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Data Mining Your Credit Balances – Data Mining Your Credit Balances – How to Find the How to Find the GOLDGOLD
Maryland Chapter of AAHAM
Monthly Meeting
The Hotel at Arundel Preserve
December 19, 2014
Magnitude Of The Credit Balance ProblemMagnitude Of The Credit Balance Problem
• Hospitals with annual revenues of $100 million can generate $3 million of new credit balances each year.
• Nation-wide, more than $10 billion in new credit balances are created by each year.
• A large teaching facility or health system may require 10 FTEs just to resolve the new credit balances that are created each year.
• Cost to cut a refund check? $10, $15…up to $35 !!!!!
Causes of Credit BalancesCauses of Credit Balances
•Front-end efficiencies/Increase up-front collections
•Complex reimbursements/Multiple insurance coverage
•Back-end resolution of overpayments has not kept pace with front-end improvements
•Staffing required to manually resolve credit balances far exceeds available resources
• Typical focus is on resolving high dollar overpayments • Allowance errors are not prioritized• Thousands of small balance Patient overpayments continue to build,
prohibiting efficient processing
Why are so Many Staff Hours RequiredWhy are so Many Staff Hours Required to Resolve Credit Balance Accounts?to Resolve Credit Balance Accounts?
Resolving credit balances is a manual process Resolving credit balances is a manual process that requires the retrieval of documentation that requires the retrieval of documentation and the completion of various forms:and the completion of various forms:
EOB Request Forms Check / Refund Request Forms Government Forms (CMS Form 838) Refund Submission Forms to Various Payers Piles/Stacks of Greenbar printouts
April 18, 20234
Where’s the Where’s the Gold?Gold?
Allowance Adjustments
55%
Misapplied Payments
10%
Overpayment35%
Finding YOUR Finding YOUR GoldGold
Determine YOUR ratio’s
• Run reports – based on payment service codes– based on allowance service codes
(NOT based on FC, Ins Bucket or Ins Plan Code)
Review your credit balance policies/procedures to ensure findings supported– Handling of small balance write-offs for both credit and debit balances– Approval levels appropriate for today’s environment?
• Adjustment limits; Refund limits• Dollar threshold for both• Signing/approval authority for both
Mining Tool-BeltMining Tool-Belt
• People• Your Staff• 3rd Party Staff• Payer Resources
• Systems
• PAS• Ad-Hoc• Contract Management• 3rd Party System
Using the Tools - PatientUsing the Tools - Patient
DRILL into report to identify like – causes
• Matching Debit – same DOS• Matching Debit – different DOS• Open Debit – different DOS• Prepayment with no DOS• Duplicate payment
VALIDATE for accuracy (95% or higher)• Run report(s) on routine basis
AUTOMATE where possible
Risks Associated With Risks Associated With Not Resolving Patient RefundsNot Resolving Patient Refunds
Patient Dissatisfaction – Bad PR
Increased State Legislation Regarding Patient Refunds
California, Texas, North Carolina, New York…
Adverse Effect on Up-front Collections
April 18, 20239
Root Causes to Look For - PatientRoot Causes to Look For - Patient
FACILITY RESOLUTION COUNT TOTAL $
Happy Holidays Health System
Matching debit account and account has only one payment. Payment was for two accounts but was only posted to one account. 165 $ (4,694.11)
Happy Holidays Health System Matching debit account. 301 $ (62,390.29)
Happy Holidays Health System
Patient overpayment on this DOS but patient has other open debit balances. 150 $ (32,329.76)
Happy Holidays Health System Patient overpayment. 1,331 $ (457,458.87)
Happy Holidays Health System Patient prepayment. 34 $ (10,486.03)
1,981 $ (567,359.06)
April 18, 202310
Using the Tools - AllowancesUsing the Tools - Allowances
DRILL into report to identify like–causes• Duplicate adjustment• Twice in error• Adjustment equals balance• No payments• Charges added/removed after billing• Mis-posting DOS
VALIDATE for accuracy (95% or higher)• Run report(s) on routine basis
AUTOMATE where possible
Root Causes to Look For - AllowancesRoot Causes to Look For - Allowances
FACILITY RESOLUTION COUNT TOTAL $
Happy Holidays Health System
Account has no payments. Possible allowance posting error or charges were over adjusted. 165 $ (122,863.52)
Happy Holidays Health System Adjustment equals account balance. 620 $ (282,477.61)
Happy Holidays Health SystemAdjustment was posted two times in error. 775 $ (209,747.24)
Happy Holidays Health SystemCharges were adjusted off incorrectly. 327 $ (39,120.83)
Happy Holidays Health SystemTotal adjustments meet or exceed total charges. 912 $ (279,412.88)
2,799 $ (933,622.08)
April 18, 202312
Using the Tools – Payer Using the Tools – Payer
Review contracts• Timely filing/look-backs• Late charges• Charges removed• Check or take-back?– Segregate process accordingly
Appeal CorrespondenceNo response = Payer retraction. Keep your money!
