You’ve Been Deniedtnhfma.org/resources/Documents/2019 TN HFMA Fall...• Obtain “critical”...

You’ve Been DeniedDON BILL INGSLEY, DIRECTORLANDON ADKINS, ASSOCIATE DIRECTORPROTIVITI

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Today’s Discussion▪ Denials Analytics

▪ Patient Access

▪ Charge Capture and Pricing

▪ Billing and Collections

▪ Benchmarking

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Denials & UnderpaymentsDenials & Underpayments

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Non-Payment Denials

Payment less than the amount contractually owed.Underpayments

Denials & Underpayments 835 & 837

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A facility usually learns of an insurance claim denial via the Explanation of Benefits (EOB) remittance statement.

Payer to Provider

The 835 is the American National Standards Institutes (ANSI) Health Care Claims Payment and Remittances Advice electronic standard format. HIPAA requires the use of 835 or an equivalent by all payors. A national remittance code maintenance committee maintains the standardized 835 remittance codes. These standard ANSI codes are listed on (http://www.wpc-edi.com/codes):

• Claim Adjustment Reason Codes (CARCs): Communicate why a claim or service line was paid differently than it was billed.

• Remittance Advice Remark Codes (RARCs): Communicate additional explanation for an adjustment already described by a CARC, or convey information about remittance processing.

Provider to Payer

The 837 EDI transaction set is the format established to meet HIPAA requirements for the electronic submission of healthcare claim information.

Revenue Cycle

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SchedulingAdmissions/Registration

Provision of Services

Charge Capture Charge Master Charge Posting Charge Validation

Billing CollectionsCash

Application

Authorization

Compliance

PricingContracting/Verification

MedicalRecords

Denial Management

Contracting/ Verification

Cash Controls

Government Rates and

Cost Reports

Cash Posting

Patient Access

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SchedulingAdmissions/Registration

Provision of Services

Charge Capture Charge Master Charge Posting Charge Validation

Billing CollectionsCash

Application

Authorization

Compliance

PricingContracting/Verification

MedicalRecords

Denial Management

Contracting/ Verification

Cash Controls

Government Rates and

Cost Reports

Cash Posting

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• Scheduling

• Obtain “critical” patient demographic/insurance information and populate system data fields

• Trigger the pre-registration process

• Ensure a patient friendly introduction to the health system

• Provide a standardized method of entry for patients

• Benefits Verification

• Contact insurance carrier to verify that patients have valid insurance coverage

• Ensure that a patient’s financial class is accurately noted within the system (i.e., covered by insurance vs. self-pay)

• Ensure that patients are actively employed (applicable for high dollar procedures)

• Determine patient deductibles, coinsurance, and/or copay information

• Determine if patients will need to be contacted by a financial counselor prior to treatment to make payment arrangements

• Pre-certification

• Obtain the appropriate pretreatment authorizations for particular services as a requirement of payer contracts to ensure

reimbursement

• Determine if patients will need to be contacted by a financial counselor prior to treatment to make payment arrangements

Scheduling / Pre-Registration Objectives

Bottom-Line Benefits: A good pre-registration program favorably impacts the bottom line (e.g., insurance is verified, pre-certifications are obtained, copayments or deductibles can be collected, financial counseling can be initiated, billers can issue clean claims, etc.)…essentially allows the facility to identify problems prior to treatment to protect financial liability.

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• Gather accurate and complete patient demographic and insurance information (this is the most important part of registrars job)

– Copy insurance cards and other legal identification (provides a mechanism to check the accuracy of information entered on the

registration screens); look at insurance card during the admitting process to validate information on file (e.g., match name on

insurance card with name in system used for billing)

• Inquire about secondary insurance

• Ensure benefits have been verified and pre-certification has been obtained

• Ensure that all forms of documentation are fully completed (e.g., Medicare questionnaires, etc.)

• Obtain all necessary signatures (e.g., assignment of benefits, consent for treatment, financial responsibility, authorization for release of

information, deposit of valuables, advanced directive, etc.)

• Check system for outstanding balances owed/delinquent payments

• Collect copays, deductibles, and/or percentage of self-pay accounts prior to treatment

• Identify patients that will require financial assistance

• Promote warm public relations (this increases community trust in the facility); a good impression at registration improves the overall

impression of the facility

• Check the master patient index/record for previous admissions to obtain/update demographics and prevent duplicate records

Admissions / Registration Objectives

According to Zimmerman and Associates, Inc., for every $1 that is collected up-front, $11 is saved at the back end.

