NOTICE: This document contains confidential or proprietary information which may be legally...

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, and may not be shared with vendors outside of Craneware. p.1

Emily CastoTerritory Sales Manager

New York State

Craneware, Inc.

[email protected]

WelcomeWelcome

Linda Corley, MBA, CPC

Corporate Compliance Officer

Revenue Cycle Solutions

Dell Services

[email protected]

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, and may not be shared with vendors outside of Craneware.

Developing Sound Controls Managing the Shift from

Revenue Cycle to Revenue Integrity Practices


Today’s Agenda

Importance of Continued Focus on the Revenue Cycle

Transitioning from Revenue Cycle to Revenue Integrity

Significance of the Chargemaster

Identifying where Problems start

Strategies for Revenue Integrity

Questions & Answers


Why Focus on the Revenue Cycle?

Increase in Bad Debt due to Revenue Leakage

Increase in Compliance Risk

Increase in Non-payment


What is Revenue Leakage?

Revenue leakage – the gap between the amount of

revenue providers are entitled to and the amount of

reimbursement eventually received – is missed or “lost”

revenue.


Increase in Bad Debt

40% of what hospitals bill is collected1

$31.2 billion in uncompensated care2

17% growth in uncompensated care with no increase in

reimbursement at EMH Regional Healthcare System in Ohio3

25% of Americans have trouble paying for medical care4

80% of payments uncollected at any given time5

1. Healthcare Financial Management: Trends in Hospital Uncollectible Revenues (February 2008)

2. Healthcare Financial Management Association Report: Getting Rid of Bad Debt Blues (April 2008)

3. Healthcare Finance News: Ohio Hospital System Addresses Bad Debt by Identifying Patients, Resources (January 30, 2008)

4. USA TODAY: Report: Even the Insured Have Trouble Paying Bills (October 25, 2007)

5. The Advisory Board Company, Financial Leadership Council: "Cultivating the Self-Pay Discipline" (2007)


Increase in Compliance Risk

$76.5 million owed to Medicaid from a New York hospital because of

overbilling1

42% of improper payments identified by Recovery Audit Contractors

are attributed to improper coding2

38 states had either proposed or passed legislation related to pricing

transparency as of September 20073

$2.2 billion expected recoveries from fraud investigations and audits

by the OIG in the first-half FY 20084

1. Medicaid Fraud Control Units: 2005 Annual Report

2. HealthLeaders: When the Auditor Comes Calling: Surviving an Audit (June 2008)

3. Healthcare Financial Management: Is Your Strategic Pricing Strategy Based on Fact or Myth? (May 2008)

4. Office of Inspector General: OIG Reports More Than $2 Billion in Recoveries From Fighting Fraud, Waste, and Abuse for First-Half FY 2008 (June 12, 2008)


Increase in Non-Payment through Errors

A $300-million hospital can easily lose $3 million to chargemaster

and charge capture errors1

90% of claim denials are preventable2

67% of denials are recoverable

14% of claims submitted are denied3

One out of every seven claims has to be resubmitted, appealed

or written off

1. Healthcare Financial Management: Are You Speeding Toward Revenue Loss? (December 2004)

2. American Medical News: Stake Your Claim: How to fight for fair reimbursement (June 21, 2004)

3. Healthcare Financial Management: Improving Cash Flow with Better Charge Capture and Denial Management (October 2005)


Increase in Non-Payment due to Errors

According to a study of 1 million hospitals’ claims:1

56% of claims contained coding errors

• 86% of the errors were HCPCS based

o 79% of the HCPCS errors were chargemaster related

27% of claims contained billing errors

17% of claims contained charging errors

$75 to $125 per claim is the cost associated with managing a denial

or reworking a claim

1. Healthcare Financial Management Association: Outpatient PPS Can Undermine Effective Revenue Cycle Management (July 30, 2004


The Case for Revenue Integrity

The achievement of operational efficiency, compliance and ligament reimbursement – can be achieved only with the proper processes, tools, and related expertise.

(rev-uh-noo in-teg-ri-ty) -nounRevenue Integrity


Symptoms of a Significant Revenue Cycle Problem

High dollars written-off due to lack of medical necessity

Low percentage of:

• Medicare APC and other payors’ reimbursement of charges

• Claims that transmit electronically without biller intervention

High Percentage of :

• “Return-to-provider” (RTP) Claims

• Rework Claims

Multiple rejections for “duplicate claims”

Not enough staff to keep up with collections follow-up

High or growing days in A/R

Cash flow problems


How to Stop Revenue Leakage and begin the Shift to Revenue Integrity

“What is the most important tool to ensure optimum and compliant reimbursement?”

THE CHARGEMASTERTHE CHARGEMASTER


Start in the Middle

The Chargemaster is the database responsible for

translating care into billable and payable services



The Charge Description Master, CDM or Chargemaster is the vehicle through which an organization describes all of its services-both internal and to the outside world

Basis for measuring

• Revenue Performance

• Costs

• Productivity



The Chargemaster is your “Friend” to charging

and billing accurately or “Foe” when it creates

careless patterns of

behavior



When does CDM Maintenance cause Lost Charges?

