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Optimizing the Patient Bill Lifecycle: Best Practices for Billing and Collection Policies

Ensuring each patient’s medical records are translated into an accurate, complete bill is critical to effective financial management within healthcare. The patient bill lifecycle extends from the moment of intake to long after treatment has concluded. Failing to capture pertinent data at any point in the process can result in substantial lost reimbursement opportunities.

The inception of a patient bill

Once a new patient walks in the door, the hospital needs to start capturing data. From a billing perspective, the most important details are the patient’s identity and insurance (especially whether the patient is covered by Medicare), their current healthcare status and history, and other relevant demographic information.

For returning patients it’s important to confirm or update existing records, as any changes in the patient’s insurance or health could affect billing and payment processes.

Diagnosis, treatment and ICD-10 codes

The next phase of the bill lifecycle is recording all of the tests, procedures and clinical observations conducted at the hospital. For the facility to receive the full reimbursement for these services, every aspect of the patient’s diagnosis and treatment needs to be entered into their medical record using appropriate ICD-10 codes. If a care provider uses an incorrect code, or even a less-specific code for a procedure, the oversight can result in sub-optimal reimbursement for that service, delayed payments or denied claims.

The patient bill lifecycle after discharge

When treatment is complete and the patient has been discharged, the medical record will be finalized, translated into a bill and sent to Medicare or the insurer. However, this isn’t the end of the patient bill lifecycle. There are still numerous actions hospitals need to take to ensure full reimbursement.

Transfer DRGs

What happens to the patient after discharge can affect the hospital’s reimbursement. For example, a patient’s episode of care may involve a post-acute care transfer for follow-up treatment at another facility. In these cases, a portion of the total reimbursement will be allocated to the second facility. However, if the patient doesn’t go for follow-up care or if a skilled level of care is not given at the second facility, the hospital that provided the original treatment may be entitled to receive the entire reimbursement.

Medicare Bad Debt

Subject to strict CMS regulations, hospitals can receive reimbursement from CMS for patient debts, such as unpaid Medicare coinsurance or deductible amounts. Currently, Medicare Audit Contractors will reimburse hospitals up to 65% of the bad debt incurred. This is a potentially huge source of revenue for many U.S. hospitals. However, recognizing opportunities and complying with CMS procedures for receiving Medicare Bad Debt payments can be challenging for hospitals lacking resources to re-review outstanding patient bills and identify eligible amounts.

Medicare Disproportionate Share (DSH) Payments

Capturing and tracking information about Medicaid patients is also important for the purpose of tracking DSH eligibility and maximizing revenue for the care provided. Finding every DSH-eligible day puts a hospital closer to the threshold — and each day above that level is valuable.

As audits become more stringent, it’s important to be able to prove the patient’s Medicaid eligibility, type of coverage and funding source for the programs involved. The best way to realize and protect your DSH reimbursement is to match your patient file against state-run Medicaid databases, retain your eligibility files and re-match your patient file at least once before your cost report is audited.

Optimizing your patient bill lifecycle

Many hospitals are forfeiting millions of dollars in reimbursements because they lack the resources to re-review large volumes of patient bills.

When Medicare claims are generally being accepted and hospitals are getting paid, underlying reimbursement issues can go unnoticed. Medicare Audit Contractors aren’t searching for opportunities to increase payments. It’s up to hospital leaders to find ways to maximize revenue by managing data more effectively throughout the patient bill lifecycle.

Learn more about TransUnion Healthcare’s solutions to optimize Medicare reimbursement.


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