Improving A/R and productivity using Web-based clearinghouse tools
November 08, 2010
Southern Pines Women's Health Center (SPWHC) is an OB/GYN practice dedicated to comprehensive female healthcare, with five physicians and one nurse practitioner on staff. Our services range from management of normal and high-risk pregnancies to diagnosis and treatment of infertility and other reproductive system disorders. Laboratory tests, bone density scans and ultrasounds all are offered on-site.
With three clinical locations, timely reporting and transparent management of the roughly 32,000 claims submitted annually is essential for SPWHC. Unfortunately, however, we did not always have these capabilities. One part of the problem was the reporting functionality provided by the server-based clearinghouse that, until 2009, was the sole vendor available with our electronic health record (EHR) and practice management systems.
Report formatting is not typically the first thing a practice looks at when considering its choice of clearinghouse solutions, but it proved to be a critical factor for us. Our ability to gather across-the-board business intelligence and make meaningful data comparisons was restricted simply because the format in which we received the information was different for every payer. We might be able to run a specific denial report for one payer, for instance, yet be unable to pull comparable data on other payers.
Moreover, we lacked workflow efficiency. Even though the clearinghouse submitted claims electronically, most of our daily billing functions remained fairly labor-intensive. Options for electronic remittance and statements were limited, and data entry was a manual process with all the associated time constraints and error risks.
Charges, contractual adjustments, insurance payments and patient reimbursement were keyed in by hand. Paper Explanation of Benefits (EOB) statements took time to work manually-and took valuable filing cabinet space as well. Work lists were printed each day and physically handed out to billing staff. When questions or difficulties arose, they had to retrieve original paper documents from our files.
As might be imagined, the combined effect of these factors made it difficult to effectively organize and track billing operations. As we watched accounts receivable (A/R) over 120 days eventually reach 32 percent-with an average A/R at 34.7 days-we resolved to make a change.
Searching for better functionality
Fortunately, early in 2009 our EHR and practice management vendor expanded the number of clearinghouse solutions from which clients could choose. Not long afterward, it threw open the door to all vendors.
Naturally, SPWHC took advantage of the opportunity to evaluate its clearinghouse options. A selection committee that included myself, a billing office manager, an AR specialist, a charge entry person, and our IT professional began the process by outlining a few criteria.
Our bottom-line goals included: improving cash flow; reducing claim rejections; and increasing staff productivity. In addition, however, we felt it was important to partner with a system that would actively manage the administrative aspects of the transition. We did not want to risk inadvertent-and potentially costlyerrors with all of the payer agreements, electronic remittance forms, eligibility documents and other necessary paperwork.
It was with these criteria in mind that we attended an industry trade show and looked at many of the clearinghouse systems available. We narrowed the field of contenders to three,(two of them traditional client/server-based systems and one a Web-based solution), and requested in-office demonstrations for the selection team and the billing office staff. It was important, we believed, to have those who would be using the system participate in its selection.
In the end, the selection team based its final decision on four elements: 1) positive billing staff feedback; 2) solid user references; 3) high KLAS ranking; and 4) transitional paperwork management.
The Web-based Navicure solution satisfied all four elements, and was the only clearinghouse that offered to handle virtually all the paperwork necessary for payers, electronic remittance, eligibility and more. As a practice, SPWHC simply was not as accustomed to handling this kind of red tape, but the clearinghouse's support staff deals with these formalities on a regular basis. Their experience managing the entire process not only eased the transition for the practice, but also reduced the chance of data entry error.
In addition, the Web-based nature of Navicure's system meant that we did not experience any of the downtime often associated with hardware and software installations.
Steady cash at implementation
A dip in cash flow, common during many technology transitions, figured into fiscal preparations prior to the clearinghouse deployment. SPWHC prudently increased its credit line and worked A/R diligently to build up extra cash on hand. As it turned out, however, the precautions were unnecessary. The practice did not experience a cash flow decline-or any other glitches-during the changeover.
We did run parallel systems for a short time, but overall the transition was smooth. Having the necessary transitional paperwork completed by Navicure was a huge benefit for us. Any questions we had during the transition were answered quickly and without hassle because we had unlimited access to a designated client representative. Even implementation with the practice management system was uneventful because of the support provided on both sides.
Solid communication and client support played a key role in the transition, and still does to this day. Whether the practice asks a question via the application's message center, a phone call or secure e-mail, same-day follow-up from client support is typical. We talk to actual support staff, not an automated directory, whenever we need assistance.
Productivity up, A/R down
Human nature being what it is, even positive changes are seldom embraced immediately. There was some initial hesitancy among billing staff when SPWHC first deployed the new clearinghouse. It did not take long, however, before improved reporting and easier workflow became apparent. (In fact, business office staff recently lobbied to get one of our larger local payers set up on electronic remittance to streamline their workflow.)
Reporting functionality is no longer a hindrance; the system provides a variety of claims data analysis tools that have helped the practice better gauge its financial performance. Perhaps the most important tools are those that have allowed billing staff to identify the root causes of specific rejections and denials, which in turn helps us educate staff about ways to eliminate them.
Our rejection rates benefit from the larger community of users as well. Because the clearinghouse solution is Web-based, all rejections received by practices can be incorporated into a comprehensive edit database. So, whenever another user receives a claim rejection, the reason for that rejection becomes an additional edit for the other users-thereby increasing the first-pass rate for everyone.
In addition, SPWHC currently is taking advantage of electronic EOB forms to more easily file secondary claims and better capture that revenue stream. Under the old system, paper EOBs had to be filed and retrieved manually, and charges were keyed in by hand, increasing the possibility of error and claim rejections. To make matters more cumbersome, nine times out of ten the EOBs contained protected health information (PHI) about multiple patients. That meant billing staff wasted valuable time manually whiting-out or blacking-out PHI for unrelated cases.
Now, the billing staff can electronically select and submit only the information they need for the secondary claim. Rather than manually keypunching data, the clearinghouse automatically populates documents for them. If they need to view details, they drill down on their screens without leaving the application or getting up to search for paper files. These sorts of workflow efficiencies mean more time spent on productive endeavors and less time wasted on mundane tasks. Navicure's ability to standardize the reports from the different insurance companies allows SPWHC to better compare and contrast data.
Of course, the real advantage is seen in improved bottom-line numbers. After only a few months, our A/R over 120 days old declined substantially, from 32 percent to 17.2 percent of accounts-and it continues to fall. We have experienced a 20 percent drop in average A/R days, from 34.7 to 28 days. Total A/R has fallen from just under $1 million prior to implementation to around $650,000 afterward.
From the very beginning of our implementation, improved reporting and workflow functionalities have assisted SPWHC in its revenue cycle management. The support the practice now receives has enabled strong financial growth-with the promise of more to come.
Greg Catt is Chief Executive Officer of the Southern Pines Women's Health Center in Southern Pines, NC.