Category: For Hospitals & Physician Groups

Stay informed on the latest industry news, best practices, and trends in revenue cycle management for hospitals and physician groups.

Most Expensive Administrative Cost for Providers? Prior Authorization.

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Administrative overhead is a real burden for many providers. Technology and automation have been mandated by the Centers for Medicare and Medicaid in certain parts of healthcare processes, but overall, the healthcare industry is way behind in utilizing technology and automation for increased efficiencies and profit. This blog will explore the latest findings from the Council for Affordable Quality Healthcare, Inc. (CAQH) as well as some of the potential reasons providers don’t pursue automation, despite its proven benefits.

The seventh annual report from CAQH found that prior authorization costs are the most costly, time-consuming transaction for providers. On average, providers spend almost $11 on each manual prior authorization, which is up from $6.61 just a year ago. Obviously, the costs are significantly lower for partially and fully electronic transactions, at $4 and $2 respectively, but automation of prior authorization transactions remained very low in 2019.

Why is it so difficult? Unfortunately, there are several reasons:

1. Data inconsistency

Payers don’t use the same codes to communicate prior authorization status, errors and next steps, including the need for clinical documentation to prove medical necessity. Standardization and transparency is needed to make the process easier for all involved.

2. No standardized clinical documentation

Health plans require different levels of clinical documentation detail for prior authorization requests to help determine medical necessity and appropriateness. This lack of standardization makes it difficult to automate a prior authorization response.

3.  Lack of clinical and administrative system integration

Bi-directional integrations between practice management systems and clinical systems, like electronic health records, are uncommon, which means data has to be manually entered into one system from another. This represents an opportunity for human error and a drain on productivity and efficiency.

Despite the known barriers, not much progress is being made year over year. The CAQH found that adoption of prior authorizations increased by only one percent from 2018 to 2019 to 13% overall. However, the CAQH just approved a 2-day rule to accelerate the prior authorization process, and 80% of industry stakeholders are in agreement.

The rule outlines the following timelines must be met 90% of the time within a calendar month:

  • A two-day additional information request. A health plan, payer or its agent has two business days to review a prior authorization request from a provider and respond with the additional documentation needed to complete the request.
  • A two-day final determination. Once a health plan receives all requested information from a provider, its payer or agent has two business days to send a response containing a final determination.
  • Optional close out. A health plan may choose to close out a prior authorization request if it does not receive the additional information needed to make a final determination from the provider within 15 business days of communicating what additional information is needed.

This new rule is very encouraging, considering the health plans participating in the CAQH represent 75% of the insured population in the United States. This rule will not only help reduce administrative costs for providers, but more importantly, it will help save lives by ending delays in care caused by prior authorization requirements.

If you’re interested in reading about best practices for mitigating prior authorization challenges, check out this whitepaper.

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Mitigating Healthcare Challenges with a Healthy Revenue Cycle

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The top 5 challenges facing healthcare today can all be mitigated by a healthier revenue cycle. This blog will explore changes you can make in your rev cycle to address and even conquer these challenges, outlined by Managed Healthcare Executive.

Challenge #1: Costs & Transparency

It’s a bit shocking that we’re going into 2020 with so many offices not being able to accurately confirm a patient’s eligibility or provide an accurate out-of-pocket amount that will be owed for the service provided. If your team struggles with providing this information, there are tools you can easily implement to remove these challenges.

The right patient access solution (as part of a revenue cycle management platform) can help you reduce denials due to avoidable pre-service errors, which typically account for 50% of denials, in addition to:

  • Increase revenue from payer and patient payments
  • Spend less time tracking down patient information
  • Increase staff productivity
  • Reduce bad debt and avoidable write-offs

Challenge #2: Consumer Experience

Most Americans aren’t able to correctly define copay, deductible and premium. These same folks typically will avoid going to the doctor for recommended or even required services because they’re afraid of the cost and confused by the overall experience. After all, healthcare is the #1 cause of bankruptcies in the United States, so the fear is legitimate.*

It shouldn’t be unreasonable for a patient to know what to expect throughout their entire experience of receiving care. A strong revenue cycle management solution should be able to help you:

Identify –

  • Patient’s coverage and benefit verification
  • Patient’s financial responsibility
  • Patient’s need for financial assistance vs. ability to pay

Communicate –

  • The patient’s insurance coverage for service
  • Set payment expectations (how much to pay now and methods of payment)

Collect –

  • The amount the patient owes at the time of service

Providing this information to your patients not only ensures a positive experience for them, it relieves a huge burden from your staff by not having to deal with frustrated and confused patients. This resource guide can help you explain common healthcare terms to your patients. We encourage you to print it and make it available to your patients.

