SAFEGUARD YOUR REVENUE IN AN ERA OF CHANGE

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1 SAFEGUARD YOUR IN AN ERA OF CHANGE Regulatory, economic and technological changes have made running a hospital, urgent care center, or medical practice increasingly difficult today. The complexity of revenue cycle management (RCM) for healthcare facilities and practices has increased dramatically in recent years. With the Affordable Care Act (ACA) and ICD-10 threatening to further strain payer-physician relations, that trend is not likely to change any time soon. As we transition to a new era in healthcare one with a different payer mix, quality-based reimbursement model, and an entirely new set of diagnoses and procedure codes taking a hard look at your revenue cycle and administrative practices is a necessity. The implications of healthcare reform on your physicians and your revenue are seemingly endless. For example, switching from a fee-for-service to an accountable care (ACO) model will require significant legwork to receive higher payments for physician services. You already have encountered some fee schedule changes that have affected your reimbursement; this will continue as the Centers for Medicare and Medicaid Services (CMS) review relative value units (RVU) every five years. And, because CMS has increased funding for fraud and abuse programs, it s likely that Recovery Audits by Contractors, or RAC audits, will increase exponentially, making quality assurance of your coding more important than ever. Add to these complexities the transition to ICD-10, which will require significant training, technology and manpower expenses, and it s easy to expect increasing strain on your budget. In an effort to reduce insurance costs, many employers are switching to high-deductible health plans. As a result, there has been a rise in difficult-to-collect, patient-responsibility receivables while at the same time reimbursement from governmental and commercial payers has flatlined. Revenue Cycle Management (RCM) is a complicated process that requires constant monitoring, fine tuning, and follow up. Your reimbursements ride on how well your doctors, nurses, and midlevels document the care they provide; your reputation rides on each patient experience. The good news? With the right people, the right amount of precision and oversight, and the right tools, it is possible to achieve radical improvements in both. The key is to find ways to cut costs and increase your revenue. How? By automating processes, streamlining workflow, improving coding accuracy, increasing your clean claims rate, and accelerating payments. To begin, you ll want to examine all of your RCM functions and question your efficiency and success in any area that impacts your bottom line. Some factors to consider: How efficient is your workflow system? Are you prepared for the ICD-10 transition and the move towards the ACO model? Do you have a solid auditing process for your coding? How successful is your administrative team in keeping up with fee-schedule changes? Can you identify any opportunities to automate or improve your processes? Your answers to these and other questions will help you determine if you have the time and personnel resources necessary to keep your administrative functions in-house, or if it would be more practical to outsource them. Safeguard Your Revenue in an Era of Change 1

2 THE RCM PROCESS: FINDING MISSED Finding missed revenue starts with the painstaking process of negotiating managed care contracts and enrolling your providers with third-party payers. Keep in mind that deciding whether to contract with certain carriers or remain a non-participating provider can have a significant impact on your reimbursement. Missing fee-schedule changes can wreak havoc on your accounts receivable (A/R), so it s essential that you keep a close eye on fee schedules and review your managed care contracts regularly a necessity that is often overlooked. Getting your claims paid is dependent on ensuring your physicians and midlevel providers are quickly enrolled with Medicare, Medicaid and other payers prior to the filing of the first claim. Keeping up with the ever-changing application process of Medicare and Medicaid is difficult; adding commercial payers, the Council for Affordable Quality Healthcare (CAQH), and other groups to the mix adds to the challenge. The biggest sources of missed revenue especially in emergency medicine are incomplete charts, insufficient provider documentation, and improper coding. In order to bring cash in the door, complete charts and accurate provider documentation are vital. Thus, the lifeblood of the overall operation is chart reconciliation, the meticulous process of ensuring that every patient record is not only accounted for but also contains all of the elements necessary to properly code each chart. If any elements of the chart are missing or illegible for example, EKG strips, critical care time, diagnosis, physician/nurse notes, etc. the chart cannot be billed or must be downcoded. To avoid such outcomes and ensure revenue is not lost it s important that you provide immediate feedback to your physicians and nurses on their documentation skills so they can improve, as well as allow them the opportunity to complete certain chart sections they ve missed. Another important step in the documentation process: capturing the right demographic information from patients and verifying their insurance eligibility up front. Both are vital to ensure that claims are paid, patients aren t wrongfully billed, statements go to the right place, and much more. Through electronic eligibility verification, you can increase your clean claims rate and realize drastic cost savings (as compared to paper eligibility). This translates to more payments, less manpower costs per claim, and a significant improvement in your revenue cycle. You ll also want to take a hard look at your coding philosophy. If it s too conservative, you risk missed revenue opportunities. If it s too liberal, you risk non-compliance. Once you find the perfect balance for your coding philosophy, it s important that you frequently communicate it to your coding staff and physicians and also provide them follow-up education that supports that philosophy on a regular basis. Regularly auditing your coding results will help your organization catch mistakes; providing retrospective feedback to your coders will help teach them to do better going forward, ultimately increasing your revenue while ensuring both accuracy and compliance. Once a chart is coded and billed, relentless A/R follow-up and responsive customer service must ensue. The continued increase of high deductible health plans requires a greater focus on the collection of Safeguard Your Revenue in an Era of Change 2

