Institutional billing for acute care hospitals, critical access hospitals, rural hospitals, specialty and psychiatric hospitals, and hospital outpatient departments.
Hospital revenue does not leak in one place. It leaks in the three days before an admission, in the gap between observation and inpatient status, in off-campus departments billing without the right modifier, and in denied inpatient claims nobody rebills before timely filing closes. The median practice we take on has $118,000 in AR older than 120 days on day one, and 19% of denied claims were never reworked or appealed. Our full service medical billing team works those accounts inside the system you already run.
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Hospital billing services cover the institutional revenue cycle: UB-04 and 837I claim production, revenue and condition coding, DRG and APC validation, observation status review, denial appeals and patient balances. Luxen works inside your existing hospital information system. Across 38 client practices, first-pass denial rate fell from 14.2% to 6.1% within 90 days of onboarding.
Hospital billing is institutional billing, and it does not behave like the professional billing a physician group runs. Claims go out on the UB-04 (CMS-1450) paper form or the 837I electronic format, carry a type of bill, revenue codes, condition codes and occurrence codes, and are adjudicated under IPPS by MS-DRG or under OPPS by APC rather than line by line.
Most hospitals also bill service lines that behave like their own practices: emergency department, observation, laboratory, diagnostic imaging, infusion and drug administration, operating room and anesthesia, and employed physician groups on the professional side. We staff certified coders across all of them.
Five places where hospital money goes missing, from claims we have audited. Dollar figures are Luxen claim audit medians per claim, not payer published rates.
| Scenario | Codes | What goes wrong | $ at stake per claim | Luxen audit finding |
|---|---|---|---|---|
| Outpatient service three days before an admission | TOB 013x outpatient claim, modifier PD | Diagnostic and admission related services are billed separately instead of bundled onto the inpatient claim, and are recouped on audit | $612 recouped per admission | Outpatient services inside the 3-day payment window were billed separately from the inpatient claim on 9% of admissions reviewed |
| Short inpatient stay that never crossed two midnights | Condition code 44, TOB 12x, condition code W2 | The Part A claim is denied and nobody cancels it and rebills under Part B inside the one year filing limit | $1,180 written off per denied stay | Inpatient admissions that did not meet the two midnight benchmark were rebilled under Part B in only 1 of 5 eligible cases |
| Observation hours under reported | Revenue code 0762 observation hours | Billed hours do not match the nursing record, so a composite outpatient stay is underpaid or falls out of packaging | $148 short per observation stay | Observation hours under revenue code 0762 were short by a median of 4 hours against the nursing record |
| Off-campus provider based department claim | Modifier PO, modifier PN | The modifier is missing or wrong, so the line is paid at the wrong site rate or rejected outright | $54 short per outpatient line | Modifier PO was missing on 12% of off-campus provider based department claims |
| Inpatient claim challenged on DRG assignment | MS-DRG, CC and MCC capture | Secondary diagnoses are not documented to the level the DRG was billed at, and the payer regroups downward | $2,940 per regrouped inpatient claim | DRG validation denials made up 14% of hospital inpatient denied dollars |
The three day payment window is the single highest dollar bundling rule in hospital billing, and it is almost never explained on vendor sites. Under section 1886(a)(4) of the Social Security Act and 42 CFR 412.2(c)(5), outpatient diagnostic services and admission related non-diagnostic services furnished on the date of an inpatient admission and the three calendar days before it must be bundled onto the inpatient claim rather than billed separately.
Subsection (d) hospitals paid under IPPS get the three day window. Non-subsection (d) hospitals get one day: psychiatric hospitals and units, inpatient rehabilitation hospitals and units, long term care hospitals, children's hospitals and cancer hospitals, under 42 CFR 413.40(c)(2) and 42 CFR 412.540. Getting the window length wrong for your own facility type creates recoupments in both directions.
The window reaches past the hospital itself. Services furnished in an entity wholly owned or wholly operated by the hospital are inside it, and the professional claim carries modifier PD, defined by CMS as a diagnostic or related non-diagnostic item or service provided in a wholly owned or operated entity to a patient admitted as an inpatient within 3 days or 1 day. Hospitals that acquired practices and never mapped ownership into the billing system are the ones that fail this on audit.
Across claims we have audited, outpatient services inside the 3-day payment window were billed separately from the inpatient claim on 9% of admissions reviewed. In states where one system owns most of the outpatient sites, such as the hospitals we work with in Texas, that percentage is the difference between a clean audit and a six figure recoupment.
