Revenue Cycle Management in Healthcare, Exams of Nursing

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Revenue Cycle consists of CORRECT ANSWER several departments with numerous responsibilities. Department responsibilities and names vary by organization. The key to a strong revenue cycle is a CORRECT ANSWER clean claim. Patient Access is responsible for over CORRECT ANSWER 60% of the claims fields on a UB04. In 1975, the American Hospital Association brought together all the national payer and provider organizations and developed the CORRECT ANSWER National Uniform billing committee (NUBC). In an effort to simplify healthcare billing in America and to develop one standard, a nationally accepted billing form was created in 1982. It has been replaced and now the CORRECT ANSWER Uniform Bill (UB04) is the recognized bill form for hospitals and other institutional healthcare providers. The UB04 document is made up of 81 different data fields, called CORRECT ANSWER form locators. Each form locator name describes the CORRECT ANSWER type of information input into the field. Recent changes to the form include an increase in filed size, additional fields being allocated, and labels changed to better explain the purpose of the form locator.

Data elements necessary for accurate billing include: CORRECT ANSWER *Provider and patient information (Form locators 1-41) *Services provided to the patient (Form locators 42-49) *Patient's insurance information (Form Locators 50-

65. *Diagnosis, procedure, and physician information (Form Locators 66-81) Required fields are: CORRECT ANSWER provider name, address and telephone number & pay to name, address[situational] *patient control number *medical/health record number [situational] *Other provider ID [situational] *Insured's name *Patient's relationship to insured *Insured's unique ID (certificate, social security number, HI Claim/ID number) *type of bill *federal tax number *statement covers period (from/through dates) *patient name and address *date of birth *sex *admission date (inpatients) *admission type (inpatients) *patient status *conditions codes [situational] *occurrence code and data[situational] occurrence span code (inpatients) *occurrence span dates (inpatients) *value codes and amounts *revenue code *HCPCS/rate/HIPPS rates codes *service date *units of service *total charges *payer identification (name) *health plan ID *release of information certification indicator *prior payments [situational] *National Provider ID Case Management CORRECT ANSWER *Insurance group name [situational] Insurance group number [situational]treatment authorization code [situational] *document control number [situational] *employer name [situational] *diagnosis and procedure code qualifier *principle diagnosis code other diagnosis codesadmitting diagnosis *patient's reason for visit [situational] *principal procedure code and date [situational] *other procedure code and date [situational] *attending provider name and identifiers (including NPI) [situational] *operating provider name and identifiers [situational] *remarks [situational] *code-code field [situational Case Management was introduced in the 1980's in order to control costs by CORRECT ANSWER improving quality and manage use of hospital inpatient resources.

There is a renewed interest in case management, as the hospital C Suite is beginning to recognize its unique role as a bridge between the clinical and financial realms of CORRECT ANSWER healthcare delivery. An interdisciplinary case management team (which may consist of utilization review and discharge planning functions work directly with healthcare providers to ensure CORRECT ANSWER all admissions and observation stays in the hospital are justified, documentation supports the appropriate level of care and payment for the hospital, roadblock from timely discharge form the facility removed and that condition of care across the continuum improves quality, patient satisfaction avoiding unnecessary readmissions. The case management team also works directly with the finance department to CORRECT ANSWER streamline the revenue cycle, improve communication with payers and institute operational efficiency and ultimately a more profitable bottom line. Case Management performs five major functions to the revenue cycle team: CORRECT ANSWER *Obtain pre-authorizations and precertification approve from insurance carriers and payers *Reduce unnecessary admission and effectively manage length of stay. Inherently, they manage medical necessity which results in reduction of clinical denials or denied days. *Assist with the discharge process and may assist with CMS regulatory requirements surrounding discharge. i.e. ( IMM, 2 Midnight Rule, Notice Law) Act as a liaison between providers and the revenue cycle departments (HIM) to ensure accurate, complete documentation for compliant coding and billing processes by providing a careful review of physician documentation (CDI- Clinical Documentation Improvement) to maximize compliance and reimbursement. Recent CMS regulatory changes require a more proactive collaboration between patient access, case management, utilization review and discharge planning to coordinate CORRECT ANSWER admission, in house care, discharge and post- acute care services.

