Technology has long promised to ease administrative burdens on physicians and healthcare staff, but has a poor track record of delivering. One exception is automating the onerous, largely manual, charge note reconciliation process. The right tool can significantly reduce the time and dollars spent on this task while improving compliance and reaping more revenues for hospitals and physician practices.
Denied claims are costly and all too common. A 2018 Health Affairs article reported that the total value of challenged claims could be as high as $54 billion. The COVID-19 pandemic’s dramatic impact on volumes and revenues has intensified the need to ensure organizations can collect all the revenue to which they’re entitled while minimizing denials as well as staff and physician time and costs.
What is Charge Note Reconciliation?
To reduce the inordinate amount of resources spent on this process, Ingenious Med launched its automated Charge Note Reconciliation tool in early September 2020. It automatically compares medical documentation against charges created in the Ingenious Med® application. Where discrepancies exist, it automatically notifies the appropriate physicians and staff so they can provide the proper documentation before submitting the charge. Any bills missing documentation can also be flagged and held in the system until the clinical notes are received.
Charge Note Reconciliation also notifies providers of clinical notes that lack a corresponding bill, ensuring they capture charges for all the services they delivered. This automated process helps healthcare organizations improve efficiency, reduce denials, capture missed revenues and lower compliance risks and costs.
The four key benefits of automated Charge Note Reconciliation are:
- Decreased clinician and staff billing time and costs
- Reduced denials
- Increased revenues
- Enhanced preparation for audits
1. Decreased Clinician and Staff Billing Time
The Center for American Progress reported in 2019 that U.S. billing and insurance-related costs ranged from 2% to 5% for traditional Medicare and Medicaid to an astonishing 17% for commercial insurers. One component of these costs is the time it takes to reconcile charges and clinical notes.
Manual charge note reconciliation requires staff to review clinical notes from the EHR or other IT systems and compare them with physician charge entries. This process involves accessing an EHR or having support staff submit a patient record request, searching records for specific notes and ensuring that the chart content matches a given charge.
The time – and costs – involved in this process add up quickly. In an organization with an average of 75 weekly patient encounters, reconciliation would require 325 hours of labor, not to mention the impacts to revenue cycle KPIs such as charge lag, days not final billed (DNFB) and accounts receivable days.
Automated reconciliation gives staff immediate visibility into whether matching documentation exists. It automatically connects patient clinical and billing data with the right clinician, reconciling charges and notes with minimal additional labor costs to make revenue cycle processes more efficient.
2. Reduced Denials
A 2017 study found that over 3% of hospital revenues are at risk due to claims denials and reported that the top issues for such denials were:
- 24%: registration and eligibility issues
- 15%: missing or invalid data
- 12%: authorization and pre-certification issues
- 11%: missing medical documentation
- 10%: service not covered
This study suggests that some 26% of denials are related to inadequate data or documentation. Charge Note Reconciliation ensures that any and all bills missing needed documentation are flagged and directed to the right clinician to reduce this key cause of denials.
3. Increased Revenues and Faster Collection
When clinicians fail to accurately or completely capture charge codes at the point of care due to burdensome processes, administrative and physician burnout and /or revenue cycle problems such as charge lag, each missing or noncompliant bill can cost an organization thousands of dollars.
Reducing the number of claims that must go through appeal is key to faster collections. Although appeals are supposed to be processed within 90 days, the average processing time in FY 2019 was 1,372 days (over three years), the Department of Health and Human Services (HHS) reports.
Charge Note Reconciliation helps to reduce the need for appeals by flagging missing notes for both administrators and clinicians in multiple places if they create a bill without the necessary corresponding clinical documentation; conversely, it alerts clinicians that they need to bill where they have created notes without corresponding charges. Missing Bills gives users provider-facing indicators and reports, while Bills Matrix provides an aggregate view that helps users focus resources on problem areas.
4. Enhanced Preparation for Audits
Audits have become more frequent and costly over the years. According to a 2018 survey conducted by healthcare consultancy Sage Growth Partners on behalf of Ingenious Med, 56% of the 104 respondents have faced a CMS or payer audit more than once. Under these conditions, healthcare organizations must ensure that their charges are substantiated with proper documentation if – and when – they are audited. If not, they face penalties that further impact revenues.
According to a Becker’s Hospital Review article, the American Hospital Association (AHA) found that CMS’s use of Recovery Audit Contractors (RACs) to audit claims has cost nearly a quarter of U.S. hospitals over $25,000 a year.
Further, penalties for inaccurate claims – even if the errors are unintentional – can be steep. In 2019, the Medicare Learning Network reported that the cost of civil False Claims Act violations can be three times the claim discrepancy amount plus up to $22,927 per false claim filed. In 2019, that cost the healthcare sector $2.6 billion.
External audits from Medicare RACs and private payers for items like quality, billing and coding accuracy are growing more frequent and casting a wider net. Claims submitted for treating COVID-19 patients are generating yet more audits. The Office of Inspector General (OIG) plans to audit COVID-19 discharges for compliance with federal requirements.
Streamlining and ensuring the accuracy of all aspects of the revenue cycle has become more critical to survival for all types of healthcare organizations. Make sure yours is taking advantage of automated tools like Charge Note Reconciliation to make that task easier for clinicians and administrative staff alike.
To learn more about how Charge Note Reconciliation reduces coding compliance risks and makes revenue cycle workflows more efficient, please register for our webinar on October 28, 2020.