Challenge #3: Delivery System Transformation

Being able to provide care to those that don’t have easy access is a growing challenge.

Critical Access Hospitals (CAH), designated by the Centers for Medicare and Medicaid Services, are designed to reduce the financial vulnerability of rural hospitals and improve access to healthcare by keeping essential services in rural communities. Because of the immense financial constraints CAHs face, resources can’t afford to be wasted. Optimizing efficiencies within their revenue cycle provides a significant opportunity to reduce operating costs and improve productivity. These facilities should be required to use technology to optimize their revenue cycles so staff isn’t wasting time on activities that could be easily automated.

Challenge #4: Data & Analytics

Just having access to data isn’t enough. Revenue cycle teams need actionable data – they need to be able to make necessary changes and improvements based on the data they have. It’s great if you know what percentage of claims are being denied, but do you know why they’re being denied? Are there certain providers that are denying claims at a higher rate? Is there a specific procedure code that’s being denied more than any other?

Actionable data helps you:

  • Gain insight into your data to inform your decisions regarding resource allocation, process improvement, and strategic rev cycle management.
  • Access your rev cycle activity from disparate systems to identify contributing factors and investigate cause-effect relationships affecting claim denials and appeals.
  • Monitor changes over time and anticipated reimbursement of claim denials, and identify root cause by payer, denial category, denial reason, CPT and more.

Challenge #5: Data Interoperability

Accessing data between disparate systems is a common challenge in healthcare. We’ve talked with large healthcare systems that are looking to consolidate their vendors, even if that means foregoing unique functionality that a specific vendor provides, in order to eliminate data silos.

The right revenue cycle solution should be able to feed data into your EHR and other critical systems so you can access your data wherever and whenever you need it. And the solution should be comprehensive enough to allow you to manage your entire revenue cycle process without needing additional vendors to supplement missing functionality.

The Bottom Line

Money makes the world go round. The revenue cycle is the lifeblood of a healthcare organization. If managed at it’s highest efficiency, your organization will reap the benefits of maximum reimbursements and staff productivity – with streamlined resources.

Ken MagnessKen Magness is a focused healthcare professional with more than a decade of experience in helping clients understand the true value of automation in the revenue cycle management process. As the Strategic Initiatives Leader at Quadax, Ken and his team are passionate about connecting with healthcare providers to help them create and leverage the appropriate technology solutions to optimize the revenue cycle process and improve the experience of their patients and staff.

Source:
*CNBC Medical Bills Are the Biggest Cause of US Bankruptcies: Study, Dan Mangan June 2013

Healthcare Providers Must Educate on Patient Financial Responsibility

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With all of the attention on healthcare transparency, it seems ironic that Americans are more and more confused about healthcare, specifically their insurance policies. Continue reading “Healthcare Providers Must Educate on Patient Financial Responsibility”

Hot Topics in Healthcare: Increasing Revenue Cycle Complexities

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If you think managing the healthcare revenue cycle is challenging now, brace yourself because there are several forces that are likely to drive more complication and complexity into the revenue cycle. Recent analyses of hospital finances are painting a complex picture – Medicare spending cuts, declining service volumes, rising costs, a shrinking payer mix, underutilized technology and increasing financial waste are all threatening the profitability of our hospitals and providers.

We’re Getting Older

As more and more baby boomers reach the age of 65, the mix of profit-generating commercial business and break-even to unprofitable government payers will continue to shrink. In addition to the increasing Medicare population, reductions in federal payments to hospitals will total $252.6 billion from 2010 to 2019, according to a new report commissioned by the American Hospital Association and the Federation of American Hospitals.

To compound the issue of an aging population and cuts in federal reimbursement, a report from Fitch Ratings predicts the third straight year of declining profitability for the nonprofit hospital sector, but not as steep as the previous two years. Finally some good news!

No More Passing the Buck

As the nation transitions from fee-for-service reimbursement to value-based care, coordinated efforts amongst an array of providers are required to improve quality and efficiency of patient care – and reimbursement. Under this approach, providers are financially rewarded for positive patient outcomes and efficient care delivery. This is a major shift in behavior from the traditional fee-for-service model, where providers are compensated for each test, treatment, and medication, regardless of patient impact.