HFMA Insta Poll March 2009



Considering the basis of payment, approximately how much of your revenue is charge based?


Imbed Essential Controls into CDM Maintenance Process

The CDM has a pervasive effect on the charge capture process

Internal controls are most effective when closest to transactions

A control point is located anywhere a process can break down

Internal controls assure that you either prevent or detect errors

The importance of a control point depends on probability, frequency and materiality of error

What are the controls most important in CDM management?


Essential CDM Controls needed to Shift to Revenue Integrity



Control Risk Materiality Control Point

3. Medication units of service incorrect

Impacts 100% of transactions using incorrect dosage

Comparison of description and CPT Intent of service to identify incorrect unit of service

4. Pharmacy acquisition costs do not reconcile with revenue

100% of transactions tied to billable supplies

Compare Pharmacy purchase history against CDM




5. Clerical data entry error to CDM table

Impacts 100% of transactions using incorrect code

Automated checking of key data elements by comparing to external sources

6. Delay creating new charge codes

Clinical transaction is never billed or can’t be delivered

Electronic change request form with automated escalation




7. Clinical department’s inappropriate use of charge due to absence of education

Varies from random error to 100% of transactions

Automated way to notify department managers of information specific to clinical department

8. Clinical department disengaged from CDM

Risk increases with staff turn-over

Provide department read only access to the CDM




9. Order entry system doesn’t reflect CDM edits

Impacts 100% of transactions using incorrect code

Implement workflow that includes e-mail acknowledgement & sign off




10. Poor documentation results in loss of knowledge

Reliance on individual knowledge and best effort documentation is common

Automated, defensible documentation of all edits and guidance.

11. Price falls below cost and/or fee schedules

Lost revenue on all contracts paying lesser

Line item comparison to fee schedule benchmark


But How?


THE CHARGEMASTER is a key strategic asset in the fight to Stop Revenue Leakage and make the shift to Revenue Integrity – The more accurately it’s managed, the more value it delivers


8

DENIAL &APPEAL

MANAGEMENT

CLAIMSSUBMISSION

9

THIRD PARTYFOLLOW-UP

10

PAYMENT POSTING

11

13

CONTRACTNEGOTIATION/

ADMIN.

14

REJECTIONPROCESSING

12

8MEDICAL

RECORDS &CODING

SCHEDULING

1PRE-REG &PRE-CERT

2

INSURANCE VERIFICATION

3

FINANCIALCOUNSELING

4

REGISTRATION& POS CASH

COLLECTIONS

5

CHARGECAPTURE& ENTRY

7

6MEDICAL

MANAGEMENT

= Patient Access Functions

= Medical Management Functions

= Receivables Management Functions

Revenue Management


Why are hospitals having more claim rejections and denials

Patient Financial Services has lost ability to completely “clean-up” claims on the back-end to positively affect reimbursement!

Appropriate “time” for control may be lost if all processes are not in place “prior” to provision of the service

Patient Financial Services (Business Office) does not:• register / schedule / admit• review for medical necessity prior to service• maintain the chargemaster• select / post charge• code the HCPCS / CPT-4 codes• code diagnoses / procedures• add modifiers


Inpatient and outpatient claims undergo thousands of edits looking at patient status, diagnosis and procedure data, services provided and demographic data – they either pay or reject or deny.

Rejections and denials are not contractual write-offs. This distinction is an important one.

Patients remaining in acute care past the average LOS are estimated to cost hospitals over 50 million dollars per year.

Hospitals are fined (or placed under a Quality Improvement Agreement) due to patients being admitted as inpatients when they do not meet inpatient admission criteria. (RAC recoupments!)

Perplexing Points to Ponder


2001 – 57% of hospitals were paid less than the actual cost of caring for their Medicare patients¹

92% of hospitals lose money on outpatient services – the fastest growing segment of hospital billable services

• Medical necessity denials “cost” hospitals more dollars than received in collections in some hospitals

“Lost” revenue has contributed to the negative margins experienced by nearly one-third of all U.S. hospitals every year

When is revenue not really “CASH”?

When it’s still in “CHARGES”

¹AHA, The Case for Hospital Payment Improvement, May 2003


Where do denials begin?

Opportunity vs. Reality: “Know” the facility’s strengths and weaknesses

Pre-registration is a “must” for accurate reimbursement

Insurance verification builds up speed for quicker payment

Scheduling “stops” that may slow down the billing process• Registration collaboration essential!!!• Case Management involvement earns $$• Manage physician relationships for appropriate

reimbursement

Outpatient is not Inpatient – Why the difference means $$• Medicare “inpatient only” procedures cause denials

Patient Access:Why the final bill does not originate in the billing office!


