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Tip: Building a case for automated demographic validation

Patient Financial Services Weekly Advisor, September 16, 2005

Most Patient Access departments have traditionally monitored registration accuracy via some kind of audit program. For example, a supervisor may pull a certain percentage of the previous day's registrations and look for missing or incorrect information. This is labor intensive and often takes away from badly needed hands-on training time.

This manual process has generally led to a calculation of a departmental registration error rate. Typically, a goal might be 98% accuracy required. Employees who are above the departments "acceptable" error rate are often subject to some form of additional training and education. This retraining process often requires considerable supervisory time. As a result, Patient Access supervisors are often unable to keep up with the workload required for monitoring and improving registration accuracy.

Across the board, we have found that 15-20% of all registrations suffer from bad demographic integrity. No traditional supervisory audit would ever be able to catch this (because they would not have access to this information). Furthermore, when you add new and improved address information, 50-70% of all registrations require updating.

Improved information includes proper ZIP codes, apartment numbers and street addresses-all of the information that can make difference as to whether your billing statements get delivered properly.

State-of-the-art technology for demographic validation can help. Not only does it affect cash flow, but it affects patient public relations as well. Quite a number of hospitals experience big problems with patients because patients say they never received a bill.

For example, here is what a large Midwest health system had relative to accounts with poor demographics. They could not locate these patients and were prepared to turn them over to a collection agency:

• 3,700 accounts with incorrect address, phone and insurance data
• $12,000,000 in outstanding A/R
• 120+ days old

Using automated demographic validation to clean up those 3,700 accounts with incorrect information, they:

• corrected demographics on over 90% of patients
• collected $120,000 from patients
• collected $6 million from insurance companies
• sent $2,300,000 to collections ($9.7 million less)

As the example shows, the return on investment for using new technology to validate incorrect demographic information is significant. In this case, the ROI was well over 10:1.

Note: It is important to understand that use of automated technology requires adjustments to Patient Access staff daily workflow. This in turn requires employee education and training.

For example, when a new address is returned at point of registration, the Patient Access employee must be prepared to discuss this point with the patient/guarantor. The registrar may say "we have a different address on file." This conversation is always valuable. In the event the patient insists they live at an address different than what was updated, it important to "save" that updated address as it may be needed later - if the mail is eventually returned. This extra step in the registration process does take time, but saves time and money later in the revenue cycle.

This week's tip was contributed by by Bruce Nelson, vice president, Search America. He can be reached at Bruce.nelson@searchamerica.com.

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