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Strategies To Proactively Drive Revenue Cycle Efficiency And Reduce Cost

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Strategies to Proactively Drive Revenue Cycle Efficiency and Reduce Cost

 

Managing the revenue cycle in healthcare businesses can be costly. However, if insufficient measures are taken to oversee good billing processes, collectible revenue is often left on the table. Constant annual changes in billing and coding rules make the processes especially frustrating, but smart strategic planning using relevant internal and external resources can help maximize efficiency and reduce costs, thus making the business more profitable.

Internal Monitoring

It’s always important to monitor a few internal figures to identify claims issues. In addition to the daily review of electronic claims denial reports, several monthly agings should be reviewed, including by provider, insurance, and location of service (i.e., by office and hospital, or by a specific hospital if your software has the capability). These reports help isolate a problem source, which can be further examined for common patterns contributing to the lack of payment. Such patterns include no response to claims sent to a certain carrier, which might mean a corrected address is needed. If office claims are denied on established patients, staff might not be getting the information updated at check-in. Or, if a particular provider’s claims are unpaid longer than the others, he or she might need to be educated to provide sufficient information for coding. Review these additional reasons for claims denials, and how you can prevent them.

A Coding Partner Is A Valuable Investment

The services of a coding partner can be a valuable investment for preventing root causes for claims denied. With rules changing yearly, and sometimes quarterly or even monthly, requesting a periodic analysis can provide your business with some easy to digest reports that provide helpful insight into what might need some extra attention in your revenue cycle processes.

Revenue cycle management efficiency can also be improved by staying abreast of potential changes in insurance requirements or issues your peers have experienced. Listening to partners/third parties that your providers work with, such as auditing and coding support consulting companies, like YES, can be a valuable resource for this information. Becker’s Hospital Review provides some perspective on revenue cycle management in this article. Additionally, professional associations for groups such as physician specialties, mid-level providers, pharmacies, etc., often have monthly newsletters and/or articles on their websites regarding billing matters that impact their members. Insurance carriers, too, will sometimes report in their newsletters and website entries that certain coding edits will be added to their systems and claims that don’t pass those edits will reject. Don’t forget that insurance provider representatives can be valuable to help resolve ongoing claims and other insurance matters, so know who they are and maintain good relationships with them.

Having Certified Coders On Your Staff Is Key To Revenue Cycle

Coding is always a key factor in healthcare billing, and keeping your coders up-to-date on rules and new or revised codes is essential to successful revenue cycle management. Having certified professional coders on your staff establishes a solid skill foundation, and as discussed in this article, providing ongoing continuing education by nationally recognized educators ensures that your staff will stay current with codes and coding rules.

Revenue cycle management is complex and not likely to get easier, although practical resources are available. Strategic use of useful outside information (from certified external partners) along with inside monitoring and solid practices, can result in a very proactive drive in revenue cycle management.

End of The Fiscal Year Push!

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End of The Fiscal Year Push!

 

Every organization associated with Health Information Coding has felt the pressure to catch everything up at the end of the Fiscal Year. It helps to understand what is at stake and how you can help.

Fiscal YearFiscal Years (FY) vary depending on the organization. Some correspond to the calendar year, while others start/end at times established for taxing and accounting purposes (The Balance, 2019). Annual Financial reports are generated during this time to show the success or failure of the organization to meet its goals and expectations. Banks and Financial Institutions look at these reports to evaluate their investment and decide whether to raise or lower the rates they charge based on the perceived risk. Administration will use the data to plan for future expansion or contraction. Finance can identify weaknesses in the Revenue Cycle and negotiate contracts with Third-Party Payers. Raises and bonuses rely heavily on positive results. The positive and negative consequences are dependent on collections, cash reserves, and bad debt – all items influenced by timely and accurate coding.

