Hospital administrators are bracing for a roller coaster ride. Congress has already moved to repeal the Affordable Care Act (ACA) via the budget reconciliation process, although reform implementation is proving to be fraught with complications. The good news is the back-and-forth will delay the eventual impact of major changes; the bad news is that it’s hard to plan ahead when details about a replacement program are scarce. In this guest post, Bruce Ackerman, the executive VP of global sales for a data capture and verification solutions provider, offers hospital administrators advice on how to prepare for the rough transition period ahead by avoiding denied claims.
There’s little doubt that major changes are on the way for health insurance infrastructure and hospital funding, primarily due to Medicaid retraction, federal deregulation turning control back to states, and an overarching emphasis on lowering costs for consumers, employers and governments. As the healthcare system responds to new requirements and mechanisms, hospital administrators and finance departments will be pressured more than ever to protect the bottom line while continuing to deliver quality care.
The healthcare industry as a whole will have to innovate to increase efficiency and revenue in an increasingly complex and competitive system. After years of rising premiums, high deductibles and frustrating interactions with insurance companies, consumers are maxed out and concerned about pending changes. To prepare for the transition period ahead, administrators should renew their focus on optimizing operations and deploying automated technology solutions that will help their organizations adapt to tighter funding and more competition.
Drain on bottom line
Rejected claims are a significant drag on bottom lines and productivity. The California Nurses Association found in 2011 the state’s insurers denied 26% of all claims the previous year. Similarly, the National Health Insurer Report Card shows top insurers deny claims at rates ranging from 11% to 27%. Experts are quick to point out that most of these denials aren’t due to eligibility or even coding errors. In fact, many are denied simply due to inaccurate or incomplete patient information: basic demographics, Social Security numbers, insurance plan numbers, etc. To reduce rejected claims, hospitals should begin work now on improving basic administrative processes, including automation and staff training.
Reworking and resubmitting claims is expensive; submitting clean claims from the start saves time and money. Time and staffing constraints often make it difficult to resubmit claims within the allowed time frame – essentially leaving money on the table. Even when claims are successfully resubmitted, the additional time and work protracts the revenue cycle, disrupts cash flow, and eats into profit margins. When this is routinely happening at hospital scale, these incremental losses add up quickly. According to CDC figures from 2014, annual U.S. healthcare costs surpassed $3 trillion, and of that an estimated $754 billion is lost to fraud and billing errors.
The key step in reducing rejected claims is to accurately and efficiently enter patient data into the hospital records system at intake. Advanced ID scanning and verification solutions increase the speed and accuracy of data entry, and are essential to streamline customer service. Intake coordinators are often a patient’s first contact with the hospital; when staff can spend time focusing on patient needs instead of manual data entry, the patient experience gets off to a smoother start. Patients are happy to skip waiting in line and filling out clipboards full of repetitive paperwork.
Better data capture
Many facilities are deploying ID scanning and verification technologies to ensure better data capture. Automated patient registration processes, self-service kiosks or desktop or mobile card scanners can be integrated with EHR systems and policy databases to ensure that patient data is up to date and verified. Such systems significantly reduce errors in patient records and claims submissions while saving hundreds of keystrokes per patient intake. When accurate data is fed into the hospital system from initial point of contact, electronic claims submissions reduce the time between a patient’s admission and the insurance company’s receipt of claim for that service.
Scan-and-verify systems also help combat the growing problem of identity theft and insurance fraud, issues that could intensify if the pending ACA repeal-and-replace transition doesn’t roll out as smoothly as planned. There will likely be some degree of upheaval as insurance providers opt in or out of the new system; employers and individuals may change insurance plans more frequently as it all shakes out.
Hospitals by their nature have a broader patient base, can’t refuse care based on insurance type, and often deal with patients who didn’t plan to be admitted; patient intake functions will be significantly disrupted during the transition. Hospital administrators have to start preparing now in order to adapt quickly as changes take effect, especially because they’ll also need bandwidth to respond to more substantive regulatory or funding changes.
In addition to federal reforms, convergent trends will increase pressure on hospital operations: higher patient volumes, an aging population with chronic health problems, a millennial generation that expects IT-driven healthcare options, and a shift to consumer-driven healthcare. Given that more people are paying out of pocket for routine services due to high deductibles, they’re more likely to choose providers based on price and value. It seems likely that the federal plan replacing ACA will involve increased use of Health Savings Accounts, giving patients more control in choosing providers.
In other words, the quality of care and customer experience will be bigger factors in healthcare choices, compelling providers to control costs and optimize services by following best practices from other consumer-driven businesses. This includes the use of cloud platforms and services to automate, record and analyze patient data in order to improve treatment, comply with regulations, integrate with external provider and insurance systems, manage revenue cycles, and identify problem areas. The Council for Affordable Quality Healthcare (CAQH) has estimated full adoption of electronic transactions (in other words, reducing manual business processes) could save U.S. healthcare billions of dollars per year and millions of labor hours per week.
The business of providing care isn’t going to get easier for hospital administrators, at least not in the next few years. Hospitals are on the front line of health care, struggling to accommodate government mandates, insurance company machinations and consumer demands. Optimizing resources, sustaining cash flow, and maximizing revenue are fundamental to their survival and success. There’s very little room for the kinds of avoidable errors that lead to rejected claims.
To fortify your organization in the face of impending upheaval, make sure to start with the basics: collect accurate, verified patient data and leverage that to build digital systems and services. Facing an uncertain future is less threatening when your essential processes are sound and effective.
Bruce Ackerman is the executive VP of global sales for Acuant, a leading provider of data capture and verification solutions.