Quality Control in Healthcare Credit Balance Management: Why It Matters & How to Do It

Why Quality Control Matters in Credit Balance Management

Poor quality control in a hospital's credit balance management process can lead to various errors that have financial, operational, and compliance implications. If volumes/dollars of resolved credit balance accounts is prioritized above all else, accuracy will suffer and so will the health of your revenue cycle. Below are a few common errors resulting from poor quality control.

Errors Resulting from Poor Credit Balance Quality Control

Overpayments and Underpayments

Inaccurate identification of credit balances can lead to increased overpayments or underpayments. These financial discrepancies negatively impact revenue integrity and can even reduce net revenue.

Billing Errors

Inconsistent or incorrect billing practices may lead to errors in patient bills and statements, leading to confusion, dissatisfaction, and potential disputes.

Compliance Violations

Failure to adhere to regulatory requirements and compliance standards in credit balance management can lead to fines, legal consequences, and damage to the hospital's reputation.

Delayed Refunds

Inefficiencies in the credit balance resolution process may result in delayed refunds to patients or payors leading to patient dissatisfaction, potential legal consequences, and strained relationships with payors.

Inaccurate Financial Reporting

Lack of quality control may lead to inaccuracies in financial reports and statements. Misleading financial information may affect decision-making, hinder strategic planning, erode stakeholder trust, and open the door for further compliance concerns.

Fraud & Mismanagement

Inadequate controls and oversight may create opportunities for fraud or mismanagement of credit balance leading to financial losses, reputational damage, and legal consequences.

Patient Dissatisfaction

Poor quality control can result in billing errors, delayed refunds, and a lack of transparency which may lead to dissatisfied patients, reputational damage, and decreased patient loyalty.

Increased Operational Costs

Inefficiencies in credit balance management processes may result in increased administrative expenses, resource allocation inefficiencies, and reduced overall operational efficiency.

Loss of Payer Relationships

Failure to adhere to contractual agreements with payors may lead to contract disputes and challenges in negotiating favorable terms in the future.

Exposure to Audits & Penalties

Non-compliance with credit balance regulations and reporting requirements may lead to audits, fines, and penalties for failure to meet compliance standards.

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How Hospitals Can Improve Credit Balance Quality Control

Focusing on the origins or root causes of credits is a great place to start. Credit balances can be caused by simple errors made at any step in the revenue cycle process, identifying what is causing these credits can help prevent them in the future.

Next Steps‍

• Audit a subset of resolved credits in regular intervals.
• Collect all data and study the “storyline” of each audited credit balance.
• Establish Quality Control Key Performance Indicators (KPIs).
• Study staff performance and productivity relating to credits.
• Audit and improve credit balance reports.
• Provide ongoing coaching and training.
• Audit the revenue cycle for trends that could be causing credits.
• Make sure payer contracts are up to date with the current contracted rates.
• Educate teams on reimbursement codes found on the explanation of benefits.

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How Crossroads Health Approaches Credit Balance Quality Control

At Crossroads Health, we’ve built a Credit Balance Quality Control Team whose mission it is to improve quality through detailed analysis and by coaching, educating, and making quality a habit across the organization. This team collects data to study subsets of resolved credits across all clients, working to confirm accurate resolutions and provide feedback for improvement to all our credit balance analysts. The result of our investment in Quality Control has been unmatched accuracy and improved performance across the organization, and for our clients.

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For guidance or assistance with credit balance management at your facility, contact Crossroads Health. We are healthcare credit balance specialists, in fact it’s all we do!