March 4, 2019
Part 4 in the PMG Series: Key Strategies for your health center
By: Robert B Skeffington, PMG Partner and Co-Founder
As my colleagues and I travel around the country visiting Community Health Centers (CHCs), a common concern bubbles up: “I hate month end”. We are hearing this more often than in past years and from both new and tenured health center administrators alike. CHC administrators dread the review of their month end reports from the billing office which often show poor results and in some cases serious cash flow issues. This in turn leads to the creation of the subset report packages for the Finance Committee and finally the Board as well. The inevitable questions and explaining is soon to come at meeting time. Is there a better way?
Yes there is and let’s take a look at how. While challenges such as Credentialing/Provider enrollment, insurance eligibility, staffing levels/staff turnover or billing system issues are surface reasons, the real or root causes are most likely unknown. In the end, your billing staff or billing vendor sends claim information to an insurance carrier for payment. We smile when these claims are paid, which is the correct reaction. When claims are either not paid or paid at less than the health center expected, a frown occurs. For some health center administrators they think this is the end of the process. In fact, this is the beginning of the Denial Management Process. It’s fairly easy and will get the health center paid.
No matter how efficient and well run, every Community Health Center in America will see a certain number of claim denials this week. While the number of non-paid claims will vary widely, there are some numbers to consider. At the very low end of the range the number of denied claims is 4-5% while the top end of the range can be 12% and even higher. Per the 2017 National UDS Reports, the average health center generates just over $157.00 per encounter. Just think of how much better the financial reports would be with a 5% boost in income?
While denial management is one of the keys to maximizing revenue at a health center, few organizations make this a priority. Tools abound to measure denial rates and develop a plan of attack to fix and resubmit the denied claim. Some are more powerful while others are easier to use and manage. This is half the battle and will put you on the path to payment.
The other half of this is to share the information on the denial to the person or group which caused the denial in the first place. Let’s close the loop so we don’t constantly receive denials! This can be part of a comprehensive, health center wide plan of eradication or a simple training opportunity. In my ten plus years in the FQHC market I have never heard a clinic staff member show indifference or not want to help fix the issue. This is an easy fix and can produce real results for the organization as well.
In the end, let’s not dread month end and its financial reporting showing less than optimal results. Let’s strive for ever improving reports showing lower denials and higher payments month after month. Setting up a denial management system at your CHC is easy and needs to be addressed if not already in place.