clearinghouse

One of the biggest frustrations for a practice or billing manager is to spend several hours processing medical claims, only to have several of them unexpectedly denied. The American Medical Association recently reported that between 1.38-5.07% of claims are denied by payers on first submission. While it seems like a small fraction, that could mean significant bottom-line loss in the long-run. For a growing practice, we’re talking hundreds if not thousands of denials each year leading to lost revenue and more staff time dedicated to appealing those claims. Specific services are often denied, or reimbursement is reduced, particularly if you're a multi-specialty practice who submits on multiple sites, payers, and patient tests. The trick is to make sure claims are clean the first time. The following are five things you can do today to reduce the frequency of medical claims processing mistakes.

What Does a Medical Claims Processor Do?

Medical claims processors typically work for an office gathering patient demographic and insurance information for submitting claims to payers. A medical claims processor’s main job is to make sure doctors are being compensated for the procedures they’re doing, and that the payer is paying out the doctor properly. They are often employed by a doctor or network of healthcare providers and can also be on the insurance side. To be an effective medical claims processor, it helps to be knowledgeable in diagnosis codes, CPT codes, and compliance requirements, and common errors associated with medical procedures a doctor provides.

Make the Move to Electronic Medical Claims Processing if You Haven't Already

Electronic claims take 30% less time to process compared to paper claims. Electronic claims eliminate routine and time-consuming manual staff work and reduce error so your claims are much more likely to be correct the first time, leading to increased cash flow. If you need help making the transition, ImagineBilling^TM uses automated timers and natural language processing so that little human intervention is needed to process a claim. It acquires demographics, charges, checks against payer rules, and submits for payment.

The Air Traffic Controller of Medical Claims Processing

Making the transition to electronic medical claims is great, except for the fact that now you no longer have the US Postal Service to transmit for you. Enter medical clearinghouses. Clearinghouses are electronic, HIPAA compliant hubs that allow practices to process claims to insurance carriers. Not only that, they also scrub each claim and inspect for error and any potential denial triggers. If there are mistakes, the clearinghouse alerts you on what should be corrected. Once the claim passes inspection, it’s sent electronically to the insurance carrier through a secure connection, and you’re reimbursed!

Managing medical claims is tough. Stop the frustration and start being paid what you’re owed!

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Facilitate Communication Between Your Staff

Frequent communication among staff goes a long way when it comes to denial management and preventing error. Often times, there’s a disconnect between the two, causing inaccurate documentation. Coding and billing staff need to work together to document all the right information necessary to support optimal billing. Schedule weekly or monthly meetings if necessary. That way, everyone is on the same page and front to back end communication runs seamlessly.

Train Staff on Best Practices with Medical Claims Software

At the end of the day, whether or not you have top of the line software to support your claim management, your medical claims processor will ultimately determine the fate of your denial rate. Encourage medical claims processors to identify and communicate trends on a daily or weekly basis. This could help prevent a problem in the future if any variation is noticed within those trends. Make sure staff is trained on what it takes to generate a clean claim, and why claims are denied in the first place. Train staff to document properly and select correct procedure and diagnostic codes. For new hires, send them to educational seminars once or twice a year so that they can keep up with documentation requirements and changes. Consider organizations like RBMA, RSNA, EDPMA, ACEP, HBMA, and MGMA that also offer online documentation resources, so that no matter what, you have access to updated requirements for your specialty(s). The goal is so make sure every staff member is an RCM superstar.

Track Your Progress

New solutions and processes are one thing, but it’s another to quantify your progress. Calculating the denial rate is a great start; it’s the percentage of claims denied by payers during a given period, which will give you a sense of your revenue cycle management process’s effectiveness. To calculate your practice’s denial rate, add the total dollar amount of claims denied by payers within a given period and divide by the total dollar amount of claims submitted within the given period. A low denial rate indicates a healthy cash flow. The industry average is between 5-10%.

Originally published September 27, 2019

Technology has dramatically changed the way healthcare organizations, including providers and payers, operate. It has also made a marked difference in medical billing processes such as claims processing.

Electronic Claim Definition

A major change for the medical billing industry occurred with the adoption of electronic claims, which the American Medical Association defines as a paperless patient claim form generated by computer software that is transmitted electronically over telephone or computer connection to a health insurer or other third-party payer (payer) for processing and payment. Electronic claims processing reduces the need for paper records and benefits healthcare organizations by:

• Minimizing disruptions to cash flow
• Tracking claim status
• Increasing accuracy and cutting down on claim rejections and paperwork
• Decreasing overhead costs and staff time

An integrated clearinghouse can reduce the length of your medical billing cycle by 30-days between charge post-date to first payment through electronic medical claims processing.

