Proactive practices for improved payer payments
Organizations should have good processes to manage payment exceptions, including rejections, denials or outstanding receivables
Even with significant changes in healthcare reimbursement and increasing patient payment responsibility, payers still play an essential role in a healthcare provider’s revenue stream.
Although it may be tempting to rely on the status quo when it comes to payer payment, there are opportunities to boost collections by shifting key activities upfront and leveraging revenue-driving tools and processes on both the front and back ends of the revenue cycle.
This article, the second in a four-part series examining ways to optimize the revenue cycle, focuses in particular on improving payer payments. Click here to read the first article in the series.
Strategies for expanding payer revenue
Historically, healthcare providers have taken a somewhat reactive approach to payer payment, waiting until claims were denied to identify and fix problems. However, this reactive model is flawed in today’s fast-paced healthcare environment because it slows cash flow, increases collection costs and decreases efficiency.
By engaging in a more proactive approach, providers can realize a more streamlined revenue cycle. Consider the following strategies organizations can leverage to optimize data and elevate revenue cycle performance.
Verify insurance eligibility and registration information upfront
Because lack of patient eligibility is one of the largest reasons for claims denial, collecting the most accurate coverage data—even before the patient is seen—jump-starts the revenue cycle. Proactive eligibility verification double checks that the patient is insured and allows the organization to fully understand what services are covered. Gathering this data early minimizes denials and saves staff time and resources on the back end as potential issues are proactively managed. Automated verification speeds the process and further improves data accuracy.
In addition to proactively verifying eligibility, front desk staff should also collect and validate demographic and other registration information at the start of the patient encounter, reducing the likelihood of mismatch errors or denials due to incomplete or inaccurate patient information. Without upfront eligibility verification and accurate registration, the organization runs the risk of being underpaid—or not being paid at all.
Develop a claims scrubbing process
Rather than waiting until a payer denies a claim to figure out it includes preventable mistakes, organizations should engage in a robust claims scrubbing process to be sure a claim is as correct and complete as possible before submission.
Sound claims scrubbing can save time, improve accuracy and generate faster claim resolution—all of which contribute to a more efficient and effective revenue cycle. Technology enables a strong process by automating methodologies that seek out problematic data and highlight inconsistencies, errors and potential issues. The optimal claims scrubbing technology includes up-to-date information from payers, responding to frequently changing payer guidelines and local coverage determinations.
When considering a claims scrubbing tool, make sure the vendor uses certified coders to ensure the solution offers the most comprehensive and accurate methodologies.
Monitor claims movement
Some providers still work with paper claims, which not only slows the submission process but also provides no visibility once the claim leaves the provider’s office. Electronic claims submission, on the other hand, speeds the claim to the payer and allows the provider to follow the claim throughout the submission process.
This technology tracks the claim to the clearinghouse, monitors when it is released to the payer and provides acceptance or rejection feedback from both the clearinghouse and the payer. The resulting data allows the provider to measure progress and look for opportunities to hasten payment.
Another benefit of electronic claims submission is reduced administrative time and costs. In fact, the American Medical Association (AMA) estimates the average cost of processing a clean paper claim is $6.63 while the same claim sent electronically costs only $2.90.
Manage exceptions
Even with the most proactive revenue cycle, payment does not always occur. Organizations should have good processes to manage payment exceptions, including rejections, denials or outstanding receivables. This should involve tracking and analyzing outliers to identify common patterns and root causes, which can be addressed to limit future incidents.
For instance, an organization can incorporate specific edits into their claims scrubbing methodology that target recurring and preventable problems. Data analysis can also highlight repetitive staff errors and point to training opportunities. When leveraging analytical tools, it can be helpful to look at exceptions by location and provider as well as against state and national benchmarks.
Create meaningful write-off categories
Every provider wants to avoid writing off revenue that is truly collectible. However, sometimes pursuing payment is not worth the effort. For example, the Medical Group Management Association (MGMA) estimates an average cost of $25 to $30 to rework a denied claim. To avoid this issue, it is important to have internal controls that segregate different types of denied claims, varying by specialty and service mix.
Typically, creating five to 10 write-off categories enables easy data tracking and allows meaningful segregation for trend analysis and process improvements. Through this process, providers can identify patterns in order to uncover the root of the problem causing claims to be denied and find clarity around how to correct these issues moving forward to eliminate future denials. Additionally, the write-off data can be used to support future negotiations with payers for value-based reimbursement.
Revenue-cycle success at every point
Technology and automation give providers more control over the revenue cycle by supporting a proactive approach to payer payments. By making claims information more accurate on the front end and improving data analysis to identify and avoid claims exceptions, providers can realize a more effective revenue cycle.
Part three of this series will examine benchmarks that providers can use to analyze and optimize revenue cycle performance.
Monte Sandler is the executive vice president of revenue cycle management services at NextGen Healthcare.
