The emergency department is a vital part of every hospital's financial success, as the open door to an increasing number of admissions. Successful EDs closely monitor several key areas that impact a department's revenue and efficiency; nine of the most important of these areas are presented below.
1. Front-end accountability. Every ED visit must be accounted for, processed and billed. In the evolving era of the electronic health record it is important there be an independent source document which is used for visit reconciliation. Critical is the demand on physicians for chart completion. Ideally this should be within their clinical shift; respecting this may not always be feasible, a 24-hour turnaround is a second-best option. All outstanding charts should be addressed in a timely manner; every unprocessed chart represents delayed revenue, or worse yet, lost revenue.
2. EHR issues. There are several issues surrounding EHRs that present opportunities for hospitals but also present areas that need attention. First, there is no doubt EHRs present inter-physician efficiencies, a hallmark of the evolving ACO landscape and a giant step toward better quality of care.
There are however potential abuses of these records that can place a hospital and the physicians at risk. Imbedded in many EHRs are documentation macros that offer physicians the opportunity of speedier record completion, but if abused, also present the risk of "every chart starting to look the same." The latter can lead to an increasing number of medical necessity payor denials, resulting in cash flow and/or revenue loss. This type of denial can also begin to raise the risk level of an audit.
In every ED it is imperative that every provider be well-versed in the proper usage of the chart, but perhaps this is most evident in teaching institutions, involving residents. The proper communication link between attending physicians and their residents can ensure the proper coding and billing of patient accounts; poor or inefficient linkage can not only result in lost revenue, but also present a medical-legal and HIPAA risk if charts become disconnected and lost in cyber-space.
3. Physician compliance. Physician compliance, specifically in the completion of their third-party credentialing paperwork is critical to consistent ED cash flow. An emergency physician in New York, for example, who sees a relatively high mix of Medicare patients but who lets the Medicare paperwork lapse through a second month will cost the practice over $10,000 in lost Medicare revenue. Coupling this with other payors likely with higher reimbursement rates, the practice is quickly dealing with an increasing number of delayed payments, and the risk of further loss, due to timely filing issues.
4. Payor-mix tracking. Depending on region, the current healthcare landscape shows an increasingly fluid patient demographic mix warranting close monitoring. As governmental managed care populations move in and out of plans, it is important to first properly identify current patient coverage. Poor registration processes can mean delayed and potentially lost revenue. A second population subset is the self-pay patient mix, particularly created by the increasing number of patients opting for high-deductible insurance coverage. This shift slows down cash flow compared to prior coverage patterns, and will likely be slower than shortages due to "normal" deductible processing.
For true self-pay patients, the initiation of a prompt-pay discount protocol affords the ED practice an opportunity to collect revenue that may otherwise be lost, or at minimum collected much later by a collection service.
5. Contracts and fee schedule. Two areas that can have dramatic impact on ED practice revenue involve the practice fee schedule and payor contracts. The fee schedule deserves a yearly review and update. One metric in particular that should never occur is a procedure fee that is less than the highest reimbursement being received from any plan. Very important the fee schedule must include all services actually being performed in the practice. Inclusion of observation, sedation, ECG and x-ray interpretation codes are all recommended for inclusion even if they are not all being currently performed or billed, especially if they are being considered for future billable services. As new EDs are being built and others are expanding it is vital that all services be addressed in each contract. It is always more difficult to add billable codes after a contract is signed, and it is not advisable to agree to a payor's "market fee schedule" without knowing all of the specifics. Additionally all CPT codes and modifiers must be accurate according to current Medicare and AMA guidelines and protocols.
Contracts issued to ED practices will commonly not include sections and clauses that are unique to emergency medicine. These include such issues as the prudent layperson definition of an emergency, EMTALA protocols, procedure bundling and prompt-pay parameters. Appeal, addenda and notice protocols require close scrutiny. These issues are frequently either completely overlooked or presented in boiler-plate formats, virtually always requiring attention and/or revision.
