MOUNT VERNON — Knox Community Hospital has agreed to a three-year contract with Ovation Healthcare for billing services starting Feb. 1.
The move is part of its strategy of partnering with outside entities to deliver better service.
Chief Financial Officer Danielle O’Brien said the decision involves expertise, technology, and manpower.
“Right after COVID, we lost a couple of billers who had 30-plus years of experience. They knew Medicare and Medicaid inside and out. It was impossible to replace that expertise and knowledge,” she said.
Hospital CEO Bruce White, in February, cited difficulties with insurance providers moving from fee-for-service to managed care.
At the time, he noted that Medicare and Medicaid denied 4% to 5% of claims. However, commercial carriers deny about 15% of claims.
A CBS analysis earlier this month puts the number at 19%.
“Medicare and Medicaid underpaid us, but at least they paid, and we didn’t have to jump through incredible hoops,” White said.
“As they’ve shifted those covered lives over to the advantage programs, which are commercial players, those commercial players are playing games with all of their commercial products. So we’re finding our workload and the complexities of simply trying to bill and collect for what we do are going up substantially.”
White said KCH has limited bandwidth to dig deep into denials. He said that Ovation brings better business intelligence.
O’Brien agreed.
“The complexity of the denials and the claims, and the administrative burden it takes to get paid on a claim, is outrageous nowadays,” she said.
“We just don’t have access to a lot of the BI tools, or business intelligence, where we can really drill down into the claims and look at denials and patterns, identify those, and help us to collect on that reimbursement.”
New contract streamlines complex claims process
In February 2024, a cyber attack hit Change Health Care, the billing clearinghouse KCH used. The attack interrupted the hospital’s revenue cycle.
O’Brien said the hospital partnered with Ovation Healthcare in December 2024 on a one-year agreement to help with accounts receivable that grew after the cyberattack.
“That was really a disruption to our revenue cycle in general. We had a lot of older accounts out there. We just didn’t have the manpower to help with that,” she explained.
“It’s been a success. They’ve collected over $12 million for us on accounts receivable.”
O’Brien said that based on that success, KCH decided to enter a three-year agreement with Ovation.
“It has gotten harder and harder for hospitals, particularly rural community hospitals, to be able to bill and stay on top of collecting and getting the reimbursement for the services that we provide.”
Knox Community Hospital CEO Bruce White
O’Brien said that, from a patient standpoint, KCH has done several things over the past year regarding outside vendors, statements, and the ability to pay bills via text and online, enhancing convenience.
“I think this will be another step into enhancing that customer service, platform, and just the overall billing process as well. So I see this as a positive move for the organization,” she said of Ovation’s extended contract.
“But again, from our standpoint, we don’t see any impact to the patient. Our statements are going to be the same. Our processes, while they may be enhanced and our productivity may be enhanced, a lot of those are going to be the same. We’ll use the same billing platforms and applications that we use today for our billing,” she said.
KCH employees transition to Ovation Healthcare
Ovation met with the hospital and physician billing staff the week of Jan. 5.
“All 42 employees had the opportunity to transition over to Ovation as an employee with benefits Day 1,” O’Brien said. “Most did accept. A couple of them didn’t look for positions within the hospital.”
O’Brien said that about 75% of the billing staff were already working remotely. Under Ovation, all will work remotely.
The CFO noted that employees have greater opportunities to advance within the Ovation organization.
“Ovation Healthcare has really enhanced that service line. They’re up to over 900 employees,” O’Brien said. “If [employees] were looking to get into another area in terms of coding or management or supervising or technology, there’s opportunity for them, whereas in Knox Community Hospital, the opportunity is a lot smaller.”
O’Brien said billing is complicated.
“It’s a process, and our counselors do a great job explaining that with our patients. On the other hand, that’s an area where we have a hard time filling the position for our financial counselors,” she said.
“We used to have five to six counselors on site to work with our patients or to answer questions on the phone. Now we’re down to three, and it was difficult filling those.”
Ovation is responsible for recruiting and replacing employees.
White said insurance companies constantly change their protocols about what is medically necessary. Carriers are not required to notify hospitals of the changes.
“We don’t find out about it when they make the change; we find out later when they deny everything,” he said.
“Having a partner to help us do this piece we think is really going to be beneficial.”