A Beginner’s Guide to Electronic Claims Processing

Innovations like electronic claims and electronic healthcare records are the start of a revolution in healthcare; one that promises to dramatically simplify the way billing offices, practices and hospitals get paid. In this article, we will cover a brief definition of electronic claims, why they are important to the medical billing industry, and ways you can adopt this new technology for the betterment of your patients and your practice.

Reduce the length of your medical billing cycle by 30-days between charge post-date to first payment through electronic healthcare claims processing.

btnLearnMore orange

Electronic Claim Definition

What is an electronic claim? An electronic claim is a form generated electronically for processing a patient’s demographic information, insurance and treatment between the payer (or clearinghouse) and healthcare provider. Electronic claims processing reduces the need for paper records and are quicker this manually submitting a patient’s information.

Adoption of electronic claims began in 1975 when the National Uniform Billing Committee (NUBC) began developing a standard data set used nationally by healthcare institutions, providers, and payers. These standards took into considered the need for information against the burden of providing that information and culminated in the adoption of the national uniform bill, or UB-82, seven years later. These standards established one nationally accepted health billing form. Smaller committees were formed on a state level to implement the UB-82 manuals.

Paper Claims vs. Electronic Claims

A lot of time and money can be saved by not having to print out forms, complete them manually, and sending them via snail mail to health insurance companies or payers. Through electronic claims and the absence of manual labor, the human error quote goes down. Old paper claims were hand written and illegible. Claims sent electronically receive an error rate between 2-3 percent, while claims submitted on paper have an error rate of around 28%.

Software systems are also not without its flaws. Especially, if there is a glitch in the system or the internet is down, it may be difficult to access certain data which would not be the case with manually filed claims. All in all, this is not supposed to happen and is very unlikely to last longer than a fraction of a day which makes electronic claims still advantageous over manually claimed files. Paper files on the other hand must be stored safely for a very long time and can be destroyed without the chance of getting them back which is very unlikely to happen when submitted claim files electronically.

Automated Electronic Claims Submission

Automated electronic claims submission integrates your electronic claims to your existing workflow. First, paper claims are converted electronically through optical character recognition imaging (OCR). Next, your medical billing software aggregates and scrubs each claim for potential denial triggers that could delay the cycle. Third, the clearinghouse sends the claims electronically to the insurance carrier through a secure, HIPAA compliant connection for real-time visibility into the status of the claim. Last, the claim is accepted, and your organization receives reimbursement. An integrated business intelligence tool like ImagineIntelligenceTM can be used to compile a report of the most common causes of claim denials to mitigate potential loss in productivity later.

Other Advantages of Electronic Claims

What are the benefits of submitting claims electronically? Electronic claims can be stored on a data server and submitted one of two ways: either directly to the payer through direct data entry, or through a clearinghouse. Both methods are more accessible and less fragmented than paper claims when shared among specialists. Billing offices, practices and hospitals typically see a reduction in processing time with electronic claim submission clearinghouses between confirmation that the electronic claim was received and real time status checks on when the claim has been approved. Likewise, there is less of a chance of claim files being lost on the way to the healthcare provider when compared to paper claims.

With electronically submitted claims, hospitals, primary care providers and other physician offices can gain efficiencies through more automation and less staff work. Considering providers spend anywhere between 10 to 30 minutes per claim on manual tasks, the potential savings is huge when considering the savings on paper, postage, ink, staff, and envelopes. Health insurance companies can also process electronic claims faster and with less effort.

Electronic Medical Billing

Earlier this year we wrote a blog article on the benefits of eliminating paper from your revenue cycle through electronic medical billing. In the article, we mention medical providers could save at least $1.1 million labor hours per week by transitioning to full electronic claims processing. Electronic medical billing is easy to use and helps practitioners reduce the time spent filling out forms. When integrated with electronic patient collections, practice owners can reduce overhead while generating additional revenue through more efficient revenue cycle management.

The healthcare industry is moving swiftly in the direction of digitizing the entire revenue cycle. In 2017, just over 6 percent of healthcare claims were submitted as paper forms. Financial organizations big and small have a lot to gain through integrating electronic claims processing with other parts of the revenue cycle. Schedule a live demo today to find out how the Imagine Team can work with you to integrate electronic claims processing into your existing workflow.

Using Patient Billing Software to Drive Better Patient/Provider Connection

For those that follow healthcare closely, there isn’t a week that goes by that the conversation around the shift in patient responsibility doesn’t come up and with good reason. In 2018 the average deductible was north of $1,500 and growing.

