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The Real Cost of Inadequate Patient Access Processes Presented by: Tim Raimey Date: October 31, 2012.

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Presentation on theme: "The Real Cost of Inadequate Patient Access Processes Presented by: Tim Raimey Date: October 31, 2012."— Presentation transcript:

1 The Real Cost of Inadequate Patient Access Processes Presented by: Tim Raimey Date: October 31, 2012

2 Heading – Ariel 40 One of the largest healthcare consulting firms in North America. We develop strategies and deliver services that support the latest industry trends such as ICD- 10 strategy, Meaningful Use, EHR implementations, ACO readiness, HIE planning, physician-hospital alignment and much more. Were focused on helping healthcare leaders improve operational, clinical and financial performance, ultimately leading to increased patient safety and better outcomes. 2 Who is Beacon Partners?

3 Heading – Ariel 40 Many claims are denied due to inadequate patient registration processes 3 Why are claims denied?

4 Heading – Ariel 40 Missing Social Security Numbers Incomplete or Missing Guarantor Information Incomplete or Missing Employer Information Policy Identification number incorrect 4 Common Registration Errors

5 Heading – Ariel 40 Patient not eligible Charges are not covered in the plan No authorization or no precertification on file Wrong payer identified Benefit reached maximum allowable under plan 5 Common Reasons for Denials

6 Heading – Ariel 40 6 Cost to Rework a Claim: Physician ItemCost Staff Time$10.67 Supplies$ 1.50 Interest$1.75 Overhead$1.00 TOTAL$14.92 Assumptions: -Staff Time includes 20 minutes of billing staff time at $22 per hour, plus 10 minutes of another staff members time(ex: front office) valued at $20 per hour -Supplies include telephone, paper, envelope postage -Interest is calculated on $200 at 10%, compounded monthly for 30 days -Overhead includes management, equipment, space and other fixed costs Source: Walker, Woodcock, Larch, 2009

7 Heading – Ariel 40 7 Cost to Rework a Claim: Hospital ItemCost Staff Time$15.30 Supplies$ 4.50 Overhead$5.20 TOTAL$25.00 Assumptions: -Staff Time includes 30 minutes of billing staff time at $24 per hour, plus 10 minutes of at least another staff members time(ex: front office) valued at $20 per hour -Supplies include telephone, paper, envelope postage -Overhead includes management, equipment, space and other fixed costs for hospital Source: HFMA Executive Roundtable, Nov 2010 Zimmerman and Associates 2009

8 8 Physician Practice Stories

9 Heading – Ariel 40 Pulmonary and Sleep Study Practice with offices in 4 locations: ̵ Five providers seeing an average of 80 patients per day collectively ̵ Sleep studies account for about 45 of the 80 patients per day ̵ Sleep studies tend to be costly 9 Pulmonary and Sleep Study Practice

10 Heading – Ariel 40 Pulmonary services for this practice typically have a 95% success rate with claims paid Sleep study services average 78% success rate with claims paid 10 Claims Payment Front desk staff minimally experienced Claims denied for sleep study are very costly to the patient, provider, and provider staff

11 Heading – Ariel Looking at the Real Costs A closer look at the costs of a denied sleep study claim: Office visit $1,550, plus $1,500 for medical equipment and supplies = $3,050 $3,050 x 10 patients (22% x 45 patients) = $30,500 Add 40 minutes of the providers time explaining to an angry patient about the claim

12 Heading – Ariel 40 Ophthalmology practice, one provider: Averages 15 patients per day Patients tend to be older population Success rate for claims paid in this practice 95% Experienced front desk staff 12 Ophthalmology Practice

13 Heading – Ariel Looking at the Real Cost A closer look at the Ophthalmology Practice: Office visit for new patient, Level IV $225 Provider sees 15 patients per day for 4 days a week total 60 patients On average 3 patients per week claims are denied (5% x 60) Weekly average loss in claims (3 patients x $225) =$675 or ($2,700 per month)

14 Heading – Ariel 40 But dig a bit deeper….. Add 2 to 3 hours of the front desk staffs time investigating the reason claim denied Add 1 hour to the providers time explaining the denial to his elderly patients Add the potential of write offs Add the potential of hes a good doc, dont worrying about paying 14 Opportunity Costs

15 15 Hospital Story

16 Heading – Ariel 40 General Hospital in Midwest with 340 beds Emergency Department (ED) capable of providing services for all levels of care, including critical ED averages 65 patients per day 16 Hospital in the Midwest Patients are billed for ED services based on categories of care provided Category 1 (lowest) to Critical Care (highest)

17 Heading – Ariel Looking at the Real Costs A closer look at the costs: Category 3 charge is $441 (majority of patients) This hospital reports the success rate for claims paid for ED charges is about 75% Assuming 25% of 65 patients cant or wont pay, loss would be (16 patients x $441) =$7,056 per day

18 Heading – Ariel 40 Lets look even deeper…. $7,056 per day x 7 days = $49,392 a week $49,392 x 4 weeks = $197,568 a month Add in the hours the billing staff spend with insurance companies, patients, and medical records staff 18 Additional Time and Effort

19 Heading – Ariel 40 Reduce claims denial Increase cash flow Improve patient experience Decrease bad debt Reduce provider and staff time spent on discussions about why claims denied 19 Whats the goal?

20 Heading – Ariel 40 Adequately train front desk staff to get registration right the first time Assign enough staff for registration activities ̵ Its better to capture the data right the first time, than to spend time investigating what was missed Use integrated systems to assist staff in registration and verification Pre-register as many patients as possible 20 How do we get there?

21 Heading – Ariel 40 Pre-verify insurance eligibility, authorizations, pre-certifications Audit registration outcomes and processes Track denials by payer, reason, financial impact Communicate denial rates back to front end staff Collect copayments Collect self pay 21 How do we get there? (continued)

22 Heading – Ariel 40 Error rates due to front end billing: ̵ < 2% Time of service collections: ̵ Copayments: 100% ̵ All other time of service payments: 75% 22 Leading Performance Indicators Source: Walker-Keegan, Woodcock, Larch, 2009 Number of patients cleared prior to visit: ̵ 90 % Claim edits and denials due to registration and referrals: ̵ < 2% Percentage of insurance verified: ̵ 98%

23 Heading – Ariel 40 Clean claim submission rate – 90% Medicare return to provider denial rate – 3% Bad debt write off as a % of gross income – 3% Charity write off as a % of gross income – 2% Overall final denial rate after appeals – 1% 23 Leading Claims Submissions Rates Source: 2010 HIMSS Financial Systems Steering Committee

24 Heading – Ariel 40 If all of these processes are being addressed, then you will have one less challenge as your organization moves toward achieving Meaningful Use and preparing for ICD-10 implementation. 24 Healthcare Reform Impact

25 Heading – Ariel Light at the end of the tunnel

26 BEACON BeaconPartners.com BOSTON · CLEVELAND · SAN FRANCISCO · TORONTO Thank You 26 Thank You For more information please contact:


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