Medical Banking Revenue Cycle Management - March 2011

Medical Banking Revenue Cycle Management: EOB Processing

ARRA and other healthcare reform initiatives by the federal government continue the focus on driving down the cost of healthcare by gaining efficiencies within the industry. The re-focusing on more efficient and effective healthcare delivery has stimulated new opportunities in healthcare IT and patient care.

The current state of the US economy, the fact that healthcare represents 17% of GDP and the fact that it is universally agreed that efficiency gains are key components to quality and affordable healthcare in the US, has stimulated very interesting business models and relationships.

Though many have come to think of healthcare insurance companies as simply providing healthcare coverage, these companies have been diversifying to create new revenue streams within healthcare and to increase their margins. In many instances those twin goals provide an upgrade in quality of care to the patients they serve.

Recently Aetna's $500 million acquisition of Health Information Exchange (HIE) vendor Medicity was meant to help Aetna save money through better care coordination while increasing software related revues. The Medicity solution when combined with Aetna's CareEngine Decision Support System will more efficiently identify gaps in care and patients' appropriate disease management programs. The intended and likely result is that Aetna saves money by providing the best type of care and Aetna's patients get the best possible coordinated healthcare treatments.

The quest for more efficient, cost effective healthcare delivery is not limited to payers. Although we should take note that Aetna's acquisition of Medicity might be the beginning of a trend. There was a similar deal a few months ago as UnitedHealth Group acquired Axolotl. (http://www.fiercehealthcare.com/press-releases/ingenix-and-axolotl-combine)

It would seem that almost any entity that somehow touches any aspect of healthcare Revenue Cycle Management is seeking to provide value and efficiencies to providers and patients. What we know for certain is that clinical and financial data will increasingly become co-mingled as healthcare and payment reforms continue.

Solutions that can readily be integrated into the provider's work flow and create efficiencies, allowing providers to reallocate time and resources to patient care are met with enthusiasm.

EOB Processing as part of Medical Banking

One of the least invasive, low cost of entry and highest Return On Investment available to providers immediately is automated remittance processing. Some financial institutions are aware of this and provide this service for their providers.

There is no more effective way to gauge the health and efficiency of any provider's Revenue Cycle Management than to effectively process the remittances. The remittances are the culmination of all the aspects in the revenue cycle; perhaps that is one reason providers generally spend an inordinate amount of their back office resources to processing remittances. Proper and efficient processing of remittances is the financial life blood of any healthcare provider

Key to an efficient medical banking related healthcare remittance processing solution is a robust paper to 835 conversion capability. That is to say that the ability to convert paper EOBs to a postable, electronic (ANSI 835) file is the most critical aspect of EOB and remittance processing. The goal is to automate 100% of any provider's remittance posting; regardless of the source or format of the remittances. While some of the largest health plans can originate an 835, these files are variable enough from plan to plan to warrant manipulation prior to integration within the patient accounting system.

Configuring an electronic file is often difficult to create based on EOB data alone. That is why best practices stipulate implementing a series of business processes, including 835 validation (for each 835 in system), comparison with the original claim, a configurable rules engines and routines that minimize exceptions. Each line item on the EOB is typically subjected to this process.

In addition cash posting must be responsive to the policies and procedures uniquely adopted by the provider's office. These policies are often changing and sensitive from practice to practice and to government regulations as well. For these reasons, the best EOB processing vendors recognize the need to do custom implementation for each provider site.

Furthermore, the best vendors recognize the need for critical parts of the implementation to occur at the provider site. Beware of solutions that claim to accomplish the implementation 100% remotely or that there is "standard" implementation or output files that will be posted.

In addition to cash posting, banks are beginning to implement technologies to more efficiently automate denial management, COB processing/secondary billing and statement fulfillment. Imagine structuring workflow queues so that accounts are automatically aggregated by FTE, literally minutes after being scanned through a lockbox. Another area of focus in medical banking is strategic capital sourcing, giving providers the option of advance funds on an ongoing or ad hoc basis. In many scenarios, banking technology will augment and not replace existing point solutions (i.e., cash posting). Typically services are accessible via secure internet-portals.

To reduce wide variation in electronic remittance advice and paper documents remittance processing companies should:

• Reduce all adjustments into one of five categories: Contractual Obligations, Patient Responsibility, Payer Initiated, Corrections and Reversals, Other
• Convert 100% of all-payer remittances to an electronic file within 24-48 hours of provider receipt.
• Reduce to only one portal, all the connection points necessary to concentrate 100% of the provider's paper and electronic remittances
• Simplify processing and adjustments
• Submit secondary claims at least 5 days faster
• Accelerate cash posting by 5 or more days through conversion of paper remits to electronic remits and simplification of remittances
• Reduce cash posting errors by at least 95%
• Reduce unapplied cash by at least 1 day
• Reduce patient complaints by at least 20%
• Reduce research effort by 50%

As with any type of "boom" opportunity there are outlier companies (both good and bad) in healthcare remittance processing. MediStreams would be happy to discuss your needs or opportunities from an objective perspective. We can be reached at: Email: info@MediStreams.com or by phone at 888-ANSI-835 (888-267-4835)