2 Midnight Rule- On July 1, 2015, CMS released proposed updates to the "Two- Midnight" rule regarding when inpatient admissions are appropriate for payment under CORRECT ANSWER Medicare Part A. Inpatient admissions will generally be payable under Part A if the admitting practitioner expected the patient to require a hospital stay that crossed two midnights and the medical record supports that CORRECT ANSWER reasonable expectation. Notice Law- Passed in March of 2015 requires hospitals to provide observation patients who have a outpatient observation stay of more than 24 hours an adequate oral and written notification within CORRECT ANSWER 36 hours after being placed in observation. Hospital's will be required to: Explain the individual's status as an outpatient and not as an i CORRECT ANSWER npatient and the reasons why; *Explain the implications of that status on services furnished, in particular the implications for cost-sharing requirements and subsequent coverage eligibility for services furnished by a skilled nursing facility; o is written and formatted using plain language and made available in appropriate languages; o is signed by the individual or a person acting on the individual's behalf (representative) to acknowledge receipt of the notification, or if the individual or representative refuses to sign, the written notification is signed by the hospital staff who presented it. Utilization review (UR) monitors the use of CORRECT ANSWER resources, reviews stays and is a safeguard against unnecessary and inappropriate medical care

The UR nurse will manage and monitor the case through-out the course of the stay ensuring all needed services are provided in a CORRECT ANSWER timely manner. They may arrange education for the patient and family. UR assists with review of CORRECT ANSWER medical necessity, quality of care, appropriateness of decision making, place of service, and length of hospital stay. Types of Utilization Review CORRECT ANSWER *Prospective - A review of the patients proposed care plan, prior to provision or service or entry into the facility. Used to determine if medical necessity requirements will be met. *Concurrent- a review of the patient's plan of care and resource needs real time while patient is an inpatient. *Retrospective- a review of services that were provided to the patient after they have been discharge. CORRECT ANSWER Discharge planning begins as soon as the patient is CORRECT ANSWER admitted into a facility, the discharge planner is working with Case Management, UR and care providers to manage the entire patient stay and move the patient out of acute care as soon as medically possible. The discharge planner considers: CORRECT ANSWER *Estimate the LOS based on assigned DRG. *Will there be any delays with discharge? *What needs to be facilitated in order to discharge the patient, will they need post-acute care such as SNF, Home Care or Hospice services? In collaboration with Case Management, an effective Utilization Review program can help healthcare organizations: CORRECT ANSWER *Position the organization for changes under healthcare reform with coordination of care across the healthcare continuum *Enhance quality of care with interdisciplinary team focus on the progression of the plan of care *Increase payment and decrease costs

by expediting patient discharge *Improve the revenue cycle process by ensuring accurate coding for prompt billing, reducing denials, and improving contracting terms with managed care payers. *Proactively prepare for Recovery Audit Contractor (RAC) audits and protect against take backs. Medical Documentation is required to record pertinent facts, findings and observations about a person's CORRECT ANSWER individual health history, including; past and present illnesses, examinations, tests, surgeries, other treatments and outcomes. The record chronologically documents the care the person has received. Due to meaningful use requirements a vast majority of hospitals have transitioned to CORRECT ANSWER electronic health records (EHR) and all federal and state requirements still apply. The record facilitates: CORRECT ANSWER *The ability of the physician and other health care team members to evaluate and plan of the patient's immediate needs and to plan for care over time. *Facilitation and continuity between members of the health care team *Accurate and timely claim reviews and payment *Utilization review and quality of care evaluations *Data collection *The record serves as a legal document in court *Payers have a contractual obligation to their beneficiaries; as such, they may request the record to validate site and type of service, medical necessity and appropriateness of care. Basic principles of documentation which apply to all health care services and levels of care: CORRECT ANSWER *Record should be complete, accurate and legible *The documentation of each patient encounter should include the following: *Patient name, age, other demographic information *Reason for the encounter, relevant history, physical finding including health risks such as obesity, hypertension etc., all diagnostic tests and results. *Assessment, clinical impression and diagnosis o Medical necessity for tests, procedures, other care ordered *Patient's response to therapy/care provided; good or bad *Changes in treatment

