FINDING THE MONEY: Turning Transactions Compliance into Cash. March John Thompson, Director Tom Grove, Vice President. 1 healthcare IT solutions

Transcription

1 FINDING THE MONEY: Turning Transactions Compliance into Cash March 2004 John Thompson, Director Tom Grove, Vice President 1 healthcare IT solutions

2 OUR DISCUSSION TODAY Realizing savings from transactions standards Building block: The Pre-registration Model Implementing the 270/271 in the pre-registration environment Implementing the 278 transaction Implementing the 276/277 transactions 2 healthcare IT solutions

3 FINDING THE MONEY 3 healthcare IT solutions

4 TRANSACTION STANDARDS Forecasted savings ranging from $1 Billion to $4 Billion Increased staff efficiency through increased automation Vendor application changes Business process changes Substantial changes in processes and staff competencies throughout the revenue cycle 4 healthcare IT solutions

5 TRANSACTION STANDARDS Revenue Cycle Departments Changes in organization structure and staffing Increased automation Staff re-alignment Improved data quality Reduced write-offs 5 healthcare IT solutions

6 TRANSACTION STANDARDS Transactions in the Revenue Cycle Admitting, Registration and Authorization Eligibility, coverage or benefit inquiry (270) Payer response (271) Required prior authorization from the payer (278) Billing Healthcare claim (837) Follow-Up Claim status (276) Response (277) Cash Posting Claim payment/advice (835) 6 healthcare IT solutions

7 THE PRE-REGISTRATION MODEL It s Not Just About Patient Flow Anymore! 7 healthcare IT solutions

8 THE PRE-REGISTRATION MODEL A well developed pre-encounter program is the key to tapping TCS Return on Investment (ROI) Pre-encounter activities include: Resource scheduling Payer authorization Benefit verification Pre-registration 8 healthcare IT solutions

9 THE IMPORTANCE OF PRE-REGISTRATION Pre-registration is no longer simply a value-added service performed to improve patient flow. Today, it is the critical activity that enables the efficient operation of the total revenue cycle. 9 healthcare IT solutions

10 THE IMPORTANCE OF PRE-REGISTRATION Research has found that where there are low levels of preregistration, gross days outstanding (GDRO) is higher. From Top Performers, Jennifer Towne for the Healthcare Financial Management Association. 10 healthcare IT solutions

11 WHY? By pre-registering patients, organizations can: Gain the lead time needed to obtain insurance benefits prior to an encounter Inform patients of their financial obligations prior to an encounter Increase up-front collections 11 healthcare IT solutions

12 WHY? By pre-registering patients, organizations can: Schedule self-pay patients for counseling services Reduce denials of non-covered services Improve customer satisfaction 12 healthcare IT solutions

13 BENEFITS Using today s technology to leverage the benefits of HIPAA, effective organizations can: Improve accounts receivable Reduce denials Enhance data integrity Improve FTE utilization 13 healthcare IT solutions

14 THE TREATMENT APPROACH Ineffective organizations tend to use a treatment approach to manage encounter issues Resources are deployed to manage financial issues on the date of service Goals: Maintain patient flow and low wait times Get the authorizations that we can Have the billing staff figure out payment issues and bill the patient after the encounter 14 healthcare IT solutions

15 TREATMENT APPROACH RESULTS Practitioners of this approach generally experience mixed results: Patient flow and wait times may be unpredictable. Over-staffing and under-staffing are common. Patients are seen without approvals. Patient may neglect to pay for services after the fact. Bad debt and write-offs mount. 15 healthcare IT solutions

16 THE TREATMENT APPROACH It is interesting to note that many practitioners of the treatment approach actually schedule patients in advance of encounters, yet they do not use this golden opportunity to pre-register these patients. 16 healthcare IT solutions

17 THE TREATMENT APPROACH Although these organizations will benefit from implementing HIPAA transactions, they will still tend to experience avoidable denials, upfront collection difficulties and the customer dissatisfaction associated with these issues. 17 healthcare IT solutions

