| Much like the major financial institutions closely | | | | of a growing practice. Reduced labor, office |
| following the lead of the Federal Reserve, health | | | | supplies and postage all contribute to the bottom |
| insurance carriers follow the lead of Medicare. | | | | line of your practice when submitting claims |
| Medicare is getting serious about filing medical | | | | electronically. |
| claims electronically. Yes, avoiding hassles from | | | | Electronic Tool 4: Claim Status |
| Medicare is only one piece of the puzzle. What | | | | Continuous rebilling of unpaid claims creates denials |
| about the commercial carriers? If you are not | | | | for duplicate claims with each rebill processed by |
| fully utilizing all of the electronic options at your | | | | the payer - causing more work for you and the |
| disposal, you are losing money. In this article, I will | | | | carrier. Using the HIPAA electronic claim status |
| discuss five key electronic business processes | | | | standard offers an alternative to paying your |
| that all major payers must support and how you | | | | staff to spend hours on the phone checking claim |
| can use them to dramatically improve your | | | | status. In addition to confirming claim receipt, you |
| bottom line. We'll also explore options available for | | | | can also get details on the payment processing |
| going electronic. | | | | status. The reduction in denials lets your staff |
| Medicare recently began putting some pressure | | | | focus on more productive revenue recovery |
| on providers to start filing electronically. Physicians | | | | activities. You can use claim status information to |
| who continue to submit a high volume of paper | | | | your advantage by optimizing the timing of your |
| claims will receive a Medicare "request for | | | | claim inquiries. For example, if you know that |
| documentation," which must be completed within | | | | electronic remittance advice and payment are |
| 45 days to confirm their eligibility to submit paper | | | | received within 21 days from a specific payer, |
| claims. Denials are not subject to appeal. The | | | | you can set up a new claim inquiry process on |
| bottom line is that if you are not filing claims | | | | day 22 for all claims in that batch that are still not |
| electronically, it will cost you extra time, money | | | | posted. |
| and hassles. | | | | Electronic Tool 5: Remittance Advice |
| HIPAA is Your Friend | | | | HIPAA's electronic remittance advice process can |
| While there has been much groaning and distress | | | | provide extremely valuable information to your |
| over new rules and regulations heaved upon us | | | | practice. It does much more than just save your |
| by HIPAA (the Health Insurance Portability and | | | | staff time and effort. It increases the timeliness |
| Accountability Act of 1996), there is a silver lining. | | | | and accuracy of postings. Reducing the time |
| With HIPAA, Congress mandated the first | | | | between payment and posting greatly reduces |
| electronic data standards for routine business | | | | the occurrence of rebilling of open accounts - a |
| processes between insurance carriers and | | | | major cause of denials. |
| providers. These new standards usher in a new | | | | Another major benefit from electronic remittance |
| era for providers by providing five ways to | | | | advice is that all adjustments are posted. Without |
| optimize the claims process. | | | | this timely information, you data entry personnel |
| Electronic Tool 1: Eligibility | | | | may fail to post the "zero dollar payments," |
| Practitioners frequently accept insurance cards | | | | resulting in an overly inflated A/R. This distortion |
| that are invalid, expired, or even faked. The | | | | also makes it more difficult for you to identify |
| Health Insurance Association of America (HIAA) | | | | denial patterns with the carriers. You can also |
| found in a 2003 study that 14 percent of all | | | | take a proactive approach with the remittance |
| claims were denied. Out of that percentage, a full | | | | advice data and start a denial database to zero in |
| 25 percent resulted from eligibility issues. More | | | | on problem codes and problem carriers. |
| specifically, 22 percent resulted from coverage | | | | Free Resources |
| termination and/or coverage lapses. Eligibility | | | | Thanks to HIPAA, nearly all major commercial |
| denials not only create more work in the form of | | | | carriers now provide free access to these |
| research and rebilling, but they also increase the | | | | electronic processes via their websites. With a |
| risk of nonpayment. Poor eligibility verification | | | | simple Internet connection, you can register at |
| increases the likelihood of failing to precertify with | | | | these websites and have real-time access to |
| the correct carrier, which may then result in a | | | | patient insurance information that used to be |
| clinical denial. Furthermore, time wasted because | | | | available only by phone. Even the smallest practice |
| of incorrect eligibility verification can cause you to | | | | should consider registering to verify eligibility, |
| miss the carrier's timely filing requirements. | | | | request referral authorizations, submit claims, |
| Use of the HIPPA eligibility transaction allows | | | | check status, receive remittance advice, download |
| practitioners to automate this process, increasing | | | | forms and update your provider profile. |
| the number of patients and procedures that are | | | | Registration time and the learning curve are |
| correctly verified. This standard allows you to | | | | minimal. |
| query eligibility multiple times during the patient's | | | | Software & Clearinghouses |
