Fixing the Front-End of the Revenue Cycle: Integrated Financial Clearance

The growing financial burden placed on patients makes it difficult for hospitals to collect. This financial challenge is only expected to get worse as:

• Unemployment rates increase as the U.S. faces a recession
• The number of uninsured or underinsured increases
• Costs increase due to inflation
• The aging population grows sicker

Financial clearance mitigates financial risk to healthcare providers by securing agreements from payers and patients to provide reimbursement for elective and urgent services. This step is critical to realize and maximize third-party reimbursement from payers. Additionally, providers can use information gathered from the patient prior to service to minimize out-of-pocket burdens by presenting financial assistance program options, providing patient counseling, and establishing payment plans.

Identifying the ability to pay helps providers understand where they are most likely to collect payment in the revenue cycle. Financial clearance is an essential part of the early stages of the revenue cycle. It’s also become the part of the revenue cycle that’s the most problematic, which creates the need for an integrated financial clearance program.

What is an Integrated Financial Clearance Program?

AGS’s integrated financial clearance program ?helps healthcare organizations and providers combat avoidable write-offs and payment delays by consolidating:

• Price estimation
• Demographic entry and verification
• Insurance verification and eligibility
• Benefit determination
• Prior authorization and referral management
• Patient liability identification
• Medical necessity validation

Integration is beneficial because it:

• Makes vendor management easier – fewer vendors, fewer frustrations
• Allows for better accountability because it isolates and addresses problems where they occur
• Provides better and more visibility via a dashboard, which helps identify where potential roadblocks and backlogs may occur
• Improves efficiency by eliminating the duplication of work, which helps reduce operating costs
• Allows for a consistent and streamlined patient experience across service lines

Without integration, financial clearance systems can’t scale.

“AGS helps you leverage and amplify your existing technology or select appropriate partners based on your goals. Additionally, we build bespoke automation to ensure financial clearance information is comprehensive and consolidated, ensuring continuity across the patient experience.” - Katy Morgan, vice president of strategy at AGS Health

Addressing the Front-End of the Revenue Cycle

Consider the following:

• Since the onset of COVID-19, medical claim denials have risen 11% nationally
• Half of all denials are caused by front-end revenue cycle issues
• Registration/eligibility, authorization, and service not covered are the leading causes of front-end denials
• Registration/eligibility has been a leading cause of denials since 2016, representing about 27% of denials
• 86% of denials are preventable

Implementing preventative practices prior to patient visits can help providers reduce the likelihood of denied claims. The main reasons for denial include:

• No Prior Authorization Obtained?– Nonstandard authorization processes bring additional barriers to accuracy and completion in addition to the growing clinical requirements for service.?Leveraging payor websites, 3rd party technology, and bespoke automation help to simplify both the determination and submission of prior authorizations, a denial which has little to no mercy in rectifying post services are rendered.
• Missing or Incorrect Information?– Validate insurance information, patient names, subscriber IDs, and service codes on medical claims. Leaving just one field blank on a claim form can trigger a denial.
• Outdated Insurance Information?– Verify that you have updated insurance cards on file so claims can be processed quickly.
• Services Not Covered?– Validate patient coverage beyond eligibility to ensure the services scheduled are covered under the patient’s specific plan. Clarifying benefits helps you and your patient understand the final costs.
• Not Medically Necessary?– Upfront edits created by analyzed denial data and provider rules enable visibility to providers on what is not meeting medical necessity prior to services being rendered, driving better provider documentation or adjustment of treatment as appropriate.

It’s important that RCM teams are aware of these leading causes of denials and take steps to reduce claim errors immediately. With due diligence and these best practices, providers will gain confidence that their claim denial rates will decline.

These denials all occur at the front end of the revenue cycle and can be resolved with a sound Integrated Financial Clearance program in place.

What to Include in Your Integrated Financial Clearance Program

The following are important to include in your Financial Clearance Program and reduce the likelihood of denials:

1. Complete Financial Clearance:?Complete clearance activities for scheduled appointments between 14-30 days out from appointment dates (some exceptions apply, i.e., procedures likely requiring peer-to-peer), and re-verifying where appropriate for events such as changes in month or year.
2. Strategically leverage automation within the Prior Authorization process:?Technology is not fully mature and certainly not a one-stop shop for all types of authorizations. Pick a partner with flexible technology when seaming together the authorization process – e.g., break down auth determination vs auth submission components.
3. Close the feedback loop with your denials team:?Establish clear lines of communication and accountability to gain insight into top denials that can be stopped upfront. Consider leveraging a coding denials expert who not only resolves/appeals denials but can provide documentation insight into your providers and recommend upfront edits.

Conclusion: Integrated Financial Clearance Supports Revenue Generation

When?financial clearance is done right – through integration , you can:

• Increase net revenue
• Eliminate duplication of work and reduce the burden on?Patient Financial Services
• Improve operations and workflows
• Reduce AR Days through cash generating activities
• Reduce denials
• Avoid claim write-offs and reduce on-going bad debt placements

All of the above contribute to improved revenue collection and speed to collection. If financial clearance isn’t integrated, integrated accountability is also lost.

If you are ready to get started with your integrated financial clearance program or are ready to learn more,?contact us .

Source of the content: AGS Health Blog