plan and/or revision of diagnoses *Plan of care and any risks associated with care plan. *Name of person documenting, and the date and time of assessment Tampering with or falsification of medical documentation is a CORRECT ANSWER crime. Tampering with, erasing or changing documentation after the fact undermines your credibility in the event of litigation. It is important to not jeopardize the record by using questionable or improper correction methods. Non clinical Patient Access staff should not make any non-policy approved changes to a CORRECT ANSWER patient medical record. The following will guide you in making proper documentation and corrections: CORRECT ANSWER *NEVER document in pencil or erasable ink *Never attempt a correction by erasing *Never obliterate an entry or use correction methods such as 'white out' or correction tape *Never add to or clarify an entry after receiving a subpoena If it is necessary to correct an entry; simply draw a single line through the entry so that the original entry is still readable. Make a notation explaining why the correction was necessary (wrong patient, etc.). If necessary, make a note/addendum with the correct information. Last step is? CORRECT ANSWER Date and sign the notation and corrected entry. If information is left out or omitted from the record; it is acceptable to go back and amend the record, this amended documentation is often referred to as a CORRECT ANSWER 'late entry'. Health Information Management (Medical Record Department) CORRECT ANSWER The hospital is required to maintain a medical record on every patient under state licensure laws, Joint Commission standards, and conditions of participation in federal reimbursement programs. The medical record is a written

compilation of information generated during the course of a patient's treatment for illness and or health maintenance. It documents a variety of data including personal, social, financial, and medical information. The required content may vary from state to state. Federal regulations (Medicare/Medicaid) state that the medical record must be retained for a minimum of five years and otherwise accordance with state law. If the patient is under the age of 24, the record must be kept until they are CORRECT ANSWER 24 years of age or older according to Federal regulations. Healthcare facilities and states may impose even longer retention time. Primary Purposes of the medical record: CORRECT ANSWER *To serves as the communication and continuity of care tool among physicians and other health care professionals involved in the patient's care *To furnish documentary evidence of illness and treatment *To protect the legal interests of the patient and the health care provider *To provide clinical data for research and education The content of the medial record serves as a legal document and the CORRECT ANSWER HIM department has the responsibility to protect the legal interests of the patient, provider and hospital. Patient Access education should stress the importance of preserving the legal record and reminded that anything written as a note or comment is discoverable in any CORRECT ANSWER legal proceedings. HIM performs other functions in order to prepare the medical record: CORRECT ANSWER *Coding- HIM must also ensure that complete and accurate data is obtained on a timely bases so that staff can accurately code and abstract data for the submission of claims and quality analysis. *Transcription of physician dictation, reports, notes and discharge summaries *Chart analysis for deficiencies, compliance and other quality measures. *Release accounts for billing post coding. *Manage release of information to patients, payers, providers and attorneys. This

includes management of patient portals and CCD- Continual of Care Documentation. Release of Information (ROI) CORRECT ANSWER State law governs who has the ownership of the physical medical record. Most states provide the medical record is the property of the health care provider; however, it is essential that the confidential information contained in the medical record be released only to appropriate persons or parties. A valid Patient Consent to Release of Health Information must contain: CORRECT ANSWER *Specific name or general designation of the program or person permitted to make the disclosure •Name and title of the person or organization to which disclosure is to be made • Name of the patient •Purpose of disclosure •What information is to be disclosed •Signature of patient, if minor authorized signature from parent/guardian, if patient is incompetent or deceased, the signature must be by a legal representative such as Power of Attorney. •Date consent signed •A statement that the consent is subject to revocation at any time. •Date the consent will expire • Once record information is disclosed to an entity not covered by HIPAA, the information may be subject to further use and disclosure without the protections offered by HIPAA Diagnosis Related Group (DRG) is a system to classify CORRECT ANSWER hospital cases into one of approximately 500 groups, referred to as DRGs, expected to have similar hospital use. DRGs were developed for Medicare as part of the Prospective Payment System (PPS). DRGs are assigned by a "grouper" based on the ICD diagnoses, age, sex, and the presences of complications. DRGs have been in use since 1983 to determine how much Medicare pays the hospital based on like-resources used in hospitals in same area. Ambulatory Payment Classifications (APCs): is a system CORRECT ANSWER of averaging and bundling using CPT procedure codes, HCPCS Level II, and revenue codes submitted for payment. The APC system utilizes groups of CPT codes based on clinical and resource similarity and establishes payment rates for each APC

