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Optimizing revenues through effective contract management.

Many provider organizations are losing millions of revenue dollars each year because their systems and administrative processes do not efficiently and effectively monitor and enforce contract terms. This inefficiency may result from many factors, including lack of understanding of managed care contracts, terms, and requirements; limited information systems; and inadequate operational controls that interfere with an organization's ability to capitalize on contract terms. Adequate information systems, process improvements, and well-informed contract management staff can help many organizations reduce costly errors and inefficiencies that result when the negotiated terms of managed care contracts are not enforced.

Communication↗

Calculating five types of typical underpayments.

Underpayments to providers under their payer agreements are a cause of many thousands of dollars in lost revenue. Providers should devise a plan to make certain that payments made to them are accurate, on time, and adhere to other contractual obligations. The importance of developing and implementing such a plan is substantiated by the fact that nearly 100 percent of a provider's commercial business is under contract. As a starting point, providers may wish to focus on five common types of underpayments: underfunding due to late payments; fee-schedule changes that are contractually disallowed; miscalculation of performance-based bonuses and errors in risk-payment reconciliations; inappropriate denials or inappropriate downcoding of claims; and non-payments. The successful execution of a plan to identify and resolve problems and recover payments owed relies on the provider's ability to document and prove that payment is due.

Accounts Payable and Receivable↗

Effective claims denial management enhances revenue.

Claims denial management can enhance revenue in times of declining payment and increasing cost pressures. Denials usually arise from process problems leading to inadequate documentation. A denial management team should oversee prospective prevention and claims recovery. Prospective prevention minimizes denials by defining scope of service, tracking causes for denials, and improving related processes. Claims recovery improves chances of recovering denied payment.

Aged↗

Surefire strategies to reduce claim denials.

Denials can be reduced by undertaking some simple steps: Transfer patients automatically from scheduling to pre-registration to have benefits verified and authorizations obtained. Make sure system data fields are large enough to enter all information needed. Track the frequency of denials for noncontracted services and either include them in the contract at renegotiation or discontinue the billing.

Benchmarking↗

Identifying barriers to billing compliance.

Programs designed toward the control of health care fraud are leading to increasingly aggressive enforcement and prosecutorial efforts by federal regulators, related to over-reimbursement for service providers. Greater penalties for fraudulent practices have been touted as an effective deterrent to practices that encourage, or fail to prevent, incorrect claims for reimbursement. In such a context, this study sought to examine the extent of compliance management barriers through a national survey of all accredited US health information managers, examining likely barriers to payment of health care claims. Using data from a series of surveys on the stated compliance actions of more than 16,000 health care managers, we find that the publication and dissemination of compliance enforcement regulations had a significant effect on the reduction of fraud. Results further suggest that significant non-adoption of proper billing compliance measures continues to occur, despite the existence of counter-fraud prosecution risk designed to enforce proper compliance. Finally, we identify benchmarks of compliance management and show how they vary across demographic, practice setting, and market characteristics. We find significant variation in influence across practice settings and managed care markets. While greater publicity related to proper billing procedures generally leads to greater compliance awareness, this trend may have created pockets of "institutional non-compliance," which result in an increase in the prevalence of non-compliant management actions. As a more general proposition, we find that it is not sufficient to consider compliance actions independent of institutional or industry-wide influences.

Data Collection↗

Rates of claims for cumulative trauma disorder of the upper extremity in Ontario workers during 1997.

Surveillance of work-related cumulative trauma disorder of the upper extremity (CTDUE) requires valid and reliable claim extraction strategies and should examine for confounding and interaction. This research estimated crude and specific rates of CTDUE claims in Ontario workers during 1997 while acknowledging misclassification and testing for confounding and interaction. Lower and upper limit event estimates were obtained by means of an algorithm applied to the Ontario Workplace Safety and Insurance Board (OWSIB) database and were combined with "at-risk" estimates obtained from the Canadian Labour Force Survey (LFS). Poisson regression was used to evaluate confounding and interaction. The method used to identify CTDUE claims had a substantial impact on the magnitude of rates, female to male rate ratios, the most commonly affected part of the upper extremity and the highest risk occupational categories. Poisson regression identified sex interactions. It allowed rigorous evaluation of the data and indicated that rates should be examined separately for men and women. Researchers should clearly define extraction strategies and examine the impact of misclassification.

Adolescent↗

Light at the end of the tunnel for denials management.

Denials management is too important to a provider's financial health to be addressed haphazardly. The Six Sigma performance-improvement methodology can ensure your organization receives the full payment to which it is entitled.

Benchmarking↗

Well scrubbed. Look for quality of data, flexibility in a claims validation system.

Coding and compliance validation products complement practice management systems or claims clearinghouses. "Scrubber" systems help practices file accurate claims the first time, shortening the accounts-receivable cycle and reducing denials. By weighing the pros and cons of a scrubber system and learning how to evaluate one, you can acquire the right technology for your practice.

Accounts Payable and Receivable↗