In the majority of hospitals and health systems today, clinical, coding and revenue cycle operations are separate from one another. But these departmental silos can cause breakdowns in the process from care to code to charge, which can have a major impact on the organization’s bottom line. The most obvious threats are denials that can lead to costly delays, both in care and collections. But there’s another risk that can have as great an impact on hospitals and health systems: penalties for non-compliance. Administrative, civil and even criminal penalties for illegal billing practices can be damaging, both to a hospital’s profitability and reputation.
So, how can healthcare organizations improve financial results and reduce their compliance risk? Many are finding the answer in revenue integrity, an approach that combines multidisciplinary workflow improvements and internal auditing to help make sure a hospital’s charges aren’t just complete and comprehensive, but also compliant.
There’s a reason it’s not called revenue optimization.
When someone has integrity, it means they’re honest and have strong moral principles. The same can be said of healthcare organizations that practice revenue integrity. Yes, it’s about optimizing revenue for the services provided, but it has so much more to do with making sure every action and interaction that contributes to the revenue cycle is legally and contractually compliant.
According to a 2017 HFMA survey of 125 hospital and health system executives, 22% identified revenue integrity as the leading priority for their organizations, but less than half of respondents (44%) have established revenue integrity programs. Of those who have, 61% report a decrease in compliance risk after establishing the program.
But with so many regulatory compliance requirements facing hospitals and health systems—a number that seems to be growing every day—it’s challenging to make sure your organization’s efforts can address all of them.
Here’s just a sampling of revenue cycle-related regulatory risks:
• Accurate coding and billing
• Advance Beneficiary Notice of Noncoverage (ABN): Medicare requires that the ABN form be given to patients when providers believe Medicare will deny payment for services due to a lack of medical necessity.
• HIPAA: Organizations that electronically transmit health information in connection with reimbursement claims, benefit eligibility inquiries, referral authorization requests or other administrative functions involving individually identifiable health information are required to secure the data from unauthorized disclosure.
• Administrative Simplification: Healthcare providers that conduct electronic transactions must comply with Administrative Simplification, which is a set of standards, operating rules, code sets and unique identifiers that allow information to be shared electronically in consistent ways.
• Primary and secondary payer responsibility: Providers are responsible for the collection and maintenance of patient information, including employment and insurance information. They have a responsibility to identify payers other than Medicare so that incorrect billing and overpayments are minimized.
• Utilization Review: Required under Medicare, utilization review is a process that helps providers determine whether a service is medically necessary. Avoiding unnecessary readmissions through utilization review can help keep Medicare penalties at bay.
It goes without saying that having someone who is knowledgeable about regulatory changes—and available to monitor them on a regular basis—is key.
Additionally, compliance audits should be a regular occurrence under any hospital or health system’s revenue umbrella. And it’s just as important to ensure audit results are communicated appropriately and follow-up training is provided to correct any compliance issues. Finally, follow-up audits should check to make sure that any necessary corrections were made. Similarly, it’s also important to consult a compliance expert when considering workflow improvements. While the improvement might serve to make workflows more congruous, it could also trigger a compliance concern.