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

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Presentation on theme: "Data Mining Your Credit Balances – How to Find the GOLD Maryland Chapter of AAHAM Monthly Meeting The Hotel at Arundel Preserve December 19, 2014."— Presentation transcript:

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

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 May 3,

5 Where’s the Gold?

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

7 Mining Tool-Belt People Your Staff 3 rd Party Staff Payer Resources Systems PAS Ad-Hoc Contract Management 3 rd Party System

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

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 May 3,

10 Root Causes to Look For - Patient FACILITYRESOLUTION 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) Happy Holidays Health SystemMatching debit account. 301 $ (62,390.29) Happy Holidays Health System Patient overpayment on this DOS but patient has other open debit balances. 150 $ (32,329.76) Happy Holidays Health SystemPatient overpayment. 1,331 $ (457,458.87) Happy Holidays Health SystemPatient prepayment. 34 $ (10,486.03) 1,981 $ (567,359.06) May 3,

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 FACILITYRESOLUTION COUNT TOTAL $ Happy Holidays Health System Account has no payments. Possible allowance posting error or charges were over adjusted. 165 $ (122,863.52) Happy Holidays Health SystemAdjustment equals account balance. 620 $ (282,477.61) Happy Holidays Health System Adjustment was posted two times in error. 775 $ (209,747.24) Happy Holidays Health System Charges were adjusted off incorrectly. 327 $ (39,120.83) Happy Holidays Health System Total adjustments meet or exceed total charges. 912 $ (279,412.88) 2,799 $ (933,622.08) May 3,

13 Using the Tools – Payer Review contracts 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 May 3,

14 Risks Associated With Not Resolving Credit Balances Criminal/Civil Penalties Mis-stated Profit Mis-stated Revenue Negative Management Letter Comments Patient Dissatisfaction May 3,

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 May 3,

16 Types of Credit Balance Accounts that can be Automated Mis-posted Contractual Adjustments Mis-posted Payments/Payment Transfers Patient Refunds

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

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

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. May 3,

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 May 3,

21 DISCUSSION May 3,

22 CONTACT INFORMATION CONTACT INFORMATION THANK YOU!!! Kathy Sandora – CRCE Executive Director, CBAS Operations CDR Associates, LLC Ken Krieger Senior Sales Executive CDR Associates, LLC May 3,


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