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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Critical Access Hospital and Rural Health Clinic Conference

Build Your Way to a Healthy Revenue Cycle September 14, 2017

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Denial Management Underpayments Claims Review – “Embryo to Grave” Revenue Cycle Committee A Healthy Chargemaster

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Denial Management and Underpayments

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Denial Management



The goal of denial management is to manage denials on the front end by billing accurate and timely claims.



A good denial management program can lead your facility to a path of compliant claims where the denials are payor errors versus facility errors.

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Denial Management We are finding that more and more claims are denied by the payors for erroneous reasons. This is adding more complexity to the denial management process.



Technical denials – Are most commonly processed by patient accounting, coding, or registration areas and are usually the result of a preventable or clerical error. Common denials include: − Qualifying visit codes/Missing modifiers − Insurance coverage issues − Timely filing



− No authorization Most of these denials can be corrected without filing an appeal and are preventable. © Wipfli LLP

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Denial Management Clinical denials – Are reviewed first by HIM for potential code assignment and escalated if necessary to an RN or clinician.



Common denials include medical necessity, which often requires an appeal that should be prepared by a clinician. − Provider documentation issues. − Incorrect assignment of diagnosis and/or procedure codes.

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Denial Management Workflow The workflow for denial management and reporting is largely based on the health information system and its capabilities. Below are a few components:



The denials should come into work queues or be assigned to staff dependent on skill and the resources of the health information system.



Processes for getting denials to other departments, e.g., HIM, Admissions, and clinical staff, need to be developed, implemented, and documented in policy.



Processes and procedures for working denials, including time frames, identification of responsible staff dependent on denial type, should be implemented and documented.

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Denial Management



Reporting, Process Improvement, and Monitoring − Reporting will need to be developed based on the health information system’s capabilities.



− Reporting will be used for determining trends, monitoring improvements, and reporting to the various departments and committees. Report development – Recommended data parameters:

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Denial Management Team Development The charter of the team is to:

• • •

Review denial reports



Make necessary policy and procedure changes

• •

Monitor progress

Look for trends Perform root cause analysis on preventable denials

Report improvements

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Underpayments Underpayments Most CAHs and RHCs either do not have contract management software or lack the staff necessary to maintain this type of system. Contract Negotiations

• • •

Contract negotiations should not be done in a silo. − Know your patient population profile, payers, market dynamics, and internal struggles with contract terms Create a strong internal communication system for your contract negotiator. − Bidirectional feedback Contract terms should be clear and concise, and revenue cycle staff should be educated on executed payer contracts. − Timely filing, appeals, payment methodologies © Wipfli LLP

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Underpayments Identifying Underpayments For those facilities with no contract management system, identifying underpayments can be a much larger task and will rely on a combination of people, process, and technology.



Look for denial trends, e.g., chest x-ray in ED suddenly being denied by a payer.



Since CAHs are reimbursed on an inpatient per diem and an outpatient percentage of Medicare, put a process in place to ensure all Medicare reimbursement is accurate. A monthly report can easily be developed to accommodate this.



RHCs need strong reconciliation processes in place for ensuring that payment has been received for Managed Medicaid.

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Underpayments Identifying Underpayments (Continued)



Any other payers that are reimbursed either on an inpatient per diem or a percentage of billed charges can be added to the Medicare report.

Payers that reimburse on fee schedules, MS-DRG and/or APR DRGs



Important for CAHs to load the appropriate weights into their encoder and compare payments to what the encoder estimated. − Need to ensure that weights are updated appropriately on an annual or quarterly basis if needed.



With fee schedules, you will need to rely on your denial management program whether from a contract management system or a report developed internally.

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Underpayments Following are some underpayment denials:

• • • •

Line item denials Authorizations Charge capture E&M levels

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Claims Review Program “Embryo to Grave”

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Claims Review – “Embryo to Grave” In the health care industry today there are so many rules and regulations facilities must follow in order to stay complaint; it is overwhelming!



Hospitals are required to have a Quality Assurance Performance Improvement (QAPI) plan.



RHCs are required to have an annual program review.

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Claims Review – “Embryo to Grave”



Our “Embryo to Grave” program meets several departments’ QAPI and program evaluation initiatives and also serves to address other concerns such as: − New regulations − Charge capture − Over and underpayments − Billing compliance issues − Admission compliance issues − Documentation issues − Coding issues − Chargemaster issues

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Claims Review – “Embryo to Grave”





To build the program, we recommend you start with a team. The team would consist of the following, at a minimum: − Revenue Cycle Director − Patient Access Director − HIM Director − Patient Financial Services Director − Utilization or Case Management Next, you would build a worksheet based on the items that you want to review. The graph on the next slide has suggestions for the different areas. We suggest you consider the following but remember that this project is based on QAPI as well and should incorporate known problems specific to your hospital. − The spreadsheet can be changed based on your QAPI or a new regulation you want to monitor in a specific area. © Wipfli LLP

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Claims Review – “Embryo to Grave” Your spreadsheets should be built with simple dropdown menus.