Imagine a future in which consumers are empowered with more options for managing their healthcare costs.

btnLearnMore orange


Generally, when you hear these stats they are all focused on one conclusion: Patients are responsible for more of the bill than ever before and providers are spending too much time trying to collect those payments. Recently Fierce Healthcare published an article quantifying this challenge. The article painted a grim picture of the challenges independent medical practices are facing:

  • 70% of respondents are worried about administrative tasks taking time away from patients.
  • 63% of respondents are worried about patient responsibility.

It’s important that we don’t downplay these challenges. They are real. However, for all the challenges this presents, equally as large is the opportunity providers have in capitalizing on the trend and building a competitive advantage in the marketplace.

The Patient's Perspective:

Healthcare is one of the most complex transactions in the economy. It comes with a range of emotions that aren’t present in any other transaction. Not only are patients possibly given a diagnosis or prognosis that is unwelcomed, but they may also be given a price that they simply can’t afford. The out-of-pocket shift has made going to the doctor a complex choice and in many cases patients are putting off or simply declining the coverage they need.

The Provider's Perspective:

At the end of the day, a healthcare practice is still a business. Now more than ever the financial viability of a healthcare practice is tied to their ability to be effective and efficient in capturing from the patients. However, efficiency and effectiveness need to be evenly matched with compassion and professionalism. Billing professionals are tasked with asking patients to pay for a diagnosis they didn’t want, it’s extremely difficult to do.

Best Practices for Patient Billing:

A fundamental consumer expectation in any financial transaction is being able to answer one simple question- how much will this cost? Unfortunately for the consumer, many hospitals and health care systems lack the ability to do so. Similarly, the healthcare industry is far behind others when it comes to offering the kinds of services that consumers expect, like online appointments and automated payments. Patient are confused and scared by the billing process. The first and last point of contact patients have with your practice is with billing. With that in mind, below are a few recommendations for ways to bridge the gap between patients and provider:

  • Communication- One of the biggest challenges facing patients today is they simply don’t understand their bill. Providing clear, up-front messaging about anticipated/estimated balances and following up with patients about their bill alleviates this concern and comforts the patient. Engage patients when and how they want to communicate.
  • Technology- There have been rapid advances in the technology available to aid in the collections process. Tools like integrated patient pay services (time-of-service or online) have made the posting process seamless for both the patient and provider. Advances in data collection and analytics have brought artificial intelligence to the forefront allow doctors to more accurately identify problem areas and periodize them.
  • Payment Options- With healthcare bills ranging from a few dollars to several thousands of dollars, patients need multiple options to pay their bill. An omnichannel approach combining all payment modalities (in-person, online, over the phone, etc.) ensures you have the right tools for all patients. The goal is to provide a pathway for the patient to pay on time or over time.

Getting paid for healthcare services is hard. It is hard on the patient financially and hard on the healthcare organizations resources. However, when you recognize that this challenge is also an opportunity to provide the patient with the payment option that suits them the best, the result can be happier patients and staff members alike.

5 Best Practices for Healthcare Revenue Cycle Management

Some businesses don’t realize how much cash flow is available in their balance sheets. It’s important for providers to periodically review their organization’s revenue cycle for any inefficiencies or improvements that may be holding the company back from growing. You can eliminate manual data entry errors and reduce transaction times by automating processes. However simply cutting costs is not enough to build a successful practice. Creating a positive patient experience is also crucial for the long term financial success of any practice. Below is a brief overview of medical revenue cycle management along with some best practices for improving revenue cycle management in healthcare.

Billing offices and practices can save an average of $3.60 per eligibility check and benefits verification by switching to an automated system.

btnLearnMore orange


What is Revenue Cycle Management in Healthcare?

