In the fall of 2012, Keith Cantrell, Chief Revenue Officer of SCP Health Medical Billing, was looking to drive change: denials were too high, collections were not being optimized, and workflows were overly manual. Cantrell wanted quick wins; he knew that athenahealth’s consultants would get him on the right path.
The Performance Manager consulting service from athenahealth uses a keyperformance indicator (KPI)-driven approach to manage software and workflow changes across the business, and brings significant domain expertise in best-practice use of athenaIDX software solution.
An initial review of the KPIs identified a key setup gap with EDI remittance posting. The project team was able to make changes during the onsite kickoff meeting to eliminate over 50% of the edited remits requiring manual posting. This saved SCP over $6,000 per month in avoided payment posting-related costs from the project’s first week onward.
SCP Health depends entirely upon its client hospitals to supply registration and insurance information, and getting quality insurance data from those hospitals has always been challenging. As a result, insurance eligibility denials were the single highest source of preventable denials, at over 5% of billing. Solving the issue involved a comprehensive redesign of the eligibility verification process, to maximize an exception-based workflow. The result was a 58% drop in eligibility-related denials within 6 months of the rollout of the redesigned workflow.
Deep dive analysis drives down claim rejections and denials
While eligibility was a major driver of claim rejections and denials, it was by no means the only one. The project team used deep dive analysis, through extended monthly workouts, to identify the root cause of top claim rejections and denials each month. For each issue, an owner was assigned and targeted action plans were put in place to ensure that preventable denials were being “headed off at the pass” as early in the billing cycle as possible.
A summary of improvements
Working together, athenahealth and SCP Health made significant progress within each area of the revenue cycle targeted for improvement. Specific accomplishments include:
- Claim rejections: A 51 percent reduction in claim rejections, with 10,000 fewer claim rejections received each month.
- Claim denials: A 42 percent reduction in denials, with over 10,000 fewer denials worked each month.
- Between claim rejections and denials, at $15 per reworked claim, the savings in rework costs are estimated at over $300,000 per month.
- Eligibility verification denials: Eligibility process and setup improvements resulted in eligibility-related denials dropping to 2.1 percent of billing, from a 5.0 percent pre-project average, with no associated increase in staff.
- Paper claims: A 32 percent reduction in paper claim rate, or 15,000 fewer paper claims each month. Based on an estimated processing cost of $2 per paper claim, this translates into over 6,000 fewer paper claims per month, or $12,000 in monthly savings.
- Electronic payment posting: A 53 percent improvement in EDI remittance edits, or roughly 20,000 fewer manually posted payments per month, with associated savings of over $6,000 per month.
athenahealth is a leading software provider that leverages technology and analytics to help healthcare providers across the continuum of care effectively manage their financial, clinical, and human capital work flows. Offering a comprehensive suite of innovative technology-enabled solutions, athenahealth aims to improve quality, increase efficiency, and reduce waste in the healthcare industry.
It’s continuous improvement, and month after month we see significant progress because the athenaIDX team knows what to look for and how to turn those areas of improvement into something that’s actionable.
- Kristi Bradley SCP Health Vice President Revenue Cycle