To somewhat freshen up a term that can become stale due to overuse or, possibly, misuse, I would like to spin “business intelligence” (or business analytics) and convert it to “intelligent business.” Sometimes, playing with words (which is fun for me at times) can reshape our paradigms. “Business intelligence” implies the use of systems and processes which simplify the retrieval of data and its conversion into actionable information readily accessible to decision makers in real time[1]. But business intelligence goes beyond technology tools; BI is indeed "intelligent business" decision making. But first, let’s talk about BI’s/Intelligent Business benefits.

BI’s Key Performance Indicators reflect the organization’s mission and objectives.

I like the concept of each organization focusing its decision making on its mission and objectives. BI helps significantly to do just that, because executives and management can identify and align Key Performance Indicators (KPIs) to the broader organization’s mission, goals, strategies, and culture as well as to each of its business units’ objectives. The magic of BI is that the information displayed can be rolled up or drilled down to specific levels of interest and responsibility within the organization. Let’s say that the COO, who likely would never log into his or her organization’s clinical application, can view a consolidated corporate view or an expanded view of all regions’ or facilities’ clinical KPIs. Likewise, a department head can view his or her specific KPIs benchmarked against department-specific goals.

BI fosters quicker data-driven solutions.

Yes, successful decisions are often based on “hunches”, but in today’s LTPAC world executives and managers have to make and report on specific data-driven KPIs. Before technology truly enabled BI, decisions were often hunches based on information manually extracted from old data, assuming that the information was possibly a trend. It was like trying to drive a car exclusively looking in the rearview mirror. But for businesses to function intelligently with BI, the information needs to be organized and displayed in ways that fosters comprehension, timely quality decisions, and, may I add, accountability. BI also enables managers and executives to retrieve and view data in ways that are specific to their responsibilities and needs.

BI crosses data silos for multi-dimensional views.

Let’s take labor management, for example. For years LTPAC providers have analyzed labor hours and dollars based on hours and dollars per patient per day. Manually, that would mean reconciling time card totals with the census tabulated and reported by the nursing department. However with business-critical enterprise-class software, providers are now using time and attendance applications for labor hours, payroll applications for labor dollars, and clinical applications for the census in aggregate, by payer type, by clinical unit within the facility, and so forth. But each application may be from a different vendor. To get them to talk to each other and to consolidate and convert that data into actionable information instantly requires data mining and BI technology.

BI displays convenient and useful information

BI can also display the information in ways useful to the decision makers. I’ve hinted at this throughout this blog, but the magic to BI is its intelligent use. It starts with identifying and aligning KPIs to the organization’s mission, objectives, strategies, and, yes, culture (but that is a topic for another day). Once selected, KPIs determine how data is be collected, combined into useful information, and displayed in consumable formats. Because the KPI-driven information is available in real time and actionable, executives can make data-driven decisions right now. Now that’s intelligent business.

[1] Lest we get off on a tangent here, I am going to use Merriam-Webster as my source for defining “real time”: “the actual time during which something takes place <the computer may partly analyze the data in real time (as it comes in) — R. H. March>.” (Italics added) In this instance, BI generates information in real time as soon as the system has access to the data (as it comes in).  In the case of most of our BI customers, that means refreshing the data available in their respective data warehouses several times a day – as frequently as each customer wants to have its data updated.

No one likes rejection - neither an amorous suitor, an eager job seeker, nor a presidential aspirant. But when it comes to love, employment, politics, or money, well, no pun intended, money trumps them all. And the root to your positive cash flow lies squarely in your ability to collect the revenue owed. Most provider revenue comes from third-party payers through the medium of claims. But occasionally, notwithstanding their best efforts to submit clean claims, providers may receive rejections due to undiscovered errors. The key is to turn those rejections into payments - quickly. Here are a few tips to consider and to implement

How do providers receive rejections?

The answer should be obvious, but it is worth mentioning.

