Revenue Cycle Responsibilities. Revenue Cycle. Objectives 4/9/2013

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1 Revenue Cycle Kathryn DeVault, RHIA, CCS, CCS-P AHIMA 2013 Objectives Identify responsibilities within the Revenue Cycle Focus on management of the revenue cycle process Discuss the revenue cycle process in small/cah facilities Evaluate training and education needs for staff involved in the revenue cycle process Revenue Cycle Responsibilities 1

2 Revenue Cycle All administrative and clinical functions and any events that take place in the patient care process that permits the organization to receive payment for the services rendered. Collection of the full entitled payment Monitoring and managing the requirements and performance of third party payers Revenue Cycle Opportunities Opportunity to increase cash flow Reduce write-offs and denials Improve contract compliance to reduce underpayments Improve documentation and coding quality Reduce medical necessity denials Revise charge master and perform charge capture and rate structure assessments Insulate facilities from potential negative impact of government regulatory programs such as RAC Revenue Cycle Front Scheduling Pre-registration Admitting Insurance Verification Insurance Authorization Middle Case Management Charge Capture Clinical Documentation Coding Charge Master End Billing Reimbursement Contract Management Accounts Receivable Bad Debt Refunds Denial Management 2

3 Revenue Cycle Major functions typically included: Admitting, access management Case management Charge capture HIM Patient financial services, business office Finance Compliance Information technology Admitting/Access Management Front-end registration of encounter Verification of eligibility Certification Registration Scheduling Collection of insurance information Collection of copays Consents and notices Issuance of ABNs Admitting/Access Management Appropriate demographic captures Financial class Payer Consents Authorizations Accurate outpatient physician orders on registration Educate physicians on what is required for an appropriate physician order and specificity 3

4 Admitting/Access Management Work with third party payers to manage preauthorization, eligibility, and coverage determinations Research the more frequently used payers updated plans Accept ICD-10 on implementation date or will there be a delay in code acceptance? Will more specific information be required for precertification or admission certification? What happens to the pre-certifications made with ICD-9-CM codes prior to the implementation date? Admitting/Access Management Medical Necessity and Advanced Beneficiary Notice (ABN) Keep up to date with changes, ICD-9 or ICD-10 Codes required to be keyed in or diagnosis description only? Instruct patients on their financial liability for the encounters Co-pays, deductibles, uninsured Provide Advanced Beneficiary Notice (ABN) Admitting/Access Management Education Staff Pre-certifications/certifications Scheduling staff Financial counselors Physician office staff Content ABNs LCD/NCD Medical necessity 4

5 Case Management Matching of individual s health requirements with appropriate resources Documentation review Provider interaction and education Criteria monitoring Critical pathway guidelines Concurrent DRG assignment Case Management Collaborate with physicians on documentation requirements for DRGs or continuation of stay Level of care for patient Contribute to patient protocols Take part in care plans Case Management Education Staff Case Management Utilization Review Patient Care Staff (nursing, ancillary departments) Physicians Content Documentation requirements to meet case management/utilization and core measurement needs Present On Admission diagnoses (POAs) Hospital Acquired Conditions (HACs) Provide top 20 DRGs for review 5

6 Charge Capture Ensures correct charge entry Verifies account number, service and account type, and charges Point of care vs. batch entry Linking to order entry Late charges CDM Code updates Charge Capture Education Staff Data entry Any staff involved with charge capture Content All items surrounding charge entry HIM HIM functions include: Reconciliation of accounts vs. documentation received Order and timeliness of the processing cycle Coding Physician query process Internal and external coding accuracy audits Request of records, documentation 6

7 HIM HIM should be involved in addressing: Return to provider, denials management Response to PFS requests Edit correction (OCE, groupers) Policy development based on corporate guidance HIM HIM should be involved in addressing: Data presentation Data analysis Write-off preparation Additional documentation requests HIM HIM team members provide expertise in: Facility-wide liaisons Coded data experts Coding accuracy and consistency Case mix analysis DRG and APC experts Education Holder of the rework effort Coding a common focus Integral to unbilled management functions 7

