Health Management Technology

Cardiology of Tulsa (COT), a rapidly growing practice of 15 cardiologists with three offices in two northeastern Oklahoma cities, has long recognized the impact technology can have on its clinical and financial health. The practice’s use of technology has spanned the continuum, from implementing a rudimentary practice management system in 1989 to receiving the Davies Ambulatory Care Award for its innovative use of electronic medical record (EMR) technology in 2006.

The success that COT enjoyed by applying technology in the clinical setting prompted practice leadership to explore how it could realize similar improvements in financial operations. Three years ago, COT began to investigate technology solutions that would help streamline and optimize the revenue cycle. Practice leadership recognized that, by working with an innovative revenue cycle management (RCM) partner, they could greatly improve the claims management process with the goal of reducing denials and minimizing the number of accounts receivable (A/R) days. The opportunity to analyze workflow processes and ultimately achieve greater operational efficiency was also appealing.

The Problem
We had previously relied upon a large national clearinghouse vendor to handle our claims processing function. However, by the end of 2003, we had grown increasingly frustrated with the vendor’s performance. About 15 percent of our claims were being rejected because of front-end, administrative errors, and the vendor was not following up on these rejections to make corrections and recoup payment.

Unfortunately, we incurred significant costs due to the vendor’s under-performance. Rejected or denied claims piled up. In some cases, problems inherent with the claims remained unresolved for 60 days or longer—beyond the payer’s resubmission deadline—which meant those fees were never reimbursed. In fact, we estimate that $25,000 to $50,000 was written off in 2003. Our days in A/R grew from 35 to 40, and our overtime costs soared as we paid staff members to play catch-up with the ever-increasing backlog of claims needing to be reworked.

The vendor also offered only a limited scope of services that no longer met our needs. We provide a comprehensive range of non-invasive diagnostic and therapeutic care and the practice was growing rapidly, seeing 20,000 patients each year. The vendor simply could not keep up, nor were they able to offer the level of customer service and support we expected.

The Solution
In 2004, we launched an aggressive 6-month campaign to find an RCM partner that could address these problems and provide us with advanced technology to optimize our revenue cycle. The three-member selection team was comprised of our business office team leader, the business services director and me.

We established a set of priorities against which each candidate would be evaluated. At the top of the list was claims processing functionality. We wanted to ensure our new partner offered an advanced editing engine that would catch potential problems early in the process and allow us to consistently submit clean claims to our payers. In addition, we wanted comprehensive functionality from a single vendor that would allow us to automate the entire revenue cycle, from claims management and electronic remittance advice (ERA) to secondary claims submission. To maximize efficiency and effectiveness, we also required that the vendor be able to accept downloads from our practice management system.

We initially assessed six vendors and their systems via face-to-face meetings and Webex conferences. After quickly narrowing the field to three, we brought in the entire business office team to participate in product demonstrations. We asked them to rank the RCM systems in five areas: 1) Overall functionality; 2) Sophistication of the claims scrubbing tools; 3) Ease of use; 4) Ability to automate the full spectrum of the revenue cycle; and, 5) Commitment to customer support and service.

Ultimately, the team chose the Web-based RCM system from Navicure. In addition to meeting the criteria above, we were particularly impressed with the advanced edits suite Navicure offered. This suite scrubs claims against a comprehensive set of national and payer-specific edits, automatically updating the system to reflect the most recent changes in payer policies. Online functionality also was a plus, as it would provide our staff with real-time, secure access to claims information.

We began implementation of the RCM system in April of 2005. Because the system is Web-based, the transition was very smooth and there was no need to interrupt workflow to deploy new technology. We began with a short test period involving select back-office staff, and then quickly rolled it out throughout the practice. Staff found the system easy to use because it led them from one function to the next. This minimized the amount of training that was required to get staff fully up-to-speed on the new system.

Immediate Results
We began to realize benefits from the RCM system almost immediately. Payer rejections and denials have been virtually eliminated because staff members are automatically notified if claims contain administrative or coding errors. In the past, there would have been a lag of 7 to 10 days before we even learned of a denial and could rectify it. Online functionality now allows staff to follow a claim’s progress in real time and rework problem claims immediately, often turning them around the same day. As a result, our claims are processed more quickly and our days in A/R have dropped from 40 to 32.

Staff productivity also has been on the rise since the system was implemented. We employ 3.5 certified coders who used to log significant amounts of overtime—10 to 15 hours per month—to keep abreast of rejected and denied claims. That time has been reduced by 90 percent. Likewise, overtime hours charged against business office staff has dropped about 15 percent in the past year-and-a-half and current overtime hours are unrelated to RCM functions.

The online functionality of the RCM also provides a level of flexibility that enables staff to access the system from any workstation. In the past, coding and billing staff would have to leave their files, or carry them from location to location when covering for co-workers (e.g., during lunch breaks or illnesses). Now, staff can float as necessary with no interruption to claims processing.

In addition, COT no longer dedicates staff time to posting payments, a task now handled via electronic remittance advice. Besides saving time, this approach also eliminates bookkeeping errors that may have occurred if payments were inadvertently posted to the wrong account.

Additional Functionality and Support
The ERA also serves as a trigger for secondary claims submission. We have always submitted secondary claims manually as a service to our patients. Now, relevant information is automatically culled from the ERA and reconfigured for submission to the secondary insurer, saving staff substantial amounts of time. In fact, time dedicated to secondary claims has dropped 33 percent, from 760 hours per year to 250 hours per year, a savings equal to one-quarter FTE. The secondary claim is forwarded electronically to payers (such as Medicare) that are prepared to receive them in this format. Alternatively, they can be generated on paper to meet other insurers’ requirements. In either case, the process is vastly superior to a manual process. In fact, it is so efficient, we sometimes receive the secondary payment before the primary claim has been paid.

Reporting has also been an area of benefit. Our staff use reporting and analysis tools to run both standard and customized reports. Reporting capabilities include an Explanation of Benefits (EOB) Manager, rejection trending and analysis, and inbound status reports summarizing submitted and rejected claims. For example, the “daily rejected claims report” enables us to review administrative errors versus coding errors versus system errors. Managers can redirect claims with errors to the appropriate staff member the same day to be corrected and reprocessed. Likewise, the EOB Manager allows us to access a full spectrum of online information, rather than sorting through paper or scanned documents. We can pull an entire EOB file by insurer, by day, or view an individual EOB, perhaps responding to a patient’s request for information.

The increased level of support provided by the vendor also has allowed us to streamline revenue cycle management. A convenient online messaging center facilitates dialog when questions arise. When we do need to call the vendor, the company answers the phone before the third ring, as promised. If customer service representatives cannot respond to our query immediately, they typically reply within 24 hours, even contacting payers on our behalf if necessary.

The use of an RCM system revolutionized the way our practice conducts business. Each step of the revenue cycle has been streamlined, and we are constantly finding ways to further enhance our efficiency and effectiveness. To top it off, we are financially healthier than ever before and can focus our attention on what we do best—delivering high quality care to every patient who walks through our door.

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Nancy Nelson, RN, CMPE, is chief administrative officer at Cardiology of Tulsa, Tulsa, Ariz. Contact her at nnelson@cotheart.com.