Transcript Why Revenue Cycle Management?

Revenue Cycle Management: Dealing
with Denials
Fred J. Pane , B.S.Pharm.
Sr. Director of Pharmacy Affairs
Premier Inc.
Linda Pearson, R.N., M.B.A.,CCM, ACM, CPHQ
Manager, Case Management Department
H. Lee Moffitt Cancer Center & Research Institute
Erica Egri, M.S.
Premier Management Engineer
South Florida Baptist Hospital
Why revenue cycle management?
• American Hospital Association:
– Hospitals across the U.S. are under pressures of escalating debt.
Uncompensated care approached $25 billion in 2003.
– A survey of 130 hospital CFOs in 2004 revealed a leading financial
priority to reduce accounts receivable (A/R) days.
• The Advisory Board Company developed a white paper on revenue
cycle management in 2005 for CFOs
• Those affected:
– Hospital bond ratings and cash on hand
– Capital expenditures and future building plans
– FTEs and payroll expenses
American Hospital Association and The Advisory Board Company
Why revenue cycle management?
• Reducing days in A/R is tough!
• Challenges:
– Self-pay and uninsured patients
– Billing errors
– Insurance underpayments
– Operational inefficiencies
• Some hospitals have placed cashiers in their EDs, other
departments to collect co-pays before the patient leaves
Revenue cycle business model
Outpatient
prospective
payment
system
Medical
records
coding
Revenue
generation
Claims
submission
Back-end
Thirdparty
follow-up
Rejection
processing
IS support
Charge
capture/CDM
coding
Payment
processing
Encounter
services
provided
Appeals
Scheduling/
registration
Front-end
Start
Contract
management
Patient access
Created by Fred J. Pane, B.S.Pharm.
We need to know ALL of our payers!
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•
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•
•
•
•
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Payer A:
Payer B:
Payer C:
Payer D:
Payer F:
Payer G:
Payer H:
Payer I:
Current MA rate
Cost plus 10%
75% of charges
70% of charges
65% of charges
80% of charges
Current MA rate plus 5%
Medicare rate
Actual Hospital Reimbursement Rates
Ambulatory medical oncology unit
payor mix
Hospital A
payor %
Hospital B
payor %
Combined
locations %
Medicare
Blue Cross
Managed
Medicaid
Self-Insured
Commercial
Medicaid Managed Care
Self-Pay
Medicare Managed Care
Direct Contract
41
28
20
4
3
3
2
1
<1
<1
48
19
27
1
2
2
1
<1
0
<1
42
26
21
3
3
3
2
1
0
0
Total
100
100
100
Payor
What are the top profitable product
lines?
• Percentage of total hospital profit 2005
– Inpatient-top 3
• Cardiac 18%
• General Surgery 14%
• Oncology 9%
– Outpatient-top 2
• Radiology 26%
• Oncology 14%
The Advisory Board Company, Innovations Center
Outpatient Reimbursement: Case
Management’s Role
Linda Pearson, R.N., M.B.A., CCM
H. Lee Moffitt Cancer Center & Research Institute
Objectives
• Identify case management role as “Clinical Business
Manager”
• Describe the role of case management in Medicare
reimbursement
Hx of Medicare
• Social Security Act
• National Health Insurance Program
Health insurance intended for
people
• Age 65 or older
• Some under age 65 with disabilities
• ESRD
Medicare program overview
Medicare
Administered by CMS
and local contractors
Part A
Hospital Insurance
Benefits (automatic)
 Hospital inpatient
care
 Hospital OP LMRP
 Nursing home care
 Home health care
 Hospice care
Part B
Medical Insurance
Benefits (optional)
 Physician services
 Outpatient services
 Medical supplies
 ESRD services
Part D
Prescription Drug
Benefit
Part C
Medicare + Choice
(optional)
 Medicare managed
care
 Provides at least
comparable benefits
 Flexible benefit
structure
CMS
Decentralization of Medicare
• Section 1816(a)
Section 1842(a)
• Intermediaries and carriers
– To identify your local FI or contractor go to
www.cms.gov
CMS
Responsibilities of carriers and FIs
• General overview
– Implement integrity and safeguards
– Oversee billing, payment and benefit functions
• Development of LMRPs / LCDs
– Medical review of claims
– Determination of medical necessity
Advance beneficiary notice
• Notifies the beneficiary of reasons services not covered
• Given before services rendered
• Beneficiary’s financial responsibility
– Secondary insurance
– Charity
– Appeal rights
Actual Hospital Model
Advance beneficiary notice
• Beneficiary as informed consumer
– Physician / patient communication
• Treatment options
• Quality of life issues
– Active participant in healthcare decisions
Patient appeal process
1. Physician orders noncovered service
2. ABN issued to patient
3. Patient signs ABN; services rendered
4. Provider bills services with modifier
5. FI denies claim; notifies beneficiary
6. Beneficiary files appeal to FI
7. Medical records sent to FI
8. Wait…..
Actual Hospital Model
Provider appeal process
LCD Reconsideration Process
• Request to modify any section of existing LCD
• Must be submitted in writing and clearly state specific
revisions
• Copies of published evidence supporting revision
Provider appeal process
• FI has 30 days to determine if request is valid
• If valid, within 90 days of day request received,
FI makes a final reconsideration decision
• FI must provide rationale for decision
regardless of final determination
FI = Fiscal intermediary
LCD appeals
The appeal process and changes to the final LCD
is long and tedious.
