14 Feb Is Automation Killing Your Bottom Line?
Automation can be a wonderful tool in the healthcare revenue cycle. It can cut down on payment processing time, provide real reimbursement numbers for reporting and free up personnel for other tasks. But like most other industries, there are pitfalls to automating your accounts receivables. Even when systems do exactly what they are programmed to do, human intervention and analysis is required.
Take for example the managed care systems that are available today. With these software systems you can load all your payer contracts, scrub your bills, fire your bills electronically to almost any carrier, calculate expected reimbursement and post payments, all automatically. When this process works it is seamless and completed start to finish with very little, if any, human intervention…and that’s where the trouble starts. Let me give you an example of how these systems can have “leaks” that can only be identified with human eyes.
A large health system from the mid Atlantic region uses a very popular and efficient managed care system. They have one contract that pays their outpatient procedures based on revenue codes. The contract divides revenue codes into two categories; primary and non-primary. If a claim contains any of the primary revenue codes then the reimbursement is based on a fee schedule. If the claim contains only non-primary revenue codes then the claim is reimbursed on a percent of charge basis.
This hospital system has a very busy chemotherapy department and several of their patients treated in this department have coverage that falls under this contract. Now, the contract is loaded into the managed care system correctly, and the system correctly calculates expected reimbursement based on the contract, but there is a problem. On several of these claims there is a $600 charge for “declotting vascular access port” and this service is listed in the charge master with a 361 (Minor Procedure) revenue code, a primary revenue code according to the contract. This one minimal charge caused the whole chemo claim to go into a fee schedule rather than pay at the >60% of charges that it should have paid. The system handled the claim correctly, the fee schedule payments came in and were posted, any additional adjustments made and the claims went to zero balance. We found 13 claims like this over a 12 month period. These 13 claims produced additional $183,000 cash after we removed the 361 and resubmitted them. Hospital personnel did not catch this because of automation.
Does your health system utilize automated A/R software and if so, how can you be sure automation isn’t killing your bottom line? Contact us to find out what you’re missing.