Scrubbing Reimbursement Rates Clean

Jan. 1, 2008

A private practice Radiology group integrates a claims editing application with its practice management solution, increasing accuracy and improving cash flow.

Like many medical practices, St. Paul Radiology, of St. Paul, Minn., found managing the complexities and pressures of securing reimbursement a considerable challenge. According to the most recent PayerView statistics available, denial rates for the state’s Medicare agencies ranged from 4.3 percent to 14.9 percent. Among national payers, Cigna topped the list at 5.9 percent while Champus/Tricare had the eighth-highest rate with 12.3 percent. Unfortunately for us, our own rate was even higher. Of course, in Radiology, denials and delays are even more of an issue than in most specialties, especially in a practice of our size. In our field, just a few thousand claims may represent hundreds of thousands of dollars in reimbursement. Five years ago, we took a comprehensive look at our explanation of benefits (EOB) data and its impact on our healthcare business, and we saw plenty of room for improvement.

A private practice Radiology group integrates a claims editing application with its practice management solution, increasing accuracy and improving cash flow.

Like many medical practices, St. Paul Radiology, of St. Paul, Minn., found managing the complexities and pressures of securing reimbursement a considerable challenge. According to the most recent PayerView statistics available, denial rates for the state’s Medicare agencies ranged from 4.3 percent to 14.9 percent. Among national payers, Cigna topped the list at 5.9 percent while Champus/Tricare had the eighth-highest rate with 12.3 percent. Unfortunately for us, our own rate was even higher. Of course, in Radiology, denials and delays are even more of an issue than in most specialties, especially in a practice of our size. In our field, just a few thousand claims may represent hundreds of thousands of dollars in reimbursement. Five years ago, we took a comprehensive look at our explanation of benefits (EOB) data and its impact on our healthcare business, and we saw plenty of room for improvement.

Fortunately, our practice has a long history of innovation on which to draw. After founding the practice in 1920, Edward Schons, M.D., established the nation’s first super-voltage radiation facility in 1939. In 1961, Thomas Johnson, M.D., pioneered the use of a technique known as percutaneous selective angiography, a first among private practice radiologists. As one more example of innovation among many, St. Paul installed the first automatic film processor, in 1962. Today, St. Paul is the largest private-practice radiology group in the United States, with 96 radiologists providing diagnostic imaging and interventional radiology services throughout six imaging centers. We like to think that our business services division, Midwest Physician Services, embraces the same adventurous spirit that the founders and leaders of our practice demonstrated in the past.

Well aware that our denial rates were a pressing issue, we discovered a way to improve coding and claims submission in 2002. Wanting to do more to ensure claims were clean and error-free before they left the office, we made the decision to begin using ClaimStaker, a claim editing application or “claim scrubber,” from Alpha II Software Solutions. Until that time, our coders depended on reference books to manually confirm that all coding rules were being followed. As we soon learned, an interactive, online resource had the capability to serve our staff much more effectively. With an automated reference, these types of claims scrubber solutions could work faster and be more comprehensive.

Fully Integrated, Clean Claims Editing

It is becoming increasingly common for medical practices to use this type of software product, which edits professional and institutional claim files for validity prior to submitting them to the insurance companies. Often, the claims editing is built into the provider’s practice management (PM) or medical billing system software. In fact, Alpha II works with many of these vendors to incorporate this function into its solutions as embedded software. When not “built-in,” a claim scrubber can work as a stand-alone software solution that analyzes claim files and returns an interactive report for use by both coders and billing staff.

Although claims editing software has just recently gained popularity, this solution has a lengthy track record. The application utilizes a comprehensive medical necessity database and a coding rules engine developed by clinicians, coders and healthcare experts over the course of more than 20 years. As with any transition from manual to paperless processes, adapting our practice’s administrative workflow presented some challenges. For us, fully integrating the claim scrubber with our PM system was a critical priority. The vendor is experienced working with many different software developers and reseller partners, so they were able to offer the claims data in a variety of output formats, including HTML, XML and comma-delimited files.

In our case, the PM solution vendor developed an interface that allowed us to work with comma-delimited claim files directly from within our system. This simplified and accelerated the process of transmitting valid and corrected claims. Our “clean” claims were sent on to the payer and only the claims needing review by a coder were held. From installation to training, getting started with the vendor’s system turned out to be a simple matter. We found the application itself to be intuitive and straightforward. The vendor offered follow-up training when needed, showing us how to create custom-configurable edits, for example, so we could manage those on our own.

Reduced Error Rates, Increased Payments

These configurable edits provide us with the ability to accommodate atypical insurance rules and allow us to enable or disable a host of standard edits for specific claim types or payers.

We’ve used the software to improve claim validity in a variety of areas, including: Medical necessity edits, such as Medicare LCD/NCD; CCI/CCP bundling and unbundling; ICD-9 codes; modifiers; and, claim-level technical edits. Although in Minnesota RVU sequencing edits aren’t required, because insurance billing rules continue to remain a dynamic component of our business, we have discovered that a solution that keeps us in-step with these changing requirements is essential. Furthermore, having reliable software support is equally as important. Even today, five years later, the vendor’s helpdesk remains an available option for technical assistance or determination support.

For more information on the Alpha II ClaimStaker solution

As a result of the positive outcomes the solution has provided, as well as the valuable support from the vendor that continues to be an asset to us, our Medicare EOBs currently reflect an extraordinary level of accuracy. By incorporating the vendor’s claim editing software and additional revenue cycle enhancements, we have reduced our error rate for Medicare claims from the 35 percent range to less than one percent. Our EOBs consist of a healthy number of payments, as opposed to a disappointing proportion of denials, and this has had quite a substantial impact on our cash flow. Fully integrating the automated claims editing process was a real eye-opener for us. Currently, with the appropriate modifier and code pairing data at their fingertips, our coders are much more aware of best-practice coding protocol.

Additionally, our claims are more often coded accurately on the front end, saving us valuable time correcting them later. Furthermore, because it’s a training tool as well as a claims-editor product, staff members who use ClaimStaker reinforce what they already know while learning more about radiology edits every day. In 2007, we transitioned to the solution’s Enterprise Edition, which is Internet browser-based. This version scrubs multiple claims per second, generating our reports in minutes. The vendor supplies monthly updates for the rules database, which includes medical necessity policies, freeing us from the concern of keeping the software updated on our system. Simply put, this solution is among the key resources we rely on to maintain the high-quality level of service we expect.

As with any transition from manual to paperless processes, adapting our practice’s administrative workflow presented some challenges. For us, fully integrating the claim scrubber with our PM system was a critical priority.

In July, NightHawk Radiology Holdings, a leading provider of solutions to radiology groups, acquired Midwest Physician Services. We frequently encounter colleagues at many radiology business manager meetings who are not using a technology like the one we implemented, and we find that hard to believe. Given downward pressures on reimbursement, radiology practices must continue to remain proactive to safeguard against internal errors. Essentially, the solution we discovered provides the same type of technology that many payers are currently utilizing—we believe this is the key to enhancing revenue for any medical practice.

Theresa Hazen is director of business office services at St. Paul Radiology, St. Paul, Minnesota. Additional article content was provided by Karla Krey, the billing office supervisor at St. Paul Radiology.Contact them at thazen@ stpaulrad.com and [email protected].

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