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For other articles and previous issues click here. May 23, 2005 Corralling
Codes Out Front Front-end medical necessity coding compliance can ease the burden on HIM departments and enhance a hospital’s revenue cycle. The task of coding and billing claims gets harder every quarter—possibly even every month. That’s how often payors update the rules that govern coding and compliance. More and more, HIM departments are becoming the prime resource within the hospital for making sure claims go out right the first time. Today, HIM is considered an integral part of the billing and revenue management process, with HIM executives sharing in the responsibility for minimizing the number of days a claim remains in accounts receivable. That is a monumental challenge, to say the least. Yet it’s one most HIM departments are uniquely qualified to address. Few healthcare executives dispute the benefits of front-end compliance since it reduces the number of claim denials and amount of staff time required to fix claim problems after the fact. This is accomplished by verifying medical necessity when a patient is seen so an Advance Beneficiary Notice (ABN) is collected at the time of service and by ensuring that the proper code sets are assigned before the claim is submitted to minimize denials, delays, lost revenue, and write-offs. Healthcare executives recognize the expertise professional coders in the HIM department bring to these issues. Coders are familiar with coding conventions and understand the ever-changing rules and regulations of Medicare and private payors. Over the past few years, many hospitals have come to rely on the HIM knowledge base more heavily as local medical review policies (LMRPs) have played an increasing role in accurate coding. More often than not, facilities look to HIM professionals to perform medical necessity checks—either at the registration process or later in the revenue cycle, when claim scrubbers identify problems during billing. In fact, research conducted by 3M Health Information Systems’ compliance solutions team during the 2002 AHIMA convention showed that more than 70% of the 450 HIM directors surveyed were being brought into the claims correction process. The finance department called on them to conduct medical necessity research to uncover problems and do the required “clean up” so claims could be submitted correctly the first time. Increasingly, many industry financial consultants recommend that HIM directors become official members of a hospital’s revenue cycle team to provide input as the organization analyzes and establishes the most effective billing practices. It’s a responsibility most HIM professionals accept willingly, recognizing that they have the experience and expertise necessary to code claims that are in compliance with LMRPs and other requirements, such as quarterly edits published by the National Correct Coding Initiative (NCCI). Nonetheless, the shift in responsibility can drain HIM resources, requiring coding staff to invest a great deal of time in pulling files, backtracking to various departments to gather more information, and investigating each payor’s policies to uncover potential problems. Often, these historical activities divert HIM professionals from completing current tasks, and can add days to the accounts receivable cycle. A Proactive Approach to Medical Necessity—Addressing
Four Critical Issues 1. Reduce the amount of time-consuming manual labor involved in back-end fixes. In most cases, HIM professionals are brought into the process post-service by the business office, either during claim scrubbing or after a claim has been denied. This back-end method means HIM staff members must do the following: • pull charts; • manually compare diagnosis and procedure code pairs against local Fiscal Intermediary rules; • communicate with physicians and check for additional documentation; • ensure the appropriate use of modifiers; and • relay their findings and fixes back to the billing department. The result? Cleaner claims, but a great deal of time lost to backtracking. An alternative approach is to utilize professional coders up front, calling on them to check for medical necessity during the initial coding session. In addition, it’s beneficial if they review the codes assigned by other healthcare professionals and ancillary departments throughout the hospital, which are usually transmitted through the chargemaster. This involves a significant process change for most facilities, but one that would most certainly result in cleaner claims, fewer delays and denials, and more efficient use of human resources. 2. Reduce the amount of time spent researching revenue codes, NCCI and outpatient code editor edits, and LMRPs. There are many variables that affect coding compliance. The Centers for Medicare & Medicaid Services (CMS) has issued National Coverage Determinations (NCDs) that affect countless code pairs. Local carriers contribute to the maze with their own LMRPs. Edits that further regulate what can and cannot be billed together are added and modified frequently. Often, the detective work involved in discovering potential problems and avoiding coding errors is overwhelming. New software and Web-based technologies are making this task more manageable. The solutions provide greater timeliness and specificity in identifying edits that will derail a claim, allowing coders to integrate this information into the initial coding session. The result can be a seamless workflow that all but eliminates the need for back-end fixes. The most recent generation of software solutions vastly improves on current “pass/fail” claim scrubbers, which only tell coders that something is wrong with the claim without providing clues to specific problems. Newer applications can provide a direct link to the LMRP in question so coders can review the policy, identify the problem, and take immediate steps to fix it. This means coders will not have to search through endless Web pages or make countless telephone calls to the payor to resolve situations. 