Better Technology, Fewer Denials

Could investing in new technology to help reduce claim denials actually help you collect as much as $85,000 from a single payer?

That's the experience Reginald King, director of billing and credentialing for Centennial Pediatrics, says his multi-location practice had shortly after it purchased its data clearinghouse technology two years ago.

King says his clearinghouse software, which uses a "claims scrubbing" technology to unearth coordination of benefits mistakes and eligibility issues that trigger denials, helped the practice collect its rightful reimbursements, boost upfront claims collection payments by 8 percent, and get paid up to 20 days faster by payers.

"When I came here almost two years ago, our claims-collection percentage was average," King recalls. "It was okay."

At a time when patients are expected to pay more for medical procedures and copays, and payers are cutting back on services, lowering denials has become a top priority at practices that want to stay in business. And fortunately, King's experience is a testament to the new breed of technology that can help practices reduce such denials.

Rooted in denial

Before the era of electronic transmission, when practices would submit paper claims to insurers, they would have to wait days or even weeks to find out if the claims were rejected - by manually going through remittances to find denials.

"Practices would get a denial, and basically then, you see why it was denied and what you need to fix it and resubmit that claim, and hope it goes through that time," says Sabrina Burnett, vice president of Austin-based consulting practice Health Directions, LLC, noting that the process would take 45 days or longer. "Sometimes even on that second submission, it wouldn't process fully. It would get rejected again."

Today, thanks partially to the Electronic Remittance (835) transaction rules, plus the increase in electronic communications between payers and healthcare organizations, practices are no longer shuffling through paper. But many are still wading through electronic PDFs, says Salil Shetty, founder of RemitZEN, a manufacturer of healthcare claims reimbursement technology. In fact, some practices still update 50 percent to 80 percent of data sent by payers into practice management systems manually, which take hours to sort.

"[Practices] often needed to go through hundreds of claims to find the ones that are denied," says Shetty.

Even though denial-management technology - a category that includes data clearinghouses, which allow practices to store and send claims to multiple payers, and claims "scrubbing" software, which scours claims for denial-triggering codes and errors - exists, not all practices use the most up-to-date, sophisticated offerings on the market.

"Traditional scrubbing technologies tend to be more limited," says Michael Gladson, director with Chicago-based consultancy Huron Healthcare, noting that older technology often relied on simple "yes or no" criteria.

The need for new technology

The timing for the new, improved denial-management technology couldn't be more fortuitous, as claim denials are an increasing complaint by physician practices.

"Everybody is under both additional cost and reimbursement pressure," says Gladson. "A lot of practices are getting by, trying to perform even better with fewer staff. I can't confirm that there is a sea of more denials coming through, but it is taking longer and it is harder to resolve them."

Because of the added stress, practices need to be savvier when it comes to collecting money.

"What is happening now is providers are getting pinched and pinched, so they have to find every way to get money that's owed to them," says Charlotte Martin, president and CEO of Gateway EDI, a manufacturer of revenue cycle management technology.

Time to upgrade?

Today's denial-management technology, sometimes referred to as revenue cycle management technology, possesses "a greater level of sophistication, with more frequent edits and greater accuracy," says Gladson.

But what if you already own technology to manage and edit your claims, such as a data clearinghouse system? Is what you have enough, or is it time to trade up?

Here are a few questions experts say practices should consider when trying to decide what to do:

• How many bad claims are you catching in advance? If the answer is "not enough," consider that today's advanced billing software allows physicians to get real-time claim updates, says Gladson. At Centennial Pediatrics, headquartered in Nashville, claims that don't meet a payer's litmus test get kicked back right away. "It's like a pre-rejection report that you can clean up," says King.

• Are you collecting what you should from patients? Once that patient is out of your office, it's more difficult to collect a payment, notes Burnett. "Where we were a decade ago, what these front-end software systems would do, is they would make sure you had the right number in the right place," says Burnett. "But where we are today is that you have this technology that while the patient is still in your office, you know what the patient's upfront responsibility is, so you have the opportunity for upfront collection. If you know right then what the physician is going to bill for, you can immediately put this information through the scrubbing technology and it will give you information based on payer, provider, and contracted fee."

• Do you know your most common denials? The latest offerings in the denial-management arena don't just flag denials. They are also able to generate reports so a practice can be aware of trends or major payer policy changes that are triggering rejections. Gladson advises practices to seek out technology that allows them to group denial codes so they can know who to hold accountable. "There may be 10 or 15 reasons for not being eligible," he says. "Then you can group them and prioritize them to address them." Doing this is an easy way to catch common "low-hanging fruit" denials that could be affecting your practice's bottom line, he adds.

• How much of staff is dedicated to denial management? If you have more than a couple of dedicated staff who deal with claims processing, and you'd like to cut down in that department, new denial-management technology may be the answer. "Two years ago, I had three additional people here working on claims," says King. "We don't require that anymore."

Getting your money's worth

In determining whether their existing technology is up to par, Burnett suggests practices ask themselves whether they are using all of the features provided by their current data clearinghouse or other denial-management technology.

By doing this, they may be able to lessen the strain on billing and coding staff.

Burnett offers the example of the practice whose in-house coder could use a little helping hand.

"Certified coders are extremely important and by no means should they ever be excluded from a practice," says Burnett. "However, some of these solutions allow you to pinpoint and correct coding errors online prior to the claims submission. So even if it's coded correctly, maybe for [a certain payer's] guidelines, maybe you need to take [a code] that's [a tertiary diagnosis] and make it primary."

And if your current data clearinghouse or other revenue management system doesn't have these kinds of features, that's a good signal to start shopping around.

"It's truly amazing that every provider out there does not have some of this [new] technology," says Burnett. "Ten percent to 40 percent of claims are denied. The ROI speaks for itself."

Marisa Torrieri is an associate editor at Physicians Practice. She can be reached at marisa.torrieri@ubm.com.