The Revenue Cycle, Practice Management, and EDI
We evaluate Clearinghouses (EDI) based upon how well they support the revenue cycle management efforts of the medical practice. And for the vast majority of practices, the entire patient-to-pay revenue cycle happens within their local Practice Management System (PM) beginning when an patient appointment is entered into their appointment scheduler. A medical practice’s Billing System is the cornerstone or kernel of all its practice reporting, so all related patient data must flow into it in order to have coherent data that will allow you to successfully manage your practice from a single, end-to-end solution.
Tight Integration Between EDI & PM
Practice Management Systems and Clearinghouse functions (the day-to-day, hands-on claim management) go hand in hand. One without the other makes it impossible to manage the revenue cycle with granular precision. Ideally, they need to be a single integrated system.
Every practice is slightly different, but most practices accept insurance – a fact that is right now being blown up by HealthCare.Gov as tens of millions of new patients who previously didn’t have medical insurance are now making appointments to obtain medical care and preventative care. Because clearinghouses have so much data passing through them, they are in a unique position to analyze claim error data and rejections. The better they become at analyzing claim errors, the better they can become at helping you PREVENT them. And that is the name of the game –collecting all owed revenue and preventing all non-payment from insurance carriers (e.g. denials).
But before we can bring clarity to the relationship between your clearinghouse’s functionality and your PM software’s responsibilities, we need to pan back and understand some related parts in light of the big picture, RCM.
REVENUE CYCLE MANAGEMENT vs. PRACTICE MANAGEMENT
It is only with the moving parts of the revenue cycle in hand, that can we jump forward to Practice Management Software with Integrated EDI Features.
UNDERSTANDING YOUR REVENUE CYCLE MANAGEMENT NEEDS
Because patient pay now amounts to almost 25% of an office visit, it is critical to:
1. Determine Patient Responsibility before the Visit
2. Collect Patient Portions during the office visit –including prior balances. (Doing this with precision requires your Practice Management System to be joined to your clearinghouse account.)
3. Validate, Process, and Track all claims. (Here your clearinghouse reports back to your PM system)
4. Next, Managing Payer Reimbursements –Comparing payer payments against your fee schedules, contracted rates, and Relative Value Units (geographical norms).
5. Then Posting Payments & Adjustments, and processing pre-collections (patient statements).
6. Follow up on Patient Balances – (Here again, making sure that all open patient balances trigger an alert upon the next appointment.
7. Customer Satisfaction through trouble-shooting, communication, and promises kept by your clearinghouse and your PM support team is preeminent to practice management success.
Thinking Ahead to ICD-10
8. Because of next year’s arrival of ICD-10, the clearinghouses that did well in the 5010 transition should also do well in the ICD-10 transition. So this must also be taken into consideration.
INTEGRATED EDI FUNCTIONS
Selecting a billing system with tightly integrated clearinghouse features will allow you to achieve greater efficiencies along the revenue cycle management continuum.
Examples of Clearinghouse features integrated within your Billing System include:
1. Checking eligibility within the billing system. If you have to check eligibility on the clearinghouse system, you’re creating extra work for yourself.
2. You billing system needs to check eligibility in batch 2 or 3 nights before your patients are due in your office –automatically, while you’re asleep. This is a significant time saver and mission critical to estimating patient pay BEFORE the patient arrives.
3. Claim validation within the billing system should happen prior to uploading the file to the clearinghouse. Most billers receive claim edits from the clearinghouse instead of within the billing system, adding unnecessary time before you can get paid on your claims.
4. Internal sending of claims and receiving payer reports without having to leave the billing system. If you have to leave your billing system and log into the clearinghouse to view reports, then you are sacrificing RCM efficiency and creating extra work for yourself.
SOME CLEARINGHO– USE CONCERNS
– Direct Connections: Does the clearinghouse you’re considering have direct connections for the majority of their claim volume or do they source their connections to other clearinghouses. The more direction connections, the higher level of customer satisfaction.
– Provider Focused
Some clearinghouses are payer focused clearinghouses. You can discern the difference by asking how much of the clearinghouse revenue is obtained from the payer. If more than 50% of the revenue is obtained from the payer, then the clearinghouse is payer focus or has its roots and loyalty in the payer space. The best clearinghouses are ones that are Provider focused.
Practice Management Systems and Clearinghouse functionality go hand in hand. One without the other makes it impossible to manage the revenue cycle with granular precision. Ideally, they should be a single integrated system.