Strategies to Decrease Denials, Improve Patient Satisfaction and Increase POS Cash
In our recent blog, How Small Changes Can Have a Huge Impact Preventing Denials, we explained how the butterfly effect is present in the healthcare revenue cycle because small changes on the front end can result in big payoff on the back end.
Several examples of the butterfly effect appear throughout history. One interesting story I like involves survival. A Union soldier in the American Civil War named Arthur MacArthur Jr. led a charge at the Battle of Franklin in 1864 and was nearly killed by a bullet that passed within an inch of several major organs. Had the bullet entered his body just to the right or left, he likely would have been killed and thus unable to father Douglas MacArthur, the heroic general who led the U.S. Pacific Army in the fight to defeat the Japanese Empire in World War II.
What if that bullet had taken a different path?
When you apply the Butterfly Effect to the revenue cycle, small changes in seemingly simple and established processes and solutions, such as patient scheduling, patient registration, physician ordering and health insurance eligibility verification can result in a significant decrease in operations costs, improved patient satisfaction, a reduction in denials and increased cash collected at the point of service.
Patient Scheduling Opportunities
This is perhaps the first opportunity to leverage the positive return of the butterfly effect in the revenue cycle.
Scheduling is where the registrar should be able communicate patient financial responsibility and even take a deposit, copay or coinsurance from the patient, but often doesn’t. It’s usually not their fault. Without real-time and benefit-specific insurance eligibility verification, based on your hospital’s specific contracts and analysis of payment remittance from your payers, registrars don’t have the tools they need to share an accurate estimate of the patient’s financial responsibility, which makes it difficult, if not impossible, to ask the patient to pay their share of the expected cost.
Already with this missed opportunity, costs associated with collecting are escalating and decreasing the value of that patient dollar.
Patient Registration Improvements
This is perhaps the best opportunity to save big costs in the revenue cycle. After registration, the patient will receive the service they came for, making it harder to collect their portion of the bill. And, without technology that audits all registrations in real time using benefit specific eligibility and benefits verification, you are setting yourself up for a denial. For example, the registration clerk often does not receive the details necessary from a typical clearinghouse eligibility transaction to understand the patient’s procedure-level benefits in the hospital’s contract with that payer. Issues like this at the front-end account for more than a third of denials (37%) according to AccuReg customer data.
Today it is inadequate to simply verify that a patient has coverage. Is the patient eligible for a specific procedure or service? How much is left of their deductible in real-time? What’s the accurate co-insurance cost for the patient?
If you don’t have that information provided through your current eligibility verification vendor, you miss a valuable opportunity to collect the patient portion of the bill. You may collect the patient copay, but they may not be covered at 100%. If the procedure costs $10,000, and you missed the opportunity to accurately collect at scheduling or registration, the patient is out the door and will be surprised and perhaps angry you didn’t provide their total financial responsibility before the procedure. That situation can lead quickly to collections and to bad debt.
The good news is, you can optimize your revenue cycle with technology that is driven with automation, workflow and key components of artificial intelligence (AI), including machine learning, robotic process automation and predictive analytics. These tools can uncover tiny oversights before they cause catastrophic events.
Claims Denial Management
According to AccuReg customer data, two thirds of denials are eligibility related—meaning they can be identified and prevented well before the service is rendered. Insurance eligibility determinations are the easiest areas to correct and are not a heavy lift with the right tools. If you can predict something is going to happen, you can prevent it from happening by creating rules to identify pre-denial issues.
Many revenue cycle technologies don’t use machine learning to audit 835 and 837 transactions data to identify patterns of denials. But they should because that data shows patterns clearly. AccuReg helps our customers avoid billions of dollars in denials by implementing rules based on these patterns. Rules enable you to predict gaps in information that result in claim denials so those errors can be corrected before submitted for payment.
By using technology to audit 100% of accounts and identify and alert staff for the exceptions that require corrections to prevent denials, you eliminate significant downstream operational expenses while reducing the total number of denials.
Think of it this way: We’ve established that every touch of a patient’s account represents a cost to the hospital. To try to eliminate extra touches, registrars must start with accurate information, ask patients to pay their portion at every opportunity and offer multiple ways to pay. If you don’t obtain a patient payment at scheduling, you pass the buck to someone else to ask.
When the patient leaves the building after a procedure, they’re not a patient, they’re a debtor. They may not answer your phone calls, letters, and eventually that account may be sent to a collection agency. You’ve had several opportunities to collect, but now the patient is out the door. The situation could easily have a different ending if you simply ask the patient at the point of scheduling to pay in full or set up payments.
Tools like a rules engine that automates patient payment estimation are crucial to reducing operations costs, increasing collections and getting paid faster. We saw 52,000 such errors resolved annually with just one client and a 25% reduction in eligibility-related denials in two months with the same client. Financially, that means that client avoided about $1.3 million in rework costs annually and eligibility denials were cut by 50% in six months.
As the wings of a butterfly can change the path of a tornado, small changes to the front end of your revenue cycle can result in big benefits to your bottom line.