How to simplify practice management on the revenue cycle side

May 6, 2015
Chief Executive Officer, PracticeAdmin, and Board Member of the Healthcare Administrative Technology Association (HATA)

A group of thought leaders met to develop a strategic plan for a small group practice of physicians. The leader said, “If Penn Central would have thought of themselves as a transportation company rather than a railroad, they may well still be in business rather than bankrupt.” Thought leaders within most any industry are required to think big, seize opportunity and take advantage of all resources available – or suffer the consequences.

A day will come in healthcare that, for the most part, a pathway to resolution of sickness or injury will be pre-determined by an accurate diagnosis during an initial patient/provider encounter. Proper resources will be put in place, and the “team” will achieve successful patient outcomes within the prescribed cost structure. Just as successful railroad companies transformed into transportation companies, success in healthcare will be defined as transformation from financial transactions to financial outcomes. Providers and payers will find their current contentious relationship a distant memory as they form quality business relationships.

Today, too many barriers exist to even begin developing a blueprint to get us from here to there. Each industry between the provider and the payer must concentrate on its own self-interests. The same holds true for the provider and payer. The industries of electronic health records (EHRs), practice management (PM) systems and clearinghouses are in a high-stakes game of understanding their role as the transactional-based financial foundation of provider/payer relationships diminishes. Conversations in the war room of companies in each of these industries center squarely on the return on investment (ROI). Unfortunately, the focus is on the current ROI and not on the ROI of what could or should be.

But can the thought leaders from EHR, PM systems and clearinghouses ever come together to begin building the blueprint for simplifying administrative processes? The PM system industry has more than 600 companies providing a variety of technology solutions for the full range of healthcare professionals. It represents nearly 100 percent of all initial claims submitted on behalf of hospitals, physicians and allied healthcare professionals. Administrative simplification of payer/provider communication is a key factor in influencing the cost of healthcare in the United States.

The Healthcare Administrative Technology Association (HATA) is a new trade group that brings together practice management software vendors to collaborate on these issues.1 The association’s founding members, ADP AdvancedMD, HealthPac, MDSynergy, Medinformatix, NextGen, Optum and PracticeAdmin, represent more than 275,000 healthcare providers. The association serves as one representative voice to advocate and influence stakeholders and government representatives on healthcare administrative technology issues.

From the provider’s perspective, there are several key workflow elements for the healthcare revenue cycle: 1. Confirm patient eligibility; 2. Confirm prior authorization; 3. Capture charges; 4. Submit claim; 5. Receive claim acknowledgement; 6. Receive claim adjudication results; 7. Process payment.

For a practice seeking to maximize revenue, all seven elements need to be done accurately and consistently for all patient visits. Of these items, technologies to optimize elements 3 and 4 are widely adopted, with 78 percent of providers using an EMR2 and over 95 percent of claims being submitted electronically.3 As a result, the industry has seen significant improvements in the speed of claim adjudication, with two-thirds of claims processed within two weeks.4

However, although they may be getting paid faster, practices still spend too much time on the other elements of the revenue cycle, particularly in pre-visit verifications and post-claim submission follow-up.

Recently, the National Committee on Vital and Health Statistics, an advisory body to the Department of Health and Human Services, held a hearing on proposed regulations that would add more requirements to the revenue cycle workflow between payers and providers.5 The focus is on the payers and, for elements 5 and 6, they must provide enhanced acknowledgments for claims submitted electronically. Developed by the Council of Affordable Quality Healthcare (CAQH)’s Committee on Operating Rules for Information Exchange (CORE), these CORE Phase IV Rules aim to provide time savings and more accurate status to medical practices.6

At the hearing, HATA offered recommendations to address the need for administrative consistency, mitigation of regulatory redundancy and the resource burden to comply with additional regulations. HATA also stressed the importance of continued cross-industry stakeholder inclusion in the development of necessary additional standards and rules.

One common issue with the final element, payment processing that creates unnecessary work for medical practices, is the problem of linking payments (generally delivered by electronic funds transfer) to the remittance advice received from the payer. While a good PM system has tools to facilitate this process, CAQH CORE Rules Phase II requires that common tracking numbers are used on both the EFT and ERA transactions.7 This should dramatically reduce the payment-posting complexity and help practices clearly see which claims still have pending balances.






5. February 26, 2015 Hearing by the Subcommittee on Standards, National Committee on Vital and Health Statistics, Department of Health and Human Services



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