Insurance submission and processing has evolved over the past decade transitioning from printing paper claim forms to an electronic workflow. Adaptations include the NPI implementation, using a new standard paper claim form, sending more electronic claims as payors offer connections (or even refuse paper claims), moving to the ANSI 5010 electronic claim submission format, and most recently transitioning to ICD10. Considering those changes, along with the flurry of your other projects, have you audited your insurance carrier setup lately to ensure it is configured to maximize revenue cycle efficiency? By efficiency, I am referring to leveraging technology you are already paying for to get the most bang for your buck and maximize payor reimbursement.
Some people may think cleaning up the carrier list is a grueling meaningless chore and a waste of valuable time. On the contrary, the payoff is quick and it’s in real dollars and cents so you will want to reap the benefits by tackling the list at full speed. The outcome is not simply to consolidate an old insurance carrier list; it is much more dynamic than that. This blog, the first part of a two piece post, will explain what to look for and why. Read on my friend.
First off, I encourage you to work alongside the revenue cycle team rather than assign this task to the person in charge of adding new insurance carriers to your practice management (PM) system. Features are unknowingly and unintentionally missed by great billers because they are not typically true system experts. On the other hand, not all technical staff know the nuances of billing and sometimes overlook features that would be helpful. Even the sharpest, most experienced billing staff have likely missed a step here and there in the rush of the day. Rather than accept a verbal confirmation that claims are going great, perform this audit together and get the facts in black and white. The goal of the remaining content is to bring you up to speed so that you can share your intention and goals for this assignment.
Paper vs. Electronic
Let’s start with some basics. Claims are sent on a printed paper claim form through snail mail or transmitted electronically via the internet. Insurance carrier setup is not complicated for paper claims. Before electronic filing was available, it was typical for an insurance to be built multiple times in PM because payors had multiple claims addresses. When adding the insurance to a patient’s registration, staff would search through a long list of the same carrier name then add the insurance if the claims address matched the address on the back of the patient’s insurance card. With carriers listed multiple times, it left more room for error in choosing the wrong insurance to add to patient’s registration.
Electronic claims are more complex. Electronic Data Exchange (EDI) allows your PM system to communicate with insurance carriers and other health care partners by sending and receiving secure electronic data such as claims, remittance, and eligibility. Claims are not always sent to the payor directly from your practice, but rather, they go through a clearinghouse. Your clearinghouse serves as a “mailman” between your practice and the payors. In order to get your claim to the payor, clearinghouses give you a list of payors that accept electronic claims. When adding the carrier to your PM system, you use that list to find the payor ID number and enter it into your PM system. Once you enter the payor number and maybe a few EDI settings, you are almost ready to start sending electronic claims. Some payors may require enrollment first. When adding the insurance to a patient’s registration, staff searches for the insurance carrier name and doesn’t solely rely on the claims address on the back of the insurance card anymore because electronic claims go through one central processing hub for that payor. This means that there is not typically a need for multiple insurance carriers to exist on your master list. Less duplicate carriers means lower maintenance and less potential for error when adding to patient’s registration.
Along with a streamlined condensed list, there are other benefits of sending claims electronically. Electronic claims are received by the payor faster than paper claims therefore they get processed faster. This is great news for your accounts receivable lifecycle. Electronic claims are not only more secure, they are also not limited to the number of boxes on a paper claim form. This enables you to provide payors details needed to process claims more efficiently.
When claims are sent through the clearinghouse, they have “electronic footprints” that provide better tracking every step of the way. You can see time stamps from when the claim was received by the clearinghouse and when the payor accepted it. This information is valuable when troubleshooting submission rejections and for proof of filing.
Clearinghouses include many added value services such as giving your claim an extra scrub to catch errors before the payor even gets the claim. This gives you an opportunity to fix and submit a clean first claim to the payor. Electronic submission provides faster recognition of claim issues or denials. With paper, you are missing the important pre-screen process. In addition, the clearinghouse can be a huge support and advocate when working with you and payors to process claims efficiently.
Billers are better able to troubleshoot claim rejections with electronic claims because they can identify if it was a clearinghouse rejection or a payor rejection. In my training sessions, I explain how important it is to know where in the claim lifecycle a claim was rejected and who rejected it because that points you to the resolution much faster. Early recognition is key to finding and fixing claim issues.
Finally, electronic claims provide better reporting because structured data can be categorized for revenue cycle management intelligence. Unlike paper claims, you are able to analyze trends on the most rejection or denial reasons. You are able to drill down the data and interpret the results using endless scenarios. Some clearinghouses even offer online data analytical reporting tools.
Stay tuned next week for the second half of this post to hear about the 6 Steps to Insurance Carrier Cleanup and why it is worth your review.