Revenue Integrity Standards and Accreditation in Healthcare Billing and Collections Standards Billing and Collections Summary The overall performance of the billing department relies on a strong performance from the rest of the revenue cycle departments. Billers are not clinical so information related to the clinical care of a patient cannot be edited by billing staff. If the clinical information on a claim was incorrectly entered earlier in the revenue cycle, claim submission will stop until a clinical department can be consulted for corrections. Monitoring and measuring the errors and reasons for errors will provide invaluable data for performance improvement throughout the revenue cycle. Billing and claim submission can only operate smoothly if strong processes and information technology solutions are in place that provide real time, rule-based edits on accounts throughout the revenue cycle. Standard edits should be in place and hospitals should be able to add custom edits as needed. Claims billed correctly and compliantly are vital to the hospital s cash flow. A clean claim is the biller s ultimate responsibility but their reliance on the rest of the revenue cycle cannot be overstated. Real time feedback to all departments is an important step in performance improvement and will help to ensure a continuous flow of information and ultimately cash flow. Third party payers are not the billers, only consideration when submitting claims. Patients and/or guarantors also require timely, accurate and concise billing statements. Successful hospitals utilize biller specific worklists, automated systems, updated edits supported by vendors, and biller specific productivity and error reporting. The hospital business office is also responsible for follow up on third party payments including technical denial follow up, reviewing payment discrepancies,
rebilling and billing secondary claims, researching credit balances and many more critical tasks related to revenue. It is important to have efficient processes in place to ensure a smooth, organized flow of data and payments. Measuring outcomes based on industry standards is important to determine how successful this important part of the revenue cycle is performing. Cashiering, refunds, and transaction posting functions focus on processing reimbursement from third-party payers and guarantors. Payments on behalf of, or made by the patient should be posted accurately to the correct account. Monitoring and measuring outcomes of established standards will ensure efficient and compliant management of cash. The goal of follow up and posting is to keep A/R collection times to a minimum. The timeliness of follow up directly relates to collection effectiveness. Effective goals are ones that can be measured and tracked. Prioritizing workflow based on the results of your performance measurements will improve resource utilization and minimize the time needed to collect the cash for the hospital. Accountability for outcomes should be communicated and documented with a focus on improving processes and performance. Hospitals successful with third party follow up and collections utilize staff crosstrained for working more than one payer type, regular reviews or collector s work for quality management, and quick identification of denials, underpayments or non-payments. Using systems that are fully integrated with all other systems in the revenue cycle allows efficient identification of required information and facilitates a better flow in the revenue cycle. Monitoring standards will help hospitals identify areas of improvement needed and will assist in establishing measurements for progress.
BC-01 BC-01.01 BC-01.02 Clean claim submission rate Hospitals will monitor for clean claim submission utilizing automated reporting, when possible, to report and track claims that can be transmitted without manipulation. Best practice standard is 90% of claims will process without manipulation or intervention. Rationale for BC-01 The goal of the revenue cycle is for data to flow correctly and efficiently to the billing system resulting in a clean claim that can be billed without intervention. Any disruption in the cycle will create a claim that can t be billed without manipulation. If the billing staff has to stop and track down issues in order to process the claim then revenue will suffer. Monitoring the clean claim rate will allow hospitals to determine where in the revenue cycle intervention may be needed. This standard should be tracked by utilizing automated reporting with documentation of findings maintained. Equation: N: Total number of claims that pass edits requiring no manual intervention D: Total claims accepted into claims scrubber tool for billing Surveyors will request the data for analysis and will request random charts for accuracy reviews. It is the responsibility of the hospital to collect and maintain data with documentation to verify the data collected.
BC-02 BC-02.01 BC-02.02 BC-02.03 Credit Balance: Gross Amount Hospitals will track and manage their credit balances using gross revenue as a measure. The hospital should evaluate their credit balances and determine goals for improvement. It is suggested that hospitals assign a reasonable number of accounts that should be worked per day, per applicable staff member, to accomplish goals and best practice standards. BC-02.04 Best Practice standard is that less than two days of gross revenue will be in a credit balance. Rationale for BC-02 A credit balance on a hospital account is the result of payments and allowances being posted to an account in excess of the total charges. Common causes of credit balances are duplicate payments, overpayments, charge corrections, excess patient payment due to inaccurate estimate of financial liability, incorrect coordination of benefits and many other causes. The Office of Inspector General (OIG) monitors credit balances and penalties may be imposed if they are not monitored and corrected. Under the Affordable Care Act hospitals must identify, reconcile and report overpayments within 60 days. Monitoring these credit balances will help you maintain compliance with federal standards. In addition, if a patient has made an overpayment those refunds should be made in a timely manner to help maintain patient satisfaction. Equation: This standard should be tracked concurrently and tallied at least weekly to ensure compliance with state and federal requirements. 2 Step calculation: Step one: Monthly gross revenue by 30 = 1 day of gross revenue Step Two: Total amount of dollars in credit balance 1 day of gross revenue = Number of days gross revenue in credit balance
BC-03 BC-03.01 BC-03.02 Claim rejection turnaround time Hospitals will track and manage claim rejections to evaluate turnaround times. Turnaround time is measured from date of rejection until date of claim resubmission. BC-03.03 Best Practice standard is <15 days for claim turnaround. Rationale for BC-03 A claim rejection results from missing, inaccurate or invalid information on a claim. The rejection can be from information in the system that originated at any point in the revenue cycle. Monitoring claim rejection reasons can help a hospital pinpoint process errors. Correction of the error should begin as soon as possible and monitoring the length of time the correction takes can highlight issues that were or are taking place in the revenue cycle. Communication between departments is essential in the correction process. Any breakdown in the process should be identified, documented and corrected to decrease future claim rejections and increase clean claim rates and cash flow. This standard should be tracked concurrently and tallied at least weekly to monitor identified issues in the revenue cycle process. Equation: N: Total time, in days, for each claim rejection turnaround to be completed D: Total number of claim rejections Dividing the number of claims into the number of days needed for turnaround will give you an average turnaround time for rejections. Surveyors will request data collected for analysis. It is the responsibility of the hospital to collect and maintain data with documentation to verify the data collected.
