How one health system focused on revenue cycle staff education to improve its denial rate

Many longtime revenue cycle leaders can recall a simpler time when insurance companies sold plans that were broadly accepted by providers in their service areas. Back then, hospitals provided services to patients, billed their health insurance plans and expected relatively prompt payment.

This is no longer true. Today’s revenue cycle team members must be knowledgeable in a much wider variety of topics, including, perhaps most important, different types of health insurance plans. Revenue cycle leaders must take on the challenge of understanding the nuances of payer contracting themselves and then educate their teams so patients have a positive experience and understand their financial obligations for rendered healthcare services.

In 2022, Wooster Community Hospital (WCH) — a 173-bed, full-service and acute-care facility in northeastern Ohio — began a process improvement project around denials that has allowed a deep dive into what has been driving denials.

Using the claims adjustment reason codes (CARC) from WCH’s 835 remit file (electronic remittance advice) data, revenue cycle leaders classified the hospital’s denials into categories (e.g., registration, billing, coding, medical necessity, prior authorization) that reflected the responsible process owners (e.g., registration, precertification, revenue cycle department leaders). A review of this data showed:

• A lack of understanding among front-line revenue cycle staff of the various insurance types, including the different lines of business offered by most major payers and the different plan designs
• CARC-based denials driven by registration processes consistently accounting for about 40% of overall denied dollars ($23 million), compared with about 6% to 8% for providers across Ohio

Given that registration denials are the most easily avoided, WCH’s revenue cycle leaders realized they could take steps to improve the rate.

How WCH tackled the registration denial issue

To tackle this issue, WCH’s revenue cycle leaders embarked on a four-step initiative.

1 Implement changes in the registration process. A significant change in the registration process, among others, was to migrate the real-time eligibility (RTE) verification process from a scripting and user emulation process within the hospital’s RTE tool to a standard process using the 270/271 transaction set (Health Plan Eligibility Benefit Inquiry and Response).

A significant change in the registration process, among others, was to migrate the real-time eligibility (RTE) verification process from a scripting and user emulation process within the hospital’s RTE tool to a standard process using the 270/271 transaction set (Health Plan Eligibility Benefit Inquiry and Response).

By moving to the 270/271 method of eligibility verification, WCH’s revenue cycle leaders were able to complete the process inside the organization’s electronic health record (EHR) rather than in separate software. This approach made the verification process more seamless and quicker for patient access team members.

An added benefit of this change in method is that it allows the revenue cycle team to perform reverifications more easily from worklists created from schedules within the EHR. Staff can see at a glance which accounts on the worklist are coming back as ineligible or have some other eligibility issue. This insight lets them focus on the accounts that need attention instead of having to go through each account individually.

Changes were also made to training for registration, such as providing different scenarios for coordination of benefits (COB), identifying which insurance carrier is primary or secondary, etc., and defining insurance business lines like Medicare Advantage (MA), Medicaid and commercial coverages.

2 Develop a revenue cycle boot-camp training program. This was the heart of WCH’s initiative. To enhance the system changes made, revenue cycle team leaders realized that patient access staff needed more education around general revenue cycle concepts. CARC denial data helped inform the initial curriculum, but changes were made to the program later based on suggestions and questions from attendees.

The basics. When considering the training needed, the focus was on the why of the information that patient access staff are expected to gather. If the why is understood, the how will make much more sense. Staff have historically been trained to “fill in the boxes” on the registration screens so that patients can be moved on to receive care more quickly. But staff’s lack of understanding about what they were collecting resulted in their collecting wrong information or no information at all. WCH’s revenue cycle leaders saw the same types of errors driving the same types of denials month after month.

The monthly boot-camp training sessions last about four hours and are typically held the day after new employee general orientation. Attendance is usually between four and eight team members. Each session starts with a basic explanation of what the revenue cycle is, what areas of the health system are involved and how those areas work together.

Instructors explain that most of the information exchanged between providers and payers in the claims process is electronic — that no one actually sees it. This information helps them understand how what they enter into the system impacts the people and processes that come after the encounter with the patient and that even the smallest error can have a huge impact on downstream events, potentially resulting in the loss of reimbursement to the organization. Translating dollars lost into full-time equivalents so staff can relate to the magnitude of denials is especially effective. Everyone understands the impact of more (or fewer) employees.

