Take the following steps to stay aware of what you’re owed to secure revenue, says healthcare consultant Steven Berger, FHFMA, CHE, CPA, president, Healthcare Insights, LLC:
1. Book all of your contractual adjustments at time of billing. The reason it should be done all the time, Berger says, is that “it’s good accounting, good finance, and good management.”
If you’re booking the contractual adjustment at time of payment, that means you’re booking the payment, he says. “It means you didn’t know how much money you were expecting to receive for that service. That is outrageous.”
- With inpatient cases, it’s hard to know beforehand, because you’re getting paid a per diem or case rate (DRG). But since you wouldn’t know how long the patient will stay or exactly what their ICD-9s are going to be to turn into a DRG, you can take a guess, but you just don’t know.
- On the outpatient side, there are not a lot of excuses for not knowing beforehand, Berger says. “If a patient is coming in for an abdomen CT, there should be a charge—but if it’s been pre-registered and you already have done pre-certification work, you should know the patient is acceptable.” Some providers have a system that allows them to instantly determine their net revenue for that case.2. Take advantage of a contract management system. Contract management systems are developed in order to allow hospitals to put their contracts into the software, so by inputting essential elements that create the net revenue, the system will then produce the net revenue, and therefore the net receivable.
Berger acknowledges software implementation takes time and money, but, “There is a small up front amount you have to pay, which can get paid back through better reimbursement within four weeks.”
Most hospitals are being underpaid by their managed care companies. “With software, you can identify those underpayments, which they weren’t able to before, because they were booking the payment without knowing if it was right or not.”
3. Ensure proper pre-registration and pre-certification processes on the front end. Time of registration is key focal point, Berger says. “The biggest thing I say in revenue cycle classes is that most importance piece is pre-registration and pre-certification. If you do things from the beginning correctly, it’s even more important than billing and follow-up.”
Editor’s note: This week’s tip was excerpted from HCPro’s monthly newsletter, Managed Care Contracting & Reimbursement Advisor. For more information, click here.