At a Glance
A revenue integrity plan should address five key areas:
- Accuracy of patient information
- Verification of payer information and policies
- Accuracy of documentation
- Processing of claims
- Accuracy of payment
As reform increases pressure on healthcare organizations from both government and private payers, the need for new strategies that preserve and accelerate their cash flow is critical. A first step is to implement a revenue integrity improvement program. Achieving revenue integrity means ensuring that providers are paid fairly, accurately, and quickly by all payers for care and services rendered to patients. It also involves eliminating the potential for lost revenue opportunities at every point in the revenue cycle.
When developing a revenue integrity improvement plan, a provider should begin by determining the points at which the organization's revenue cycle is breaking down or has the potential to break down, particularly under reform. Does the potential for lost revenue exist before services are provided, as services are provided, as the claim is produced, or when payment is processed-or is there already evidence of revenue "leaks" due to breakdowns in these areas? Once these areas have been determined, an action plan should be developed to ensure accuracy throughout scheduling and registration, preauthorization and reauthorization, all aspects of documentation, and billing and collection. The organization also should outline the appropriate actions for responding to denials.
Ensuring Accuracy of Patient Information
The registration process presents the best opportunity to ensure that patient information is accurate and to collect any patient liabilities. It is also ground zero for catching revenue integrity errors early before they have an impact on cash flow further downstream.
The task of gathering and recording the correct demographic, financial, and clinical information about the patient should begin as early as possible in the revenue cycle process. This is a critical undertaking, as it is widely acknowledged that many problems with revenue cycle integrity are introduced during scheduling and registration. In fact, patient access errors account for approximately 60 percent of all rejected or denied claims.
Healthcare providers can take some simple yet innovative steps to remove errors from scheduling and registration-while also better engaging patients. Centralized patient access teams can contact patients via phone to gather and validate patient demographic and payment information prior to time of service. This enables patients to provide the necessary data when it is more convenient for them. It also provides an opportunity to collect necessary co-pays and deductibles early and potentially incentivize patients to pay up front by offering discounts for early payment.
Hospitals also could offer self-service kiosks to enable patients who are comfortable with using them to reduce wait times by registering themselves and entering their own information. Various data interface engines can be integrated with these kiosk applications to ensure data accuracy, including connections to scheduling and registration systems. Of course, consideration must be given to the privacy and security of information being displayed and entered.
Another way to ensure accuracy during registration and scheduling is to give employees who register patients incentives in the form of monetary rewards or other recognition for regularly obtaining correct patient information and collecting patient fees up front. Quality assurance programs designed specifically for registration can track each individual registrar's accuracy and collections, providing the organization with a basis for measuring registrar performance.
Requiring preauthorization on all scheduled procedures helps a hospital identify and track exceptions, allowing the registration team to focus on problem areas and resolve them quickly. Also, preauthorized patients can be "fast tracked" on the day of their procedure, thereby reducing waiting times and improving patient satisfaction scores.
Verifying Payer Information and Policies
Verifying that the correct payer has been identified for each patient and that all payer policies, including those related to preauthorization and reauthorization, are followed can help organizations avoid potential denials or delays in payment. Because payer preauthorization policies vary, careful monitoring and coordination with case management can help to prevent loss of revenue related to specific payer coverage policies. To ensure that patient and payer information are aligned, every healthcare organization should educate its staff on the role that employees play in protecting an organization's revenue stream.
A good patient registration quality assurance program that allows edits to be built during the admissions process is vital. Such a program will better support admissions staff in entering the correct information for each patient, providing management with a quantifiable metric to measure quality and performance in the admissions and registration areas. The data obtained by using this program also will make it easier for hospitals to calculate their net revenue per payer-key information that can be leveraged during annual contract negotiations with payers.
Supporting Accuracy in Documentation
Ensuring that all services provided to the patient are entered appropriately into the charging system and documented as needed on the patient chart for accurate coding is critical to supporting revenue integrity.
