7-2 Final Project White Paper

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1 7-2 Final Project Submission: White Paper Zachary Colby Business Administration, Southern New Hampshire University HCM 345: Healthcare Reimbursement Professor Candice Faison December 10, 2023

2 Table of Contents I. Reimbursement and the Revenue Cycle Reimbursement……………………………………………………….….3-4 Patient Flow………………………………………………………………4-5 II. Departmental Impact on Reimbursement Departments……………………………………………….…….………..5-6 Activities……………………………………….……………………...….6-7 Responsibilities………………………………………..…………………..7 III. Billing and Reimbursement Third-Party Policies…………………………………….……………… .... 7-8 Structure and Follow Up Plans………………………………………...….8-9 IV. Marketing and Reimbursement Managed Care Contracts…………………………………………………..9 Ethics and Compliance……………………………………………...……10 V. References………………………………………………………………………..11

3 Introduction My name is Zachary and I am the supervisor of the Patient Financial Services department. My objective is to educate other department managers about reimbursement and its importance in healthcare. I will explain how each department effects reimbursement for the organization. I have chosen one hospital to discuss which is Weeks Medical Center located in Lancaster, NH. Weeks Medical Center is a not-for-profit Critical Access Hospital which also has four Rural Health Clinics across many locations in northern New Hampshire. Weeks Medical Center provides services in many different areas including Radiology, Oncology, Rehab, Wound Care, Primary Care and Behavioral Health. Weeks Medical Center is also part of a multi-hospital system called North Country Healthcare which also includes Androscoggin Valley Hospital in Berlin, NH and Upper Connecticut Valley Hospital in Colebrook, NH. Reimbursement and Revenue Cycle Reimbursement “ Healthcare reimbursement describes the payment that your hospital, healthcare provider, diagnostic facility, or other healthcare providers receive for giving you a medical service.” (Torrey, 2020). The payments for the services provided are dependent on the patient. Some patients will have government payers such as Medicare, Medicaid, and Tricare and some patients may have private health insurance through their employer like Blue Cross and Blue Shield, Cigna, and Harvard Pilgrim. Both government payers and private payers may have coverage where the charges are not paid in full, and a balance is due from the patient. If a patient does not have any insurance coverage, then they would be considered self-pay, and the facilities reimbursement would come solely from the patient.

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4 Healthcare reimbursement is different from other industries, and it is much more convoluted. When we go into the grocery store there are prices on everything, and it is easy for us to know how much we are going to pay and that is not the case in healthcare. In healthcare when a person presents for treatment there is no way to know what services they will need, how much it will all cost and how much the patient will be responsible for. Healthcare Reimbursement is a very complicated process. If a facility such as Weeks Medical Center provides medical services and fails to receive reimbursement for those services, it will affect the facilities financials. Facilities provide services with the expectation that they will be reimbursed either from a government payer, private payer, or the patient. Patient Flow “ Healthcare revenue cycle management begins when a patient makes an appointment to seek medical services. The process ends when organizations have collected all claims and patient payments.” (Lapointe, 2018). The revenue cycle management is divided into three categories which is front-end process, middle process, and the back-end process. The front-end process includes pre-registration, registration, prior authorizations, and insurance verifications. During this process all demographic information including insurance information is obtained. Insurance co-pays should also be collected during this stage. The middle-process is where case management can get involved as well as charge capture, hard coding and soft coding of diagnoses and procedures. This is when HIM/Coding will apply the ICD-10 diagnosis codes and correct CPT codes based on documentation. The back-end process lands with patient financial services and this includes processing bills, posting payments, handling denials and any credits.