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Paper Claims vs. Electronic Claims

The National Uniform Billing Committee (NUBC™) was formed in 1975 to develop and maintain a single billing form and standard data set to be used nationwide by institutional, private and public providers and payers for handling healthcare claims. Now, 46 years later, more than 80 percent of all institutional claims are submitted electronically.

Unlike paper claims, which are often rejected due to inaccuracies, omissions and other problems, submitting claims electronically can result in fewer lost or incomplete claims. The AMA notes that electronic claims submission also can:

• Reduce the amount of time and resources physician practices devote to manual administrative functions—time that can be better spent with patients or focused on other practice efficiencies
• Pre-audit claim fields automatically for potential errors before submission to a payer
• Identify claim issues and provide online claim resolution before processing by a payer
• Submit claims almost instantaneously to a payer 
• Reduce postage, supplies and mailing expenditures
• track a claim's progress between intermediaries (e.g., a billing service or clearinghouse) and a payer through an electronic audit trail

Although software systems aren’t without flaws, the average error rate for paper claimsis 28 percent, markedly higher than that for their electronic counterparts. One of the reasons is sometimes illegible documentation. Paper charts also can’t be integrated with electronic healthcare systems, require more storage and are more susceptible to being damaged or destroyed.

Read about five things you can do to reduce the frequency of medical claims processing mistakes.

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Understanding Automated Electronic Claims Submission

Automated electronic claims submission integrates a healthcare provider’s electronic claims with its existing workflow. The process begins with paper claims being converted electronically through optical character recognition imaging (OCR). Next, medical billing software aggregates and scrubs each claim for potential denial triggers that could delay the revenue cycle. Third, the clearinghouse sends the claims electronically to the insurance carrier through a secure, HIPAA- compliant connection to achieve real-time visibility into the status of the claim. Finally, the claim is accepted, and the provider organization receives reimbursement.

An integrated business intelligence tool such as ImagineIntelligence^TM can be used to compile a report of the most common causes of claim denials and mitigate potential productivity loss. It helps physician practices make data-driven decisions and features enterprise-level reporting, real-time notifications, personalized dashboards, bi-directional data exchange and more.

Additional Advantages of Electronic Claims Processing

The use of electronic claims can result in significant financial savings for both physician practices and payers. These claims can be stored on a data server and submitted either directly to the payer through direct data entry or via a clearinghouse. Both methods are more accessible and less fragmented than the use of paper claims, especially when shared among specialists.

Also, with electronically submitted claims, hospitals and physician practices often gain efficiencies through more automation and less staff work. Considering the amount of time providers spend per claim on manual tasks and the corresponding costs for paper, postage and ink, the potential savings from using electronic claims proceeding is huge.

Electronic Medical Billing

Earlier this year we wrote a blog article on the benefits of eliminating paper from your revenue cycle through electronic medical billing. In the article, we mention medical providers could save at least $1.1 million labor hours per week by transitioning to full electronic claims processing. Electronic medical billing is easy to use and helps practitioners reduce the time spent filling out forms. When integrated with electronic patient collections, practice owners can reduce overhead while generating additional revenue through more efficient revenue cycle management.

The healthcare industry is moving swiftly in the direction of digitizing the entire revenue cycle. In 2017, just over 6 percent of healthcare claims were submitted as paper forms. Financial organizations big and small have a lot to gain through integrating electronic claims processing with other parts of the revenue cycle. Schedule a live demo today to find out how the Imagine Team can work with you to integrate electronic claims processing into your existing workflow.

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Automate medical claims processing

Originally published May 7, 2019

Managing claims can be a challenging process for any healthcare provider, no matter the size. Even the largest health systems with experienced coders experience denied claims. That’s why it’s essential for physician practices that want to maintain a strong revenue cycle to implement a comprehensive denial management strategy.

Denial Management Definition

An often-used definition of denial management comes from healthinsurance.org: “the refusal of an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.” Forms of denials include “soft denials” or a temporary denial that goes not require an appeal and could still be paid if the followed up on, and “hard denials” or a denial that could result in lost revenue if not appealed.

While an estimated 67 percent of denied claims are appealable, as many as 65 percent are not reworked because the time and expense of reworking the denials manually would be more than the revenue they could generate.

When you’re processing hundreds or even thousands of complex medical claims every week, a small percentage of denied claims can have a significant impact on your bottom line. Physician practices that don’t employ denial management in medical billing essentially forego revenue they’re due.

