Presentation on theme: "1 Skills for the New Healthcare Internal Auditor Revenue Cycle."— Presentation transcript:
1 Skills for the New Healthcare Internal Auditor Revenue Cycle
2 WELCOME TO MY WORLD! What is the “Revenue Cycle?” It is the entire process: From scheduling, to pre-admission, to registration, to charge capture, to HIM coding, to patient financial services/business office’s claims submission, to insurance resolution, to payment in full—with or without financial counseling –or bad debt. Each component has potential for audit.. But first let’s learn some of the basics.
3 Outlining The Revenue Cycle
4 Definition of basic terms Admitting-Central Registration-Patient Access Scheduling – central scheduling vs each dept does their own Charge capture – the process of the revenue generating departments marking charge tickets or order entry. Health Information Management/HIM – medical records Business Office – Patient Financial Services Hold days - # of days hold before dropping off the computer (usually 4-7 after d/c. Need to wait 72 hours for all Medicare accounts. )
5 More Terminology Help CPT- procedure codes that outline what procedure was done. (updates Jan yearly) CPT=# HCPC – a 2 nd type of procedure coding – but alphabetical. J/pharmacy; G & C/usually temporary Medicare only codes (updates April yearly )
6 Health Information Management/ Medical Records All visits require an ICD/diagnosis code before the claim will be processed by the payer HIM coders take the physician dictation/notes and assign ICD as well as CPT codes, where appropriate Coding backlog occurs due to physician delays, record delays and coder shortages= cash delays.
7 How are charges submitted to payers? IT creates billing document. UB-04/837I form is for hospital charges sent to payer. 1500/837P form is for physician/professional charges. Forms are sent electronically (65%) or hardcopy to payers/health plans HIPAA Transaction Sets dictated standardization
8 What is an AR Day? An indicator of how fast the cash is moving Different ways to count an AR Day: From Final bill to paid in full From Discharge to paid in full Gross vs net days Gross – without deductions Net – with allowance/reductions for different items: bad debt, contractuals, etc.
9 Redesign Revenue Cycle Opportunities - WIN
10 How Medicare’s Common Reimbursement Systems Work Inpatient: Diagnostic Related Groups/DRG Uses Dx, procedures where an end coder groups into payment categories ( 1 payment/1 stay ) Outpatient: Ambulatory Payment Classification/APC ( Each CPT could be paid ) Uses CPT and HCPC codes to group clinically and financially related codes into APC payment groups Skilled Nursing facilities – Resource Related Group ( a # of days = 1 RUG payment ) Home Health – Home Health Related Groupers (1 HHRG $ for each 60 day care plan)
11 Reimbursement Systems Remittances –payment document from the payers What type of payment arrangements are hospitals experiencing thru contracting as well as federal and state mandated: Prospective payment systems – payment based on something besides charges: Diagnosis, CPT codes, care plans. (EX: Medicare PPS: Inpt/DRG; Outpt/APC) Fee for service – payment based on charges Per Diem – payment based on a per day rate Capitation – payment based on covered lives, per member, per month
12 Charge Description Master Challenges
13 National Issues with CDM/Charge Description Masters Congress Sub Committee/Ways and Means - focusing on hospital charge structure Under/Uninsured – focusing on how hospitals charge and collect MILLION DOLLAR QUESTION—can you explain how your charges were created to your community?
14 Golden Rule for Charging Use Medicare Guidelines for all payers No care team/charge capture staff member can even tell who the payer is for the pt. Question : How are charges to be created? Answer : Cost plus a reasonable mark up
15 The Road Ahead MedPAC survey of hospital charge- setting practices (9- 04; 6/05): CDM-lgr/complex No systematic relationship: cost to charge Mark-ups vary by service: low cost items=higher markup; pharmacy, supplies and new services Payer’s Bill of Rights Ca Assembly Bill 1627 (eff ) Hospitals have a written or electronic copy of their CDMs available on location Clear and Conspicuous notice required in the ER, admission and billing office List of 25 most commonly charge services available upon request CDM submitted to the state on an annual basis
16 The Charge Description Master Welcome to the charge master – CDM It houses all charges that are billable It houses all stats-only items It houses all hard coded CPT codes It houses all activity used for productivity It requires at least yearly updating with changes in the CPT and HCPC manuals It houses all regulatory billing requirements
17 Revenue Opportunities within the CDM Key to success is department ownership Key to success is understandable charge descriptors. The MOM TEST! Key to success is ongoing CDM Integrity Team work in identifying revenue opportunities, changing regulations and teaching to all effected individuals. Key to success is automation for research,etc—but only with the above elements!! “Computers are useless. They can only give you answers” Pablo Picasso
18 Charge Protocol Manual Explore how charges are being created. Who, within each department, is inputting charges? Charge tickets, order entry, bar coding? Interview staff – all 3 shifts – to determine who/how inputting of charges. Use actually billing documents – UB04 and itemized statements to ‘see’ the actual charge capture. Develop written protocol on HOW TO!
19 Patient Financial Services/Business Office
20 Hot Spots Within Patient Financial Services/Business Office Credit Policy/CP – easily understood by the patients & the staff. Communicated to the patients early and throughout the process Documentation in the patient’s history shows CP used. If not resolved within CP and not eligible for charity, turn to bad debt. EX) Inpt/120 days from D/c; Outpt/90 days d/c
21 More Uglies with PFS Lost charges –sent to the floor, never charged for; charted, never charged Late charges – claims dropped off IT, then charges submitted. Cost of both – if identified, adjusted bills sent to the payers. Patient receive 2 statements –from payers and facility.
22 Let’s Look at the Billing Documents: UB-04s and itemized Statement UB-04 = sent to the payers; hardcopy and electronic Itemized statement = usually sent to the patient. Payers, on request only. Tells the story of the CDM with billable services. Roll the itemized to the UB –without manual intervention
28 Tracking and Trending Last but not least, keep the focus: PREVENT REPEAT REWORK. PFS has a massive amount of information. Sample: Trend late charges by dept; eligibility denials by area; Medical necessity denials by CPT code; manual ‘touching’ to the UB-92 prior to submission, etc.
29 AR System’s Contact Info Day Egusquiza, President Free Info Line – informal updates, process ideas, etc. HAVE FUN!