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Claims data analysis helps hospital recoup revenue
Appeals, following underpayments generate income
By analyzing claims data to assure that the hospital was reimbursed appropriately and aggressively appealing all denials and underpayments of claims, DCH Health System in Tuscaloosa, AL, was able to generate a 1.25% increase in net patient revenue.
The additional revenue comes from appealing denials by commercial insurance companies and Medicare, denials that result from the Medicare Administration Contractor (MAC) audits, as well as following up on underpayments by insurers, says Brian Pisarsky, RN, BS, ACM, CPUR, director of case management services at DCH Regional Medical Center and Northport Medical Center.
"Our revenue integrity division of the case management department pays close attention to all of the hospital's claims. If we determine that we were underpaid or not paid, we appeal the case," he adds.
Creation of revenue integrity division
DCH Health System created the revenue integrity division to look for sources of lost reimbursement in October 2008. The division is staffed by nurses and professionals from the hospital business office and works in the case management department.
"The case management staff in my department were already working closely with business office personnel on denials and appeals. We put them together into one department that combines expertise in claims and billing with expertise in medical necessity issues," Pisarsky explains.
The revenue integrity division is staffed by three revenue integrity nurses and four revenue integrity coordinators who have business office backgrounds.
"The beautiful part for us is the marriage between the financial and the medical. There are claims issues that may not make sense if you don't have a financial background and others that are confusing if you don't have a medical background. Our team talks to each other continually and works very closely to ensure that we are paid appropriately," Pisarsky says.
All of the hospital's contracts with insurers are loaded into the computer system. As reimbursement comes in, the computer system compares the claims the hospital submits and the reimbursement received to the insurance company's contract to ensure that the hospital has been paid appropriately.
If a claim has not been paid appropriately or has been denied, the revenue integrity department either issues a formal appeal or calls the insurance company to find out why the claim wasn't paid.
For instance, if the hospital's contract with an insurer calls for $5,000 in reimbursement for a particular claim and the hospital receives only $4,500, it shows up on the computer analysis.
If the analysis determines that the hospital has been underpaid for a claim, the revenue integrity staff drill down to find the cause and follow up with the appropriate hospital department to get additional information before contacting the insurance company.
The revenue integrity team contacts the utilization review staff to ensure that all of the services the patient received were pre-certified and reviews the record to determine if there were medical necessity issues.
"A portion of the unpaid claims involve medical necessity or pre-certification. As soon as they are identified, someone from the department talks to the insurance company. We talk back and forth on any inappropriate payment and take it to whatever level of appeal we need to in order to get it paid," he says.
If it is a medical necessity issue, a revenue integrity nurse reviews the patient record and contacts his or her counterpart at the insurance company.
"When there is a medical necessity issue, it's more effective to have a nurse talk to another nurse because they can talk about the medical issues as well as the billing issues," Pisarsky says.
When insurance company contracts are up for renewal, the hospital's contracting staff use the data to negotiate contracts. For instance, if the contracting staff have data that show that the insurer consistently underpaid claims, it may be able to negotiate a higher payment amount or a change in the contract provisions.
Pisarsky uses the data to educate his staff when analysis shows that there were problems with documentation or utilization management.
"If we identify patterns in the denials that are due to our practices, we develop quality improvement and process improvement initiatives to correct the problem," he says.
(For more information, contact: Brian Pisarsky, RN, BS, ACM, CPUR, Director of Case Management Services, DCH Regional Medical Center and Northport Medical Center. E-mail: bpisarsky@DCHSYSTEM.com.)