How Carolinas HealthCare System Improved Transparency and Curbed Denials

New processes and automation helped the health system cut denied dollars in half for radiology services alone.

Back in 2007, leaders at Carolinas HealthCare System, Charlotte, N.C., wanted to make their pre-service processes more efficient and effective. Specifically, they wanted to reduce denials, improve collections, and help staff work more productively. Yet it was the desire for greater price transparency that helped the project pick up momentum.

“Price transparency helped us make the case for more automation,” says Katie Davis, assistant vice president of corporate patient access and patient financial services for the health system that includes 950 care locations responsible for nearly 12 million patient interactions each year. “We had started on the road to automation in patient access, but the push for price transparency put it on everyone else’s radar.”

Since then, their efforts have helped protect valuable patient relationships as well as the bottom line. Specifically, leaders at Carolinas HealthCare System boosted pre-service collections from $3 million in 2014 to $4.6 million in 2015.

Carolinas HealthCare System Pre-Service Cash Collections Grow

Carolinas HealthCare System Denials for Radiology Services Decrease

Automating Pre-Service Processes

Until 2007, the pre-service department at Carolinas HealthCare System had manually handled preregistration, insurance verification, prior authorization, and up-front cash collections for all high-dollar scheduled services—such as surgery and radiology—for 11 facilities. “Over time, this had become very labor intensive,” Davis says. “Staff would work through all four phases of the pre-service process [preregistration, insurance verification, prior authorization, and up-front cash collection] until they were finished with each account. Then in 2007, we divided those tasks among dedicated teams to gain some efficiencies.” After a three-month pilot, the health system immediately saw a jump in productivity.

However, the pre-service process was still labor intensive, considering staff handled approximately 17,000 preregistrations per month. At that point, leaders recognized they needed to move away from manual processes. “We couldn’t get any more efficient if we did not automate the processes,” Davis says.

At the same time, patients and staff were becoming dissatisfied with how the health system provided price estimates. Initially, staff searched payer websites or combed through a large book of pricing codes to provide patients with an estimate for their scheduled service. Later, they tried a free pricing tool that was added on to their patient accounting system. Neither strategy worked well.

“The price estimates were completed by our managed health resources department and sent to the outreach call center to be given to patients,” Davis says. “However, the call center staff did not understand insurance benefits and could not explain them to patients.” As a result, patients did not understand exactly why they owed the estimate. Sometimes, a week would go by before patients heard back from the call center staff with the estimate. Davis was concerned that such problems would have a negative impact on the health system’s patient relationships over the long term.

To remedy the problem, Davis and her team investigated various price estimators. They also investigated tools that would automate authorizations. After selecting two such tools, they moved forward with the implementations in 2013. Leaders started the rollout at just one facility and focused on radiology services, which are often easier for creating estimates because they tend to have a fixed price. From there, leaders expanded the implementation to other facilities in the health system.

The tool creates an estimate based on charges, contract rates, and patient benefit information. “We can review how much of the patients’ deductibles have been met, which is important because many patients are moving to high-deductible plans,” Davis says. “Now, we can give patients a much better idea of what their financial responsibility is.”

For surgery estimates, staff can give patients the average price based on the previous year’s data. “We don’t give patients a price range, but rather we say it is the average price and that the true price can change depending on several variables, such as time in the operating room and recovery,” Davis says. Estimates do not include any physician charges.

Making prices more transparent for patients is part of the health system’s broader strategy to build better, more meaningful relationships with patients, Davis says. “We want to make sure patients understand what their benefits are,” she says. “So many people think their insurance is supposed to cover everything. We work hard to make sure they understand their financial responsibilities and don’t get sticker shock.”

Training Staff

Davis says her team was eager to adopt the new price estimator and other automated revenue cycle processes because leaders promoted the benefits early on. “The staff understood that the changes would help them work faster and smarter,” Davis says.

For example, the team realized that the automated authorization tool, which works in tandem with the pricing estimation tool, would free up their time. “When we pre-register a patient, we can automatically see the patient’s insurance benefits,” Davis says. “If the benefits are correct, the case will automatically move to authorization. Services can be authorized in total, authorized in part, or returned with ‘no authorization found.’ Any account problems automatically populate a work queue, enabling staff to focus on the accounts with the highest potential for denial. Otherwise, it is primarily a hands-off process.”

To jump-start the learning process, the software vendor trained several “super users” on the authorization and pricing estimation tools. “These super users were staff members in the department who were good at training others,” Davis says. “Then the super users, along with supervisors and managers, trained the staff as we rolled out the tools facility by facility.”

Realizing Results

Leaders at Carolinas HealthCare System quickly realized results from the health system’s new capabilities and workflows. In 2013, radiology denials alone totaled slightly more than $3.2 million. In 2014, radiology denials dropped to $1.7 million. They also were able to repurpose staff. Thanks to automation, revenue cycle staff can handle 40,000 preregistrations a month with fewer FTEs than they had in 2007. “We only have to touch 20 percent of accounts, instead of 100 percent of accounts, every day,” she says. Leaders have moved FTEs to other areas in the corporate patient access department and elsewhere.

In addition, the health system’s price estimation call line, which is staffed by a two insurance specialists, now reports up through Davis’ team. “We can give patients their estimated financial responsibility when they call us,” she says. “We get their insurance information, key it in while they are on the phone, and give them an estimate that is just for that particular facility.”

Looking ahead, leaders plan to evaluate the system for use in the clinics, Davis says.

Implementing Improvements

Davis provides the following suggestions for leaders who want to decrease denials and make prices more transparent for patients.

Research different technologies. “You need to do a lot of homework to see what type of solution fits your needs and your situation,” Davis says. Giving staff some say in the product selection helps to improve buy in, she adds. It also helps to understand the nature of the technology. “Any kind of estimation tool is not plug-and-play software,” she says.

Don’t be wedded to old processes. “You have to be open and willing to change what you have been doing,” Davis says.

Conduct quality checks every quarter.  This can help ensure that estimates given to patients are accurate.

Focusing on Change Management

Ramping up to offer price estimates to patients can be an arduous process, Davis says. “You have to spend a lot of time getting it right because those relationships with patients are really important,” she says.

Leaders also need to be able to lead their team through change, Davis says. For example, training all staff to say “estimate” instead of “quote” was just one of the many cultural changes they needed to make at Carolinas HealthCare System. “This is a very detailed process, and you have to address those details when you are training,” she says.

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Laura Ramos Hegwer 
is a freelance writer and editor based in Lake Bluff, Ill., and a member of HFMA’s First Illinois Chapter.

Interviewed for this article:

Katie Davis is assistant vice president of corporate patient access and patient financial services, Carolinas HealthCare System, Charlotte, N.C..