In my more than 20 years in anesthesia billing and practice management, I have seen that business is getting tougher for the providers. They are working more hours, taking more calls, financially dealing with a worsening payer mix … all of which results in pressure.
I have been asked multiple times by providers: “What is the most important billing metric: Days in Accounts Receivable, Net Collection Rate, Denial Percentage, Clean Claim rate?”
While all these billing metrics are important, the measure of claims that don’t even get billed is the most important because that is obviously zero. And that’s why the Charge Capture Rate is one of the most important KPIs that most anesthesia practice leaders neglect to measure and track.
The Impact of the Charge Capture Process
To understand the impact of missing charges, let’s take a look at the following example:
Let’s assume a 10 partner practice:
- Performs 1,000 cases per month (12,000 per year)
- Has an average case acuity (12 units per case)
- Has an average payer mix (55% Medicare/5% Medicaid/and 5% Self-Pay and 35% commercial cases) which translates to a $440 average yield per case. Let’s assume the billing process loses 10 cases per month (1%):
The results of a 99% charge-capture process is over $50,000 per year in lost revenue, which translates to $5,000 per partner. An extra $5,000 of revenue for any practice would be great.
If the charge capture process is only working at 97%, you can see that the financial impact increases significantly.
But … the problem is that most reconciliation work is manual and is assigned to one person at your billing company. This process is tedious and often forgotten. I have heard things like “Tom at the billing company does the reconciliation and he has been here 10 years and is super-conscientious, so I am not worried about it.” This statement may be true; But, what happens when Tom takes a vacation or the person sitting next to him quits? The billing company and Tom are now doing double-duty, and no one is making sure this actually gets done.
The obvious question from anesthesia providers is, “How do I check this since I am busy treating patients?” The easy answer is: work with your billing company and your hospital to develop a tracking process. This will take you less than 30 minutes per month to manage.
The simple report below is just looking for irregularities. Have it run on a one-month lag so you eliminate any days whereby cases are on hold for missing documentation or a medical direction time overlaps.
The next report will require some assistance from the hospital. Group leadership needs to ask the hospital leadership for a report of all patients that received anesthesia based on date of service. All you need is the patient’s name and date of service in a worksheet. This may take a few iterations because the hospital IT department may include local anesthesia in their numbers. Then request the same report from your billing company and compare the two reports. That sounds like a tedious process, comparing lists, but there are functions to alert you and this whole process will take you 10 minutes per month.
In this example, what happened? Were these two cases canceled? Did they get local anesthesia or did the cases not get billed by my billing company?
I have heard clients say we have an EHR and it captures everything. That is true — EHRs are a much better system than a manual process. These systems are excellent for gathering cases done in the operating room. The anesthesia times are always accurate, diagnosis and procedure are always exact, and the systems are all a major leap forward for anesthesia.
Where they all fall short is when cases are done out of the OR.
For example, most EHRs electronically submit the day’s cases to the billing company at the end of the day, typically at midnight. The files are transmitted to the billing company after each case is closed and signed off by the provider.
What happens for an OB case? The patient comes to the hospital at 11:00 p.m. and is in labor for 20 hours. The person that started the epidural is off the next day and signs off and closes the electronic chart the following day. Does the hospital system transmit this case to the billing company two days later?
Repeatedly over my career, I have seen EHRs struggle with capturing all OB Cases. The other cases that seem to cause EHRs trouble are cases such as MRIs, post-operative pain follow-ups done on the floor, etc. When these systems are set up initially, it is a major undertaking for the hospital IT staff and naturally, these professionals cannot think of everything. So are they including these types of cases in the daily download?
I even worked with a group that had a large orthopedic caseload and luckily, they paid themselves based on a compensation model, meaning everyone got paid for exactly what they performed. One vigilant provider began to notice he was not getting paid for post-operative pain blocks and we investigated and realized the download had not been including post-op pain blocks for the past 45 days. After a few more weeks we were able to get the hospital IT department on a conference call and to my amazement, the hospital IT person said, “Yeah, we had a bug a few months ago that messed up the data download.” That bug would have caused the group to lose over $200,000 if it continued for an entire year.
Dealing with an EHR system, I recommend in addition to the two reports previously discussed that you keep a separate log of out-of-OR procedures (OB, MRI, Cysto’s, etc.), and just review the cases every few months to make sure you are capturing all the cases. Assuming an average commercial epidural reimbursement of $900 per case, you can see that if you are missing a few OB cases a month what the financial impact can be. As for “bugs,” that’s a hard thing to manage but you may want the billing company to do a spot check on add-on charges (Blocks, CVP’s, etc.) to make sure that if the provider is doing the work, the data is getting to the billing company.
The question I have heard is: “Should I fire my billing company for not capturing all my charges?” The answer is “No, you just need to ensure you are getting paid for the work you are doing.” Charge capture is one way to increase reimbursement at your anesthesia practice and ensure accurate coding and compliance as well.
To learn more, call 866-817-3813 or visit: https://www.changehealthcare.com/solutions/anesthesia-practices
Insufficient charge capture is a high-impact issue for healthcare organizations and can result in lost revenue and compliance issues. Given current margin pressures, healthcare organizations cannot afford to have sub-optimal processes in this area. Although hospitals and health systems have been working on charge ...