BC-04 BC-04.01 BC-04.02 Medicare Return To Provider (RTP) denials rate Hospitals will track and monitor claims that RTP from Medicare. Monitoring the reasons for the RTP will assist hospitals in evaluating processes in the revenue cycle that may contribute to the RTP. BC-04.03 Best Practice standard is that less than 3% of Medicare claims will be RTP.* Rationale for BC-04 Medicare claims that are returned to provider (RTP) are claims that the Medicare system cannot process. Reasons a claim may be returned can and will vary to include: Missing or invalid ID number, Incorrect or overlapping statement dates, Missing or invalid condition or occurrence codes, revenue and/or HCPCS/CPT code missing or invalid and many others. Hospitals need cash and submitting clean, complete claims allows that need to be met. Claims that are returned create a slowing or stopping of cash payments for the hospital. Monitoring these returned claims will allow you to determine what is missing or incorrect and if there are patterns or trends. If process issues are identified and corrected then cash will continue to flow and the revenue cycle will increase in compliance and efficiency. This standard should be monitored concurrently and measured and analyzed at least weekly. This will allow process issues to be identified and corrected quickly for maximum cash flow benefit. Equation: N: Total number of Medicare claims returned to provider D: Total number of Medicare claims submitted Surveyors will request the data for analysis and will request random charts for accuracy reviews. It is the responsibility of the hospital to collect and maintain data with documentation to verify the data collected.
BC-05 Aged Accounts Receivable (A/R) as % of A/R > 90 Days BC-05.01 BC-05.02 Hospitals will track and monitor A/R that is aged > 90 days after date of discharge. Evidence of monitoring all A/R balances will be considered a hospital best practice. BC-05.03 Best Practice standard is that < 20% of all A/R is > 90 days. Rationale for BC-05 Working accounts with balances in a timely manner is imperative to keep A/R collection time to a minimum. Timeliness of follow up will have a direct relationship to successful collections. The longer a balance is owed, the more difficult it will be to collect. Creating processes and workflows to manage accounts efficiently will keep accounts from aging and becoming uncollectable. Monitoring aged accounts receivables will allow hospitals to evaluate the process for follow up and rework flow if needed to ensure timeliness of follow up. This standard should be monitored concurrently and measured and analyzed at least bi-weekly. This will allow process issues to be identified and corrected quickly for maximum cash flow benefit. Equation: N: Total Dollar amount of claims in A/R > 90 days D: Total Dollar amount of claims in A/R Surveyors will request data collected for analysis. It is the responsibility of the hospital to collect and maintain data with documentation to verify the data collected.
BC-06 BC-06.01 BC-06.02 Gross days accounts receivable (A/R) outstanding The hospital will have procedures in place to ensure that payment on accounts is received within an appropriate time frame. The hospital will have procedures in place with specific guidelines on actions required to pursue payment on outstanding accounts. BC-06.02 Best practice standard is <50 days of accounts will be in A/R. Rationale for BC-06 Accounts receivable (A/R) is revenue that is owed to the hospital by patients and third party payers. To maintain financial stability, a steady cash flow is needed. The primary objective on managing your A/R is to minimize amounts owed by decreasing the time from billing to collection. Tracking the amounts owed and the reasons for delay will allow hospitals to make sure that their processes are streamlined and effective. Having specific procedures and guidelines in place for the actions that need to be taken to pursue payment will decrease the time to collect. Monitoring this standard will allow hospitals to track and trend outstanding A/R. Equation: This standard should be monitored concurrently and measured and analyzed at least monthly. This will allow process issues to be identified and corrected quickly for maximum cash flow benefit. 2 Steps for this equation 1. Take the total charges for the last 6 months number of days in the last 6 months = average daily charges 2. Total A/R Average daily charges = Days in A/R Example: If you have charged $500,000.00 in the last 6 months and there are 180 days in those months, your average daily charges would be $2777.00. Then if your total A/R is $150,000.00 your days in A/R would be 54 days. Surveyors will request policies and procedures to verify that processes are in place to pursue payment effectively. It is the responsibility of the hospital to collect and maintain data with documentation to verify the data collected.