3/9/2016
Contract Management Processes
for Revenue Cycle Monitoring Copyrighted Material - Any Duplication requires PMMC Approval
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Introduction: Kristen B. Wood, CPC, PMP • Originally from Northeast Ohio, now resides in Charlotte NC • Certified Professional Coder and Project Management Professional • Over 30 years Revenue Cycle, Medical Coding and Billing Experience • 9 years Electronic Medical Record and Practice Management software Project Management, Implementation, and Training experience of over 100 medical practices Nationwide • Senior Account Manager at PMMC since 2012
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What is a Contract Management System? Tools designed to manage all aspects of the Facility or Provider’s payer reimbursement contracts with the purpose of maximizing financial performance and minimizing risk.
Designed to calculate reimbursement for individual claims as well as analyze all posted transactions including payments, contractual and administrative adjustments. Using analytical tools, accurately identifies correctly and incorrectly paid claims as well as provides detailed analysis of Denials and payer performance. Allows for modeling of proposed contract reimbursement changes to aid in negotiations as well as providing analysis of upcoming payers trends
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REIMBURSEMENT VARIANCE MONITORING Do you have an organized electronic process or are your staff manually viewing remits? How do you know if a payer has paid you correctly? What is causing your underpayments and denials? How can they be prevented?
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What causes a ‘sick’ Accounts Receivable? • • • • • • • • •
Mystery Contracts Registration Errors Billing Errors Denials Government Reimbursement changes Payer Tactics Staff resource issues Poor communication and missed opportunities Disadvantageous evergreen contracts
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Mystery Contracts • Do you have an organized method of tracking the effective and renegotiation date for every one of your Facility’s payer agreements? • Do you save each contract, addendum, and fee schedule electronically so all of your Collections team have access? • Do you have a process for communicating all reimbursement changes internally as well as to your Contract Management vendor? • How do you know if the payer changes reimbursement without notifying you in writing? • Do you regularly attend payer meetings and Government calls?
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Registration - The Front Line • How does Registration currently verify Insurance plan coverage? • Are all Insurance cards scanned into your billing system ? • Correct Secondary plan entry is essential to accurate patient billing • PPO and HMO pre-authorizations requirements should be identified at the time of admission if possible
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Billing Errors • • • • • • • •
Missing or incorrect use of modifiers Missing charges & Late Charges Posting errors Non-covered services Bill types CCI edits Missing Authorizations or Precerts on claims All Payers should be set up for Electronic 837 and 835 remits Do you know what your most common billing errors are ?
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Denied Claims • Electronic Claim Clearinghouse edits- should be reviewed and corrected daily • Track medical necessity denials separately from other denials • Decipher the CAS code and remark code meanings and then identify payer trends • Develop relationships with your Insurance payer representatives • What are your timely filing deadlines for your payers?
When was the last time you performed a Root Cause analysis?
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Denied Claims Tracking • Divide Denial Types into a minimum of 3 categories: Clinical, Administrative, Contractual 1. 2. 3.
Clinical- Medical Necessity- make sure you have a process in place for tracking provider trends as well as payer habits Administrative- Coding and Billing errors should be quantified and tracked for process improvement Contractual- can be vague and require a call to the payer, should be researched against your contract to make sure they are legitimate
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Commercial Payer Tactics • • • • • • •
Claim rejections at the Clearinghouse Length of stay (LOS) underpayments Medical necessity denials Vague denial and remark codes Paying under old rates Bundling incorrectly Service denials for outlier accounts
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Medicare and Government Reimbursement Changes • Are you reviewing Government denials and underpayments the way you should? • CCR and other CMS quarterly factor updates- are you keeping track of your Inpatient and Outpatient Cost-to-charge ratio updates? Are they being paid correctly by your Medicare HMOs? • State Medicaid reimbursements- many recent changes that HMOs have not kept up with= recovery opportunities for denied LOS, Transfers, ER services, Observation, and outlier thresholds
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MANAGING YOUR ACCOUNTS RECEIVABLE What are your average A/R days? Do you know your average charge amount per day? What is your payer mix? How much are your collectors recovering? How much SHOULD they be collecting? What are your biggest denial reasons?
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Contract Modeling for New Contract Negotiations
• Negotiate from a position of power
• Empowers you with information on how proposed reimbursement changes will impact your financial bottom line- ahead of time
• IP and OP proposed rate changes • Proposed carve outs • Outlier calculation changes
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Contract Modeling Challenge: • • • •
32 different commercial payers Contract reimbursements shifting towards value-based Complex coding and terms Projections using tools like Access and Excel are manual and inaccurate
Solution: • •
Targeted top five commercial payers to model proposed terms Saved $3.7 million in otherwise lost reimbursements
“This allows us to go into new negotiations with the utmost confidence.” - Adena Health System
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Contract Modeling to Prepare for Industry Changes • Never be caught by surprise again
• Enables you to model industry changes as well as reimbursement methodology changes before they go into effect so you can prepare • State Medicaids moving to APR-DRG reimbursement methodology
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What Monthly Reports Should I Use? • • • • • •
Recovery Productivity Underpayment and Denial Recovery Collection reports Claim Inventory and A/R Reports Slow pay and unpaid claims analysis Overpayments Denial Trend reporting
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Quarterly Analytics • • • • • •
ICD analysis Payer scorecard and Financial performance Denial Trending Variance Assessment Cost Reporting Accuracy Reporting
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7 Things to Do Now 1. Meet with your Collections team and determine areas of improvement: Do you have the resources that you need to work all of your Denials and underpaid claims? 2. Meet with your Management Team: Registration, HIM, Coding managers, Billing office, and Collections department to create a list of the most urgent issues that need addressing 3. Make sure you know what your biggest payers are as well as the most common reasons for denials 4. Do you know when your last Charge Master review occurred? 5.
Create a system to track all your payer contracts renegotiation dates and then analyze reimbursement so you can determine the disadvantageous contracts you should renegotiate. 6. Make sure you assess all electronic processes that affect Reimbursement and make automation a priority 7. Meet with your Contract Management vendor to discuss reporting needs Copyrighted Material - Any Duplication requires PMMC Approval
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Thank You! Questions?
Contact Info: Kristen Wood
[email protected] 704-944-3082
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