Best Practices In Revenue Cycle Management: A Guide To Optimizing Your Revenue Cycle In A Value-Based Market T h e 2 0 1 8 O P E N M I N D S M a n a g e m e n t B e s t P r a c t i c e s I n s t i t u t e W e d n e s d a y, A u g u s t 1 5, 2 0 1 8 2 : 3 0 p m 3 : 4 5 p m J o e N a u g h t o n - T r a v e r s, S e n i o r A s s o c i a t e, O P E N M I N D S www.openminds.com 15 Lincoln Square, Gettysburg, Pennsylvania 17325 717-334-1329 info@openminds.com
Agenda I. Introduction To Revenue Cycle Management & Its Importance A Value- Based World II. Utilizing Analytics To Improve The Revenue Cycle III. Simplifying Revenue Cycle Management: The ABCs IV. Questions & Discussion 2
I. Introduction To Revenue Cycle Management & Its Importance A Value-Based World 3
Revenue Cycle Management In A Value-Based World To thrive in a value-based world, ensuring the highest rates of claim collection is critical so that provider organizations can manage cost, care, and outcomes across the entire episode of care. This requires a finely tuned revenue cycle management system. Many organizations typically only collect 80% of Medicaid services that are billed! Target collection rates in health care should be roughly 95% or more of net revenues, depending upon payer! 4
Revenue Cycle: A Continuous Process Goal of shortening the timeframe of the cycle a shorter timeframe will maximize cash Services are provided up front but payments are not received until later cash is needed to bridge the gap A shorter revenue cycle will free cash for other important purposes (stability, emergencies, growth)
A Typical Facility-Based Notion Of The Revenue Cycle Patient Access Patient Payment Resolution Registration & Scheduling Remittance Management Patient Intake Revenue Cycle Denial Management & Appeals Service Delivery & Documentation Claims Submission & Tracking Charge Capture & Coding Utilization Review
Phase 1 Phase 2 Phase 3 Phase 4 Four Phases Of The Revenue Cycle Referral & Intake (Prior to services) Verifications Authorizations Service Delivery (During services) Credentials Documentation Billing & Collections (Following services) Claims submission Denials management Payment receipt and posting Monitoring & Process Improvement (Ongoing) Analytics Process improvement
Referral & Intake: Eligibility Insurance eligibility and benefit verification should take place before the initial client visit and be verified regularly thereafter Staff should have a working knowledge of insurance plans and coverage options Publicly provided benefit plans will have a well defined benefit set; commercial plans will require knowledge and interpretation Benefit eligibility should be reviewed with the client prior to services
Referral & Intake: Insurance Verification Information typically needed: Name of client Name of subscriber, if different from client Insurance ID number Date of birth of client (DOB for subscriber) Home address and home phone number
Referral & Intake: Insurance Verification Obtain eligibility and benefits through a variety of avenues Web-based tools like Availity and Emdeon Many payers (commercial & Medicaid HMOs) have their own web portals that can be accessed with user IDs/passwords to obtain member eligibility and benefits, and, in some cases, clinical authorizations, and web-based billing The old stand by calling on the telephone
Referral & Intake: Authorizations Clinical authorization process should be identified at the time of confirming benefit eligibility Each payer with have a specified process for obtaining required authorizations Authorizations will need to be tracked; most EHRs have functionality to track the number of authorized services provided and remaining
Referral & Intake: Authorizations Why are clinical authorizations so important? If authorization was not attempted, for whatever reason, most payers will deny these services and they must be written off. The client cannot be balance billed. The agency, in many cases, will not have access to the payer s appeal process because it is considered an administrative denial. Clinical Authorization In some cases, you are able to obtain initial and follow-up visit authorization at the time of verification Some payers authorize an initial assessment and several follow-up visits (3-7 visits at a time) Some payers are very specific about CPT codes, providers, and diagnosis codes
Referral & Intake: Clinical Authorization Some payers will authorize out-ofnetwork services so that members can access their out-of-network benefits Although the verification and/or intake staff can obtain the initial authorizations, in general, the treating clinician will be responsible for obtaining any ongoing clinical authorizations (through phone, web portal, faxing outpatient authorization report)
Service Delivery: Credentials Verify and document credentials when clinicians are hired Document which provider networks require credentials for various services Ensure clinicians are credentialed with networks and renew prior to expiration Assign tracking of credentials to a specific person and integrate the process with the HRIS and EHR Assign staff to clients and services based on required credentials
Service Delivery: Documentation Service documentation should ideally be collaborative (with the client) and concurrent (at the time service is being delivered) Required documentation should be completed prior to service delivery (DA, goal plan, other assessments) Charge capture should be standardized and ideally configured behind the scenes in the EHR
Service Delivery: Charge Capture & Billing Charge Capture & Billing Make sure that you have processes in place (electronic and/or paper) to capture the services rendered by your providers Provide clinicians with a boiler-plated charge ticket with the most commonly used CPT codes (90791, 90834, 90837, 99204, 99214) Have an established process to review charge information and account for all services rendered before the services are billed
Billing & Collections: Claims Submission Claims submission must be complete, accurate, and timely Process maps to account for all roles and tasks Billing checklists Claims scrubbing utilize EHR billing edit features to check for required documents, dates, workflows Submit claims as soon as feasible the sooner submitted, the sooner converted to cash
Billing & Collections: Billing Follow Up Determine whether the billing denial is related to a revenue cycle issue or a payer issue If a revenue cycle issue, then what step? If a payer issue, begin the process of working the denials