8 HIM Education Staff Coders Data Analysts Clerical staff Content All software programs LCD/NCD Medical necessity Patient Financial Services Edits.. Generation and resolution Pre- and post-billing Generation of bills Denials management Postings (remits, payments Appeals Collections Patient Financial Services Claim Reconciliation Monitor failed submissions Examine unpaid claims Work closely with HIM to ensure the coding accuracy on denials Decreased productivity Higher number denials due to new system Staffing increase to handle overflow of failed/denied claims 8

9 Patient Financial Services Education Staff All PFS employees that work with claims and payers Regarding New payer requirements Contractual changes and new expected payments Finance Case mix analysis Patient volume data (DRG review) Service line analysis Decision support Data benchmarking AR days Source of primary data Finance Education Staff Financial Analysts Content New payer regulations GEMs MS-DRG changes 9

10 Compliance Facility s legal watchdog Possess expertise in regulatory requirements Coding accuracy reviews Compliance Education Staff Compliance officer Auditors Content MS-DRG changes Coding Guideline changes Information Technology Key throughout entire revenue cycle Component systems critical to the revenue cycle Decision support Support for the financial and encoder systems Report generation 10

11 Information Technology Education Staff Programmers Content Data changes/updates Code set changes Software changes Revenue Cycle Management Team Revenue Cycle Management Team Improve the efficiency and effectiveness of the revenue cycle process Develop goals and objectives Define optimal performance for facility Should represent areas that need improvement 11

12 Revenue Cycle Management Team Multidisciplinary approach Representative from all revenue cycle areas Education and updates Payer trends Government and regulatory modifications Organization Strategy Revenue Cycle Management Team The RCM team should assess the following: Current operating levels Which areas require improvement Which areas require targeting and monitoring Revenue Cycle Management Team Best practice suggestions may include: Value of DNFB cases not to exceed two days of average daily revenue AR days not to exceed 60 days Bill hold days set at four days post discharge Late charges not to exceed 10% Accurate registrations no lower than 95% 12

13 Revenue Cycle Management Team Sample performance indicators: Dollar value of discharged, not final billed, encounters Days from discharge to coded Number of accounts receivable days Percentage and amount of write-offs Percentage of nonerror claims Percentage of late charges Percentage of accurate registrations Revenue Cycle Management In Small Hospitals Revenue Cycle Management Small hospitals can effectively manage their revenue cycle Develop RCM team to lead process Evaluate identified performance indicators Identify areas requiring improvement Continue to re-evaluate as processes improve 13

14 Charge Description Master (CDM) Charge Description Master Unique identifier for each service Triggers charge from CDM to be posted to patient s account Procedure code (CPT) attached to each service Hard coding Charge Description Master Large database Price list for all provided services CDM Elements: Revenue code HCPCS/CPT code Service description Price/charge Department number 14

15 CDM Maintenance Each ancillary area and revenue cycle area participates in maintenance process Basic yearly maintenance critical Yearly code set updates CMS coding and billing guidance May warrant additional CDM updates Addition of new services CDM Maintenance Lack of maintenance may lead to: Risk of compliance violations Undercharging for services Lost revenue Overcharging for services compliance Incorrect HCPCS or diagnosis code Lost revenue Incorrect revenue code Lost revenue Claims Management 15

16 Claims Management - Audits Internal auditing systems Identifies failed edits and flags Incompatible dates of service Nonspecific or inaccurate diagnosis and procedure codes Lack of medical necessity Inaccurate revenue code assignment Claims Management - Audits Prevents submission of incomplete or inaccurate claims Errors corrected prior to claim submission Speeds up claims process for facility reimbursement Rejected Claims Duplicate claims Re-bill claim on 31 st day Duplicate payment deducted from future billings Duplication errors: Intraline duplicates same claim line Intraclaim duplicates within same claim Interclaim duplicates between claims Date rate duplicates within a specified timeframe Lifetime duplicates once per lifetime charges 16

17 Rejected Claims National Correct Coding Initiative (CCI) Edits Comprehensive edits inappropriate unbundling Mutually exclusive procedure codes not reported together Very frequent reason for claim rejection Rejected Claims Global Surgical Edits Evaluation and Management (E/M) services related to a surgical procedure included in payment of the procedure Global surgical package with different global day allocations depending on CPT code billed Claims Submission HIPAA Administrative Simplification Improve efficiency and effectiveness of healthcare delivery systems Standards and requirements for electronic exchange of certain health information Established the Transactions Rule Eight electronic transactions Six code sets Use same sets of code to communicate coded health information 17

