(Almost) immediate gratification: a large Atlanta-based physicians group achieves a 98 percent clean claims processing rate and cuts monthly operating costs by more than half after implementing a Web-based claims management system.

The difference between a thriving physician practice and one that struggles can often be found in how quickly it turns claims into cash. Each patient encounter represents revenue, but a practice can't maintain its financial health unless every visit or service is accurately reported and every claim yields optimal payment.

WellStar's Physicians Group, part of WellStar Health System, is an Atlanta-based group of 55 multi-specialty practices. Many of these practices have multiple locations throughout the northwest Atlanta area, including Cobb, Barrow, Paulding, Douglas and Cherokee counties. We employ 250 physicians and advanced practitioners, and send out between 80,000 and 90,000 claims to various Medicare carriers and private payers each month.

From the beginning, WellStar's Physicians Group recognized the importance of an efficient claims management process. The organization created a comprehensive internal system to make sure claims were clean, complete and compliant with edits imposed by various payers. In addition, WellStar's Physicians Group contracted with a clearinghouse to manage the external aspects of the process, namely submitting the claims and following up to ensure that they reached their proper payer destination in a timely manner.

Problem

Shortly after I was hired as business office director in February 2002, however, we became increasingly aware that the clearinghouse was merely serving as a "transfer station" or "switch" in the claims process. With this realization, we began to evaluate what services we regarded as essential in a relationship with a claims management partner.

At the top of the list was a high level of communication and reporting, so that we could know precisely where each claim was within the payment cycle. We wanted confirmation that claims had been received by the payer, what each claim's status was, if problems had been encountered and if claims were missing. In addition, we wanted to know that the clearinghouse was aggressively following up on aging claims, as well as providing us with feedback that would help us improve our internal processes.

Customer support and service were also high priorities, in that we wanted a partner that would keep our interests at the forefront and deal with us candidly about problems and concerns.

After evaluating our current relationship, we recognized that our expectations were not being fully met and determined that we needed to investigate other approaches. What we really required was a full-fledged clearinghouse partner that would handle every step in the claims management process and find ways to enhance our bottom line.

Solution

By the fall of 2003, we invited four vendors to present their systems, including our current clearinghouse. During the selection process, we asked each vendor to explain how its solution would help us achieve four specific objectives:

* reduce the number of paper claims the Physicians Group submitted which, at that time, averaged about 18 percent of all claims;

* decrease the number of days a claim spent in accounts receivable (A/R), which averaged 60 to 65 days in 2003;

* increase the existing first-pass clean claims rate from 90 percent to 95 percent; and

* improve customer support, communications and reporting so that WellStar's Physicians Group would know immediately about any claim problems, delays or rejections.

It was imperative that all affected departments within WellStar's Physicians Group be comfortable with the claims management process we ultimately selected, so we created a task force to help us develop priorities, identify system requirements, and review vendor proposals and demonstrations. The task force was comprised of three representatives from the central billing office, three from the information services/ technology department, one from WellStar's internal claims support desk and five end-users.

After a few months of review, the task force chose the Payerpath Claims Management product. We felt that the company clearly understood our processes and offered a solution that would help us achieve our stated objectives.

Implementation

We decided to implement the new claims management process in several stages, helping us to identify any potential concerns and correct them before going fully live. The first step was to bring a core group of 12 information system (IS) and central billing office (CBO) users up to speed, so they could train others in each of the member practices.

Secondly, we chose a pilot group of eight practices representing various specialties to test the system in July 2004. That process went smoothly and half the remaining practices were brought up on schedule in early August. By the end of the month, the remaining practices were on board.

With the previous clearinghouse, billets in the individual practices performed charge entry from superbills each day, confirmed the coding, checked for edits and created claims in the operating system. Claims were then swept nightly by IS staff and run through the clearinghouse scrubber software, enacting next day review and reconciliation by the end-users; once edited, they would be released for processing to the clearinghouse.

Payerpath allows us to eliminate two processing steps, cutting a day out of the claims cycle and, even more importantly, saving IS and CBO staff significant time and effort by removing more "switches" from the process. Because the system is ASP-hosted, the claims are sent directly to Payerpath and receive immediate confirmation. This Web-based approach also means that software updates are made once and are available to all practice sites. As a result, less support time is required and IS staff is free to work on more pressing issues.

Although we previously used sophisticated software to apply national, regional and payer-specific edits, Payerpath also has a comprehensive compliance feature that reinforces our existing process. If errors are identified, the application highlights them. Staff members at each practice then log onto the application via the Web and can easily make corrections prior to payer submission. Plus, management reports allow us to proactively identify claim error trends and put processes in place to prevent them.

We also discovered that the system's reporting functionality enables hilling office staff to track claim information by practice and identify operational inefficiencies. Plus, the application's centralized processing control tightens the audit trail and reduces the amount of lost claims.

Results

We began to enjoy the benefits of the Payerpath Claims Management system almost immediately. In fact, most, if not all, of our additional objectives were met or exceeded within weeks. We saw our monthly claims management costs cut by more than half, with savings ranging from 52 percent to 60 percent each month. This was due, in large part, to Payerpath charging us a fee per provider, while our previous vendor charged us per transaction.

The number of paper claims was also halved during that first month, going from 18 percent to 9 percent. Paper claims were further diminished to 7.25 percent within three months, demonstrating a 60 percent improvement overall.

At the same time, our first-pass rate rose to 95 percent in the first month, and to 97.25 percent by the end of the second month. By the time we closed out 2004, that figure had edged up even further, to 97.9 percent.

We have also achieved great success in decreasing the number of days that claims spend in A/R for all specialties. Overall, WellStar Health Systems wants its member practices to have an average of 50 to 55 days. By the end of the year, primary care and pediatrics were down to 30 to 35 days. Other specialties like behavioral health, rehabilitation services and pathology typically exhibit longer payment times, but the new process nonetheless reduced this specialty group average from 110 days to 88 days.

Payerpath worked closely with us to achieve one additional goal: We were able to double the direct connections that WellStar's Physicians Group has with payers from five to 10.

Within a few short months, we have reaped invaluable benefits from our new Web-based claims management system and achieved efficiencies that, previously, we could only hope for. Thanks to the ongoing collaborative nature of our relationship, we will continue to work with Payerpath to enhance the process even further.

Source:

Marc LeBrun

Business Office Director

WellStar Physicians Group

Atlanta

www.wellstar.org

Product/Company

Payerpath Claims Management System

Payerpath Inc.

Richmond, Va.

www.payerpath.com

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