Provider organizations are feeling the squeeze in all directions. Fee-for-service is rapidly being replaced by value-based care. Staffing shortages and low unemployment restrict hospitals’ ability to recruit and retain a qualified workforce. And many hospitals struggle with flat volumes that hamstring their ability to increase revenue and boost operating margins. The latest analysis from the Advisory Board found that average operating margins dropped to 1.7% in 2018, down from 1.8% in 2017.
“A more sustainable operating margin would be around 2.5%,” Advisory Board Executive Director Christopher Kerns told Modern Healthcare last year.
Most of these threats are out of their control, which is why we’ve seen many hospitals and health systems double down on addressing what they can control—improving their revenue cycle performance, shortening time to collect, and cutting down denials. But it’s impossible to know what problems exist if your organization doesn’t have a good way to track and benchmark its revenue cycle performance. Don’t you need quality data for that? Yes, and you already have it.
“The vast majority of the data needed across the revenue cycle can be found in the scrubbed 837 bill file,” says Laurie Pomerantz, vice president of sales and business development for GAFFEY Healthcare. “Couple that with data from your 835 remittances and you will glean important insights that can help make a real impact on your revenue cycle performance.”
Pomerantz points to obvious applications like claims denials management, but also more fundamental areas, such as improving charge capture, thoroughly reviewing your charge master and taking a closer look at truly clean claims.
As an example, let’s take a look at how harnessing this goldmine of data can help make a dent in your denials, excerpted from a RevCycleIntelligence interview with Sandra Wolfskill, director of healthcare finance policy and revenue cycle MAP at HMFA.
First, Wolfskill recommends tracking a claim denial rate key performance indicator (KPI). Calculate by dividing the total number of claims denied by the aggregate number of claims remitted. But, she cautions, it’s important to include only the “actionable denials, or denials that could be corrected within the organization to boost reimbursement.”
This includes payments containing a denial code on 835 remittance claims, appeal denials, and zero or partial payment accounts containing a denial code. Do not include denials for non-covered services, patient financial responsibility, duplicate claims, Medicare Recovery Audit Contractor (RAC) recoupments, and encounter claims.
OK, so the process sounds a little involved and definitely resource intensive. Recognizing the hurdles to harnessing this quality data, GAFFEY Healthcare developed ClaimCPR, a toolset that allows you to look more closely at revenue attrition by matching 837 and 835 files to provide a holistic view into potential missed revenue opportunities. The toolset provides aggregate reports for analysis, root case discovery and process improvement, and allows for custom queries to root out other potential issues. Beyond automatically identifying the issues, ClaimCPR also can help address them through areas such as charge capture, implant charge audits, chargemaster code analysis, claim efficiency-claim edits, ABN/LCD compliance checks and ED level analysis.
Interested in learning more about how GAFFEY Healthcare’s ClaimCPR solution can help you harness 835/837 data? Contact Laurie Pomerantz today.