After a competitive bid process, Mercy chose HTP Inc.'s RevRunner suite of online tools to help billers and front-desk staff with these calculations. "We found out we were underestimating the patient's share of the bill. We were asking for $100 to be on the safe side, because we didn't want to have to refund patients, but we were really not asking for enough money."
One of the bright spots, Bailey says, is that the IT department had minimal involvement in the project, because the tools are online. But the biggest surprise, say Bailey and Pettigrew, is the results.
"We're seeing improved receipts in Medicaid reimbursement from patients previously identified as self-pay. That's a big swing," Bailey says. "We're finding more commercial payment info earlier in the process."
Since implementing the RevRunner product in July 2007, Mercy has experienced a 17 percent decrease in self-pay patients at admission in July 2007 vs. the prior month; a significant increase in Medicaid admissions for July, which equates to $200,000 in cash acceleration; and found $350,000 in charity care that would have previously been written off as bad debt in August.
Meanwhile, point-of-service and pre-service collections improved by $1.7 million from May 2006 to April 2007, and post-service collections are up $1.3 million from January to July 2007 compared to the same period in 2006. Overall, Mercy Health System assumes it will achieve a $5.7 million increase in net revenue and a $4.9 million improvement to its bottom line for the calendar year, meaning an ROI from the staffing and technology investments of 6:1.
Most impressively, says Bailey, Mercy is now $10.8 million under budget for bad debt for 2007 when normalized for price increases and revenue capture initiatives, and total uncompensated care for the month of October 2007, the latest period for which data was available at press time, was at 4.2 percent.
Fixing bad claims
Bette Warn, who runs a billing organization for an emergency physician group and internal medicine group in Lakewood, CO, has a similarly high volume of self-pay patients because her physicians treat a high number of indigent patients. Finding some source of payment for treatment rendered on such patients is critical for ATD Resources LLC, for which she is executive director. With 74 practitioners, Warn first focused on fixing claims before they were denied for errors.
"Where there have been data entry issues, we can do training with the billers to minimize errors," she says. "But before, there was no way to see that prior to a denial from the insurance company." Now, with Navicure, a vendor that provides Web-based claims applications for physician groups, ATD can discover potential deniable claims errors before they're submitted for processing and determine who is making the errors.
"It's more expensive than what we were using before, but it's paid off in reduction in staff and the use of paper, and it keeps people at their desk instead of up digging through file cabinets or arguing on the phone over insurance payments," she says.
In the first year, ATD increased self-pay collections by $1 million and reduced collection agency referrals by 57 percent. The reductions can be attributed mainly to the fact that the new information tools help the billing officer know patients and their coverages better.
Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at firstname.lastname@example.org