A Cure for Revenue Cycle Pain

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Challenge:  The cost of payment and collections processing, for physician and healthcare systems, is an incredible 30% of revenue.

This is even more staggering when you consider that, in comparison, the banking and financial services industry is able to run with automated billing systems that cost a mere 3% of revenue.  It’s no wonder healthcare systems are eager to solve the revenue cycle dilemma as fast as possible.

Why the discrepancy?  Much of the blame can be attributed to the fact that medical billing is a very tedious process.  After discharge, clerks work to pull together medical documentation for the episode.  From this point, an analyst reviews the documents and extracts the information that is relevant to the billing process.  A coder then scours the record and selects the proper diagnosis and procedure codes from reference books.  A data entry operator then enters the codes into the billing system.  This workflow is very time consuming and the potential for human error is great.  In addition to the FTE expense, statistics prove an even more alarming concern.  The likelihood that too many or too few codes are used is quite frequent.  Too many codes means the patient is overcharged and may lead to stiff penalties.  Missed codes means the patient is not charged enough and represents a loss of important revenue.  Added to this the HHS is focused on reducing overpayments attributed to claims that do not meet medical necessity requirements (RAC).  Healthcare systems are required to bolt on additional audit procedures and reprocess claims rejected due to errors.

Enter CAC, which stands for Computer Assisted Coding.  CAC utilizes complex computer algorithms called Natural Language Processing (NLP) to evaluate the un-structured medical record.  CAC structures the text that comes from transcribed reports and typed notes.  This allows doctors to work as they are accustomed to.  Codes are applied automatically and the information is sent to the billing system or an analyst for review.

Solutions such as Dolbey’s Fusion CAC will add both ICD-9 and CPT4 codes to process both inpatient and outpatient charts. This solution is the first and the only proven solution to provide computer assisted coding to both inpatient and outpatient charts.  This unique and exclusive capability gives hospitals the advantage of implementing one solution to meet the needs of your entire healthcare facility.

In many cases, manual coders, enhanced with the results of CAC, potentially approve or amend the automatic results to reduce effort by as much as 80%.  This reduced effort translates directly to a reduction in the time between discharge and revenue capture.  This time savings can have a direct impact on a hospital’s revenue cycle by decreasing the discharged but not final billed backlog and has other potential savings by eliminating dependency on outsourcing, reducing human coding errors and automating Present On Admission (POA) reporting.

Analysts estimate the worldwide market for automated coding will grow to $2.3 billion by 2013. This growth will be focused in the U.S. because of the primary role that insurance plays in the health care delivery system here.