Hayes' Healthcare Blog

3 Benefits of a Data Driven Approach to Billing Integrity

Posted by Robert Freedman on September 6, 2017 at 9:00 AM

Six trends affecting the healthcare billing industry in 2017 have been identified by MDAudit-Blog-1.pngMedicalBillersandCoders.com. They include the transition from ICD-9 to ICD-10, implementation of CPT codes, evolution of EHR management, the rise of money managers, cognitive computing and onset of block chain technology.[1]

As the healthcare industry continues to evolve, more focus is being placed on revenue integrity. This means more intense scrutiny on every element of the revenue cycle from the front end through the mid-cycle to the back office. No aspect of the revenue cycle is receiving more attention than the billing function.

Organizations must deal with these trends while at the same time ensuring the quality of their billing function. Many rely on auditing to monitor their billing processes and make sure billing departments are being run effectively. However, the key to proper billing is identifying root cause issues and applying appropriate corrective action. Auditing is simply a tool to help accomplish that, not an end in itself.

To ensure billing integrity, organizations must develop a process that is supported by a system. Auditing is only one element of an oversight system that also includes analysis and corrective action. Taken together, this system supports a data-driven approach that can enhance billing integrity. The system should effectively translate patient encounters into proper coding to ensure full payment and maintain compliance – making sure you get to keep what you have collected.

The system ultimately needs to be driven by data, since data gives you analysis that provides insight necessary to implement improvement. Here are three key benefits of a data-driven approach to ensuring billing integrity.You can evaluate 100 percent of your billed cases from every provider

A data-driven continuous monitoring approach enables you to process every case through screening analysis to find likely problems. With a traditional, prescheduled audit program you will review less than one percent of cases.

As a result, with a traditional audit approach, auditors will only uncover outliers if they happen to be randomly checking a specific issue that turns out to be a problem. The traditional approach typically does not monitor billing activity but instead schedules reviews of various areas of the process based on OIG type worklists, “gut” instincts or historical anecdotes.

Organizations will establish certain areas such as denials, PEPPER, HAC or OIG work plan items, and focus their efforts on investigating those throughout the year. If some of the designated areas turn out to be free of issues, then you have wasted valuable time and resources sampling, testing and reviewing them.

Meanwhile there are many targets with a real need for corrective action that you could have been tracking. There’s a good chance you are missing these areas with actual problems.

A data-driven approach enables continuous monitoring and anomaly detection in identified problem areas and presents a coherent, integrated, intuitive process that gets to root causes and resolves problems going forward. The process is issue-based rather than schedule-based. You use targeted rather than random sampling, enable early rather than arbitrary detection, analyze trends versus identifying discrete instances and focus on root cause correction rather than simply fixing transactions.

To use a baseball analogy, in a traditional approach, you are deciding to swing in a certain area before the pitch is delivered. With a data-driven approach you can see where the pitch is headed and then swing at it, dramatically increasing the odds you’ll get a hit.

You control your data

When target areas are preselected in a traditional approach, you then must request a data dump of claims data from the IT group or another department. From there you have to conduct manual Excel spreadsheet exercises that entail randomly choosing groups of claims to review. The hope is that parsing this data can uncover useful information that can lead to corrective action. This type of auditing process results in scraps of paper and spreadsheets and no coherent, organized system. You end up with your “answers” spread out all over your desktop.

An integrated, automated, data-driven system is much more efficient. It will identify the areas you should be auditing, select the cases to be reviewed and present a thoughtful analysis of the results. It will then identify the next steps you need to take in an orderly process. There is no ocean of data provided by another department to wade through.

You control the parameters for obtaining data and then receive it in an organized fashion that allows you to zero in on problem areas as they are happening. This focused analysis enables you to gain the insights necessary to implement meaningful change. You no longer have to waste time on administrative tasks that can be handled by the system.

You can easily institute a closed-loop corrective action process

A data-driven process provides a self-managing system that tracks the issues so they don’t recur. It enables you to easily implement a closed-loop corrective action process that gets to the root of the problems you uncover. You can then implement the actions required to eliminate the issue permanently. And you can set up triggers to revisit the issue later to ensure that the corrective actions you have taken and are still effective.

Closed-loop means more than just finding and testing risk areas. It also requires that you integrate the process from testing to recording to continuous, ongoing monitoring of the problem area so it does not recur. Without a data driven system, implementing a closed-loop process involves manually setting up separate, disjointed steps that are difficult to coordinate and will not provide the results you need.

You will lack an automated alert to check the effectiveness of the corrective actions you have put in place. As a result, problems could reappear without you realizing it. You can set up an edit in your billing system but that only helps fix transactions rather than getting to root causes. Additionally, edits are fragile and unreliable and can often stop working without notice.

The billing component of your revenue cycle is critical to ensuring your revenue integrity. A traditional, prescheduled auditing approach is simply not effective in identifying true risk areas, getting you the data you need and enabling tightly controlled closed-loop corrective action. The best way to accomplish all three is with a data-driven system that automates and focuses the audit function and enables effective analysis.

Interested in more thoughts on the combination of your billing and compliance departments?  Feel free to download our white paper, An Unexpected Marriage: Mining Common Data to Assess Compliance and Revenue Cycle Risk.


Download White Paper

[1] 6 Trends to Watch Out For Healthcare Billing Industry in 2017, MedicalBillersand Coders.com, May 26, 2017.

Topics: compliance risk, mdaudit, Revenue Cycle Health, revenue integrity

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