3 patient responsibilities. According to a report from the Kaiser Family Foundation in November of 2012, The percent of covered workers enrolled in a plan with a general annual deductible has increased significantly over time. In 2006, just over half (52%) of covered workers had a deductible for single coverage, compared with almost three-quarters (72%) in In recent years, the average deductible has increased from approximately $500 to $1,000, increasing the burden of both the patient paying the deductible and the provider collecting the payment. The AMA is pushing for insurers to give physicians tools to determine patient responsibility before treatment is provided, alleviating the headaches of collecting patient deductibles on the back end. (Rae & Panchal, 2012) $1,000 CURRENT PATIENT DEDUCTIBLE average deductible has increased 50% The American Medical Association s 2013 Administrative Burden Index, created to calculate the administrative costs associated with reworking claims to address insurer denials, determined that each reworked claim costs between $1.25 and $3.32, depending on the insurer. Frank Cohen, senior analyst for Frank Cohen Group, a data analytics firm that helped create the index, estimates that the typical physician practice will lose $14,600 each year on claims reworked to address insurer denials. (Dolan, 2013, p. 2) Being proactive on the front end verifying patient eligibility at registration, focusing on clean claims, setting up payment plans for self-pay and co-pays, integrating outbound auto-dialers/ calling campaigns, etc. are sure ways to reduce your A/R. Ensuring you are capturing the correct patient demographic information right the first time around plays a major role in getting cash in the door and in promoting a positive patient experience. Because each step of your RCM process is interdependent and has a significant effect on other steps within the cycle, any practice management system or technology you use should automate as many manual processes as possible... Leveraging technology is the best way to increase automation and improve efficiency and accuracy throughout your RCM process. Because each step of your RCM process is interdependent and has a significant effect on other steps within the cycle, any practice management system or technology you use should automate as many manual processes as possible among them, coding, claims preparation, eligibility, denial management, self-pay collections, etc. You ll find automation instantly improves efficiency and accuracy while lowering your manpower costs over the long run. To reveal problems throughout the RCM process, you ll want a practice management program that provides a data warehouse environment with business intelligence tools. Most practice management systems provide some level of reporting on provider productivity, patient acuity, payer mix, A/R aging by financial class, denial rates, and much more. But to maximize value and impact, you ll want to implement a program that also gives you the ability to drill down and gain valuable insight into cash flow, staff productivity, denial details, and other metrics while also allowing you to compare current and historic data on key performance indicators. Safeguard Your Revenue in an Era of Change 3

4 IS OUTSOURCING THE SOLUTION? As you become increasingly aware of the myriad of changes and initiatives prompted by the Affordable Care Act (ACA) and how they ll impact your physicians and your practice, you ll want to closely examine and honestly evaluate your ability to tackle these changes. Can you manage the changes required with minimal impact to your bottom line? If you doubt your organization s ability to undertake all the needed changes on its own, consider outsourcing your RCM to a coding and billing company. As administrative functions are taking more time and resources than ever before, more and more healthcare organizations are finding that outsourcing their RCM functions enables them to devote their limited time and resources to their primary mission: improving patient care and relations. A key benefit to outsourcing RCM and other administrative functions is that doing so grants you access to technology and expertise your practice wouldn t otherwise have the resources to procure. It also can reduce your manpower costs, risk of non-compliance, and revenue loss as your practice undergoes the impending changes and initiatives in the healthcare industry. Regardless of the size or specialty of your practice, there is an outsourcing firm out there that is the right fit for you. Medical billing and practice management organizations generally specialize in certain areas such as emergency medicine, pediatric, family practice, radiology, and countless others. To find the best RCM firm for your practice, you ll want to first issue a request for proposal (RFP) for your specialty, making sure to include requests for a coding audit, case studies, references, and any other requirements particular to your needs. RFP Issuing an RFP is key to finding the perfect RCM firm that fits your needs. If outsourcing isn t right for your practice, you have yet another option: hiring a consultant. An experienced consultant can help you find ways to increase efficiency and improve your RCM process or other administrative functions. There are a number of consulting companies that specialize in medical billing and practice management, and many RCM firms offer consulting services as well. Prior to entering into any consulting partnership, it s recommended that you have clearly defined objectives for the goals you re trying to achieve for your practice. As with finding the right RCM company, you ll want to issue an RFP to find a suitable consultant. Safeguard Your Revenue in an Era of Change 4

