If you have ever seen the Abbot and Costello comedy routine “Who’s on First?” then you can understand that managing charges for patients within a hospital organization can be just as confusing. With today’s modern electronic systems, there is often a misconception that the system will “automatically” track and accurately drop all the charges from the backend. This misconception causes a drop in revenue at organizations that can often cause difficult-to-recover-from financial problems.
Much like the comedy routine, words have a specific meaning. In an Electronic Health Record system, “Posted” is the only true state that a charge is qualified as revenue. Charges can also be in a state of “Suspended,” “Review,” “On Hold,” “Manual” or “Pending,” on their way to being “Posted.”
Even the word “Revenue” is often misunderstood. Some think “Revenue” means the money the department has earned; others believe it is the amount that the department generated for the organization after the bills were paid. Both answers are correct, depending on your context. The charges created are the amount of money the department has generated by providing services to the patients, which is often the “fair” way of measuring the work a department is doing. However, this does not mean that is what the organization will get paid for. There are adjustments made by payors based on what they are willing to pay, write-offs of accounts for patients who do not pay, and contractual agreements between payors and the organization on prices, which results in the ending revenue amount being less than the “Actual Revenue” the organization earned.
To complicate the matter, there are often “late charges” that get added to the patient’s account post-discharge, creating a whole new set of issues for the department’s revenue numbers.
Therefore, it is extremely critical that organizations create a proper charge management process and adhere to it on every level of the patient’s care. The clinicians, doctors and nurses for each department need to have someone reviewing the daily charges to quickly prevent late charging from occurring. This review by the people closest to the patient’s care can eliminate a significant number of late charges from happening. It is important to prevent late charges before they happen because after a bill has been sent to a payor and a late charge is added to the bill, each late charge could cost between $20 to $100 to reprocess or worse, the organization will get a full denial from the payor for untimely submitting the claim.
Next, the revenue team needs to validate that any “Suspended” or “Pending” charges are released to allow them to get to the “Posted” state every day. In addition, the billers and coders need to monitor charges daily. These individuals need to ensure that when they add or subtract charges from an account, they are using the correct dates of service and correct accounts. Simply missing the dates or accounts can put these charges in a “blackhole” where they could never make it on a bill. This shows up as revenue that is still in the Discharged Not Final Billed (DNFB) space but is not tied to the correct accounts.
Softek has created a Charge Reconciliation Tool for organizations to easily implement the workflow process of keeping everyone accountable for tracking and reviewing the charges for each department. With our tool, the leadership team has visibility into who is reviewing their charges and ensuring all charges are making it to a “Posted” state. The result is a much smoother communication on which charges are being dropped and who is responsible for making sure these charges end up on the patients’ bills.
Being proactive in your charge reconciliation prevents unwanted financial problems that cause you to have to make tough decisions about cutting back staff, services or treatments all because no one knew “Who was on First!”
What does Softek® do?
Softek’s mission is to help hospital systems get the most out of their investment in Cerner® Millennium™. We do this by providing innovative software solutions and consulting services that can achieve more together than either can alone.
At Softek, our team of innovators and software developers brings expertise beyond the ordinary to every client. Our experts are involved with Cerner® Millennium™ hospitals throughout the country, consulting clients so they can optimize system performance and revenue integrity.
Softek delivers a full suite of consulting services and software solutions to assess and optimize EMR system performance, including revenue cycle integrity and patient accounting.
Softek was awarded 2021 Best in KLAS for Revenue Cycle Optimization.
Let’s talk to see how you can get the most out of your Cerner® Millennium™ system.
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