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Three-phase plan to reduce denied claims

HIM Connection, March 16, 2004

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"What gets measured gets improved" is the mantra of Charles Brown, revenue-cycle administrator for MultiCare Health System in Tacoma, WA. The health system administration knew it had a problem with denied claims, but it lacked the resources to even get an accurate measurement of the situation.

A three-phase process of improving the revenue cycle resulted in decreased denials, decreased accounts-receivable days, and an operating income that went from $18 million in 2002 to $39 million in 2003. Follow MultiCare's lead and you might have similar claims-capturing success:

*Phase I*

Target pockets of revenue opportunity "to get the biggest bang for your buck," says Brown. For example, Brown built a "high-dollar" team and devoted their efforts to the 2% of accounts that represent 49% of the organization's dollars. An underpayment team expanded the efforts of an outside firm that had been auditing and rebilling insurance claims. In 2003, the team more than doubled the typical repayment capture of about $3 million a year.

"There are huge revenue opportunities in effectively managing payment and minimizing denials," says Brown.

*Phase II*

Focus on redefining the revenue cycle around the ideal patient experience. "Things fall into place and it's easier to get buy-in when you focus on patients," says Brown. The system created a Web site for patient inquiries, financial counseling, and open access physician offices to improve the patients' MultiCare experience.

*Phase III*

Introduce technology improvements. "Before, I think denials were handled on an as-needed basis," says Jennifer Lange-Rebner, manager of revenue enhancement. "We didn't have the systems or the tools in place to really let us know what was being denied."

MultiCare installed new systems such as automated eligibility verification, registration-error tracking, and document storage that have made many staff members' jobs easier, and improved patient satisfaction. Prior to the technology, the manual tracking process and manually filed explanations of benefits (EOBs) resulted in a one-week turnaround time for account inquiries. Now, EOBs can be retrieved on any desktop shortly after payments are posted.

"I think the organization overall has really embraced our increased focus on the revenue cycle in general and on denials," says Lange-Rebner. "Overall, people are really supportive of the process and understand the increased resources that we've put toward this."

Communication played an important role in the improvements. Brown made quarterly presentations on the organization's achievements. He made sure to publicize MultiCare's goals and explain the revenue cycle and the role that every employee plays in it, says Lange-Rebner. "Everybody needs to contribute and do their part."

"There's so many things that we do that we can't attach a dollar amount to, so it's hard to assess the value but something like this, where you see the dollars recovered, that has really added to people's job satisfaction," she adds.

This week's excerpt is from the HCPro Inc. newsletter, "Medical Records Briefing." Click here to order or learn more.

Kate Alvarez
Editorial Assistant
kalvarez@hcpro.com

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