How to Improve Your Clean Claims Rates

Healthcare organizations are feeling the pinch when it comes to maintaining their revenue due to current economic conditions, government programs like RAC, the HITECH Act and other legislation that has passed under healthcare reform.  Today, the quality of an organization’s coding and billing processes can determine what operating margins will be tomorrow.  One important metric of quality is a high “clean” claim rate, which reflects both compliance and accurate payment.

Defining a “Clean” Claim
A clean claim has many definitions, but for our purposes it is a claim that was accurately processed and reimbursed the first time it was submitted to the payer.  Submitting more clean claims and reducing denial rates can be challenging due to complex and changing payer reimbursement policies and procedures.  The average U.S. hospital has a clean claims rate ranging from about 75-85%.1

Healthcare providers should focus on the following three best practices to ensure clean claims and accurately received payment for all covered services performed:

  1. Setting up a continuous, proactive payment rules research and discovery plan.  Make sure your facility understands CMS and your payers’ rules.
  2. Analyzing and reviewing denials and underpayment to determine the internal and external root causes of unsuccessful claims.  Develop reports to trend and monitor denials and identify areas of vulnerability.
  3. Fostering a culture of education between clinical, HIM and finance staff to ensure common goals, accountability and understanding of the revenue cycle while developing corrective action plans to resolve underlining issues.

The following are four areas where healthcare organizations can often see the most improvement:

1) Pre-billing Claim Scrubbing
Monitoring all of the websites, correspondence and other sources of yet-to-be published edits in a comprehensive and consistent manner is online bingo a daunting task for any provider organization.  As a result, most hospitals partner with a claim scrubbing vendor.  Unfortunately, your claim scrubber can also be part of the problem.  Most vendors offer basic medical necessity and correct coding initiative (CCI) edits but won’t develop custom edits for the payers that are denying the most claim dollars at your facility. To achieve 100% clean claims, your vendor must be able to deduce vague or unpublished payer rules from remittance data and be willing to create custom pre-billing edits for your facility.  Your hospital must have the denials management capability to categorize denials and discover root-causes in order to understand what your current claim scrubber can or can’t do.

2) Review and Education
Providing structure to accommodate rapid rule and policy changes will increase the likelihood that fewer erroneous claims will be submitted.  Develop protocol to ensure that claims are sent to the appropriate area to be reviewed and corrected.  Ensure that your HIM department has the tools to review any new medical necessity or billing changes.

3) Reporting and Analytics
Good analytics and reporting allows healthcare organizations to efficiently sort pre-billed claims and denials for rework.  A best practice for creating an efficient workflow is grouping claims by issue so team members can efficiently work similar claims, thereby reducing time.  It is also conducive to the Patient Accounts Department to identify trends that contribute to A/R days.

4) Policies and Procedures
To continuously improve effectiveness and efficiency of the Revenue Cycle, in-depth policies and procedures that support a continuous learning model are warranted.  Some of these include:

  • Developing a well-documented claim-correction process
  • Trending issues by payer to identify critical issues
  • Collecting accurate documentation on all payer-related issues to support effective contract negotiations
  • Creating a teamwork approach for Clinical, Patient Accounting, HIM and Contracting to understand the revenue cycle for your facility
  • Creating a culture of accountability for departments, teams and individuals
  • Tracking preventable denials back to the source for a permanent fix

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