How Healthcare Billing Departments Can Maximize AR Potential Before Year-End
November 17, 2023
In the digital age, innovation often means mastering the fundamentals.
With provider margins razor thin, hospitals and medical groups report continued revenue cycle workforce shortages and increased challenges competing to fill open positions amidst compensation wars. Then, add to that the ever-growing payer-provider relationship divide, the emergent “Payviders” market, increasing claims submission complexities and denials, and you’ll find that revenue cycle leaders have their work cut out for them.
So, when everyone is buzzing about artificial intelligence and the latest and greatest technological advancements, sometimes it’s worth getting back to the basics. If we could hit pause for just a moment and take a look at the fundamental claims management blocking and tackling to see where we can tighten up on best practices before embarking on any net new technology – we may find some quick wins that add up to significant dollars.
Founded by healthcare providers 35 years ago, The SSI Group, LLC (SSI) is a national clearinghouse company with unmatched domain expertise in medical claims processing. With that experience comes a wealth of claims data that we share with revenue cycle leaders. These key insights can maximize your AR potential before year-end.
Denial Trends in 2023
- In 2023, data shows that initial denial rates are growing to over 13 percent. Initial denial rates have risen over a percentage point each year industry-wide since 2021.
- Payers are slowing down their processing of denials dramatically. Providers are routinely experiencing denials taking approximately 5-7 days longer to process than a payment.
- The volume of Medicaid denials continues to have the highest increase month over month since 2021.
So why have denial rates risen so dramatically? A recent survey commissioned by the Healthcare Financial Management Association’s Pulse Survey program ranked the common reasons for initial payer denials, putting errors in patient access and registration at the top, followed by medical necessity and incorrect patient information.
SSI Pro Tip #1: Identify payers with a high volume of DENIALS and are the slowest to deny. Focus on process improvement to turn those slow denials into quick win payments.
Preventing Front-End Denials
According to SSI data, in 2023, front-end denials account for close to 45% of all denials. The majority of front-end denials lead to full denials.
Labor shortages continue to exacerbate this issue, with a recent survey published in Becker’s Hospital Review showing nearly half are experiencing severe shortfalls in vital positions, from front-end revenue cycle to denial management experts.
Front-end registration roles, where eligibility verification typically takes place, are bearing the brunt of this problem, becoming harder to fill as low wages and limited career growth opportunities compel hires to move on quickly. Efficiency and streamlining processes can assist with these labor bottlenecks.
SSI Pro Tip #2: Avoid lost revenue by catching potential eligibility-related denials on the back end before submission to payers.
One way to do this is with SSI Pre-Billing Eligibility (PBE) edits, which offers a strategic and proactive approach to combatting denials and safeguarding revenue cycles. Acting as a safety net, PBE allows providers a final eligibility check to catch potential denials on the back end before submission to payers. Seamlessly integrating into the existing billing workflow, PBE enables providers to conduct a comprehensive final review of eligibility, identifying and rectifying any inaccuracies that could lead to denials. This proactive measure not only fortifies the billing process but also enhances financial health by accelerating cash flow by 6-10 days and reducing the days in accounts receivable (AR), ensuring a smoother and more efficient revenue cycle.
“SSI clients utilizing PBE are seeing up to a 67% reduction in pre-registration denials alone by implementing this solution.” – Nicholas Caddell, Product Manager of Professional Services at the SSI Group
Refining Claim Edits
In the pursuit of a more efficient and effective revenue cycle, healthcare providers must scrutinize every step of the claim submission process. A critical area for improvement is the elimination of redundant tasks, particularly when it comes to claim edits.
A common inefficiency arises when claim scrubbers and Health Information Systems (HIS) perform overlapping functions. Identifying and removing duplicate edits between these two systems can streamline the claim submission process significantly. By conducting a thorough review of the edits performed by both the claim scrubber and the HIS, providers can pinpoint where these redundancies occur.
