HCM 345 7-2 Final Project Submission White Paper PDF

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Final Project Submission: White Paper

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Michele Barker HCM 345 Healthcare Reimbursement 7-2 Final Project Submission: White Paper Southern New Hampshire University Brina Hollis June 20, 2021

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Table of Contents I. Reimbursement and the Revenue Cycle …............................................................. 3 Reimbursement............................................................................................................ 3-4 Flow of Patient …........................................................................................................ 4-6

II. Departmental Impact on Reimbursement …...................................................... 6 Department ….............................................................................................................. 6-8 Activities …................................................................................................................... 8-9 Responsible Department …......................................................................................... 9

III. Billing and Reimbursement …................................................................................ 9 Data …....................................................................................................................... 10-11 Third Party Policies …............................................................................................. 11-12 Key Areas of review …............................................................................................. 12-13 Structure …............................................................................................................... 13-14 Plan …....................................................................................................................... 14-16

IV. Marketing and Reimbursement …...................................................................... 16 Strategies …............................................................................................................. 16-17 Communicate …...................................................................................................... 17-18 Contracts …............................................................................................................. 18-20 Compliance …......................................................................................................... 20-21

V. References ….............................................................................................................. 22-24

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Reimbursement and the Revenue Cycle: Reimbursement The health care system has changed over the past several years with innovative technology in the way reimbursement and revenue cycles are handled. Reimbursements and revenue cycles are crucial for health organizations and departments within each facility medical organizations so that they can maintain and operate efficiently and effectively. According to Harrington, “reimbursement is the monetary value a healthcare facility or provider receives after providing a service to a patient” (Harrington, 2020). When a patient visits a health care facility, the health care provider is paid through a third-party payer, either a government or insurance payer to cover the cost of the services provided to the patient. Private insurers negotiate with health care providers on certain items, medical procedures, codes, and billing coverage with facilities. It depends on the type of insurance the patient has whether they will be paying a copay at the time of the visit or receive a bill. Co-pays are “a common feature of many health insurance plan, it is a fixed out-of-pocket amount paid by an insured for covered services. It is a specified dollar amount rather than a percentage of the bill, and they usually paid at the time of service” (Kagan, 2020). Not all medical services ask for a copay. When hospitals fail to receive reimbursements the people's account will go to collections if not paid. However, the billing department at many facilities will work with the patients to arrange a payment plan on the services provided at that facility. There are insurance companies that do not cover all medical services under the patient's insurance policy and certain provider services may be denied because they will not be effectively reimbursed for a procedure. For example, many urgent cares do not cover school physicals because insurers cover this service in primary care offices. If the person wants a physical at and urgent care, then they will have to pay an out-of-pocket expense and pay $95 to $125 depending on the type of physical needed. If the

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company does not receive reimbursement for services rendered, then ultimately the company cannot pay to keep the facility operating cost and make a profit, meaning that eventually the company will shut down and file for bankruptcy. Reimbursement and the Revenue Cycle: Revenue Cycle “Healthcare revenue cycle management is the financial process that facilities use to manage the administrative and clinical functions associated with claims processing, payment, and revenue generation. The process encompasses the identification, management, and collection of patient service revenue” (LaPointe, 2014). In the revenue cycle there are three major processes that take place for it to be successful and they are front-end, middle-end and back-end processes. Each of these three main processes contribute to the revenue process. According to Harrington, “the front-end process gathers all the patients’ demographics, makes a copy of the patients’ ID and insurance cards for verification, collect any fees for the patient pertaining to the visit. The middle process consists of documenting any procedures or services given to patients such as injections, x-rays, blood work, EKG, or cleaning of a wound. The back-end process makes sure all bills are being processed are handled, any claims there were denied for errors are looked over and make any corrections to the charge description master if necessary” (Harrington, 2020).

