Differentiating the Exceptional from the Conventional: Using ECM to Improve Claims Denials Management

As organizations transition from paper processes to electronic, they search for ways that technology can enhance patient services as well as operational efficiency. Recently, for healthcare professionals—and even for people outside the industry—the prevailing topic of discussion has been the implementation of electronic health records. As we apply technology to improve healthcare operations, we need to expand that vision. In truth, some of the biggest issues facing healthcare institutions are associated with the revenue cycle. Recouping fees and funds is a multifaceted and complex process. Providers must navigate complex procedures to collect fees; payers must evaluate high volumes of claims for validity as well as for accuracy; and patients are caught in the middle.

Like most operations in the business world, the revenue cycle is guided by two key components: data-driven applications and unstructured documents. Both of these contain vital information which, when used correctly, can provide dramatic enhancements to your revenue cycle. Accessing the information within these components can be a challenge. Typically, unstructured documents are a mix of paper and electronic documents; the digital files usually come in various formats. The data-driven applications are usually characterized by different manufacturers, multiple programming languages, and varied data structures. Without the right technology, unifying them—and subsequently using their information to drive the revenue collection processes—can seem like an unattainable goal.

Bringing information together to transform processing capabilities

To address this challenge, many organizations implement enterprise content management (ECM) software, with the expectation that it will create efficiency throughout their organizations. A powerful ECM suite with the right tools can meet even the highest of expectations. ECM solutions can provide access to clinical, clerical, and administrative documents immediately, which has obvious benefits. Patients no longer have to endure excruciating waits for lab results, or for answers to medical or billing questions. The human resources department can store and access personnel records electronically, addressing security and privacy requirements that are mandated by law. Electronic access to patient records enables healthcare professionals to make informed decisions. With so many ECM systems on the market, however, it can be a challenge to differentiate hype from substance.

In choosing an ECM solution, your objective should be to identify one that offers a broad spectrum of capabilities. ECM, by definition, should give you the ability to simplify and enhance processes throughout your entire enterprise. The right system can provide tremendous ROI, since you do not have to purchase an assortment of products to enhance different departments. Three factors in particular distinguish such a system:

• Extensibility - A robust ECM solution should have the extensibility via web services to hook into applications and data stores behind the scenes, facilitating your access to documents and processes within your familiar software applications. In terms of denial processing, extensibility ensures that documents and data that are needed for decision-making are captured and delivered to the decision-makers, eliminating the need to search for information. Thus, information is delivered to the right people so that they can make the right decisions in a timely manner.
• Flexibility - When considering an ECM solution to improve revenue cycle efficiency, flexibility is of the utmost importance. Healthcare organizations need a system that can react to changes in payers’ Standard Operating Procedures (SOPs). Select an ECM solution that doesn’t require programming to reconfigure processes, but offers the convenience and power of keyboard/mouse configurability.
• Ease-of-use - An ECM system can have all of the functionality in the world, but if it is not easy to use, its abilities to improve your revenue processes are severely limited. A system that can dramatically simplify processes for your end users will be widely accepted and appreciated.

Bringing people together to get the most out of your denial processing strategy

Finding the right system is the first step toward simplifying your revenue cycle. Another essential component for success is finding a vendor that not only knows how to leverage an ECM solution, but also intimately understands the healthcare revenue cycle, including the challenges that lead to denied payments. As you meet with vendors to narrow your ECM choices, make sure they have a thorough understanding of your needs, your challenges, and your business processes.

By the same token, your success is dependent on your ability to designate someone from your organization who has a comprehensive understanding of your data: where it is located, what it is, and what it means. With the right people and the right system in place, your denial processing strategy has the potential to recover significant revenue.

Expediting the processing of denied claims

The claims denial process is fraught with potential for error. Registration discrepancies, coding errors, a lack of patient precertification, noncovered services, procedures that do not match a diagnosis, and a litany of other factors—some of which may even seem arbitrary—can result in claims denials.

