Reducing Rejections, Revitalizing Revenue

Sept. 1, 2007

A Web-based RCM system enhances cash flow for a multispecialty group practice.

A number of years ago, leadership at Core Physician Services, Exeter, N.H., a community-based multispecialty group practice with 91 providers, came to the realization that delivering exemplary care was not the only factor affecting the practice’s success and stability. It must also ensure that the business side of the practice is as well cared for as its patients.

 A Web-based RCM system enhances cash flow for a multispecialty group practice.

A number of years ago, leadership at Core Physician Services, Exeter, N.H., a community-based multispecialty group practice with 91 providers, came to the realization that delivering exemplary care was not the only factor affecting the practice’s success and stability. It must also ensure that the business side of the practice is as well cared for as its patients.

 To achieve this objective, Core began investigating the latest generation of revenue cycle management (RCM) technologies in 2004. It explored solutions that would improve its ability to submit payable claims, increase and speed reimbursement, and streamline the entire revenue cycle from patient check-in to payment posting. Core, which provides primary care and specialty care services to communities along the greater New Hampshire Seacoast, ultimately adopted a Web-based RCM solution that has greatly reduced rejections and dramatically improved days in accounts receivable.

Problem

 The advent of HIPAA and transition to EDI transactions more than 10 years ago prompted us to conduct critical assessments of our administrative functions. Leadership at all levels of the organization recognized that, in an environment of rising costs and diminishing reimbursement, it was vital that we institute measures to better manage our revenue cycle. In other words, we recognized that for the practice to succeed as a viable business, we had to ensure we had the financial stability to maintain our offices, pay our providers, and furnish the diagnostic and therapeutic services vital to the well-being of our community.

 One area that demanded immediate attention was claims management. Our internal assessment revealed that days in accounts receivable (A/R) were about two times higher than the Medical Group Management Association national benchmark of 32 days. The largest contributing factor was lost claims and delays in claims processing.

 Up until that point, we had relied upon a traditional clearinghouse. However, all too often we found that files were vanishing before they ever reached the payer. Additionally, the clearinghouse was unable to provide timely status reports that would allow us to verify that claims had indeed been submitted and were being processed. In other words, we were left with no mechanism to check if the ” bills” we sent to insurers were received, if the insurer was able to process the information contained in the claims and, ultimately, if a check was in the mail.

 Likewise, this ” black hole” meant we had no access to information that would allow us to easily fix and resubmit claims that had been denied or rejected. Nor were we able to easily analyze denial or rejection patterns that would have enabled us to revamp internal processes and provide staff or provider training to prevent similar errors going forward.

Solution

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 Our frustration with the status quo prompted clinical, administrative and IT staff to compare notes with professional colleagues. We soon discovered that many practices were struggling with similar concerns. Wanting to move quickly, we took advantage of professional conferences and IT user group meetings to convene with our professional counterparts, discussing the pros and cons of the various technologies others had implemented. We followed up by contacting practices individually to discuss their systems, as well as the vendors providing their technology. Simultaneously, we appointed members of the Core staff to conduct Internet research to compare features and benefits of diverse applications and solutions.

 Based on this data-gathering effort, we subsequently invited several vendors for demonstrations. During this exhaustive, albeit rapid, process, we quickly narrowed the search to a single vendor— Navicure. The feature that tipped the balance was the real-time, online access the company provided— billing staff would have fingertip access to claims status and could make online corrections for immediate resubmission. Leadership involved in the search found the RCM solution easy to use, while offering functionality that was more extensive than many of the other systems under consideration.

 An additional deciding factor was the reputation for customer service that the vendor had earned. We received positive reviews from virtually all Navicure users we contacted.

Implementation

 Because it is Web-based and highly intuitive, the RCM system proved simple to implement and the practice was able to ” go live” within only a few months. We were not required to purchase new hardware or software, which minimized disruption to practice operations and shortened the learning curve dramatically.

 To begin the conversion, we prepared a list of all payers to which we submitted claims. In addition, we assembled all provider numbers. Billing staff turned this information over to the vendor, which then built comprehensive online claims processing functionality; worked with our existing practice management system to ensure data flowed between the two systems efficiently; and, interacted with the previous clearinghouse to manage all conversion activities.

 During this process our billing staff trained on the new system, which was conducted through WebEx sessions and only took a couple of hours. This reduced implementation costs because we incurred no travel expenses for training— staff missed a minimal amount of time while learning how to navigate the RCM system. New staff members have subsequently been trained in the same manner.

Results

 As pleased as we were with the ease of implementation, we were even happier when we began to see the benefits of converting to Web-based claims management. Our staff could track claims online and received almost instant notification if there was a problem. Claims scrubbing that encompassed both national policies and individual payer edits (activated before the claim was actually submitted to the insurer) flagged any problems that might sabotage timely payment. Our billers could intercept the problem claim, make corrections or gather additional information, and resubmit it online within a day or two. This meant we no longer had to wait weeks to receive rejection notices so that we could then rework the claims for subsequent resubmission.

 As a result, our days in A/R dropped nearly 30 percent, from 60 days before implementation in early 2004 to 43.2 days by September 2004. They had fallen nearly another 33 percent to 28.9 by the end of the first quarter in 2007. The age of accounts receivables likewise improved. In 2004, about 27 percent of accounts receivables were 120 days or older. Currently, that figure has dropped to 10-12 percent. Throughout this same time frame, we were adding new providers at an unprecedented rate and increased revenue by nearly 80 percent.

 We also have been able to achieve greater operational efficiency. For instance, electronic remittance advice has allowed us to streamline posting. Payments are posted automatically, eliminating the possibility of errors associated with manual processes and making revenue available more quickly. Because of these advances, we have been able to redeploy four FTEs from the posting department, and have assigned them to pursue other revenue enhancing activities like following up with patients on outstanding balances. We had, in fact, been poised to hire an additional person for posting at the time we implemented the Web-based RCM, but were able to avoid this expenditure for ongoing savings.

Benefits

 One of the greatest benefits is the goldmine of information available through reporting and analysis functionality. In the past, we were unable to access vital data. Even when information was contained somewhere in the old system, we were forced to invest untold amounts of staff time to manually compile reports, which were outdated almost as soon as they were circulated.

 Online access means we can generate daily, weekly or monthly reports to improve workflow and cash flow. For example, once a month we run reports on the five most common reasons claims are rejected. This enables our staff to make corrections in-house, allowing claims to get paid the first time and thereby enhancing cash flow by reducing days in A/R.

 We use this type of information for ongoing staff training, as well. Analysis allows us to track repeated errors and pinpoint individuals who may be responsible for them. For instance, a member of the front-office staff may be reporting administrative information in the wrong field, or a physician may repeatedly forget to add the fourth or fifth digits on diagnosis codes where applicable. Once identified, the staff members can undergo additional training to correct problems that may be interfering with the revenue stream. This ongoing training is available via the Internet, and as during implementation, can be accomplished with a minimal investment of time and resources.

 Leadership at Core Physician Services has been 100 percent satisfied with the financial and process improvements that have resulted through implementation of automated RCM technology. We have found that the practice submits claims more promptly (and more cleanly), identifies potential problems more readily, and, consequently, gets paid more quickly.

Thomas Devin is vice president
of finance for Core Physician Services, Exeter, N.H.
Contact him at
[email protected]
.

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