Reimbursement Resolutions: Examining Your Practices
Making New Year's resolutions has become a fine tradition, not just in the United States, but all over the world. Legend has it that the idea of New Year's resolutions started with the ancient Babylonians more than 4,000 years ago, coinciding with the annual spring planting of crops. It is anyone's guess if the ancient Babylonians were any better at keeping their New Year's resolutions than we are today, but the concept of picking a time of year to make a fresh start and a renewed effort to deal with problems that need attention hasn't changed much.
The problem with most resolutions is that we often fail to keep them. They may turn out to be too hard to keep, or perhaps the perceived rewards don't materialize as soon as we had hoped, so we give up. But there is a resolution that is both achievable in the short term and can pay off handsomely once completed a review of your organization's reimbursement processes. Here's some practical advice to help you accomplish just that:
Perform an Audit
Start out by performing an audit of your company's reimbursement records. The purpose of performing internal auditing in the reimbursement area is to ensure that your company remains in compliance with various regulatory standards, contractual agreements with third party insurance payers, company policies and procedures, and general guidelines of efficiency for billing and reimbursement function.
The patient record review is the most time consuming portion of a reimbursement audit, but by auditing your billing files and other reimbursement-related records first you can identify potential problems areas that may need further investigation as you complete the rest of your process review. Depending on the size of your organization, auditing approximately 10 percent of the current patient accounts should give you a good idea of how well the company and its billing staff are meeting expectations.
You can hire an outside consulting firm to perform a complete audit of your reimbursement-related records, or you can assign the task to internal staff so long as you are confident that those performing the audit have a high level of expertise in the area of reimbursement. If you decide to handle the project with existing staff, make sure you first design a basic audit tool that will allow you to collect, aggregate, and objectively assess your data in terms of the percentage of records that are compliant in each individual area reviewed. Remember, it is much easier to manage your processes effectively if you can measure them accurately.
Your record review should include a thorough examination of medical necessity documentation such as physician orders, CMNs, and other clinical documentation provided by ordering physicians. The person reviewing the file should assess whether medical policy criteria was met by the documentation in the patient file, and if not, whether the reimbursement staff was able to recognize this before the claim was sent for payment. The reviewer should also note whether intake personnel properly screened the order to ensure that it met qualifying criteria before the delivery was made.
The record should also be audited to assess whether intake forms, signed proof of delivery, assignment of benefits, patient notification of financial responsibility, insurance verification, and claim forms are present in the file and have been completed correctly.
Next, collect data on denials so that you can identify trends, determine how long it is taking to get a claim out the door and to get it paid, and what products are most frequently denied. You should not need to manually calculate this data. Look first to see if your software offers an option to aggregate the data by reading remittance notices received electronically from Medicare. If your software does not provide this feature, then consider a standalone product like RemitDATA that can do the job.
If you have set up your software system optimally from the start, you should be able to attach reason coding to all the adjustments made to accounts in the system. If this is the case, finish off your chart audit by looking at adjustments totaled by reason code so that you can get a sense of the most frequent causes for write-offs.
Then calculate your days sales outstanding (DSO) and determine how much of it is from claims that have been billed but not yet paid, and how much is from revenue that has not yet been billed because it is missing some form of required documentation.
Now that you have collected all of your data, sit back and take a critical look at what it is telling you. Are there problems with physician orders and CMNs not supporting medical necessity criteria? Is it taking too long to get medical necessity documentation and detailed written orders back so that you can submit the claim? Are denials predominately related to just a few products or specific denial codes? Are adjustments high in specific areas that can be reduced such as write offs caused by untimely filing or lack of prior authorization? Getting a handle on where opportunities for improvement exist will help you know where to focus your attention as you complete a process review of your reimbursement department.
Process Review
Identifying opportunities for improvement through a careful audit is only the first step. Only with a thorough review of processes will you be able to find the root cause of the problems you have identified, and then solve them.
Start your process review by speaking to everyone involved in the steps taken from the time an order is placed until the cash is posted for the claim. It is important to interview every employee even if you think you know exactly what it is that they do. Listen carefully and don't assume anything. Your employees will likely appreciate the fact that you have solicited their input, and you may just learn a lot too.
First ask each employee to describe their job duties. Ask them to list everything they are responsible for, and whether or not they share those specific duties with other employees. Then ask each employee to verbally walk you step by step through the tasks they engage in on a daily, weekly, and monthly basis in essence, the process they follow to complete their job duties. Pay special attention to processes that are linked to problem areas that were revealed during the audit phase of your reimbursement review. Take detailed notes as you listen; you will need them later.
Now review the actual job descriptions of each employee you interviewed (you do have written job descriptions for each of your employee's don't you?). Compare them to the list of job duties you created as you listen to each employee describe their role. Are there any glaring gaps where it appears that no one seems to own a key task, for instance insurance verification or CMN tracking? If they correspond to any of the deficits on the audit make a note of them. Are there tasks that seem to be everyone's responsibility? Are they being neglected according to your audit? Sometimes "everyone's responsibility" translates into "no one's responsibility" when everyone assumes that someone else will complete the task.
You can solve problems like these by making sure all of your employees have written job descriptions; that key tasks are assigned to one employee who has primary responsibility for completion of the task; and that knowledge deficits that may discourage employees from owning certain tasks are addressed by providing the training and resources necessary to complete the job.
While it is always important to have your staff all on the same page, working like a well-oiled machine, the most common cause of inefficiencies in reimbursement departments are processes that have not kept pace with the company's growth. It's easy to see that processes that may have worked when the company was generating $1 million in revenue a year, may not function well when revenue growth has pushed that figure to $3 million.
Take a bird's eye view of the process, from order intake to cash posting, by using the information you learned through interviews with employees to create a flow sheet of the actual process. Again, pay close attention to the specific areas of vulnerability that you identified during the audit. How do your company's processes vary from the best practices you have heard about in countless seminars and in articles? Which processes involve too many complicated steps and could potentially be made more efficient? Are there critical steps in the process that are missing altogether? Where is documentation bogging down and why? Make a plan to address any problems with the process that you may have uncovered.
An audit and process review of your billing area may sound like a Herculean task, but it can actually be accomplished in less than a week by a person with a high level of expertise in HME reimbursement. It's true that making the changes needed to truly gain a fresh start in your billing department may take a little longer, but the rewards will make all your efforts worthwhile.
This article originally appeared in the November 2003 issue of HME Business.