Vector Health finds missed insurance coverage with Stedi
Vector Health is a healthcare technology company that recovers revenue for rural hospitals.
There are over 3,000 rural hospitals in the U.S., serving over 60 million Americans. Roughly half of those hospitals have negative operating margins. Vector helps them collect revenue they've earned but haven't billed payers for.
Challenge
When a patient arrives without an insurance card, the hospital books the visit as self-pay. That means the hospital has to bill the patient directly and try to collect payment.
A patient who can't pay their hospital bill becomes a write-off. Those write-offs come out of the hospital's operating margin.
Many of those patients do have insurance coverage. It's just that an eligibility check isn't always possible at intake. The patient may not have their member ID card. Or they may have switched plans. But they still need to receive care.
"Once patients walk past the front desk, no one is doing discovery or verification. Hospital RCM isn't doing it," says Braden Fineberg, co-founder of Vector Health. "Huge chunks are just falling through the cracks. Somewhere between 10-30% of patients have insurance. It's just not being collected."
"Somewhere between 10-30% of patients have insurance. It's just not being collected."
Hospitals kept asking Vector for an insurance discovery solution – a way to find coverage for self-pay patients using only demographic information, like name and date of birth.
Solution
To offer insurance discovery, Vector integrated Stedi's Insurance Discovery API into its product, the Vector IDV portal.
"Stedi's API was easy to work with," says Braden. "I had new features up and running in a weekend."
"Stedi's API was easy to work with. I had new features up and running in a weekend."
Hospital staff can use Vector IDV to run discovery checks on patients before or after intake. The portal displays the results in plain English.
When coverage is found, staff can follow up with an eligibility check that's powered by Stedi's Real-Time Eligibility API.
The discovery check answers whether coverage exists. The eligibility check returns more detailed benefits information, like copays, deductibles, and out-of-pocket maximums.
"We're pushing more customers to verify after they discover, to pick up additional granularity on the plans. It makes it much more actionable when they actually know what to bill a patient at registration," says Braden.
Results
Stedi's insurance discovery checks find active coverage for 35% of the self-pay patients Vector runs through them. That rate is almost 3x the industry average for other discovery tools and higher than the 26% hit rate Stedi typically sees for emergency medical services.
And it translates into real dollars for the hospitals that Vector serves. Vector reports that a hospital moves $500,000 per month from self-pay to insurance billing.
On average, a hospital moves $200 to insurance billing for every dollar it spends with Vector. Most hospitals see their first recovered dollars within 30 days of signing.
"Large health systems have had these financial tools for 20+ years. Nobody built a version for rural. We did," says Annie Klomhaus, CEO and co-founder of Vector Health. "Even a modest revenue lift matters to whether they stay open."
Stedi gives Vector the infrastructure it needs to build on.
"We didn't have to build any of the payer infrastructure. We plugged into Stedi and shipped," says Braden.
"We didn't have to build any of the payer infrastructure. We plugged into Stedi and shipped."
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