Children’s hospital EDs: Understanding complexities to improve reimbursement


Emergency care at children's hospitals has unique complexities from the front door to billing, which can create revenue challenges. Children's hospitals have one of the highest averages of unpaid bills, according to an AHA survey. Understanding and identifying these unique differences can help tighten up processes and ensure optimal reimbursement.

Challenge #1: Different set of conditions Providers in children's emergency departments don't typically see chest pain or sepsis – children bring a unique set of healthcare problems to the table. Another issue is that some parents tend to bring their children to the ED as the first option, even when another care setting may be more appropriate. Many parents of children with chronic or congenital conditions like to stay within the children's hospital system in order to maintain continuity of care. In other situations, the emergency department is the provider of choice because it is open 24/7, and the family has access to care whenever it is needed. This means that children's hospital EDs tend to see lots of very low-acuity patients (i.e., runny nose, congestion) and very high-acuity patients (i.e., congenital health problems).

Challenge #2: Compassion vs. sustainable care There is a great need for compassionate care with children and their families as with patients of all ages, but when can compassion become detrimental to a hospital’s financial health? Providers at children’s hospitals are more apt to give services away because there are children involved. One example I recall had to do with a child who was receiving a transplant. The child was privately insured, but the hospital was ready to write it off as a charity case. How often does this happen? Another thing I’ve noticed is that children’s hospitals have a tendency to bill the facility level only and not facility procedures. This means that not only revenue is being lost, but the resources utilized by the facility over and above just the visit are not accurately reported. Treating children and their families with compassion when they are uninsured or unable to pay is the right thing to do. However, often a significant amount of money is left on the table by not first evaluating all avenues for payment. 

How to ensure optimal reimbursement

1. Have defined processes in place for data gathering. Ensure those involved in the intake process are educated on how to gather information that will be helpful. I've seen many children's hospitals without a well-defined process for gathering information because they are accustomed to writing off care as the first option. It is possible to gather information in a kind and considerate manner, and then use this information on the back-end of the revenue cycle process to ensure that all possible payment avenues are explored before a decision is made whether or not it's necessary to write off care.

2. Ensure proper documentation of medical necessity. When a physician order is placed, there needs to be a matching diagnosis behind it with documented medical necessity for support. I have experienced many times when a non-specific diagnosis code is added to remedy poor documentation. Physicians submit orders for CTs and MRIs, and these diagnostic procedures come back uncovered because there is no strong documentation to support it. My advice is to have someone review orders and ensure proper supporting documentation. Documentation should be able to explain what a physician performed and ordered, why he or she did it and the thought processes behind them. If the documentation or the order is unclear, the physician or physician's staff should be queried prior to the service being performed, if possible, and documentation/orders should be corrected by both the ordering physician and the facility. In addition, it should be documented why the correction took place in the orders.

3. Have a strong follow up process in place. Understand what payers will or will not pay for, but don't accept payment denials when they don't make sense. If medical necessity denials come back, ensure documentation is reviewed. If documentation is not the issue, someone other than the physician should be trained and educated to defend the claim with the payer. Go to the source armed with information. On occasion, it may be worth putting the effort in to change a medical policy all together, instead of appealing single claims. If a physician truly believes a service was appropriate and has proper documentation, it is worth going to the payer and asking why a medical policy does not line up. Payers can change their medical policy based on a sound argument. Be prepared with documentation to prove your position.

Elizabeth Morgenroth, CPC, is a revenue cycle business analyst at T-System, Inc. and has 16 years of healthcare experience in the payer, provider and vendor areas of service. While with Blue Cross and Blue Shield of Kansas, she provided coding assistance to all professional specialties statewide. Ms. Morgenroth was responsible and integral to the entire revenue cycle process for a family practice in Lawrence, Kan., with four physicians and five physician assistants. While working for Clinical Coding Solutions, she performed professional and facility coding for nearly all specialties. In her current position, she is responsible for encoder tool development and ICD-10 readiness for T-System revenue cycle solutions.




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