Data Mining Your Credit Balances –
How to Find the GOLD
Maryland Chapter of AAHAM
Monthly Meeting
The Hotel at Arundel Preserve
December 19, 2014
Magnitude Of The Credit Balance Problem
• Hospitals with annual revenues of $100 million can
generate $3 million of new credit balances each year.
• Nation-wide, more than $10 billion in new credit balances
are created by each year.
• A large teaching facility or health system may require 10
FTEs just to resolve the new credit balances that are
created each year.
• Cost to cut a refund check? $10, $15…up to $35 !!!!!
Causes of Credit Balances
• Front-end efficiencies/Increase up-front collections
• Complex reimbursements/Multiple insurance coverage
• Back-end resolution of overpayments has not kept pace
with front-end improvements
• Staffing required to manually resolve credit balances far
exceeds available resources
•
•
•
Typical focus is on resolving high dollar overpayments
Allowance errors are not prioritized
Thousands of small balance Patient overpayments continue to build,
prohibiting efficient processing
Why are so Many Staff Hours Required
to Resolve Credit Balance Accounts?
Resolving credit balances is a manual process
that requires the retrieval of documentation
and the completion of various forms:





EOB Request Forms
Check / Refund Request Forms
Government Forms (CMS Form 838)
Refund Submission Forms to Various Payers
Piles/Stacks of Greenbar printouts
4 April 13, 2015
Where’s the Gold?
Overpayment
35%
Allowance
Adjustments
55%
Misapplied
Payments
10%
Finding YOUR Gold
Determine YOUR ratio’s
•
Run reports
–
–
based on payment service codes
based on allowance service codes
(NOT based on FC, Ins Bucket or Ins Plan Code)
Review your credit balance policies/procedures to ensure
findings supported
–
–
Handling of small balance write-offs for both credit and debit balances
Approval levels appropriate for today’s environment?
• Adjustment limits; Refund limits
• Dollar threshold for both
• Signing/approval authority for both
Mining Tool-Belt
• People
•
•
•
Your Staff
3rd Party Staff
Payer Resources
• Systems
•
•
•
•
PAS
Ad-Hoc
Contract Management
3rd Party System
Using the Tools - Patient
DRILL into report to identify like – causes
•
•
•
•
•
Matching Debit – same DOS
Matching Debit – different DOS
Open Debit – different DOS
Prepayment with no DOS
Duplicate payment
VALIDATE for accuracy (95% or higher)
•
Run report(s) on routine basis
AUTOMATE where possible
Risks Associated With
Not Resolving Patient Refunds
 Patient
Dissatisfaction – Bad PR
 Increased
State Legislation Regarding
Patient Refunds

California, Texas, North Carolina, New York…
 Adverse
9 April 13, 2015
Effect on Up-front Collections
Root Causes to Look For - Patient
FACILITY
RESOLUTION
Happy Holidays Health System
Matching debit account and account
has only one payment. Payment was
for two accounts but was only posted
to one account.
165
$
(4,694.11)
Happy Holidays Health System
Matching debit account.
301
$
(62,390.29)
Happy Holidays Health System
Patient overpayment on this DOS but
patient has other open debit
balances.
150
$
(32,329.76)
Happy Holidays Health System
Patient overpayment.
1,331
$
(457,458.87)
Happy Holidays Health System
Patient prepayment.
34
$
(10,486.03)
1,981
$
(567,359.06)
10
April 13, 2015
COUNT
TOTAL $
Using the Tools - Allowances
DRILL into report to identify like–causes
•
•
•
•
•
•
Duplicate adjustment
Twice in error
Adjustment equals balance
No payments
Charges added/removed after billing
Mis-posting DOS
VALIDATE for accuracy (95% or higher)
•
Run report(s) on routine basis
AUTOMATE where possible
Root Causes to Look For - Allowances
FACILITY
RESOLUTION
Happy Holidays Health System
Account has no payments. Possible
allowance posting error or charges
were over adjusted.
165
$ (122,863.52)
Happy Holidays Health System
Adjustment equals account balance.
620
$ (282,477.61)
Happy Holidays Health System
Adjustment was posted two times in
error.
775
$ (209,747.24)
Happy Holidays Health System
Charges were adjusted off
incorrectly.
327
$
Happy Holidays Health System
Total adjustments meet or exceed
total charges.
912
$ (279,412.88)
2,799
$ (933,622.08)
12
April 13, 2015
COUNT
TOTAL $
(39,120.83)
Using the Tools – Payer
Review contracts
•
•
•
•
Timely filing/look-backs
Late charges
Charges removed
Check or take-back?
– Segregate process accordingly
Appeal Correspondence
No response = Payer retraction. Keep your money!
Make use of a “Free Labor” resource
Free labor to provider = Reduced costs
13April 13, 2015
Risks Associated With
Not Resolving Credit Balances
•
•
•
•
•
Criminal/Civil Penalties
Mis-stated Profit
Mis-stated Revenue
Negative Management Letter Comments
Patient Dissatisfaction
14April 13, 2015
Benefits to Using Automation to Resolve
Credit Balance Accounts
• Allows the Provider to process outstanding backlog of
credit balances without having to add additional staff
• Greatly reduces the costs associated with processing
credit balance accounts
• Minimizes the possibility of manual errors and potential
fraudulent activity
• Ensures ongoing, timely processing of credit balances
• Simplifies and speeds up daily procedures
15April 13, 2015
Types of Credit Balance Accounts
that can be Automated
• Mis-posted Contractual Adjustments
• Mis-posted Payments/Payment Transfers
• Patient Refunds
How Does Automation Work?
Automation is a process used to resolve large volumes of
patient refunds or mis-posted allowances without any
human interaction.
Scoring algorithms are used to identify accounts that have
patient overpayments or mis-posted allowances
Transaction files are created that are then batch uploaded
into the providers patient accounting system to resolve the
credit balance accounts
CCF Case Study
• In 2007, CCF identified a large number of outstanding credit balances
that were overpaid by patients
•
•
•
29,000 accounts affected
24,000 patient refunds due
$890,000
• CCF set a goal to resolve all outstanding patient refunds within a one
year period
• Estimated total cost to manually resolve all current patient refunds was
$170,000 to $200,000
• Prior to implementing automation, CCF staff performed a statistical
sample of potential patient refunds to ensure that the
accuracy rate was 99% or higher
Results
• CCF processed 24,000 patient refund checks over a three
month period at a total cost of $27,000. A savings of
$173,000 based on the initial estimate.
• CCF continues to process patient refunds on a weekly
basis through an automated process. On average 800
patient refunds are processed through automation on an
ongoing weekly basis.
19April 13, 2015
Impact to CCF
• Gross Days in Credit Balance – 2004
• Hospital = 2.6
• Physicians = 7.3
• Gross Days in Credit Balance – 2009
• Hospital = 1.2 (54% reduction)
• Physicians = 4.1 (44% reduction)
• Total FTE Savings Since 2005 = 50 FTE’s
• Increased patient satisfaction
20April 13, 2015
DISCUSSION
21April 13, 2015
CONTACT INFORMATION
THANK YOU!!!
Kathy Sandora – CRCE
Executive Director, CBAS Operations
CDR Associates, LLC
443-904-4361
ksandora@cdrassociates.com
Ken Krieger
Senior Sales Executive
CDR Associates, LLC
412-260-9924
kkrieger@cdrassociates.com
22April 13, 2015