Copyright (c) 2008 Jim Yarsinsky
Due to the rapid change from inpatient to ambulatory care, increased claim denials and growing volume of small dollar accounts, savvy PFS directors are leveraging full optimal performance by transitioning from labor-intensive processes to highly automated processes.
Best performing revenue cycle departments are using IT systems to ensure claims are billed accurately, timely and in accordance with third-party payer regulation. They use add on systems to reduce up-front reject rates and decrease third-party denials. Even if systems are promoting correct data flow, they know whether their current system is fully leveraged to optimize revenue cycle process.
The revenue cycle is extremely complex and the potential for errors is high especially since the average hospital processes hundreds of thousands of transactions each year. Many patient accounting departments are also trying to cut administrative costs. Without proper technology, breakdowns will occur.
You should have an advance insurance verification system. This is a fast growing application that allows providers to quickly identify coverage issues as opposed to having spends time calling payers. Good insurance verification systems go directly to the payer’s Web sites to electronically obtain insurance eligibility, and then automatically post that information to the patient accounting system. Online eligibility helps decrease denials and secures service reimbursement.
Consider automating the ABN process. Manual screening processes create massive medical necessity write-offs. Good ABN software screens for medical necessity on the front end as well as the back end before claims are submitted. If this system is used properly, you can have 100% Medicare compliance when it comes to billing. If necessary, a fully completed Medicare-compliant ABN form can be printed in less than a minute, ready for patient signature, including the estimated cost.
Create a system where missing required 837 elements are automatically routed back to the front-end department responsible for populating them. Once repaired, further automation would allow the HIPAA compliant claims to bill directly when fixed, without manual intervention by the billing department.
Consider automating the Medicare secondary billing process. This process allows claims to be billed to secondary payers before the primary payment has been received. This can result in speeding up payment from eight-to-ten days.
Update or replace bill scrubber technology if your clean-claim rate percentage is not where it should be. This improvement improves accuracy and increases revenue.
It is your best interests to use a system that provides prioritized work lists. Follow-up reps should not “pick and choose” which accounts to work. Accounts should be follow-up on using logic that a supervisor establishes. Use the following:
Online claim-status capabilities to query the status of electronically submitted claims. Performance monitoring tools to provide you with reports showing how well staff is following up on accounts. Cash Posting Automate posting of payments and contractual allowances. This is a huge time saver. Good patient accounting systems will post payments automatically, take write-offs and roll responsibility to next payer or to patient. This will allow cash posters to focus on exceptions rather than manual posting of each payment and denial.
Automate the posting of electronic payer confirmation reports to the notes/comments section of your legacy system.
Denial management implement contract and denial management tools to help manage your contract reimbursements, recover underpayment and successfully appeal low-paid or unpaid claims. It is no longer adequate for the business office to salvage whatever revenue it can through heroic denied appeal activities. Hospitals on average lose 15% of their claims due to denials and other contractual issues. Without a good denial management system, it becomes very difficult to determine why you might be receiving so many insurance denials. A typical 300-bed hospital loses over $3 million a year due to denials and underpayments.
A good denial management system tracks claims by downloading the electronic remittance advice and recording all of the denials that have occurred. It attaches patient information and the reason for denial as well as the dollar amount. If a claim has been returned as additional information, the software puts it into a working queue and then could generate a report indicating when the claim must be returned and the additional information requested about the patient. Each registration and pre-registration employee receives a report with his/her identified errors. They also have built-in forms so the appropriate forms or letters can be generated and forwarded as a cover letter for easy submission back to the payer.
Contract management system automates the process of collecting, monitoring, and analyzing contractual terms with payers. Manually looking up contract rates in contract books for payment variances can be a very time consuming process.
Imaging system stores documents such as remittance advises and patient correspondence that can be retrieved immediately. A good imaging system will help keep patient accounting folks in their seats as opposed to searching through files for correspondence.
In today’s revenue cycle landscape, technology has rapidly evolved and has become more and more of an essential and strategic component for improving revenue cycle performance and reducing accounts receivable.
Perhaps the day will come when hospital business offices will consist of massive computer systems with no patient accounting representatives? Maybe in the future hospital computers will be able to submit bills to payers the day of patient discharge. Possibly payers will process payments that day of receipt and automatically wire payment on the day of receipt. Could hospitals someday see their days outstanding at one, due to full automation?