Paper-based claims – In those instances where providers must submit paper claims, a rejection may come in the form of an Explanation of Benefits (EOB) or letter. This is obviously the least preferable way to submit claims, but providers may not have a choice, depending on the payers. So here is the possible trap. Payers have front-end scrubbers used to detect errors. This takes place before the claims proceed to the adjudication system. Because this occurs up front, payers will likely not have a record of the claims scrubbed. So if a biller calls about the status of a claim, the payer’s customer support person may not even find the claim. When providers do receive rejection notices, these documents will describe what needs to be corrected.

Electronic claims – Most claims clearinghouses have portals which allow you to easily identify rejected claims. In that view, billers can identify rejected claims and take action to correct them and resubmit the claim within the portal

Tip: Where possible, file claims electronically. When not possible, carefully scrutinize the remittance advice when you receive it

The importance of timely responses

We cannot stress enough the need for providers to respond to the rejections as soon as possible. To fail to do so will not only result in payment delays, but possibly in no payment at all. Providers have established timely filing limits ranging from 90 days to 18 months. Should a provider fail to respond to the rejection within that time frame, well, that’s too bad. It becomes a likely bad debt write-off

Tip: Pay attention to the aging every month. Following up sooner than later is prudent, because it is easier to track down what information you need now than it would be later

Most common reasons for rejections

Some of the most common reasons for rejections, more than likely resulting from input errors or having the incorrect information in the first place, include the wrong payer ID number, member ID number, the wrong date of birth, a misspelled name, etc. Even claims clearinghouses may miss these errors

Tip: Identify the most common potential errors and include them in the triple check process “script”.

Documentation needed to correct errors

The biggest problem our team has observed over the years involves the preadmission and admission processes. Obtaining vital information ahead of time with the necessary documentation in hand is critical to verifying correct name spelling, DOB, address, member numbers, verifying primary and secondary payers, etc.

How a clearinghouse can help

Using a clearinghouse to submit claims gives providers several advantages.

• A clearinghouse typically has the ability to scrub claims and catch errors BEFORE submission to the payers.

• A clearinghouse can display claims rejections which providers can view and correct.

• A clearinghouse constantly checks for updates to new payer-specific requirements, such as new codes, eligibility requirements, etc.

The bottom line to avoiding the fiscal pains of rejection is to constantly monitor for them and to respond quickly with the correct information. Identify the most frequent causes of rejection and include them in your claims triple check process.

It only makes cents.  

“Measure twice, cut once.” How often I have heard that truism and when heeded, it has saved me countless hours of redoing, perpetual visits to the local hardware store, and unnecessary spending. My bank account thanks me. My wife is grateful. And the results at least meet expectations. But measuring twice and cutting once has a much broader application beyond do-it-yourself projects.

When it comes to claims submission, we all agree that submitting a clean claim the first time saves time, reduces frustration, and ensures that cash is in the bank as soon as possible. Here are some guidelines and tips we offer to help providers, like you, to measure twice and cut once:

1. Identify prior to admission who the payers are. Follow best practices and gather the required documentation. Don’t take their word for it. Assume you were raised in Missouri, the “show me” state.

2. Make sure the resident meets the payer’s eligibility requirements. It’s one thing to know who the payers are, it’s entirely another thing to confirm that the resident’s services meet the eligibility requirements for payment. Our clearinghouse offers direct access to HETS to help providers determine Medicare eligibility for specific services.

3. Depending on the state, providers may with have to check for Medicaid eligibility by phone or can use an electronic system.

4. The claim should include all direct care services specific to the covered period identified in the claim, including ancillary supplies, therapies, and diagnostics, depending on the resident condition.

5. Code properly. Providers have just experienced the Y2K of ICD-10 and it appears that the transition has been fairly uneventful, at least from what our customers have experienced. But celebration may yet be premature. We encourage providers to keep up the pressure and audit, train, retrain, and update. Now is not the time to relax.

