“Most hospitals believe that denials are a normal part of accounts receivable (A/R) but up to 95 percent of denials could be prevented if they were billed correctly from the start,” says Lori Zindl, President, OS inc. Before bundled payment and further changes to how they get reimbursed, hospitals must find a way to get more money in without additional staff, she adds.
OS inc. is a solution provider at the marcus evans National Healthcare CFO Summit Fall 2016, taking place in Los Angeles, California, October 16-18.
What are the typical headaches associated with revenue cycle management?
This comes down to one thing: if the hospital A/R is high, it is because claims are getting denied. If they do not get paid within 15-30 days, it means their claims scrubber is not doing its job. We find this in virtually every hospital.
How could they ensure the claim is correct to start with? What tools could they utilize to manage this better?
If they know the payer rules, pay attention to all of the requirements and build in edits, we call this claims scrubbing, they can prevent denials. When they get a denial, they try to correct the claim, but they actually have a less than 40 percent chance of getting the payment in off of the rebill. They have now kicked the payment another 60 days down the line and paid staff to touch it a few times. Many clearinghouses and claims scrubbing products charge extra for writing custom edits or make it difficult to get edits added, but we believe that is what a claims scrubber is for, to prevent the same denial from happening again.
There is a level of claims scrubbing by every hospital clearinghouse, but they all struggle with denied claims. They have to add staff, then suddenly their margins go down because they have to appeal, and the days creep up. Our technology avoids all of that. Hospitals using our claims system get 95 percent of their claims to pay on first submission, without paying anyone in the back end to follow up. That is unheard of in this industry. The technology keeps the business office organized and patients happy.
How does the software help? How can efficientC revolutionize the industry?
When we implement efficientC, we look at 30-60 days worth of 835 remittances for a provider, find the top ten denials, what they are not getting paid for at first pass, and build those edits. The edits and payer requirements already built into the software are very strong, so they can achieve a reduction in denials even without new edits. When denials come through, they are flagged to a claims analyst instantaneously. We are building those edits constantly and results are amazing. The average cash improvement is 15 percent, denial reduction 40 percent.
As efficientC is a complete product – there is no need to have different pieces for contract management, scrubbing, denials and compliance – maintenance and training is much easier.
What trends should healthcare CFOs keep their eyes on?
Payers are not making it easy. More of them are following Medicare rules, but then they make up their own version of rules, so it is difficult to manage. State Medicaid programs are usually the easiest as their rules are published.
With bundled payment, reimbursement will go down, so hospitals must find a way to get a higher percentage of claims paid right away. Staffing is the biggest expense in revenue cycle management and it takes away from potentially hiring revenue producing staff on the clinical side.
Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division
Tel: + 357 22 849 313
Email: press@marcusevanscy.com