Compounding the situation, you may file claims correctly, only to find that a payer has changed its standard operating procedures. Then the volley begins, as you struggle to resubmit denials before their deadlines. When you consider the sheer volume of claims that are processed concurrently in every facility, you can imagine the substantial revenue that could be recovered with the right denial processing strategy.

A robust ECM solution will allow you to route documents and data electronically so that they can be used to expedite denial processing. After gathering information, your ECM system should be able to consolidate it into a user-friendly format that is viewable on a single master decision screen. Processors then have the data at their fingertips to determine immediately why claims were denied and how to refile them.

With the right ECM and workflow system in place, you can eliminate the need to search through countless computer screens and applications to find patient information that is required to resubmit claims. Workflow can distribute claims to a specific processor, and simultaneously ensure that all of the patient information that is needed for filing is gathered and available on a single screen. As an added benefit, a powerful ECM and workflow system can also manage work distribution. This guarantees that processors are not overwhelmed. The net result is a tremendous savings in the time needed to process denials. Having patient and procedure information available at the click of a mouse eliminates staff frustration and also helps your organization to process denials in a timely manner.

Workflow can also be used to address changes in SOPs. Often, claims that have been submitted correctly are denied because payers change their procedures. The ability to address SOP changes across an enterprise via workflow ensures that healthcare providers will file subsequent claims in accordance with payers’ specifications. Appeals letters can also be standardized through workflow, and customized with specific patient information. Workflow can even be configured to provide alerts based on deadlines so that you can resubmit denials within each payer’s mandated timeframe. By standardizing processes, workflow can also simplify claims submissions in cases where multiple payers have different requirements for patient demographic information.

Using ECM to gain an overview of your denial processing

A solid ECM system can further enhance your denial processing strategy by allowing you to track, monitor and measure the causes of your claims denials. Reporting capabilities that are available with certain ECM systems can provide—in graphic representation—a summary of the reasons your claims are being denied. Comparing your denials enables you make proactive decisions as you target specific areas for improvement. For example, if you discover that the majority of your denials are a result of incomplete (or incorrect) demographic information, you can configure your workflow system to ensure that patient demographics are complete and up-to-date before claims are submitted.

Using that same scenario, it is equally important to have an overview of which denials are causing you to lose the most revenue. Some business areas may account for a smaller number of denials, but if the amount of revenue involved is significant, it may be wise to make that area a higher priority. By choosing an ECM system that can integrate with your A/R software, you can compare the financial losses from denials that are associated with different areas of your enterprise. Having this information available leads to better decision-making and more informed management.

Using ECM to improve your bottom line

According to Healthcare Financial Management (“Six steps to an effective denials management program,” September 2005), “Studies have suggested that implementing an effective denials management program can have a more dramatic impact on improving the bottom line than any other single revenue-generation or cost reduction initiative. The consensus is that an effective denials management strategy is crucial to minimizing a healthcare provider’s revenue exposure.”

Clearly, it is not enough to merely identify denials and address them on an individual basis. Manual processes simply are not capable of addressing a denial processing strategy on a level that will provide significant returns. Using performance analytics to measure and manage your denials is the best way to implement a universal strategy for recovering revenue for services rendered. Most healthcare organizations lose 3 percent to 7 percent of their revenue to denials (Healthcare Financial Management, “Using technology to improve denials management,” August, 2005). A strong strategy coupled with appropriate technology can significantly decrease your losses, create a stronger cash flow for your organization, and improve your overall business performance.

As you consider an ECM software implementation, evaluate its potential uses outside of the denial processing realm. Identify the criteria that would allow a system to benefit your entire organization. Take into account the ROI that a flexible system can provide when you apply it to different areas throughout your enterprise. An initial investment in ECM software can be leveraged to simplify back-office operations such as accounting, HR, credentialing, registration, billing, and other departments that keep operations running smoothly. At the same time, it can be used to augment an EMR/EHR system to ensure that patient records are comprehensive. When you understand the qualities that distinguish a truly exceptional ECM system from one that is merely conventional, you will discover that denials, underpayments, and other inefficiencies do not have to be an accepted part of your revenue cycle.

For more information or to schedule a demonstration, please Contact DocFinity now.