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Savannah, Ga.-based Memorial University Medical Center (MUMC) had been using an outdated voucher system to record the procedures, services, and supplies provided to emergency department (ED) patients. Charge entries at the 622-bed hospital were based on nursing documentation alone, rather than including physician documentation and orders. This resulted in an incomplete picture of the services performed. In numerous cases, ED documentation did not match charge entries.
An extensive chart assessment identified ED and observation facility coding issues as a primary culprit. In total, MUMC learned it had the potential to improve gross revenue by $24 million per year with more accurate charge capture and coding.
A consultant reviewed a sample of ED and observation charts, including the department’s medical records, chargemaster, and itemized patient statements. The two-day, on-site review process focused on accuracy as well as the quality of the documentation and facility charge capture process. A sample of 64 ED charts and 20 observation charts were reviewed, using patient population totals from the financial analysis provided by MUMC. Patients were assessed using the American College of Emergency Physicians’ ED Facility Level Coding Guidelines.
Snapshot of the results. The assessment concluded that the hospital was under-assigning the patient level of service approximately 75 percent of the time by undervaluing the resources actually used for those patients. The result was very low distribution levels (about 60 percent of patients in facility charge levels 1 and 2) for a Level 1 trauma center with 100,000 ED visits per year. A more accurate distribution would not only improve revenue, but also result in the ability to distinguish patients with relatively high-resource requirements from those with lower resource intensity.
Areas for improvement. The assessment identified the following areas for improvement.
Observation specifics. An analysis of observation patients revealed that clearly documented procedures often were omitted from the bill, amounting to approximately $141 lost in gross revenue per patient. Some charts were missing infusion stop times, which resulted in an inability to bill those services. Of the 20 observation patients who received injection and infusion services, only one patient was billed accurately in accordance with clinician documentation for an overall accuracy rate of 5 percent.
MUMC determined it did not have the staffing or skill sets to make the necessary process changes and opted to bring in a consultant to provide full-service facility coding for its ED and observation services, including facility evaluation and management (E/M) calculation, code assignment, and quality assurance. Using coding software and professional coders, the consultant pinpointed documentation deficiencies and other improvement opportunities.
With the technology-enabled service, billing modifiers could be appropriately assigned, providing additional information about procedures and allowing for more accurate payment. Documentation review and query processes were adjusted to include information recorded by physicians so no procedures were missed.
By the end of the first month, MUMC’s per-visit gross revenue increased to $258 per patient, and by the middle of March the average patient charge reached $1,260, up from the baseline of $1,040.
A few months after transitioning to the new coding and billing services, MUMC’s annualized gross revenue had increased by $24.8 million, the level originally estimated by the assessment, and per-patient charges also had increased to more appropriate levels:
An additional benefit was that the new system and team of coding experts brought the assurance of compliance and data integrity, resulting in accurate, defensible charges for MUMC.
Distribution levels improved to a normal bell curve appropriate for a hospital of MUMC’s size and scope of services, as shown in the exhibit below. Previously undervalued services were remedied by charge capture that more accurately reflected the resources expended by the facility.
As a result, a higher level of service was assigned for about 65 percent of the ED patients, and a lower level of service was assigned to 3 percent. Also, a higher level of service was assigned for about 70 percent of observation cases, where patients routinely require a significant amount of resources.
Coding turnaround times improved to consistent rates of less than 48 hours, well under the contracted time of 72 hours, improving the speed and efficiency of billing. The faster turnaround times led to improved rates of patient payment.
With the support of an outside facility coding service, MUMC had transformed its system of charging and coding while increasing accuracy and efficiency. The technology-based solution enabled the query process between physicians and coders to work, effectively improving documentation overall.
In the end, careful analysis of its coding and billing processes led to improvements in Memorial’s financial health. Improved accuracy and efficiency were the staff’s primary goals, and those were met in the first month of implementation. MUMC’s future plans include consideration of the same services for its labor and delivery department.
Steve Hendrix is a vice president at T-System Inc., Kansas City, Mo.
Elizabeth Morgenroth, CPC, is a medical business analyst at T-System Inc., Kansas City, Mo.
According to the American College of Emergency Physicians, facility coding reflects the volume and intensity of resources utilized by the facility to provide patient care, whereas professional codes are determined based on the complexity and intensity of provider performed work and include the cognitive effort expended by the provider. There are five ED facility charge levels (with five corresponding CPT codes 99281-99285) that differentiate ED care provided by the severity of the patient symptoms and the intensity of resources needed to treat the patient. For example, a patient presenting with an uncomplicated insect bite who only requires a quick assessment would be assigned to a Level 1 facility charge level (CPT 99281). In contrast, a patient with a severe infection who requires constant monitoring and an MRI would fall into Level 5 (CPT 99285). There is also a critical care code, CPT 99291.
Facility E&M (or E/M) codes refer to those for evaluation and management, and are related to reporting care received in nonprocedural encounters—such as instructing a patient how to use crutches, taking a health history, or obtaining a translator for patient communication. Facility procedure codes refer to traditional clinical care.
Source: American College of Emergency Physicians, ED Facility Level Coding Guidelines
Publication Date: Thursday, December 05, 2013
TriMedx helps health systems control costs and uncover savings opportunities by optimizing the clinical engineering function.
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow.
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
Emad Rizk, MD, president and CEO of Accretive Health, discusses the uncertainty facing hospitals and the transitions affecting revenue cycle management.
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
Jim Bohnsack, vice president, solution & corporate development for Conifer Health Solutions, explains how the company helps healthcare providers leverage data to deliver better outcomes while optimizing reimbursement for all payment arrangements.
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Steve Scibetta, senior director of channel sales for Ontario Systems' healthcare product line, shares insights into effectively managing receivables.
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Elena White, vice president of risk, quality, and network solutions for Optum, discusses how healthcare providers can leverage data and technology as they enable risk in their organization.
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
Somnia President and CEO Marc Koch, MD, MBA, explains how hospitals can drive transformative change in the perioperative experience for outstanding clinical and financial outcomes.
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
PMMC President Roger L. Shaul discusses the effects of healthcare reform on revenue cycle management and how PMMC's products help clients adapt to a changing financial environment.
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Greg Burgess, Founder and Chief Product Officer at Burgess Group shares insights and opportunities for payment integrity in the rapidly changing healthcare IT landscape.
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
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