Pamela Fell Jackson Health System Corporate Director Corporate Business Office Corporate Business Office August 13, 2014 “The Buck Starts Here “The Buck Starts Here”

The Most Important Process in the Business Office: Billing Starts The Most Important Process in the Business Office: Billing – “The Buck Starts Here” 2

What do the majority of CFO’s see as the most important Business Office function? 3

Collections! 4

But… How many collectors do you need to collect an unbilled claim?! 5

Billing: A Clean Claim is a Paid Claim! 6 PAID

What is a Clean Claim? A clean claim is a claim untouched by a biller and clears all edits at the payer. These claims will pay without human in intervention in less than 30 days 7

When a patient is discharged, the claim must be final coded before submitting to the payer. Also, there’s usually a bill-hold time for all charges to be entered Typical hold days are: Inpatient: 4 days to allow for the 72-hour overlap Outpatient: 3 to 5 days 8 Discharged Not Final Coded

9 High Variability in DNFC 1 Performance Mid-Cycle 1) Discharged not final coded. Discharged Not Final Coded Total Number of Days n= % decrease Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle Operations.

Discharged Not Final Billed These are accounts being held in the facility’s financial system where a claim has not produced that is missing data elements required for billing in addition to final coding. Examples are: Missing authorization numbers Payer ID numbers missing or invalid Revenue codes with a credit balances 10

Discharged Not Final Billed 11 Experiencing Delays in the Business Office Business Office 1) Refers to results from the 2013 survey. Discharged Not Final Billed Total Number of Days n=76 (2011); n=31 (2013) $18M Average dollar amount of discharged not final billed activity for hospitals in the high-performance quartile 1 $42M Average dollar amount of discharged not final billed activity for hospitals in the low-performance quartile 1 Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle Operations; Financial Leadership Council 2011 Revenue Cycle Benchmarking Survey.

Claim has Been Released from DNFB; Billing Process Begins! Claims import daily from the facility’s patient financial system into the EDI billing system Edits/bridge routines should be established to maximize immediate transmission to the payer Clean claims should be released daily via the 837 file, even though many payers do not accept transmissions on weekends and holidays. This ensures the claims meet the first transmission from the clearinghouse 12

First-Pass Yield 13 A Widening Gap Between High and Low Performers Patient Access 1) The low-performance quartile for this comparison is 74.5%. First-Pass Yield n=60 (2006); n=36 (2008); n=49 (2011); n=29 (2013) Percentage of Claims Arriving in the Business Office Error Free Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle Operations; Financial Leadership Council 2011 Revenue Cycle Benchmarking Survey; Financial Leadership Council 2008 Member Survey of Revenue Cycle Operations.

Understanding the Claims Rejecting to Your Editor Facility Specific Edits Payer Specific Edits Clearinghouse Specifics/ AMA Edits 14

Billing Process - How to Make Your Billing Editor ‘Your’ Editor This is an ever evolving process. New billing requirements are entered by your EDI providers daily Requires the effort of the entire billing team Billers and collectors should be encouraged to bring corrections to management for possible electronic correction 15

Facility Specific Edits Edits Causing Claims to Reject to the Editor Some of the more common edits are: Admit source 1 must have an ER charge Trauma Center 5 must have a trauma level charge Occurrence code 11 can not be after the admit date POA Indicators (1 vs. blank) 16

Payer Specific Edits Each major payer has their own set of edits that are maintained by your EDI system Payer specific edits may not always conform to UB04 guidelines. Bridge routines must then be built at the facility These edits are ‘payer’ specific and not ‘facility’ specific; therefore, modifications might be needed NCCI Edits CCI Edits 17

Clearinghouse Edits The clearinghouse changes the format of the billing file to conform with the payer specific EDI guidelines Loops and segments aren’t standard across all payers 18

Sources of Rework Prior to Initial Submission 19 No Consistent Trend in Predominant Source of Errors Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle Operations; Financial Leadership Council 2011 Revenue Cycle Benchmarking Survey; Financial Leadership Council 2008 Member Survey of Revenue Cycle Operations. Mid-Cycle Sources of Errors Leading to Business Office Rework 2013 n= n= n=25 Insurance Information Demographic Information Coding Physician Documentation Other Insurance Information Demographic Information Other Coding Physician Documentation Insurance Information Demographic Information Coding Physician Documentation Other Mid-cycle Patient Access

Resources Allocated to Rework 20 Variable Benefits of Devoting More Resources to Claims Rework Business Office 1) Refers to those in the 75th percentile for 2013 survey results. Percentage of Business Office Resources Devoted to Reworking Claims Prior to Initial Submission n=45 (2011); n=30 (2013) +5 days Average increase in AR days for hospitals with more business office resources dedicated to rework 1 +24% Average increase in cost to collect for hospitals with more business office resources dedicated to rework 1 -54% Average decrease in denial write-offs for hospitals with more business office resources dedicated to rework 1 Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle Operations; Financial Leadership Council 2011 Revenue Cycle Benchmarking Survey.

Discharged Not Sent to Payer If a claim drops into the billing editor and can not be corrected and released the same day, the claim becomes part of the discharged not sent to payer file Errors usually require correction via the Health Information Management (HIM) department, Patient Access or the clinical staff Accounts should be assigned to an internal report by errors and areas of responsibility and distributed to the appropriate departments for correction 21

Submitting the Claims The claim has passed all the previous edits and has been transmitted to the payer Final level edits at the payer site could be: Can not ID patient Incorrect DOB Incorrect subscriber ID Baby’s name Not eligible for date of service 22

Payer Rejection Report These claim rejections are returned to the facility via the 835 file (payer rejection report) which should be worked daily Almost impossible to build payer level edits at the facility level for these rejections Until the claim is on file at the payer, billing owns the claim and it’s their responsibility to get the claim on file 23

Late Charges: To Bill or Not To Bill? Pros to billing late charges Medicare regulations require all services provided to be billed Account will re-adjudicate in the contract management system Changes could throw account into an outlier Cons to billing late charges Usually no additional reimbursement Billers must be knowledgeable on all contractual terms Collectors have to ultimately write-off the charge(s), which necessitates another account review. If not caught, could transfer to bad debt 24

What Should be Monitored and Trended? DNFB DNSP – Claims holding in the editor Daily electronic submissions Clean claim rate Biller productivity Electronic billers Paper billers 25

26 Questions?