While the goal of value-based reimbursement is expected to improve our population’s health, the shift in approaches brings along a new set of challenges for the healthcare industry. While many organizations are hiring care management coordinators and behavioral health support staff members to build the necessary infrastructure for value-based care, many are still citing the following as barriers to adopting this standard of care:

  • Lack of staff time to collaborate between providers
  • Unpredictability of revenue
  • Lack of ability to understand potential financial risk
  • Lack of resources to report, validate and use data

Regardless of these challenges, with only 39.1% of healthcare payments made in 2018 under a fee-for-service structure and the increased industry demand for value-based care, profitable provider organizations need to partner with each other and insurers to deliver value rather than passing the buck back and forth.

 A Lot of Money is Wasted

Imagine throwing 25% of your paycheck right out the window. That is how much of healthcare spend in the United States is wasted. Administrative complexity is responsible for the most waste ($265.6 billion) – billing and coding errors and time spent reporting on quality measures. The authors of the report cited opportunities to reduce administrative waste through insurer-clinician collaboration and data interoperability.

The United States spends almost twice as much as other high-income countries on medical care despite similar utilization rates. Administrative costs were again identified as a major driver in the overall cost difference amongst the United States and other high-income countries.

The Data Struggle is Real

We are constantly surrounded by technology – from streaming TV, to an app that lets you see and speak to someone at your front door while you’re hundreds of miles away, to your Amazon packages being delivered by drones. There is no doubt that we are in the era of advanced technology, but adoption and investment in technology is still in its early growth stage in the healthcare industry. There could be several reasons why, including:

  • A lack of general knowledge as to where to look for technology solutions
  • A lack of understanding that there are solutions available to solve complex issues
  • EHR implementations and maintenance is more challenging than anticipated
  • All of the home-grown, legacy systems that require updating before being able to integrate with newer systems

Data interoperability is the key to these problems facing the healthcare industry. Being able to exchange, interpret, use and share data amongst other providers, payers and even the patients themselves would undoubtedly cut down on administrative waste and enhance the implementation of value-based care.

There is Hope!

These challenges are daunting, but the right partner can shed the necessary light and get your organization’s revenue cycle where it should be to maximize your revenue. Quadax is more than a revenue cycle management solution provider. We are in lockstep with our clients from the beginning and that service and commitment never ends. If you’re ready to learn how Quadax can help your organization support a growing Medicare population and a value-based care model while decreasing your administrative waste and making your data work for you, reach out any time!

 

Ken MagnessKen Magness is a focused healthcare professional with more than a decade of experience in helping clients understand the true value of automation in the revenue cycle management process. As the Strategic Initiatives Leader at Quadax, Ken and his team are passionate about connecting with healthcare providers to help them create and leverage the appropriate technology solutions to optimize the revenue cycle process and improve the experience of their patients and staff.

Don’t Be Tricked by Patient Access Management Vaporware

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The foundation of the revenue cycle management process is patient access. Having a solution in place on the front-end can substantially minimize denials and rework on the back-end of the RCM process.

In addition to confirming demographics, insurance coverage and medical necessity, communicating the patient’s out-of-pocket responsibility before or at the time of service significantly increases the likelihood of receiving full patient payment.This shouldn’t be surprising. How many services do you receive that you have no idea what you are going to be charged? The healthcare industry has always seemed to operate amongst their own set of rules. But two major disruptors in the healthcare industry are going to start requiring more cost transparency and more of a partnership between the patient and physician:

1.  The transition to value-based care.
2.  Consumerism and the continued growth of high-deductible health plans.

As patients are becoming responsible for more and more of their healthcare costs – 30% of uninsured patients or patients who have out-of-pocket costs after insurance generate more than 80% of the hospitals’ self-pay revenue – we are seeing a decline in provider reimbursements for several reasons. The obvious reason is they simply cannot afford to pay their bill, which we will address later. Another less obvious reason is that they simply don’t understand why they are receiving a bill for services when they have insurance. Picture this:

Krystin goes into the hospital for a routine, scheduled colonoscopy. She pays her copay at the time of service and knows she has to pay $1,000 of her remaining deductible, which she also pays at the time of service. However, she is also responsible for coinsurance of 20% after her deductible is met, which is a new component of her health insurance plan that she doesn’t understand. The hospital doesn’t explain or inform her about her coinsurance amount. After the procedure, the provider bills the payer, and receives the explanation of benefits (EOB) stating that Krystin is responsible for $200, the coinsurance amount. The payer then sends Krystin a bill for the coinsurance, approximately 60 days after the service. Krystin receives the bill, but throws it away because it doesn’t clearly explain her balance and she knows she has health insurance, so it must be a mistake. She receives another bill, now 90 days after the service, and again, throws it away thinking it’s a mistake. When she receives a bill from a collection agency, she is confused and now very angry. She calls the provider and is informed about her coinsurance. She is furious that the hospital didn’t inform her about this amount before her service and vows to find a new provider for future services.

