SELF-SABOTAGE Are you making one of these common revenue cycle mistakes?

What are the top revenue challenges that surgical facilities face, the issues that give your business office fits and give you sleepless nights? To find out, our billing company, Medical Billers and Coders, conducted a survey of around 1,000 facilities, asking administrators, office managers and providers to identify the trouble spots in their revenue stream. Surprisingly, we found that just a handful of common problems are causing the majority of your headaches. Here are the 4 most common reasons for revenue dip, according to our survey, and how to tackle them.

Inaccurate coding
Accurate coding is the No. 1 struggle. A majority of our respondents said their billing team was inefficient and overwhelmed, especially with ICD-10. Add to this a growing shortage of certified and experienced coders, and you get more coding inaccuracies. In addition to securing a well-trained coding team, closely monitoring your claims — whether you have 3 on-staff coders or work with a third-party company — can help ensure correct coding each time.

The best way to do this is to hold periodic internal audits. For these audits, select a sample of your completed claims (a common sample size is about 10% of your case volume) and look for any errors, inconsistencies or trends. How often you hold these reviews — bi-weekly, monthly, quarterly, yearly — depends on your facility's volume and if you know of any existing problems.

Most of the time, inaccurate coding stems from redundant codes, temporary codes, revenue codes (in hospitals), DRG code complexity and the usage of varied software or systems. Look closely for problems in these areas. Once you identify any inaccuracies, you can work with your coders to correct future claims.

AR follow-ups
A lack of timely accounts receivable (AR) follow-ups was the second most common problem our respondents faced. Most said that it was hard for their billing department to get insurers to pay up within 21 days of claims filing, leading to AR accumulation.

A simple but effective way to improve your AR is to designate a team of staffers to follow up on unpaid claims. Have this team prioritize accounts by starting with your highest-dollar-value AR from your oldest cases and working down the list. Set clear expectations for when you want these claims cleared out of the system and track your team's progress.

Be sure to set time frames that specify when these unpaid claims should be followed up on, how often and when you expect payment. For example, your team's goal may be to follow up with the insurer every 15 days after a claim's submission, with the goal of getting it paid within 40 days. While delaying or forgetting to check on an unpaid claim here and there might not seem like a big deal, a continuous lack of AR follow-up can lead to huge write-offs down the road. In fact, we found that if the AR days are between 180 and 360 days, the chances of collection are below 10%.

Eligibility verification
Not verifying a patient's insurance coverage — third on our list of common revenue problems — can make or mar your chances of getting paid.

Many of our respondents said that front desk staff are having trouble verifying all of the details of patients' insurance before scheduling their appointments. They're too busy handling appointment phone calls, collecting co-pays, printing receipts and scanning insurance cards. It's easy for things to slip between the cracks.

Make sure that if your front-desk staffers are the ones verifying patients' insurance, you offer training and hire only those with experience in this area. In addition to training, make sure that you regularly hold meetings with your front desk to reinforce these skills as well as identify any issues. Encourage staffers to share what is working well, or if they're running into recurrent problems. For example, if your front desk is still having problems with insurance verification, consider hiring someone (either outside of your facility, or a full- or part-time staffer) specifically to conduct pre-admission calls and verify patients' insurance. Since you're not getting paid for claims rejected due to a lack of eligibility verification, the added expense may be worth it.

INPATIENT ADMISSIONS
CMS Refines Two-Midnight Rule

SHORT STAY In the updated two-midnight benchmark, physicians can admit a patient who is expected to stay for less than 2 midnights as an inpatient.

CMS's update to its controversial "two-midnight benchmark" gives providers more flexibility when determining whether hospital patients are designated as inpatient or outpatient in Medicare claims. The changes are part of CMS' final 2016 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems.

The original two-midnight rule told Medicare's payment and audit contractors to assume that an inpatient hospital admission is legitimate if it spans 2 midnights. Shorter stays were to be billed as outpatient. While inpatient stays receive a lump sum from Medicare Part A to cover all aspects of a patient's stay, Medicare Part B pays for outpatients based on the services provided. In the updated benchmark, patients staying less than 2 days may be considered inpatient in special circumstances.

The rule was created in 2013 (CMS has since delayed enforcement) when Medicare contractors noticed a spike in claims for inpatient services that should have been submitted as outpatient and rejected these claims. Meanwhile, cautious providers began submitting more claims for extended "outpatient observation hours, which left patients on the hook for higher out-of-pocket costs.

Hospitals and providers have criticized the rule, saying it undermines their clinical judgment. In response to the criticism, CMS says it worked with stakeholders to refine the rule and will begin enforcing it in 2016.

In the updated two-midnight benchmark, physicians can admit a patient who is expected to stay for less than 2 midnights as an inpatient, so long as they document supporting factors, including things like severity of symptoms or risk of adverse events. CMS says that this designation should not be used for "minor surgical procedures or for a period of time that "does not span at least overnight. For stays longer than 2 midnights, the policy is unchanged.

"We are pleased to see that the agency finalized its changes to the two-midnight policy, says the American Hospital Association Executive Vice President of Government Relations and Public Policy, Thomas Nickels. "Hospitals appreciate the certainty that stays of at least 2 midnights are inpatient, with stays of less than 2 midnights also considered inpatient based on physician judgment.

For a closer look at CMS's updated Payment Systems, visit osmag.net/SevJ3G.

— Kendal Gapinski

Denial management
Having an unclear or unsuccessful denial management strategy is the fourth biggest reason facilities lose out on revenue. While denial management can encompass several of the factors that we've already mentioned, including coding inaccuracies or following up on AR, one of the biggest aspects of your strategy is how you handle unpaid claims and how you appeal rejections.

Since the appeal process varies, depending on your state and the type of insurer you're dealing with, make sure your billing team is educated on the process for each of your insurers. Make sure your team has a good grasp of the payer's deadlines and how to weed out which rejections are worth the time and effort of an appeal (things like missing eligibility verification often aren't winnable).

One overlooked part of denial management is the monitoring of claims rejections. Set up a tracking system so staff can document which claims have been denied and why. Over time, this monitoring could help you spot recurring problems and help you make necessary improvements, whether that's fixing a coding inaccuracy or clarifying a change in policy with the payer.

Since the appeal process varies, depending on your state and the type of insurer you're dealing with, make sure your billing team is educated on the process for each of your insurers. Make sure your team has a good grasp of the payer's deadlines and how to weed out which rejections are worth the time and effort of an appeal (things like missing eligibility verification often aren't winnable).