the claim matches what actually happened without a reconciliation step.
• Audit-ready invoices come out of the billing engine in the format the payer expects, so nothing is reformatted by hand.
• Because it is one system, the claim file, the clinical record and the bill cannot disagree with each other, which removes an entire category of rejection.

If you want to know where your own days are going, the exercise worth running before you talk to any vendor is to split your receivables into the four intervals at the top of this article. Bring that split to a demo and the conversation will be about your numbers rather than anyone's features.