July 2009 FEATURE ARTICLES
Revenue Cycle Management
SaaS Model Improves RCM
Hospitals find a better way to expedite claims, control A/R days and maintain operational cash flow.
By Frank Tavolacci
Like most hospitals, NYU Langone Medical
Center (NYULMC) has struggled with reducing denied claims, the
resubmission process and the special requirements of Medicaid
claims. Collectively, the three-hospital organization submits
some 34,000 combined in-patient and out-patient
claims per month.
At NYULMC’s 160-bed Hospital for Joint Diseases (HJD), the Medicaid population is nearly 40 percent, while 726-bed acute/general care Tisch Hospital and 140-bed Rusk Institute for Rehabilitation Medicine are 8 percent. These collectively had a significant effect on cash flow and days in accounts receivable (A/R) with mounting resubmissions. NYULMC faced the added challenge of creating a common claim data-sharing system across several facilities that would streamline workflow processes.
Successful revenue-cycle management (RCM) can mean economic survival. With the increasing percentage of Medicare-derived revenue, hospitals are searching for better ways to expedite claims, control A/R days and maintain operational cash flow. As hospitals grapple with the process of moving to first- and second-generation automated claims-management software, they are either looking to their legacy hospital information/patient accounting system providers to introduce additional revenue-management features, or are adding third-party solutions to accomplish the task.
Located in the heart of New York City, NYULMC consists of NYU School of Medicine, Tisch Hospital, the Rusk Institute for Rehabilitation Medicine and the Hospital for Joint Diseases. The medical center serves Manhattan, Brooklyn and Queens, with a significant percentage of its patient population from around the country, resulting in some 34,355 patient discharges each year and a faculty and staff of nearly 10,000.
NYULMC was using the PREMIS turnkey system (now part of RelayHealth) that allows the submission of all claims through a single system and one pipeline. Although this was a major step forward in the center’s total RCM goals, additional areas were identified where automation could solve some specific challenges and facilitate further integration with the legacy patient accounting system.
Merger Causes Changes
When NYULMC and HJD merged in 2006, NYULMC began submitting HJD claims with an NYULMC taxpayer identification number, master patient index identification and other claim identifiers for payer-specific provider numbers. There were different contractual rate structures between the two hospitals and the legacy accounting system did not allow the production of some of the payer-required claims data, accommodate staggered payer changeover time lines or provide a way to protect receivables.
Claim system limitations required a technologically savvy patient accounts staffer to manually submit the 32-34 claim files received from the billing system every morning. Lack of a backup to such a specialized staffer meant lost days in A/R, resulting in decelerated cash flow.
With such a significant Medicare patient population, NYULMC needed a way to receive immediate notification of acceptance or rejection of submitted claims in order to reduce A/R days. Finding a solution to overcome setup and configuration limitations in the legacy accounting system was also necessary, while allowing certain rules associated with billing outside of the accounting system to be maintained.
Differences between NYULMC claims-data formatting and Medicaid (as well as other payer) formatting requirements also needed to be accommodated. The center’s insurance table uses dashes in the insurance name description, for example, which are not valid in the 837 claim world. Making changes for several exceptions in the entire charge master (more than 100,000 codes) was impractical.
NYULMC began looking for the right solution by reviewing a number of vendor offerings. By this time, RelayHealth had introduced ePREMIS, which would provide greater automation, functionality and automatic updates via a software-as-a-service (SaaS) connectivity model.
NYULMC chose to stay with a turnkey rather than a remote hosting installation setup. All of the involved stakeholders felt that housing the equipment onsite would provide greater control and responsiveness to any challenges. IT staff worked with RelayHealth to determine necessary server size and operating system configuration to meet vendor specifications. The IT team configured local area network and wide area network connectivity to the application and facilitated the user acceptance testing portion of the rollout.
Tweaking the Configuration
The IT billing group then worked in conjunction with RelayHealth staff to configure the system for claims submission from the legacy patient accounting system to ePREMIS. This would allow running of scripts, converting data to the appropriate billing format, facilitating use of the payer’s latest claims edits version and other associated functions.
Since the claim output configuration would be the same as the previous solution, all that remained was re-routing claims to the new software. The necessary settings within the application were determined, allowing the processing of claims per the center’s business model, while facilitating system user interaction that maximized and streamlined their workflow. The application went live in six months.
Vendor staff assisted in setting up training classes within NYULMC’s campus training center for the 60 staff members. In addition to staff presence during installation, testing and training, the vendor was onsite for several weeks and as part of a long-term maintenance plan, assisting staff with questions and workflow processes.
Since going live, NYULMC has been able to further streamline workflows and maximize the effectiveness of all system capabilities upstream of the ePREMIS claims solution. The automated submission functionality has eliminated the need for a special technology-savvy staffer each morning to implement claims submissions and the entire staff is immediately aware of any individual claim problem and where the problem originates before submission. This allows the hospital to meet its various daily submission deadlines for all payers, thereby accelerating collections and decreasing A/R days. The result has been a 16-day reduction in accounts receivable from 59 days to 43 days.
One of the additional modules installed from the ePREMIS suite was Medicare Direct Entry, which makes NYULMC immediately aware of Medicare claim problems, enabling staff to address them and still meet their daily submission deadlines. By automatically bouncing the claim against the Medicare system prior to submission, errors are detected and corrected with one click. A clean claim is then submitted, which reduces denials, accelerates cash flow and decreases A/R days.
With such a significant Medicare patient population, NYULMC needed a way to receive immediate notification of acceptance or rejection of submitted claims in order to reduce A/R days.
Medicare claims, for example, that involve implants or chemotherapy drugs require specific manufacturer invoice codes. Previously, these claims would be partially paid or rejected outright if necessary revenue code data was not included in the claim submission. Today, the automated bridge (edit) routines identify these claims so that designated staff can input the necessary additional data and submit the claim to the payer. This eliminates payer rejection or non-payment of the entire claim due to lack of documentation. The bridge routines also allow staff to gradually change over HJD pin numbers, addresses and other variable information for every payer in a mutually advantageous time frame.
Report Generation Automated
Another major benefit is the ability to automate report generation. Prior to the upgrade, users would have to manually print and distribute the necessary reports each day. This introduced workflow slowdowns and other inefficiencies. The new report feature allows automatic generation and dispersal to the specific staff members who need them each time a download is performed.
The increased report granularity and targeted data-extraction capability allows workflow/process challenge identification, while providing staff confirmation that payers have received the claim files. Now, recurring edit issues can be identified and mapped over time to establish a pattern and prevent it from happening in the future. The ability to model workflows helps route errors correctly and redress them quickly.
The elimination of manual processes through automation, access to more detailed actionable information and selective routing has saved the staff many hours each day in the workflow process. This greater workflow and process streamlining allows staff to re-allocate to new projects without overworking them.
For more information
on RelayHealth solutions
From the Catalog
According to www.relayhealth.com : ePREMIS helps streamline business office processes and improve revenue-cycle management capabilities. With ePREMIS, hospitals can more efficiently manage claims editing, transmission, storage and compliance, ultimately leading to accelerated cash flow, reduction in the number of days in accounts receivable, improved productivity and lower costs. ePREMIS records and stores every event in the life of a claim from the day it enters the system until the day it is paid, creating accurate, detailed audit trails. ePREMIS is HIPAA compliant and available as a turnkey or SaaS solution.
Frank Tavolacci is senior director, patient financial systems at NYU Langone Medical Center.