For CFOs, the bottom line matters, whether it’s the P&L or identifying what’s in the bank. Occasionally, though, it does help to know within the context of “what’s in the bank,” how the money gets there. Since Medicare Part A is a significant revenue source, being aware that just submitting a claim for Part A-covered days-of-service may not be enough can be helpful to supporting the organization’s efforts to create an impediment-free flow of cash to the bank.

Let’s take a closer look at the obvious. Assuming the resident meets all the Part A eligibility requirements and that he or she receives Medicare-coverable services, the Medicare MAC will pay the entire amount of the RUG-determined per diem for the first 20 days of the spell of illness. The “rub” is who pays for the coinsurance for the remaining days of qualified services from the 21^st day onward? This is where the secondary payer comes in and, potentially, the headaches.

Introduction

Secondary claims, if not properly handled (and I mean filed electronically, not manually – more about that in a moment) can slow up cash flow. “A claim is a claim, isn’t it?” Nope. "Well, I’ve got the staff and I am certainly paying enough for them to process the claims. They know what they’re doing.” Yes, but because of the intricacies of submitting the secondary claim after receiving payment from the primary payer, providers can and often do see a delay in payment or no payment at all. “But why?” you may ask.

A little background

Once Medicare pays the claim, the MAC may through a coordination of benefits agreement automatically forward the secondary claim to the secondary payer. But not in all cases. Only if the secondary payer pays a fee for such services. The secondary payer can be a commercial insurance (Medi-Gap) or Medicaid. In some states, Medicaid secondary payer claims will cross over automatically. However, even if the state automatically processes the secondary claim, some states do not pay the entire coinsurance amount.

In those cases where the secondary payer does not pay the fee for Medicare to automatically forward the secondary claim, the provider’s Central Billing Office or AR staff or Billers will have to identify, process, submit, monitor, and intervene as needed to collect the secondary payer payment. They can do this manually (Really?) or electronically (Get with the program, folks.).

Manual or electronic processing – showing our bias

Let’s look at the two alternatives.

Paper-based secondary claims – This process is as old as dirt. Because there are many nuances to the process and opportunities for omissions, errors, and procrastination, it creates delays. The billing department receives notices of payment from the primary payer. Then billers have to print the UB04, attach the claim level, related remittance advice, and mail or fax these papers to the secondary payer. The manual method usually requires a tickler file, likely an accordion file with 30 slots in which to place copies of the submitted documents for follow-up. On the follow-up day, the biller places a call to the payer. Unfortunately, it’s not unusual for the payer to not have a record of the submission. So the biller will have to resubmit the claim again and move the claim documentation further back in the accordion file.

Oh, and here is another possible “...grant me the serenity to accept the things I cannot change…” moment. Some secondary payers require a 15-30-day waiting period before a provider can resubmit the claim. How’s that for taking the starch out of your shirt?

Because preparing, filing, and following up on secondary payer claims can engender procrastination, it's easy to lose track of the secondary payer claims. This can result in further payment delays or no payment at all, if the submission takes place outside the allowable filing window (sometimes 90 days to a year).

Electronic claims – the aspirin of secondary claims processing

Processing secondary payer claims electronically through a clearinghouse is as fast and easy to follow as this paragraph. Because the process of claims preparation to submission to follow-up to payments is automated, it gets the job done faster. It also helps to reduce the staff hours consumed when processing claims manually. Word to the wise, “Use the technology at hand.” 

What can a CFO do?

The bottom line looks much healthier, because the provider electronically processes not only primary payer claims, but secondary claims as well. It’s certainly one less headache.

And that makes cents.

Likely you’ve heard the old Biblical reference about the fruitless outcome of trying to put new wine in an old bottle. Sometimes you just have to discard the old bottle and start afresh with a new one. From an organizational standpoint, that means scrapping the old ways and introducing the new. Business Intelligence with its Key Performance Indicators and dashboard views are the new wine of data-driven decisions. But as intoxicating as that may sound, if you try to introduce it into the old bottle of your organization’s old ways of reporting and communications, you may have an informational hangover. So what can the new bottle look like? I suggest the following may help, based on some of our BI customers’ successful practices:

• Make BI part of your organizational culture - your mission and objectives
• Tie BI to performance incentives
• Use BI daily – communications and support
• Include BI in your monthly financial and operational performance reviews

Make BI part of your organizational culture – your mission and objectives

In our recent blog, I introduced the following:

“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.”

Doing so, makes the next step easier.

Tie BI to performance incentives

One of our customers, operating over 40 buildings across five states, has tied administrator and other executive incentive plans to the KPIs specific to their responsibilities. Doing so keeps the entire organization focused on tightly-defined outcomes tied to the company’s overall mission and objectives as mentioned above. This makes accountability measurable and immediate. And because BI is “real time”, it is a useful tool for coaching, facilitating, supporting, and redirecting. This unique level of transparency is motivational. It helps leaders to review their performance trends and, where appropriate, even within the context of how they are doing compared to their peers.

Use BI daily – communication and support

Many of our customers use BI in their daily morning stand-up meetings. Because of the dashboard’s flexibility, the dashboard administrator can determine who sees what information based on predetermined roll-based permissions. Department heads can view their relevant KPIs, while their administrators/executive directors can view all department and facility-specific KPIs. Regional managers and consultants view consolidated regional information as well as specific facility and department performance. CEOs, COOs, and CFOs can view consolidated information at a corporate level or drill down to region and facility information as desired.

This helps also to simplify communication up and down the organizational structure. Facility, regional and corporate staff no longer have to ask, “What?” They can dwell on the “why” and what to do about the opportunities or challenges that the “what” reveals.

Include BI in your monthly financial and operational performance reviews

One COO of a multi-facility chain, reports that he uses the dashboard during the monthly financial and operational reviews. “Today with primeVIEW (PCT’s BI dashboard) conspicuously displayed on a large monitor in his office for group discussion, (Ray Tyler, COO of Health Services Management Group) and (his) team can observe and examine such Key Performance Indicators (KPIs) as census, labor, RUG levels, and accounts receivable throughout the day. His use of primeVIEW goes beyond daily operations; Tyler also refers to it during his monthly financial reviews with facility administrators who simultaneously view performance in areas of focus. ‘By the time our P&Ls are ready, they are a month or more in arrears,’ commented Tyler. ‘But with primeVIEW, we can discuss what happened last month and examine current KPIs which directly impact financial performance and help us predict month-end outcomes.’”

Summary

Business Intelligence can become an integral part of your organization’s communication, management, leadership, and accountability structure. Inculcating in how you lead and oversee your business can yield significant dividends.

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.