6. A major key to successful first-time clean claims submission is communication. In some case, we have heard of billers identifying ICD-10 miscoding and not communicating the corrections back to the clinicians. Part of the training process needs to include feedback flowing back and forth between coders and billers.

7. For those who bill for Part B services, watch the CPT codes edits, including which codes may or may not be coded together. Be vigilant in keeping up with the frequently-changing CPT codes.

8. Some common errors our providers have encountered include the wrong payer ID, errant bill type-related diagnosis codes (for example, outpatient services should not use admitting diagnosis codes), admissions dates, claim filing indicators (set up by the billing software which may not be visible on the claim itself), zip codes, etc. None of these are by themselves huge, but again to use a truism, “The devil is in the details.”

9. Scrutinize the claim and see that all required and appropriate fields are completed.

10. In some cases, providers assume that billing is easy and routine. It isn’t. Don't fall into the trap of a quick orientation and training and hope the biller has it right. 

11. Conduct a thorough triple check of all claims. This can be a multi-disciplinary review of all claims prior to submission. Stay tuned for another blog diving deeper into this.

Measure twice. Cut once. Great advice for the do-it-yourself projects and for claims submission. It makes cents.

What a Claims Clearinghouse should do

Before I address the topic, I think reviewing what a claims clearinghouse is and what its benefits can be to you will give context to the question of processing secondary claims. In the past, to process claims, billers completed paper forms and sent them via the Postal Service to the payer. Sounds simple, but it wasn’t and in some cases where providers are still submitting some claims in this way, it isn’t. Phone calls and error-generated resubmittals contribute to a complex, cumbersome, costly, and prolonged payment process. With electronic claims preparation and submittals, however, clearinghouses have stepped in to take over for the Postal Service with a few advantages, including claims screening and claims workflows. The software manages the flow and aggregates the claims. Clearinghouses let providers securely submit and track claims to multiple payers all in one portal. Consider it like online banking. Here are some of the advantages claims clearinghouses offer:

• Single location electronic claims management with real-time electronic claims verifications
• Smooth claims flow to payers with a significantly reduced risk of rejections - since claims clearinghouses are connected to multiple payers and understand the peculiar format and workflow requirements
• Electronic Remittance Advice (ERA) –view all payments and adjustments
• Claim Status Reports
• Rejection analysis in which the system explains error codes in English
• Edit and correct claims online anytime
• Real-time support

The benefits – simplification and speed

• Fewer denied claims and significantly higher claim success - you can catch and fix claim errors in minutes rather than days or weeks
• Rapid claims processing significantly reduces reimbursement times.
• Time savings - You can batch claims instead of submitting each one at a time.
• Reduced human-caused errors and the need to repeatedly re-key transaction data into each payer’s website
• Avoid phone call frustrations to payers
• Shorter payment cycles
• Reduction of cumbersome and expensive snail mail-related processes

 How not all clearinghouses are the same

Good clearinghouses have:

• A payers list - your payers need to be on their payers lists or can get on their lists quickly
• Nationwide payer network – they must have a national reach
• Claims software exchange– clearinghouses should be able to “talk” with your billing software and have a success track record.
• A flat subscription fee instead of a module-based or a la carte menu of billable services
• Support – accessible and responsive
• Dashboard-based error reports & a control panel with an easy-to-understand and navigate interface
• Long Term Care focus - For Long Term Care providers having a clearinghouse that was built from the ground up specifically for LTC is a real advantage.

Why using a clearinghouse for secondary claims is important

For all the same advantages and benefits listed above as well as:

• Efficient secondary claims processing – a sure advantage over manual billing or going to each payer’s website to key in transaction data
• Reduction of rejected and denied claims - optical readers may not be able to correctly read the paper claim. This can be particularly stressful considering the tight timeframes in which a payer will accept claims.
• Proper processing – clearinghouses know how to process the claim
• Control – because the system simply generates the claims candidates, at the click of a button you determine which claims the clearinghouse should send. This is important, because in some cases, Medicare automatically bills the secondary payer. You don’t want to submit duplicate claims.

