Are Unbilled Accounts Jeopardizing your Cash Collections?

Maintaining an optimum cash flow is an ongoing challenge, and if your hospital is not effectively managing the Discharged Not Final Billed (DNFB), you probably have too much revenue being held until a final bill can be produced. Simply stated, until the hospital information system can produce a final bill, that bill cannot be submitted to a payer, and hence, will not be paid by that payer. Although awareness of the importance of the DNFB has become more widespread, many hospitals still have considerable opportunity to improve their management of the DNFB, thereby reducing days in accounts receivable and enhancing cash flow. The improvement in cash flow may represent several days of revenue, which can be a substantial amount of money for all but the smallest facilities.
 
Background
The DNFB consists of accounts for patients who have been discharged from a billing system, but for whom a final bill cannot be produced for one or more reasons. Typically, the Patient Financial Services (PFS) Department, in conjunction with other revenue cycle departments, establishes rules within the hospital information system that mandate certain requirements are met before the bill can be produced and submitted.
 
There are a number of possible reasons a claim may remain in DNFB. Bill hold days, where the system is programmed to produce a final bill after a specified number of days to give service departments time to submit charges, Health Information Management (HIM) Departments time to complete coding, etc. are the most common. Lack of insurance verification, missing demographic information, lack of Care Management review, failed medical necessity checks, accounts for which coding has not been completed, and missing charges are other examples of the possible causes of DNFB accounts (a more comprehensive list appears in the "DNFB Resolution" section). Under the best of circumstances, the DNFB may amount to at least four days of revenue because of the bill hold days; but if there are issues in resolving the DNFB, much more than that can be at stake. DNFB accounts that are within the bill hold days are generally not viewed with concern. However, DNFB accounts held beyond the bill hold days are very much a concern. Since the hospital will not be paid until the account is billed to the payer, it is imperative to establish ownership of the DNFB and accountability for keeping the DNFB under control.
 
For the purposes of this discussion, we will limit our comments to the true DNFB; those accounts that don't meet the criteria for production of a final bill. Submission of claims after a final bill is produced could be a topic for another day, with billing backlogs, unresolved claim edits, reconciliation issues, and other challenges delaying the submission of a clean claim to a payer.

Challenges 
Who owns the DNFB? What department in your facility has primary responsibility for managing the DNFB? Traditionally, it has been the PFS Department that has taken the lead. To be sure, Care Management is a key ally in managing the DNFB, Healthcare Access plays a major role, and HIM has also been heavily involved, due to coding requirements.
 
As third party payers continue to be more and more demanding, in terms of the data required to submit a claim, and as more and more compliance considerations find their way into the billing process, there has been a corresponding increase in the complexity of the system requirements for producing a final bill. From an operational standpoint, the departments responsible for the DNFB must now frequently seek the assistance of clinicians in the various service areas to resolve DNFB issues. Clinical healthcare professionals who were not involved in the DNFB process in the past must therefore become an integral part of DNFB resolution today. This requires a rethinking of the DNFB resolution process.
 
Insights
 
To be successful in managing the DNFB, there must be a partnership that includes PFS, Healthcare Access, Care Management, HIM, key clinical departments, and the skilled nursing facility (if applicable). If DNFB is a major issue, creation of an interdisciplinary DNFB Task Force to bring these areas together is an excellent way to address and resolve DNFB issues. There must be an executive sponsor who can assign the appropriate level of importance to the work, who can keep the Task Force focused, and who can help the Task Force members overcome the obstacles they encounter. The executive sponsor will also serve to foster accountability. The Chief Financial Officer is usually the executive sponsor of the DNFB Task Force. There must be a specified lead, and while any of the Task Force departments could fill that role, the PFS Department is the stakeholder that is perhaps most noticeably affected when the DNFB spirals out of control. PFS is typically responsible for maintaining a dependable cash flow, managing the accounts receivable, meeting timely billing deadlines, and a host of other functions that can be adversely affected by a delay in resolving the DNFB. There is a certain logic in assigning lead responsibility to a stakeholder with a lot to gain from a well-managed DNFB.
 
At the staffing level, PFS, Healthcare Access, HIM, and other key departments should designate resources to review daily DNFB report(s) and perform the necessary steps to ensure the accounts meet the criteria for production of the final bill. At a minimum, each of the data elements below should be monitored daily and tracked to ensure DNFB accounts are being resolved in accordance with hospital policy:

The DNFB Task Force will determine which department has the primary responsibility for each DNFB reason code. Resolution will be accomplished collaboratively, but accountability isn't possible if responsibility isn't clearly defined.

What types of issues result in DNFB accounts? Since hospitals establish the criteria for final bill production, the reasons for DNFB accounts can vary from one hospital to the next. There are, however, a number of common causes for DNFB accounts. The following is a typical list of reasons for DNFB, identified in the host information system, which can be corrected within the bill hold days to enable production of a final bill. If any of the following (or any criteria required by the hospital) is not present, a bill will not be produced by the host system until the criteria are met:

Associated charges, such as an injection charge and associated drug charges.
These and other hospital-defined DNFB reasons must be resolved before a final bill can be produced. As a general rule, and dependent upon the determination of the DNFB Task Force, responsibility for resolution of these DNFB reasons will be assigned as follows:

Education, training, and tracking results are important components of effectively managing the DNFB. The DNFB report can serve as an effective training tool to help staff members from the Task Force departments understand the many issues surrounding claims that fail billing edits. Recurring DNFB issues should be monitored and tracked. Departments responsible for the issues should receive regular feedback, as well as training to minimize delays going forward. Management and staff must understand how to resolve and avoid delays and be held accountable for unresolved DNFB issues. DNFB targets for each area should be established by the DNFB Task Force, in conjunction with the management team in each area. If there are significant DNFB issues, it may be necessary to develop incremental targets, to establish realistic short-term goals on the way to meeting a long-term objective. Involving the management team in the process promotes buy-in and accountability.

 
Summary
DNFB accounts held beyond the bill hold days have a negative impact on cash flow and accounts receivable. This impact can represent many days of revenue. The DNFB must be effectively managed through a partnership of PFS, Healthcare Access, Care Management, HIM, key clinical departments, and the skilled nursing facility (if applicable). A DNFB Task Force consisting of the Chief Financial Officer and management from each of these departments is an excellent means of collaboratively identifying and resolving DNFB issues. The Task Force will assign responsibility, implement daily DNFB review, facilitate training, establish targets, and foster accountability.
 
The benefits associated with effective management of the DNFB can be significant. In difficult economic times, most hospitals cannot afford to overlook this important aspect of revenue management.
 
We are pleased to have the opportunity to present this information to you. If you have any questions or need assitance in managing DNFB accounts, please contact me at 610-517-1386 or Linda Koontz, Consulting Manager, at 484-844-1731.

Yours very truly, 

Kim Hollingsworth
Partner 
IMA Consulting 
http://www.ima-consulting.com/