Technology Helps Physician Practices Streamline Coding Processes, Improve Cash Flow

In a tight economy, all businesses must look for new ways to increase efficiency, reduce expenses and maintain a steady cash flow. Small physician practices seeking to meet these goals should turn their attention to an area that likely is costing them more time and money than it should be: coding.

Specifically, small practices that have a high number of claim denials, serve heavy Medicare populations, work with many different commercial payers or have inexperienced coding staff are prime candidates for improving coding accuracy and decreasing delays in accounts receivable.

“Timely and accurate coding is paramount to the health and success of any medical practice because it is at the core of managing the revenue cycle,” according to Steve Greenberg, senior vice president of coding solutions, Ingenix. “Accurate and efficient coding methods are even more critical for small practices that can be highly dependent on cash flow.”

Further, in small practices, staff members generally are “Jacks of all trades,” so saving time and rework in one area, such as coding, allows them to spend more time doing other activities, such as claims auditing or fee schedule analysis. In other words, any change that improves coding productivity enables staff to take on additional responsibilities, Greenberg suggested. Efficient coding operations “can help sole practitioners and small physician practices weather this period of economic uncertainty,” he remarked.

Efficient, electronic coding improves revenue stream

One important step toward more efficient and accurate coding is implementing electronic coding solutions. “Electronic coding resources offer new opportunities to improve physicians’ bottom lines,” Greenberg said. “Whether they have automated other processes within their workflow or whether they are still largely paper based, electronic coding resources coupled with claims editing functionality promise greater efficiency and accuracy without requiring seismic change to office operations.”

Many physician practices have achieved higher efficiency by utilizing comprehensive practice management systems such Ingenix CareTracker, which automates their workflow and enhances productivity by integrating electronic coding and claims editing capabilities.

“The good news is that there is no need to wait to start employing electronic coding and claims editing solutions today, because there also are stand-alone resources available that deliver immediate benefits,” Greenberg noted. “Because of these benefits, practices may face serious risks if they don’t utilize technology to better manage coding and perform claims review.”

Those risks include a greater percentage of claim denials and errors, which lead to payment delays and rework time; the average cost to correct a denied claim is between $25 and $30.¹ Other significant consequences of an ineffective coding process include undercoding – not capturing the nuances of a procedure or intervention, which can result in lower reimbursement – and upcoding – overstating the nature of a procedure or intervention, which can result in penalties and fines.

For example, a physician may see a two-year-old boy presenting with fever and pulling on his ears. If otitis media is the only diagnosis that is reported, but the patient presents with several other symptoms that are evaluated by the physician (e.g. rhinitis, cough, skin rash), that service is undercoded. In contrast, a surgeon who performs an abdominal hysterectomy, but reports an abdominal hysterectomy with bladder suspension (supports the bladder to reduce incontinence) is upcoding. Electronic coding resources and claims editing allow for review of codes to help identify such instances.

According to the Centers for Medicare & Medicaid Services (CMS), the majority of payment errors by the traditional Medicare program for services covered on a fee-for-service basis involve overpayments.² Due to this reality, there are increasing government mandates for accurate medical coding, including the CMS Recovery Audit Contractors (RAC) program, through which the federal government recovered more than $900 million from hospitals during a three-year demonstration program. For physicians, pay-for-performance initiatives require capture of certain data to qualify for full reimbursement.

Electronic coding solutions can help physicians document and code appropriately and reduce upfront denials, and speed payment by minimizing common coding problems, such as insufficient documentation, incorrect coding, medically unnecessary charges and non-response errors, Greenberg suggested. “There are clear improvements in denial rates when claims are reviewed electronically with electronic coding tools and claims editing engines that offer multiple books of content in a single source and explore the millions of relationships between diagnostics and procedural codes,” he said.

Small practices need tailored solutions

“The goal is to produce clean claims on the first pass,” he noted. To accomplish this goal, small practices need the power of a strong system but often cannot afford the infrastructure such technology may require. Physicians also may wonder how they will integrate the technology into their current workflow, what hardware they will need and how difficult it will be for their coders to transition from a paper system to an electronic system.

To address these needs, Ingenix developed a suite of products that are specifically tailored to small practices, Greenberg explained. “We made the systems very easy to use and, knowing that some of our clients might be migrating from print-centric coding practices, we also designed the online materials to mimic the look and feel of the print materials,” he said.

“In doing so, the transition to technology will be relatively seamless and coders’ comfort levels should be high,” he added. “To speed up the revenue-cycle management process with increased coding accuracy and efficiency using Ingenix tools, all a practice needs is a computer and Web access.” 

Ingenix offers small practices online coding software – EncoderPro.com Expert – a Web-based, hosted-solution that does not require practices to purchase additional hardware or software. EncoderPro.com Expert harnesses the proven coding rules and logic of Ingenix ClaimsManager and contains more than 20 print publications worth of referential content, including monthly updates to medical coding information and Medicare policies. This software helps coders select appropriate codes based on physician documentation, and includes a “compliance editor” that allows coders to review coding relationships based on 75 Medicare coding rules and 50 commercial coding rules.

In February, Ingenix launched Claims Batch Editor. This add-on product to EncoderPro.com Expert is designed to work with a physician’s current workflow and identifies inappropriately coded claims before they are submitted for payment. Claims Batch Editor also allows a user to upload several claims to the compliance editor at once, eliminating the burden of having to enter codes from claims individually. “Using Claims Batch Editor, coders can upload 500 claims in the same amount of time it would take to upload one claim, which is remarkable,” Greenberg said.

In May, Ingenix introduced the Claims Batch Editor with Repair Toolkit, a package for EncoderPro.com Expert that provides the same claims analysis capabilities as Claims Batch Editor, but further streamlines the process by allowing coders to make claim corrections as they are identified by the technology.

“The correction element of the Claims Batch Editor with Repair Toolkit results in faster turnaround of payment, lower accounts receivable days and the reduction of resources required to rework and resubmit claims a second time,” according to Greenberg.

Ingenix’s small practice coding products “complement each other to facilitate first-pass payment and really are game changers, because this level of claim coding analysis, review and repair has not been readily available to small practices before,” he noted.

“By helping small practices deal with the administrative complexities of their business, we are allowing physicians to spend more time on patient care and positive outcomes,” he said.

¹ Medical Group Management Association.
² CMS, “FY 2004 Improper Medicare Fee-for-Service Payment Report.”

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