Example: Documentation area – Build data parameters where every field can be measured with a menu of key values that can produce simple pie charts or graphs for reporting.

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Claims Review – “Embryo to Grave”

• •

Choosing your claims to review: − No more than 30 claims per quarter − Zero balance claims from the previous quarter In order to identify trends, we suggest that Inpatients, OP surgery, and ED claims are reviewed every quarter and other ancillary departments are reviewed on a rotating system based on the services your hospital provides. − Always keep in mind, if there is a regulation change that you want to monitor, consider adding it to the mix. − Example: CPT code changes - 73550 Femur two view was replaced with 73551 Femur one view and 73552 Femur minimum of two views on 12/31/15. − Accounts need to be chosen on as random as possible a basis in order to keep out any bias. © Wipfli LLP

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Claims Review – “Embryo to Grave”



• • •

Once the accounts for the quarter have been chosen, each area will be supplied with the initial spreadsheet filled in with the patient name, encounter/account number, and date of service. Each department would have someone assigned to fill and analyze their portion of the spreadsheet. The spreadsheet should be a shared file in order for the various departments to audit independent from one another in their own time. A time frame for completion must be established and respected. Responsibility must be assigned to compile the data and provide it to QAPI and any other committees designated. We suggest the Revenue Cycle Committee.

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Claims Review – “Embryo to Grave”

• •

A policy and procedure for this process must be developed. Longer term improvements identified would be handled as part of the QAPI process. − Easy or short-term improvements would be reported in QAPI but may be monitored through a key performance indicator (KPI) in the Revenue Cycle Committee.

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

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Revenue Cycle Committee

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Revenue Cycle Committee Revenue Cycle Committee (RCC) Communication is key in hospitals today, and RCCs have become necessary. The key components to a successful RCC include the following:



Keep the committee small with permanent staff from the revenue cycle areas and invite other hospital representatives as the agenda indicates.

• •

Manage by Key Performance Indicators (KPIs).



Review monthly Med Learn bulletins, Medicaid bulletins, and monitor other payer websites and correspondence for changes on the horizon.



Develop subcommittees for issues and projects that are complicated and need attention; then update the RCC on progress and decisions made.

Roundtable every meeting and provide a safe environment for staff to communicate.

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Revenue Cycle Committee Revenue Cycle Committee (RCC) (continued)



Consider incorporating the denial management team. − Discuss and plan for new legislation and reimbursement models: ~ HHS HCCs ~ American Health Care Act ~ Provider-Based Clinics

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Revenue Cycle Committee − List of common KPIs Patient Access Inpatient  Admission Error Ratio Outpatient Registration Error Ratio Total POS collections for the month Average  POS collections as a % of goal % collected compared to potential # of pts qualifying for sponsored programs

Utilization Management

Best Practice

KPI formula

1.0% 1.0% TBD TBD

Inpatient registration errors/Total inpatient charts

90% TBD Best Practice

Outpatient registration errors/Total outpatient charts Total cash collected at time of service (POS) POS collections/POS collection goal POS collections/POS collection potential (this is based on  monies that were eligible for collection at POS) How many patients were converted from self‐pay to a  sponsored program. KPI formula

Observation appropriateness

95%

30 day readmits  (all diagnoses) Overall rate of appeals overturned

10% TBD

Incorrect Observation admissions/Total Observation  admits How many inpatient admissions were readmitted within  30 days Successful appeals/Appeals written

Best Practice

KPI formula

Health Information Management % of charts reviews resulting in a query Query response rates Coder Productivity ‐ Outpatient Coder Productivity ‐ Inpatient (initial) IP Coding Accuracy Days in Discharged, Not Final Coded (DNFC)  Deficiency Rate

20% Queried charts/Total admissions 98% Number of query responses/Queries sent 20 per hour # of inpatient accounts coded per day by coder 3 per hour # of inpatient accounts coded per day per coder 97% Coding errors/# of outpatient admissions 4 Discharged but not coded claim $$/Average daily revenue 10% # of charts with deficiencies/Total charts

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Revenue Cycle Committee − List of common KPIs (Continued) Denials Overall Denial rate as a % of gross revenue Overall rate of appeals overturned Average admin denials follow‐up success rate Average under payments follow‐up success rate

Patient Financial Services Total Discharged, Not Final Billed (DNFB) Average Clean Claims Pass  Rate Average Rejection Rate Days in  AR (Net) AR >90 as a % of billed AR $s in Credit Balance AR Days in Credit Balance AR (gross) # Late Charge Encounters Bad Debt as a % of gross Charity as a % of gross Cash Collections as a % of Goal Collections agency success rates % of self‐pay accounts with no collections  $ value of self‐pay accounts with no collections

