Decision Support Solutions

Putting an end to payers' use of garage sale economics

If you were bargain hunting at a neighborhood garage sale, you probably wouldn’t think twice about haggling over the cost of an old lamp. The sticker might say it’s $5, but both parties could agree that it can be purchased for $3. The vendor receives less money than anticipated, but is nonetheless satisfied with the sale.

Certainly one would not expect to see this same scenario play out in an industry as professional as healthcare. Yet, every day, healthcare providers forfeit revenue to payers who erroneously deny and underpay for services they provide. As a result, physicians are left searching for new ways to drive down operational costs in order to maintain an income. This problem is exacerbated by the fact that few hospitals and clinics have the ability to cut operational costs without consequently sacrificing the quality of the care they provide. The answer to settling disputed claims lies in the effective mining and utilization of financial data – not in creative cost-cutting.

Knowledge (and Data) is Power

Data is a powerful form of ammunition when it comes to a claim getting paid correctly. Payers can, and will, get away with subpar reimbursements, if allowed. With decision support (DS), healthcare providers are able to analyze and compare actual reimbursements to the carrier’s expected payments, helping practices collect what is rightfully owed. Some of the more robust DS reporting modules allow groups to quickly “slice and dice” an enormous amount of information that would otherwise be incredibly difficult to compile.

Knowledge is power, and without a system like DS, providers may not have the information needed to recoup lost revenue from erroneously denied or underpaid claims. Using DS software, providers can easily organize financial data to reflect the terms of the contractual agreements, supporting underpayment disputes, and preventing payers from capitalizing on mismanaged claims.

In fact, the contractual agreements between the provider and payer are often the basis of disputes.

Once a contract is signed with an insurance carrier, healthcare providers should ensure the carrier adheres to the terms. By employing software with the ability to compare carriers’ contractual reimbursement obligation to payments posted, providers can easily and efficiently collect the correct amount of money for procedures performed. With a system like DS, healthcare providers have pertinent financial information made readily available to them. As a result, billing managers can make confident analysis of whether or not a payer is adhering to contractual obligations.

Using DS systems, billing managers and physicians can be alerted if claims are missing information or if a payer has failed to fully reimburse the practice. With this kind of support, practices are able to head off potential issues before they arise.

Contract Negotiations

The benefits of a proactive DS system are diverse. DS technology is crucial to managed care contract negotiations because the user can determine a payer’s historical denial percentage rates as it relates to market competitors. In doing so, practices can easily quantify the administrative costs attributable to appeals (follow up calls, payment posting, etc.) and use this information to justify requests for additional reimbursement.

In addition, DS can be used to create sophisticated charts and spreadsheets to visually illustrate if an insurer’s “claim denial edit” is paid after appeal. When a payer realizes they are losing money by processing an appeal (when they ultimately pay the claim), both the payer and provider benefit.
 
Get More and Do Less

When considering the time and resources required to efficiently manage the financial operations of a practice, decision support is a must. For instance, under Carmel, Ind.-based Zotec Partners’ DS system, if no response is received from the payer, it can generate a letter to the guarantor notifying them that their provider has not been paid and how they can get involved without shifting the balance to patient responsibility. Patient involvement is not only the best way to resolve a claim, but may also result in less work for the practice.

Some DS reporting tools, such as the one offered by Zotec Partners, transcend the competition because of their ability to match up payments to charges. For example, a line item report of payments, credits, contractual adjustments, and debits attributable to billed charges for a given period, is made easy using DS, and that just scratches the surface. Calculations, such as gross and net collection, days in accounts receivable (AR), payment percentage by payer, and payments per relative value unit (RVU) are easily added by a mouse click. In addition, the ability to “drill through” rolled up data is one of the more impressive capabilities of DS. For instance, the user can “drill through” the AR for any historical period, resulting in a report with patient detail designed to include the necessary fields payers request for special projects and much more.   

Unless healthcare providers are armed with detailed financial information that a system like decision support provides, they may be doomed to lose revenue from mismanaged claims. Without closely monitoring the revenue and costs associated with a practice, it cannot run successfully. Decision support is a reliable way to insure that payers don’t apply garage sale economics in the world of healthcare.

– Brian Marx is the director of billing and reimbursement for Radiology Associates of Hollywood, a 50-physician practice based in six South Florida hospitals. Direct questions and comments to editorial@rt-image.com.