Streamlining Revenue Cycle Processes

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1 Bank of America Merrill Lynch Case Study Streamlining Revenue Cycle Processes September 2014 Innovative patient and commercial receivables for Executive summary At (MDRH), a team of 40 orthopedic specialists is dedicated to helping patients regain their flexibility and get back on the move. The hospital worked with Bank of America Merrill Lynch to implement a flexible alternative to its cumbersome, paper-intensive processes for patient and commercial receivables. Leveraging HealthLogic EDC and Patient Payments Online, Marina Del Rey achieved Contents A cost-effective cure Automating commercial payments... 3 The future is now... 5 new efficiencies and reduced costs while increasing patient satisfaction.

2 STREAMLINING REVENUE CYCLE PROCESSES 2 A cost-effective cure provides high-quality healthcare for residents of Marina Del Rey, California, and surrounding communities. In addition to general acute medical services and 24/7 emergency care, the hospital is recognized for its advanced surgical technology in the areas of spine care and orthopedics. But the hospital s patient payment experience wasn t nearly as state-of-the-art. We would bill the patient, and they would mail in a check or write their credit card information on the invoice and mail that in, says Jeffrey Green, business office supervisor,. But fewer people are comfortable with providing their personal information on a sheet of paper and putting it in the mail, given identity theft concerns. So instead they would come into the hospital and wait for someone in the front office to take the payment and print out a receipt. Or else the patient would call in, and someone would have to answer the phone and take the information. Clearly there had to be a more efficient and cost-effective method of collecting the steadily increasing number of patient payments. With help from Bank of America Healthcare Banking, MDRH adopted Patient Payments Online (PPO). Adding up the benefits of Patient Payments Online Since deploying PPO, Marina Del Rey Hospital has realized the following efficiencies: Decreased patient payment costs Reduced manual processing with associated posting errors Increased convenience for MDRH patients to pay bills securely, driving customer satisfaction Patient satisfaction: enabling patients to pay anywhere at any time PPO allows the patient to make a payment anytime they want, anywhere they want, Green explains. They could be out of town and realize they need to make a payment. Now they can. With PPO, patients make those payments using a website designed specifically for. The process is straightforward. After patients receive a new statement, they go to the MDRH website and log into the payment site. This ensures that their PHI is protected, as mandated by HIPAA. They can then select a one-time payment or else enroll in the service and store their preferences. Payment choices include electronic check and credit card, as well as recurring payments against a balance. Check and card payments are immediately processed as a deposit to s Bank of America Merrill Lynch account. It s really convenient, adds Green. The best thing about it is that Bank of America Merrill Lynch integrated with our website, and we didn t have to make many modifications. All we had to provide was a link. The patient clicks on the link and goes to a secure website at Bank of America Merrill Lynch to make the payment. When they re done, they come back to our site. It s very nice. Bank of America Merrill Lynch integrated with our website, and we didn t have to make many modifications. All we had to provide was a link. Jeffrey Green Business Office Supervisor Not only does PPO reduce the time and resources required to manually post patient payments, it also auto-posts those payments to the hospital s Siemens patient accounting system in the form of an HIPAA-standard 835 file.

3 STREAMLINING REVENUE CYCLE PROCESSES 3 It s all automated, says Green. The payment comes in, PPO creates an 835 file, and that file is sent off to our Siemens posters. Our accounting system is Siemens as well, so this provides a good reconciliation process for us. It all fits together perfectly. Every day we know exactly what payments came through. I know when a payment comes in, I can track it being posted, and I can be sure that the money is in the bank. The biggest benefit of all For a small company, every hour counts, especially when the economy is bad, says Green. So the more you can get automated, the more effective you can be. We re getting great results from PPO. It reduces man hours, and we try to reduce hours everywhere we can. We re getting great results from PPO. It reduces man hours, and we try to reduce hours everywhere we can. Jeffrey Green Business Office Supervisor Green added that Bank of America Merrill Lynch had even built logic into the 835 file creation process that lets MDRH know whether it s dealing with an in-patient or an outpatient invoice. That helps with auto-posting. They were able to build that logic in their file creation process so we don t have to have someone manually intervene, he explains. Since launched the service in 2011, Green has seen the percentage of online payments steadily rise and that s without any formal marketing programs. One month we just put on the statement that you can make this payment online, he says. Basically, we ve doubled since we started last September. We were doing about 7% or 8% back then, and now we re at 15%. This is a good trend. Looking ahead, Green expects the use of the payment site will only increase. It s something people want, says Green. I wouldn t be surprised if by next year 50% of our volume is from patients paying online. Automating commercial payments With a patient payment solution in place, the next order of business was to address commercial payments. Like providers everywhere, has to handle a tremendous volume of paper just in the process of getting paid by insurers. Now, thanks to HealthLogic EDC, MDRH is gaining the upper hand. How HealthLogic EDC works When MDRH submits a claim to a payer for payment, it also sends a copy of the claim to Bank of America Merrill Lynch for use when creating the 835 posting file. The payer then sends paper checks and EOB documents to the MDRH lockbox at the bank. The lockbox unit deposits the checks and scans all documentation into an image format. EOB information is captured from each image and matched to the original claim; this provides the maximum amount of information to MDRH so that it can accurately post the payment. A quality assurance validation is performed on every EOB so that MDRH receives the highest-quality 835 file and the lowest possible exception rate when posting. Finally, Bank of America Merrill Lynch transmits to MDRH the 835 file for automated posting. The goal is to have as much of the 835 file post automatically as possible. Adding up the benefits of HealthLogic EDC Adopting EDC has helped streamline its revenue process by: Imaging paper EOBs and capturing data for commercial payments Creating electronic, postable 835 files to MDRH s specifications Saving the hospital the equivalent of one full-time employee

4 STREAMLINING REVENUE CYCLE PROCESSES 4 EDC has greatly reduced our posting time and error rates, says Green. It s also a great security mechanism. Launched by the hospital in 2011, EDC now handles 70% 75% of payments. HealthLogic 835 remittance file EDC: Converts EOB to 835 file Denial Management: Identifies denied/ underpaid claims Processes payment; scans and images EOB Lockbox ERA: Consolidates 835 files from all payers Provider Payment posted to PAS Revenue collected 837 claim file Payer Sends payment + EOB The most important thing that EDC provides It s being able to get that 835 file, Green says. Mind you, it s not an easy process. When you re dealing with one payer it s very easy. But we get checks from many different insurance companies and many different places. For Bank of America Merrill Lynch to create that 835 file is a key point. And then to transfer that file electronically to our Siemens accounting system for posting is perfect. It saves us many hours. Green says the use of EDC has saved the hospital the equivalent of one full-time employee. Launched by the hospital in 2011, EDC now handles 70% 75% of MDRH s commercial payments, according to Green. Even insurance checks mailed directly to the hospital are forwarded to the lockbox. We want all of our insurance checks to go directly to our lockbox, which is the bank, Green says. It s what top management wants. There s less chance for error or for any other type of discrepancy to occur.

5 STREAMLINING REVENUE CYCLE PROCESSES 5 The future is now With the healthcare industry at a critical juncture due to new regulations and shifts in the financial markets, healthcare organizations continue to hone operating plans and pursue new strategies to succeed in a rapidly evolving landscape. For, PPO and EDC from Bank of America Merrill Lynch are driving steady improvements across the revenue cycle. We expect they ll continue to play a big role by increasing the percentage of people using these channels to process payments, Green says. Doing this electronically is very good because of all the checks and balances. Of course, doing things electronically is also the wave of the future. Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ( Investment Banking Affiliates ), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed Bank of America Corporation