It’s difficult to define healthcare revenue cycle. There’s a lot of overlap between the revenue cycle management process, practice management, and medical billing; all of which involve managing the relationship between patient, payer and provider. Depending on your specialty or practice, the definition of healthcare revenue cycle management consists of systems and procedures built to reimburse doctors for time and resources spent on patient requests. The typical healthcare revenue cycle flowchart consists of the following steps:

  • Clinical Operations- RIS, LIS, EHR/EMR, or any system used to manage the schedule, registration and demographic information of patients
  • Medical Coding- translating procedures into CPT, ICD and HCPCS codes. Claim scrubbing, data validation, and submission
  • Payer Contracting- reconciliation and remittance with the insurance company, payer or clearinghouse
  • Patient Billing- payment posting, statements, billing methods, and collections
  • Reporting- data mining, forecasting and practice analytics using financial and performance data

Best Practices for Improving Healthcare Revenue Cycle Management

Despite the challenges associated with revenue cycle automation, it’s important for billing offices, practices and hospitals to adopt smart and flexible billing methods. If done thoughtfully and utilizing the right technology partner, the benefits will quickly outweigh the cost of training and implementation.
  1. Build charge capture and verification into the revenue cycle. On average, hospitals lose around 1 percent of their potential net revenue due to missed charges and loss of productivity. Electronic claims processing takes 30 percent less time compared to manual processing. Today, charge capture and file transfers can be performed using automated timers and natural language processing with little to no manual intervention.

  2. Automate and collect patient financial responsibility upfront. The more information you can provide up front to help patients understand and manage costs, the fewer write-offs you’ll have to manage in the end. Administrative costs can increase if organizations use manual processes to check prior authorizations and eligibility. CAQH’s 2016 Index showed manual prior authorization can cost providers an average of $7.50 per transaction, while electronic prior authorization can cost as low as $1.89 per transaction.

  3. Streamline your office’s front-end and back-end responsibilities. There's a large grey area between clinical modalities and revenue cycle operations. It is in this space where payments get lost in translation. This disconnect between front-end and back office systems and the resulting manual data entry is an invitation for errors. Electronic eligibility (or e-eligibility) along with fully integrated clearinghouse promotes more transparency into the status of a claim while minimizing denials.

  4. Use data to benchmark and forecast medical revenue cycle performance. Keep your finger of the pulse of your practice’s financial health AND staff performance. Each step in the revenue cycle should have its own set of KPIs. Setting KPIs and tracking over time will unveil bright spots in your revenue cycle and show you how to manage resources better.

  5. Treat billing and payment as one unified system. Today's technologies provide a tremendous opportunity to merge billing and payment into a single, cost-saving process. Since many customers already perceive billing and payment as one thing, the technology should be set up to reinforce that. When connected, billing managers can recognize patient payments faster, while a paperless billing process can deliver a better patient experience.

Sometimes realizing additional revenue takes more than new processes. So where to begin? Start by identifying two or three inefficiencies or challenges preventing your company from growing, either through a loss in revenue or patient satisfaction. Then identify opportunities and technologies that can improve operational efficiency as well as the ability for patients to understand and pay their bill. Consider the above revenue cycle management healthcare best practices and you will be well on your way to building a stronger business case for improving your revenue cycle performance.

Risks in Healthcare Cybersecurity and How to Avoid Them

Healthcare Cybersecurity Statistics 2019

  • This year, there have been 3.68 million individuals affected by data breaches currently under investigation by the U.S. Department of Health and Human Services.
  • Healthcare data breaches are reported at a rate of one per day.
  • Security company Cybersecurity Ventures predicts that healthcare will incur two to three-times more cyber-attacks than the average of all other industries.
  • The most common locations of breaches to patient health information (PHI) are email, printed documents, and a company’s network server.
  • Hacking and IT-related incidents account for most data breaches. Other causes include misuse of administrative privilege, improper disposal, theft and unauthorized access.
The average cyberattack for a small healthcare provider can cost upwards of $1 million in recovery. Download white paper, "Healthcare, Cybersecurity, and You."
btnLearnMore orange

What is Data Privacy in Healthcare?

The most widely agreed upon standard for data privacy in healthcare comes from the HIPAA Privacy Rule which establishes national standards to protect patient medical records and health information.  The rule requires appropriate safeguards for ensuring the privacy and security of PHI including who is covered by the privacy rule, the type of information that’s protected, and limitations in how PHI can be used by a company or practice.

Sensitive healthcare data can include patient data like PHI, payment records, payer and provider employee data, and data related to wired and wireless IoT (Internet of Things) medical devices.  47 states have laws that require security breaches involving personal data to be reported to the authorities in addition to HIPAA’s Privacy Rule.

Importance of Data Security in Healthcare

Why is information security important in healthcare? For starters, it’s a market opportunity, and it’s a goldmine for criminals!  Cyber criminals cost the global economy over $400 billion a year, according to estimates by the Center for Strategic and International Studies.  As we saw with Target in 2013, just one data breach can throw a $145 million wrench in the cogs.  Healthcare data breach costs are the highest of any industry at $408 per record.  While credit card information and PII sell for a couple dollars on the dark web, patient health information can sell for as much as $363 according to the Infosec Institute.

