How transparency will change the way you do business
Date Posted: Thursday,
December 08, 2011
Imagine having the ability to reduce denial rates, accelerate cash flow, increase administrative efficiencies and anticipate audits for your practice or client in real-time. As the current environment of regulations and reimbursements continues to become more complex, this scenario seems like nothing more than fiction.
Unfortunately, the administrative burden to manage payment processes as dictated by regulators, insurers, Medicare and other payers is not getting easier. With HIPAA, PPACA and a 21 percent cut in Medicare as a result of the American Reinvestment and Recovery Act of 2009 (ARRA) on the horizon, the financial viability of outpatient healthcare practices is at risk for many.
Moreover, the OIG has unleashed auditors to "police" compliance efforts and combat Medicare fraud. With each violation discovered, these auditors are compensated, which creates significant motivation and yet another obstacle for already overburdened billing and coding professionals.
Adding to the challenges, payer reimbursement rules change frequently and are often unbeknownst to practice and billing managers that is until claims are denied. The time it takes to research the reason behind denials, take corrective action and resubmit a claim is a tedious and costly process that ultimately increases accounts receivable days and negatively impacts cash flow. The issues created by payer rule changes are amplified for outsourced billing services companies that may have hundreds of practices as clients. One misstep and revenue cycles could be compromised for months.
This environment is not only volatile, but it is also limiting. Without access to key information needed to maximize revenue cycles and prepare for potential audits, billing and practice managers are at an extreme disadvantage. Until now, the business intelligence that practices need to make strategic decisions has been controlled by the government or payers. Privy to all of the key information, these entities know who receives payment, the amount of funds allotted and when payments will be issued all the while, billing professionals and practices are kept in the dark.
This lack of actionable information is appalling and, quite frankly, no longer acceptable. In order to succeed in today's healthcare landscape without contemplating a merger with another practice or an alignment with a hospital, data transparency must become a reality to those in the trenches who are subjected to strict regulations on a daily basis.
Utilizing the Right Tools
Times, however, are changing. With the assistance of advanced business intelligence and comparative analytics technology, billing managers can rehabilitate a practice's financial future like never before. The question of how to identify, aggregate and mine the appropriate data to be successful has emerged.
Thankfully, through technology and the standardized reporting mandated by HIPAA, a legitimate answer is here and easy to access. This "Rosetta Stone" is the widely-adopted ANSI 835 standardized electronic remittance notice.
The 835 is the American National Standards Institutes Health Care Claims Payment and Remittances Advice Format, which is used to communicate approximately 80 percent of adjudicated claims daily. It not only features hundreds of data elements for claims processing, but from an analytical standpoint, it can offer detailed trend analysis consisting of codes, payers, specialties and geographies to better understand how a practice is performing.
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Rehabilitating Revenue Streams
Utilizing this information is highly advantageous for billing and practice managers. It delivers actionable insights and unprecedented levels of transparency that can be used to assess and eliminate the causes choking a practice's cash flow without pursuing a convoluted paper trail.
· Business Intelligence - Insights derived from analyzing this data can produce an "epiphany" moment, where billing managers can target potential problems that clients may be experiencing.
With access to proactive information, billing managers can be more proactive on behalf of their clients, leading to increased cash flow, improved internal processes or renegotiated contracts. By utilizing business intelligence, clients can be better served, and issues can be diagnosed before revenue is compromised.
· Comparative Analysis - This data can be extracted to benchmark performance against peers by specialty and region. When juxtaposing performance against that of peers, it is easy to spot inequalities in coding denials and reimbursements.
Additionally, the data can alert practices and billing managers of the potential threats for an audit. Moreover, this information not only highlights issues, but enables practices and billing managers to address and improve business functions, renegotiate contracts with payers and reduce audit and compliance risk.
· Regulatory Changes - On top of financial burdens from other regulations, decreasing reimbursements, practice and billing managers have another change to prepare for: the transition from ICD-9 to ICD-10.
While its October 2013 deadline still seems distant, ICD-10 not only requires the use of more codes, but they are also more in-depth. Therefore, it is important for the right processes to be put into place as soon as possible in order to catch and eliminate coding errors that could derail payment processes.
Analysis of 835s can help anticipate or mitigate audits if it is determined that a certain code is being overused unnecessarily or improperly, which could be beneficial as practices and billing managers become acclimated to the transition. Additionally, by assessing 835s, an audit could be potentially prevented or, if inevitable, can be anticipated and prepared for to achieve a favorable outcome.
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Embracing the Solution
The healthcare industry has historically been laggards when it comes to the adoption of technological solutions. But with constant changes and pressing new demands, the future stability of the business-side of medicine is being threatened, making it imperative to take action.
With innovations in business intelligence and comparative analytics, practice and billing managers can help physicians regain control of their future. Equipping themselves with the knowledge found in ANSI 835s can be the difference between success and failure in this new age of healthcare.
Michael Sanderson is the president of RemitDATA, an expert in reimbursement, utilization data and comparative analytics. For more information, please visit http://www.remitdata.com/RCM.
835s can be used for business intelligence and comparative analysis to:
- Combat dwindling reimbursements and accelerate cash flow
- Reduce risk by comparing code usage and performance
- Decrease denial rates
- Increase administrative efficiencies by highlighting duplicate denials and past due claims
- Compare real-time reimbursements against local, regional and state peers
- Anticipate audits by setting risk alerts and recognizing outliers
Business Intelligence and Comparative Analytics in Action
The 835 is only useful if a statistically valid sample is aggregated. A pioneer in comparative analytics, RemitDATA, has assembled the largest provider-facing database of 835s over the past decade directly from practices, healthcare IT partners, clearinghouses and large health systems. Through its software as a service (SaaS) platform, TITAN, ERNs are custom-weighted for relevance, so physicians can analyze data based on specialty, code, payer and geography.
TITAN provides an infinite number of peer and regionally-based comparisons for an unfettered view into reimbursement, productivity and utilization issues. Whatever matters most to a physician can be dissected in real-time. Key metrics, such as staff productivity, payer delays, underpayments or audit risk, can be analyzed, so strategic decisions can be made. Users can determine if their issues are based on improper coding or inefficient staff, and adjustments can be made to improve operational performance and, ultimately, increase cash flow.