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In Figure 1 shown above illustrates the complete revenue cycle management and the process beginning with the initial point of contact and ending where payment is collected. All healthcare facilities prioritize the revenue cycle in order of importance depending on the type of facility. The department that is important is the front-end process in patient registration and planning, and insurance eligibility. Patient registration and scheduling is important because “employees create a patient account that details medical histories and insurance coverages” (LaPointe, 2016). This is where the health care provider payer-relations team negotiates reimbursement levels for patients with different health plans. It is the basis for which claims can be billed and collected in the most efficient and effective way possible. Insurance eligibility verification is “especially important during pre-registration to ensure that insurance companies will reimburse the healthcare organization for medical services provided. As the top claim denials is eligibility issues” (LaPointe, 2016). “The front-end of the revenue cycle must be diligent with determining Medicaid eligibility and assist uninsured patients understand their

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coverage options with the insurance exchanges” (LaPointe, 2016). The back-end process is also important in coding because if they do not properly code items, this could cause a loss of revenue or even cause a patient to not receive an important procedure. The remaining steps of the revenue cycle management are important for the success of the healthcare facility and by following each of these steps in order, the chance of incorrect information is minimized all while maximizing the effectiveness of the process. Departmental Impact on Reimbursement: Departments Harrington states “that the management of the reimbursement process affects profitability of an organization” (Harrington, 2020). When a department is not run efficiently, billing costs will rise, the collection rate will decline, resulting in an increase in accounts receivable. There needs to be appropriate management that helps maintain the organizations' patient provider relationships. The departments that utilize reimbursements data includes the finance and technology department. Healthcare organizations relies on these departments for reimbursements because the “finance department deals with accounts receivable (A/R), its metrics around collection rates, denials, and denial management. The technology department considers the systems, applications, and processes throughout the entirety of the patient-provider interaction” (Murphy, 2016). The technology department's role is “to improve the reimbursement process in claims management and reimbursement rates, and to recognize errors such as overpayment, underpayment, and no payment” (Murphy, 2016). The finance and technology department influence reimbursements at healthcare organizations and have an effective role on the revenue cycle. It all returns to the front-end, back-end process, providers, clinical staff, and management. Management needs to ensure communication, monitor employee performance, and review revenue cycle metrics and analyze trends regularly to turn a profit.

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The type of audit health organizations should perform to determine whether the impact of reimbursements is fully achieved by these departments are internal and external audits. “Internal audits function to help ensure that additional unknowns, such as fraudulent activity and new technology risk are considered and addressed properly in relation to an already complex slate of challenges” (AHIA, 2013). Having strong audits and stringent regulatory controls leads to effective organizational risk management. Internal audits have four areas that they concentrate their attention and resources on they are master compliance, existing and emerging risks, enhance efficiency through technology enables auditing, and network and negotiating. Master compliance “improves analysis of the IT department and data privacy concerns. It improves the accuracy of patients’ financial records. The exploration on healthcare institutions identifies the need to adopt internal audits that enhance scrutiny of reimbursement systems” (AHIA, 2013). Existing and emerging risks reduce medical frauds, insurance frauds, and internal frauds. It also addresses the new risk involved in technology related to security breaches, privacy vulnerabilities and social media platforms. Enhance efficiency through technology enables auditing “to devise efficient and cost-effective ways to monitor these activities and review and analyze the data on a continuous basis by using advance data analytics and tools and to enable team members through education and training” (AHIA, 2013). Networking is an effective internal audit process and identifies the internal and external networks. Effective internal auditing depends on skills of auditors and techniques to handle different situations. (AHIA, 2013). These department could impact the pay-for performance incentives because the pay-for performance is “a fundamental change in payment methodology that could transform how healthcare is delivered more than the current prospective payment system and managed care

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plans” (Healthleaders, 2018). The pay-for performance is based on patient quality of care, patient satisfaction and utilization. Many patients now take an active role in their care decisions by seeking a variety of information from disease-specific information to clinical outcome scores. To have a good patient outcome “doctors will realize that in order to provide quality and efficient care, they will need to closely work with members of the hospital staff” (Healthleaders, 2018). If the doctor does not input, the correct code the finance and technology department will be impacted because the patient will receive a high bill for the services provided that should have been covered. It will affect all areas of reimbursement process including reimbursements for hospital readmissions, mortality rate, and infections rates. Departmental Impact on Reimbursement: Activities The reimbursements billing department depends on selecting appropriate Current Procedural Terminology (CPT). The finance department has its role in developing helpful coding with the doctors. The main purpose of this activity is to maintain short codes for clerical and financial activities to help the hospital keep records. The code states the service provided and outlines the charges clearly and saves on time for the financing administration for upcoming reimbursements. The financing administration reviews the relative code values and involves the assessment and management of patient insurance information and payment records. They receive all patient information about insurance plans, collect copayments and deductibles and ensure payments are paid on time. It maintains the records of payment history and prepares a detailed document file for each case as well as forwarding the patients’ information to the appropriate department. The technology department uses medical documents to create data and thar are demonstrated in graph forms business intelligence tools and displays outstanding patient charts. They use the software and techniques to provide a systematic review of cost and reimbursement