Verification of Benefit Opportunities

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Verification of Benefit Opportunities

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Payer Names

Authorization Opportunities

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Authorization Opportunities

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Payer Names

Charge Capture and Pricing

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SchedulingAdmissions/Registration

Provision of Services

Charge Capture Charge Master Charge Posting Charge Validation

Billing CollectionsCash

Application

Authorization

Compliance

PricingContracting/Verification

MedicalRecords

Denial Management

Contracting/ Verification

Cash Controls

Government Rates and

Cost Reports

Cash Posting

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• Documentation of services rendered/supplies utilized indicating the charges to be posted

• Posting charges in the charge entry system to be applied to the patient account for billing purposes

• Reconciling those charges posted to the documentation of service rendered/supplies utilized and then reconciling charges posted in the

charge entry system to any departmental reports (e.g., departmental charge reports, interface error reports, late charge reports, etc.)

• Posting charges timely allowing time for reconciliation and any corrections prior to bill submittal

• Obtaining accurate reimbursement for services/supplies provided to patients

• Compliance with regulatory mandates requiring accurate documentation and billing for services rendered

• Increasing patient satisfaction and patronage as a result of correctly billing for services rendered

• Assists in tracking the true costs of providing healthcare services/supplies

Charge Capture Objectives

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• Lesser-of cases - total charges were less than allowed reimbursement amount in the contract and the organization is not collecting all

potential revenue because charging is too low

• Line-item lesser-of provision - An insurer will pay an established amount for a certain test or service unless the organization charges

less than the predetermined price, in which case the payer will reimburse the “lesser-than” amount.

• Claim-level lesser-of provision - An insurer will pay an established amount for a category of charges, such as an inpatient case payment

based on MS-DRG. The compensation would cover all charges involved in the encounter, including any lab work, X-rays, imaging, and anesthesia.

Lesser-of Provisions

Procedure Codes Where Line Charge = Line Paid

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Payer Names

Procedure Codes Where Line Charge = Line Paid

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Payer Names

Billing and Collections

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SchedulingAdmissions/Registration

Provision of Services

Charge Capture Charge Master Charge Posting Charge Validation

Billing CollectionsCash

Application

Authorization

Compliance

PricingContracting/Verification

MedicalRecords

Denial Management

Contracting/ Verification

Cash Controls

Government Rates and

Cost Reports

Cash Posting

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• Billing

• Bill patients and/or third-party payers for services rendered

• Ensure bills are complete and accurate

• Accounts are billed either in paper form or electronically after they are coded by Health Information Management (typically a 3-5

day post discharge rule)

• Comply with HIPAA transaction standards (i.e., 837, 835, 276, 277 transactions)

• Payment Posting / Account Follow-Up

• Collect payments and post them to the appropriate patient account in a timely manner

• Identify, rework, and/or distribute underpaid, overpaid, denied, and rejected claims to be processed for resolution

• Inquire about the status of outstanding claims/bills

• Manage payer, patient, and third-party relations

• Resolve account balances with insurance companies and/or patients

• Determine which accounts to work internally or outsource to a collection agency (consider time, cost, and the organization’s

expectations)

• Manage patient relations

Billing and Collections Objectives

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Standard Deviation Analysis

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Standard Deviation Analysis

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Standard Deviation Analysis

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Days to Pay

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Days to First Payment

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Benchmarking

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Hospitals and Health Systems: Denials KPIs Target

Overall denials rate as a percent of gross revenue ≤ 4%

Clinical denials rate as a percent of gross revenue ≤ 5%

Technical denials rate as a percent of gross revenue ≤ 3%

Rate of additional collection for underpayments ≥ 75%

Rate of appeals overturned 40 – 60%

Electronic eligibility rate ≥ 75%

Physician pre-certification double-check rate 100%

Case managers’ time spent securing authorizations rate ≤ 20%

% of high-revenue managed care contracts modeled (80/20 rule)

100%

Total denial reason codes ≤ 25

Initial Zero Paid Denial Rate ≤ 4%

Physician Organizations: Denials KPIs Target

Overall initial denials rate as a percent of gross revenue ≤ 4%

Clinical initial denials rate as a percent of gross revenue ≤ 5%

Technical initial denials rate as a percent of gross revenue ≤ 3%

Underpayments additional collection rate ≥ 75%

Appealed denials overturned rate 40-60%

Electronic eligibility rate ≥ 75%

Physician pre-certification double-check rate 100%

Total denial reason codes ≤ 25

Key Denials Metrics and HFMA Industry Standards