The key to ensuring accurate charging is to establish accountability and organization alignment for charge capture quality. One means to this end is adding charge specialists who are accountable for the accurate posting of charges to the revenue cycle team to work directly with clinical staff. If adding staff is not realistic, all clinical managers and staff should, in the very least, regularly receive training and education on the importance of correct charging and documentation. Given that lost charges represent 3 to 5 percent of lost revenue, establishing and maintaining proper processes is crucial.
Setting goals for documentation is an important aspect of ensuring compliance with correct processes. Organizations can track and measure accuracy of documentation by auditing charge sheets. To establish a link between clinical care and financial performance, include a revenue cycle goal in each clinical director's scorecard or list of annual goals. By making clinical directors accountable for accuracy of documentation in their departments, correct charge capture will become a priority for clinical staff, as these staff will be encouraged by their directors to take the time to ensure the hospital is being paid for the services it provides. In areas that are at a high risk for missing charges, daily charge reconciliation should be required. Additionally, certain technologies, such as rules-based charging systems, can easily identify systematic charge deficiencies and improve charge capture compliance.
Processing Claims Effectively and Efficiently
To ensure revenue integrity, a provider must be able to accumulate charges quickly, cross-reference them correctly to the claim based on specific payer requirements, and submit them expeditiously for turnaround. The use of payer codes to drive processing, posting, workflows, and reporting is a good place to start. For instance, development of payer-specific edits and bridge routines can increase claim efficiency. These same codes can drive posting back into the patient accounting systems and provide an organizational structure for metrics and performance reporting.
Denials can be used as a rallying point for identifying and plugging leaks within the revenue cycle that affect payment. Analyzing the reasons behind denials can help improve processes upstream. Verifying coding and compliance for cases that may be subject to audit or medical necessity review improves accuracy and increases compliance.
Verifying the Accuracy of Payment
Quality checks should be in place to ensure that the expected payment is received and, if not, that all underpayments-including explicit or implicit denials-are investigated and resolved.
Building a proper checks and balances system into a healthcare organization's revenue cycle will reduce burdensome work further downstream. A portion of this system should include ensuring that all payments received from patients and payers are correct. A recent study by the American Medical Association found that health insurers mishandle one-fifth of all claims, leading to delayed reimbursement and additional administrative costs for hospitals (2010 National Health Insurer Report Card, the American Medical Association, www.ama-assn.org).
Creating workflows to address denials and underpayments can help route denied claims quickly for faster resolution and increased cash flow. If a provider uses a third party to handle collections, the provider should establish measurable goals and track progress. These goals should include days in accounts receivable and goals for patient-friendly processes.
How Does Your Revenue Cycle Measure Up?
Formulating a revenue integrity plan is essential to ensuring that a provider receives the right payment for the services it delivers. Providers should develop an integrity improvement plan checklist, such as the checklist on page 47, to review and evaluate integrity of revenue cycle processes, workflows and performance by staff in patient access and patient services, and billing and collection indicators. Doing so will protect the organization's ability to fulfill its mission.
Kate Banks is president, customer revenue strategy and improvement, MedAssets, Inc., Atlanta, and a member of HFMA's Georgia Chapter (email@example.com).
Sidebar: Revenue Integrity Improvement Plan Checklist
The following are issues that a healthcare provider should investigate and consider when attempting to improve revenue integrity and reduce the potential for lost cash throughout the revenue cycle.
- Are we able to obtain authorization, verify insurance benefits, and determine patient liability on all prescheduled visits prior to service?
- Have we invested in the training of our staff to communicate successfully with patients about their financial requirements?
- Are our contract terms well understood and operationally implemented?
- Is there good communication between patient access and managed care departments? Are processes in these areas in line with payer requirements, supporting our ability to secure proper payment for all contracted payers?
- Are we recording the correct charges for each patient?
- For those areas that still track and input charges using manual processes, have we established expected ranges that enable exception reporting?
- Are the codes that are dropping to claims from the chargemaster generating clean claims?
- Are billers removing or changing codes to get the claim out?
- Do we analyze the reasons for payer rejections and denials to improve billing and upstream processes?
- Do we have the proper workflow in place to automate timely resolution of payer rejections and return to provider claims?
Publication Date: Monday, November 01, 2010