Another key strategy is to analyze the most frequently triggered edits. These are often the low-hanging fruit that, when addressed, can lead to quick and impactful wins. By reviewing these top frequency edits, providers can determine which ones can be eliminated or resolved through automation. This not only simplifies the claims process but also reduces the administrative burden on staff.
SSI Pro Tip #3: Speed up claim submission and AR days by eliminating wasteful claim edits.
Opting for Electronic Attachments
A significant portion of healthcare claims—32%—necessitates supplementary documentation from providers, a process that is often mired in inefficiency. CAQH’s 2022 data reveals that a vast majority, 73%, of the roughly 181 million annual claims attachments are still being processed through manual means. The shift towards electronic attachments is not merely a technological upgrade; it’s a financial strategy projected to save providers $49 million. Moreover, this digital transition has the potential to shrink the claim payment timeline by up to two weeks.
The advantages of electronic attachments extend into operational improvements. They dismantle the barriers imposed by organizational silos, portal logins, upload specifications, payer stipulations, and file size limitations that currently encumber the claims process. Additionally, electronic attachments deliver proactive and precise edits tailored to specific payer mandates, such as the claim’s monetary value, Diagnosis-Related Group (DRG), or procedure codes, enhancing the accuracy and compliance of claims.
In contrast to the traditional method of mailing records—which is prone to loss and errors, resulting in incomplete or missing documentation—electronic attachments offer a robust solution. They provide real-time 277 claim status updates, ensuring that every document is accounted for and trackable throughout the claims process. This level of oversight and control is pivotal in maintaining a seamless and efficient revenue cycle.
SSI Pro Tip #4: Ensure your documentation is sent electronically with your claim submission to avoid costly denials.
Harnessing Data for Decision-Making
Ultimately, to make the best financial decisions for your organization, you need access to revenue cycle data, along with the ability to transform the data into the insight necessary to adjust and improve business practices.
For example, a solution like SSI Claims Analytics provides hospitals and health systems with quick, seamless access to volumes of revenue cycle data, displayed in easy-to-read visuals that allow users to measure, track, and improve upon critical key performance indicators (KPIs). The solution delivers robust reports that allow for performance comparisons over time, along with industry benchmarking.
SSI’s solution allows you to:
• Predict future cash flow for optics into your month-end and year-end totals
• Anticipate the timing of payments, along with the dollar amount of the payment
Armed with SSI Claims Analytics, health systems can develop a big-picture approach to resolving revenue cycle challenges while simultaneously honing in on the most critical areas for process improvement. Visibility is possible from the beginning of the claim through payer response via various user-configured views, from day-to-day operational details to high-level executive performance summaries and everything in between.
SSI Pro Tip #5: Compare payer behavior insights and bottlenecks in cash flow to drive a more strategic revenue cycle.
As the year draws to a close, healthcare providers are presented with the critical task of evaluating their revenue cycle management. The journey to maximizing accounts receivable (AR) is fraught with challenges, from escalating denial rates to the intricate dance of payer-provider negotiations. Yet, within these challenges lie opportunities for significant financial gains.
The insights and strategies discussed herein are not just theoretical musings but are battle-tested methods, honed by SSI’s 35 years of expertise in medical claims processing. By addressing the root causes of denials with precision—be it through SSI’s Pre-Billing Eligibility Edits (PBE), streamlining claim submissions, or embracing the efficiency of electronic attachments—providers can unlock potential revenue that might otherwise slip through the cracks.
As we pivot to a more data-driven approach, leveraging tools like SSI Claims Analytics, healthcare organizations can illuminate the path to a more robust end-of-year financial position. This strategic clarity enables not only the anticipation of cash flow but also a deeper understanding of payer behaviors and operational bottlenecks.
The time to act is now. By implementing these tips, healthcare billing departments can ensure they are not just surviving but thriving as they cross the year-end finish line.
Are you ready to amp up your Revenue Cycle Management (RCM) strategy and capture the full potential of your year-end AR? Contact us today to embark on a transformative journey with a partner that understands the pulse of healthcare billing.
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