18 A PREVENTION APPROACH Using a prevention approach, effective organizations use scarce resources to prevent denials by pre-registering patients. Goals: Secure approvals and authorizations Explain benefits vs. charges Reduce or eliminate tasks on the date of the encounter Reduce or eliminate bad encounters 18 healthcare IT solutions

19 PREVENTION APPROACH RESULTS Prevention approach practitioners more often get the following results: Prior authorization of scheduled encounters Out-of-pocket payment prior to or no later than the date of service 1 to 2 minute check-in encounters replace lengthy registration sessions Advance payment arrangements for elective self-pay encounters 19 healthcare IT solutions

20 PREVENTION APPROACH RESULTS Prevention approach practitioners are also positioned for an additional major benefit: They are positioned to fully benefit from the administrative simplification benefits of HIPAA through the effective use of preregistration practices 20 healthcare IT solutions

21 HOW DO WE GET THERE? Many organizations have the FTEs (full-time equivalent employees) to do this now, but they are deployed inefficiently at the point of the patient encounter. One Northern Virginia client realized that a change in focus was required. 21 healthcare IT solutions

22 THE PARADIGM SHIFT Their focus shifted from How do we get more resources to manage our hectic encounters? to a realization of As goes preregistration, so goes the revenue cycle. 22 healthcare IT solutions

23 ONE EXAMPLE 75% of encounter-based FTEs were shifted to the central scheduling unit with a new mission: To collect all registration information during the scheduling encounter 23 healthcare IT solutions

24 ONE EXAMPLE A financial screening group was then created to: Obtain insurance benefits Collect managed care referral Explain benefits and payment requirements 24 healthcare IT solutions

25 THE RESULTS Without adding FTEs, the organization experienced the following results: Denials decreased Waiting time decreased from 24 minutes to 3 minutes Up-front collections increased 25 healthcare IT solutions

26 THE PRE-ENCOUNTER MODEL, FULLY IMPLEMENTED 26 healthcare IT solutions

27 Pre-Registration Model ADT System Schedule the patient-pre-register also when patient is scheduling ADT System Pre-register patient when provider is scheduling ADT System Validate data up-front by running "missing data" report by registrar by account. Forward clean account ADT System Obtain 3rd Party payer eligibility/benefits or Managed Care authorization ADT System Map eligibility/ benefit data to insurance benefit screens Increase lead time, increase upfront collections Identify errors earlier on front-end, increase clean claim percentage 270/278 Request 271/278 Response 835 Response 276 Inquiry 277 Response Clearinghouse Automate claim status inquiries Submit Claims Attachments Attachments 270/278 Request Payer 271/278 Response 837 Claim 837 Claim Billing System Invoke edits to reduce 277 additional information requests Billing/Claims System Perform "Express Check-In on date of encounter ADT System Calculate coinsurance as percentage of avg. charges ADT System Generate "prepayment letter explaining benefits and requesting outof-pocket expenses 835 EOB Information for Secondary plan 835 Remit Billing System 835 Remit Billling System Payment Posted Was payment received? No Billling System Denial posted Account forwarded to Private Pay for follow-up Yes End 27 healthcare IT solutions

28 IMPLEMENTING THE 270/ healthcare IT solutions

29 270/271 The 270 and 271 transactions will allow you to request and to receive authorization and benefit information from your payers. The transactions may be conducted in advance of or at the time of service. 29 healthcare IT solutions

30 270/271 To maximize ROI and patient satisfaction, you must pre-register patients in advance of encounters. Benefits: Improved lead time to obtain insurance benefits prior to the encounter Better communication and management of patient expectations for the encounter No patient waiting time for registration/pre-certification at the encounter 30 healthcare IT solutions

31 IMPACT 20% FTE savings FTEs reassigned to pre-registration, reducing bad debt write-offs and write-offs due to lack of authorization 31 healthcare IT solutions

32 BEST IMPLEMENTATION STRATEGY This transaction is easy to implement as a web-based transaction Purchase blocks of transactions from a vendor More effective is an integrated solution with your HIS Saves staff time Avoids errors 32 healthcare IT solutions