5 Denials can include incorrect diagnosis codes; medical necessity related to payer policies/regulations and charge errors. All stages of the revenue cycle are vital to reimbursement, but pre-registration and registration are key as it is the first step to make sure the facility/provider has all the correct information for the patient. If information is not accurately obtained at the beginning, then the rest of the revenue cycle process will be difficult and can cause potential issues and denials. The chart below illustrates all the different processes/functions within revenue cycle. (Nashville News, n.d.) Departmental Impact on Reimbursement Departments There are many different departments that utilize reimbursement data starting with all revenue producing clinical departments such as radiology, oncology, rehab, and physician practices. These departments all utilize the data, so they know if they are receiving reimbursement for the services they are providing. All areas of revenue cycle utilize reimbursement data to ensure the facility is getting reimbursed for the services they are providing and if they are not, they investigate what could be causing the issue. Are there any trends that are related to any issues in any of the revenue cycle stages. Administration also utilizes the data,

6 so they understand if there are any changes need regarding processes or prices. They would also use the data for budgeting purposes. Collecting data is very important when it comes to pay-for-performance incentives because if the data needed is not available then the facility could be losing incentive reimbursement that they are entitled to. “ Pay-for-performance" is an umbrella term for initiatives aimed at improving the quality, efficiency, and overall value of health care. These arrangements provide financial incentives to hospitals, physicians, and other health care providers to carry out such improvements and achieve optimal outcomes for patients.” (James, 2012). While reimbursement is very important and healthcare facilities should always seek any incentive they can, quality patient care is even more of a top priority. Pay for performance has become popular recently with government and private payers and this includes Medicare and Medicaid. This is because for many years reimbursement was paid based on volume and not quality of care and if it is not transitioned to pay-for-performance reimbursements it can be harmful to patients when they don’t receive quality care. Activities There are activities in all departments that provide an impact on reimbursement, all these department’s roles are important to the financial success of the organization. The registration department needs to obtain accurate information on the patient during pre-registration and registration times. During the visits, clinical staff including providers need to document the visit correctly and compliantly. The next activity would be coding reviewing the documentation and ensuring the correct current procedural terminology (CPT) code is chosen and the correct ICD- 10 diagnosis code is used. Finally, the account falls to patient financial services for the claim to be submitted and payment to be received. If anything is denied by the payer, then it falls to

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7 patient financial services to either adjust off or submit an appeal. Of all the activities the registration activities are the most important to make sure is correct or changes are necessary because coding is different based on payer and so is coverage, especially when it comes to prior authorization for services. The earlier in the patient experience that data can be gathered and be correct the better. Responsibilities The department responsible for ensuring compliance with billing and coding would be all the revenue cycle departments (Registration, HIM/Coding, and Patient Financial Services) but primarily HIM and Patient Financial Services. There are many regulations that each of these departments need to follow to ensure compliance. Regarding the departments impact on reimbursement for the organization it will reflect in a positive way if we are following policies and procedures because this should prevent denials and potential issues. Audits on accounts for each departments work will help to ensure compliance. Third Party Policies Third Party policies are comprised of information needed to accurately bill a third-party payer. “Third-party payer is an entity, such as an insurance company or government program, that reimburses healthcare providers for services rendered to patients.” (MD Clarity, n.d.). Third Party Payers include Medicare, Medicaid, and Commercial payers such as United Healthcare, Cigna, and Anthem. Third Party Payers each have policies and procedures on billing practices and requirements for how claims need to be submitted by the providers. Patient Financial Services departments need to understand each of these payers’ requirements for them to create operating procedures to be followed to ensure that providers are receiving the maximum reimbursement from the payer. It is also important for Administration to think of individual

8 areas reimbursement such as for Weeks Medical Center and its four Rural Health Clinics when it is expanding or adding providers in the clinics it is important to think of where the reimbursement is best from the payers. For key areas to review the first is patient demographics including name, date of birth, address, insurance(s) to ensure this is all up to date. Ensuring this information is all accurate assists in timely and clean claim submission to the payers and will not delay reimbursement. The second area would be with clinical staff and providers making sure that all documentation is correct and complete. This includes any written documentation, ICD-10 Diagnoses, and CPT/HCPC codes. Correct and complete documentation will assist patient financial services staff to ensure claims are clean and accurate to make sure claims are submitted in a timely manner to not delay reimbursement. This will also assist with any required appeals to the payers for denials of the claims. Finally patient financial services team should review any denied claims timely and resolve appropriately. This may mean an appeal to the insurance company, updating charges on the account if there were erroneous charges and adjusting off balances. Structure and Follow Up Plans Regarding the structure of follow up staff I do feel it is most important to structure staff based an insurance assignment. With this structure comes Subject Matter Experts (SME) where each staff member owns either an insurance or depending on staffing and insurance volume it may be an alpha split within an insurance. It is also important for each staff member to understand their role and all compliance aspects of their role and insurance(s). Another valuable piece to this structure is continued training and education related to all aspects of PFS and as the policies and procedures with their insurance(s) change frequently. It is also very valuable to have clear and consistent communication, this includes from their peers, leaders, and