5 CONCLUSION Whether you re operating a small private practice or a large hospital system, managing your revenue cycle is a process that can be difficult for even the most experienced professionals. There are countless opportunities for revenue loss: provider number denials, insufficient documentation, improper coding, incorrect patient information, delinquent self-pay accounts, changes in fee schedules, and more. Third-party payers are making it more and more difficult to collect reimbursements for the care your physicians provide. And even if you find yourself able to keep up with RCM s daily intricacies, healthcare s coming changes and their impact on your physicians and bottom line add an entirely new dimension to the complexity. To survive, a practice needs the technology to provide sufficient business intelligence and a team of individuals to monitor key performance indicators throughout each step of the RCM process. If your practice has these resources already, you ll want to begin preparations for the coming healthcare reform initiatives now. If your practice lacks them, you ll want to act to find a firm to whom you can outsource these tasks. Outsourcing can alleviate the burdens of RCM so that you can focus on what you do best: providing quality healthcare and a positive experience for your patients. If outsourcing isn t an option, a consultant can take an unbiased look at your administrative functions and help your team develop new processes and procedures to enhance your revenue cycle. Whether you choose to outsource, hire a consultant, or tackle it on your own, there is a lot of homework to be done and important decisions to be made, all of which will have a significant impact on your bottom line. The key is to start evaluating and acting on your facility or practice s RCM needs now, so you can ensure your revenue won t suffer in the future. Safeguard Your Revenue in an Era of Change 5

6 Whitepaper courtesy of SymMetric Revenue Solutions Founded in 1998, SymMetric Revenue Solutions, Inc. (formerly Apollo Information Services, Inc.) is a recognized industry leader in revenue cycle management. Processing more than 2 million patients per year for more than 100 client facilities, we maximize reimbursement by providing compliant coding and billing for professional services in emergency departments, urgent care, occupational health clinics, and more, as well as facility coding for ED s and billing for hospitalist programs. We help physician groups maximize their revenue, reduce their costs and achieve fanatical compliance. Although not indicative of the results yielded by all coding and billing companies, the case studies that follow showcase three real-world examples of the positive impact a professional coding and billing firm can have on the reimbursement levels of a variety of facilities. CASE STUDY: 11-HOSPITAL SYSTEM CASE STUDIES When SymMetric Revenue Solutions began professional coding and billing for 11 emergency departments in a system operating in the eastern U.S., we increased revenue across these facilities by more than $50 per patient. The graph below represents one of the facilities in this system. Increasing revenue for physician groups ANNUAL $7M $6M $5M $4M $3M $2M $1M $0 Reimbursement Before & After $ $ $89.48 PRIOR 1 YR 2YR $160 $140 $120 $100 $80 $60 $40 $20 DOLLARS PER PATIENT Safeguard Your Revenue in an Era of Change 6

7 CASE STUDY: FACILITY CODING An emergency department with an annual volume of 24,000 patient visits in the eastern U.S. was struggling with their facility coding. With SymMetric Revenue Solutions expert coding, the ED s revenue for facility services increased $127 per patient. CASE STUDIES Increasing revenue for physician groups Continued ANNUAL Facility Coding Reimbursement Before & After $15M $12.5M $10M $7.5M $5M $ $ PRIOR 1YR $600 $500 $400 $300 $200 DOLLARS PER PATIENT CASE STUDY: SMALL COMMUNITY ED A small Midwest-based community hospital with an annual ED volume of 11,500 patient visits had been toiling with their billing and collections for several years. With SymMetric Revenue Solutions help, their revenue increased $53 per patient within one year. ANNUAL $1.4M $1.2M $1M $800K $600K $400K $200K $0 Reimbursement Before & After $ $ $58.02 $ YR - 2YR 1 YR 2YR $140 $120 $100 $80 $60 $40 $20 $0 DOLLARS PER PATIENT Safeguard Your Revenue in an Era of Change 7

8 For more information and a complimentary coding audit contact: SymMetric Revenue Solutions 4350 Fowler Street Suite 15 Fort Myers, FL (888) info@symmetricrs.com SymMetric Revenue Solutions, Inc. All rights reserved. Safeguard Your Revenue in an Era of Change 8

9 References Rae, M., & Panchal, N. &. (2012, November 02). Snapshots: The Prevalence and Cost of Deductibles in Employer Sponsored Insur. Retrieved August 20, 2013, from The Henry J. Kaiser Family Foundation: Dolan, P. L. (2013, July 1). Amednews Staff. AMA meeting: Insurer report card points to patient collection hassles, p. 4. Safeguard Your Revenue in an Era of Change 9