Web-based verification helps shrink AR days

Collection efforts more proactive now

When Phyllis Ekdall, CPA, director of finance for Vanderbilt Medical Group, assumed her position three years ago, she found the physicians’ organization — part of Vanderbilt University Hospital in Nashville, TN — in need of a turnaround. Reeling from a computer system conversion, the medical group also was experiencing a large volume of denied or rejected claims, Ekdall notes. "In reviewing the denied claims, we found the single biggest reason for their return was registration errors," she says, mistakes that could have been prevented at the point of service.

"When you have the number of patient visits we have every year — about 600,000 — there’s a significant amount of demographic and insurance data to capture," Ekdall notes. "If you don’t get that at the time of service, it’s difficult to chase down after the fact. Most systems allow a bill to be submitted almost immediately, and so the bill may already have been sent before the information is verified."

With consulting support and some major help from a web-based insurance verification product, Ekdall says, accounts receivable days have dropped dramatically, registration errors are down, and staff spend their time in proactive collection efforts, rather than tracking down rejected bills. "Our AR days have gone down 20% in the past year and 35% from our post-conversion high," she adds. "It’s due to a lot of different initiatives, but insurance verification has been a critical piece of making that happen."

It was normal not to have accuracy’

Like many physician groups, Ekdall says, Vanderbilt Medical Group was doing very little insurance verification. Patients would present without an insurance card, or even if they had one, it might or might not clearly identify the proper plan. With office staff checking in dozens, even hundreds of patients, in a day, she adds, "it was normal not to have accuracy."

Ekdall was introduced to a product called One Source, from Nashville-based Passport Health Communications, by a staff member who stumbled across it on the Internet.

One Source differs from integrated insurance verification products, says Beth Wolskij, national sales director for Passport, in that "because it’s web-based, you don’t need software, you don’t have maintenance fees, and you don’t have installation projects. You only need a regular browser, and [the service] is available 24 hours a day, seven days a week."

For a health system like Vanderbilt’s — including the hospital as well as the physician group — start-up cost for the browser-based product is about $2,000, Wolskij adds, "for as many users as you want access to." The client is also charged 33 cents per transaction, she notes, for services that in addition to insurance verification include patient address verification, credit reporting, and claims status. An integrated electronic insurance verification system, Wolskij says, is likely to cost between $15,000 and $40,000, plus annual maintenance costs.

If Passport adds a payer or a functionality, that information is released to every user on a moment’s notice, she says. "There are updates to the web site every week, and the users don’t even know it. If we add [an insurance company] to their list of payers, they sign on Friday morning and [the new payer] is there.

Also because of this ability to provide constant updates, Passport can remain compliant with the Health Insurance Portability and Accountability Act (HIPAA) of 1996 requirements, which are a "moving target" because of the ongoing changes and reinterpretations, Wolskij points out.

Passport was in the process of adding Medicare to the list of payers with whom Vanderbilt may check eligibility through its service, Ekdall says. When that addition is made, the service will cover about 75% of them, she says. As of late May, the coverage was well over half.

The process, Ekdall explains, works like this: As people call in for appointments, the patient is scheduled and then the call is transferred — perhaps by the secretary in a physician’s office — to a work queue that is handled by a group of employees trained in the nuances of insurance. Those employees go onto the Internet and check the insurance information the patient provides while he or she is on the telephone.

Although the medical group is moving toward centralized registration, it’s not completely there yet, she notes. "We still make appointments in the clinic specialty [area], but pass calls as much as possible. When we started, we literally had 700 people in the institution who could register a patient."

In addition to the web-based browser, Passport provides the Vanderbilt system with a nightly file-batch service. "Through a virtual private network," says Wolskij, "they send us at high volume eligibility files of their prescheduled appointments. We verify the information for them, and then they push the data where they need it to go in their system."

Passport actually sends back two types of electronic files, she explains. "One file is the marriages,’ where all the information matched — not just whether the patient is eligible [for a particular insurance], but the specific plan." That specificity is crucial, Wolskij notes, when there may be a dozen or more plans under, for example, Blue Cross of Tennessee.

Divorce by phone

The second report includes the "divorces," she says, "where something didn’t match, the payer or the plan or whatever. We send those in a separate file because somebody needs to get on the phone and talk to that person." When the batch file has a match, notes Ekdall, it puts a flag by that person’s account in the Vanderbilt computer system, so employees know that account information has been verified. "No human hands have to touch that account if it comes back validated," she adds.

The use of Passport has reduced registration errors, Ekdall says, and also has corrected problems that are not as easy to measure. "You don’t always realize the magnitude of what errors can cause," she points out. "If you didn’t know the right plan at the right time, you may not have done the right authorization requirement. Just measuring the registration denials alone can understate the magnitude of this."

One of the most important benefits of the system, Ekdall notes, goes beyond the ability to get paid more expeditiously for office visits. "It’s not as much the money when one office visit is denied, as the amount of resources spent tracking down those small-dollar bills. It’s a domino effect." Now, she says, "staff can devote that time to proactive collection activities. That’s probably the bigger benefit."