ExdionAiR: Account Receivables Status Updates

 Capture and Record claims status from the carrier portals. Download and save EOBs to the client’s Practice Management System

Healthcare Account Receivables Automation

ExdionAiR is an automated Accounts Receivables solution in healthcare that eliminates manual process challenges involving claims status updates.

Capture and Record claims status from the carrier portals. Download and save EOBs to the client’s Practice Management System.

Automation in Accounts Receivables eliminates manual process challenges involving claims status updates through multiple payor portals. ExdionAiR will help you reduce costs, increase productivity, and free-up resources.

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Accounts Receivables Maturity in Billing Organizations

Introduction 


In recent years, regulatory and coding system changes have revolutionized the way US healthcare system works. While the healthcare industry is on the forefront on adopting newer medical technologies and practices, the service providers are facing daunting challenges. Rising healthcare costs, lowering disbursement rates and shrinking profits are putting a huge pressure on the healthcare service providers. With over 1/3 of the healthcare organizations on negative margins, there is a need for an effective and efficient revenue cycle management.

According to various reports:

  • 30% of medical practice income is lost due to improper billing
  • 20% of hospital claims are denied or delayed, a whopping 96% of them are resubmitted
  • Inaccuracy or incomplete data accounts for 5% of net income
  • Reducing claim denial rates by 3 to 5% can add $5 to $10 Million on the revenue side

In a recent article published in Health affairs, authors Ge Bai and Gerard Anderson note that profitable service providers are those that keep their costs low and benefit from greater efficiency. Billing companies bears the most brunt on revenue cycle leakages. Billing service providers do not have process to prevent denials from falling through the cracks. Many billing service providers rely on homegrown database and manual sheets to track performance. Their ability to track denied accounts and resolve them at earliest is limited by manual interventions and associated errors. Not just billing companies, but the hospital revenue cycle management suffers because of poor follow up process, communication gaps amongst various departments, and lack of root cause analysis to eliminate payment denials. US billing service providers need to implement systems that streamline denial management process and reduce administrative costs. To make a successful transition to a self-sustainable, affordable and profitable healthcare, billing service providers need to:

  • Efficiently manage their cost structure
  • Develop systems and process that ensure consistent response and quality of delivery
  • Streamline operations to reduce waste
  • Build cost effective business continuity mechanisms

AR management is key to healthcare billing company’s profitability and sustainability. To set themselves to eliminate revenue leakage, billing companies must begin an active assessment of where they stand with current service provider experience and what future improvements are needed. Hence, an effective AR improvement strategy with right operational model is a strategic arsenal for every future-oriented billing company to drive superior customer value and higher revenues. AR improvement program is panacea for billing companies and their partner face on cost and service delivery front. AR improvement is not just an IT project but a change management process. There is no time to waste or prolong their decision on focus towards AR improvement.

Billing company’s AR improvement program requires thorough planning and diligent execution based on an empirically derived framework. A maturity framework is a useful tool for billing companies and their provider clients to analyze and measure their billing process on the context of collections effectiveness. AR improvement program starts with evaluation of their existing systems and process. how business is run, how it is managed and monitored. What is the denial strategy adopted, how it is monitored and reviewed? How effectively the root causes of denial are captured and knowledge routines are codified to ensure human intervention errors are limited?. An as-is analysis serves as the health check and provides insights to what needs to be done to improve the revenue realization and cost optimization.

eARMM: a maturity framework for AR improvement program

 Based on analysis of a wide spectrum of billing companies and their consistent ability to deliver on collections, we identify four stages of AR maturity, like 1) Rudimentary 2) Emerging 3) Defined and 4) Optimized. Figure 1 presents the four maturity stages of AR management in billing organizations. The four stages of AR maturity is based on comprehensiveness of the AR process, documentation, service outcomes, Customer engagement, Information management, Performance and partner management. Process comprehensiveness covers the extent of formal SOP’s, the reliability and codification of process including ownership of outcomes at various stages. Documentation covers the purpose, completeness, storage, reproduction and retrieval aspects of data. Service dimension covers the service roll outs, service standards and work plans. Customer management process involves planning, selling, contract and support the customer throughout the AR billing cycle. Information management encompasses all AR activities that deal with generation, dissemination, analysis and storage of information. Information chain management thus will capture right from a customer request,escalations and follow ups, information about service allocation, denial audits, service completion time and post service feedback. Performance relates to the availability of metrics to define and manage AR process. Ability to capture and report metrics like denial rate, denial associations, or denial costs improves the predictability and sustainability of billing operations. Partner management includes seamless integration of systems across billing and their partners. This includes device, application and program compatibility. Higher the compatibility more integrated and mature are the AR process, as data drop and creeping of errors could be minimized.

