Prevention Is the Name of the Game When Accelerating Cash Flow
Monday, September 26, 2011
The percentage of your practice’s claims that are paid in full on first submission directly affects your days in accounts receivable.
While days in accounts receivable are a common revenue cycle metric in medical practices, a not-so-common measurement — but equally important — is the percentage of first-time claim approvals. Do your registration, clinical and billing teams understand their roles in denial prevention, or do your billers spend an exorbitant amount of time working on denial resolution? In today’s health care environment, high-performing revenue cycle workflows hinge on a well-trained team, efficient processes and the right technology. As the paradigm continues to shift toward disease prevention and wellness in health care delivery, a healthy revenue cycle is based on proactively preventing denials by building accountability and efficiency into the workflow.
Controlling the quality of claims submitted to the payor starts when the patient contacts your office to schedule an appointment. This is the ideal time to preregister the patient by obtaining complete demographic data and subscriber/patient insurance information exactly as it appears on the insurance card. One of the most effective uses of technology, which directly impacts your balance sheet, is the functionality within your practice management system (EPM) or clearinghouse to check patient eligibility, determine patient benefits and obtain appropriate authorizations prior to service delivery. This should be done on every patient before every visit. When the patient presents for treatment, verify preregistration data, collect copay or deductible, and scan or copy the patient’s driver’s license and insurance card.
Keys to Ensuring Accelerated Cash Flow
Accelerated cash flow in a practice is directly related to charge integrity, timely claim filing and prompt payment by the payor. Correct CPT and ICD-9 coding and accurate charge entry are just as critical to denial prevention as obtaining accurate demographic and insurance information. Despite focused attention on registration and charge integrity, errors caused by data entry, missing information, incorrect coding or database library set-up issues still occur. One of the most valuable denial-prevention tools is the claim scrubber, which allows you to check the validity of a claim by comparing data to a rules engine prior to submission to the payor.
To develop a work culture that promotes accountability, hold the appropriate team responsible for timely resolution of the issues identified in the EPM, clearinghouse or payor editors. Within 48 hours of service delivery, all charges should be entered into your EPM and transmitted to the clearinghouse or payor. At this point in the workflow, if a clearinghouse claim scrubber or payor editor rejects the claim, it can be corrected, as the payor has not accepted the claim for adjudication.
Being Proactive Is King
Daily review of the clearinghouse or payer submission reports is a critical step in proactively preventing denials and tracking status of the claims. Analysis of the denial codes allows you to measure the volume and causes of rejected claims, identify preventable trends and system issues, and, most importantly, pinpoint the root cause of the rejection. On a monthly basis, have your billing department develop a list of the top rejection reasons and share the data with your team. This is an excellent starting point for continuous process improvement activities, which are required to prevent errors from occurring.
Increasing the number of claims paid on the first submission requires knowing why claims are being rejected and taking action to proactively prevent the rejections. High-performing revenue cycle workflows report a 95% first submission clean claim rate. What is your percentage of claims paid on the first transmission?
Gregg Kosterlitzky is a partner in the Padgett Stratemann Tax Department. He maintains a broad-base business tax planning and strategies practice, which includes the formation of business ventures and tax controversy matters. He has significant experience with federal and state tax planning matters, including tax issues related to mergers and acquisitions, dispositions, financings, and reorganizations. For more information, visit www.padgett-cpa.com or call (512) 476-0717.