DNFB (discharged, not final billed) is the accumulation of charges for accounts that have not been coded or cleared the Billing edits. This number can get out-of-hand with unnecessary delays that cripple the cash flow and rob the organization of interest it could earn from cash reserves. If bad enough, the organization will have to pay interest on money borrowed to cover expenses that should have been covered by reserves. Rejected/denied accounts can further erode the financial well-being of the organization: billing/appeal deadlines missed, underinsured may pay the first accounts submitted and have nothing left for the late bills, old accounts may be lost and never processed, etc. Community goodwill may also suffer if patients are billed for items or services that should have been covered by Third-Party Payers.

An expensive remedy for delays from coding backlog is to use overtime. Forcing employees to work weekends and evenings may be helpful to their pocketbooks, but can exhaust them, resulting in errors, lower productivity, and disruption of personal plans. The extra cost will also have to be covered in the budget somehow.

Fiscal YearRejected/denied accounts can result in long payment delays from the Payers. To avoid this, it may be better to suffer a short delay by scrubbing the account clean before billing. Edits for missing charges, incorrect dates, wrong physicians, and coding errors can be corrected upfront. However, if these delays are not followed up and fixed in a timely fashion, it can result in other losses: billing deadlines missed, funds may dry up when the patient is underinsured, and old accounts may never get attention.

After the crunch of “dropping everything” is over at the end of the FY, it is an opportune time to look at fixes for these problems. An ounce of prevention is worth a pound of cure. Setting productivity standards and monitoring coding quality will ameliorate some of the mad rush next year. Preventative measures to decrease and monitor holds is another step in an effective, efficient Revenue Cycle program.

Medicare Advantage Insurers Use Reviews to Get Higher Payments

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Medicare Advantage Insurers Use Reviews to Get Higher Payments

 

The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) has flagged payments billed by health insurance companies to the federal Medicare Advantage program after an investigation revealed they might be overstating patients’ diagnoses without the proper documentation to receive larger payments (oig.hhs.gov, 2019). Based on the 2016 Medicare Advantage encounter data analyzed by the OIG, it was found that “Medicare Advantage Organizations almost always used chart reviews as a tool to add – rather than delete – diagnoses; over 99% of chart reviews in our analysis added diagnoses” (oig.hhs.gov, 2019).

Medicare AdvantageAs a result, insurers were able to get an extra $6.7 billion in payments in 2017 from the Centers for Medicare and Medicaid Services (Modern Healthcare, 2019). The OIG stated in its report that for a diagnosis to qualify for a risk-adjusted payment, it must be documented and supported by a medical record from a face-to-face doctor visit. The study found that many of these diagnoses were unsupported by the necessary documentation (oig.hhs.gov, 2019).

In a previous article, YES HIM Consulting discusses the background of Medicare Advantage and how the payments are calculated: “The Centers for Medicare and Medicaid Services pays each Medicare Advantage Organization (MAO) a monthly per-person amount for each beneficiary enrolled in its plan. The plan payment rates are determined by the plan’s bid, which is submitted to CMS on an annual basis. The per-person amount paid to each plan for enrolled beneficiaries is adjusted to account for differences in health status between enrolled beneficiaries.”

Medicare AdvantageAnd, since MAOs are paid more for sicker patients due to the higher medical costs, insurers will go to great lengths to find as many diagnoses to tack on for greater payments, including hiring third-party vendors to audit medical charts and identify additional diagnoses. The OIG report found that in 2016, “a total of 553 Medicare Advantage Organizations submitted 52.6 million chart reviews for risk-adjustment purposes, for an average of more than 95,000 reviews per insurer” (Modern Healthcare, 2019).

However, a spokesperson for America’s Health Insurance Plans says the report from the OIG may be inaccurate, because it analyzed encounter data, which is often considered incomplete or incorrect, and not the actual medical records (Modern Healthcare, 2019). This method would potentially reduce insurers’ payments.

This instance is not the first time that MAOs’ risk-adjusted payments have come under scrutiny. A different audit by the OIG revealed that Medicare Advantage plans were overpaid by millions of dollars due to over-exaggerated, unsupported risk scores (Modern Healthcare, 2014). In the OIG’s latest report, 40.6 million chart reviews were submitted, ultimately adding diagnoses, and almost half of those reviews (41%) had no records of an office visit, test, procedure or other methods to justify such diagnoses (Modern Healthcare, 2019). In addition, an OIG report from 2018 found that MAOs inappropriately denied medical claims to increase profits (The New York Times, 2018).