Best Practice

KPI formula

3% 60% 98% 98%

Denial  $$/Gross revenue Successful appeals/Appeals written Overturned admin denials/Total admin denials Overturned underpayments/Total underpayments

Best Practice

KPI formula

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Discharged but billed $$/Average daily revenue Claims passed through billing without touching/Total  claims Payers rejected claims/Total claims submitted to Payers Average daily revenue/Total Net AR Percent of AR over 90 days/Total AR Dollar value of credit balances Credit balances/Average daily revenue # of accounts that incur late charges Bad debt write‐offs/Gross AR Charity care write‐offs/Gross AR Collections/Collections goal Cash collected from agency/Agency inventory Number of self‐pay accounts with no payments/Total self  pay accounts  $ value of self‐pay accounts with no collections

TBD 2.0% 40 20% TBD <1 TBD 4% 3% 100% TBD 10% $0

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

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Healthy Chargemaster

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Healthy Chargemaster



The Charge Description Master (CDM) has evolved from a tool to manage inventory with a minor role in billing to one primarily organized to support the creation of clean claims.



Some health information systems still use the chargemaster as an item master that contains charge codes, billing codes, inventory items, and statistical monitoring items. − Maintaining a CDM that supports all these functions increases its complexity and often is not in sync with the functions provided by the billing system vendor. − Often interfaces with order entry systems and ancillary systems, which increases the potential for incorrect charge information to flow to the patient bill.

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Healthy Chargemaster



Suggestions: − Identify the CPT/HCPCS changes you will need to make when they are announced in October for the January 1 effective date each year. − Review and discuss major revisions with impacted clinical departments. ~ Deletions, revisions, additions − Review high volume services to assess how current charges compare with proposed payment Medicare/Medicaid reimbursement amounts. − Review mark-up strategies for continued relevance. − Review supplies and other items charged separately to assess whether they should continue to be charged separately or incorporated into another service. ~ Ensure that this has been done through a committee like an RCC so that all parties understand and know the changes and all systems are updated, not just the CDM, and communicated to stakeholders. © Wipfli LLP

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Healthy Chargemaster You must consider the following when updating CPT/HCPCS:



Ancillary ordering systems for departments like lab, radiology, pharmacy, PT, clinics, etc.



Physician order forms with pre-printed CPT codes

• •

Superbills/charge tickets



Interface with the clinical side of practice management systems

Order sets in the electronic medical record

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Healthy Chargemaster Develop a process for new services and separately chargeable items. This would include a form with the following parameters: Demographic and requesting department data Medical Supplies - Instructions for Completion

To: CDM Coordinator

A. In the "Comments" section below, please note any special instructions for processing your request. Date Requested: B. In the "Charge Master Description" box below (max 30 characters), describe the item.

Requestor Name: Dept Name/Nbr: Phone Number:

C. If the item described is a kit or a bundled supply (not pre-packed), you must document the cost of

Email Address:

each item contained in the kit.

Effective Date:

Requesting Department to Complete A=ADD

Name

D=DELETE

1 A=ADD

Synthes

Vendor

Vendor

Materials

Item

HCPCS

Management

Sterile = S

Number

No:

#

Non-Sterile = N

390.005

Indicate (S/N)

000012025 Sterile = S

EA Disposable

Medical

Yes (Y)

Yes (Y)

Supply

No (N)

No (N)

Cost

Implantable

Yes (Y)

No (N)

Unit

C=CHANGE

Vendor

827.00 EA

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Healthy Chargemaster CDM Coordinator data, reviewers, and approvals: CDM COORDINATOR Item

UB04

CDM Description

HCPCS Code

#

Rev

'(Limit to 30 Characters)

(If applicable)

Code

12025

Combination Clamp, Large

Reviewer/Date

Notes

CDM Use Only

NA

Mark-up

NA

3

Calculated

Dept

Charge

Budget

2,481.00

Additional Information Request:

CDM Coordinator Entry into System Dept Notification Update Order Entry/Form Send to Order Entry

Approved date: Approved By:

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Healthy Chargemaster

• •

Ensure an open line of communication with Patient Financial Services. Participate in Revenue Cycle committee like RCC and Denials Management.

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

Conclusion



Institute a robust denial management program that also addresses underpayments



Develop an “Embryo to Grave” quarterly claims review process tied to your facility’s QAPI or annual evaluation

• •

Develop a functional Revenue Cycle Committee Maintain your CDM You will be on your way to a healthy revenue cycle!

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

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Today’s Presenters: Judy Holloway Senior Manager, Health Care Practice 510.768.0066 [email protected] Teresa Jacques Senior Manager, Health Care Practice 510.768.0066 [email protected]

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Critical Access Hospital and Rural Health Clinic Conference Reno, Nevada September 12-14, 2017

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Build Your Way to a Healthy Revenue Cycle - Wipfli

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