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Maximization of Healthcare Reimbursement

Reimbursement and the Revenue Cycle

What Reimbursement Means to a Healthcare Organization

The U. S. healthcare system is rather complicated due to the existence of several approaches to paying for the provided care. Private payers (insurers and individuals) as well as the government (through Medicare or Medicaid) pay for the healthcare services to providers (Harrington, 2019). Healthcare reimbursement can be seen as the financial foundation of healthcare organizations as this is the money they receive for provided services and use to ensure their proper functioning. Another difficulty related to the payment system in the United States is the fact that patients receive services first, and after that, payers provide the corresponding amount of money. If the provided services are not paid on time, a healthcare organization will lack money to cover its expenses, including but not confined to employees’ salaries, equipment, and maintenance.

The healthcare revenue cycle encompasses the provision of services and receiving funds for all the provided care. Healthcare organizations receive funds from the government, private insurers and patients, based on the plans patients have. If the insurer or the government does not cover this or that service, the patient has to pay for the received care. Sometimes hospitals find it difficult to collect money from patients, so they address collection agencies that help them. This is the last resort for healthcare organizations as they try to maintain effective communication and proper relationships with their patients.

Flow of the Patient Through the Cycle

As mentioned above, the revenue cycle can be referred to as the flow of money associated with the provision of healthcare services. The primary department that plays a key role in the reimbursement process is the financial unit. This department ensures that all services are paid and collects funds if some disruptions occur. The cycle starts at the front office, where a patient first addresses the hospital with their problem (Harrington, 2019). The front office employees collect the necessary data, which implies the completion of the electronic health record (EHR) (Pepper, 2019). At that stage, the employee arranges the meeting with the corresponding healthcare professional who provides care. The latter makes a diagnosis, develops a treatment plan, completing the EHR. Many healthcare organizations address third parties that encode the services they provide to patients, and the encoded services are sent to the corresponding insurer or governmental agency. Some hospitals do not address third parties, so their employees (mainly the medical staff) encode the service at once. Thus, at this point, the IT department, front-end employees (the medical personnel) are involved in revenue cycle management.

Once the insurer or governmental agency (or the patient) pays for the service, the financial department becomes central to the process. If some issues occur (some bills are rejected), the financial department communicates with the representatives of the partner to settle the issue and collect the necessary amount of money. In some cases, the legal department should also participate in funds collection as sometimes patients try to prove that they did not receive quality care or failed to receive the needed services at all (Harrington, 2019). When the issues are settled, financial data is processed in the financial department, and the associated data is added to the patient’s record. Importantly, modern technology makes the cycle more efficient as previously as a considerable part of operations are often automatized. The departments mentioned above (excluding the financial unit that is the key player in the process) have been ordered based on their place in the cycle rather than their importance. It is hard to identify the most important department in terms of the reimbursement cycle management as each of them is an indispensable part that completes specific functions that are equally relevant.

Departmental Impact on Reimbursement

The Impact of Departments

As mentioned above, every department involved in the reimbursement cycle plays an important role in the process, having a similar impact with certain specifics. For instance, if the front-end personnel complete the EHR with errors, the reimbursement process may be disrupted (Pepper, 2019). These are also people who communicate with the patient, which is a part of the provided services. Hence, the staff should be able to develop effective communication channels and appropriate relationships with patients. The audit of the record completion (with the focus on errors and processing time), as well as the technologies and strategies, should be implemented (Green, 2020). In order to measure the impact of the department, it is possible to estimate the number of returning and leaving patients, error rate, and patient satisfaction.

The medical staff provides care and identifies the exact health-related services that are needed. The audit of this department can involve the audit of medical errors and the use of clinical procedures (Green, 2020). The quality of provided services can be the primary measurement to identify the exact impact of this department on pay-for-performance incentives. The financial unit has the central impact as it ensures that all expenses are covered, and all bills are filed properly. As for auditing this department, the common accounting audit should be implemented. The impact of this unit can be measured by the detection of the unresolved issues and errors in financial records. Finally, the legal department plays a key role in settling legal cases if such take place. The way the department addresses these aspects can be a matter of audit. It is essential to identify whether the employees try to communicate effectively and settle issues without going to court. This can also display the impact of the department on the pay-for-performance incentives.