| care, from initial scheduling to billing. This kind of | | | | Registering for free access to individual carrier |
| real-time feedback can greatly reduce billing | | | | websites can be a significant improvement over |
| problems. Taking this process even further, there | | | | paper for your practice. The drawback to this |
| is at least one vendor of practice management | | | | approach is that your staff must continually log in |
| software that integrates automatic electronic | | | | and out of multiple websites. A more unified |
| eligibility into the practice management workflow. | | | | approach is to use a good practice management |
| Electronic Tool 2: Referral Request & | | | | application that includes full support for electronic |
| Authorization | | | | data exchange with the carriers. Depending on the |
| A common problem for many providers is | | | | type of software you use, your choices and |
| unknowingly providing services that are not | | | | costs may vary as to how you submit claims. |
| "authorized" by the payer. Even when | | | | Medicare provides the option to submit claims at |
| authorization is given, it may be lost by the payer | | | | no cost directly via dial-up connection. |
| and denied as unauthorized until proof is given. | | | | Alternately, you may have the option to use a |
| Researching the issue and giving proof to the | | | | clearinghouse that receives your claims for |
| carrier costs you money. The situation is even | | | | Medicare and other carriers and submits them for |
| more acute with HMOs. Without proper referral | | | | you. Many software vendors dictate the |
| authorization, you risk providing free services by | | | | clearinghouse you must use to submit claims. The |
| performing work that is outside the network. | | | | cost is usually determined on a per-claim basis and |
| The HIPAA referral request and authorization | | | | can usually be negotiated, with prices starting |
| process allows providers to automate the | | | | around twenty-four cents per claim. While using |
| requests and logging of authorization for many | | | | billing software and a clearinghouse is an effective |
| services. With this electronic record of | | | | way to streamline procedures and maximize |
| authorization, you have the documentation you | | | | collections, it is important to closely monitor the |
| need in case there are questions about the | | | | performance of your clearinghouse. Providers |
| timeliness of requests or actual approval of | | | | should instruct their staff to file claims at least |
| services. An additional benefit of this automated | | | | three times per week and verify receipt of those |
| precertification is a reduction in time and labor | | | | claims by reviewing the various reports provided |
| typically spent getting authorization via telephone | | | | by the clearinghouses. |
| or fax. With electronic authorization, your staff will | | | | How About a Good Scrub? |
| have more time to get more procedures | | | | A powerful tool that you can use to maximize |
| authorized and will never have trouble getting to a | | | | the percentage of "clean claims" that go out is |
| payer representative. Additionally, your staff will | | | | called a claim scrubber |
| more effectively identify out-of-network patients | | | | These systems automatically review electronic |
| in the beginning and have a chance to request an | | | | claims before they are sent out. They check for |
| exception. While extremely useful, electronic | | | | missing fields, misused modifiers, mismatched CPT |
| referral requests and authorizations are not yet | | | | and ICD-9 codes and generate a report of errors |
| fully implemented by all payers. It is a good idea | | | | and omissions. The best systems will also check |
| to seek the assistance of a medical management | | | | your RVU sequencing to ensure maximum |
| vendor for support with this labor-intensive | | | | reimbursement. |
| process. | | | | This process gives the staff time to correct the |
| Electronic Tool 3: Claim Submission | | | | claim before it is submitted, making it far less |
| Submitting claims electronically is the most | | | | likely that the claim will be denied and then need |
| fundamental process out of the five HIPPA tools. | | | | to be resubmitted. Remember, the carriers make |
| By processing your claims electronically you | | | | money the longer they can hold on to your |
| receive priority processing. Your electronically | | | | payments. A good claim scrubber can help even |
| submitted claims go directly to the payer's | | | | the playing field. All carriers use their own version |
| processing unit, ensuring faster turnaround. By | | | | of a claim scrubber when they receive claims |
| contrast, paper claims are processed only after | | | | from you. |
| manual sorting and batching. | | | | The Bottom Line |
| Processing insurance claims electronically improves | | | | With the mandates from Medicare and with all |
| cash flow, reduces the expense of claims | | | | other carriers following suit, you simply cannot |
| processing and streamlines internal processes | | | | afford to not go electronic. All aspects of your |
| allowing you to focus on patient care. A paper | | | | practice can be enhanced by the use of the |
| insurance claim typically takes about 45 days for | | | | HIPAA standards of electronic data exchange. |
| reimbursement, where the average payment time | | | | While the initial investment in hardware, software |
| for electronic claims is 14 days. The reduction in | | | | and training could cost tens of thousands of |
| insurance reimbursement time results in a | | | | dollars, the proper use of the technology virtually |
| significant increase in cash available for the needs | | | | guarantees a rapid return on your investment. |