Presentation description:
Complex regulations and increased compliance scrutiny make the outpatient claims process a significant administrative and financial challenge. The lack of effective, integrated processes for validating medical necessity prior to billing and for addressing claims edits and rework can result in denied claims, increased compliance risk, write-offs and significant loss of revenue. This session will discuss the people, process, and technology issues involved in building an effective, integrated outpatient claims process across key departments.

Abstract:
Vanguard Health Systems owns and operates 15 acute care hospitals and complementary facilities across the U.S. In reengineering the outpatient claims process across its many facilities, Vanguard decided to focus on five network hospitals located in communities near Phoenix. These hospitals operated with different legacy abstracting and billing systems, inconsistent billing procedures, and few safeguards to prevent denied claims. Without an efficient, system-wide process for addressing claims edits, rework could take weeks, often stalling when referrals went unanswered or information couldnt be tracked down in a timely manner. The result was a backlog of claims edits and A/R averaging 60 days at some facilities.

To integrate coding and claims workflow, Vanguard looked for a solution that could automate referrals and share data at key checkpoints in each facility's revenue cycle. The organization also wanted a system that could integrate with a the organization's EHR, a central objective of Vanguard's overall IT roadmap. The goal was that every site would look exactly the same, employing standardized processes and consistent, integrated technology. Vanguard chose the HFMA peer-reviewed 3M Ambulatory Revenue Management Software (ARMS) from 3M Health Information Systems.

Today, using 3M ARMS, OCE, NCCI, LCD and NCD edits are surfaced for all codes on the claim, allowing coders to view both hard-coded chargemaster codes, including corresponding charge department codes, revenue codes, units, and other key data elements together with the soft-coded HCPCS/CPT codes assigned in the HIM department. Claims cannot be dropped without first addressing edits, which are resolved by trained coders who understand the intent of the edit and can append modifiers if needed or refer edits back to ancillary departments for charge correction. The goal is to have very few claims returned from the Business Office.

Results were seen almost immediately. A major improvement for Vanguard is the reduction in back-end rework. With most billing edits surfaced and addressed during coding, Vanguard's Phoenix hospitals have recorded significant declines in edits flagged by each facility's bill scrubber. Arrowhead, a 220-bed acute care facility, saw its monthly edits drop 77 percent over a six-month period, while rework activity decreased from one full-day to a half-day. West Valley Hospital, an acute care suburban hospital, noted a similar drop in back-end edits of 65 percent six months after software implementation.

At Phoenix Baptist and Maryvale, two urban facilities in Phoenix, the story is much the same. System-wide, bill scrubber edits were reduced by 52 percent in the first three months after implementation. Arrowhead and West Valley also estimate that 40-60 percent of medical necessity edits are resolved at the point of coding, while Phoenix Baptist and Maryvale estimate over 80 percent of medical necessity edits are now resolved in HIM. With the reduction in bill scrubber edits, rework activity has greatly diminished, as have costs associated with rework. A common cost estimate for rework activity ranges from $25-$100 per claim.

Finance professionals have a critical role to play in helping their facilities establish a proactive approach to achieving medical necessity compliance and preventing denials. This session will discuss the people, process, and technology issues involved in building an integrated, cross-departmental claims process.