Types of Healthcare Data Security Threats

One of the best preventative measures you can take to secure your company’s data is to educate yourself on the methods used by hackers to access PHI.  Most threats are a combination of software and social engineering.

  • Ransomware – Ransomware is a type of malicious software where an attacker holds a user’s system or personal information hostage in exchange for payment.  The healthcare industry accounted for 88% of all ransomware attacks in the U.S. in 2016.
  • DOS Attacks – DOS or denial-of-service attacks are a type of attack where your server is bombarded with traffic requests to overwhelm and shut the service down.  Like Ransomware attacks, DOS is often used to hold a web-based service hostage.
  • Phishing – A phishing scam tricks users into unknowingly providing access to a system through an email or pop up disguised as a legitimate request.  According to a 2018 report by phishing defense company Cofense, terms most often used in email subject line for phishing attacks include “New Message in Mailbox” and “Attached Invoice.”
  • Man-in-the-middle Attacks – This is a type of cybersecurity attack where an attacker eavesdrops on communication between two entities.  Man-in-the-middle attacks can occur through your SSL, Wi-Fi network, and DNS.
  • Malware – A malicious software like a virus, worm or Trojan horse where code is injected into your computer to steal, delete or encrypt information.

Healthcare Data Security Challenges

Annual data breaches have increased by 73% between 2010 and 2017.  34% of healthcare data breaches occur from unauthorized access or disclosure.  While seemingly more threatening, malicious breaches occur half as often as breaches due to internal mistakes.

According to the FBI, an increase in healthcare cyber intrusions is likely due to a lack of resilience compared to the financial and retail industries.  Health organizations have a lot of information that’s valuable to criminals.  They often have a bunch of personal information that can be used for traditional financial fraud, as well as health insurance information that can be sold for even more on black markets.

Most healthcare breaches are motivated by financial gain, with healthcare workers most often using patient data to commit tax or credit fraud.

The unfortunate truth is that the healthcare sector is an easy target for cyber criminals because of its vast ecosystem.  There are so many interconnected individuals that have access to medical and billing records – patients, dependents, specialists, physicians, hospitals, billing service providers, health insurers… the list goes on and on.  Not to mention medical records are the highest valued credentials on the dark web at $20-$50 per record – that’s at least 90% higher than the value of someone’s credit card information.

According to a recent study by the Information Systems Security Association (ISSA) and Enterprise Strategy Group (ESG), the top cause of risk to cybersecurity in healthcare include a lack of training, lack of enforcement, and overconfidence.

Tips for Cybersecurity in Healthcare

Healthcare data security is by no means "one size fits all."  A small, rural practice will invest differently than a large, metropolitan hospital.  Based on your business and your needs, you should identify what data is most important to protect, then plan your safety measures accordingly.  Perhaps you'll realize that technology isn't what's needed, but people and processes instead.
  1. Promoting safety standards isn't just IT's job.  Appoint a security officer within each department to help promote good practices, you’ll have more eyes and ears dedicated to the cause and spread awareness on a more granular level.
  2. Use firewall and anti-virus to protect against malicious intrusions.  The firewall inspects all messages coming in from the outside and decides whether the message should be allowed in based on pre-determined criteria.  Anti-virus stops malicious software that has already surpassed your safety measures and entered the system.
  3. Passwords are your first line of defense when preventing backs into any server.  By ensuring that employees have a strong password, a company can all but eliminate 75-80% of cyber-attacks.
  4. If a hack or breach does occur, disclose the incident immediately to your security team.  Information can often be recovered if authorities are notified soon after a security breach.  Recovering data is extremely difficult as more time goes by because of the network of offshore channels this information is relayed through.

Your company may have the most intuitive healthcare cybersecurity software and direct safety processes. But at the end of the day, your safety culture won’t shift until every single employee consciously decides to change their habits.  It requires leadership and commitment!

How Automation Improves Medical Billing in Practice Management Systems

In this article, we will explore some of the challenges associated with medical billing in practice management, as well as the benefits of automating your current practice management system software.

Everyone in healthcare knows receiving payments is hard. They know it’s not just one thing that makes it hard. It’s all the small, routine tasks that are never reported, all the conversations, and all the files moving between systems that are never mentioned in your monthly report, determine your budget, and help to make smarter business decisions.

