Is Noridian Getting The Job Done?
Part 2 in a series analyzing the facts regarding DSO and Denial Rates following the DMERC to MAC change. This article takes a look into Region D.
Effective October 2006, Noridian took over processing claims for Region D. This was responsibility was previously held by Cigna.
The chart below displays the number of Days Sales Outstanding (DSO) and Denial Rates for Infusion products and the HME industry as a whole. September represents Cigna’s last month of processing claims and the Noridian data is from Q4 2006. This data represents dollar weighted averages and is statistically valid (RemitDATA processed over 30 million claim lines in 2006). Dollar weighted averages place value on those claims that matter most to you: the ones with the most cash. It allows those products you sell higher quantities of but receive lower reimbursement for, to not skew the data.
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Cigna
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Noridian
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DSO
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JULY
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AUG
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SEPT
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OCT
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NOV
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DEC
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INF
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96
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123
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109
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65
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73
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80
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All HME
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58
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65
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64
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50
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64
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60
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Denial Rates
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JULY
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AUG
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SEPT
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OCT
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NOV
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DEC
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INF
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41%
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42%
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53%
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27%
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45%
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35%
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All HME
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20%
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21%
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25%
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14%
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16%
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20%
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Regarding DSO for infusion products, we can see a drastic difference from Cigna’s last 3 months (Avg. 109 days) to Noridian’s first 3 months (Avg. 73 days). Contrast that to all HME products where the average 3 month DSO for Cigna is 62 days compared to 58 for Noridian.
Denial Rates for infusion products adjudicated by Cigna show high denial rates of 41% and 42% for July and August and jump drastically to 53% for September. Although Noridian started off relatively well in October with a 27% denial rate, they had a rough November and December. However, Noridian shows a 10 point lower average denial rate for Q4 2006 than Cigna did for Q3 2006. Contrast that to all HME products where the denial rate has seen a gradual increase from 20% to 25% for Cigna and a climb from 14% to 20% for Noridian for Q4 2006.
The transition from Cigna to Noridian has produced slightly lower Denial Rates and lower DSO’s for infusion products. However, the data shows DSO is on the rise, so keep a careful watch on your AR. If you are not sure how to do that or would like to see how your company’s DSO and Denial Rates compare to this data, please contact us at MoreInfo@RemitDATA.com.