Make use of a “Free Labor” resourceFree labor to provider = Reduced costs
April 18, 202313
Risks Associated With Risks Associated With Not Resolving Credit BalancesNot Resolving Credit Balances
• Criminal/Civil Penalties
• Mis-stated Profit
• Mis-stated Revenue
• Negative Management Letter Comments
• Patient Dissatisfaction
April 18, 202314
Benefits to Using Automation to Resolve Benefits to Using Automation to Resolve Credit Balance AccountsCredit Balance Accounts
• Allows the Provider to process outstanding backlog of credit balances without having to add additional staff
• Greatly reduces the costs associated with processing credit balance accounts
• Minimizes the possibility of manual errors and potential fraudulent activity
• Ensures ongoing, timely processing of credit balances
• Simplifies and speeds up daily procedures
April 18, 202315
Types of Credit Balance Accounts Types of Credit Balance Accounts that that can be Automatedcan be Automated
• Mis-posted Contractual Adjustments
• Mis-posted Payments/Payment Transfers
• Patient Refunds
How Does Automation Work?How Does Automation Work?
Automation is a process used to resolve large volumes of patient refunds or mis-posted allowances without any human interaction.
Scoring algorithms are used to identify accounts that have patient overpayments or mis-posted allowances
Transaction files are created that are then batch uploaded into the providers patient accounting system to resolve the credit balance accounts
CCF Case StudyCCF Case Study
• In 2007, CCF identified a large number of outstanding credit balances that were overpaid by patients
• 29,000 accounts affected• 24,000 patient refunds due• $890,000
• CCF set a goal to resolve all outstanding patient refunds within a one year period
• Estimated total cost to manually resolve all current patient refunds was $170,000 to $200,000
• Prior to implementing automation, CCF staff performed a statistical sample of potential patient refunds to ensure that the accuracy rate was 99% or higher
ResultsResults
• CCF processed 24,000 patient refund checks over a three month period at a total cost of $27,000. A savings of $173,000 based on the initial estimate.
• CCF continues to process patient refunds on a weekly basis through an automated process. On average 800 patient refunds are processed through automation on an ongoing weekly basis.
April 18, 202319
Impact to CCFImpact to CCF
• Gross Days in Credit Balance – 2004• Hospital = 2.6• Physicians = 7.3
• Gross Days in Credit Balance – 2009• Hospital = 1.2 (54% reduction)• Physicians = 4.1 (44% reduction)
• Total FTE Savings Since 2005 = 50 FTE’s
• Increased patient satisfaction
April 18, 202320
DISCUSSIONDISCUSSION
April 18, 202321
CONTACT INFORMATIONCONTACT INFORMATION
THANK YOU!!!THANK YOU!!!
Kathy Sandora – CRCE
Executive Director, CBAS Operations
CDR Associates, LLC
443-904-4361
Ken Krieger
Senior Sales Executive
CDR Associates, LLC
412-260-9924
[email protected] 18, 202322
