Data Mining Your Credit Balances – How to Find the GOLD Maryland Chapter of AAHAM Monthly Meeting The Hotel at Arundel Preserve December 19, 2014

Magnitude Of The Credit Balance Problem Hospitals with annual revenues of $100 million can generate $3 million of new credit balances each year. Nation-wide, more than $10 billion in new credit balances are created by each year. A large teaching facility or health system may require 10 FTEs just to resolve the new credit balances that are created each year. Cost to cut a refund check? $10, $15…up to $35 !!!!!

Causes of Credit Balances Front-end efficiencies/Increase up-front collections Complex reimbursements/Multiple insurance coverage Back-end resolution of overpayments has not kept pace with front-end improvements Staffing required to manually resolve credit balances far exceeds available resources Typical focus is on resolving high dollar overpayments Allowance errors are not prioritized Thousands of small balance Patient overpayments continue to build, prohibiting efficient processing Title should be credit balances…

Why are so Many Staff Hours Required to Resolve Credit Balance Accounts? Resolving credit balances is a manual process that requires the retrieval of documentation and the completion of various forms: EOB Request Forms Check / Refund Request Forms Government Forms (CMS Form 838) Refund Submission Forms to Various Payers Piles/Stacks of Greenbar printouts April 14, 2017

Where’s the Gold? Did we see if we could make the Allowance gold or yellow?

Finding YOUR Gold Determine YOUR ratio’s Run reports based on payment service codes based on allowance service codes (NOT based on FC, Ins Bucket or Ins Plan Code) Review your credit balance policies/procedures to ensure findings supported Handling of small balance write-offs for both credit and debit balances Approval levels appropriate for today’s environment? Adjustment limits; Refund limits Dollar threshold for both Signing/approval authority for both Add insurance bucket to Not based. Spell out Credit balance Review small balance policy for dollar limits and to include both debit and credit balance Add both adjustment and refund approval limits.

Mining Tool-Belt People Systems Your Staff 3rd Party Staff Payer Resources Systems PAS Ad-Hoc Contract Management 3rd Party System Under people add payer resources. Change vendor to 3rd party staff

Using the Tools - Patient DRILL into report to identify like – causes Matching Debit – same DOS Matching Debit – different DOS Open Debit – different DOS Prepayment with no DOS Duplicate payment VALIDATE for accuracy (95% or higher) Run report(s) on routine basis AUTOMATE where possible Add matching debit different DOS. Same comment as allowance under automate

Risks Associated With Not Resolving Patient Refunds Patient Dissatisfaction – Bad PR Increased State Legislation Regarding Patient Refunds California, Texas, North Carolina, New York… Adverse Effect on Up-front Collections Change title April 14, 2017

Root Causes to Look For - Patient FACILITY RESOLUTION COUNT TOTAL $ Happy Holidays Health System Matching debit account and account has only one payment. Payment was for two accounts but was only posted to one account. 165 $ (4,694.11) Matching debit account. 301 $ (62,390.29) Patient overpayment on this DOS but patient has other open debit balances. 150 $ (32,329.76) Patient overpayment. 1,331 $ (457,458.87) Patient prepayment. 34 $ (10,486.03)   1,981 $ (567,359.06) April 14, 2017

Using the Tools - Allowances DRILL into report to identify like–causes Duplicate adjustment Twice in error Adjustment equals balance No payments Charges added/removed after billing Mis-posting DOS VALIDATE for accuracy (95% or higher) Run report(s) on routine basis AUTOMATE where possible

Root Causes to Look For - Allowances FACILITY RESOLUTION COUNT TOTAL $ Happy Holidays Health System Account has no payments. Possible allowance posting error or charges were over adjusted. 165 $ (122,863.52) Adjustment equals account balance. 620 $ (282,477.61) Adjustment was posted two times in error. 775 $ (209,747.24) Charges were adjusted off incorrectly. 327 $ (39,120.83) Total adjustments meet or exceed total charges. 912 $ (279,412.88) 2,799 $ (933,622.08) April 14, 2017

Using the Tools – Payer Review contracts Appeal Correspondence Timely filing/look-backs Late charges Charges removed Check or take-back? Segregate process accordingly Appeal Correspondence No response = Payer retraction. Keep your money! Make use of a “Free Labor” resource Free labor to provider = Reduced costs Add after late charges/charges removed. Remove automate … cant on payer stuff April 14, 2017

Risks Associated With Not Resolving Credit Balances Criminal/Civil Penalties Mis-stated Profit Mis-stated Revenue Negative Management Letter Comments Patient Dissatisfaction Add after late charges/charges removed. Remove automate … cant on payer stuff April 14, 2017

Benefits to Using Automation to Resolve Credit Balance Accounts Allows the Provider to process outstanding backlog of credit balances without having to add additional staff Greatly reduces the costs associated with processing credit balance accounts Minimizes the possibility of manual errors and potential fraudulent activity Ensures ongoing, timely processing of credit balances Simplifies and speeds up daily procedures April 14, 2017

Types of Credit Balance Accounts that can be Automated Mis-posted Contractual Adjustments Mis-posted Payments/Payment Transfers Patient Refunds Should is be changed to was?

How Does Automation Work? Automation is a process used to resolve large volumes of patient refunds or mis-posted allowances without any human interaction. Scoring algorithms are used to identify accounts that have patient overpayments or mis-posted allowances Transaction files are created that are then batch uploaded into the providers patient accounting system to resolve the credit balance accounts Should is be changed to was?

CCF Case Study In 2007, CCF identified a large number of outstanding credit balances that were overpaid by patients 29,000 accounts affected 24,000 patient refunds due $890,000 CCF set a goal to resolve all outstanding patient refunds within a one year period Estimated total cost to manually resolve all current patient refunds was $170,000 to $200,000 Prior to implementing automation, CCF staff performed a statistical sample of potential patient refunds to ensure that the accuracy rate was 99% or higher Should is be changed to was?

Results CCF processed 24,000 patient refund checks over a three month period at a total cost of $27,000. A savings of $173,000 based on the initial estimate. CCF continues to process patient refunds on a weekly basis through an automated process. On average 800 patient refunds are processed through automation on an ongoing weekly basis. April 14, 2017

Impact to CCF Gross Days in Credit Balance – 2004 Hospital = 2.6 Physicians = 7.3 Gross Days in Credit Balance – 2009 Hospital = 1.2 (54% reduction) Physicians = 4.1 (44% reduction) Total FTE Savings Since 2005 = 50 FTE’s Increased patient satisfaction April 14, 2017

DISCUSSION April 14, 2017

CONTACT INFORMATION THANK YOU!!! Kathy Sandora – CRCE Executive Director, CBAS Operations CDR Associates, LLC 443-904-4361 ksandora@cdrassociates.com Ken Krieger Senior Sales Executive 412-260-9924 kkrieger@cdrassociates.com Ks and kk April 14, 2017