Patient Access

Evaluate each and every access point, to flow-chart how

patients are brought into the hospital to receive services; as

well as set goals for planned improvement in data gathering

and POS cash collections

Perform monthly “admissions” review – graph data for ALOS

Pay particular attention to ER admissions. Involve CM / UR in the

“Patient Status” decision-making process

Track all inpatient admissions denied by payer

Establish accountability for medical necessity and the Medicare

“required” Advanced Beneficiary Notice (ABN) or Health Insurance

Notice of Non-coverage (HINN) procedures

Use “compliance” software for diagnosis review for outpatients

Institute required financial counseling sessions with all beneficiaries

Strategies for Shifting to Revenue Integrity


Medicare’s Advanced Beneficiary Notice (ABN) for outpatients and Hospital Issued Notice of Non-Coverage (HINN) for inpatients

Is your facility providing “bed and breakfast” along the

trip?

Observation after OP Surgery – Non-covered by Medicare

Caution flags to watch out for

Must have physician documented “complication” of the OP

surgery to qualify for Observation – even then, it is not

reimbursed

Nausea and vomiting generally considered not a

complication


Charge Capture Strategies

Continued training for:• clinical areas on Medicare coverage and coding requirements

• “charge” posting staff on ensuring all services being charged

Continual review of CDM to ensure all line items are

correct• Incorporate payer specific coding for reimbursement

Is there a line item for every service, test, exam, drug,

supply (non-routine) and procedure the hospital may

provide?

Is CDM coding revised quarterly? • CMS publishes new OPPS edits and Addendum B (APC by HCPCS

code) each quarter


Charge Capture Strategies

Review of UB to determine if “coded” HCPCS are dropping

to the claim

Does a soft-coded HCPCS override a CDM HCPCS?• “Test” claims important for accurate and compliant billing

Is the HCPCS appearing under the correct

Revenue Code?

Who audits charge process to ensure all services provided

have been charged appropriately?• “Strength” in identification and correction of lost charges

• Important for optimum payment but most important for compliant reimbursement and ability to retain $$ after RAC or Medicaid Integrity audits


Charge Capture Strategies for Claim Edits Compliance (medical necessity) edits – “front-end” edits

•Compile “write-offs” by line item service, department, physician, and registrar•Publish results and communicate to all parties•Use results for educational sessions for registrars/departments

Pre-bill edits – “back-end” edits prior to claim transmission•Require review by “eagle-eyed” manager prior to reversing to the department whose revenue cannot be collected•Post to spreadsheet for reporting to departmental managers

FISS edits – “return-to-provider” claims with error reason codes

•Require weekly report (itemized list) by biller or collector of claims in the FISS that have not been cleared for payment.


Charge Capture Strategies for Claim Edits

Erroneous information provided by patient•No coverage on date of service – Commercial, and, yes, Medicare

•Medicare should be billed as “secondary” payer – not primaryoAuto or other accidents require “primary” payer information

Typographical error at time of registration or billing

Inconsistent information within claim form•Therapy date of onset of symptoms, number of prior visits

Insufficient information required to consider claim

for payment

Overlapping dates of service – Home Health & SNF patient•Need accurate and complete Discharge Planning data

OP services provided within 72 hours of IP admission


Comparing Apples to Oranges“Returned to Provider” or “Denied”

Error messages are sometimes difficult for collectors to understand – maintain “error resolution” manual with screen prints and instructions on corrections

Medicare Fiscal Intermediary Standard System (FISS) errors (glitches) cause payment delays – analyze $$ and call FI or MAC if substantial

Create task force for focused correction for specific payers if problems exist

Know standard “payment receipt” time (days in collection) by payer


Comparing Apples to OrangesHealth Information Management

Promote collaboration of HIM staff and clinical charge posting staff

Track problematic accounts that require additional work or re-work by HIM

Establish written procedure for clinical area review or HIM review of line items rejected for modifier determination

Ask HIM to meet with PFS to discuss accounts on holdTrack by outpatient area, by physician and by error message

Drill down into DNFB for inpatient accounts to establish $$ by issue


Comparing Apples to OrangesMedical Management

Although Case Management and Utilization Review have been considered components of the Revenue Cycle, NOW is the time to ensure their participation in optimization of payment.

Consider defining written procedure for admission practices!

Important component of compliance.

Often given “responsibility” with no “authority”•Identify CM strengths and weaknesses•Draft improvement plan•Measure performance•Ensure measurable outcomes to document and report “quality” initiatives


Comparing Apples to Oranges

“I sometimes visit a hospital where PFS staff state they have no Medicare denials…”

•Why do they think there are no or very few denials?

•What change does this thinking require?

•Do you know?

What was the total dollar amount of all the services provided in your hospital last month that did not

result in a payment?


Receiving the Remittance Advice

How sweet is its arrival or does it ever arrive?

1. Payment

2. Denials

3. Reasons for Denials

4. Appeals


Communication – How do we know we have made the shift to Revenue Integrity?

Revenue Cycle Management – Establish monthly meeting to review:

• Total revenue earned

• Total cash received

• Total “non-collectable” charges

• And all “benchmark” and best practice data the hospital can track!

Quality Assurance for Revenue Integrity

• Set goals and quantify!

Celebration!


Emily CastoTerritory Sales Manager

New York State

Craneware, Inc.

[email protected]

Questions?Questions?

Linda Corley, MBA, CPC

Corporate Compliance Officer

Revenue Cycle Solutions

Dell Services

[email protected]

NOTICE: This document contains confidential or proprietary information which may be legally...

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