grouping. The 650 + APCs are divided by significant procedures, medical services, ancillary services and partial hospitalization services. The APCs are similar clinically, by resources used and cost. A payment rate has been established for each APC. Current Procedural Terminology (CPT): CORRECT ANSWER Comprehensive listing of descriptive terms and identifying codes for reporting medical services and procedures performed by physicians. This provides a uniform language that will accurately describe medical, surgical, and diagnostic services and will thereby provide an effective means for reliable nationwide communication among physicians, patients and third parties. There are three categories of CPT code. International Classification of Diseases (ICD-CM) (clinical modification) is designed for the classification CORRECT ANSWER of patient sickness, disease, signs and symptoms for statistical purposes. The ICD codes not only are important to the reimbursement process, but are equally important for tracking disease and compiling statistical data. The US National Center for Health Statistics and the Centers for Medicare and Medicaid are responsible for the annual update of ICD- CM, which occurs each October. Correct coding is a crucial job and it requires an in depth understanding of medical terminology. The primary purpose of the ICD classification of morbidity and mortality information is for CORRECT ANSWER statistical purposes and for the indexing of hospital records by disease and procedure in order to provide clinically meaningful data for health care planning, research and quality assurance activities. Several codes and sub-codes may be used to describe a procedure. Effective October 1, 2015 the US adopted ICD-10 CM, being the last developed country to adopt. The new classification system vastly expanded the number of codes which allows for greater clinical specificity and reporting. Healthcare Common Procedure Coding System (HCPCS): CORRECT ANSWER The objective is to establish common standards of communication among users and between providers and users, increase the compatibility of reported data, and

compare physician and hospital bills and episodes of illness. The HCPCS is divided into two principal subsystems, referred to as Level I and Level II codes. Level I CORRECT ANSWER a numeric coding system maintained by the American Medical Association (AMA). It consists of descriptive terms and identifying codes that are used primarily to identify medical services and procedures furnished by physicians and other health care professionals. Level II CORRECT ANSWER a standard coding system that is used primarily to identify products, supplies, and services. Alpha-numeric 5 character codes used to report services or supplies such as ambulance, DME, orthotics, dental and other unique services, drugs and procedures not included in CPT Charges can be entered on a patient encounter manually, typically by the area that provided the medical service or automatically upon CORRECT ANSWER ordering or resulting. It is best practice to enter all charges within three days of providing the service. Late charges are charges that are entered after the account has moved to the bill status. Late charges negatively impact A/R and often cause rework by requiring CORRECT ANSWER reprocessing of claims. The Industry wide benchmark is all charges should be entered no more than CORRECT ANSWER 3 days after the service is provided. Recommendations for a strong charge entry process suggest reconciliation of charges for each service performed and regular maintenance of overall charges for the hospital. Charges are housed in the CORRECT ANSWER Charge Description Master (aka CDM or Charge Master), which is usually managed by someone in Patient Financial Services or other revenue cycle department.