Medicare AdvantageTo more accurately support these risk adjustments going forward, the OIG laid out several recommendations: First, the Centers for Medicare and Medicaid Services oversee the MAOs that received payments from unlinked chart reviews and no service records; Next, they conduct audits that confirm the diagnoses listed on chart reviews; And lastly, scrutinize the risks and benefits for accepting unlinked chart reviews for risk adjustment consideration (oig.hhs.gov, 2019).

Crafting Your Organization’s Strategic Plan For A Successful Year

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Crafting Your Organization’s Strategic Plan For A Successful Year

 

The healthcare and health information management industry is no stranger to constant changes and evolutions. To successfully navigate the future – and be prepared for anything – healthcare organizations need to craft a strategic plan. But what does strategic planning entail? “Strategic planning is the process of documenting and establishing a direction of your company – by assessing where you are and where you’re going” (The Hartford/Small Biz Ahead, 2018).

Strategic PlanA strategic plan is beneficial for everyone: It allows the company owner to identify which goals will help grow the organization, and it helps the employees foster that growth by accomplishing the necessary objectives and increasing productivity. By including your employees in the planning process, you create a sense of ownership and accountability for the plan to succeed. Bottom line: Everyone is on the same page about the company’s direction and goals.

The strategic planning process should include:

  • Company Goals, Values, and Mission: Setting your company goals, values, and mission provides the framework of a strategic plan, and may be the most important step of the process. To successfully execute your strategic plan, you need to set performance benchmarks, and identify the initiatives to achieve that growth. For an example, review AHIMA’s strategic objectives they planned for 2018-2022.
  • Establishing Partnerships and Securing Clients: Without partners and clients, your organization would not be a success. It is paramount to dedicate a portion of your strategic plan to making new connections that will help your business grow. Identify all stakeholders in your industry, and develop a proposal that demonstrates your value and how your companies could work together for a profitable future for both parties.Strategic Plan
  • Creating a Budget: Your organization likely does not have unlimited financial resources, so it is crucial to set monetary boundaries that allow you to achieve your goals and meet all objectives without breaking the bank. Your company partnerships may help increase your budget, giving you flexibility on how you meet your goals.
  • Continuing Education for Coders and Auditors: There is a plethora of organizations that are in constant need of skilled, qualified medical coders and auditors. Build time into your plan for continuing education to ensure your team maintains the knowledge they need to make your organization successful. In addition, by encouraging ongoing education, you will increase your coder and auditor retention, as well as your return on investment.
  • Communication and Brand Guidelines: According to the Journal of AHIMA, one of the 10 best practices of strategic planning is communication. “Develop coherent strategic plan messaging using tools such as blogs and social media, newsletters, brown-bag [informal] meetings, conference presentations, collaborative tools, and FAQs. Execute outreach relentlessly” (Journal of AHIMA, 2013). Use trade shows to get your organization’s name in front of the companies with which you want to do business. Establish your brand guidelines, and adhere to them in all internal and external communications.

Most importantly, remain flexible and ready to adapt your plan to fit your current situation as needed.

Revenue Cycle Management 101: Impact of ICD-10 Coding in Inpatient RCM

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Revenue Cycle Management 101: Impact of ICD-10 Coding in Inpatient RCM

 

Revenue Cycle Management is a method of tracking patient care episodes from registration to final payment.  Briefly, the cycle starts with admission, then care is provided, documentation and charging for services follows, then ICD-10 coding, later billing, and finally collection.

Revenue Cycle Management

We can’t delineate this process without considering Errors & Denials and Claim Follow-up. Much of the revenue is collected on the back-end, after discharge.  Until the patient bill is paid, vendors, staff, equipment, overhead, etc. are paid through loans or bonds.  Hence, there is an incentive to code and bill efficiently, to limit the interest paid.  Revenue can also be totally lost if contractual billing deadlines are not met, or if there are limited funds available and paid on first-come first-served basis.  Don’t be last in line.