9 administration. The better the communication the better staff are successful with their roles and responsibilities and the higher rate of maximum reimbursement for the organization. To ensure that all staff are following compliance related to the organization, the individual’s role and state and federal regulations it is important to have regular performance monitoring. One method of monitoring this is with performance reports using key performance indicators. These performance reports will ensure that staff are following internal compliance protocols but there are also state and federal compliance that needs to be followed. Every healthcare facility should have a Compliance Officer or Compliance Department which would assist the PFS department with compliance measures to be followed. Routine or regular training and education regarding each staff members role will also assist in ensuring compliance is followed. Regular departmental auditing should also be performed especially when it comes to CMS requirements for billing such as Rural Health Clinics where there are a lot of rules and regulations around the billing of rural health clinic visits. Marketing and Reimbursement Managed Care Contracts “Managed care is a healthcare delivery model that seeks to provide high-quality healthcare while controlling rising costs.” (payrhealth, 2020). Reimbursement is affected by managed care contracts because unlike historical reimbursement where it was derived from a fee-for-service model to now reimbursement is driven by value-based payment models and quality driven. “There are several types of managed-care plans such as Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO, Point of Service (POS), Exclusive Provide Organizations (EPO), and Integrated Delivery Systems (IDS).” (Harrington, 2019). Some of these require members to select a PCP while others do not. Reimbursement rates for each of

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10 these can vary and affect the organization. Payers such as Medicare and Medicaid offer Managed Care options to their enrollees. Ethics and Compliance The primary resource needed to ensure compliance is a solid relationship with the compliance officer or members of the compliance department. The compliance officer or compliance department will help ensure billing and coding compliance is followed. Organizational policies and procedures should be communicated to all staff as appropriate especially those relating to compliance regulations. Strategies that can be utilized to ensure that ethical standards are followed are developing an organizational code of ethics and professional code of conduct. Both the code of ethics and code of conduct need to have a clear and concise communication to all so this can be enforced and followed. Weather it is ethical or unethical it is irrelevant, but any compliance violation can have a negative impact to reimbursement to the organization. Some compliance violations are informational only, but some have a financial implication.

11 References : Harrington, M. K. (2019). Health care finance and the mechanics of insurance and reimbursement (2nd ed.). Jones & Bartlett Learning. The Seven Steps of Revenue Cycle for a Healthcare Practice . (n.d.). Www.nashvillemedicalnews.com. https://www.nashvillemedicalnews.com/article/4279/the-seven-steps-of-revenue-cycle- for-a-healthcare-practice LaPointe, J. (2018, December 17). What Is Healthcare Revenue Cycle Management? RevCycleIntelligence. https://revcycleintelligence.com/features/what-is- healthcare-revenue-cycle-management Torrey, T. (2020, February 27). How Healthcare Providers Are Paid by Reimbursement . Verywell Health. https://www.verywellhealth.com/reimbursement-2615205 James, J. (2012). Pay-for-Performance. Health Affairs . https://doi.org/10.1377/hpb20121011.90233 Third-party payer - RCM Glossary | MD Clarity . (n.d.). Www.mdclarity.com. https://www.mdclarity.com/glossary/third-party-payer PAYRHEALTH. (2020). How Managed Care Contracts Impact Reimbursement | PayrHealth . Payrhealth. https://payrhealth.com/resources/blog/how-managed-care-contracts-impact- reimbursement/

7-2 Final Project White Paper

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