Healthcare providers withhold R$4.5bn in hospital payments | Business

Conversely, there are instances where hospitals submit incorrect claims, using wrong codes or amounts that health plans do not cover, among other reasons that lead to disputes with insurers.

Fernando Torelly, CEO of Hcor, noted that the average EBITDA margin of the 140 hospitals affiliated with ANAHP (the national association of leading hospitals) is around 12%. “The initial contested rate is getting closer to the EBITDA margin,” he said.

The initial contested rate refers to the percentage questioned by insurers at the start of negotiations. It is estimated that by the end of discussions, this percentage is reduced by half. However, even if a procedure charge is deemed accurate, payment can take years to materialize. “I am currently negotiating contested medical bills from 2022,” said Denise Santos, CEO of BP – Beneficência Portuguesa. She mentioned that with improving economic performance, insurers are more willing to resume discussions—previously, doors were closed as the focus was solely on the crisis.

Nonetheless, this remains a critical issue for the sector. “Currently, contested bills are the biggest problem for hospitals,” said Paulo Chapchap, medical director of Hospital Santa Joana.

Data from Bionexo, a company managing medical accounts for hospitals, shows that from January to October this year, R$801.2 million were contested by insurers. In 2023, R$348.3 million were questioned.

Payment delays disrupt cash flow. “Hospitals need to seek bank loans, with high interest rates, to meet their financial obligations,” said Antônio Britto, a top executive with ANAHP.

Mohamed Parrini, CEO of Hospital Moinhos de Vento in Porto Alegre, criticized insurers for improving their financial metrics at the expense of service providers (hospitals, clinics, and laboratories) by extending payment deadlines, contesting procedure payments, not adjusting rates, or imposing aggressive commercial terms.

Mr. Torelly of Hcor suggested setting a cap on questioned medical bills. This practice is primarily employed by health plans to reduce costs, though some hospitals perform unnecessary procedures during times of low revenue. “I propose renaming the contested bills to ‘index of mistrust,’ which implies a sense of urgency,” he said.

According to Rafael Barbosa, CEO of Bionexo, hospitals still face significant inefficiencies, with errors in payment processes. Mr. Barbosa believes about 10% of insurer disputes stem from incorrect billing codes. “Automating billing processes helps reduce errors. The aim is to prevent misdirected payment requests to insurers,” he said. Bionexo entered the medical account management market two years ago, during which time it has reversed R$411 million in contested claims.