The first part of this blog series introduced our fictional patient Frank, following along some common issues him and his provider may encounter on the front-end of the revenue cycle management process. Part two continues this journey with the back-end of the patient billing cycle.
Last we left Frank, he had registered with the hospital, paid a specified amount upfront, and undergone an experimental reconstructive foot surgery. Now that care has been completed, Frank and his provider will enter the final stages of the revenue cycle management process.
In many cases, errors on the front-end of the RCM process can create issues on the back-end. Even if there were zero errors on the front-end, plenty of potential pitfalls can still cause problems throughout the final stages.
Like the front-end of RCM, the following back-end steps call for a high level of attentiveness and proactivity:
Step 1: Claim Management – Worst-Case Scenario: Forcing a Square Claim into a Round Bill
An important piece of documentation concerning Frank’s primary and supplementary insurance has gone missing. Some of the outpatient procedures were flagged for the wrong plan. In their rush to get the bill out the door, the hospital forced the bill through their RCM platform. The payer automatically denied the claim and sent it back to the hospital.
From time-to-time there are bound to be issues creating final bills, such as delays with clinicians or waiting on feedback from payers. There are a handful of ways a hospital working with an outsourced RCM partner can ensure accuracy and help keep the claims process moving forward without force billing.
Step 2: Reimbursement – Worst-Case Scenario: When Things Don’t Go as Planned
In a perfect scenario, at the point of reimbursement, the hospital will have a clean claim that has passed through the clearing house. Payment for Frank’s claim would arrive anywhere between two weeks to a little over a month.
Solution: Revel in the fact that your team passed through an error-free claim and your hospital is getting paid.
However, as is the norm with Frank’s case, things don't always go as planned.
Step 3: Line Item Denials – Worst-Case Scenario: Mysterious Modifiers
When Frank’s procedure was being coded, an unnecessary modifier was manually added to a procedure because the hospital’s RCM solution was not updated and was poorly integrated with their EHR. Random or out-of-place modifiers can result in a line item denial.
An updated RCM platform under strict supervision and oversight during the coding and charge process is the best way to avoid line item denials. For hospitals who may be stretched for resources, outsourcing some of the more time extensive analytical RCM tasks can help verify automation accuracy and avoid errors due to manual edits. All this will save a hospital billing team time on the back-end.
Step 4: Complete Denial – Worst-Case Scenario: Do Not Pass Go. Do Not Collect.
Let’s imagine during registration the hospital never got authorization from Frank’s insurance. Doomed from the start, this claim was completely denied.
In cases where the error occurs at the registration desk or over the phone, we need to look back at the first step completed on the front-end of the RCM process:
During a preregistration call – initiated by Frank or by the facility – all coverage must be verified by the registrar. The registrar also needs to let Frank know what is owed at the time of service.
In instances where the hospital processed an error-free registration and coding was correct, often the hospital will run into payment issues as a result of contract variances. A contract variance occurs when expected reimbursements do not match what the payor will actually pay the hospital.
Step 5: Contract Management – Worst-Case Scenario: The Trouble Insurer
Contract management is another area where outsourcing RCM can help prevent denials and/or streamline the denials management process.
Let’s say none of the issues that have plagued Frank’s claim ever happened. The claim came out of the clearing house immaculately clean, but the insurance company severely underpaid in comparison to rates outlined in the payor contract.
In the event of underpayments from insurers, hospitals must comb through payor contracts to find evidence to hold up their claim.
Identifying and motivating insurance companies requires consistent follow-ups which can take time away from hospital staff. Working with a third-party contract management vendor can help alleviate many payor pains by quickly identifying culprits and finding effective resolutions that don’t require internal resources.
Step 6: Statement Processing and Self-Pay Management – Worst-Case Scenario: Confusing Bills
The surgery was a success! Frank’s claim was not denied, and the insurance company paid promptly and accurately.
Frank is well into his recovery when he receives an incredibly confusing bill. It seems as though he will need a manual to figure out what he owes and how he can submit a payment. He calls the hospital very unhappy – a long call that wastes his time and takes away from hospital staff’s other responsibilities.
Take a moment to review statement generation, what’s included, and how they are sent. Focus on time frames, content of statement, and providing clearly outlined payment options.
In many instances a patient-billing partner can help create custom statements that clearly outline patient financial responsibilities. In addition, many third-parties can also facilitate online bill paying for a hospital.
In today’s marketplace, hospitals have shifted their approach to treating patients more like consumers. As part of this new dynamic, the transactional portion of the patient experience must require just as much attention as the treatment stages.
As we have seen from Frank’s journey, amazing patient care can still suffer from a poor billing experience, which can also hamper the payment process. To help support hospitals whose medical billing processes may inhibit a positive patient experience, MEDHOST offers full-service Revenue Cycle Management solutions. Our team of RCM specialists work side-by-side with hospitals to help instill revenue cycle management best practices that can improve net gains and help promote a superior patient financial experience.
To learn more about how MEDHOST helps hospitals avoid denials and streamline patient payments, contact us at 1.800.383.6278 or firstname.lastname@example.org.
Get the full Avoiding Common RCM Pitfalls: Worst-Case Scenario Handbook Part 2. Download the guide for free on our Resources page.