Industry experts have been saying for the past five years how a surge of automation is leading to the next big change in healthcare. One example we meticulously follow is the day to day operations and financial impact of automation on medical billing and practice management.

Medical billing with 1,400 interfaces configurable with your
current practice management system
btnLearnMore orange

What is a Practice Management System Used for in a Medical Office?

Practice management systems are used to run the business side of a medical office, including scheduling, insurance claims, billing and accounting. Practice management systems typically do not include a patient’s medical records, but they can integrate with EMRs for a more robust view of a patient’s experience.

Practice Management System vs. EMR. There is some overlap between features included in an EMR versus a practice management system. EMRs focus primarily on the clinical side of a medical practice management systems focus primarily on the administrative side. Common features of an EMR include document scanning, charting, medication tracking, and appointment scheduling. Common features of a practice management system include the following:

  • Patient Scheduling and Registration - setting an appointment via an online portal or with the front desk; providing demographic data, updated contact details, and payer information
  • Eligibility Check and Demographic Verification - including pre-authorization, instantly highlights issues with payer compatibility. Resolving these issues prior to a patient visit can reduce your denial rate later
  • Coding and Review - translating medical practice diagnostics, equipment and procedures as billable records while reducing instances of denials due to incorrect or missing information
  • Collection of Co-pay/Balance - the fixed amount received from a patient for a service immediately after the appointment or soon after
  • Claim Management - creating, validating and submitting a claim to a clearinghouse or payer, either electronically as an e-claim or manually as a paper claim
  • Correcting Errors/Denials - systematically addressing the causes of why a claim was rejected or denied before resubmitting it for consideration
  • Payment Posting - posting payments into the respective patient accounts against a particular claim to reconcile them
  • Patient Statement and Communication - sending patient invoices and reminders via their preferred method of contact, either over the phone, through email, or as a printed statement
  • Analytics/Data Analysis - comprehensive financial dashboards can help you and your team analyze the performance of your practice at a single glance

Is it Possible for Any Existing Practice Management Systems to be Integrated with the EHR or EMR?

The short answer is, Yes. Any practice management system can theoretically be integrated with any EHR, so long as they can share data seamlessly. You’ll know if your practice management system and EHR are integrated if a patient’s medical records and insurance information are available in the same place and change one another at the same time.

For more detail, it’s important to distinguish between an integration and an interface. An interface is a feature that connects two or more independent systems, so they can communicate with data in a standard file format that’s stored in multiple locations. As such, there will often be restrictions on what information can be transmitted between the EHR and the practice management system. Data maintained in one location is usually indicative of a full integration. Instead of a patchwork of applications desperately trying to talk, the systems share a common code and database.

Integrating complex systems comes with its own social and technical challenges. Social challenges include regulatory restrictions, political constraints, and navigating operational requires of backend billing staff with front end administrative requirements. Technical challenges include building around legacy, premise systems, and cloud-based applications.

Challenges Associated with Medical Billing in Practice Management

Obstacles in implementing a medical practice management software include a lack of time to set up the infrastructure, lack of expertise, and system privacy/security:

  • Security and privacy of web-based or cloud-based practice management software is a concern when hosted on another company’s server. Since this software is available from anywhere with a web connection, it’s also vulnerable to attacks by cybercriminals. Consider the financial and reputational risks related to use of third parties for core services. If security is a priority, check out ImagineMedFMTM VPN, encryption, and user authentication.
  • Billing and collections, charge capture and coding was rated as one of the top risk areas for healthcare organizations in 2019. While outsourcing medical billing is a common method for offloading organizational tasks, lack of visibility into controls of third-party systems can result in lost revenue and lower claim resolve rates. Furthermore, outsourcing occasionally requires careful supervision to ensure business and patient experience standards are upheld.
  • Value-based care holds a healthcare organization accountable for both the clinical and financial outcomes of a patient’s care. 36% of hospital system executives are exploring medical practice management systems that will allow them to streamline financial and clinical systems. This challenge increases exponentially for multi-specialty practices whose claims are spread out across multiple billing systems.
  • Staff turnover and retaining talent affects provider workloads, patient outcomes and costs when managed using manual billing systems. Some doctors will choose employment with a healthcare system as a way to avoid the clerical responsibilities associated with running their own practice. For practice owners who remain independent, they are faced with the challenge of providing the necessary training and resources their staff needs to manage their day to day.

