Pamela Fell
Jackson Health System
Corporate Director
Corporate Business Office
“The Buck Starts Here”
August 13, 2014
The Most Important Process in the Business Office:
Billing – “The Buck Starts Here”
2
What do the majority
of CFO’s see as the
most important Business
Office function?
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Collections!
4
But…
How many collectors
do you need to collect
an unbilled claim?!
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Billing:
A Clean Claim is a Paid Claim!
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What is a Clean Claim?
 A clean claim is a claim untouched by a biller and clears all
edits at the payer. These claims will pay without human in
intervention in less than 30 days
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Discharged Not Final Coded
When a patient is discharged, the claim must be final coded
before submitting to the payer. Also, there’s usually a bill-hold
time for all charges to be entered
Typical hold days are:
 Inpatient: 4 days to allow for the 72-hour overlap
 Outpatient: 3 to 5 days
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Mid-Cycle
Discharged Not Final Coded
High Variability in DNFC1 Performance
Discharged Not Final Coded
Total Number of Days
n=28
8.0
6.1
71.3%
decrease
2.3
High-Performance Quartile
1) Discharged not final coded.
Median
Low-Performance Quartile
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Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle
Operations.
Discharged Not Final Billed
 These are accounts being held in the facility’s financial
system where a claim has not produced that is missing data
elements required for billing in addition to final coding.
 Examples are:
 Missing authorization numbers
 Payer ID numbers missing or invalid
 Revenue codes with a credit balances
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Business Office
Discharged Not Final Billed
Experiencing Delays in the Business Office
Discharged Not Final Billed
Total Number of Days
n=76 (2011); n=31 (2013)
10.8
10.2
8.0
7.2
4.8
5.0
High-Performance Quartile
Median
2011
Low-Performance Quartile
2013
$18M
$42M
Average dollar amount of
discharged not final billed activity for
hospitals in the high-performance quartile1
Average dollar amount of
discharged not final billed activity for
hospitals in the low-performance quartile1
1) Refers to results from the 2013 survey.
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Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue
Cycle Operations; Financial Leadership Council 2011 Revenue Cycle Benchmarking Survey.
Claim has Been Released from DNFB;
Billing Process Begins!
 Claims import daily from the facility’s patient financial
system into the EDI billing system
 Edits/bridge routines should be established to maximize
immediate transmission to the payer
 Clean claims should be released daily via the 837 file,
even though many payers do not accept transmissions on
weekends and holidays. This ensures the claims meet the
first transmission from the clearinghouse
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Patient Access
First-Pass Yield
A Widening Gap Between High and Low Performers
First-Pass Yield
Percentage of Claims Arriving in the Business Office Error Free
n=60 (2006); n=36 (2008); n=49 (2011); n=29 (2013)
92.5%
86.5%
79.8%
77.0%
85.0%
80.0%
75.5%
High-Performance Quartile
1) The low-performance quartile for this comparison is 74.5%.
2008
70.5%
65.0%
Median
2006
70.0%
69.7%
66.5%
2011
Low-Performance Quartile
2013
Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle Operations; Financial Leadership
Council 2011 Revenue Cycle Benchmarking Survey; Financial Leadership Council 2008 Member Survey of Revenue Cycle
Operations.
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Understanding the Claims Rejecting
to Your Editor
Clearinghouse Specifics/
AMA Edits
Facility Specific
Edits
Payer Specific
Edits
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Billing Process - How to Make Your
Billing Editor ‘Your’ Editor
 This is an ever evolving process. New billing requirements
are entered by your EDI providers daily
 Requires the effort of the entire billing team
 Billers and collectors should be encouraged to bring
corrections to management for possible electronic
correction
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Facility Specific Edits
Edits Causing Claims to Reject to the Editor
Some of the more common edits are:
 Admit source 1 must have an ER charge
 Trauma Center 5 must have a trauma level charge
 Occurrence code 11 can not be after the admit date
 POA Indicators (1 vs. blank)
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Payer Specific Edits
 Each major payer has their own set of edits that are
maintained by your EDI system
 Payer specific edits may not always conform to UB04
guidelines. Bridge routines must then be built at the facility
 These edits are ‘payer’ specific and not ‘facility’ specific;
therefore, modifications might be needed
 NCCI Edits
 CCI Edits
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Clearinghouse Edits
 The clearinghouse changes the format of the billing file to
conform with the payer specific EDI guidelines
 Loops and segments aren’t standard across all payers
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Mid-Cycle
Sources of Rework Prior to Initial Submission
No Consistent Trend in Predominant Source of Errors
Sources of Errors Leading to Business Office Rework
2013
n=29
Other
Physician
Documentation
24%
Patient Access
10%
26%
Insurance
Information
Mid-cycle
28%
Coding
12%
Demographic
Information
2011
2008
n=41
n=25
Other
Other
Physician
Documentation
Physician
Documentation
23%
10%
27%
Coding
5%
20%
Insurance
Information
16%
47%
25%
15%
Coding
Demographic
Information
12%
Insurance
Information
Demographic
Information
Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue Cycle Operations; Financial Leadership
Council 2011 Revenue Cycle Benchmarking Survey; Financial Leadership Council 2008 Member Survey of Revenue Cycle
Operations.
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Business Office
Resources Allocated to Rework
Variable Benefits of Devoting More Resources to Claims Rework
Percentage of Business Office Resources Devoted to
Reworking Claims Prior to Initial Submission
n=45 (2011); n=30 (2013)
35%
19%
15%
10%
7%
5%
25th Percentile
Median
2011
75th Percentile
2013
+5 days
+24%
-54%
Average increase in AR days for
hospitals with more business office
resources dedicated to rework1
Average increase in
cost to collect for hospitals with more
business office resources dedicated to
rework1
Average decrease in denial write-offs for
hospitals
with more business office resources
dedicated to rework1
1) Refers to those in the 75th percentile for 2013 survey results.
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Source: Advisory Board - Financial Leadership Council 2013 Survey of Hospital Revenue
Cycle Operations; Financial Leadership Council 2011 Revenue Cycle Benchmarking Survey.
Discharged Not Sent to Payer
 If a claim drops into the billing editor and can not be
corrected and released the same day, the claim becomes part
of the discharged not sent to payer file
 Errors usually require correction via the Health Information
Management (HIM) department, Patient Access or the
clinical staff
 Accounts should be assigned to an internal report by errors
and areas of responsibility and distributed to the
appropriate departments for correction
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Submitting the Claims
 The claim has passed all the previous edits and has been
transmitted to the payer
 Final level edits at the payer site could be:





Can not ID patient
Incorrect DOB
Incorrect subscriber ID
Baby’s name
Not eligible for date of service
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Payer Rejection Report
 These claim rejections are returned to the facility via the
835 file (payer rejection report) which should be worked
daily
 Almost impossible to build payer level edits at the facility
level for these rejections
 Until the claim is on file at the payer, billing
owns the claim and it’s their responsibility
to get the claim on file
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Late Charges: To Bill or Not To Bill?
 Pros to billing late charges
 Medicare regulations require all services provided to be billed
 Account will re-adjudicate in the contract management
system
 Changes could throw account into an outlier
 Cons to billing late charges
 Usually no additional reimbursement
 Billers must be knowledgeable on all contractual terms
 Collectors have to ultimately write-off the charge(s), which
necessitates another account review. If not caught, could
transfer to bad debt
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What Should be Monitored and
Trended?
 DNFB
 DNSP – Claims holding in the editor
 Daily electronic submissions
 Clean claim rate
 Biller productivity
 Electronic billers
 Paper billers
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Questions?
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