Ascend Billing Services, a physician-owned company with 22 staff members, handles about 7,500 claims per month. We serve emergency department (ED) physicians at three area hospitals, as well as primary care and neurology practices, and are diversifying rapidly. Recognizing that we would need to invest in infrastructure and capabilities to support growth, we reevaluated our clearinghouse and revenue cycle management options in 2006.

Claims and cash flow

By that time, we felt we had outgrown our clearinghouse. Rather than helping us improve our own processes, the relationship complicated claims management work. Through prior professional experience, we knew that the ability to track claims after submission and throughout the adjudication process would help us serve our customers more effectively. However, we had no practical way to access that information.

On a more basic level, we regularly discovered that an entire day's worth of claims had not been processed. Although we submitted claims electronically, our clearinghouse primarily relied upon manual, paper-based, back-end processes. Thus, after a day or a week, we might discover that as much as $120,000 in charges had not been processed.

Searching for a new platform

After years of coping with the limitations such as lacking recourse when a payer indicated it never received a claim, Ascend reached a tipping point in late 2006.

We began to search for a revenue cycle management partner to replace our clearinghouse service. At the same time, we wanted to update our outdated, DOS-based billing system, adapt our operations to more effectively utilize staff member talents and take advantage of new technologies. We also wanted to enhance the accuracy of our reimbursement from secondary insurers, a special concern for ED physicians because they see so many Medicare patients.

Over the course of our six-month research and evaluation process, we learned that our frustrations were surprisingly common among our peers. Practices using a wide variety of clearinghouses reported very similar problems.

Based on our due diligence efforts, we placed emphasis on two key criteria for our clearinghouse service. First, we wanted complete transparency into our work, enabling us to track claims through every step. Second, we were committed to adopting a system that was easy to use. We wanted software with a minimal learning curve that would streamline overall training procedures.

To guide our decision and lay the groundwork for staff acceptance of the pending transition, we included employees in the presentation and demonstration sessions while reviewing technology options. We were able to gain consensus and generate enthusiasm at the same time. In fact, our staff was eager to the point of periodically inquiring how quickly we could make the switch.

The transition: Workflow, roles and lessons learned

We began using a Web-based revenue cycle management (RCM) system, for claims management and other functions, as soon as our new billing system was in place. During implementation, we took a "team leader" approach whereby leads received training and, in turn, trained their groups. Each department - accounts receivables, data entry and payment posting - had a designated team lead.

In our view, learning from another recently-trained user sends a signal to employees that the process is not overwhelming and that they can master the new method quickly. Plus, in our experience, team leaders were indeed effective in understanding and accommodating the trainee perspective. Meanwhile, trainees were not tempted to assume that mastering the software was particularly easy for the trainer because he or she has been using it for years.

Workflow adaptations. To make the transition to - and the best use of - the Web-based RCM, we re-organized staff along the lines of the team approach described above. This change allowed us to step back and ask: What is each staffer good at? We assigned responsibilities accordingly, to make best use of one person's computer expertise, for example, or another person's experience with government payers.

In the past, everyone had overlapping duties and shared responsibilities. AR reps would post payments and file charts, for example. Wearing multiple hats is common in smaller organizations but, with this transition, our people could now focus directly on completing assigned tasks more efficiently.

Workflow changed in other ways as well, as a by-product of automation and new capabilities. Correcting format errors in claims on the front end, for example, is different than re-submitting denied claims after the fact. Rather than letting all re-work fall to our AR staff, coders can now resolve more errors before claims submission to avoid rejections, enabling AR to focus only on re-submission or appeals.

This new team structure enhanced the division of labor overall. But we were able to keep those aspects of our previous model that still worked. For instance, certain AR representatives still retain responsibility for specific insurance carriers because they know so much about each health plan's requirements and practices. Yet they no longer have to sift through all rejections to find their own.

With automation and our reorganization, our specialized teams can use their time more efficiently. Whereas workflow once depended upon the actual turnaround time for large batch process, we now submit claims every day. And each staff member's tasks are more orderly. Rather than flipping through hundreds of pages to identify rejected claims, he or she can glance at an organized, prioritized work list.

New roles for management and clients. The team approach enhanced management roles as well as staff roles. Previously, all staff reported to Ascend's office manager, while the practice manager focused on contract management, new business and other functions. Today, there is no office manager position. All team leads report directly to the CEO. Our project manager focuses on operations, services and support for new clients, along with a range of other issues that, in the past, would have caused production to stop while the problem was resolved.

This new, leaner organization also has better business intelligence at its disposal. Management can research the performance and productivity of individual staff members and hold them accountable to expectations.

With access to Web-based RCM, the clients' roles have changed as well. With a user ID and password we provide, physicians can now view real-time reports to see where their practice stands. They have come to value this function, and it serves as a competitive advantage and selling point for Ascend.

Lessons learned. Based on our experience with this transition, we would recommend a tiered approach to staff training. This would call for several phases of vendor-led training that get progressively more advanced. Claims validation might be the first subject, followed by instruction on more advanced features like electronic remittance advice and, later, guidance on making the most of reporting. This way, staff can eventually master the system - without getting overwhelmed in the early stages.

Our implementation process did not cause any cash flow issues. In fact, some of our physicians learned about the switch only when they called to ask why they were seeing improved cash flow. However, any transition to a new claims management system may delay reimbursement temporarily. We recommend advising physicians that an AR slow-down is possible. This way, they will be either prepared for it or pleasantly surprised if it is avoided.

A range of results

The billing system, Web-based claims management system and operational changes have allowed us to prepare and submit claims more quickly. We can correct data entry or formatting errors prior to sending, monitor the status of all claims, and manage rejections based on coverage more quickly. Through electronic remittance advice, the majority of payment posting is handled automatically.

Our accounts receivable goal was a 5 percent reduction. After 120 days, we had exceeded that target, reducing our average days in AR by 6 percent.

After eight months, revenue had grown by 23 percent. We had also become significantly more productive. We brought on 10 new doctors - increasing volume by about 6 percent - without hiring additional staff.

The Web-based RCM and reorganization also impacted other areas of the business. With greater visibility into the status of our claims with each payer, for example, we can hold payers accountable. Our ability to produce insurance carriers' acknowledgements of claim receipt truly changes the conversation. Beyond day-to-day monitoring, we use rejection rate data, our administrative cost of re-working errors, and other information to better position ourselves during contract renegotiation.

Billing for ED physicians presents some unique challenges and we can now manage those more effectively. For example, ER physicians don't have front-desk staff. Rather, they rely upon the hospital to gather insurance, demographics and other information. When there's a mistake or a patient inadvertently misrepresented his or her coverage, we know very quickly. In fact, patients are sometimes shocked at how quickly we receive eligibility information. Without a doubt, this capability improves the timeliness of our collections.

In our line of work, there's a misperception that providers and billers are at the mercy of insurance companies. There's often a sense of resignation - that we can't do anything but re-submit, appeal and take payers at their word. But re-engineering the revenue cycle process has paid off in cash flow enhancement, rejection rate improvement, and better service to our clients as well as a stronger position in our business relationships.

Agnes Radz, MBA, is Chief Executive Officer for Ascend Billing Services in Littleton, CO. Ascend Billing Services is a physician owned and operated billing service that began in October 1999 by the Emergency Physicians at Porter and Littleton Hospital (EPPH). www.ascendbillingservices.com