When leadership makes decisions based on the assumption that ICD-10 coding impacts the revenue cycle process while only in the coding stages of the process, opportunities to decrease DNFB (discharged, not final billed) days are missed. As consultants, we see that accurately and timely coding is not always enough. Keeping the coding staff informed of the DNFB on a daily basis, has a tremendous impact on keeping the unbilled accounts within expected dollar figures. As coded encounters go through the coding and reviewing process, coding managers and staff must be understood as essential components in the RCM process. Here is a brief overview of how ICD-10 coding can impact in various stages within the RCM process. This overview provides a good start for decision makers to assess and identify key aspects in which ICD-10 coding can improve DNFB.

Revenue Cycle

  • Clean bills avoid delays with claim rejections. If everything is correct the first time, there is no need to reprocess and rebill the claim.  Many third-party payers use DRG (diagnostic related groups) to determine payment.  This system was developed to standardize payments to hospitals for similar admissions (Pneumonia, Appendectomy, Stroke, Hip Replacements, etc.).  Encoders are available to help find the appropriate diagnosis and procedure codes and select the DRG.  They also identify age/gender edits, inappropriate principal diagnoses, and assist with sequencing of diagnoses and procedures.
  • Scrubbers are billing programs that do a final check before releasing the bill. They can find medical necessity issues, and errors in abstracting (procedure date, surgeon, and disposition).  These errors will need to be returned to coding for correction.
  • Assistance from coding may also be needed in the appeals process of claims rejected by third-party payers. There is a tendency to let these claims sit and miss deadlines for appeal, even if the cause is due to a minor technicality that can be easily corrected.
  • Retrospective Audits can be another tool to assist the revenue cycle process. They provide expertise in identifying coding and sequencing errors that can result in over or under payment.  They can provide education to the coding team, keeping them current with quarterly and annual updates.  They can also provide reassurance against major coding issues that can result in negative third-party payer or regulatory agency actions (intensified review, fines, and/or penalties).

Pay close attention to what can impact ICD-10 coding efficiency as well. ICD-10 coding can be affected by resources downtime, staffing shortage, holds for missing documentation and quality review.  Investing in reliable equipment and redundancy will limit the first item.  Staffing shortage can be managed by overtime, contract coding, and/or hiring additional staff.  Productivity should also be monitored.  Timely resolution of Holds requires Identifying the correct party to resolve the hold, and making them responsible.

End-to-end patient experience becomes top priority in today’s evolving revenue cycle

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End-to-end patient experience becomes top priority in today’s evolving revenue cycle

 

Regardless of how good the average experience of a patient has been during their time at any given healthcare system, what often determines their general memories of their experience is the financial resolution that follows after. High costs and/or a difficult payment process can tarnish a patient’s perception and greatly affect their opinion on said healthcare system as a whole. One of our own team members experienced a similar situation in which she chose not to return to one of her specialist doctors because their outpatient coder mishandled her bill, resulting in her insurance not covering the charge and her bill sitting in revision. In today’s world, you can leave a review of your experience virtually anywhere where payment is exchanged. It is because of this that health systems need to prioritize reinforcing the structure of their back end and front end financial processes to make them look, feel, and behave more like online retail or personal banking environments.

Patient Experience

“Patient payment behavior is changing the revenue cycle. Rising insurance deductibles and higher out-of-pocket medical expenses mean up to 30% of a health system’s revenue is now derived from the patient-as-payer population” (Visitpay.com, 2019). The revenue cycle of today has drastically changed from that of the past few decades and is only continuing to evolve as technology continues to advance, enabling patients to have a greater role in the process. As with many processes in the healthcare industry, revenue cycle has turned into a hybrid of the old structures and guidelines and new methodology. The way in which patients pay their bills has continued to change as well. “Rising insurance deductibles and higher out-of-pocket medical expenses mean up to 30% of a health system’s revenue is now derived from the patient-as-payer population.” (Visitpay.com, 2019).

