By Kaitlin Howard
Kaitlin Howard is a researcher and writer producing insightful content across the healthcare revenue cycle. She has written and produced content for Zelis, Waystar, and Recondo Technology, as well as agencies. With a B.A. in English and Writing from University of Denver, Kaitlin stays current on market updates on claims management and healthcare payments, publishing a regular educational blog series on industry trends and Zelis offerings.
As healthcare costs continue to soar and profits continue to stagnate, some of the blame can certainly be attributed to faulty claims processing. In fact, ineffective claims editing can lead to a cascade of expensive problems (e.g., high error rates, inaccurate and inconsistent assessment of claims, penalties for regulatory noncompliance, unnecessary overhead, and fraud and litigation costs).
The numbers are staggering.
- 80% of all claims containing coding or other errors
- 86% of denials are potentially avoidable and 34% are absolutely avoidable
- Almost 65% of claim denials are never resubmitted
Moreover, the ability to attract and retain participating providers depends largely on the payer’s ability to process and settle claims quickly and accurately.
The Importance of Claims Editing Software
Chasing claims revenue is labor-intensive, laborious, and costly. That’s why finding a solution that maintains payer rules while allowing for custom rule creation is a necessity when evaluating clinical coding and editing software.
Many practice management systems, EHRs and clearinghouses offer some level of claim editing. But practices can no longer rely on simple front-end editing that only checks for issues like missing or incorrectly formatted fields. Even systems that check Medicare local/national coverage determinations or national correct coding initiative (NCCI) edits may be lacking in true clinical coding edits.
Consider finding a solution that can edit for these top denial categories:
- Mismatched CPT or ICD codes
- Incorrect coding
- Lack of medical necessity
- Upcoding and unbundling
- Missing or wrong modifiers
Best practice: As you research your solution, consider how often the content is updated. Remember, a quality solution should be sophisticated enough to return edits that require attention without overwhelming billers and coders with unnecessary information.
Best Practices for Claims Editing
Once you’ve selected the right clinical coding and editing software for your organization, it’s time to start implementing. And since the best approach to identifying billing errors is to spot them prior to payment, here are a few tips and tricks to start you off on the right foot.
1. Use the rules in effect on the date of service.
Due to frequent changes in the regulatory climate, Medicare requirements, commercial editing rules, and coding systems, billing codes and their subsequent rules are in constant flux. As such, it’s vital to edit claims based on the rules and codes in effect when the provider rendered the service. Failure to do so will, in turn, result in a higher rate of provider appeals.
Payers must use date-appropriate rules and codes to edit and pay claims accurately and consistently. The first time.
Ideally, your claims editing software can automatically apply rules and edits based on the service rendered date, giving you the flexibility to respond immediately to changes without losing the ability to accurately edit claims for services performed while an earlier set of rules was set.
2. Source edits at the code relationship level.
If claim edits result in reductions or denials, providers want to know the reason for the edits. Consumers, especially since they now bear an increasing share of the cost, are no different. Failure to provide such information could potentially put you at risk for costly appeals or lawsuits.
Best practice: Base your edits on industry-recognized third-party sources. Clearly document said sources, and explain your edits in simple language both providers and patients can understand.
3. Provide full disclosure and transparency.
Printing a number on an EOB is a far cry from telling someone what they need to know.
Simply put, it’s not just a matter of avoiding lawsuits. Transparency is also about keeping providers and members satisfied and giving them the information they need to understand the decisions made regarding health care provision and reimbursement. And as healthcare is becoming even more consumer-driven, transparency is vital to the success of your healthcare organization.
When claims are denied, providers and members need to know the reasons why and, if they disagree, what they can do to appeal the denial.
Your claims editing system should make messaging edits, rule sources, and disclosure statements available to providers and consumers, minimizing the impact of potential inquiries and appeals.
4. Integrate rules engine capabilities.
With a continuing trend toward mergers and acquisitions, payers must be creative in their new product offerings and contracting to win new business. To support these new offerings, core adjudication and operational systems need to provide new levels of automation and workflow integration.
Meaning: Your claims editing solution should employ rules engine technology that incorporates a comprehensive set of commercial and Medicare edits and rule logic to minimize the manual work involved in adjudicating straightforward claims.
5. Use the right rules for facility claims editing.
Facility claims editing is driven via different claim forms, contracts, and coding rules, rather than by professional services editing. As such, it’s important to understand that professional claims and facility claims are, in fact, very different.
A payer that uses professional edits to edit facility claims will encounter a range of problems, including:
- Conflict with provider contracts
- Reprocessing of claims
- High provider appeal rate
- Possible loss of network providers
But the solution is relatively simple.
Organizations should be using a facility-specific claims editing solution.
Payers can then streamline the claims processing workflow, while improving payment integrity to maximize potential savings.
6. Customize rules to suit individual lines of business.
One size does not fit all.
Each health plan has its own way of doing business, complete with varying provider contracts, member benefits, and business-specific payment policies. As such, your claims editing solution should be customizable, while still providing the configuration capabilities needed to manage agreements and respond to regulatory changes at the drop of a hat.
An ideal solution enables health plans to align rule sets to their specific line of business, allowing payers to customize the software’s editing logic to support user-defined rules and reimbursement policies and the sequence in which said rules are applied.
The Wrap Up
Pre- and post-payment reviews are both important program integrity strategies, often making the biggest impact when used together. But ensuring that your organization is identifying most claim errors prepayment can put quite a big chunk of change (and time!) back in your pocket.
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