Access Process Revenue Cycle Success!

The Right Steps at the Right Time, Done Right—Equal Great Results
John Holton, CEO, and Hans Morefield, SVP Strategic Partners

Poor revenue cycle practices can hurt a hospital's bottom line by 50 percent. Hospitals lose $42 per outpatient visit because patients are ineligible for care or claims are denied and have to be re-worked. It costs a hospital from $80 to $125 per denied claim that has to be re-worked. Sixty percent (60%) of denied claims are a result of pre-encounter errors. These staggering numbers can easily be reversed by improving the revenue cycle activities that take place before the patient's visit.

Ensuring that a submitted claim will be paid starts long before the claim is prepared. A successful revenue cycle process starts before the patient even arrives for service (pre-encounter).This article examines the optimal pre-encounter revenue cycle services (Right Steps), the optimal order of these processes (Right Time), the optimal automation of these processes (Done Right) and the benefits you can expect (Great Results).

Right Steps: Pre-Encounter

The five key revenue cycle steps during the pre-encounter phase are:

1. Patient Identification: Since patients have typically been to the provider before, correctly identifying them and locating their previous record is essential to minimizing data entry errors, incomplete data collection, and patient frustration from registration delays. Checking public databases to confirm addresses, telephone numbers and credit worthiness are all steps that ensure authenticity, essential for error-free claims submission.
2. Insurance Coverage Determination: Waiting until a patient arrives is too late to identify their insurance plan. Determining the insurance coverage a patient intends to use must be done even before an appointment is scheduled because payer/contract rules may not cover a patient for a particular service or at a particular facility.
3. Medical Necessity Checking: For Medicare patients, providers must establish whether Medicare considers the test or procedure medically necessary. If Medicare does not believe the medical necessity standard is met, then the provider must obtain the patient’s agreement to pay for the service before the service is provided or the provider may not bill for the service. Hence, medical necessity checking must be pre-encounter, and for better customer service, the patient should be notified prior to their arrival at the hospital.
4. Authorization/Referral Management: Most payers/insurance plans have rules requiring providers to obtain prior authorization for a test or procedure from the payer and/or be able to demonstrate that a valid referral was received.
5. Eligibility Verification: Confirming a patient’s eligibility under the insurance plan they present for coverage is a pre-encounter “must” step. Not only does this identify the patient who presents (knowingly or unwittingly) coverage that has lapsed, but it also serves to verify the proper collection of insurance data.

Right Time for Pre-Encounter Steps: Scheduling

Most providers have yet to fully engage their schedulers in the revenue cycle. As a result, they miss out on a smoother, more effective process. As hospitals nationwide have demonstrated, schedulers (and the scheduling process) have the capacity to take on appropriate pre-encounter revenue cycle steps. Specifically, hospitals should have their schedulers performing the following steps:

• Patient identification
• Insurance coverage determination
• Medical necessity checking
• Authorization/referral management

Medical necessity checking by schedulers is perhaps the most debated of these steps. Some express that schedulers will find this difficult and believe it is better suited for medical records (coders) or registration personnel. The experience of leading providers is that right access management solution (for example, scheduling.com) makes the process quick, accurate and easy for schedulers. More importantly, these providers recognize that scheduling is the right time for medical necessity checking because:

1. the physician office is typically calling and can provide (and clarify, if necessary) the diagnosis,
2. if medical necessity is initially denied, then the physician can be asked at that time for a secondary diagnosis, and
3. if medical necessity is denied, then the patient (still in the physician’s office) can easily discuss with the physician whether to go forward with the appointment.

If medical necessity is done at any time other than at scheduling, then a call back to the physician’s office is likely. At this point, the patient has probably not been in the office for days, their chart is not
readily available, and the physician may or may not still be on hand. If a call to the patient is also required, a process that should take 20-30 seconds could require 20-30 minutes (if completed at all).

Similarly for the authorization/referral management process, scheduling is also the right place to start. With the right access management solution, the scheduler will be prompted if a procedure or test requires an authorization or referral and can inform the caller of the requirement and request more details. Even if the caller does not have the authorization details, the right access management solution will track the need to collect an authorization.

Right Time for Pre-Encounter Steps:

Pre-Registration

It’s best when eligibility verification is done in advance of an appointment. While many providers still check eligibility for inpatients and other high-dollar procedures at the time of registration or admission, there are advantages to checking it for all patients before they arrive. If you only discover ineligibility after patients arrive, then waiting to identify other valid coverage, if possible, will be time-consuming.

If no other coverage can be identified, denying service to the patient is difficult and perhaps illegal. If the patient is registered as self-pay and goes forward with the service without pre-payment terms firmly established, the likelihood they will pay their claim on time (if at all) is low.