Billing & Collections: Billing Follow Up Review the information gathered at the verification process Confirm whether required authorizations were obtained Confirm that credentials are up-to-date Review the quality of the documentation
Billing & Collections: Billing Follow Up Staff should be familiar with payer s claims adjudication process (State Prompt Pay laws, contractual requirements) Consider developing an appeals process when services are denied because of medical necessity Track your denials by payer; reach out to your payer s provider relations staff and meet with them on an as needed basis to resolve issues
Billing & Collections: Billing Follow Up Working With Self Pay Clients Most volatile payer source Establish financial expectations upfront (develop tools to assist in revenue capture) Develop decision point for financial noncompliance (notify treating provider) Develop policy regarding treatment of clients with unpaid self pay balances
Billing & Collections: Cash Receipt & Posting Timely processing minimize the time from service delivery to cash Compare payments received to amounts billed Analyze adjustment codes
II. Using Analytics To Improve The Revenue Cycle 23
Monitoring & Process Improvement: Analytics Analytics consist of the tools and techniques to explore, analyze, and extract value and insight from health care data
There Are A Number Of Basic Analytics That Can Improve The Revenue Cycle The best analytics will allow analysis by potential root causes Process issues Staff or clinician issues Payer issues not all payers interpret benefits the same or have similar processes. Example: Billing Performance Index
Analytics: Collection Ratio The ratio of total collections to charges Time series analysis a declining % indicates an issue A gross figure doesn t allow analysis by internal process, clinician, or payer
Analytics: Days In Accounts Receivable The average number of days cash is tied up in accounts receivable Ratio is easy to compute and trend Note: Does not include the number of days before billing was submitted A gross figure doesn t allow analysis by process step, clinician, or payer
Days Analytics: Days In Accounts Receivable AVERAGE COLLECTION PERIOD 45 40 35 30 25 20 15 10 5 0 Months
Analytics: Aged Accounts Receivable Can be tracked in age categories Less than 30 days 30 60 days 60 90 days 90 120 days Those claims over 120 days have a small probability of collection Benchmarks can be set for each age category
Analytics: Aged Accounts Receivable Can be trended over time $1,200,000 AGED RECEIVABLES Current 30 Days 60 Days 90 Days $1,000,000 $800,000 $600,000 $400,000 $200,000 $0
Analytics: Aged Accounts Receivable Can be analyzed for quality of the receivables at a specific point in time 30-60 days 13% 60-90 days 2% Aged Receivables > 90 days 7% Current 78%
Analytics: Denials Analysis Adjustment Codes Analysis Documenting denial and adjustment codes can create the data needed for comprehensive analysis The EHR can be used to capture and report the codes Analysis of the data can lead to insights and corrective actions More comprehensive than dealing with each claim individually
Analytics: Denials Analysis Analysis of top adjustment codes to determine process issues (835 or Custom Codes): Improper Provider Credentials Missing Authorization Filing Time Expired Service Not Covered By Benefits Incomplete Claim Information
Analytics: Denials Analysis Analysis of adjustment code by Type 25 Adjustment Codes By Type 20 15 10 5 0 Missing Authorization Incomplete Claim Information Filing Time Expired Service Not Covered Improper Provider Credentials
Analytics: Denials Analysis Analysis of adjustment code by Payer 14 Missing Authorizations By Payer 12 10 8 6 4 2 0 Payer 1 Payer 2 Payer 3 Payer 4
Analytics: Denials Analysis Analysis of adjustment code by Clinician 18 Missing Authorizations by Clinician 16 14 12 10 8 6 4 2 0 Clinician 1 Clinician 2 Clinician 3 Clinician 4
Monitoring & Process Improvement: Process Improvement Systematic change and improvement in the process occurs with analytical tools and insights combined with solid quality improvement tools Root Cause Analysis Plan Do Study - Act Lean Six Sigma
Monitoring & Process Improvement: Process Improvement Structured process documentation can create consistency of tasks and clarity of roles Goal of process documentation to document and share best practice processes so that can be remembered, reused, and refined Process documentation tools: Narrative documentation (Playscript format works well) Visual maps Software that documents process models and facilitates the pass off of tasks
III. Simplifying Revenue Cycle Management: The ABCs 39
ABCs Of Accounts Receivable Management Admissions Billing Collections
Admissions Getting The Front End Right Is Probably The Most Important Step In Improving Your Agency s Collection Rate
Admissions Centralize accountability for accuracy and completeness of client demographic information Benefits verification Authorization Required clinician credentials Coordination of benefits Establish required data fields for client registration and perform QA on data entry for 100% of client registrations Set up reports for common admissions-related billing problems: Missing data fields Missing service authorizations Missing diagnoses Use your EHR s edit capabilities regarding payer benefits rules to the maximum extent possible Establish very tight security controls for which staff members can add new records to the payer table file
Key Questions For Verifying Commercial Insurance Coverage: Benefit Questions Is the insurance policy active? What was the effective date of the policy? How do you define the waiting period? Is there a waiting period? For certain benefits, all benefits? Is the client subject to this waiting period? Are there any pre-existing conditions? What are the mental health benefits under this policy? Are benefits for substance abuse any different? Are there any riders to the contract? Is there a deductible and has any of it been met? Is there a co-payment for services? Is there a cap for mental health coverage? Is the cap based upon a calendar year or a benefit year? Has any of the cap/deductible amount been used? Is there a lifetime cap on services? What is the amount? Is the cap / deductible separate from medical services? Are there mental health services that are not covered? Are there diagnoses not covered?