Status is the most expensive decision in the building, and it is made by a physician before anyone in billing sees the account. Under 42 CFR 412.3(d)(1), an inpatient admission is generally appropriate for payment under Part A when the admitting physician expects the patient to require hospital care crossing two midnights. Section 412.3(d)(3) allows a case by case exception on documented clinical judgment when the stay will not cross two midnights.
When utilization review determines the stay does not meet inpatient criteria, condition code 44 changes the admission to outpatient, but only if all four CMS conditions are met: the change happens before discharge while the patient is still in the hospital, no inpatient claim has been submitted, a physician concurs with the utilization review committee, and that concurrence is in the medical record. Miss any one and the only remaining path is a self denial.
Under CMS Ruling 1455-R the hospital cancels the Part A claim, submits a no pay Part A claim showing provider liability, and rebills the covered services on type of bill 12x with condition code W2 attesting that this is a rebilling with no appeal in process. CMS is explicit that claims filed beyond 1 calendar year from the date of service will be rejected as untimely and will not be paid. In our reviews, inpatient admissions that did not meet the two midnight benchmark were rebilled under Part B in only 1 of 5 eligible cases.
The Medicare Outpatient Observation Notice (CMS-10611), required by the NOTICE Act and in use since March 8, 2017, must be given to a beneficiary receiving observation services as an outpatient no later than 36 hours after observation begins, or on discharge if sooner. Late or missing Medicare Outpatient Observation Notices appeared in 16% of observation stays past 24 hours we reviewed, and each one is a patient balance dispute waiting to happen. Our denials and AR recovery team works status denials as their own queue, not mixed in with coding rejections.
If your hospital bills from a clinic that is not on the main campus, two modifiers decide what that visit is worth. Modifier PO is reported on hospital outpatient claims for items and services furnished in an excepted off-campus provider based department. Modifier PN identifies a non-excepted service provided at an off-campus outpatient provider based department, required on each claim line since January 1, 2017.
Non-excepted off-campus provider based department services are paid under the PFS Relativity Adjuster at 40 percent of the OPPS rate. That is not a rounding difference. A department mapped to the wrong exception status is billing at less than half its entitlement, or over billing and building a refund liability, on every line it sends out. Since January 1, 2024 intensive cardiac rehabilitation codes G0422 and G0423 and cardiac rehabilitation are paid at 100 percent of the OPPS rate regardless of modifier PN.
Rural and frontier hospitals feel the site of service rules hardest, because a single provider based clinic can be a large share of outpatient volume. That is the conversation we have most often with the facilities we support in Montana.
What the rule says: under CMS Ruling 1455-R the hospital can cancel the Part A claim and rebill the covered services under Part B on type of bill 12x with condition code W2. What it costs: a median $1,180 written off per denied stay in our audits. Luxen finding: inpatient admissions that did not meet the two midnight benchmark were rebilled under Part B in only 1 of 5 eligible cases.
What the rule says: CMS applies the window to entities wholly owned or wholly operated by the hospital, with modifier PD on the professional claim, per the CMS three day payment window guidance. What it costs: a median $612 recouped per admission. Luxen finding: outpatient services inside the 3-day payment window were billed separately from the inpatient claim on 9% of admissions reviewed.
What the rule says: CMS requires all four conditions before submission, including that no inpatient claim has been submitted and that physician concurrence with utilization review is documented, per CMS Transmittal 299. What it costs: the account drops to the slower self denial path and the one year filing clock keeps running. Luxen finding: timely filing caused 6% of denials, and only 4% of those were recovered.
What the rule says: non-excepted off-campus provider based departments are paid at 40 percent of the OPPS rate under the PFS Relativity Adjuster, and modifier PN is required on each line, per CMS Transmittal 12552. What it costs: a median $54 short per outpatient line, on every line the department sends. Luxen finding: modifier PO was missing on 12% of off-campus provider based department claims.
What the rule says: 45 CFR Part 180 carries daily civil monetary penalties, and from January 1, 2026 the file needs an accuracy attestation naming a senior official plus percentile allowed amounts drawn from 835 remittance data. What it costs: penalties accrue daily for continuing violations. Luxen finding: 44% of practice managers could not name the fee basis in their current billing contract, which is the same data discipline problem one level down.
We run the revenue cycle from eligibility to zero balance inside the practice management system you already use. How full-service billing works.
Certified coders review charges against your documentation and payer rules before the claim goes out, so the denial is prevented rather than appealed. Medical coding.
Aged and denied claims are worked to resolution, then the upstream cause is fixed so the same claims stop coming back. Denials and AR recovery.
Benefits are verified and authorizations secured before the appointment, which is the cheapest place in the cycle to stop a denial. Eligibility and prior authorization.
