The emergency department is at the center of many significant issues in healthcare today.
Previously the emergency department was referred to as a "loss leader" for revenue in many hospitals, a veritable afterthought in terms of ever being considered an actual revenue generating center. There are very unique operational issues resulting in revenue capture challenges in every emergency department. However, with proper policies, protocols and the application of sophisticated revenue cycle technology, the emergency department can become a true revenue center for the hospital. This article will focus on professional-fee practice management and revenue cycle issues; however, the content, data, principles and processes are very easily extrapolated and directly transferable to facility/technical-fee based revenue cycle discussions.
Challenge # 1: The Front-End Challenges
There are several operational issues presenting challenges in emergency departments. Two prime examples of these challenges are:
• IT system leakage of patient charts left unprocessed and therefore unbilled, and
• The patient who leaves without treatment (LWOT).
The first situation can occur due to either insufficient or loss of physician documentation and/or internal electronic health record disconnections. Actual loss of charts not only represents revenue loss, but also raises significant compliance concerns and can be potentially disastrous if there is any subsequent legal action involving the patient. Many of today's industry discussions involve the topic of EHR interoperability; however, it is prudent to also evaluate and review all intra-operability pathways as well. This particular factor is at times addressed differently by independent emergency group practices, hospital-employed practices and academic practices. The incentive for full patient chart accountability and reconciliation can vary across these practice structures.
Efficient chart accountability and tracking is a clinical care, compliance, provider productivity and revenue cycle necessity. Regardless of the physician practice structure, best practice requires full chart accountability.
Another important factor impinging on this issue is the presence/absence of nurse practitioners, physician assistants and/or residents. Tracking of unprocessed charts requires a reliable mechanism for efficient updates to be provided to both practice administrators and providers. This is effectively handled through a physician portal, coupled with dashboard report tracking to insure revenue is not lost either through actual loss of charts or insurance payer timely filing issues due to poor physician response times in addressing outstanding charts. Both of these sets of tasks are most efficiently handled though the usage of technological tools and reporting functionalities. Reliance on manual paper tracking systems is inherently inefficient, costly and time-consuming today. Full accountability requires technological tools to insure all charts are accounted for and properly processed. Miss-steps here will be costly. Data for a sample emergency department is presented below.
Emergency Department Characteristics:
1. Annual volume: 100,000 patients
2. Assumed current average professional fee reimbursement: $125/patient visit
3. LWOT annual rate: 3%
4. Chart Leakage: 1%
Impact of LWOT: Loss of $375,000 in professional-fee revenue
Impact of Chart Leakage: $125,000
Total professional-fee revenue loss: $500,000.
Bottom line impact for the slippage and loss of 4% of patient charts in a 100,000 annual patient visit emergency department results in a loss of $500,000 in professional-fee reimbursement alone.
Note: Moriarty1 has recently reported on hospitals with high emergency department wait times and resulting losses due to patients leaving without being treated. She reports the average of these high incident hospitals as 14.4%. If this average patient loss of 14.4% is utilized in the above example, the professional-fee revenue loss becomes $1.8 million.
An additional and very important front-end challenge comes from the efficiency and quality of the patient registration process. The emergency department registration setting and process is one of the most unique and challenging settings in the entire American healthcare system. The federal EMTALA law requires every patient presenting to an emergency department must receive a medical screening exam, however, securing the patient's payment information is restricted until after the triage and screening takes place. This restriction occurs in no other setting throughout the entire healthcare environment. No other specialty except emergency medicine operates with this parameter. This is the heart of the unfunded mandate of emergency medicine. This issue makes it extremely critical that the processes for capturing the patient's insurance information includes steps for securing correct, current and valid information, and most importantly that the timing adheres to EMTALA regulations.
The environment today of patient high deductible plan coverage and the constantly shifting nature of patient coverage requires very efficient information capture. Historically one of the most consistent reasons for claims rejections in the emergency medicine arena has been patient eligibility, i.e. the patient's insurance information was not correct, current and/or not valid at the time of their visit to the emergency department. It is critically important to first clearly understand the EMTALA parameters and once satisfied, to capture fully accurate, correct and current payment information.
The other contingency impacting the capture of correct patient insurance information in the emergency department is quite simply the condition and presenting symptoms of the patient. A severely ill and/or injured patient who is admitted to the hospital from the emergency department requires timely follow up with either the patient or family member "after-the-fact" requiring strong internal hospital processes and protocols to insure accurate insurance information is obtained. Very important as well is assurance the updated insurance information is actually provided and transmitted to either the outsourced billing service company or internal billing staff. Slippage can readily occur here, resulting in lost time and potential revenue. If accurate information is not provided in a timely manner or not provided at all, this will have an immediate impact on both the aged days receivable and also patient satisfaction ratings. Management of the exchange of this information flow is critical to successful account management and cash flow.
Lastly, in this context it is important to include patient insurance eligibility checks particularly for the true self-pay patient. This patient has historically been a consistent and constant challenge for emergency medicine. Today's high deductible coverage environment only heightens the significance of this step in managing the receivable. This is a beneficial juncture for payment plan scheduling with the patient.