Key Questions For Verifying Commercial Insurance Coverage Service Authorization Questions Do services need to be pre-authorized? How is that done? Clinician Credential Questions What type of clinicians are covered for services? Do they need a specific license or provider number? Can we get authorization for other clinicians or out of network providers to render services?
Key Questions For Verifying Commercial Insurance Coverage: Claim Submission Questions What is the address for claim submission? Is a standard HCFA 1500 form used? Does the subscriber have to sign a claim form? Is there anything that needs to accompany the claim form? Is there a time limit to submit the claim? What is the phone number for claim inquiry?
Billing How Can We Streamline & Improve Our Billing Processes?
Billing Billing starts with service entry! Enter all services into EHR within 24 hours Set up report to track late service entry to identify clinicians and locations whose services are entered more than seven days from date of service Do QA checks for data entry accuracy Most payers should be billed on a weekly basis to improve cash flow Set up electronic billing for all possible payers Tip: confirm receipt of electronic billing files! Use pre-billing edit reports prior to billing to find and fix all identifiable claim problems Print and mail all paper claims within 48 hours
Does Anyone Actually Do Collection & Follow-Up On Unpaid Claims? Collection
Collection Things to do: Batch control systems for deposits and all correspondence All deposits entered within 24 hours of receipt All payments distributed within 48 hours of receipt Data entry QA for payment distribution Start by ensuring all A/R payments are posted in a timely manner Fact: accounts receivable follow-up and collection is the biggest problem for most organizations The standard you should seek to achieve is that your staff can account for the status of all claims that have aged 60 days since the last bill date What s the point of running an open A/R report if it is inaccurate because you haven t posted payments?
Improving The Collection Process Set up a daily undistributed receipts report to monitor deposits that have not yet been applied to A/R Use electronic payment and remittance posting whenever possible to save time and money Lobby payers to set up this capability All payer correspondence should be batched with deposits and handled within the same time frame All payer correspondence should be batched with deposits and handled within the same time frame Balance billing and denial processing should occur at the same time payments are posted Other correspondence from payers should be processed within two business days Ideally EHR allows you to post A/R follow-up notes on individual client accounts and claims Bad debts should be approved and written off the A/R as soon as the claim has been identified as un-collectable
Improving Self Pay Account Collection Use sliding fee capabilities in MIS effectively Establish clear self pay fee policies Collect self pay fees at the time of service whenever possible Use on-screen self pay balance alerts or reports at the front desk All clinicians should know client balances at the time of services Self pay statements should be sent out on a monthly basis Customize the self pay statement as much as possible in the EHR to make it clear and understandable Self pay statements can only be accurate if sliding scale fees, services, and payments are entered accurately
List Of Common Policies & Procedures Related To Admissions, Billing, & Collections Client registration policy and checklist (including insurance verification requirements) Daily insurance verification policy (for verification of continued insurance coverage) Client demographic and insurance change policy Billing diagnosis policy Self-pay fee assessment and collection policy
List Of Common Policies & Procedures Related To Admissions, Billing, & Collections Service authorization policy (initial and ongoing) No-show/late cancellation policy Appointment scheduling policy Service tracking policy Billing process policies Mail batch control policy Deposit and payment posting policy Correspondence processing policy Credit balance and refund policy Collection and follow-up policy Bad debt write-off policy Self pay collection policy Month-end procedure policy Table maintenance policies for new insurances, clinicians, and service code files
Recommended A/R Management Reports 54
Aged Trial Balance Reports Aged trial balance by payer in 30-day buckets Aging by date of service allows overall A/R analysis Aging by most recent bill date allows you to find claims with no activity Aged trial balance detail Run by payer or payer category for all claims over 60 days from date of service Goal should be to follow up on ALL of these claims (get claim status, fix any problems, re-bill, or balance bill)
Billing & Collection Performance Measurement Over 180 A/R Collection Performance Days In A/R
Questions & Discussion 57
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