Statements, balance questions and payment plans are handled by the same team that worked the claim. Patient billing.
Payer enrollment and re-credentialing are tracked through to approval, so a lapsed credential never quietly stops payment. Credentialing.
A HIPAA-trained front-office assistant working inside your EHR on calls, scheduling, intake and referrals, alongside the billing team. Medical virtual assistant.
We work inside the system you already run. No migration, no parallel instance, no data export project. Our coders and AR staff log into your environment under your access controls, after the BAA is signed.
If a department is on something not listed here, we learn it. We have never asked a hospital to change systems to work with us.
2 weeks
from a signed BAA to our team working your claims
About 3 weeks
to the first recovered payments on aged AR
20+ years
combined billing and coding experience
Luxen results and audit findings for hospital clients. Company results are from Luxen client data across 38 client practices, January 2024 to June 2026. Audit findings are from the Luxen claim audit of 61,400 claims and Luxen billing reviews of 410 practice billing reviews, January 2025 to June 2026.
Charges from nursing, pharmacy, imaging, and procedures were reaching the account on different timelines. Luxen created a department-level reconciliation and reduced unbilled hospital revenue by $624,000 in five months.
Chief Financial Officer, community hospital
We knew our denial rate was high, but the reports did not show which departments were creating the errors. Luxen traced denials to their source, lowering the rate from 14.7% to 6.1% within two quarters.
Vice President of Revenue Cycle, regional hospital system
Full engagements are written up in our dental practice case study and our ambulance billing case study.
Two patient facing rules now sit directly on top of hospital revenue, and both are enforced with money.
Since January 1, 2021 hospitals must publish a machine readable file of standard charges covering gross charges, discounted cash prices, payer specific negotiated charges and de-identified minimum and maximum negotiated charges, plus a consumer display of at least 300 shoppable services including as many of the 70 CMS specified services as the hospital provides. Effective January 1, 2026 the file must also carry an attestation that the data is true, accurate and complete, name the senior official who oversaw the encoding, report median, 10th percentile and 90th percentile allowed amounts in actual dollars from 835 remittance data over a 12 to 15 month lookback, and encode Type 2 NPIs. CMS began enforcing those revisions on April 1, 2026.
Civil monetary penalties under 45 CFR 180.90 run daily: a maximum of $300 per day for hospitals with 30 or fewer beds, beds multiplied by $10 per day for 31 to 550 beds, and a maximum of $5,500 per day above 550 beds.
Since January 1, 2022 balance billing is banned for most out-of-network emergency services including post stabilization care, for out-of-network items and services delivered at in-network facilities including hospitals, hospital outpatient departments, critical access hospitals and ambulatory surgical centers, and for out-of-network air ambulance transport. Patient cost sharing is set on the lesser of the billed charge or the qualifying payment amount. When a payment is disputed, a 30 business day open negotiation period runs first, and federal independent dispute resolution must be initiated within 4 business days after it ends. Uninsured and self-pay patients get a written Good Faith Estimate.
Those deadlines are calendar work, not clinical work. We track open negotiation and IDR windows alongside eligibility and prior authorization so no dispute expires unworked. The same discipline applies upstream: eligibility and coverage errors caused 24% of denials and missing or invalid prior authorization caused 17% of denials, while 63% of practice managers could not name their top three denial reasons. Hospitals we support in Mississippi see the same split.
3% to 6% of collections
Luxen's pricing generally falls between 3% and 6% of collections, depending on claim volume, specialty, payer mix, and how much of the revenue cycle your practice hands over.
Higher-volume practices usually land toward the lower end. Smaller or more complex practices land higher because there is more work per account. There is no setup fee and no exit fee, and the agreement runs month to month with 30 days notice.
A lower fee attached to weak billing is still expensive. The number that matters is what your collections do after you hire someone.
Luxen charges 3% to 6% of collections. The rate depends on volume, payer mix and how many service lines we carry. There is no setup fee, no exit fee, and the agreement is month to month with 30 days notice.