Identifying eligibility issues prior to the appointment gives a provider time to work with the patient to identify any other coverage (perhaps Medicaid) for which they may qualify. In the event no coverage is found, eligibility checking makes the patient aware of the costs. It also allows the provider time to run a credit-check to assess the patient’s ability to pay. The end result will either be a paid claim because coverage was found (or the patient did pay), or more time available to consider how to handle a potential charity case.

Authorization management issues are in the same category and must be addressed pre-encounter. We previously noted the value of the scheduler knowing the authorization rules to start (and possibly complete) the process, and the same applies here. If the authorization details were not collected at scheduling, then they must be completed pre-encounter or the same issues of registration delays (i.e. patient responsibility, and ultimately delayed payments or claim write-offs) will occur.

Done Right: Pre-Encounter

Attaining maximum financial results from your revenue cycle process must start at the point of scheduling and be automated through a system that integrates directly with external data (for eligibility, medical necessity and patient identification) and a rules-based workflow engine that ensures no appointment fails the test for financial worthiness.

All appointments, regardless of the scheduling system used, must be identified to patient financial service personnel prior to the date of visit. The ideal method of identification is to schedule with a single enterprise-wide scheduling system. If this is not possible, the scheduling systems in use at the hospital should be integrated to form a common appointment repository that then feeds the pre-encounter process. It is incumbent that the patient financial service personnel performing the preregistration have access to real-time information on the appointments scheduled and any subsequent changes.

During the scheduling process, the scheduling system should automatically notify the scheduler if a medical necessity check is required and prompt them to ask the physician’s office for the diagnosis. A medical necessity check is then performed and the outcome is communicated to the physician’s office while the patient is still there. If the procedure is medically unnecessary (and will be denied by Medicare), the patient can make the decision whether or not to continue the booking. If the patient reverts to a self-pay, an ABN form is prepared for patient signature and the workflow system (all part of the Access Management system) sends a message to the patient service financial counselors to evaluate the case and take any necessary steps to guarantee payment (e.g. obtaining pre-payment). Preliminary insurance information required to do an eligibility check may also be collected at this time. The system should also prompt the scheduler to request the MCO authorization number at this time if one is required. To enhance productivity, the scheduler may want to book a pre-registration call back time for the patient financial service personnel to call the patient and complete the collection of the registration information required for billing. This last step eliminates the telephone tag that plagues the pre-registration process. Your Access Management system should automatically accommodate this appointment process.

The next step in the process is to collect required patient demographics, verify eligibility and obtain the authorizations. These processes should be fully automated. The pre-encounter system should automatically launch the eligibility transactions to payers (without any re-keying of data or logging onto a payer’s website). Next, the system should either present the responses to the user or (if the user has moved on to another patient) analyze the response and ensure that patients with unverified eligibility are addressed. Similarly, the requirement for authorization/ referral management is that the scheduling system knows the payer-specific rules, and automates the gathering of data and the tracking/ decrementing of authorized visits. In the near future, the ANSI 278 referral authorization transaction will automate the communication between the provider and payer.

Experiencing great results

Hospitals that have instituted successful revenue cycle management processes collect complete demographic and insurance information on 100 percent of their non-emergent visits. They check insurance eligibility on 95 percent of their patients; execute medical necessity evaluations on 95 percent of their Medicare appointments; and apply for authorizations where appropriate on 95 percent of their managed care patients. By instilling this level of precision, these hospitals have denial rates of 1 percent or less, which result in dramatic savings—up to $38 per visit in the average hospital. Done right, an Access Management system can make a substantial contribution to improving your hospital’s bottom line and your ability to provide quality service to your physicians and patients.

A Model Pre-Encounter Scenario

In a model Pre-Encounter process the following chain of events occur:

1. complete demographic information,
2. obtain correct insurance verification,
3. check medical necessity,
4. receive authorizations (where appropriate) and
5. make any self-pay arrangements if necessary.

Any appointments that do not satisfactorily pass these screenings are bounced by the workflow component of your Access Management system to specific patient financial service personnel for completion. It is often required that hospital personnel call the insurance company directly for the authorization. If after hospital personnel complete their workup there is still an issue that would result in a denial, the appointment should be sent by the workflow system to the At-Risk supervisor for final arbitration as to whether or not the hospital will honor the appointment. Patient financial service personnel should know before service is rendered whether they would be paid for every non-emergent appointment.

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client quote:

“With SCI we reduced our lab monthly denials from $23,000 to 0, and increased utilization from 400 average orders a month to 3,230, as well as improved patient, physician and staff satisfaction.”

Eisenhower Medical Center

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