Audit Your Revenue Cycle for Claims Denial Issues to Improve Patient Billing Experience
Claims denials represent millions of dollars in lost net revenue for hospitals and health systems, with up to 7% of submitted claims being denied in an average hospital on a routine basis. However, implementing claims denial management software can seem like an overwhelming task. Claims denial management consultants can help locate the biggest problem areas for a short-term, high-impact project.
We spoke with Tim Bavosi, General Manager of Healthcare Revenue Strategies, a RevSpring company, on what CFO’s can expect to gain from an audit and ongoing support from a consulting firm. His group specializes in revenue cycle management consulting.
Where are most claims denials coming from? We find that most denials are a result of registration errors, such as eligibility, authorization, or missing data.
Are these errors usually the result of a staff training issue or a payer issue? Most denials can be tracked back to a “user error” or “technical error” (i.e. missing charges, invalid sequence of procedures (Medical Necessity), non-credentials NPI #, missing NDC #, missing occurrence code(s), invalid diagnosis, and so on). Over 90% of denials fall into one of three root causes:
- End User Error that is related to department processes, such as charge entry or data entry employees ignoring error warnings or not entering payer required data elements. Sometimes we see payer rules that have not been addressed, which comes back to basic training issues.
- Technical set-up issues like an old-charge requisition that has invalid HCPCS/CPTs attached to them, claim formatting issues, missing data as a result of not mapping the data appropriately to the claim is the second biggest mishap we find in an average engagement.
- Finally, there are patient requirements for payers like Medicare where patient must submit forms prior to approval and/or adjudication. If the patient hasn’t followed all required processes for their payer organization, denials will follow.
What are some examples of what an audit is and how has it improved denials? A standard assessment covers two areas of focus:
- Processes and Procedures. We interview all revenue cycle staff and their leadership to understand their processes, and the reasons behind them. This can cover a variety of job titles and roles within a hospital organization from scheduling personnel to centralized and off-site/segregated scheduling departments/locations. We also make sure we speak with registration staff and the registration director, as well as case managers, HIM coders and the HIM director. Other standard groups audited include PFS staff, including billers, collectors, cash posters, denial management team members, MM staff and leadership, operating room nurse managers, and C-level leadership like the CFO and the CNO. We leverage a questionnaire we’ve developed over the years to ensure we collect all applicable info.
- We assess the organizations current HCIS System. Every HCIS, from MEDITECH to Epic, Cerner, CPSI, NextGen, and Sorian, have nuances and technology standards that, if not properly implemented, can cause a surge in claims denials.
If denials aren’t properly managed, what are the impacts to the patient during the billing experience? Depending on the denial, for example, a high percentage of eligibility denials are erroneous – meaning the patient has insurance but bad data entry, missing information, spelling errors, or name discrepancies will cause the claim to deny.
In order for any “Denied Claim” to be paid, the claim must be re-worked manually by a biller then re-submitted to the payer. This scenario can impact the patient as follows:
- If an erroneous denial or any denial is not “worked,” the payer claim will remain unpaid. Depending on the hospital’s system setup, the denial (zero payment) can trigger the total balance to move from primary insurance to secondary (if one exists) then to the patient.
- The patient receives a statement that includes total charges (i.e. the entire gross charges of the service provided), which is incorrect and can cause trust issues between the patient and provider.
There are 1600+ CAS reason codes that represent different ways payer cans deny claims. Certain ones are much more prone to impact patients than others.
How long does a typical assessment last? Our standard engagement is approximately six to eight weeks, and systems can implement changes to see positive results immediately.
This article was originally published on RevSpring and is republished here with permission.