Benefits of Automated Practice Management System Software

Products like ImagineBillingTM built for high-volume, complex medical billing can be configured to your current practice management software workflow while automating it in the following ways:

  • Real-time validation of demographic information, insurance eligibility checking, and pre-authorization makes quick work of top sources of claim denials.
  • Claim generation, scrubbing and submission automatically looks for issues in your claims before they are sent to your clearinghouse or payer.
  • Electronic Remittance to automatically post insurance payments and reconcile balances much faster than can be done manually.
  • Real-time analytics and business intelligence gives you centralized access to business information and status reports for making smarter business decisions.

10 Ways to Automate Your Denial Management

Does your denial management process resemble a closed door, or a bridge? If you are a billing manager, you are all too aware of how difficult it is to manage denied claims. While looking for ways to increase the number of claims your healthcare organization is processing, it’s important not to lose sight of how many of those claims are being denied by the payer. When you’re processing hundreds, if not thousands of complex medical claims every week, a small percentage of denied claims can have a significant impact of your bottom line. This is where automated denial management comes in. Here are some ways automation can help bridge the gap between claim denials and higher profit for your healthcare organization.

reImagine your denial management and recovery strategy from a foundation of data discovery, prioritization, and intelligence
btnLearnMore orange

Importance of a Denial Management Strategy

Healthcare organizations lacking a focused strategy for denial management are more likely to receive declined denials. According to the American Medical Association, between 1.38 percent and 5.07 percent of claims are denied by insurers on the first submission. What’s more, denied claims are 3x more costly to rework than submitting a clean claim the first time. If the average cost to rework a claim is around $25, then the difference in value between a clean claim and a denied claim is around $15-17 dollars per claim depending on your clearinghouse. The challenges only compound with the increase in payers and specialties your practice adds to its revenue cycle.

Automating the Denial Management Workflow

According to a 2016 HIMSS survey, nearly a third of providers are still using manual claims denial processes. Out of the 69% using an automated denial management solution, 44% use a vendor and 18% manage their own system in-house. The best solutions to common medical billing mistakes are those which catch a mistake before they occur. For larger healthcare organizations, the sheer volume of claims requires more than a manual process. Automation fits into a well-tuned denial management strategy at three-phases: pre-denial, post-denial, and advanced reporting:

Pre-denial Management

    Start by putting the necessary processes and technology in place to ensure all anticipated causes of denials are accounted for and segmented into the correct course of action to be resolved.

  • Correct errors like duplicate billing, incorrect CPT modifiers, and inaccurate patient demographic information. Reconcile missing patient information with existing records. An automated tool like ImagineAITM verifies and corrects patient demographic details immediately.
  • Get insurance authorization for healthcare services that require prior approval. Systems like Imagine’s Pre-AuthorizationServices can do this in minutes instead of hours like manual processes.
  • With changes in a patient’s policy and greater payment responsibility falling on the patient, it’s no surprise insurance eligibility is the most common type of denied claim. Tools like ImagineDiscoveryTM are great for identifying coverage opportunities including overlooked alternative payment methods.
Post-denial Management
    Recover hidden revenue and minimize the impact of denials by top causes and sources of denials.

  • Automatically sort by dollar amount from greatest to least and/or date of service to head off filing any late claim denials. NOTE: This can take an entire day to do manually. With an automated system, it can happen before billing managers start their day.
  • Systematically assess the business impact of each kind of denial. Prioritize denials that either represent the greatest opportunity for quick revenue recovery.
  • Implement a system where claims with the same payer and cause of denial are appealed in bulk.
  • Isolate complex bills into a separate bucket to be reviewed by a trained billing manager.
Advanced Reporting
    High-level data analytics can help determine if you do not have enough people working on denials, if your process is broken, or if there’s problems elsewhere.

  • Conduct “root cause analysis” to pinpoint trends in denials. Say for instance claims submitted over the course of a few months were denied because a provider was mistakenly marked as not contracted with a payer.
  • Share insights about the reasons for denials with front-end and middle-stage revenue cycle teams can help reduce the flow of denials and address issues further upstream. For instance, if a significant portion of your denials are prior-authorization denials, review your front-end authorization process.
  • Establish benchmarks, analyze workflow performance, and track staff productivity related to denied claims. Review automatically created clean claim and denial rates with your employees can open silos and discover new opportunities for collaboration.

