Revenue Integrity Black Holes

EXPERIENCEV

AL

UE

RESULTS

Revenue Integrity Black Holes A Former CBO Director’s Perspective

Rob Jones, MBA, CPATDirector of Revenue Integrity

January 2011

Objectives

♦ Discuss some basics related to revenue integrity black holes

♦ Discuss why black holes exist

♦ Open forum discussion

♦ Walk through some “real life” examples of black holes

♦ Review solutions

Background?

♦ How many people come from Finance backgrounds?

♦ How many people come from Operations backgrounds?

♦ How many people have done both?

♦ Of the business office or patient accounting people in the room today, how many of you started off as a biller?

My Background / Perspective

♦ Representative, Medicare Billing (Hospital CBO)

♦ Supervisor, Account Maintenance (Physician CBO)

♦ Manager, Cash & Budget (Hospital CBO)

♦ Director, Patient Financial Services (Hospital & Physician CBO)

♦ Vice President, Revenue Management (Hospital CBO)

♦ Chair, Revenue Cycle Committee (various health systems)

♦ Consultant, Revenue Integrity (IMA Consulting)

What is Revenue Integrity?

♦ Revenue integrity can be summarized as follows:

“properly capture and correctly bill for services performed, maximize pricing opportunity, and ensure prompt accurate payment”

What is a Black Hole?

♦ A Black Hole is defined as follows:

“a region of space from which nothing, not even light, can escape”

What is a Revenue Integrity Black Hole?

♦ In healthcare Revenue Integrity, a Black Hole translates to:

“a system or process breakdown that prevents a hospital from getting paid accurately or timely”

WHY DO BLACK HOLES EXIST?

Why Do Black Holes Exist?

♦ Let’s start with billing requirements:

– Ultimately everything we do is summarized on a single form called the UB-04.

– Who can tell me how many fields exist on a UB04?

– Do payers have unique UB-04 data element requirements?

– How many fields on the UB04 is the business office responsible for?


♦ Assuming the UB-04 claim in billed, did it correctly capture all the services performed in field 44?

♦ The critical link between service delivery and billing on the UB-04 is the charge description master (CDM), which is basically the price book for the hospital. – Are all the services or supplies currently

listed in the CDM?

– Is the pricing relative to APC / other fee schedule reimbursement low?

– How often are CDM service codes / procedures with no assigned prices reviewed to ensure any internal manual pricing policies are compliant?

– How many people have “software” or “systems” that are supposed to take care of all this?


Assuming you’ve done everything correct and billed a perfectly clean UB-04 that captures all the services performed, are there processes and key performance indicators (KPI’s) in place to accurately record transactions and manage exceptions?

♦When is the claim adjusted?

♦Is it Systematic or Manual? If systematic, who is programming the contract management system?

♦Are transaction codes applied electronically or manually?

♦How are payment variances tracked and investigated?


Assuming everything is “perfect” on the UB-04 and the payers reimburse the correct amount, could there still be a black hole with revenue opportunity? YES! ♦Are the managed care contracts reviewed by a business office professional? ♦Is there an opportunity to unbundle certain services from and inpatient claim for additional reimbursement?♦Is there a strategic pricing opportunity based on contract terms?♦How are supply items reimbursed? What about supply expenses? Are you losing money due to supply costs?♦Are zero balances reviewed regularly for underpayment opportunity?

What’s The Bottom Line?

“You don’t know what you don’t know!”♦ No one person knows everything, the healthcare landscape is simply too

complex.

♦ Ensuring revenue integrity requires “subject matter expertise” in patient access, case management, charge capture, charge description master, coding, compliance, patient financial services, managed care, reimbursement, and finance.

♦ Coordination between all of these subject matter experts is essential to billing a clean claim with all the appropriate charges.

We Talked About People And Process, But What About Technology?

Let’s talk about technology…..

♦ Hospitals rely on information systems to link the revenue cycle departments and electronically push information flow from department to department.

♦ Information systems are not perfect and often have limitations. Additionally, these systems are only as good as the people who program them.

♦ Are your processes built around systems, or are systems built around your processes?

♦ Do you rely too heavily on technology?

Does an imbalance exist in your organization?

Systems Don’t Solve Problems, People Do!

♦ Our reliance on computer technology is one of the major underlying reasons why black holes exist.

♦ Over the last decade we have focused more on technology with a diminishing need for people.

♦ Computer automation has given us a false sense of security.

♦ Personal interaction has decreased.

♦ What about critical thinking or deductive reasoning?

Revenue Integrity: Discussion


1. Is there a person in this room that believes their hospital(s) does not have a single black hole?

2. If you had the choice to hire more people or implement a new computer system, what would you choose?

3. How has technology impacted our critical thinking ability and deductive reasoning skills?

4. Does anyone have an example of a black hole that you personally experienced?


Example #1 – After self pay collection efforts were exhausted, the accounts were not transferred or adjusted to bad debt

♦Black Hole Financial Impact:

– Medicare bad debt was not claimed

– Bad debt reserves were understated

Example #2 – Secondary balances were not getting transferred after the primary insurance company paid


– Decreased collections

– Increased bad debt via reserve provision


Example #3 – The average assigned ER level was below the local and regional hospital average


– An opportunity to assign a higher ER level exists

– Charge capture opportunity additionally identified


Example #4 – Assigned price is less than Medicare reimbursement. Impact of new OPPS coding requirements on reimbursement?


– Lost revenue

Example #5 – Supply item cost exceeds actual case rate reimbursement. In some cases which require an invoice for reimbursement, nothing is sent.


– Lost revenue

Revenue Integrity: Solutions

♦ Form a revenue integrity task force of seasoned and knowledgeable professionals in all areas of revenue cycle is the single most important critical success factor

♦ Assess current state to identify areas of weakness and create monitoring tools or KPI’s to monitor performance

♦ Cross train “intelligent” resources

♦ Do not solely rely on systems, instead build systems to support your processes

Contact Information

Rob Jones, MBA, CPAT

Director of Revenue Recovery

IMA Consulting

3 Christy Drive

Chadds Ford, PA 19317

(484) 840-1984 (office)

(484) 431-4324 (cell)

[email protected]

www.ima-consulting.com

Documents

Revenue Integrity Black Holes