Assessing reimbursement rates is practice-specific and the most important issue to the financial success of the practice. A tactical decision when dealing with payors is whether it is more beneficial to negotiate a full fee-schedule based agreement (i.e., rates for every CPT code) or a flat rate agreement, where all services are reimbursed at a single rate. Very careful data analysis is necessary for the latter especially in these days of patient acuity fluidity. A flat rate agreement also necessitates an analysis of services being planned for the future, as referenced above. Contracts should include yearly increases, to not only increase revenue, but also to counter the persistent threat of governmental rate reductions.
6. Acuity mix monitoring. Intra-practice physician variances across all payors and especially Medicare should be monitored. Tracking outside the practice using both state and national Medicare data is a very useful analysis. There can certainly exist justified reasons for physician variances versus this data as long as they are monitored and clearly understood. In these days of both Medicare and Medicaid RAC audits, knowledge and preparation are keys to success.
In this same context it is very important to monitor physician lost revenue due specifically to insufficient chart documentation. Documentation deficiencies can be closely checked through report cards, showing and explaining to each physician the issues and associated lost revenue impacting the practice. These reports can also be invaluable tools used in regular education sessions with the physicians helping them to continually improve their documentation, and also preserve ED revenue. Overlooking documentation issues can cost a practice thousands of dollars on a monthly basis.
7. AR protocols. In today’s environment it is imperative that very aggressive accounts receivable follow-up protocols be in place. Proper payment is of course first linked directly to the contracts; these payment rates should be vigilantly reviewed. Whenever possible continually increasing the percentage of both electronic payor claim submissions as well as payer electronic remittances is vital to smooth cash flow. Auto and workers' compensation claims can commonly be a practice's slowest payors to resolve; however, some states require a very short window not only for initial claim submission, but also turnaround time for payment.
An issue sometimes overlooked today is the monitoring of payors who have undergone class-action settlements. In just over the last decade virtually all of the major payors have settled class-action claims, but some slip back into pre-settlement modes once the settlement window passes. Closely monitoring these patterns is critical, since slippage back to pre-settlement days results in lost revenue again. Examples here include such things as the resumption of pre-settlement, inappropriate bundling practices and lack of transparency in payment protocols.
As referenced above, delayed filing of physician paperwork can cripple a practice's cash flow. The related metric to monitor is unbilled charges within a practice. These charges will first delay payments but can also result in lost revenue, if timely filing limits are exceeded.
8. Where’s the education going to come from? There is a major issue on the near horizon in that ICD-10 that will impact two entirely different sets of hospital personnel. First, the coders will need education along with the frank realization their productivity will likely be dramatically reduced. There are many experts offering projections of the actual impact, which no one really knows, but it certainly seems reasonable to count on a significant reduction in coder productivity. Training and planning both need to be in place now! Being ready and properly trained is a necessity.
The other population that will be impacted by ICD-10 will be the physicians. As we move further into the era of EHRs it is very important to come to grips with the fact EHRs will not entirely solve this issue, despite some protestations to the contrary. It is simply not feasible to think any EHR will be able to address the explosion of available diagnosis options through some machination of drop-down menus. That said the solution will be in physician education. Physician behavior regarding much more specificity in their documentation must occur for success in an ICD-10 world; yes, physicians will need to be re-trained in a new world of documentation.
9. Practice revenue. Realistically nothing else matters if the cash is not collected. ED practice revenue is calculated on a cash/patient visit basis, not as a percentage of charges, commonly used in hospitals. Based first upon a thorough financial analysis the cash/patient visit requires constant monitoring. Any one or a combination of the above issues will directly impact cash collections.
Emergency department practices can be a vital source of revenue, but if the issues presented above are not carefully monitored cash flow will erode as dollars are either delayed or lost entirely. Neither of these alternatives needs to occur with strong ED practice management.
John G. Holstein is the director of client development with Medical Management Professionals, Inc., a subsidiary of the CBIZ Corporation, and a healthcare executive with 27 years experience in managing and servicing emergency medicine practices. His experience includes operations, work flow processing, client service, practice management, financial reporting, analysis, managed care contracting, publications and presentations in the healthcare industry.