How Medical Billing Companies Use Data Discovery in Business Intelligence (BI)

In medical billing, we often talk about the importance of reporting and business intelligence for finding opportunities to reduce cost and increase revenue. Whether you’re a medical billing manager or the owner of a billing company, everyone employed by your company benefits when given access to data and reports related to their job performance. With that in mind, I’d like to take a step back and talk about the process that goes into creating those reports, called data discovery.

Business analytics to drive growth and show value to your clients
btnLearnMore orange

What is Data Discovery?

Data discovery is the process of collecting raw data from various sources, consolidating it into a single source, and converting it into useful information in the form of reports and visualizations. The usefulness of information is identified through recurring trends, anomalies, or predictive analytics broken down by factors like region, office, or procedure.

Data discovery can be demanding for medical billing managers when you’re accountable to both your management team and clients. Fortunately, client needs are like management needs in many ways. At a high level, clients want to see a lot of productivity reports and net gross collections, and so do billing companies. They need to know what you’re working on, changes in their revenue, and reassurance that your work is having a positive impact on their ROI.

Why is Data Discovery Important?

Data discovery is the first step into a more data-driven approach for monitoring your company’s and clients’ performance. Instead of reacting to the needs of your manager or client after the fact, a data discovery approach considers the goals and challenges of a company before building out a system for collecting and delivering the most useful information. This approach utilizes the full value of structured data to improve decision-making, optimize operational processes, and fuel new business.

Data discovery helps remove some of the biases and assumptions built into reports people create, helping them focus more on the things that practice owners and medical billing managers can control. Steps in data discovery include:

  • Collecting and preparing data -- This step can take a lot of time because of all the different business applications used by multi-specialty medical practices. Collection and preparation is traditionally a manual process that begins with extracting data every month, structuring it into a common format, and aggregating it into a central database. Today, the best business intelligence software largely automates this process.
  • Visualization -- Using visuals like graphs and dashboards to remove noise from data and highlight what’s useful information; visualizing data helps billing managers identify areas that need improvement, helps business owners understand which procedures to focus their attention, and can predict changes in the resulting revenue.
  • Advanced analysis -- Manipulating data in ways to uncover relationships between two or more data points at any given point in time; tasks include segmentation, correlations, and forecasting future value.

What Are the Best Uses for Data Discovery?

Here’s a look into some of the ways medical billing companies are using the data discovery process in business intelligence solutions to drive profitability, reduce waste, and create competitive advantage for themselves:
  • Improved operational efficiencies -- Billing companies and healthcare organizations need to be as lean as possible. Data discovery can be used to analyze a company’s operations for ways to reduce ongoing costs and maximize existing resources. For example, comparing your payer mix with the number of similar claims being processed by a certain payer as well as the amount of revenue you stand to receive will let you know where to prioritize your resources. Over time, you may notice a trend of similar claims being processed across multiple practices and can use that information to negotiate better payer rates.
  • Improved services and patient procedures -- Data discovery can track individual revenue streams to determine which services and patient procedures drive revenue and which are not. For example, a monthly report of collection trends may show a spike in certain laboratory tests being performed by pathology groups at certain times of the year. This information could be used to attract patients who typically receive the test the same time each year.
  • Transparency with clients and team members -- Medical billing companies should be able to supply practices with comprehensive performance reports at the click of a button. Provide customized reports to every client based on their unique challenges and performance focus.
  • Expertise -- Medical billing managers should be knowledgeable in how to approach troublesome denials. For example, denial rate gives billing companies data between all public and private payers and compares which provide the highest or lowest rate of denials for certain procedures. Once a procedure has been successfully adjudicated, the same process can be applied to the same procedure and payer in the future.

5 Key Issues with Medical Billing in the Revenue Cycle Management (RCM) Process

Let’s face it: medical billing has problems- serious problems. Decision makers and billing managers are facing old challenges, like manual processes, along with new pressure to reduce costs. But there’s good news! Some of the biggest issues are the easiest to address. In this article, we will cover the current realities of the medical revenue cycle management (RCM) process from beginning to end, some key issues affecting medical billing workflows today, and steps you can take to improve your company’s IT systems and financial performance.