According to the American Medical Association (AMA), 1.38-5.07 percent of claims are denied by payers on the first submission. Commercial and public payers deny about one in every 10 submitted claims. Half of denials are caused by front-end revenue cycle issues.

Whether claims are denied due to missing or incorrect data, lack of documentation, procedure coding errors or other common reasons, they can’t be resubmitted. They have to be corrected based on the reason declined.

Importance of an Automated Denial Management Strategy

Unlike claim rejection, which occurs when a claim is submitted to a payer with incorrect or missing data or coding, claim denial happens when a claim is processed and then denied by a payer. The purpose of claims denial management is to investigate every unpaid claim, uncover a trend by one or several insurance carriers and appeal the rejection appropriately.

For additional information on this topic, download our white paper, “Reasons for Medical Billing Denials and Actions to Avoid Them.”

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The best solutions for denial management in medical billing are those which catch a mistake before it occurs. For larger healthcare organizations, the sheer volume of claims requires more than a manual process.

Automated denial management can help bridge the gap between claim denials and higher profit for healthcare providers. Conversely, physician practices utilizing an outdated billing system risk an increased failure to collect copays, overly complex claims processes and unnecessary errors. They also have an increased potential for inaccuracy and ineligibility.

Automated claims management solutions are regularly updated with codes and can be used to route denied claims directly into work lists. They also offer decision support to enhance denial management workflow and mitigate the need for practice staff to spend multiple hours manually processing claims.

Automation fits into a well-tuned denial management strategy at three-phases: pre-and post-denial and advanced reporting.

Automating the Denial Management Workflow

Joseph Gesser is the Director of Technology Solutions for Pollux Systems Inc, a multi-specialty billing company and ImagineSoftware client of five years. In comparison to billing companies that bill for one specialty, Pollux Systems bills for specialties that have very different coding and billing requirements, so utilizing a medical billing software solution that has the ability to interface with all of them effectively is key.

"We've been able to increase our interface capabilities with our clients to automate certain features, as well as increase our ability to work denials automatically and be more effective on the collections cycle."

According to a 2016 HIMSS survey, nearly a third of providers are still using manual claims denial processes. Out of the 69% using an automated denial management solution, 44% use a vendor and 18% manage their own system in-house. The best solutions to common medical billing mistakes are those which catch a mistake before they occur. For larger healthcare organizations, the sheer volume of claims requires more than a manual process. Automation fits into a well-tuned denial management strategy at three-phases: pre-denial, post-denial, and advanced reporting:

Pre-denial Management

Start by putting the necessary processes and technology in place to ensure all anticipated causes of denials are accounted for and segmented into the correct course of action to be resolved. This can be accomplished by:

• Correcting errors from duplicate billing, incorrect CPT modifiers and inaccurate patient demographic information. Reconcile missing patient information with existing records. An automated tool like ImagineAI^TM verifies and corrects patient demographic details immediately.
• Getting insurance authorization for healthcare services that require prior approval. Systems that conduct pre-authorization services can complete this in minutes instead of hours like that for manual processes.
• Verifying insurance eligibility, the most common type of denied claim. Use a tool that identifies coverage opportunities, including overlooked alternative payment methods.

Post-denial Management

Recover hidden revenue and minimize the impact of denials by top causes and sources of denials. Solutions such as ImagineIntelligence^TM enable physician practices to:

• Automatically sort by dollar amount from greatest to least and/or date of service to head off filing any late claim denials, a process that can take hours, if not days, to complete manually.
• Systematically assess the business impact of each kind of denial and prioritize denials that represent the greatest opportunity for quick revenue recovery.
• Implement a system where claims with the same payer and cause of denial are appealed in bulk.
• Isolate complex bills into a separate bucket to be reviewed by a trained billing manager.

Advanced Reporting

High-level data analytics can help determine if you do not have enough people working on denials and identify problems within your denial management processes. Use these analytics to:

• Conduct “root cause analysis” to pinpoint trends in denials.
• Share insights with front-end and middle-stage revenue cycle teams about the reason(s) for denials. This can help reduce the flow of denials and address issues further upstream. For example, if a significant portion of your denials are prior-authorization denials, review your front-end authorization process.
• Establish benchmarks, analyze workflow performance and track staff productivity related to denied claims. Reviewing automatically created clean claim and denial rates with your employees can open silos and identify new opportunities for collaboration.

ImagineSoftware’s claims management solutions enable physician practices to get claims out more quickly to expedite reimbursement. We offer an average of 35 days in A/R and a 97% net collections rate. For additional information on this topic, download our white paper, “Reasons for Medical Billing Denials and Actions to Avoid Them.”