Support Revenue Collection, Improved Efficiencies as Medical Payments Become More Complex

FOUR REASONS PROVIDERS NEED MORE THAN A CLEARINGHOUSE

Medical clearinghouses have been around for years and thanks to technological advances they’re more sophisticated and useful than ever. Even so, many medical practices continue to submit claims manually or use a combination of manual and automated methods.

The bottom line: If the provider office isn’t fully automated, it’s wasting a considerable amount time and throwing away money.

Provider offices submitted 119 million claims manually in 2012, compared to 1.1 billion submitted electronically, according to the “2013 U.S. Healthcare Efficiency Index, Electronic Administrative Transaction Adoption and Savings” published by CAQH.1 More recently, in 2015, 95 percent of providers and health plans submitted claims electronically, according to the “2016 CAQH INDEX: A Report of Healthcare Industry Adoption of Electronic Business Transactions and Cost Savings.”2

While it would seem clearinghouses are already well on the way to eliminating manual transactions, many practices continue to submit and monitor claims manually. But the race is far from over.

The following are four reasons providers need more than a clearinghouse.

1. Core Competency Clearinghouse

Billing and payer contracting expertise is not a core competency of any practice. While practices are skilled at processing claims and completing other clearinghouse-related tasks, they don’t exist for that reason.

Treatment, yes. Diagnosis, of course. Testing, you bet. Healthcare providers and their staff have expertise in many areas, but being all-things-clearinghouse isn’t among them. It makes sense to get the help you need. You wouldn’t try building a house on your own. Or replacing the engine in your car.

Managing claims is a core competency for revenue cycle organizations. It’s what they do all day, for multiple customers. By doing so, they’re able to bring best practices to every client along with technology advances, payer submission rule changes and much more. A clearinghouse should be flexible and have the ability to scale to your practice and grow with you as your business matures.

The sheer number of contracts practices have with payers is reason enough to work with a clearinghouse. “Physician practices frequently contract with over 30 individual insurance companies to maximize the pool of patients that they can serve, increasing total revenue,” according to a report from Falcon Capital Partners.3 “Each insurance company brings its own unique claim forms, reimbursement methodologies and processes, and technology systems, which significantly complicates reimbursement processes.”

Administrative transactions—ranging from claims submissions to eligibility verification to claims status inquiries—accounted for approximately 4.8 million medical health plan contacts in 2015, according to the 2016 CAQH report.4

2FOUR REASONS PROVIDERS NEED MORE THAN A CLEARINGHOUSE

=

The bottom line: If the provider office isn’t fully automated, it’s wasting a considerable amount time and throwing away money.

“

Claims submissions remain the most popular way to send information electronically with 95 percent of providers and health plans participating, according to the report. Health plans are responsible, in part, for the increasing adoption rate because they occasionally offer incentives to high-volume providers or enforce electronic submission requirements, the 2016 CAQH report found.5

Limiting manual processing may help reduce operating costs and increase revenues simply through the considerable number of claims that can be processed automatically. Automated processing also helps decrease coding mistakes. Physicians Practice notes a few common mistakes are:6

• Wrong procedure code;

• Failure to link diagnosis code to appropriate procedure; and

• Inability to stay current with new coding rules.

This is why a revenue cycle management (RCM) solution is so important in this context. It helps providers stay on top of any changes, and get paid correctly and on time.

2. Improve Customer Experience, Service

The provider/patient relationship is important to the ongoing success of your practice. An unexpected surprise in the form of a bill can easily damage the relationship and send the patient looking for a new provider. Even a somewhat small bill can cause major issues for some patients. Thirty-seven percent of patients would have a hard time paying a $100 medical bill, according to an article published by MarketWatch.7

A good RCM program helps to maintain and even enhance customer relationships. Improving your patient financial services is one way to ensure positive, long-term relationships with your patients.

One way to accomplish this is by giving the patient an easy-to-understand billing statement, which addresses the cost of services delivered. This helps your customers understand the treatments they’ve received and the associated costs incurred.

Following receipt of the statement, the provider should address the ways patients can pay, ensuring it’s trouble-free. For in-office payments, patients expect the option to pay by credit card, cash or check. While at home, they should be able to access a secure, online portal, which allows payment at any time.

The goal? Make it easy to pay.

3. Time Deficit Stymies Providers

No one has enough of it. When you spend hours working claims—through various stages in the process—you have even less.

Although many claims are submitted electronically, other extremely important parts of the revenue management process are still submitted by hand. In 2015, 72 million eligibility checks were completed manually; 1.8 billion electronically, according to the 2016 CAQH study.8 For claims status questions, 34 million were checked manually; 300 million electronically, according to the 2016 CAQH study.9

Either way, using both processes, rather than committing to an automated revenue cycle workflow, contributes to a lack of efficiency, costing the practice thousands of hours every year.

3FOUR REASONS PROVIDERS NEED MORE THAN A CLEARINGHOUSE

“On average, providers spend 8.5 more minutes conducting manual transactions compared to electronic transactions. Depending on the transaction type, this time difference can be as high as 29 minutes,” according to the 2016 CAQH study.10

So what’s the big deal? Eight or nine minutes is nothing in the scheme of things. But over just one week the wasted time across all providers is astounding: 1.1 million hours of administrative work per business week, according to the 2016 CAQH report.11

That’s 1.1 million hours every week that could be better spent providing patient care or any number of other tasks core to the provider practice.

4. Wasting Money

The practice is doing it a lot. Every day. Whether it’s staff salaries related to time spent manually processing claims or the inefficiencies inherent in manual claims submissions. The difference in cost between manual and electronic transactions is staggering.