Best practice: maximize outpatient
reimbursement
• Revenue Improvement committee
– Members (clinical and financial)
– Identify Medicare reimbursement issues
– Identify appeals
• Billing and coding process
– Lead biller, QA coding specialist and Case
management / Clinical business manager
– Meet weekly
– Identify noncovered charges
– Review documentation
– Recode and rebill as appropriate
Best practice: maximize outpatient
reimbursement
• Pharmacy responsibility: new drug
– New drug approval & formulary status
– Determine drug and infusion charge
– Ensure billing codes conform with CMS rules
– Build standards into protocols and orders
• Pharmacy / radiology responsibility: individual patient
– Identify non-covered items against LMRP
– Notify MD for ABN
– Justify non-indicated use if required for appeal
Best practice: maximize
reimbursement
Role of pharmacy / radiology
1. MD + core team formulates patient Tx plan
2. Orders reviewed by pharmacy / radiology
3. Pharmacist / radiologist checks LCD software for medical
necessity (Caremedic)
4. Order passes; treatment continued
5. Order does not pass; pharmacy / radiology notifies MD to
obtain ABN
What’s next ?
Additional step in ABN process:
Patient Resource Center
• Patients receiving ABN will be screened by Patient
Resource Center pharmacist for eligibility to drug
replacement/co-pay or full assistance programs
The future of Medicare
• Changes to LCD
– Name change to Local Coverage Decision (07/01/04)
– Plan developed by Secretary to determine which
LMRPs to adopt nationally
– ***Collaboration among FIs
– FLASCO / FI meetings
– Standard format for LCDs
– Overall goal to increase consistency
Checklist for case managers
• Notify Financial Services of non-covered services
• Ensure proper CMS coding
• Update pre-printed orders and order pathways
• Check for claim denials
• Monitor rule changes
• Adopt changes into hospital processes
• Educate members of financial / clinical team
• Actively interact with LCDs and other rule makers
Reimbursement questions
• How does the reimbursement change impact
your clinical and formulary decisions?
• How do you make decisions on inpatient and
outpatient products?
• How closely do you assess payer mix?
Information sources
www. accc-cancer.com
www. cms.gov
www.cms.hhs.gov/mmu/ (NEW)
www. medicare.gov
www. fda.gov
www. cancercare.gov
www.health.cch.com
Co-payment assistance 800-272-9376
Cardiac Stress Medicare Denials
Project overview
• Goal: to decrease the percentage of Cardiac Stress Test Medicare denials on
outpatients and observation patients from 42% to 13% by June 2006
• Problem was identified through auditing of charts with Medicare denial charges
for cardiac stress tests
• Project start date: December 2005
• Project end date: June 2006
• In 2004, SFBH lost $87,531 in total charges on cardiac stress tests. In 2005,
total losses increased to $114,171
– 2 drugs denied along with test:
• Cardiac Ejection Fraction
• Cardiac Motion Wall
• Team Members:
– Jack Vasconcellos, Director, Operations
– Tammy Gaschler, Manager, Patient Care Coordination
– Erica Egri, Premier Management Engineer
– Beth Player-Tancredo, Manager, Physician Relations
– Milissa Sulick, Coordinator Cardiac Rehab
Changes implemented / interventions
• Use of new cardiac stress test script with diagnoses that meet
Medicare Medical Necessity per LMRP guidelines
– Physician is asked to select one of the diagnoses listed on
script to perform the test
• Education provided to physicians and their office staff on
financial impact of documenting inappropriate diagnosis on
hospital
– Cardiologists and biggest “offenders” were target audience
• “Offenders” identified by determining who ordered the
test through the completion of chart audits
• If a patient chart does not list the appropriate diagnosis for the
test, chart is to be held until appropriate diagnosis is obtained
Results / impact
100%
Old Process
New Process
% Denied*
80%
60%
42%
54%
-$128,600 lost
40%
24%
20%
13%
0%
2004
2005
2006
*Denotes % denials of cardiac stress tests performed
on Medicare outpatients
-$30,960 lost
$97,640
Statement of results
• Reduction in number of cardiac stress tests denied
– Savings of approximately $100,000 based on
reimbursement due to appropriate documentation
of diagnosis
• Reduction in re-work caused by having to re-pull
charts with denials to investigate cause of denial and
provide appropriate documentation for reimbursement
• Physician satisfaction – with the use of the script,
physicians will not receive as many calls from hospital
staff requesting appropriate diagnosis to perform test
Success factors and lessons learned
• Keys to success
– Team dynamics – everyone engaged and up-to-date
– Physician willingness to use new script and attend
education session
• Barriers to success
– Resistance to change from physicians’ office staff
– Coders’ goal to code charts as quickly as possible so bill
can be dropped and hospital can be reimbursed
• Lessons learned
– Medicare has a very strict reimbursement policy, and
healthcare organizations need to increase physicians’
awareness on issues related to denials and their impact
on the financial health of a hospital
Next steps
• Observation patients are currently checked for medical
necessity
– Unit clerk/cardiac rehab not entering patients on
schedule – no way of knowing whether or not diagnosis
meet Medicare medical necessity
• Monitor denials through the use of a dashboard to be
reviewed on a monthly basis
– Charts with a cardiac stress test denial will be audited
and root cause analysis will be performed to determine
cause of denial
• Solidify projected savings
• Focus on EKG Medicare denials, since it was our 2nd
largest denial in 2005