What is Revenue Integrity?
Revenue integrity is the practice of translating patient experiences to revenue in a healthcare organization and avoiding revenue leakage or compliance issues. Once referred to as “revenue optimization,” the term “revenue integrity” is a more holistic encapsulation that also includes legal and contractual compliance. There are multiple elements of revenue integrity that fit into the grander scheme of your revenue management cycle.
People, processes, and platforms all help establish and maintain revenue integrity. If you can identify revenue integrity issues ahead of time, you’ll get out ahead of the problem and can prevent revenue leakage!
The goal of revenue integrity, according to the National Association of Healthcare Revenue Integrity (NAHRI), “is to prevent recurrence of issues that can cause revenue leakage and/or compliance risks through effective, efficient, replicable processes and internal controls across the continuum of patient care, supported by the appropriate documentation and the application of sound financial practices that can withstand audits at any point in time.”
Think of revenue integrity as a sort of bridge – it helps connect clinical, coding, and revenue cycle operations, which then creates improved workflows and increased revenue. Once you begin implementing certain processes, using solid platforms, and putting the right people in place, your revenue integrity will help your hospital perform at a higher level.
A health system’s chargemaster (CDM) is the central program from which clinician documentation is monitored. The tool essentially contains the supply prices for all procedures clinicians perform. A carefully managed chargemaster can make a difference in whether a hospital receives full reimbursement for its procedures, which is one of the primary goals of revenue integrity.
The integrity of your chargemaster depends on having a fully vetted and complete process by which codes are entered. This normal method of manual input is incredibly labor-intensive and leaves room for plenty of errors and oversight. One of the best ways to manage your chargemaster is by automating your CDM through chargemaster management software and regular maintenance updates.
Managing and maintaining a chargemaster while keeping it compliant can pose some difficult issues. To learn more about chargemaster best practices, read our blog here.
Revenue and Charge Reconciliation
The charge reconciliation process is an absolute necessity because it allows fast and accurate charge capture and resolution of any pending charges. Charge capture is also a major opportunity for a healthcare organization to locate leaking revenue. Because of how extensive a facility’s revenue system can be, this means charge reconciliation must happen daily.
The issue here is that with archaic systems that haven’t been updated at many healthcare organizations, staff still will often have to take up to several hours per day to generate and review reports for each patient that has visited. This means that inaccuracy is common, and your organization will leak revenue.
Want more detailed info on revenue and charge reconciliation? Check out our blog here.
Common Issues with Revenue Integrity
Missing and Late Charges
Charging is not exactly a simple process. Insurance contracts need to be sorted out, deductibles calculated, treatments accounted for, and paperwork filed. Any combination of factors can lead to missing and delayed charges resulting in revenue loss. One of the most significant contributors to revenue loss is charge discrepancies between clinical and billing. If charges are not being accounted for at the physician level, a hospital is losing money. Building an effective, clinically based charging system is crucial for any hospital looking to take control of its revenue cycle management.
When Medicare added hierarchical condition categories (HCCs) to assess patient risk as part of the consideration for payment, the need to be precise with coding and charge capture increased. Compliance with state and federal regulations is a must for healthcare systems. These regulations range from HIPAA to SOC I & II, as well as the recent Price Transparency Mandate. It’s critical to keep track of regulations and mandates to achieve price transparency, compliance, and substantial revenue integrity in a healthcare organization.
A patient rarely pays out-of-pocket for all their medical expenses. Instead, contracts with insurance providers create a complicated healthcare payer network. Insurance companies deposit money directly into a healthcare organization’s bank account and then will send a record of that deposit to the organization’s medical billing office. The problem is that the deposit doesn’t always match the record, and balancing the discrepancy takes time and money.
Payer denials of claims can reveal process problems that occur at the coding, charging or billing level, or even contracting concerns. Analyzing claim denial patterns can help the workflows that cause the submission errors, which in turn can help increase revenue. Keep an eye on denials percentages, as well as the dollar amounts from denied claims. Standard industry denial rates range from 5% to 10%, with 2% to 3% considered to be successful. A recent report is showing that the average hospital claim denial rate is trending upwards throughout 2021.
Annual CPT Updates
Current Procedural Terminology or “CPT” is the code set containing identifiers and descriptors assigned to each medical, surgical, and diagnostic service available to patients. Each year, the American Medical Association updates the code set – this enables accurate reporting, measurement, analysis, and benchmarking of medical services and procedures across the healthcare world. With the continual expansion of CPT, your system’s revenue integrity needs to import new CPT codes into existing claims and billing software.
To learn about more solutions to improve your revenue cycle and revenue integrity, check out four ways to transform your RCM management here.
Using automated programs, a hospital system’s charges can be analyzed and processed before billing. This is incredibly helpful, as you want to catch errors before bills are sent out to patients. While automation can remove the daily need for manual entry, it still relies on an element of human input. Any automated software will need directions on what to look for and generate in reports.
While implementing measurable revenue integrity practices can seem daunting at first glance, the benefits on the back end pay off immensely. If even 1% of your facility’s revenue is lost through reconciliation errors, that can add up to hundreds of thousands of dollars. Take back your revenue cycle by focusing on eliminating these small errors, and your revenue will increase.
Be on the lookout for some of our upcoming eBooks on valuable topics like Charge Capture, Hospital Denials, and more!