“On average, each manual transaction costs providers and health plans approximately $3 more than each electronic transaction. This cost difference represents an incredible savings opportunity, given the more than three billion manual transactions conducted annually between commercial medical health plans and providers,” the CAQH report notes.12

The most expensive manually-processed claims are:

• Prior authorization;

• Claims status; and

• Eligibility verification.

Electronic transactions are a fraction of the cost of manual transactions. “Transitioning from manual to electronic processes for the transactions studied could save medical health plans and providers an estimated $9.4 billion in direct cost each year,” according to the 2016 CAQH report.13

The most common automated transactions are:

1. Claim Submission

2. Eligibility and Benefit Verification

3. Prior Authorization

4. Claim Status Inquiry

5. Claim Payment

6. Claim Remittance Advice

7. Claim Attachments

Each one can be handled quickly and efficiently via an RCM vendor submitting the information electronically.

4

The difference in cost between manual and electronic transactions is staggering.

“

FOUR REASONS PROVIDERS NEED MORE THAN A CLEARINGHOUSE

1.1MILLION

Hours of administrative work per business week wasted by

manual transactions

72MILLION

Eligibility checks completed manually in 2015

$185,000 Annual manual

eligibility processing cost

$11,000Annual automated

eligibility processing cost

$9.4 BILLION

Saved by health plans, providers moving from manual

to electronic processes

CLEARINGHOUSE: BY THE NUMBERS

For example, there are 17 eligibility-related transactions per member submitted to health plans every year. When performed manually, the cost $8.39 per check, according to 2016 CAQH report.14 A 2012 study published by the Annals of Family Medicine estimated a primary care team could see anywhere from 1,300-1,900 patients every year.15

An automated eligibility process ($0.49/transaction) could cost as little as $11,000 every year for 1,300 patients. Manual eligibility processing ($8.39/transaction) could cost a practice approximately $185,000 annually for the same number of patients. And that’s just for eligibility checks.

“Automation of activities can enable businesses to improve performance,” according to a McKinsey & Company report, “by reducing errors and improving quality and speed, and in some cases achieving outcomes that go beyond human capabilities.”16

Core Clearinghouse Features

Once the decision is made to go high-tech, this is what practices should look for in a clearinghouse vendor and its solution.

• Eligibility verification: Patients may change health plans once a year or more. It’s critical to know if they’re eligible prior to treatment.

• Claims management: Integrate with multiple health plans and other payer sources to help ensure quick payment.

• Denials management: Understand why denials are made, prioritize denials and automatically generate appeals.

• Patient access: Set payment expectations before leaving the office.

• Patient financial: Offer multiple payment options to patients.

The Answer More Than a Clearinghouse

With a better understanding of the financial ramifications and time loss caused by the use of manual claims processes, it quickly becomes apparent an automated clearinghouse is the best answer to this intricate question.

The world of the provider is much more complex today than it was even a few years ago. Payer contracts are more complicated, payments are frequently lower and time constraints continue to grow. You’re under continuous pressure to do more and offer more with less time and fewer resources. Add to this the hours spent yearly just on your practice’s manual administrative work and it’s clear a process improvement is necessary.

Whether you want to save staff time, increase revenue money or do both, a revenue cycle management solution is the first step to helping a practice become more efficient and effective.

5FOUR REASONS PROVIDERS NEED MORE THAN A CLEARINGHOUSE

=

Advantages of Using TriZetto Provider Solutions

We take on the complex clearinghouse process for our customers so they can do what they do best: provide care.

At TriZetto Provider Solutions, we help providers get paid quickly and accurately through solutions that offer business-critical information:

• Patient Access

• Claims Management

• Denials Management

• Contract Management

• Patient Financial

About TriZetto Provider Solutions, A Cognizant company

As a Cognizant company, TriZetto Provider Solutions truly is More Than a clearinghouse. TPS leverages industry-leading solutions to provide comprehensive revenue cycle management services to help organizations with billing, analytics, appeals, clinical integration, digital patient engagement and more. Our collective expertise and global reach in healthcare technology allow for endless possibilities as we work together, with our clients, to transform healthcare.

6

For more information contact us at: 866.969.3666 or visit us at:

TriZettoProvider.com

1. “2013 U.S. Healthcare Efficiency Index, Electronic Administrative Transaction Adoption and Savings,” CAQH, last modified May 5, 2014, https://www.caqh.org/sites/default/files/explorations/index/report/2013Index.pdf.

2. “A Report of Healthcare Industry Adoption of Electronic Business Transactions and Cost Savings,” CAQH, 2016, https://www.caqh.org/sites/default/files/explorations/index/report/2016-caqh-index-report.pdf.

3. “Industry Research Report: Physician Revenue Cycle Management,” Falcon Capital Partners LLC, 2013, www.falconllc.com.

4-5. CAQH, “A Report of Healthcare Industry.”

6. “Five Common Coding Errors in Medical Practice,” Physician Practice, February 12, 2013, http://www.physicianspractice.com/pearls/five-common-coding-errors-medical-practices.

7. “Forget iPhones — Many Americans Can’t Pay a $100 Medical Bill,” MarketWatch, March 24, 2017, http://www.marketwatch.com/story/forget-iphones-many-americans-cant-pay-a-100-medical-bill-2017-03-21.

8-14. CAQH, “A Report of Healthcare Industry.

15. Justin Altschuler, MD et al., “Estimating a Reasonable Patient Panel Size for Primary Care Physicians With Team-Based Task Delegation,” Annals of Family Medicine, September/Octiber 2012, https://doi: 10.1370/afm.1400.

16. James Manyika et al., “Harnessing Automation for a Future that Works,” McKinsey & Company, January 2017, http://www.mckinsey.com/global-themes/digital-disruption/harnessing-automation-for-a-future-that-works.

End Notes

FOUR REASONS PROVIDERS NEED MORE THAN A CLEARINGHOUSE