Customer Context
Our client, a leading independent provider of outpatient behavioral health services in the United States, faced issues getting paid for the services provided and piled up a substantial backlog. The performance of the in-house and domestic teams was sub-optimal and led to a backlog.
Challenges
When we took on this account, we realized that the revenue cycle KPIs were significantly below optimal numbers for their peer group. Additionally, the backlog volume across the billing processes posed a significant threat to the financial health of the mental health provider.
The client had a backlog Volume across all billing processes.
Days in A/R stood at 52 days
The total outstanding 120+ day A/R was at 28%
The success rate of eligibility verifications was below 80%
High front-end rejections resulting in delays in payments
Lower revenue per encounter was denting their profitability
Solutions
In conversations with the client’s RCM leadership, we recognized that the processes needed a comprehensive transformation program to improve metrics. We chose the Six Sigma Methodology and its five-phased DMAIC approach (Define, Measure, Analyze, Improve, and Control) to channel the efforts of all stakeholders. Consider adding a sentence to show what typical behavioral and mental health services.
Denials Analysis and Root Cause Identification. We established a process to categorize denials, identify the root cause, and implement corrective actions.
Eligibility Verification. We identified that a significant number of denials were due to eligibility-related issues, and to streamline the process, we obtained website credentials for all providers. We assigned specialized insurance verification staff to perform the eligibility and improved the TAT for eligibility checks.
Right Sizing the team and implementing workflow rules. We rightsized the team based on monthly average volume by restructuring and splitting it depending on the skills required to perform different tasks. This initiative led to efficient AR & Denial Management.
Denials Management Specialization. Our team categorized the denials based on the reasons for the denial. It implemented best practices by building the knowledge base for each denial reason and effective ways to address them. We deployed experienced denials specialists and trained them on each denial category. We initiated a joint project with the client to gain access to the maximum number of websites for different payers to reduce manual effort and improve efficiency.
Education of clinicians and Client’s RCM leaders. Our team set up a process to share the knowledge gained by working on the denials with the clinicians and RCM leaders. The approach aimed to reduce the instances of claims denials due to avoidable causes. They shared specific work instructions and business rules for each plan/sub-plan, denial cause, and effective processes to eliminate the cause.
Feedback loop for the front-end team. Front-end teams can learn a lot by learning from claim denials. To shift focus to denial prevention, our team shared consolidated feedback with the front-end team and educated them on the avoidable causes of claim denials.
Dealing with clinical Denials. We trained the team on coding standards, Insurance guidelines and implemented SOPs to handle denials.
Software utilized. Enhanced the appeal process within the software.
Operational Rigor. To institutionalize best practices, repeating the best practices in execution is essential. We institutionalized the identified improvement areas through improved tracking, reporting, and feedback to the front-end team.
Timely follow-up to reduce Days in A/R. Structured workflows enabled the team to follow up on each submitted claim immediately after 21 days from the submission date.
Feedback loop for the front-end team. Front-end teams can learn a lot by learning from claim denials. To shift focus to denial prevention, our team shared consolidated feedback with the front-end team and educated them on the avoidable causes of claim denials.
Results
We share below the highlights of the all-round improvement in revenue cycle metrics delivered to the client:
Overall billing backlog reduced from 8+ days to 0-1 days
Reduced the days in A/R from 52 days to 38 days
120+ days in A/R decreased from 28% to 15%
The eligibility success rate improved from 80% to 94%
After reviewing the results, the client moved all the processes to Access Healthcare and expanded the FTE engagement from 35 FTEs to 145 FTEs.
We improved the revenue per encounter by 4% from $267 to $278 and collections per month from $5.1 Million to $5.4 Million