Timely and accurate capture of charges for services provides the most appropriate measurement of utilization of resources. Thus, resource management: CORRECT ANSWER *Allows more timely and accurate billing and collecting, which improves net collections and cash flow. • Ensures that bills do not have to be held for late charges. • Decreases research efforts generally as questions related to duplicate charges, charge codes, and so forth are reduced Back Office- Patient Financial Services/Billing CORRECT ANSWER Now that the patient has received services and charges are entered, the next stage in the revenue cycle is the submission of the claim. Although some payers require paper UB04 claims, the majority of claims are submitted electronically in a format called CORRECT ANSWER (837i). If the hospital employs physicians or bills for professional services, they may bill on the 1500 claim form also known as the CORRECT ANSWER 837p in electronic format. Many functions happen in billing and dependent upon the accuracy of the front Patient Access and middle Case Management/HIM, this determines how much effort it will take to CORRECT ANSWER collect on a claim. The higher the clean claim rate the lower the cost to collect. Clean Claim Rate- CORRECT ANSWER This is the percentage of claims that pass internal claim scrubber edits and EDI (claims clearinghouse edits) and go directly to payer. Ensuring a high clean claim rates accelerates cash collection. Cost to Collect- CORRECT ANSWER Clean Claim Rate This is the percentage of claims that pass internal claim scrubber edits and EDI (claims clearinghouse edits) and go directly to payer. Ensuring a high clean claim rates accelerates cash collection.

Functions performed by back office: CORRECT ANSWER 1.Scrubbing of claim before submission, working edits as they arise 2.Submission of claim- UB04, 1500, 837i or 837p3.Payer acknowledgment and adjudication a.Denial of payment b.Receipt of Payment c.Request for more information 4.Posting of Payments and patient payments 5.A/R Management and follow up: Denials, Patient Balances and Payors Insurance Follow Up CORRECT ANSWER Keeping track of each claim that is billed and systemically documenting each event in the process of receiving payment is the key to excellent customer service and financial success. Follow up is truly critical but keep in mind the follow up has to be frequent and systematic to be of any value. CORRECT ANSWER One phone call every month is not an effective method to use in obtaining a payment. Thorough documentation is critical. Not only for your own records, but is that others may understand what actions have been taken or are expected. Do not rely on memory or cryptic notes. One rule of thumb to remember with documentation is that if it is not documented, it did not happen. Be sure to include first and last name of the person you are speaking to. Remember in a large company there may be 5 women named Susan. In general, the time periods for the insurance carrier to make their payment can vary by plan type. CORRECT ANSWER This varies based on CORRECT ANSWER facility contracts with payers including various group plans. For example: An indemnity or PPO plan is to be paid within 30 days An HMO is to be paid within 45 days Workers' compensation claim is to be paid within 60 days Medicare pays generally pays within 30 days. The claim is to be paid or denied within the above mentioned time periods, provided the insurance carrier receives a clean claim. A clean clam is very important. If the insurance carrier requires information that was incomplete or

missing, they receive additional CORRECT ANSWER time to process claim. *An extra 30 days if the requesting plan is an indemnity PPO. *An extra 45 days if the requesting plan is an HMO. If a claim is being contested or denied, we are to be notified in CORRECT ANSWER writing with the reason for the action spelled out specifically and clearly. If the claim is not paid or denied within the legal period, CORRECT ANSWER the insurance company is non-compliant. Note that there may be more specific laws at state level The number one delay tactic used by an insurance company is that they CORRECT ANSWER have not received the claim. Ask the person to whom you are speaking to verify the claim billing address. Even when the claim is sent electronically, carriers will deny receipt of claim. Although electronic billing firms send us confirmation of receipt, the carriers claim they do not have a system to track incoming claims. However, the confirmation we receive through National Association of Insurance Commissioners is sufficient for us to argue for prompt payment. If the insurance carrier continues to delay the payment without reasonable cause, notify your manager. If necessary, the account will be turned over to a collection agency or legal department to pursue. To improve claims management, denials must be quantified and processes put in place for improvements. Best practices include: CORRECT ANSWER *Form a denials team or include this in the revenue cycle team, to include finance, managed care contracting, patient access for data accuracy and insurance verification, care integration, HIM, and clinical departments. *Maintain a denial database, preferably automated with a consistent coding structure to more easily trend issues. With a historical database, appeals may be filed with positive outcomes. The team will understand why claims are denied and be able to educate staff and work with physicians and standards of care. *Contracts review - This team will work with payers and will see how contract terms relate specifically to denials and can assist

