Know Your Patients, Get Paid Faster

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A variety of software products are helping revenue centers receive more money more quickly.

In Martin Scorsese's classic movie The Last Waltz, The Band lead singer and pianist Richard Manuel says he "just wants to break even." Many hospitals feel the same way--but breaking even just isn't good enough anymore. "Breaking even doesn't give us the ability to continue to grow our capability to meet community needs," says Dennis Pettigrew, senior vice president and chief financial officer for Mercy Health Partners of Cincinnati.

One of the key challenges for hospitals and physician practices looking to do better than break even is identifying insurance coverage for patients before services are rendered. Although there are several ways to do it, the most common is as old as The Last Waltz, which premiered in 1978: doing it manually. But healthcare is getting smarter about verifying coverage before services are rendered, cleaning claims before they can be denied, and qualifying patients for Medicaid or charity care if they are eligible, thus saving precious time.

In large part, they're doing it through advanced software that can mine dozens of information sources via the Internet to gain patients' financial data. It's all about reducing days in accounts receivable--and making sure the proper source is tapped for revenue, says Shari L. Bailey, a revenue cycle consultant with Washington, DC-based Verite Consulting and former senior director of revenue cycle with Mercy, a five-hospital system that also has a health plan, interests in long-term care, and several employed physician practices.

Self-pay boom

Mercy, which had already made one foray into coverage identification software, was looking for a better way to manage its self-pay patients. Between 2006 and 2007, "our self-pay population had increased by nearly 10 percent and by about $88 million in gross charges, so that's a huge increase," Bailey says. "Secondly, we weren't identifying as many insurance coverages as we could for our commercial population. Our initial vendor only got 50 percent response, so we needed to improve that aspect of our business as well." Finally, Mercy wanted to identify those patients eligible for charity care earlier in the process.

One of Bailey's early primary objectives was to evaluate whether the system had the right staff in the right places to do the job. "I looked at that before we considered technology because I wanted to see if we could meet our objectives with the resources we had."

But it soon became clear that staff needed new tools to help its billers work more effectively. Much of the strategic direction for the shift in tool sets came from Pettigrew and the system's board, which boasted several members who are employed in the financial sector, including a board chairperson who is a senior vice president with Fifth Third Bancorp.

When they investigated the system's AR days, among other statistics, "they said, 'Guys, you oughta be able to do better,'" says Pettigrew. The board insisted on a solution that incorporated credit scoring, unlimited eligibility inquiries, and an ability to determine a patient's ability to pay and a recommended point-of-service collection amount.

"We were well into POS collections and had added staff to make outbound calls to patients pre-service and let them know what we would be asking them for on admission," says Bailey. "We had this manual process, but I realized we could do this much better with an automated technology. We're still making the outbound phone calls, but the manual calculation of what the patient would owe is what we changed."

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