Emergency Physicians Lobby for Bill That Would Protect Against Malpractice Suits
1. Front-end accountability. Every ED visit must be accounted for, processed and billed. In the evolving era of the electronic health record it is important there be an independent source document which is used for visit reconciliation. Critical is the demand on physicians for chart completion. Ideally this should be within their clinical shift; respecting this may not always be feasible, a 24-hour turnaround is a second-best option. All outstanding charts should be addressed in a timely manner; every unprocessed chart represents delayed revenue, or worse yet, lost revenue.
2. EHR issues. There are several issues surrounding EHRs that present opportunities for hospitals but also present areas that need attention. First, there is no doubt EHRs present inter-physician efficiencies, a hallmark of the evolving ACO landscape and a giant step toward better quality of care.
There are however potential abuses of these records that can place a hospital and the physicians at risk. Imbedded in many EHRs are documentation macros that offer physicians the opportunity of speedier record completion, but if abused, also present the risk of "every chart starting to look the same." The latter can lead to an increasing number of medical necessity payor denials, resulting in cash flow and/or revenue loss. This type of denial can also begin to raise the risk level of an audit.
In every ED it is imperative that every provider be well-versed in the proper usage of the chart, but perhaps this is most evident in teaching institutions, involving residents. The proper communication link between attending physicians and their residents can ensure the proper coding and billing of patient accounts; poor or inefficient linkage can not only result in lost revenue, but also present a medical-legal and HIPAA risk if charts become disconnected and lost in cyber-space.
3. Physician compliance. Physician compliance, specifically in the completion of their third-party credentialing paperwork is critical to consistent ED cash flow. An emergency physician in New York, for example, who sees a relatively high mix of Medicare patients but who lets the Medicare paperwork lapse through a second month will cost the practice over $10,000 in lost Medicare revenue. Coupling this with other payors likely with higher reimbursement rates, the practice is quickly dealing with an increasing number of delayed payments, and the risk of further loss, due to timely filing issues.
4. Payor-mix tracking. Depending on region, the current healthcare landscape shows an increasingly fluid patient demographic mix warranting close monitoring. As governmental managed care populations move in and out of plans, it is important to first properly identify current patient coverage. Poor registration processes can mean delayed and potentially lost revenue. A second population subset is the self-pay patient mix, particularly created by the increasing number of patients opting for high-deductible insurance coverage. This shift slows down cash flow compared to prior coverage patterns, and will likely be slower than shortages due to "normal" deductible processing.
For true self-pay patients, the initiation of a prompt-pay discount protocol affords the ED practice an opportunity to collect revenue that may otherwise be lost, or at minimum collected much later by a collection service.
5. Contracts and fee schedule. Two areas that can have dramatic impact on ED practice revenue involve the practice fee schedule and payor contracts. The fee schedule deserves a yearly review and update. One metric in particular that should never occur is a procedure fee that is less than the highest reimbursement being received from any plan. Very important the fee schedule must include all services actually being performed in the practice. Inclusion of observation, sedation, ECG and x-ray interpretation codes are all recommended for inclusion even if they are not all being currently performed or billed, especially if they are being considered for future billable services. As new EDs are being built and others are expanding it is vital that all services be addressed in each contract. It is always more difficult to add billable codes after a contract is signed, and it is not advisable to agree to a payor's "market fee schedule" without knowing all of the specifics. Additionally all CPT codes and modifiers must be accurate according to current Medicare and AMA guidelines and protocols.
Contracts issued to ED practices will commonly not include sections and clauses that are unique to emergency medicine. These include such issues as the prudent layperson definition of an emergency, EMTALA protocols, procedure bundling and prompt-pay parameters. Appeal, addenda and notice protocols require close scrutiny. These issues are frequently either completely overlooked or presented in boiler-plate formats, virtually always requiring attention and/or revision.