eARMM: a maturity framework for AR improvement program

 In the maturity stage 1, billing companies, especially in the 3-15 employee categories, have no formal SOP’s and documentation of the processes is weak; Traceability of issues and deniability association is unavailable. Capacity planning is either reactive or weak, denial management is completely reactive. Service provider relationships are mere transactional in nature, price being the key order winner. Revenue cycle performance metrics are far and few, and reporting very rudimentary. They experience revenue leakage due to poor coding practices and manual errors. Billing companies at this stage also experience revenue losses due to not filing within the SLA defined time limits and other deviations.

At maturity stage 2, billing company’s maturity on RCM is best described as “Emerging”. At this stage billing companies have made investments in organization, process and measurements. Basic documentation and SPO exist, some key performance metrics are identified at this stage. AR processes are largely reactive to the client requirements. No knowledge management initiative exists to codify and formalize root causes of denials. At this stage, companies are cognizant of possible leakage area, but have not devised comprehensive mitigation plans. SOPs, though documented only focus on the required domain knowledge but fail to cover the system specifics. Employee attrition impacts the revenue due to poor repository practices.

With broader appreciation of the business and formalization of practices, billing companies mature to stage 3. This stage, described as “externally focused” is when the billing companies build client relationships on the basis of their delivery value and cost advantages. At this stage, companies have made significant investments in data capture and consolidation to drive planning and control of leakages and cost of delivery. AR management is proactive and follows well defined methodology. At this stage, the SOPs are broader and richer encompassing not just the domain knowledge but also system level. At this stage, companies use data analysis to identify causes of revenue leakages and would have put in place fairly effective controls are in place to arrest the leakage. Coding and billing process are system defined, devoid of human intervention and not prone to manual errors. As the revenue claim management experience spreads wide and deeper within the organization, billing companies evolve to what is known as “optimized” stage. At this stage of maturity, billing companies are strategically evolved revenue assurance practices. Their delivery and client relationships are no more individual people driven, but rather platform based. At this stage, billing companies are able to closely track cost to collect and monitor revenue claim management performance ratios. At this stage, billing companies are not just serving the client requirements, but influencing the customer business transformation. The AR is managed on a predictive mode with data and intelligence seamlessly flowing between various units. At this stage, billing companies achieve and sustain industry benchmark First Pass Acceptance (FPA) and Denial management metrics. Table 1 show parameters associated at various stages.

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From an industry perspective, RCM maturity stages are closely related to the performance the service provider supply chain uses to engage with partner. As shown in Figure 1, claim rejection rates, code compliance, denial overturn ratio and turnarounds are poor at stages 1 and 2. As the billing companies evolve to stage 3 and 4, investments in process, technology and people help them to realize improved performance metrics.

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 Emerging billing companies have a comprehensive plan in place though they are impacted by poor turnaround times on getting claims out of the door. Defined billing companies have a higher document accuracy that helps them to get to the root cause and proactively address/prevent denials. On the other hand Optimized billing companies have a platform based service delivery approach. They have a seamless integration across customer and partner management process that ensure that all stake holders are focused on customer success. The ability to leverage structured data through analytics gives these companies an edge in being able to be proactive in denial management and quickly adapt to changing reimbursement guidelines.

eAARM framework based AR transformation process

 Billing companies AR improvements starts with a vision, what is that needs to be achieved. Setting a clearly defined scope and context is the key for AR improvements. Goals, both short term and long term, how the activities at each stage are connected and lead to the next broader goals need explicit enunciation. Assessing current organizational capabilities, customer pain areas, and bench-marking of competition is critical to define value levers of AR improvements. Identify key capabilities that may have to be harnessed further with investment and capabilities that may have to move towards mooing phase. Spell put capability improvement road maps that would be targeted in this year detailing the initiatives, investments and ownership. It is neither desirable nor practical to completely overhaul systems and procedures to implement AR improvement program. While considering AR improvement program think of a bi-modal mode: one to sustain current operational requirement of the business and other that brings agility for future business requirement. We propose a clear 3 step methodology for analyzing each performance element as shown in the below figure, in order to shape a robust value creation strategy for your clients.

