1. Data Mining Your Credit Balances – How to Find the GOLD
Maryland Chapter of AAHAM
Monthly Meeting
The Hotel at Arundel Preserve
December 19, 2014

2. Magnitude Of The Credit Balance Problem
Hospitals with annual revenues of $100 million can generate $3 million of new credit balances each year.
Nation-wide, more than $10 billion in new credit balances are created by each year.
A large teaching facility or health system may require 10 FTEs just to resolve the new credit balances that are created each year.
Cost to cut a refund check? $10, $15…up to $35 !!!!!

3. Causes of Credit Balances
Front-end efficiencies/Increase up-front collections
Complex reimbursements/Multiple insurance coverage
Back-end resolution of overpayments has not kept pace with front-end improvements
Staffing required to manually resolve credit balances far exceeds available resources
Typical focus is on resolving high dollar overpayments
Allowance errors are not prioritized
Thousands of small balance Patient overpayments continue to build, prohibiting efficient processing
Title should be credit balances…

4. Why are so Many Staff Hours Required to Resolve Credit Balance Accounts?
Resolving credit balances is a manual process that requires the retrieval of documentation and the completion of various forms:
EOB Request Forms
Check / Refund Request Forms
Government Forms (CMS Form 838)
Refund Submission Forms to Various Payers
Piles/Stacks of Greenbar printouts
April 14, 2017

5. Where’s the Gold?
Did we see if we could make the Allowance gold or yellow?

6. Finding YOUR Gold Determine YOUR ratio’s Run reports
based on payment service codes
based on allowance service codes
(NOT based on FC, Ins Bucket or Ins Plan Code)
Review your credit balance policies/procedures to ensure findings supported
Handling of small balance write-offs for both credit and debit balances
Approval levels appropriate for today’s environment?
Adjustment limits; Refund limits
Dollar threshold for both
Signing/approval authority for both
Add insurance bucket to Not based. Spell out Credit balance Review small balance policy for dollar limits and to include both debit and credit balance Add both adjustment and refund approval limits.

7. Mining Tool-Belt People Systems Your Staff 3rd Party Staff
Payer Resources
Systems
PAS
Ad-Hoc
Contract Management
3rd Party System
Under people add payer resources. Change vendor to 3rd party staff

8. Using the Tools - Patient
DRILL into report to identify like – causes
Matching Debit – same DOS
Matching Debit – different DOS
Open Debit – different DOS
Prepayment with no DOS
Duplicate payment
VALIDATE for accuracy (95% or higher)
Run report(s) on routine basis
AUTOMATE where possible
Add matching debit different DOS. Same comment as allowance under automate

9. Risks Associated With Not Resolving Patient Refunds
Patient Dissatisfaction – Bad PR
Increased State Legislation Regarding Patient Refunds
California, Texas, North Carolina, New York…
Adverse Effect on Up-front Collections
Change title
April 14, 2017

10. Root Causes to Look For - Patient
FACILITY
RESOLUTION
COUNT
TOTAL $
Happy Holidays Health System
Matching debit account and account has only one payment. Payment was for two accounts but was only posted to one account.
165
$ (4,694.11)
Matching debit account.
301
$ (62,390.29)
Patient overpayment on this DOS but patient has other open debit balances.
150
$ (32,329.76)
Patient overpayment.
1,331
$ (457,458.87)
Patient prepayment. 34
$ (10,486.03)
1,981
$ (567,359.06)
April 14, 2017

11. Using the Tools - Allowances
DRILL into report to identify like–causes
Duplicate adjustment
Twice in error
Adjustment equals balance
No payments
Charges added/removed after billing
Mis-posting DOS
VALIDATE for accuracy (95% or higher)
Run report(s) on routine basis
AUTOMATE where possible

12. Root Causes to Look For - Allowances
FACILITY
RESOLUTION
COUNT
TOTAL $
Happy Holidays Health System
Account has no payments. Possible allowance posting error or charges were over adjusted.
165
$ (122,863.52)
Adjustment equals account balance.
620
$ (282,477.61)
Adjustment was posted two times in error.
775
$ (209,747.24)
Charges were adjusted off incorrectly.
327
$ (39,120.83)
Total adjustments meet or exceed total charges.
912
$ (279,412.88)
2,799
$ (933,622.08)
April 14, 2017

13. Using the Tools – Payer Review contracts Appeal Correspondence
Timely filing/look-backs
Late charges
Charges removed
Check or take-back?
Segregate process accordingly
Appeal Correspondence
No response = Payer retraction. Keep your money!
Make use of a “Free Labor” resource
Free labor to provider = Reduced costs
Add after late charges/charges removed. Remove automate … cant on payer stuff
April 14, 2017

14. Risks Associated With Not Resolving Credit Balances
Criminal/Civil Penalties
Mis-stated Profit
Mis-stated Revenue
Negative Management Letter Comments
Patient Dissatisfaction
Add after late charges/charges removed. Remove automate … cant on payer stuff
April 14, 2017

15. Benefits to Using Automation to Resolve Credit Balance Accounts
Allows the Provider to process outstanding backlog of credit balances without having to add additional staff
Greatly reduces the costs associated with processing credit balance accounts
Minimizes the possibility of manual errors and potential fraudulent activity
Ensures ongoing, timely processing of credit balances
Simplifies and speeds up daily procedures
April 14, 2017

16. Types of Credit Balance Accounts that can be Automated
Mis-posted Contractual Adjustments
Mis-posted Payments/Payment Transfers
Patient Refunds
Should is be changed to was?

17. How Does Automation Work?
Automation is a process used to resolve large volumes of patient refunds or mis-posted allowances without any human interaction.
Scoring algorithms are used to identify accounts that have patient overpayments or mis-posted allowances
Transaction files are created that are then batch uploaded into the providers patient accounting system to resolve the credit balance accounts
Should is be changed to was?

18. CCF Case Study
In 2007, CCF identified a large number of outstanding credit balances that were overpaid by patients
29,000 accounts affected
24,000 patient refunds due
$890,000
CCF set a goal to resolve all outstanding patient refunds within a one year period
Estimated total cost to manually resolve all current patient refunds was $170,000 to $200,000
Prior to implementing automation, CCF staff performed a statistical sample of potential patient refunds to ensure that the accuracy rate was 99% or higher
Should is be changed to was?

19. Results
CCF processed 24,000 patient refund checks over a three month period at a total cost of $27,000. A savings of $173,000 based on the initial estimate.
CCF continues to process patient refunds on a weekly basis through an automated process. On average 800 patient refunds are processed through automation on an ongoing weekly basis.
April 14, 2017

20. Impact to CCF Gross Days in Credit Balance – 2004 Hospital = 2.6
Physicians = 7.3
Gross Days in Credit Balance – 2009
Hospital = 1.2 (54% reduction)
Physicians = 4.1 (44% reduction)
Total FTE Savings Since 2005 = 50 FTE’s
Increased patient satisfaction
April 14, 2017

21. DISCUSSION
April 14, 2017

22. CONTACT INFORMATION
THANK YOU!!!
Kathy Sandora – CRCE
Executive Director, CBAS Operations
CDR Associates, LLC
Ken Krieger
Senior Sales Executive
Ks and kk
April 14, 2017