Economic, legislative and regulatory headwinds continue to buffet healthcare providers and administrators working to improve flat or light a fire under slow financial growth. Add consumerism, audit risks and other challenges to the mix, and it’s no wonder that they must look beyond merely sampling EOBs and reviewing business processes to mine meaningful data for meaningful business intelligence.
Help isn’t only on the way, it has arrived with the development of electronic data interchange (EDI) technology leveraged in reporting engines that analyze payment information that help administrators work denials and improve business processes and achieve financial performance goals. EDI’s optimal application is as easy as following a seven-step process.
Step one simply involves choosing and subscribing to a system that best meets a hospital or clinic’s business process requirements. Basic products improve workflow by delivering standardized, sorted and prioritized remits that have been paid, denied, zero-paid or reversed, freeing employees to focus on recovering reimbursements that otherwise might go uncollected or recouped in a Medicare RAC audit.
More comprehensive services internally bench payment metrics while enabling administrators to set goals and track performance relating to reducing the frequency of unpaid claims and improving billing speed.
Secondly, as elementary as it may sound, administrators must have a thorough and clear understanding about how revenue stemming from such as wide ranging sources as remits, ERAs and 835s, is earned and collected. Decisions must be made on full data. For example, systems should enable providers to see whether payers offer electronic remittance advice via HIPAA’s standard 835. With such information and auto enrollment functionality available with a few keystrokes, administrative paperwork is dramatically reduced, contributing to improved financial performance.
Step three involves obtaining necessary remittance information to initiate appeals. This isn’t always an easy task, given the fact that unpaid claims often account for half of remits received. Programs that display remits sorted by payers, in descending order by the amount billed, enable healthcare organizations to always appeal the next denial or zero-pay that offers the highest financial reward.
Systems that provide detailed unpaid claims analysis data enable administrators to scale step four toward transforming their institution’s financial performance. They help to reduce unpaid claims by spotlighting claims adjustment reason codes (CARCs) while identifying workflow points that need improvement. Some also rank CARCs by percentage of total adjustments and details payer usage, shedding light on payer tendencies and illustrating whether payers or internal issues are the reason for unpaid claims.
Payers aren’t always to blame for slow payments. Step five involves the use of a billing and payment analysis system that locates average accounts receivable days, getting to the bottom of whether documentation lags, poor back office processes or underperforming employees—rather than slow payers—are the culprits. The key is to leverage available technology to clearly identify who or what is to blame.
Step six, improving patient collections, takes on added importance when economic factors make it more difficult for patients to pay for services, which in turn places increased pressure on providers’ bottom line performance. Systems can help administrators accurately forecast the amount to be collected from each patient and therefore adjust priorities by identifying when patient responsibility becomes a growing part of overall revenue. This, in turn, helps administrators make critical decisions as to which insurance plans to honor, while helping to develop and track payment options that give the practice the best opportunity for receiving timely payments.
Finally, available systems encourage administrators to focus on continuous business process improvement by spotlighting current numbers in light of past performance, while also incorporating national average data for accurate measurement against industry and peer groups. Ready access to these and other comparative data encourages workers to outdo themselves from one report to the next, leading to a larger ROI and a healthier overall organization.
Jim Lacy is CFO and Counsel for ZirMed. He can be reached at jim.lacy@zirmed.com.