to facilitate the appeals process. This review will assist in the renegotiation process. HFMA Denials Management Toolkit -- Managing and Improving your billing and collections CORRECT ANSWER •Denial Management Comparison •Claims Denial Tracking Spreadsheet •Departmental Dashboard • Denials by Payer Report *Denial Tracking Comparison *Expected Payment Reporting Take-Back Pursuit sheet *NAHAM sponsored resources: o NAHAM Collections Guide o Access Keys CORRECT ANSWER Terms used by the CFO: CORRECT ANSWER •Accounts Receivable: The total amount of revenue billed but not received •Gross A/R- total of charges on all patient accounts yet to be reimbursed or paid to the hospital. • Net A/R -is total patient charges minus payer contractual agreements, self-pay discounts, charity care and bad debt. It's what you can actually expect to receive in cash. •Average Daily Revenue- Average amount of revenue (net or gross) generated for specified time period. •Discharged Not Final Billed- patient encounters that have been have been discharged but have not been billed. There are several reasons for the delay but most common delays are charts have not been coded due to short staffing or lack of physician documentation. •Pay for Performance: P4P uses incentives to encourage and reinforce the delivery of evidence based practices to improve the healthcare quality and services as efficiently as possible; also available to hospitals in certain markets • Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who voluntarily come together to give coordinated high quality care to the patients they serve. One bundled payment is received that must be shared among all providers involved in the patient care. •Alternate payment model- An initiative by HHS and CMS to reduce or slow the increasing cost of healthcare and pair it with improving clinical outcomes and overall health of the patient. There are several models that link traditional Fee for Service payment to quality measure and outcomes.

Affordable Care Act CORRECT ANSWER The Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA) or, Obamacare, is a United States federal statute signed into law by President Barack Obama on March 23, 2010. It is the federal government's attempt to expand the number of people with access to healthcare. Very comprehensive bill with 10 titles/chapters addressing various areas regarding access to healthcare in the US. Managed Care Contracting CORRECT ANSWER Ensuring that a managed care contract covers all bases and contains no surprises is a perennial challenge for healthcare financial managers. Common contracting negotiation checklist is developed to help both providers and payers thoroughly assess and negotiate effective contracts. Contributors included managed care professionals from both payer and provider organizations. The checklist covers things such as criteria for CORRECT ANSWER volume, payment terms, contract terms, operational terms, and financial terms. The following excerpt addresses some important points to consider when assessing contract terms. Contract Terms Criteria CORRECT ANSWER Does the contract contain an automatic renewal clause? Does the contract contain an inflation index? Are all hospital services included? What services are excluded? Is the termination notification for no more than 90 days (with 90 days being the best practice)? •What are the provider's obligations to continue, and the payer's obligations to pay for, care for patients in treatment at the expiration of the contract? •Is an advanced beneficiary notification (ABN) acceptable for non-covered services? •Does the hospital have the ability to obtain member deposits for non-covered services? •Is there an exclusivity clause? •Are subcontracting relationships disclosed? •Are indemnification and malpractice insurance stipulations included such that the hospital and the payer each pays its own legal fees? • Is there an independent contractor clause? •Is "medical necessity" clearly defined? What are the criteria for medical necessity? •Are "emergency

condition" and "emergency admission" clearly defined and do the definitions conform to EMTALA requirements? •Is there a definition of "covered services," and are covered services clearly identified? • CORRECT ANSWER Is the "plan agreement" clearly defined? •Is "material breach" clearly defined and do terms include the plan's failure to adhere to reporting obligations? • Is there a provision that prohibits reassignment of the contract without consent? •How many days of advance notice to providers is required for modifications in payments, covered services, procedures, documents, and requirements with "substantial impact"? •Is there a warranty of HIPAA compliance? • Is "observation services" or "observation care" clearly defined?