Time and motion in dollars and cents

By Lindy Benton
08:54 AM

The world relies more and more on digital technologies to enhance every aspect of our lives—from convenient online payments, to advanced automotive features that take us where we want to go, to mobile apps that track our blood glucose levels. In this electronic space, paper and the processes it engenders are increasingly recognized as wasteful. This is especially true in the healthcare industry.

A recent report by Health Affairs and the Robert Wood Johnson Foundation identified “administrative complexity” as a category of waste in U.S. healthcare spending, which costs between $107 billion and $389 billion annually. It is defined as excess spending that occurs because of private health insurance companies and providers being unable to coordinate, the government or accreditation agencies creating inefficient or flawed rules and overly bureaucratic procedures. When it comes to claims, every step in the medical billing process has the potential for administrative waste: excessive paperwork, back-and-forth interactions between provider and payer, nuanced contracts unique to each insurance company, and different forms and ways each payer wants to exchange information.

To reduce overall healthcare spending, it’s important to examine areas of waste within healthcare transactions, and the ways to reduce or eliminate inefficiencies, streamline revenue cycle management and improve the patient experience. A 2011 study by Experis found that by digitizing business processes, from medical documentation and attachments to health information exchange, provider organizations could make significant gains in time and money. In fact, the study identified a 400-bed hospital which could potentially experience $1.6M in benefits and savings through these types of workflow improvements.

Improved Productivity

Although every medical office has its own "system" for organizing patient data, many continue to rely on paper-based processes, which make poor use of employees’ time. Searching through physical file folders for a specific patient's medical record and then being required to sift through paperwork to find the document necessary to respond to a health plan’s request for substantiation is time-consuming. Moreover, these processes are prone to problems such as filing errors, misplaced documentation, illegible handwritten notes and inconsistent clinical documentation. According to the Experis study, an estimated 12 percent of every dollar physicians receive from patients covers the costs of excessive administrative complexity.

These wasteful steps could be eliminated by digitizing medical documentation, claims and attachments. Electronic document collection, storage and exchange improves staff productivity by enabling more accurate coding, automatically flagging missing claims information prior to submission thereby decreasing rework and improving payment cycles, and redirecting time spent filling out forms, copying, mailing or faxing. Studies report that streamlining these practices could save four hours of professional time per physician and five hours of practice support staff time every week, time better spent on patient care. And with the rise of personal mobile devices in healthcare settings, organizations have access to convenient, secure options to digitizing medical documents to improve workflow and decrease costs.

Leaner Processes, Faster Reimbursements

Why is the insurance billing process bottlenecked? Consider the time it takes providers to print supporting documentation to fulfill an additional documentation request, prepare it, and mail or fax it, and then the time it takes claims reviewers to open, index, sort, and enter it into their adjudication system. Further delays are seen when plans delay claims and mail out EOBs or request for information to providers, otherwise known as solicited documentation. These documents are often requested two to four weeks after the initial claim submission.

On the flip side, adding digital substantiation documentation to the electronic submission process shortens this cycle. Provider organizations that have adopted electronic document exchange report reducing their outstanding receivables by 10 to 14 days.

Claims reviewers are overloaded by the amount of paper they wade through in a day. Any increased efficiency in the review pipeline can increase the number of claims processed without an increase in staff. Electronic medical documentation tends to result in fewer denials and rework requests as well, since the most typical cause for these delays is a failure to provide required documents. These time savings mean more claims processed per day, and thus quicker overall reimbursement.

Health Information Exchange

Government recovery audits are a growing concern that can take time and attention away from practices. Health information exchange (HIE) is a means to reduce operational costs by automating certain administrative tasks. Secure electronic document exchange allows providers to respond quickly and securely to time sensitive RAC, MAC, MIC, CERT and PERM audits through participation in the CMS electronic submission of medical documentation (esMD) program. A Milliman study determined that a physician can save more than $42,000 a year through electronic transactions for operations like claims submission, referral and preauthorizations requests, and eligibility verification. 

By participating in esMD, providers experience faster claims payments with fewer denials, reduced administrative costs, elimination of paper and manual-based processes, and timely response to pre- and post-payment audits reviews. Electronic responses improve the auditing process by eliminating lost attachments, accepting any file type and performing the necessary file conversion, and providing HIPAA-compliant transmission and storage of protected health data.

The Sum of It

By digitizing every element of the submittal process, claim filing can become completely automated and therefore much more efficient. Experience has shown that billing managers dramatically improve collection efforts simply by using technology to improve their reimbursement cycles. Implementing an infrastructure for paperless document management, in turn, results in faster and simpler coding and billing, reduced overhead, and improved client service.

Additionally, digital documentation can be easily formatted according to industry practice, security standards, and related government regulations. Healthcare policy is changing quickly these days, and keeping up with HIPAA laws and Medicare documentation requirements is an important part of doing business in the industry. Any system that will streamline the process, decreasing the likelihood of lost documentation and mistakes, will make things easier on providers and plans in the long run—and electronic claim-related documents are an important part of the solution, saving up to $389 billion a year in unnecessary administrative expenses.