Departments’ Activities

As mentioned above, the front unit employees communicate with patients and guide them through the process of reimbursement. Such data as EHR-related errors and patient satisfaction should be collected to estimate whether changes are necessary for ensuring the effective flow of operations (Pepper, 2019). As for medical staff, they provide care, communicate with patients, and provide information regarding reimbursement and available resources (Green, 2020). The analysis of such data as EHR in terms of diagnosis, medical errors, the relevance of clinical procedures, proper encoding, treatment effectiveness, and patient satisfaction should be conducted.

The financial department checks the billing, codes compliance, and collection of funds. In order to measure the performance of this department, it is important to implement regular accounting audits (Green, 2020). The exploration of patient satisfaction linked to the interactions with the financial unit can shed light on the quality of provided services and unveil the gaps that need to be addressed. Finally, the legal department ensures that all patients’ litigations are addressed properly. The unit employees also consult patients on various aspects associated with legal issues. The rate of resolves cases and client satisfaction can be the measurements of the effectiveness of the department.

Employees Responsible for Compliance

Health information management professionals are responsible for ensuring the organization’s compliance with codes and bills. These professionals are a part of the financial unit in most cases. These employees check the records completed by the staff and third parties (in case the organization uses such services). The team of these practitioners should be updated on all changes so that they could inform their peers about novelties. Clearly, if they make an error or fail to ensure proper compliance, the reimbursement cycle can be disrupted. Moreover, the organization may be sued by the patient or be fined by the governmental agencies.

Billing and Reimbursement

The quality and the outcomes of the billing process is highly dependent on the correctness of the data being collected. If there are any errors, this may take a toll on downstream processes as well as customer satisfaction and cash flow. The information usually comes from multiple proprietary systems and third-party systems. It often has to be pre-processed before being used for the actual billing. Essential steps in data collection include patient registration, the authorization and checking of insurance eligibility, patient checking, coding, charge entry, claims submission, medical billing and collection, and payment posting. During the process, it is vital that the data is accurate, which ensures fairness of charging and patient satisfaction as well as the adequate compensation of providers.

The primary purpose of the patient financial services (PFS) personnel is organizing, managing, servicing, and controlling patient accounts. It is important that PFS workers ensure a healthcare organization’s financial viability by obtaining quick and accurate payments to resolve patient accounts. Third-party policies can be helpful to PFS personnel in claim processing procedures according to relevant regulations and statutes. The policies help facilitate the stability of the Medical Trust Fund to promote the prevention, detection, and resolution of the misconduct.

The critical areas of review concerning timelines and reimbursement maximization are expected to provide accurate information to reduce the number of denials, use eligibility tools, proper reflectivity in patient’s responsibility, the verification of patients’ payment inclination, and collecting money from patients before providing care. Collecting relevant and accurate information can maximize reimbursement and reduce the number of denied claims. Also, it can help retain eligibility to make sure that a patient has insurance, identify any copayments and potential deductibles. In addition, it may be helpful for expanding reflectivity into patients’ responsibility through setting programs that allow them to view their finances.

It is necessary to document follow-up calls to include in patients’ medical records as well as be available for review to be carried out by hospital managers. Monitoring such information can allow to guarantee quality control and improvement because of the access to call attempts, patients’ health status, issues with medication, appointment status, as well as actions that concern patients after discharge and any follow-up actions to be taken. A monitoring team established for this purpose should include representatives from various disciplines within the healthcare facility, including nursing, case management, Information Technologies, and medicine.

