How Do You Reduce Healthcare Revenue Leaks?

October 30, 2019 Marcy Utley

In this second blog in our Managing Revenue Risk series, Marcy Utley, Senior Product Manager at SAI Global, discusses how an automated workflow is different from work queues in supporting collaboration on payer audits and denial appeals. 

Healthcare revenue leakage is a moving target, thanks to fluctuating payer rules and the complexity involved in denial and audit processes. As this pervasive problem continues to tighten the squeeze on already shrinking margins, having the right tools and processes to reduce revenue leaks and retain legitimately earned revenue can make a huge difference.  

However, in an environment of complex transactions managed by multiple IT systems and disparate teams within various departments, the potential for error is extremely high. To stay viable amid stiff competition, healthcare organizations need to combine automated tools and collaborative people processes to identify issues when and where they occur.  

How to reduce healthcare revenue leaks

Healthcare organizations that lack a focused strategy for denial management are more likely to see denials resolved unfavorably, or, as is all too often the norm, left to languish and eventually written off as bad debt. While claim denials are a chief source of frustration for your billing department, they also put a damper on cash flow; failing to adequately resolve denials from insurers translates to lost revenue.  

Without automation it is hard to identify, review and dispute in a timely manner inappropriate non-payments or underpayments that occur. Lack of a software automation tool results in a time-consuming and expensive process to manage.  

 

To Reduce Revenue Leakage, Timeliness and Efficiency Matter

Often, hospitals have systems that will push denied claims into a work queue by payer, department or other user-defined criteria. This approach provides the revenue integrity team with a list of denied claims by a specific category. Individual team members pick up a claim to work based on dollar amount, days in the queue or by grouping similar denials to gain efficiency. While working in the queue, employees must use other more time-consuming methods such as email, fax or phone calls to gather documentation and input to work the denial. Work queues do very little to facilitate the appeals process.  

Appealing denials requires information and input from multiple parties in the organization, and such information is critical in deciding if an appeal is worth the effort. As the denial sits in the queue, the clock is ticking for filing a timely appeal. A more effective approach is to deploy a system that will monitor and automatically alert revenue integrity employees of a denial as soon as it occurs – via the 835 transaction – and uses automated workflows for managing the appeal process including routing the claim to the appropriate stakeholders for review and collecting input and documentation.  

In addition, workflow rules can be established to notify individuals of approaching appeal timelines to ensure no denials fall through the cracks or fall to the bottom of a work queue.  
 

In Healthcare, Not All Workflow Tools are the Same

Different types of denials, such as clinical, administrative and coding, for instance, will dictate distinct processes for review and analysis. Moreover, the timeframe for appeals varies by the payer. True automated workflow facilitates the communication and collaboration process among team members across functional areas. Such a workflow routes the denied claim to the responsible parties while assigning tasks, monitoring deadlines, sending reminders and escalation notices, and tracking updates. Flexibility and configurability coupled with a workflow engine is therefore invaluable.  

With contract agreements, timelines, internal processes and staff changing frequently, many organizations are held hostage by software systems that require either the software vendor to make changes or the IT department. Both are costly and timely options. All the while, as you wait for the changes to be made, claims and appeals continue to fall through the cracks due to out-of-date processes. Using a software system that allows organizations to adjust their workflow adds a great deal of efficiency and ensures claims are always being routed through the most up-to-date process.   
 

What Does Automation Look Like?  

Let’s look at an example of a claim denied for clinical reasons.  

The system will automatically highlight the denial from the 835 transaction and notify the designated patient financial services staff member via an email alert. The employee will review the claim and add any additional information required. When complete, the system will automatically move the claim to the next stakeholder in the review process, such as the case manager.  

The case manager will receive a task assignment notification with a due date for completing the task, such as providing clinical notes. As the due date for this task approaches, the system will automatically send reminders to the case manager and patient financial services. The case manager may call the payer to obtain more details regarding the reasons for the denial and will add conversation notes to the claim in the system. They will then recommend whether to accept the denial or pursue an appeal.  

Based on this decision, the system will then route the claim to the appropriate stakeholder or department to manage the next steps. For example, if the decision is made to appeal, the health information management department will receive a task requesting that supporting documentation be attached to the claim. Once complete, the claim will then automatically move to the appropriate team member for processing. Along the way, the system creates an audit trail of activities, documenting each step. 
 

Gathering Important Metrics

Metrics should be collected and shared but can be difficult to obtain with work queue-based software systems. However, as claims work their way through a workflow-based system, critical information is gathered along the way. This data provides critical insights such as the volume and revenue associated with the claims that are audited or denied, the appeal success rate at each level, and the services or codes that are being targeted. All these metrics are critical to understanding what is happening with your denials program.  

Analysis of this information provides awareness and allows organizations to make decisions based on data, enabling the organization to more effectively and efficiently use valuable and limited resources when it comes to audits and denials. These metrics give an understanding of the work effort organizations are taking to protect legitimate revenue. Additionally, for contracted payers, it is valuable information to bring to the contracting team when negotiating with the payer. It can help demonstrate that unwarranted audits and inappropriate denials cost both providers and insurers dollars and resources. 
 

Workflow Automation is the Best Medicine

There is strong evidence of significant ROI and benefits for healthcare organizations that have invested in comprehensive revenue integrity programs. When considering the potential benefits, organizations should focus first on the value offered by automated tools for securing additional revenue.   

Not only does an automated, consistent program deliver measurable and proven benefits in terms of financial and employee performance, it does so in return for a relatively low investment. By implementing an advanced, flexible, and user-configurable workflow system that alerts you immediately when a denial occurs, facilitates collaboration, and tracks the status of tasks and deadlines, healthcare organizations can significantly reduce manual workload.  

Such a platform also facilitates efficient and timely gathering of important metrics and responses for appeals, ensuring that processes are consistently followed by all participants. In turn, this allows a healthcare organization to quickly appeal denials before the claims are considered ineligible for appeal due to timeliness.

 


Managing Revenue Risk: The 360 Approach
In the third piece of the Managing Revenue Risk blog series, Marcy discusses ways to conduct proactive mitigation to avoid potential non-compliance.

Missed part one? Read about our 360-degree approach to reducing denied claims.

 

 

 

 


Let's discuss how SAI Global’s Revenue Risk Manager can help reduce revenue leakage.  

Learn more about our Revenue Risk Manager.

About the Author

Marcy Utley

Marcy Utley is Senior Product Manager at SAI Global. She is responsible for the company's compliance and risk management solutions for the healthcare market. Marcy ensures SAI Global’s Compliance risk product line meets the needs of healthcare compliance and revenue cycle professionals. Before joining SAI Global, Marcy worked in the healthcare industry for 15 years. She held various positions, including key roles in Physician Services, Revenue Cycle, and the Compliance Department.Marcy holds a Bachelors degree in Business Management and is a member of HCCA, AAPC, and NAHRI.

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