Define revenue cycle success with charge reconciliation

Shonna-Marshall-1This article originally appeared in the July 2020 issue of the National Association of Healthcare Revenue Integrity (NAHRI) Journal.

Charge reconciliation, or the act of comparing charges generated to services provided, is an important component of accurate and comprehensive charge capture and revenue generation. Completing charge reconciliation daily protects revenue streams and promotes early identification of root cause issues affecting financial stability. Organizations often identify and realize 0.5‒1% of annual net revenue improvement through system updates/enhancements, charge methodology enhancements, effective charge reconciliation processes, and the capture of missed charges.

Every dollar is important, not only to cover the costs of care but also to prepare the organization for future reimbursement impacts and negotiations. This is especially true now given the revenue shortages due to the novel coronavirus pandemic.

Tangible value

Effective charge reconciliation supports early identification of potential issues with documentation completion, charge entry, charge workflows, and charge description master (CDM) setup. Failing to reveal these issues can lead to missed charge capture, unbilled backlogs, denials, or underpayments.

Organizations should establish baselines for comparison to current revenue capture for services or to key performance indicators. This provides insight into revenue metrics and ability to forecast revenue, helps with budget process, provides transparency with departments, opens lines of communication for potential revenue streams, enhances reporting for tracking and trending, increases accountability for revenue, and increases awareness of system functionality and maintenance.

Problem solving

One of the biggest obstacles with charge reconciliation is building an ownership model and governance structure. Clinical staff may not have been involved in payer charging/billing requirements and a comprehensive and proactive reconciliation process. Engaging them in these efforts will require training, education, accountability, and enhancements to their workflow.

Another obstacle is setting up the security and reporting structure that will allow reconciliation to occur. Revenue integrity and IT staff need to have a good relationship to get the right data for departments and ensure its quality. Getting the data is only one step of the process; the most important step is analyzing and interpreting it, then applying actionable impacts from it.

A central revenue integrity team can overcome these obstacles and drive effective deployment. The team will provide organizational oversight and support of the charge reconciliation process as well as other revenue integrity functions and processes (i.e., CDM, coding, and clinical documentation integrity, depending on the organization). Additionally, a revenue integrity department can design and implement the policies and procedures, governance, and training for these new processes.

A revenue integrity function, whether centralized, decentralized, or a hybrid model, often pays for itself many times over from the annualized net revenue improvement.

Process recommendations

Infrastructure cannot be the sole solution for an organization. Instead, a holistic approach to preventing revenue loss is often a combination of infrastructure, people, process, and technology. The revenue integrity model described can work for organizations of any size since the program drives revenue-owning areas and the staff to manage their reconciliation processes daily with oversight by a revenue integrity team. This allows those who best understand the day-to-day operations and who are also responsible for budget and reporting of variances — the clinical departments — to have more insight and accountability into their revenue as well as to make timely charge corrections when necessary.

If the team directly responsible for documentation/charge entry is also responsible for reconciliation, the number of exceptions and/or errors will typically decrease. Although clinical staff members’ primary responsibility is providing care, connections to revenue and financial impact are crucial to a successful charge reconciliation program. This knowledge equips clinical staff with a better understanding of how revenue capture contributes to funding patient care and allowing the organization to invest in future staffing, programs, and equipment. A timely process like daily reconciliation allows for close-to-real-time issue resolution and identification of breakdowns when they occur — and they will.

An organization can also leverage technology within its EHR to customize the build, automate charges, and identify (through edits) when charges are missing. However, without a governance structure and reconciliation process, a false sense of security about system build can lead to lost revenue. Overlooking quarterly or annual coding updates, regulatory changes, or payer contractual rule updates can make a good build outdated or even obsolete.

