Hospitals can no longer afford to let money fall through the cracks due to payment denials, incorrect coding or wrong rates that in soam cases are costing businesses millions.
“We were losing out on a lot of it just due to the volume contracts payers,” said Linda Yeager, coder patient accounts manager, patient financial services at Hunt Regional Healthcare in Texas.
Bellin Health in Texas found that in 40 percent of cases, insurers were not paying them correctly and in the other 60 percent, Bellin was not coding correctly, according to Michelle Conard, managed care contract team lead.
The Advisory Board is working with hospitals to recoup lost reimbursement through a Payment Integrity Compass, or PIC system, that takes data and claims information from insurance companies and looks at remits and payer contracts to generate a calculation of what should be paid.
“The heart of PIC is its calculation engine,” said Kyle Bates, associate director of revenue cycle solutions for the Advisory Board. “It calculates reimbursement on an individual account. It understands what’s due in each account.”
PIC is also able to spot trends and compare contracts, according to Andrea Engel, reimbursement specialist for Bellin Health System in Wisconsin.
Cecilia Valentine, managed care contract analyst at Hunt Regional Healthcare works on the managed care side new contracts.
“Recently we had a payer who wanted to pay pieces of service, that’s a hurdle we’ve been able to accomplish,” Valentine said.
Bellin has closed its reimbursement gap by about $2.2 million in one year. Hunt Regional saved $1.3 million over 18 months, according to administrators for both systems.
Health systems are typically successful on 32 percent of their appeals to government payers, but Bellin Health now wins about 83 percent of these appeals, according to Conard. On commercial claims, Bellin prevails on about 69 percent, compared to the average of 49 percent.
Bellin Health has about 120,000 claims monthly. The claims payment is usually 45 days from the date of service.
If there is an issue, the claim goes to a front office that works on the first and second level of denials. If the claim is still denied, it goes to the managed care contract team.
“The reporting side is key,” Conard said. “You have to figure out what’s causing the underpayment.”
Because underpayments, payer contracts, and denials are all strongly interconnected, Hunt Regional formed a new cross-functional team to increase collaboration between patient financial services, patient account management, and contract analysis.
The teams took on appeals on underpaid and denied accounts leading to a 65 percent improvement in recoveries, according to Yeager.
Hunt is a small-to-medium-sized hospital that has a third of its business in Medicare managed care. One of their big challenges was technology, Yeager said.
“On accounts receivable side, we had challenges with bundled payments, challenges identifying accounts,” she said. “We were also looking at no pay claims and underpaid claims and identifying denials. We had a lot of manual processes on the back end to determine our denials.”
A big problem was the delay in knowing denied claims. On reports, the claims looked like payment in process.
“It was 30 to 45 days before we hit a denial,” Yeager said.
PIC has reduced the time to two to five days. For instance, Blue Cross Blue Shield usually pays on Tuesdays.
“I’m working that denial on Thursday,” Yeager said.
Traditional Medicare and Medicaid pay most of the time. But Medicare Advantage and Medicaid replacement plans have a lower adherence, she said.
“That is where we’ve seen a lot of our recoveries in underpayments,” Yeager said.
PIC has been around for 16 years and is used by 375 hospitals, Bates said. Over the last year or two, it has expanded into larger health system such as Catholic Health Initiatives, Trinity Health and Mercy Health.
Date: December 19, 2016