Every physician/clinician that provides care in a hospital or clinic setting does so with the assumption that there will be some recognition and “payment” for those services. For many clinicians, the whole payment/reimbursement process sometimes seems like a black box – difficult to explain what is inside and unclear what will ever come out of it.
This challenge exists for all health systems – for both their hospitals and their medical groups. Premier healthcare organizations throughout the United States are providing great care daily. But even in the high-performing organizations where no one expects to find a large lost benefit, typically health systems are losing as much as 1 percent of their potential annual net revenue due to various issues associated with charge capture. To put this in perspective, a hospital with $800 million in annual net revenue could be losing as much as $8 million annually.
Unfortunately, there is no one silver bullet that will identify all opportunities for improvement in charge capture.
Numerous variables affect the capture of the appropriate charge, and the information surrounding and attached to the charge. These complex and interconnected variables put organizations at risk for significant losses. Some of the innate challenges include:
- Charge capture is often assumed to be a simple process. It is not. The assumption of simplicity relative to a complex process often leads to unrealistic expectations for the outcome.
- There is a risk that each department feels confident about the accuracy of their portion of the process; however, small variations in multiple areas can add up to very large losses for the health system.
- Decentralized Control:
- Accountability is decentralized across many departments.
- No matter what tools finance has for reporting, the root issues often reside at the Point of Care.
- Different systems may be involved, creating additional interfaces and handoffs.
- Tools and Metrics:
- Limited tools and metrics may be available.
- The variety of tools and the approaches in how they are used will also impact the ultimate reimbursement outcomes.
- Payer Requirements:
- Payer payment guidelines and requirements are constantly evolving.
- There is sometimes an incorrect perception that if the payer is not paying anything for it, then it does not need to be charged.
- Lack of Reporting for Key Stakeholders:
- Clinicians primarily are focused on providing excellent care and may not have exposure to a deeper understanding of the complexities of revenue capture and the broader revenue cycle.
- Clinicians (like finance) want more relevant information, a further simplification of the process, and reporting that increases clarity and reduces reimbursement losses.
Health systems sometimes have some type of algorithmic reporting that is run monthly, but most health systems do not have a holistic model in place. Solving complex charge-capture issues requires a systemic and holistic approach.
The Systemic and Holistic Approach
The systemic and holistic approach will require an interdisciplinary focus and include work plans, tactical work steps, defined work streams, and realistic goals based upon the unique challenges and losses in each organization.
Charge capture processes. Process breakdowns can involve:
- Missing or incomplete documentation
- Lack of understanding at the Point of Care of what can and cannot be charged
- Clinical or department staff who do not record the appropriate charge for the service being provided
- Untimely or incomplete updates to the CDM
- Inconsistent charging practices within the same organization
- Inconsistent charge reconciliation processes to serve as a check-and-balance
- Assumptions by one area that another area is handling the charging process
- Assumptions that the system is somehow capturing the charge when it is not
Charge capture tools and reporting. There are variations both in the tools available and how the tools are used from organization to organization. Whatever tools and reporting are used, it is essential that their usage helps prevent or mitigate the following:
- Unrecognizable services (if it is not charged, no one knows about it)
- Reimbursement loss for services performed
- Billing and claim-edit failures
- Late charging, which impacts work unit tracking and reimbursement
- Claim denials, which at a minimum require rework, and likely nonpayment
- Claim audits with takebacks, which may not affect net revenue today, but certainly does tomorrow
The Opportunity Is Real
The bottom-line is this: Health systems should not assume their charge-capture process is working well. Even one-half of 1 percent net revenue improvement could be a game-changer for health systems looking to add specialized equipment or market additional services to members of the community. A systemic and holistic model and approach to charge capture is crucial for organizations to be able to receive payment due to them for services rendered.