If you visited any of our booths during recent trade shows, you might have noticed one particular theme: Leaving money on the table. Where we just left small bills adding up to +/- $200 on a table as a game (think jelly beans-in-a-jar), many physicians, practices, and organizations are actually losing hundreds-of-thousands of dollars simply by not ensuring all documentation is being matched to appropriate charges and vice-versa. Losing revenue due to missing charges and documentation is not a new problem, but there is a solution in the form of real-time clinical documentation and reconciliation.
Why Reconciliation is Important
Physician organizations usually face two hurdles when it comes to making sure their physicians are paid appropriately and on time. The first being the act of getting proper clinical documentation in an efficient manner and the second is to ensure that all documented encounters are charged and billed. It's no secret that ICD-10 is a complex coding system, as can be seen by the struggles of physicians to properly code and charge. This issue can be traced back to the fact that most physicians are trained to think in clinical terms, not CPT. This leads to physicians thinking they're meeting documentation standards, when in reality their notes may still not meet heightened expectations due to ongoing quality measures and initiatives.
Physicians may do more than what is reflected in their actual documentation. Even though the physician can't bill for everything, they can document and code to show the appropriate level of service. On the back-end, patient collections can be a daunting challenge for providers. Reconciliation, if done properly, can help ensure that there are no charges missing associated documentation. Physicians may document the encounter, but forget to charge the patient for any number of reasons. This directly effects the rate at which billing is carried out and the time for physicians to be reimbursed for the provided care.
Impact on the Revenue Cycle
The functionality and efficiency of the revenue cycle has the ability to drive an organization forward or into the ground, which was a topic explored in a previous blog. Reconciliation has emerged as a key cog in the revenue cycle process. With a more robust ICD-10 system and the increased risk of audits, physicians have been much more cautious with their coding and charging. Some physicians even opt to bill on a lower tier simply to avoid the risk of an audit altogether.
Ensuring that clinical documentation and charges match up is key in helping to sort out proper reimbursement rates. Overlooked charges are an extremely costly error and it's not uncommon to see hospitals lose $20,000-$40,000 or more per doctor due to lost or missing charges on a yearly average. There are a large number of gross charges lost due to oversight while capturing charges, with many physicians expecting to collect only a percentage of a patient's full balance. Reconciliation solves this problem by ensuring that all clinical documentation is appropriately charged, eliminating the risk of losing revenue due to human error.
The Bottom Line
Reconciling charges to documentation and documentation to charges isn't a new concept, but it is a topic that is becoming increasingly more important. With the complexity of ICD-10 and the increased risk of audits, physicians are faced with a tough decision when it comes to coding and properly charging. This leads to selecting a lower tier of coding, leading to a loss of revenue, or overcharging, which brings about cumbersome audits. Reconciliation not only solves these issues by matching any missing charges or documentation, but it also has a significant financial impact on the revenue cycle as a whole.
