Summary: The healthcare sector as we know it is changing rapidly. Reimbursement cutbacks are rampant. How are you coping with these changes? Are you maximizing reimbursement? Are you analyzing your revenue cycle? Are you reviewing and auditing your claim denials? Have you looked at scheduling? How about billing and coding?

It is not a secret that healthcare costs are rising exponentially, currently at an all-time high. In order to “reign in” these costs, many cost cutting initiatives are under way. Healthcare, as we know it, is evolving at a rapid pace. Medicare cutbacks were one of the most drastic to take place. Beginning October 1, 2013, Medicare reimbursement was slashed up to 2% for hospitals with readmission charges higher than average. This rate is expected to increase to 3% in 2015, with more chronic diseases being phased in.

Physician compensation is moving from the traditional fee-for-service to value-based. This shift essentially will reward providers and Accountable Care Organizations for achieving certain levels of quality rather than being rewarded based upon quantity of volume. Accountable Care Organizations are becoming pivotal and are rewarded for cost saving measures in addition to quality initiatives. While value-based reimbursement is still in its infancy, providers who begin making strides now toward quality rewards will benefit tremendously when the initiative becomes mandatory. Currently, there are many pilot plans available through CMS for those transitioning to new delivery models. One such example is bundled payments in which providers are reimbursed based upon a service provided across many providers as opposed to each individual service provided by a single provider.

With major changes taking place in the healthcare arena, many as a result of the Affordable Care Act, how do providers survive in this new environment? One way to increase reimbursement and revenue is to review all aspects of the revenue cycle from scheduling appointments to auditing claims and coding to the billing process to reviewing and working denied claims and everything in between.

Maximizing Reimbursement Through Scheduling Appointments

Scheduling appointments is an art in and of itself. Some more recent innovations include wave scheduling. This process entails scheduling 3-4 patients at the top of each hour rather than scheduling at the typical 15-30 minute intervals. Basically, it becomes a first come first served mechanism and builds in such issues as late arrivals and appointments that take longer than expected. Scheduling is key to efficiency. Follow-up with appointment reminders can make the difference between “show” or “no show”. Absenteeism accounts for a large proportion of lost revenue. If they don’t show, you can’t bill for the service and staff many not reach maximum productivity.

Maximizing Reimbursement Through Front Desk Functions

The front desk is an integral piece to the revenue process. At this point, the front desk duties include verifying eligibility and determining whether the provider is in or out of network. The front desk must have a good basic understanding of the insurance process and obtain all correct and accurate demographic information. This information must all be entered into the computer accurately to ensure that when the claim is filed, it won’t be denied due to input errors from the front desk. Additionally, the insurance department spends countless hours fixing and reviewing errors made from the front desk which is time that could be spent actually submitting the claims and reviewing denials. One of the most important functions of the front desk is to collect copays, coninsurance, and deductibles. Once insurance has been verified, the front desk should collect the patient portion of the amount for the service prior to rendering the service. A lot of money is left on the table by not collecting these amounts while the patient is in the office. The likelihood of collecting after the patient leaves diminishes with each passing day. Policies and procedures should be established so everyone at the front desk knows what to collect.

Maximizing Reimbursement Through Contract Negotiation

Insurance companies are like banks when applying for a mortgage. Everything is negotiable. There are many payers out there and one can “shop” for the best rates. An audit should be performed of all payers with whom you work. The audit should indicate the rates charged as well as when the contracts are up for renewal. A strategic plan should be put in place indicating when the contracts renew and will provide an opportunity for increased revenue should the rates be negotiated in favor of the provider.

Maximizing Reimbursement Through Coding/Documentation

The coding world is changing as quickly as healthcare itself. New codes are constantly becoming available and required for proper reimbursement. We are currently transitioning from ICD-9 to ICD-10. Once this transition is official, anyone who bills under the old ICD-9 codes will have their claims denied. Additionally, there are opportunities for upcoding assuming the documentation validates the ability to do so. Many claims are denied due to inproper coding whether it is due to errors, upcoding without required documentation, or downcoding. With proper training, providers can maximize reimbursement through making a few tweaks to the coding process. Audits should be performed regularly to ensure maximum reimbursement is achieved and to ensure that documentation is being completed properly.

Maximizing Reimbursement Through Billing/Filing Claims

To ensure timely and proper reimbursement, attention should be drawn to the billing process. Are there audits in place to ensure that bills are being filed appropriately? Are there specialists that deal with particular payers such as Medicare or Medicaid? It is almost impossible to know all of the ins and outs for the billing processes associated with all payers; hence specialists by payer should be implemented if possible. Claims should be submitted in a timely manner. It is recommended that claims are filed daily but at least weekly is recommended. Mechanisms should be in place to ensure that any outstanding claims are followed up on within 30 days. Audits in this area are essential as with most aspects affecting the revenue cycle. One final audit should be performed on all claims prior to submission. Is the coding correct, is the payer/insurance information correct, are the patient demographics correct? Is everything correct for the specific payer in terms of their requirements? Is the claim being submitted according to specific guidelines?

Maximizing Reimbursement Through the Denials Process

Healthcare denials contribute greatly to lost revenue/reimbursement. As mentioned above, making sure that claims are properly reviewed and filed is half the battle. Processes should be in place to review denials upon receipt. Are they from a particular payer? Are they for a particular error? Were they filed timely? Reviewing denials and tracking and trending why they are denied can lead to a recoupment of substantial revenue. An action plan should be drafted to start addressing the more prominent issues. Is it an education issue? Is it a coding issue? If allowed, the denied claims should be corrected and resubmitted for further consideration. Additionally, if applicable, the appeals process can be utilized. In general, 20% of claims are denied and of those 50% are never refiled. This is money just thrown away.

Review

A review of the revenue cycle from start to finish can point out issues which can begin to be addressed. Fixing the revenue cycle is not an overnight process, but diligence will return positive results. Every step made increases your bottom line.

Do you need assistance with increasing revenue to make up for the changes in the economy and healthcare legislation? Do you know where to start?

BHM Healthcare Solutions are experts when it comes to healthcare financial analysis. We have helped many clients recoup impressive amounts of revenue and begin turning their bottom line around. Will you be next?

Click here to review our whitepaper on reducing denials.

Click here to request a complimentary consultation with one of our experts!