The curriculum. The curriculum includes the history of, and differences between, Medicare and Medicaid and an explanation of how the managed care versions of these programs differ from the originals. It emphasizes that most major payers have multiple lines of business, including MA, Medicaid and commercial plans. Staff are provided with sample insurance cards from each to use as a reference.

Also discussed are dual-eligible beneficiaries and the difference between a Medicare Supplement Plan and a secondary policy that a beneficiary might have from a former employer.

For commercial insurances, the discussion covers various types of plans and explains the difference between fully insured plans versus self-funded plans, reference-based pricing, narrow networks and health share plans.

It is important that all staff understand these differences because WCH does not accept reference- or faith-based plans. Staff must be able to explain this policy to patients, advise them of their payment options and collect from them at the time of service.

The different insurance cards are reviewed, with elements — such as insurance type (MA, Medicaid, commercial), electronic payer ID, claims mailing address and plan design — pointed out for staff to pay attention to while registering patients.

WCH generally treats reference-based and health share plans as self-pay, so it is important that staff can recognize these types of plans. Staff must notify the patient that the hospital does not accept the terms of these policies and that they will be expected to pay for services at WCH’s self-pay rates and seek reimbursement from their plans. WCH’s revenue cycle leaders educate staff on the various types of verbiage that reference-based and health share plans typically use on their cards.

When it comes to good faith estimates — which WCH prepares for most scheduled hospital services, and because financial clearance is performed for a set group of patients based on their registered insurance and expected balance — it is critical that patient access staff accurately gather this information and verify eligibility when services are scheduled. The estimate is sent via text message to patients.

Other training tactics. Ongoing training includes regularly scheduled communication provided on new plans being seen in our area, along with copies of sample cards. Denial trends are watched, and that data is used to drive targeted education organizationwide. For example, when denial data indicated there was a lack of understanding of COB, discussion of COB was added to the boot-camp curriculum. Also, information was shared via email with example scenarios of challenging COB for staff to refer to as needed.

Before the start of each year, a listing of MA and marketplace plans sold in WCH’s area is provided along with the hospital’s network status with each plan. The boot-camp program is of critical importance in helping team members understand this information because it provides them with the background to better understand these updates.

A bound copy of the boot-camp slide presentation is provided to each attendee so they can make their own notes and use it as a reference.

It’s worth noting that employees from outside of the revenue cycle (patient experience, lab leadership, case management, utilization management and nursing leadership) have attended the boot camp and said it was beneficial.

3 Update WCH’s insurance dictionary. These updates were designed to help staff understand the different mnemonics in WCH’s EHR system. There is limited “real estate” within the EHR to provide notes for end-users to help them choose the right mnemonic for patient insurance plans. Historically, staff would compare the insurance cards with available choices in the dictionary, choose a mnemonic and hope for the best. To improve this process, the following information was added to the dictionary:

• Electronic data interchange (EDI) payer ID to all mnemonics, if available
• Insurance assignment notes describing the type of plan associated with the mnemonic, which gives the end-user more detail about the organization’s acceptance of the plan and advises the end-user on how to categorize patients (e.g., as self-pay, plans not accepted)
• More detailed insurance assignment notes that trigger a pop-up message for some plans

Team members use the payer ID found on insurance cards to guide them to the correct mnemonic in WCH’s system.

4 Create a specific insurance-plan-only email for staff use. This email was created to enable staff to receive answers to their questions — to some extent even after hours — about patients’ plans. Staff send the email to subject matter experts (SMEs) who monitor the group email and quickly answer any type of question, such as how to choose the correct insurance plan or whether WCH accepts a policy. Staff provide a copy of the patient’s insurance card in the email, when possible, to help facilitate the SME’s immediate response.

Questions presented in this insurance-plan-specific email provide additional opportunities for educating staff as the SMEs offer their explanations (the why) behind the answers. Patient access team members say they feel supported by having quick and accurate email responses that allow them to proceed quickly with registering patients.

Results point to future opportunity

So what does the data show after a full year of running this program?

WCH has reduced its registration denials by more than 50% ($11.5 million) from where it started. There is still more work to do, including putting tools into place to enable further improvement. Revenue cycle leaders continue to follow the data where it indicates possibilities of process improvement.

This year, WCH is working on a large process improvement project in its cancer center, which is the hospital’s most complex area for registration, prior authorization and other processes. By making improvements in that environment by hardwiring standard processes, the hospital hopes to translate those changes to other settings for even more improvement.