We focus on your medical billing cycle operations so you can focus on patient service.
btnLearnMore orange

Current Revenue Cycle Management Workflow

What is revenue cycle management? Revenue cycle management (RCM) is a process whereby clinical management systems interact with medical billing systems which in turn exchange information between clearinghouses, patient statement systems, and patient payment vendors in order to complete a financial transaction between patients, providers and payers.

rcm process steps in medical billing workflow

Currently the RCM workflow from beginning to end consists of 8 medical billing cycle steps:

  • Step 1: Eligibility Check and Demographic Verification - ensuring patients have valid insurance coverage prior to scheduling an appointment.
  • Step 2: Collection of Co-pay/Balance - collecting a fixed amount from a patient at time of service, as well as the amount owed from a prior visit that wasn’t covered by a patient’s insurance.
  • Step 3: Claim Creation, Validation and Submission - creating claims either manually or electronically, and submitting them to either the insurance provider, a clearinghouse or other claims vendor.
  • Step 4: Correcting Errors/Denials - determining if a claim simply needs to be corrected and resubmitted or if additional documentation is required. Some insurance providers also have a specific appeal process, deadlines or timely filing limit you must meet to be successfully reconsidered.
  • Step 5: Claim Follow-up - reaching back out to the payer via phone, email, letter or online. When done correctly, following up can substantially reduce days in A/R and ease unnecessary financial burden on patients.
  • Step 6: Statement to Patient - sending the final costs to a patient as a printed or electronic bill including demographic details, the amount owed, date of the procedure, and transaction descriptions.
  • Step 7: Collecting Payment from Patient - mobile and online payment are two methods used today to simplify patient collections. It’s also important to consider the needs of your staff to fulfill basic requirements like automatic posting and reconciliation.
  • Step 8: Analytics/Data Analysis - processing and aggregating data into meaningful insights to improve business operations in the form of increased collections, reduced days in A/R, and stable financial performance.

Key Issues and Steps for Improving Medical Billing in Revenue Cycle Management

  1. Siloed Steps in Your Revenue Cycle Process - Around 69% of organizations use multiple vendors for their RCM process in healthcare. In the confusion of managing multiple vendors, some organizations overlook duplicate features available in their current software.
  2. How to Improve - Spend some time auditing your current RCM services. Look for opportunities to integrate systems so your clinical experience speaks to your billing management software, which in turn speaks to your clearinghouse, patient payment system, and statement vendor. Connecting patient EHR, billing information, clearinghouse, patient payment portal, and statement vendor can help you reclaim lost revenue.

  3. Backed Up Workflow During Admission, and After a Patient’s Visit - time consuming paperwork and manual processes are one of the largest contributors to inefficient claims management.
  4. How to Improve - switch from paper to electronic statements (e-statements) while still giving patients who prefer paper statements the option to receive one. Just make sure that you’re only sending the number of paper statements necessary to receive payment from patients who are most likely to pay.

  5. Denied and Rejected Claims Management - 22% of medical claims are rejected, and 65% are never resubmitted. Common causes include incorrect coding, eligibility failures, and missed deadlines.
  6. How to Improve - a three-pronged approach: Optimize processes for insurance verification and eligibility. Train your staff on crucial conversations regarding patient payment obligations and payment options. Transition to better IT software to reduce unnecessary delays between claim filing and patient billing.

  7. Adapting to Changes in ICD Codes - There are five-times the number of medical diagnosis codes in ICD-10 as there were in ICD-9. Traditionally adapting to changes in ICD codes relied almost entirely on continual training, resulting in staff turnaround and additional overhead. Challenges will increase with value-based requirements for more robust clinical documentation.
  8. How to Improve - automated coding and machine learning software can learn from past diagnoses codes compared to their rate of successful claim submissions, and then auto-populate new claims with the same information ensuring a higher success rate in a fraction of the time.

  9. Revenue Data Loss, and a Lack of Healthcare Analytics - Measuring outcomes is interesting, but not always actionable for improving productivity in your revenue cycle process.
  10. How to Improve - business intelligence in the form of roll-up reporting, real-time data processing, and intelligible dashboards. For example, it’s great to know your percentage of clean claims. But it's even better to know your top sources of denied claims. One metric shows you how well your company has performed in the past. The other metric shows you how you're company could perform better in the future.

3 Reasons You Should Offer Patient Payment Plans

The transition from volume-based to value-based care will have a monumental impact on what it means to be competitive in healthcare. There’s a growing interest in the convenience of digital communication, patient payment plans, and more options for paying healthcare bills online with an increasing financial responsibility falling on patients' shoulders.

If you enjoyed this post, you'll love our email updates!

Receive content on industry topics, upcoming webinars, current healthcare trends, and more!