Dissatisfied patients also affect your front office staff who have to deal with the angry patients. This often leads to higher turnover rates, as staff will look for a better work environment.  That is why patient engagement should be a critical area of focus for your practice. The goals of successful patient engagement should focus on reducing or eliminating:

• Phone calls from angry or confused patients

• Patient statements because they can pay their bill online

• Collections because they have paid their bill or set up a payment plan

• Bad debt for your practice

Of course, that is the ideal state. Most providers have a lot of work to do to get there. But, it is possible. Providing an accurate out-of-pocket estimation is one of the pillars. This is also one of the main functions of patient access software that is commonly vaporware (i.e., software that has been advertised but is not yet available to buy, either because it is only a concept or because it is still being written or designed.) Vendors that are beholden to stockholders, scheduled releases, or big product launches at user group conferences can fall victim to overpromising and under delivering.

Going back to Krystin’s scenario, coinsurance is a piece of the puzzle that is often not included in an out-of-pocket estimation tool. That’s because the tool has to be diligent about maintaining the numerous payer fee schedules, which are continuously changing. Providing an accurate out-of-pocket estimate relies on a solid foundation of eligibility confirmation. A strong eligibility tool will be able to provide – in real time – a patient’s insurance coverage, including copays, coinsurance and deductible information.

Another important component of a patient access tool is determining the likelihood of the patient paying their bill. Checking credit scores and payment history can give you a sense for whether the patient will pay their bill. If it looks like they can’t or won’t, you have options to maximize your reimbursement before you provide the service – by asking for a partial payment or setting up a payment plan, for example.

Through our work with clients and discussions with potential clients, we’ve encountered a lot of skepticism around patient access – particularly the out-of-pocket estimation component. And, that’s where Quadax is different. We are in direct discussions with our clients every day, and our product development is driven by our clients’ needs.

When you’re looking at patient access solutions, don’t be tricked by vaporware. The right solution will be a real treat in maximizing your cash flow.

Ken MagnessKen Magness is a focused healthcare professional with more than a decade of experience in helping clients understand the true value of automation in the revenue cycle management process. As the Strategic Initiatives Leader at Quadax, Ken and his team are passionate about connecting with healthcare providers to help them create and leverage the appropriate technology solutions to optimize the revenue cycle process and improve the experience of their patients and staff.

The Journey to AI Begins with Intelligent Automation

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What comes to mind when you hear “Artificial Intelligence” (AI)? From product pitches to the nightly news, the term AI is showing up everywhere. But just what are we talking about when we talk about AI? Driverless cars and robotically-assisted surgery?  Postal-sorting machines and facial recognition at Passport Control? Siri and Alexa? Smart forms in EHRs and product recommendations on Amazon? Since this field of research gained popularity in the 1950s, computers’ capabilities have advanced exponentially.  As our understanding of human intelligence has also improved, so too has our concept of what programs designed to replace human intelligence should be capable of doing.

Early initiatives to produce AI protocols consisted of distilling human knowledge into programming logic—lines of code to account for every variation of a particular scenario. Chess games could be won by a computer programmed with millions of potential moves, able to go through its library in mere seconds and calculate possible moves and outcomes based on known values. Algorithms were to be credited with success more so than what we today call machine learning. However, in the years between IBM Deep Blue’s defeat of chess master Kasparov in 1997 and Watson’s 2011 Jeopardy win, ground-breaking advances included natural language processing, improved information retrieval, automated reasoning and evolved machine learning capabilities.

Computers are not yet able to replicate human abstract thinking, high-level reasoning, or very complex problem-solving to fulfill the aspiration of “human-imitative AI.”  However, advances in machine learning are happening rapidly.  According to venture capital firm BGV, “Healthcare creates self-running growth by leveraging technologies that enable machines to sense, comprehend, act, and learn to perform administrative and clinical healthcare functions to augment human activity” and “The market is forecasted to be worth $6.6B by 2021, with a 40% compound annual growth rate.”[i]

Anticipated clinical applications of AI include reading and interpreting diagnostic imaging, producing medical diagnoses, predicting the most effective (and least risky) prescription drugs, and facilitating more productive patient engagement. The journal Nature suggests AI can already diagnose skin cancer more accurately than a board-certified dermatologist.