3. Reduce the number of days it takes to submit claims—and the number of days a claim remains in accounts receivable. Sometimes a claim can be delayed for two weeks or more when returned to medical records to be reworked. The file has to be pulled again and reviewed, a physician must be pressed for more information about a patient he saw days ago, and often policies will need to be researched to modify the claim. At first glance, it might appear that performing medical necessity checking and code verification through HIM actually extends the time between providing service to the patient and getting paid. However, by effectively utilizing the “bill hold period” (usually three to five days) set aside for coding and charge capture, the hospital will likely experience a decrease in its outstanding accounts receivable days. This gives the HIM department a window to check for medical necessity against the full medical record and, if necessary, time to contact the physician for additional documentation. Using this approach, HIM staff can dramatically reduce the number of days it takes to correct a claim rejected by the claims scrubber. This process improvement can have a tremendous impact on a hospital’s bottom line. Not only will it reap optimal payment from Medicare and other payors, it will also allow the facility to pinpoint instances where the patient needs to sign an ABN so noncovered services can be billed instead of written off. 4. Reduce the likelihood that the same medical necessity, modifier, and code pair errors occur again … and again … and again. While it is beneficial to provide HIM staff with the tools needed to correct coding and compliance errors, it is even more valuable to implement technology and process improvements that can help eliminate those mistakes in the first place. Too often, the information learned during the process of cleaning up bad claims is never relayed to physicians, staff members, and ancillary departments that commit the coding errors. While professional coders become aware of medical necessity requirements and edits that are in place, caregivers providing diagnostic and therapeutic services do not receive the information. Software solutions are available that have a built-in capability to create reports with this information—allowing HIM staff to communicate concerns back to registration and clinical staff, as well as to departments where coding problems originate. This sort of information exchange is vital to any hospital’s compliance plan, the facility’s overall quality, and to process improvement efforts. Using this information, the HIM department can develop educational and support programs that update stakeholders about current coding requirements. Over time, the result can be lower error rates and greater efficiency during the initial coding session. Gradual Implementation Facilitates Enterprisewide
Support What is the best way to accomplish enterprisewide buy-in? The first step is to align the priorities of the HIM and finance departments so both areas understand how front-end process change supports the goals of both functions. Second, HIM staff need to understand how coding can impact the hospital’s revenue cycle—accurate coding is indeed the lifeblood of the organization. The day-to-day responsibilities are perhaps most directly and dramatically affected by a shift from back-end fixes to an emphasis on correct front-end coding. They will recognize the vast amount of LMRP and edit-related information that needs to be considered when claims are initially coded. The challenge may seem daunting, but technology solutions can help make the task at hand manageable. The third step is to conduct a rigorous evaluation of available technologies to make sure they meet institutional objectives. Some factors to consider include the following: • Compatibility with the software and systems currently utilized by HIM. Can the new technology be tailored to provide the level of functionality the department requires? • Ease of use and seamless integration with current processes. Can the solution be adapted to workflow patterns already in place—in-house vs. remote-based coders? • Availability of vendor representatives to help facilitate the incorporation of new systems and technologies. Does the vendor recognize the impact this change process will have and assign responsive experts to tailor solutions and streamline integration? • Accessibility to the information that medical records and coding staff need to align medical necessity with services provided. Will enhanced technology decrease the manual labor and time-intensive research currently associated with researching medical necessity and editing information? • Ability to affect change gradually. Does the system allow the hospital to bring specific departments and functions online in a reasonable and manageable time frame? • Flexibility to provide reports and data that allow ongoing coding problems to be corrected. Is software available to help track recurring issues and provide a platform to educate physicians, clinical staff, and ancillary departments about compliance issues? After choosing a solution that encompasses these features and benefits, hospitals can redirect resources involved in addressing medical necessity coding problems. Over time, the hospitals can also change workflow processes, allowing them to submit clean claims the first time and positively impact the facility’s revenue cycle. — Anne Vincenti is the product line manager for 3M Health Information Systems revenue and compliance solutions. She can be reached at akvincenti@mmm.com. — Carl Bertrams is national sales manager for compliance solutions, 3M Health Information Systems. He can be reached at cbertrams@mmm.com. |
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