Photo: Duke Health
Leadership over revenue cycle operations at Duke Health always is looking for ways to reduce operational costs through automation and technology solutions.
THE PROBLEM
There are a number of clerical transactional activities that occur between providers and payers along the revenue cycle spectrum, and each one consumes considerable manual resources, translating to significant staffing and administrative expense.
One of the areas that is ripe for optimization is the workflow for obtaining the status of outstanding claims previously submitted to insurance payers in order to determine appropriate next steps for the resolution and payment of the account balance, said Scott Williams, associate vice president of revenue cycle at Duke Health.
“Historically, the process of capturing claims status has been a highly manual effort,” he explained. “It involves checking payer web portals for information – logging onto each payer’s portal, keying in a handful of relevant data elements to identify the appropriate account, capturing the relevant status information from the portal, and then rekeying that information in some format to the provider’s patient accounting system.
“Alternatively, for payers without web portals, this same process is accomplished through a phone call to the payer, which often includes a considerable wait on hold before a representative is available,” he added.
“Technology optimizations of this nature are complex, with many moving parts, and require considerable investment of resources to fully achieve the expected downstream return on investment.”
Scott Williams, Duke Health
“All of this effort translates to significant staffing levels. For Duke Health, on the physician side of our revenue cycle operation, we had approximately 30 employees focused primarily on claims status activities for payers’ slow or no response to claims submitted.”
PROPOSAL
Health IT vendor Availity’s solution offered an automated process to help provider organizations track claims in real time without manual intervention and integrated directly into the EHR system.
“This solution is designed to provide a variety of benefits: reduce costs associated with obtaining the current status on claims outstanding with payers, accelerate the insurance follow-up and resolution process to reduce accounts receivable and speed up cash flow, and utilize standardization to minimize the administrative effort in trying to develop and maintain interpretation of claims status datasets across hundreds of different payers,” Williams said.
MEETING THE CHALLENGE
Duke Health worked with the vendor to implement the automated claims status solution, based on the ANSI 276/277 Claims Status transaction set.
“Part of the beauty of this technology is the standardization of information being transferred between thousands of providers and hundreds of payers across the country,” Williams said. “The 276 standard transaction pulls relevant claims data from our patient accounting system, based on a predetermined definition and frequency for aged outstanding accounts, and submits that data to the payer.
“The 277 standard transaction captures the relevant information from the payer claims processing system and posts the status to the relevant accounts in our patient accounting system,” he added.
The typical responses back from the technology include: claims acknowledged, already paid, denied, no record of claim, still pending for processing, etc., and each one of those responses is linked to additional automated actions or routed to relevant staff to conduct further follow-up in support of getting the claim appropriately adjudicated and paid by the payer.
“For example, if we receive a claims status of ‘already paid,’ we put that account on hold for 14 days while we wait for the payment to arrive and be posted to the account,” Williams explained. “If we receive a claims status of ‘no record of claim,’ we automatically generate and submit another claim form to the payer.
“If we receive a claim status of ‘denied,’ we immediately route that account to the relevant department that works those types of denials to research and appeal the account back to the payer,” he added.
RESULTS
Subject to the limitation of those payers that support the capability of automated claims status, the technology has achieved two primary benefits within Duke Health’s revenue cycle operations.
“First, it allows us to initiate claims follow-up activities on initially denied claims much more quickly than if we had to wait for that same information from the official ANSI 835 remittances from the payer,” Williams said. “While experiences vary by payer, we have generally been able to obtain denial information anywhere from three to 14 days faster via automated claims status.
“This quicker turnaround has produced faster insurance collections, reduced accounts receivable aging and decreased days in accounts receivable outstanding,” he continued. “Second, the use of this technology has incrementally reduced the need for staffing that previously handled this workload manually, and the expenses associated with that transactional activity.”
To date, the organization has seen a 20% reduction in the number of employees supporting insurance claims status workflows and expects to see that expand over time as more payers support the technology.
ADVICE FOR OTHERS
“For other healthcare providers considering claim status optimization, it is important to find the right vendor,” Williams advised.
“While it is possible for providers on their own to connect directly with payers on automated claims status,” he said, “the complexity of the information being shared bi-directionally, and the sheer number of payers in the marketplace, provide a strong rationale for working with an established vendor that has already committed to the initial development and ongoing maintenance to this solution.”
Provider organizations must identify relevant leadership, project management, analytical resources and subject matter experts on the provider side to support this implementation, he said.
“Technology optimizations of this nature are complex, with many moving parts, and require considerable investment of resources to fully achieve the expected downstream return on investment,” he concluded. “That commitment encompasses all implementation stages, including pre-planning, development, go-live, and ongoing monitoring and support.”
Twitter: @SiwickiHealthIT
Email the writer: [email protected]
Healthcare IT News is a HIMSS Media publication.
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