The non-clinical applications of AI in healthcare are equally promising.  AI is expected to transform the data-rich revenue cycle environment into a streamlined, proactive (rather than reactive), healthy financial enterprise characterized by speed and accuracy.  The power of sophisticated algorithms to convert data analysis to insights and then to action will eliminate human error, preempt obstacles to reimbursement, and feed strategic discussions.

At this point in time, though, many of the hopes for AI still outstrip its reality.

While work continues to develop capabilities and perfect responses, other issues persist.  The AMA Journal of Ethics warns “ethical challenges must be identified and mitigated since AI technology has tremendous capability to threaten patient preference, safety, and privacy.”[ii] Some have raised concerns pertaining to the values programmed into the decision-making algorithms—whether biases inherent to the humans developing the technology are lurking in the AI. How legal liability will be handled in cases of unintended consequences or errors in judgment. And more basically, whether or not an AI system can be trusted.

Undoubtedly, technology will advance to an integrative intelligence model combining different competencies (machine learning, natural language processing, vision, predictive modeling, and robotics) to produce human-imitative AI, and the accompanying ethical and legal dilemmas will be explored, debated, and resolved.

In the meantime, revenue cycle professionals will realize significant benefits from technologies upstream of human-imitative AI.  The starting place for the progression of artificial intelligence development, as we have seen, was a rules-based, if/then schema we may now think of as Intelligent Automation (IA).  IA is now offering cost savings and operational advances to healthcare organizations.

Intelligent automation features rules-based routines to enable an application to handle repetitive tasks, particularly those with high-volume. Any time there is a clear relationship between the circumstances necessitating intervention and the prescribed solution, it can be—and should be—automated. In the revenue cycle, such tasks are abundant. Prime candidates for automation include eligibility processing, assigning workflow statuses, correction of known errors, cross-walking new provider credentials, claim status checking, remittance splitting, payment posting, and other revenue cycle tasks which are not complicated, but typically require mind-numbingly repetitive manual intervention.

IA delivers on the promises often attributed to AI for streamlined work, greater productivity, and lower costs. For example:

  • Streamline your claims management by relying on IA for data conversions, workflow management, auto-correction of known issues, and segregating those claims requiring extra attention prior to submission.
  • In your denials management and your collections efforts, use IA to move toward an exception-based work environment for greater productivity and a reduction in the volume of work you must outsource.
  • Automating certain revenue cycle tasks gives you extra bang for the buck – consider revenue leakage uncovered by the intelligent analytics of a contract management system. Using human capital, you can’t necessarily afford to pursue large quantities of low-dollar shortages. With automated efforts, you can. You win by not only repurposing staff and pursuing the high-dollar shortages staff already worked on, but also by recovering shortages previously written off.

Another tremendous advantage of the implementation of IA is the freedom to move human capital away from menial tasks into more meaningful work.  The workforce is thereby enhanced, improving both staff retention and expanding reach to improve operations.

When Adena Health System implemented RemitMax to convert paper-based payment documents to machine-postable ANSI 835s, jobs within the business office, particularly for cash posters, were radically revised.  Angela Lowery said, “It’s changed our mindset from ‘gotta key, gotta key, gotta key’ to an analytical approach of identifying payment problems and working toward solving them. You’re thinking, you’re reviewing, you’re analyzing, you’re contacting other teams and working with them. It’s truly been transformational.” (To learn more about the benefits Adena Health enjoys with RemitMax, read the case study.)

Begin the Journey

The science and technology of artificial intelligence will inexorably become more complex with greater precision, particularly for clinical applications. As AI continues to mature, don’t miss the opportunities afforded by IA.

Quadax solutions reduce complexity in the revenue cycle with intelligent automation in the areas of patient access, claims management, reimbursement management, denials and appeals management, and business intelligence.  Using Quadax tools, our clients enjoy more control, better data, and better cash flow. Let’s talk about the difference Quadax IA can make in your revenue cycle!

[i] https://benhamouglobalventures.com/2018/08/02/digital-transformation-of-healthcare-state-of-the-union/

[ii] AMA J Ethics. 2019;21(2):E121-124.