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activities. The auditing department reviews the post-service work and non-procedural services reports that are made quarterly and annually to improve compliance. Departmental Impact on Reimbursement: Responsible Department The department that is responsible for ensuring compliance with billing and coding is the Health Information Management mostly known as coding compliance specialist. The compliance specialist audits medical records to ensure compliance within the organization's coding procedures and standard. Every year, the compliance department reviews regulatory and coding guidelines and review insurance payments and denials, making sure claims are accurate and correct. If the claims are not correct and a claim is put through, then it becomes a false claim and can lead to penalties and fraud. By implementing coding principles and programs, helps the department stay in compliance as the accuracy and skills needed by the department to reduce the chance of mistakes occurring during the reimbursement process. This leads to effective communication and working relationships that improves the financial profit and reduces the risk of fraud and unnecessary legal matters. The CERT and RAC programs adopt coding and billing policies. “Comprehensive Error Rate Testing (CERT) audits focus on logistical issues, such as whether coding and billing are correct, and are not audits focused directly on the physician. Recovery Audit Contractors (RAC) focus on errors created by providers, detect and correct improper payments so that CMS/ MACs can institute changes to prevent future improper payments” (Williams, 2014). All healthcare facilities should have all documentation of patients records and payer polices up to date to improve the reimbursement process and avoid errors in claim denials and audits. Billing and Reimbursement: Data

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For a medical bill to be made up, many steps are needed to proceed smoothly without any faults. It is important that all the data that is collected be reviewed prior to sending out for a reimbursement. Data collection for billing and coding requires more than one person's attention, it requires support from all its employees. Health care facilities use multiple staff members throughout a facility to collect data for reimbursements. Some of the staff members include the clerical staff (administrators and front-end representatives), clinical staff that consist of registered nurses, licensed practical nurses, certified nursing assistant, and aides, healthcare providers and departmental employees which include management, administrators, medical billers, and coders. Data collection starts as soon as the patient arrives and schedules the appointment. The information that is gathered when the patient walks in to registers with the receptions or pre-registers online includes the patients “name, age, date-of-birth, address, phone numbers, insurance information and chief complaint” (Medical Billing and Coding Online, 2018). Retrieving all this information is necessary to create a medical file on the patient and initiate the billing and reimbursement procedure. When the patient registers and speaks to the receptionist, this is the first point of contact where a patient will have a positive or negative experience. For patients to have a positive experience at a health facility, all staff must provide excellent customer service to their patients and visitors. According to Meek, a study was conducted, and results showed that “in 2008 with seventeen million American people it concluded that patients are more likely to consider a facility or organization if they had a pleasant experience with healthcare professionals” (Meek, 2008). When a patient has positive experience with the health care professional during their visit, they will recommend the facility to other people and increase the patient flow, patient satisfaction scores and revenue to the facility.

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To ensure patients have a positive experience during their visit, healthcare professionals need to utilize “the three Ps” of high-quality customer service. According to Hodak the “three Ps of high-quality customer service are professionalism, patience, and people first attitude” (Hodak, 2020). Professionalism refers to the attitude you take towards the patient and the response received. When the patient is upset or behaved immaturely towards you, the response of the health workers is to diffuse the situation, stay calm, listen to the patient's complaints, and help the patient understand the situation or problem clearly. Patience is crucial because “every patient is different, learns different and responds differently when they are stressed, sick and experience a bad situation” (Hodak, 2020). When the patient has a question about their treatment, copayment amount or confused about medication, it is important that health care professionals be flexible and take the time to explain. By enabling the patient to control the pace of the interaction, you efficiently and calmly bring them up to speed and make the patient feel more relaxed and heard. People first attitude “builds off of professionalism and patience and expresses empathy” (Hodak, 2020). If a patient is calm, fighting, or complaining about a concern they have, health professionals can form a relationship and help them throughout their visit. Health care professionals can do this by giving them food, a warm blanket, providing care and talking to find out the issues or concerns they are experiencing. By doing this, this will ensure that patients will have a positive experience and outcome and lead to the success and thriving of the healthcare organization by having good reputation and patient satisfaction scores. Billing and Reimbursement: Third-Party Policies For healthcare facilities to maximize their reimbursements from third-party payers, there are many areas that need to be covered. Third party policies have rules and standards that are set out to provide security, privacy, and confidentiality that are required before filing a

Final Project Submission: White Paper