33 GRADUATE LEVEL STRATEGY Combine scheduling, pre-registration and financial counseling in one phone call Conduct the 270/271 transaction in real time, when the patient calls for scheduling Inform the patient of co-pays and past balances, and expect payment at time of service 33 healthcare IT solutions

34 NON-SCHEDULED PATIENTS Most non-scheduled patients arrive in the emergency department A good 270/271 process is very fast You can do eligibility, get co-pay data, and be ready for point-ofservice collection by a discharge counselor 34 healthcare IT solutions

35 IMPLEMENTING THE healthcare IT solutions

36 278 If your organization engages in revenue cycle best practices, you pre-register at least 90% of elective encounters. Use the lead time to request eligibility and benefit information and (currently) make seemingly endless calls to payers and providers to request referrals and authorizations. Almost half of the time spent in the authorization process is utilized making these calls. 36 healthcare IT solutions

37 HOW TO USE THE 278 Real-time unfavorable 278 responses received during the pre-registration process can be formatted and immediately forwarded electronically to referring providers as reminders. Pre-scheduled 278 requests can be resubmitted to payers to re-check authorization status. Unfavorable 278 responses can be presorted by patient type into reports that could be automatically routed to Case Management, Patient Access or Patient Accounting for follow-up. 37 healthcare IT solutions

38 BENEFITS 20% FTE savings FTEs shifted to coordinate data exchanges between Patient Accounting and Utilization Management 38 healthcare IT solutions

39 IMPLEMENTING THE 276/ healthcare IT solutions

40 CURRENT STATE Electronic options limited today Hidden armies of telephonewielding staff Typical 300- to 400- bed hospital has 10 to 13 FTEs dedicated to following up on accounts Each call takes up to 10 minutes 40 healthcare IT solutions

41 BENEFITS Claim Status Inquiry makes up 40% to 50% of current FTEs. 25% to 30% impact to staffing. FTEs shifted to resolve OP small balances and improve efficiency with HMOs, dramatically improving cash flow and reducing write-offs. 41 healthcare IT solutions

42 GRADUATE LEVEL STRATEGY Use automated 276 queries to accelerate the revenue cycle. Imagine a 276 sent one week after electronic billing: Not eligible immediate self-pay or claim correction Medical records request respond immediately 2 week follow-up 276 Claim missing resubmit No status yet 276 again in 1 week 42 healthcare IT solutions

43 OVERALL 43 healthcare IT solutions

44 OVERALL OPERATIONS IMPACT Revenue cycle dramatically affected Providing opportunities to achieve efficiencies Automation will substantially alter roles in Patient Accounting Should not reduce staff Seizing opportunity to realign staff, improving revenue cycle operations 44 healthcare IT solutions

45 FINANCIAL IMPACT 350-Bed Hospital Personnel Bad Debt Reductions Authorization Denial Reductions Other Cost Savings Total $187,500 $1,875,000 $750,000 $20,000 $2,832,500 Source: Realizing Savings from HIPAA Transactions. McBee and Associates, healthcare IT solutions

46 ONE PAGE SUMMARY Workflow Workflow Workflow Workflow 46 healthcare IT solutions

47 IMPLEMENTATION CONSIDERATIONS Well structured and timely implementation process Systems, Operations, Organization Vendors Plan Payers Plan Testing and certifying transactions Current electronic processes Billing, verification, cash posting Authorizations, pre-registrations 47 healthcare IT solutions

48 IMPLEMENTATION CONSIDERATIONS Well structured and timely Implementation Process (cont d) Work Groups Registration areas Patient accounting Utilization management Medical records Information services 48 healthcare IT solutions

49 PARTING THOUGHTS In the revenue cycle, technology is important. Its value increases with the quality of the process it supports. Electronic transactions are not just faster versions of paper and voice transactions they are a quantum leap. Taking proper advantage of quantum leaps requires new thinking about the old problems. 49 healthcare IT solutions

50 Questions? If you have questions later, please feel free to us: 50 healthcare IT solutions