18 Claims Submissions HIPAA electronic transactions Healthcare claims or equivalent encounter information Eligibility for a health plan Referral certification and authorization Healthcare claim status Claims Submissions HIPAA electronic transactions Enrollment and disenrollment in a health plan Healthcare payment and remittance advice Health plan premium payments Coordination of benefits Claims Submission HIPAA code sets ICD-9-CM, volumes 1 and 2 ICD-9-CM, volume 3 National drug codes Code on dental procedures and nomenclature HCPCS CPT, 4 th edition 18

19 Claims Submission Electronic Transactions: Healthcare claims Healthcare payment Remittance advice Coordination of benefits Submitted via 837I electronic format Replaces the UB-04 or CMS-1450 Physicians submit via 837P Replaces the CMS-1500 Insurance Processing Medicare Administrative Contractor (MAC) Medicare Part A Medicare Part B (hospital-based) MACs contract with Medicare to process claims for a specific area or region Determines costs and reimbursements Benefits Statement Explanation of benefits (EOB) Services rendered Payment covered Benefits limits Denials Medicare Summary Notices (MSNs) Amounts billed Amounts approved Provider reimbursement Patient deductible/copay 19

20 Remittance Advice (RA) Sent to Facility with electronic payments Reports: Claim rejections Denials payments Reconciliation and Collection Identify amount owed by the patient to the facility Identify rejected or denied line items Identify rejected or denied claims Correct and resubmit Write-off or adjust patient s account Revenue Cycle Management Case Study: Auditing by the Medicare Outpatient Code Editor (OCE) 2,530 claims 17,710 line items $5,457,513 in charges Several edits evoked during the audit 20

21 RCM Case Study OCE Edit Edit Description Violations Claims Processing Area 01 Invalid diagnosis code 23 Coding 06 Invalid procedure code 21 Coding/CDM 15 Service unit out of range for procedure 46 Order entry 27 Only incidental services reported 16 Order entry/coding/ CDM 28 Code not recognized by Medicare; alternate code for same service may be available 38 Inconsistency between implanted device or administered substance and implantation or associated procedure 54 Coding/CDM 47 Order entry/ CDM RCM - Case Study OCE Edit Edit Description Violations Claims Processing Area 41 Invalid revenue code 65 CDM 43 Transfusion or blood product exchange without specification of blood product 44 Observation revenue code on line item with nonobservation HCPCS 15 Order entry/ CDM 49 Order entry/ CDM 48 Revenue center requires HCPCS 29 CDM 61 Service can only be billed to DMERC 68 Service provided prior to date of NCD approval 14 Order entry/ CDM 32 Coding/ CDM 71 Claim lacks required device code 28 Order entry/ CDM OCE Edit 41 Invalid revenue code Delayed payment Each claims must be corrected and resubmitted for payment CDM review warranted incorrect revenue code 21

22 OCE Edit 48 Revenue center requires HCPCS code HCPCS code not reported with a revenue code on the claim HCPCS may be hardcoded in the CDM or generated by coding staff Delayed payment and rework by staff OCE Edit 38 Inconsistency between implanted device and implantation procedure HCPCS code with APC payment status indicator H (pass-through device) or APC (implant) present on claim No payment status indicator of S (significant), T (surgical), or X (ancillarynonimplant) procedure reported RCM Terminology Accounts Receivable (AR) Advanced Beneficiary Notice (ABN) Ambulatory Payment Classification (APC) Average Daily Revenue (ADR) Charge Description Master (CDM) Clean Claim Corrective Coding Initiative (CCI) Critical Pathway Guidelines 22

23 RCM Terminology Diagnosis Related Group (DRG) Discharged Not Final Billed (DNFB) Outpatient Code Editor (OCE) Return on Investment (ROI) Return to Provider (RTP) Revenue Cycle Management (RCM) References Casto, Ann B. and Layman, Elizabeth. Principals of Healthcare Reimbursement. AHIMA, Youmans, Karen. An HIM Spin on the Revenue Cycle. Youmans, Karen. Revenue Cycle Management Key Indicators and Reports that You Need to Know. Bauman, Carrie. Chutes and Ladder s of the Revenue Cycle: Strategies for Understanding Data and Coding Quality Issues that Impact Your Ability to Successfully Play the Revenue Cycle Game. www. Ahima.org 23

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