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The first step involves conducting a comprehensive “as-is process maturity audit”. This helps to identify current processes, gaps and scope for improvement. The process audit also focuses on distinct “moments of truth” interactions between the billing company and the physicians. This encompasses evaluating the current service levels in two phases. One from an internal service quality level – input quality, quality of data entry, coding quality, SOP adoption, awareness at the provider office, common payer mix, types of payer contracts handled, common denials, denial trends, quality of data currently being tracked to predict/prevent denials etc. Input quality in this context primarily refers to the quality and accuracy of charts, scanned demographic elements, ICD and CPT coding (if done at the provider side) and any other specific instructions. Service and customer support are the key drivers in building strong client relationships and sustained market leadership in the outsourced revenue cycle market.

Effective management of the “moments of truth” becomes crucial to reinforce brand experience and service quality. Billing companies must align employees at all levels to be aware of the organizational goals and also be able to keep a keen eye on cost to collect at every stage of the claim. The second phase is an evaluation from a business level – business models, contingency rates, cost to collect, gross margins, revenue leakage due to internal and external factors, and current client satisfaction levels. In the second stage, define standardized process, create and configure appropriate process changes based on the eARMM frame work. People capability gaps need to be addressed through extensive training and on the job learning. Put in formal governance structure that can capture process deviations, report denial management ratios and provide comprehensive control of the RCM process. Focus on process flows and technology adoption. With change management taken care of, the scope is gradually increased with small wins at different levels to sustain motivation through the transformation life cycle. On the process front, reduce manual intervention, identify bottlenecks, and bring in reliability. Gather intelligence to drive SOP adoption. Conduct SOP review along with your service provider. Train users about the new SOP steps and do assess how much has been internalized and implemented. Standardize inputs and output formats. Roll out standard service delivery frameworks. Create and track agent or operator level process adherence and productivity. Implement real time monitoring of production and capacity implementation. Finally, schedule appointments to review and detect charges leakages, clearing deviations, rejection rate. In the 3rd stage, deploy company-wide process and system changes with common objectives across different units and measures. Clearly articulate performance measures that reduce revenue leakages reduce wastage’s and improve first time right outcomes. A clear roll out plan is defined with key change owners at every level and defined milestones and time frames. A continuous review mechanism is put in place with appropriate incentives for driving change at all levels. The end goal would be to continuously assess and refine at all levels.

What must you remember when adopting eARMM?

From an industry perspective, RCM maturity stages are closely related to the performance the service provider supply chain uses to engage with partner. As shown in Figure 1, claim rejection rates, code compliance, denial overturn ratio and turnarounds are poor at stages 1 and 2. As the billing companies evolve to stage 3 and 4, investments in process, technology and people help them to realize improved performance metrics.

Do’s

  • Phased approach to automation, with priority on capturing denial causes side pays huge dividends
  • AR improvement that deepens end customer visibility has high payoff
  • Create process, product and change owners at all levels
  • All process must be redesigned from customer perspective
  • Top management team has to consistently create the sense of urgency
  • Keep challenging the assumptions, ask for data
  • AR improvements can be obtained through outsourcing that yields quick & significant impact
  • Hold weekly reviews with the partners and customers.
  • Improvisation is a continuous process and sometimes it is necessary to tweak certain areas after the implementation has been done.

 

Conclusion

ExdionRCM’s strategic eARMM framework can help billing companies re-claim their competitive edge in the highly penetrated medical billing market. Stage-wise maturity helps companies establish an effective collection focused service strategy. While it helps unlock hidden value, bench-marking against maturity models help billing companies and their clients refocus operations on customer ‘moments of truth’ in order to sustain customer satisfaction while lowering cost to collect on each claim processed. Complete focus should be on customer perception, process maturity and cost position. With data made available to billing company owner and managers in the “Optimized” stage, a perception analysis can help differentiate themselves from competition. The eARMM framework presented is a proven and effective tool in transforming billing companies to revenue assurance partners. Each billing company may be at a different stage of maturity but challenges remain the same – increasing competition, reducing margins, very frequently changing legislation and technology platforms and the threat to be pushed out of the race. eAARM lends itself an effective framework with the right activity road map for every future-oriented billing company to drive superior customer value and higher revenues.

 

References

  1. Kaulkin Ginsberg Revenue Cycle Management, Outsourcing Industry Report, 2013
  2. Thomas Pellathy and Shubham Singhal The Next Wave of Change for US Health Care Payments, McKinsey & Company, 2015
  3. Mitch Morris, , Health Care Providers Outlook – United States, Deloitte, 2015
  4. Ge Bai and Gerard F Anderson, A More Detailed Understanding Of Factors Associated With Hospital Profitability, Health Affairs, May 2016.