Assessing reimbursement rates is practice-specific and the most important issue to the financial success of the practice. A tactical decision when dealing with payors is whether it is more beneficial to negotiate a full fee-schedule based agreement (i.e., rates for every CPT code) or a flat rate agreement, where all services are reimbursed at a single rate. Very careful data analysis is necessary for the latter especially in these days of patient acuity fluidity. A flat rate agreement also necessitates an analysis of services being planned for the future, as referenced above. Contracts should include yearly increases, to not only increase revenue, but also to counter the persistent threat of governmental rate reductions.
6. Acuity mix monitoring. Intra-practice physician variances across all payors and especially Medicare should be monitored. Tracking outside the practice using both state and national Medicare data is a very useful analysis. There can certainly exist justified reasons for physician variances versus this data as long as they are monitored and clearly understood. In these days of both Medicare and Medicaid RAC audits, knowledge and preparation are keys to success.
In this same context it is very important to monitor physician lost revenue due specifically to insufficient chart documentation. Documentation deficiencies can be closely checked through report cards, showing and explaining to each physician the issues and associated lost revenue impacting the practice. These reports can also be invaluable tools used in regular education sessions with the physicians helping them to continually improve their documentation, and also preserve ED revenue. Overlooking documentation issues can cost a practice thousands of dollars on a monthly basis.
7. AR protocols. In today’s environment it is imperative that very aggressive accounts receivable follow-up protocols be in place. Proper payment is of course first linked directly to the contracts; these payment rates should be vigilantly reviewed. Whenever possible continually increasing the percentage of both electronic payor claim submissions as well as payer electronic remittances is vital to smooth cash flow. Auto and workers' compensation claims can commonly be a practice's slowest payors to resolve; however, some states require a very short window not only for initial claim submission, but also turnaround time for payment.
An issue sometimes overlooked today is the monitoring of payors who have undergone class-action settlements. In just over the last decade virtually all of the major payors have settled class-action claims, but some slip back into pre-settlement modes once the settlement window passes. Closely monitoring these patterns is critical, since slippage back to pre-settlement days results in lost revenue again. Examples here include such things as the resumption of pre-settlement, inappropriate bundling practices and lack of transparency in payment protocols.
As referenced above, delayed filing of physician paperwork can cripple a practice's cash flow. The related metric to monitor is unbilled charges within a practice. These charges will first delay payments but can also result in lost revenue, if timely filing limits are exceeded.
8. Where’s the education going to come from? There is a major issue on the near horizon in that ICD-10 that will impact two entirely different sets of hospital personnel. First, the coders will need education along with the frank realization their productivity will likely be dramatically reduced. There are many experts offering projections of the actual impact, which no one really knows, but it certainly seems reasonable to count on a significant reduction in coder productivity. Training and planning both need to be in place now! Being ready and properly trained is a necessity.
The other population that will be impacted by ICD-10 will be the physicians. As we move further into the era of EHRs it is very important to come to grips with the fact EHRs will not entirely solve this issue, despite some protestations to the contrary. It is simply not feasible to think any EHR will be able to address the explosion of available diagnosis options through some machination of drop-down menus. That said the solution will be in physician education. Physician behavior regarding much more specificity in their documentation must occur for success in an ICD-10 world; yes, physicians will need to be re-trained in a new world of documentation.
9. Practice revenue. Realistically nothing else matters if the cash is not collected. ED practice revenue is calculated on a cash/patient visit basis, not as a percentage of charges, commonly used in hospitals. Based first upon a thorough financial analysis the cash/patient visit requires constant monitoring. Any one or a combination of the above issues will directly impact cash collections.
Emergency department practices can be a vital source of revenue, but if the issues presented above are not carefully monitored cash flow will erode as dollars are either delayed or lost entirely. Neither of these alternatives needs to occur with strong ED practice management.
John G. Holstein is the director of client development with Medical Management Professionals, Inc., a subsidiary of the CBIZ Corporation, and a healthcare executive with 27 years experience in managing and servicing emergency medicine practices. His experience includes operations, work flow processing, client service, practice management, financial reporting, analysis, managed care contracting, publications and presentations in the healthcare industry.
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