The organization can reduce the probability of missed or delayed charges through enhanced use of technology and more timely and consistent corrections by staff. A revenue integrity team member should guide appropriate and standard processes, validate system build, and act as a clinical liaison between the services rendered and the result of capturing those services to promote timely and efficient outcomes. For example, clinic charge reconciliation is likely at the encounter level, which would include a detailed review of each patient encounter to verify that the generated charges align with the services performed. EHR system-specific reports may already exist and can be used for charge reconciliation. These reports will often include a combination of historically trended data as a road map to the expected charge volumes for a department or service location. If these reports do not exist, the organization should look into making them available through design and build efforts.

A structured audit program owned by the revenue integrity team should support the reconciliation processes. The varying services offered by providers and service areas will impact the ability to create a standardized process and should be thoroughly reviewed to understand the appropriate revenue enhancements.

The size of an organization does not typically limit the importance of reconciliation. In most organizations, given the ever-changing landscape of patient revenue and payer reimbursements, every dollar counts.

Setting priorities

Generally, all departments should be included in the audit program and perform charge reconciliation. Some organizations focus only on high-cost services, but this is a blind spot; missing revenue from a low-cost, high-volume service can be just as detrimental.

Revenue integrity audits can be prioritized by the largest revenue-generating departments, but audits should be across the board and relationship analytics should occur between facility and professional services. The revenue integrity program can also be prioritized to address specific reimbursement logic so that carve-outs or specific payer contractual reimbursement structures are identified for reconciliation or audit.

Other indicators can help determine reconciliation prioritization, such as areas that are more prone to charging errors (like late charge activity), availability of automated processes for charge capture, and if/then scenarios (edit activities) that can determine missed charges.

Program maintenance

Accountability and organizational structure are key to maintaining a charge reconciliation program. When it comes to driving maintenance and sustainability of an organization’s reconciliation processes, a revenue integrity team is a proven solution. An organization promotes accountability by having resources focused on revenue integrity, with oversight and connection to operational owners and program governance. The revenue integrity team can clarify the proper channels for issue identification, communication, and solution implementation. This is especially critical considering the speed at which regulations and charging practices can change.

Educating clinical departments on how to interpret the data available is a key component of a charge reconciliation program’s success and revenue stability. An established audit program—one that can maintain a standard process with feedback loops and root cause solutions, plus top-down leadership support and clinical department engagement—is also imperative for success.

Reevaluation

Organizations may need to periodically reevaluate their charge reconciliation process. Based on reporting, payer changes/requirements, coding updates, or audit program findings, certain departments may require additional education or system logic may need to be updated. For example, if certain charges are set up to trigger automatically, but an audit finds this is not occurring as intended, the clinical department, revenue integrity, and IT should coordinate verification of the build and process. They can then evaluate whether a new or updated process is necessary.

Tracking and reporting

A variety of information should be considered for tracking. Certain questions can help determine whether the current focus areas are appropriate. When using historical charge data to compare to current charges, these questions include:

  • Are my volumes low? Are my providers seeing fewer patients than normal?
  • Are my providers struggling with workflows that could result in missing revenue (e.g., failure to know what steps should be taken to charge for X)?
  • Is there reconciliation between provider and facility volumes/charges (e.g., workflows may need to be reviewed if the organization acquired independent providers who are creating unexpected charges)?
  • Are there system issues that could be contributing to lower revenue (e.g., the workflow to scan results is not appropriately triggering charges)?
  • Are there automated actions in the system that have not been recently reviewed for appropriateness (e.g., additions/deletions/revisions, automatic adjustments, mapping)?
  • Are additional automation opportunities available to reduce manual interventions prior to claim creation (e.g., charging from documentation)?
  • Are there other operational changes that could be contributing to lower revenue (e.g., the organization previously charged for Botox® but no longer provides that product)?
  • Do reports exist to highlight relational missed charges (e.g., a department’s revenue may be on target, but the missed charges have never been identified or addressed, so the revenue opportunity is undetected)?
  • Do reports exist to benchmark performance (e.g., captured gross and net revenue to demonstrate the success of the program)?

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Topics: featured, Performance Improvement

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