With the help of a compliance plan, it is possible to reduce the need for audits, facilitate the prevention of false claims, and help avoid ethical conflicts. The available compliance education and industry programs have enabled the implementation of an effective program (Office of Inspector General, 2021). The first step in the plan is implementing the established policies, procedures, and standards of conduct. The second step is to designate a compliance officer (CO) and compliance committee (CC) responsible for the oversight of the plan. The third step is ensuring due diligence in authority delegation, while the fourth step is providing education to employees at the facility and teaching them to develop effective lines of communication. The fifth step is concerned with conducting internal monitoring and auditing, and the step that followers is enforcing standards within the framework of disciplinary guidelines. The final step is making a quick response to any issues and implementing corrective action. Enacting such a plan is necessary with careful adherence to the standards as well as monitoring and delegation of responsibilities to ensure smooth implementation.

Marketing and Reimbursement

Several important areas for consideration are necessary when negotiating managed care contracts. Specifically, when preparing for a negotiation, healthcare facilities should consider the type of payer-provider relationship they want to establish (Arora et al., 2015). For instance, it is necessary to identify whether the contract is a one-time thing or a start of a consistent partnership. Another important strategy is looking beyond the healthcare facility as there can be multiple changes across an organization, which should be considered for negotiating more effectively and realizing a robust agreement. Besides, focusing on rates only is not the best strategy as there are other areas to consider. For instance, it is necessary to look at the influence that payers have on the workflow, such as payer problems, new policies, and procedures implementation, or issues with payer delegation credentialing.

In the context of a managed care contract, all stakeholders involved are financially and contractually connected to each other because they share financial risks. Because of the presence of financial risks, every party involved in such a contract has some level of authority and decision-making when using resources or charging for services. All parties, including healthcare providers, the sponsors of plans, as well as the developers of health plans. The success of managing the contracts depends on the effectiveness of each entity at an organization in carrying out its respective responsibilities. For instance, it is important that before a payer negotiation, all key operations staff get to negotiate the best practices and areas for improvement to guarantee high levels of performance. As a result, it is possible to get feedback on such issues as payer responsiveness, representative knowledge, problem-solving willingness, and so on.

New managed care contracts have been influencing reimbursement at healthcare organizations. For instance, value-based care reimbursement models, which take place within a value-based care model, imply a reimbursement of a defined amount per month for each plan member that is being served by an organization (European Commission, 2019). With the help of a well-established and properly managed care contract, it is possible to improve patient satisfaction by enabling patient access to comprehensive services and treatments.

To ensure billing compliance with ethical standards and regulations, the main resource to consider is internal audits. They can be helpful for pointing out any challenges taking place with billing and coding, including any mistakes, as well as enable the parties responsible for correcting them. Making sure that all errors are eliminated before billing submission to insurance companies can help healthcare facilities to collect reimbursement in time instead of waiting to be denied and resubmit later. In addition, not having auditors to monitor compliance and adherence to ethical standards can lead to the loss of money for organizations. Specifically, there may be longer waiting times for reimbursements, while the responsible parties will waste time on correcting errors after waiting for the denied requests to be resent. Besides, the lack of compliance with ethical standards can result in the loss of patients because of the low care quality, which, in turn, leads to financial burdens. There are also risks of fines, increased monitoring for compliance or probation to which organizations can be subjected.

References

Arora, V., Moriates, C., & Shah, N. (2015). The challenge of understanding health care costs and charges. AMA Journal of Ethics, 17(11), 1046-1052.

European Commission. (2019). Defining value in “value-based healthcare.” Web.

Green, M. (2020). Understanding health insurance: A guide to billing and reimbursement – 2020 (15th ed.). Cengage Learning.

Harrington, M. K. (2019). Health care finance and the mechanics of insurance and reimbursement (2nd ed.). Jones & Bartlett Learning.

Office of Inspector General. (2021). Compliance guidance. Web.

Pepper, J. (2019). The electronic health record for the physician’s office: For SimChart for the medical office (3rd ed.). Elsevier Health Sciences.

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