Ellison and Gamble2 quote Mary Beth Briscoe, CFO of the University of Alabama-Birmingham "Health systems should provide a positive clinical experience; however, if not supported by a similarly positive financial experience, patient satisfaction and organizational reputation could be negatively impacted. We should strive to provide our patients with a positive holistic encounter." Today's systems of patient engagement which result in positive patient experiences, feedback, satisfaction ratings and payment cannot be achieved nor supported with old, traditional protocols involving a statement, possible follow up telephone call, possible second statement, followed by a hand-off to a collection agency. The important point here is a satisfied patient is also a patient who will pay their bill. The efficient engagement of patients today necessitates the development of patient personas and propensities to pay indices and metrics using all available information resources coupled with sophisticated technology channeling the entire process. Today's entire healthcare revenue cycle has shifted from a provider-to-insurer paradigm to a provider-to-patient paradigm. This is the direct result of the patient becoming an increasingly larger and significant payer today. Depending on the patient characteristics, effectively analyzed and implemented engagement protocols including personal as well as automated telephone calls, text messaging, statements, very user-friendly patient statements and very important, patient portals, are required today to insure both timely payments and satisfied patients. Scenarios begin to emerge in these situations showing results such as 20 year old patients preferring to be engaged via text with payment capabilities from their devices, while older patients may prefer a more traditional approach. It is, however, necessary to closely monitor these evolving patient scenarios and patient propensities since outliers will also occur necessitating flexibility and the constant monitoring and tweaking of these engagement protocols to insure best practices and best results from the patient's perspective. Success in engaging patients "where-they-live" results in a satisfying patient experience as well as the best financial results for the practice and the hospital. This environment is so fluid today that it takes sophisticated, flexible and very versatile technology, constantly monitored by experienced staff engaging today's patients to insure they have a positive experience, resulting in a positive financial picture for the emergency department practice and hospital as well.
Challenge # 2: The Back-End Receivables Processing
It is very important to additionally and carefully examine the third party insurance environment in which we all live today. The American College of Emergency Physicians notes "Comparing Medicare payments to inflation, between the start of the RBRVS system in 1992 and 2016, Medicare payments have decreased by 53%.3" This fact coupled with payers considering Medicare based reimbursement structures, and payers
continually developing protocols for decreasing and/or limiting professional-fee reimbursement, heightens the importance and significance of compliant, efficient, effective, strong and very timely back-end receivables processing.
Traditional revenue cycle organizations and departments depend on labor intensive, inconsistent processes open to errors in identifying inappropriate denials, trending of the data, report analysis (or sometimes report paralysis) and professionally packaging of appeals back to the correct payer. Identifying the "correct" payer itself is critical as it may be required to send appeals to a different address (and person) compared to the claims submission address. The nuances here can make a significant difference in the financial picture of the physician practice. Manual, labor-intensive processes can take several days to determine if a problem even exists before deciding on the appropriate and correct next action step. Payer time-limits and cash-flow KPI requirements today necessitate technology that can swiftly identify inaccuracies and errors occurring anywhere throughout the revenue stream, which can be at multiple different junctures in the accounts receivable. Inefficient and manual processing simply does not get it done today with the shifting sands of payer tactics and patient insurance coverage. Experienced and knowledgeable people managing the proper technological investigative tools with 24/7/365 reporting dashboards, result in efficient physician financial practice management. The swift recognition of a problem using sophisticated technology coupled with direct engagement of payers to process and adjudicate patient claims is data and practice management at its best.
Challenge # 3: Measure, Monitor, Track and Report:
Accountants speak of "internal-controls." Efficient revenue cycle processes require very strong "internal controls" as well. This starts at the step of proper claim submission to the "proper" payer, management of expected claims payment timeframes, proper contract-based payment monitoring, denial management, appeals generation, monitoring and tracking, through to final payment. Every step of the revenue cycle process should include clear, management-friendly data metrics, analyses, results tracking and reporting.
Healthcare experts today speak of "Big Data." Successful emergency physician practices efficiently manage "Small Data" using 24/7/365 day report capabilities and constant practice metrics tracking. Gone are the days of revenue cycle companies and departments claiming "Of course, we track denials and appeals." We live in a time when collaboration with payers has become a mantra and alternative payment models are at the forefront of the new, evolving landscape. Prudent and smart hospital executives, physician directors and emergency practice administrators however also know payers are secure with virtually all of the data, as physician practices are constrained by anti-trust restrictions. This is reality for all physician practices. Today the financially successful emergency department practice deserves and demands sophisticated results-based data and analytics that are accessible, meaningful, visible, usable and transparent to everyone involved in the management of the practice, 24/7/365.
Today we are experiencing a shift of healthcare services being delivered in more outpatient settings. Three important facts remain about hospitals and their emergency departments.
• First, every emergency department patient visit is by definition an outpatient visit.
• Second, in these evolving days of shrinking hospital margins, the emergency department remains the source of upwards of 70+ percent of hospital admissions.
• Third, Hsia and Niedzwiecki have just reported only 3.3% of emergency department visits are "avoidable."
With 2016 topping out at 160,000,000 emergency department visits, and showing no signs of decline, effective management of emergency department practice revenue cycle processes and protocols remains a vibrant and necessary component of every healthcare system.Emergency departments are no longer loss-leaders for revenue generation. These departments can be revenue generators, but positive results come from experienced people managing sophisticated technology providing key performance data and metrics to prevent revenue loss.
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