Conclusion

Secondary payer claims are very important to Medicare Part A providers. In some cases, a provider reported that over 80% of its Medicare Part A admissions stayed longer than the initial 20 days – a significant source of revenue and, therefore, cash. Properly processing claims through a reputable and reliable claims clearinghouse engineered for LTC providers helps to expedite that revenue-to-cash conversion.

Shrinking margins

Over the years I have observed that LTPAC providers have faced and still run the risk of facing possible shrinking profit margins or, in the parlance of not-for-profit providers, surplus revenue. For the purposes of this blog posting, I’ll keep things simple by referring to the bottom line as “margins”

In a report issued in 2013¹, from 2010 to 2012, SNF median net income declined from 1.8 percent in 2010 to 1 percent in 2012. Not only does this impact funds needed to competitively and cost-effectively operate, but also affects access to capital. Although SNFs have access to capital, they do encounter challenges other health care providers don’t; specifically, the high cost of debt financing with dependence on high yield bonds and bank loans. In one instance, a large SNF provider with similar credit ratings to two acute care providers had bonds trading at 2.3 percent to 3.5 percent higher than its acute care counterparts. Experts tie this to sector-specific reimbursement models.

SNFs are heavily dependent on Medicare and Medicaid while hospitals have a more advantageous mix of commercial payers compared to Medicare and Medicaid. The biggest problem is the risk created by Medicare and Medicaid uncertainty. With greater risk comes the need for higher returns and investor caution. While investor confidence has somewhat improved, large and, especially, small providers still face a challenge. So what can providers do in today’s world of potentially shrinking margins to keep their doors open and to grow their business? Collect revenue owed as soon as possible

Revenue cycle management is critical

Ok, The truism, “Cash is King,” is a bit passé. But it is still true today. And the biggest challenge is converting outstanding revenue to cash quickly. Some of the essential elements to sound revenue cycle management include auditing, implementing best practices, policies, technologies, and training

Providers need to acquire the experience, expertise, and technologies either internally or by contracting with experts to focus on:

• Billing and A/R management best practices
• Systems auditing and problem solving
• Business process analysis, development, and standardization as well as policy design
• Project management
• Team building
• Getting results

For those providers who are struggling with implementing effective revenue cycle management, we recommend contracting with billing and A/R consultants who have the expertise and breadth of experience to implement practices and policies resulting in:

• Reduced A/R,
• Decreased DSO,
• Lower costs, and
• Helping the internal A/R team to institute effective and time-saving policies and procedures.

Consultants can either directly provide or assist in the development and implementation of time-proven systems audits and A/R reductions best practices. The benefits of these efforts are rewarding in terms of:

• Discerning problems and/or needs
• Identifying root causes
• Proposing end-to-end solutions, and
• Moving plans forward into action and successful completion.

In today’s cloud computing world, technology knowledge and skills improve chances for effective revenue cycle management. Experts can recommend functional system modifications and user supporting/training in sophisticated accounting, billing, and collections applications and practices.

Undertrained staff can lead to wasted hours and needless costs. Discovering a skills set baseline through an accurate assessment of billing staff is critical and can help providers fine-tune training needs. This understanding leads to compliance thorough process training in conjunction with best practice A/R policies and procedures from admissions through to month-end closing.

Providers can reduce the risks of shrinking margins by implementing solid revenue cycle management best practices. It only makes cents

We can help you

Prime Care Technologies combines the skills and knowledge of our in-house revenue cycle management experts with our LTPAC-targeted primeCLAIMS clearinghouse to help you stand on solid fiscal ground even in times of potentially shrinking margins.

¹Ref: Skilled nursing facing pinched margins http://www.healthcarefinancenews.com/news/skilled-nursing-facing-pinched-margins