A community hospital collecting $24,000,000 a year, roughly evenly split between inpatient DRG claims and outpatient APC claims, at a 4% blended rate pays $960,000 a year, or $80,000 a month. Fully loaded in-house billing cost 7.9% of collections for practices under $2M, across 96 practices that shared payroll data, and hospital business offices carry credentialing, coding, CDI and patient balances on top of claim production.
| Line | In-house business office | Luxen at 4% of collections |
|---|---|---|
| Annual cost on $24M collected | Payroll, benefits, software seats, coder contractors | $960,000 |
| Certified coders | Hired and covered for leave | Included |
| Denials and appeals ownership | 42% of practice managers said nobody owns denial follow up full time | Named queue owner by denial reason |
| Open biller role | Open biller roles took a median of 67 days to fill | Not your problem |
| Contract terms | Fixed headcount | Month to month, 30 days notice, no setup or exit fee |
Practices that reviewed AR ageing monthly carried 12 fewer days in AR, and every 10 days removed from AR released a median $41,000 in cash for practices collecting $1.5M to $3M a year. On hospital volumes the released cash scales with the base. We also work the accounts your team stopped touching: we recovered 61% of the dollar value of claims aged 90 to 180 days that practices had stopped working. Patient balances run through patient billing on the same terms.
| Partner type | Institutional depth | Works in your HIS | Cost shape | Risk |
|---|---|---|---|---|
| In-house business office | Deep on your facility only | Yes | Fixed payroll | Single point of failure, 67 day median to fill an open biller role |
| Generalist billing company | Professional billing habits applied to UB-04 claims | Sometimes | Percent of collections | Status, DRG and site of service rules missed |
| Specialty billing company | Institutional rules as the core skill | Yes | Percent of collections | Depends on named accountability by denial reason |
| EHR vendor RCM arm | Strong inside their product | Only their product | Bundled | Leaving the service can mean leaving the system |
| Luxen | Institutional and professional, certified coders | Yes, no migration | 3% to 6% of collections | Month to month, 30 days notice, no setup or exit fee |
52% of practices that switched billing vendors cited missing denial reporting as the main reason, so ask for the report before you sign, not after. You can also compare medical billing companies by state before you shortlist.
A 30-minute look at your AR ageing, denial reasons and payer mix. You leave knowing what is recoverable, what we would work first and what it would cost.
We sign a business associate agreement before anyone touches your system. Your named team then works inside the practice management system and clearinghouse you already use. Nothing is migrated, and claims are being worked within two weeks of the signed BAA.
Aged and denied claims come first because that is revenue you have already earned. Most practices see the first recovered payments inside three weeks.
Once the backlog is moving, we take over the agreed part of the daily cycle: eligibility, coding review, submission, posting, denials and patient balances.
You know who owns your claims. The team works inside the practice management system and EHR you already run, with no migration.
Claims are coded by certified coders against your documentation and payer rules. Automation handles the repetitive checks so people spend their time on the claims that need judgment.
We sign a business associate agreement before accessing protected health information, and access is limited to the named people on your account.
We look at your AR ageing, volume, payer mix and denial profile first, then tell you what we believe is recoverable and what it would cost.
A billing company is a poor fit if you are not willing to share visibility into your billing, if the vendor uses a rotating pool of people who never learn your practice, or if it cannot explain why your claims are being denied. Be wary of anyone promising large collection increases before they have seen your AR ageing. The right partner makes your revenue cycle more visible, not less.
Hospitals run institutional billing out of a patient accounting module inside the hospital information system, most commonly Epic Resolute Hospital Billing, Oracle Health Cerner Patient Accounting, MEDITECH Expanse, or CPSI TruBridge, with a clearinghouse such as Availity or Waystar in front of the payer. Claims leave as an 837I, or on the UB-04 (CMS-1450) paper form where a payer still requires it. Luxen works inside whichever of these you already run.
Luxen charges 3% to 6% of collections, with no setup fee, no exit fee, and a month to month agreement on 30 days notice. For comparison, fully loaded in-house billing cost 7.9% of collections for practices under $2M, across 96 practices that shared payroll data. The rate we quote depends on payer mix, service lines and claim volume.
About two weeks from a signed BAA to working claims, and first recovered payments in about three weeks. We start on the oldest money first, because we recovered 61% of the dollar value of claims aged 90 to 180 days that practices had stopped working. Nothing about your system, your chargemaster or your staff has to change to start.
No. We log into your existing hospital information system and patient accounting module under your own access controls after the BAA is signed, so there is no migration and no data export. 38% of practice managers had changed EHR or practice management system in the past five years, and of those, 71% said collections dipped for at least six months after the switch. We are not going to ask you to repeat that.
If utilization review catches it before discharge and before any claim is submitted, condition code 44 changes the admission to outpatient, provided a physician concurs and it is documented. If the claim already went out and Part A is denied, the hospital cancels it and rebills covered services under Part B on type of bill 12x with condition code W2, under CMS Ruling 1455-R. CMS rejects claims filed beyond 1 calendar year from the date of service as untimely.
Thirty minutes, no deck and no fee. We look at what is sitting past 90 days and where your denials cluster, and you leave knowing what is recoverable, what we would work first, and what it would cost.
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