Zero-balance account review: Boost revenue integrity and lower cost-to-collect
The twin goals of revenue integrity — improving coding and charge capture while lowering compliance risk — are increasingly important in times of uncertainty. With healthcare organizations feeling heightened financial pressure from all directions, now is not the time to miss out on revenue you’ve already earned.
Healthcare payers are using increasingly complex algorithms and a myriad of other tools to reduce your payment levels — often erroneously. Continued high unemployment makes it even harder to collect from patients who are saddled with ever-increasing levels of responsibility for their healthcare bills. Add in the significant decrease in volume for profitable service lines as a result of COVID-19, and it all adds up to tremendous pressure to cut costs and simultaneously increase cash collections.
By not fully charging or by not fighting claims that may have been underpaid or denied, you’re leaving money on the table. Up to 1% of net patient service revenue is lost due to charge integrity leakage — not to mention revenue lost to underpayments and improper denials. Finding and correcting these errors and oversights through zero-balance account reviews can have a dramatic and immediate impact to your bottom line.
Zero-balance account reviews: A booster shot for financial health
How do you know if you’re getting paid everything you deserve? Are there denials that you wrote off too quickly? Charges that you could have billed, or billed at a higher rate? Were there instances where the payer downgraded or underpaid what they should have based on your contracts? Once accounts are closed and given a zero-balance status, these all-too-common issues oftentimes go unseen, and the revenue attached to them sits untouched.
By not fully charging or by not fighting claims that may have been underpaid or denied, you’re leaving money on the table.
As we approach fiscal year-end for many organizations, financial executives understandably focus on lowering the cost-to-collect ratio. While many margin improvement activities act like preventive medicine to improve long-term financial health, a zero-balance account review is like a booster shot. It infuses quick cash to boost your health system’s financial immunity right when you need it, while also arming you with the analytics you need to improve revenue cycle operations on a go-forward basis.
Practical tips to stop revenue leaks, mitigate compliance risk, and lower cost-to-collect
When you’re searching for needles in a haystack, how do you distinguish the needles from the hay? With the amount of data most health systems have to sift through, the answer generally entails an analytic rules engine. Using sophisticated analytics to quickly and thoroughly identify anomalies in the data allows experienced revenue cycle team members to dig deeper to determine whether those “exceptions” are actually missing charges, preventable denials, underpayments, or even overpayments that open up the organization to compliance risk.
Consider the following tips to maximize the effectiveness and efficiency of your zero-balance account reviews.
1. Focus your search.
When you’re looking for needles in a haystack, it helps to know which area of the haystack to look in. Isolating accounts that have been closed out within a given period (such as the past year) allows you to focus on a manageable population.
2. Apply analytics to quickly highlight problem areas.
A healthcare reimbursement rules engine consists of thousands of rules — or even tens of thousands in the case of large health systems — that indicate which codes tend to go together. For example, if a patient had a hip replacement surgery, you would expect to see a charge for an implant. Similarly, if a patient received a dose of a drug in the hospital setting, you would expect to see an administration charge for that same drug.
A zero-balance account review infuses quick cash to boost your health system’s financial immunity right when you need it.
By taking the population of accounts that was isolated in the previous step and running it through this engine, you quickly highlight accounts where something looks fishy: The encounter has a charge for a high-cost drug, but not for the administration of it. The hip replacement patient wasn’t charged for the cost of the implantable device. Highlighting these anomalies, or “exceptions,” allows you to take the next step of verifying that they really are reimbursement opportunities.
3. Identify accounts with dollars attached.
Just because an exception exists, it doesn’t necessarily mean there are dollars attached to it. There’s no point in rebilling for a missed charge if the encounter was part of a bundled payment or per-diem arrangement, for example.
At this stage, it’s important to take the time to review every encounter manually, rather than automatically applying each rule across the board. A sophisticated reimbursement engine will factor in each payer’s reimbursement practices and rules, but healthcare organizations must also invest in the right level of billing and collections expertise to process the data appropriately.
With the regulatory landscape shifting faster than ever, and with new codes for telehealth and for testing and treatment of COVID-19, staying up to date with coding updates is more important and more challenging than ever. Ensuring staff members are properly educated on the most up-to-date coding guidelines and billing practices, and that they have processes in place for cross-team collaboration, will improve your bottom line and staff satisfaction.
4. Find the golden needles.
Once you have a list of encounters with reimbursement tied to them, how do you know where you should spend your limited resources to capture the most revenue? Essentially, for each of the zero-balance accounts that have revenue-capture potential, you must answer the question: Is this the right thing to do?
We recommend creating a risk stratification profile to zero in on the accounts with the greatest compliance risk or revenue opportunity. For example, you might want to start with your most profitable service lines, or with the payers that have the tightest deadlines for timely filing. If you identify a population that is large and has a simple resolution step, then consider utilizing Robotic Process Automation (RPA) as a tool to assist your limited resources.
Just because an exception exists, it doesn’t necessarily mean there are dollars attached to it.
At a big-picture level, you’ll need to weigh short-term financial gain against the long-term relationship with the payer. For example, in cases where claims are being audited or litigated, you will have to make a judgment call about the tradeoff between potential financial gain and the possibility of exacerbating an already strained relationship.
5. Take action to recover and prevent.
The beauty of the zero-balance account review is that it delivers financial benefit today and tomorrow. By running closed accounts through an analytics engine to identify exceptions, and then taking the appropriate resolution action (appeal, rebill, etc.) for each type of exception, you improve your collection rate and lower your cost-to-collect promptly. And by creating rules in your electronic health record system to flag exceptions as they occur, you can prevent those revenue leaks before the charge goes out the door.
Improve charge assurance, patient and physician satisfaction, and mission achievement
The benefits of zero-balance account reviews go beyond improving charge capture.
- Charge assurance: One of the core objectives of revenue integrity is protecting your organization from compliance risk. In addition to leaving cash on the table, erroneous coding also opens up the organization to “over-coding” scenarios, which may lead to costly audits by both commercial and government payers.
- Patient satisfaction: Patients are hesitant to come back to the hospital because of the fear of contracting COVID-19. Improving revenue integrity has an impact on patient satisfaction by decreasing the time it takes the claim to go out to the payer and patient. Limiting rebills due to late charges and unexpected patient balances from payer denials helps improve the patient’s financial experience.
- Provider satisfaction: Coding and billing accurately the first time means that patients aren’t bringing up financial conversations with their providers. When providers can focus on clinical conversations instead of answering billing questions due to a late charge or a denial, their satisfaction is greatly improved.
- Mission preservation: Ensuring that your revenue cycle is operating at maximum efficiency allows your organization to allocate resources to serving your community.
Recover revenue you’ve earned while improving cost-to-collect
Collecting more of the revenue that you have earned — in many cases at least 1% of NPSR — can help close the gap on the budgetary shortfalls stemming from COVID-19 while improving your cost-to-collect ratio. For every $1 of cost invested in the technology and human resources to perform zero-balance account reviews, we generally see an additional $4 or $5 of revenue collected.
How do you know you’re not getting underpaid? In today’s challenging environment, you can’t afford to leave money on the table. Use these steps to improve revenue integrity and your cost-to-collect ratio, and let’s talk if we can help.