Segmentation

An answer and stand-out solution to the question of what can be done to bridge the gap between patient and provider, improving the end-to-end patient experience, is segmentation. Market segmentation in regard to the healthcare industry is a process by which medical services are designed and targeted to meet the specific needs of a particular group of customers. Utilizing this technique can help revenue cycle teams engage patients more meaningfully. It is obvious that the patient to provider ratio is staggered, meaning that you can’t engage with every patient as an individual. But in using market segmentations, health systems gain a way to address the needs of different groups of patients who exhibit similar characteristics.

Segmentation

The technique of segmenting, or breaking down a huge audience into smaller, more personalized groups is one that is used across all industries. Sales, hospitality, and retail along with numerous other “consumer-facing” industries make use of segmentation in order to personalize their approach and mold their information in a way that gives the consumer reassurance in feeling like their needs are being met, while not taking on the impossible task of reaching out to each one individually. Providing patient-tailored and consistent financial information throughout the care process is the answer to connecting with and meeting the patient’s needs and giving them peace of mind, while avoiding the confusion and stress that can result from the financial experience that follows.

Value-Based Care: Trends and Challenges in Revenue Cycle Management

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Value-Based Care: Trends and Challenges in Revenue Cycle Management

The effectiveness of value-based care models is measured based on how this type of reimbursement can improve the quality of a patient’s overall health. Reducing hospital readmissions and improvement in preventive care are good examples of critical factors to assess the effectiveness of these models. U.S. legislation is clearly moving towards the adoption of value-based care models; in 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) put into place multiple quality programs under the new merit based incentive payments system (MIPS). The Health & Human Services Department (HHS) established the objective to convert 30% of Medicare charges into value-added payment models by the end of 2016. By 2018, the Agency’s objective was to make a transition to 50 percent of conventional payments.

Future Trends

Revenue Cycle Management (RCM) systems will eventually assist the industry in transitioning from fee-for-service to value-based reimbursement. The analytics of many of these RCM systems enable payers and providers to look at their patient population in more detail, such as the number of chronic disorders in their patients, allowing payors and providers to monitor claims data and identify potential abnormalities.

Revenue cycle managers are betting on data analytics to try to improve every phase in the revenue cycle process, in order to eventually obtain more cash flow from each phase. Information is being consolidated and evaluated to drive business process changes across the revenue cycle process, from scheduling appointments to claims denials. RCM systems will in due course, streamline routine processes such as claims processing and payer denials prevention.

Future Challenges

Challenge One: Lack of integration

Revenue cycle managers work with historical data from differing financial and clinical information systems. However, many hospitals and health systems have not been integrated to this level. The number of disparate information systems can continue to increase when hospitals merge and purchase physician practices and other healthcare entities. The incorporation of data from external sources can also contribute to the challenges of standardization. Large-scale analytics is still a considerable challenge, resulting in a lack of an all-inclusive view of a patient’s record.

Challenge two: Lack of preventive education

Many reimbursement problems arise from human errors, such as incorrect coding, missing items on a patient’s account, and problems with insurance eligibility. Health organizations that proactively promote appropriate coding techniques, comprehensive chart documentation, and financial policy reinforcement, have consistently reduced turnover and medical errors, which results in a reduced amount of denied claims.

Value Based Care

 

Challenge three: Lack of visibility and control on claim submission-denial process

Following up on a claim throughout its lifetime is another major challenge for healthcare revenue management. Healthcare professionals should closely monitor claims processes to identify errors. Revenue may be lost unless providers can identify where problems arise and quickly resolve mistakes. Providers can usually receive automated alerts or have a dedicated data analysis resource to produce custom and automated reporting, with the objective of identifying why payers deny claims for certain methods or codes routinely.

 

YES HIM Consulting, Inc. Largo, Fl.
Office: (727) 531-3839       Fax: (727) 240-4592