Presented toHFMA

New Jersey and Philadelphia Metro Chapter2011 Annual Institute

Is Your Collection System Receiving the Right Dose of Automation?

Payment Points in the Revenue Cycle

Claim status inquiry

(ANSI 276/277)

Bill generation / submission

(ANSI 837 or paper)

Patient co-pay

Check/other

Patient pre-screening

Registration / eligibility

requirements

(ANSI 270/271)

Eligibility

Pre-admit/ treatment

Benefit data, co -pay collection,

reconciliation and posting

Charge capture

procedures performed

Medical record documentation

Payor claims adjudicated

Supplemental billing

Insurance remit & pmt

(ANSI 835 or EOB)

Check/EFT

Supplemental payment

(ANSI 835)

Patient data transmission

(ANSI 835)

Treatment/Admission Discharge Billing

Status check/claims processing

Payment and remittance advice/settlement

Patient acct. updated

Denials mgt /recovery

Patient pay billing

Follow-up

A/R Creation Financial Settlement

Revenue Cycle Payment Topics

Payment options

Available technology

Pros and cons of available technology

Evaluating options

Registration Payment Options

Collecting payment before service

Payment plans

Credit cards

POS, WEB and TEL ACH payments

Credit Cards

Multi-function credit card terminals– Set terminals to auto-settle– POS

Internet gateways/card swipes

Monitor volumes and periodically reevaluate discount rates

Credit Cards: Pros and Cons

Pros– Relatively inexpensive technology– Widely accepted by patients– Immediate collection– Few charge backs in healthcare industry

Cons– Discounted payment– Logistics of distributed technology (terminals)– Automatic posting to patient billing system requires integration

POS, WEB and TEL ACH Payments

POS = check conversion at point of service

WEB = “e check” initiated via the Web

TEL = “e check” initiated via telephone

POS, WEB and TEL: Pros and Cons

Pros– Low-cost collection methods– Becoming more widely accepted by patients– Faster availability of funds– Few returns in healthcare industry if transactions are properly

identified

Cons– Consumer law allows delayed returns– Cost to implement technology– Automatic posting to patient billing system requires integration

Collecting from Patients After the Encounter

Patient lockbox – Prompt payment discounts– Auto-posting lockbox payments– Merging other types of payment files

On-line bill payments Collection agency payments RPPS bill payment files

eBill presentment and payment

WEB and TEL

Patient Lockbox Best Practices

Scannable document with OCR line

Patient number for unscannable payments is keyed if available

Credit card payments are authorized during the lockbox process

Information is mapped to an 835, or other file format, for automatic posting to the billing system

Transmission is balanced to the lockbox deposit total to facilitate reconcilement

Check number or last four digits of credit card number are posted along with the payment to facilitate customer service

Patient document/check copies are imaged

Virtual sorting is used to identify exceptions and facilitate reconciliation

Daily lockbox deposits should balance to deposit totals appearing on bank statements. Posted payments, plus any exceptions keyed manually, should equal the lockbox deposit.

Images of individual payments are captured and stored. Images can be used to research patient inquiries and to obtain information needed to post unprocessable transactions to the patient billing system. With an image index file, images can be transmitted to a document imaging system.

Patient Lockbox: Pros and Cons

Pros– Best practice with proven results– Accelerated availability of funds– Reduced risk– Automatic, accurate, posting of payments– Files can be posted by most patient billing systems– Reduced number of second statements– Reduced number of accounts sent to collection – Relatively easy implementation: simple posting rules

Cons– Technical implementation requires MIS resources– Out-of-town address perception issue– Printing a scannable document to meet technical requirements– Handling guarantor, multiple physician, or hospital/physician payments

Insurance Payments

Direct 835s

Manufactured 835s (IOCR)

Matching payments and remittances before posting

Payer Maps and Patient Responsibility

Cash posting in other industries: apply to invoice or client open account

Healthcare: Identify payer Identify insurance plan/financial class code Post to specific claim

Handling of remaining amount due: Driven by adjustment reason code Bill secondary, or tertiary, insurance plan? Bill patient? Write-off remaining balance?

Some newer billing systems post by encounter, reducing posting complexity

Direct 835s vs. Manufactured 835s

Funded file, since 835 is typically created from documents received with a check

Unfunded file – must be matched to payment traveling separately

Standard 835 format with consistent information by payer (as printed on EOB)

835 content and optional data segments may vary widely by payer

Proprietary reason codesHIPAA reason codes

Multi-payer file with payer identified in BPR segment

Single payer fileMulti-payer file with payer identified in GS segment

Manufactured 835sDirect 835s

Provider transmits 837 or Master Patient Index claim information

Images of lockbox documents (checks, EOBs ,correspondence, zero dollar EOBs) are transmitted to the Operations site

Correspondence is reviewed by staff and sorted into virtual batches for processing

$0 EOBs are sent to be converted to 835s Patient letters and other correspondence may be indexed by patient ID

Template software captures data from the EOB images

EOB information is verified against claim data then mapped to the 835 format 835 is balanced back to the lockbox deposit, then transmitted to provider Indexed images are stored on-line for 7 years Images and an image index file can be transmitted to the provider

The Manufactured 835 Process (IOCR)

Automated Reassociation of 835s and Payments

835 types: direct and manufactured

Payment types: ACH and check

Matching criteria: trace number (HIPAA guideline), “check”number, payment amount, effective date of payment, provider ID, payer ID….

Automated solutions match 85 percent, at best, so exception processing must be considered

Direct 835s: Pros and Cons

Pros– Standard file format– Reduced posting cost per payment– Faster A/R application, secondary bills, denial appeals– Easy implementation, if payer data is consistent – More consistent payer monitoring and reporting– Facilitates denial management process

Cons– File content is not always standard– Many payers send non-compliant files (syntax errors, etc.)– For systems requiring a payer map, implementation can be time-

consuming– Requirements of patient billing systems can make implementation

complex

Manufactured 835s: Pros and Cons

Pros– Standard file format– Reduced posting cost per payment– Faster A/R application, secondary bills, denial appeals – Process normalizes information sent by payers by repairing from claim

file, using document templates

Cons– Implementations can be time-consuming– Claim files are sometimes hard to produce– Payer maps require extensive pre-work, or changes in business

processes– Many vendors use off-shore data entry– Many vendors use data entry vs. document templates, causing repetitive

human errors– Requirements of billing systems can make implementations complex

Other Payment-Related Acronyms

Patient “snippet”

XML

HL7