Denied claims are frustrating and expensive for hospice providers.
According to the American Medical Association, Medicare annually denies 4.2% of all claims, the highest rate among U.S. payers, while the average denial rate across the hospice industry is higher, ranging from 5% to 10%. Hospices will spend an extra $25 to $30 each time they rework a denied claim, and could submit a few hundred claims per month. More importantly, a high percentage of these claims, as much as 50%, are never paid at all.
Now, hospice operators are finding that the right technology solution can drastically reduce the number of denied claims, ensuring that they get their reimbursements faster — and that they get them at all.
“Ninety percent of denied claims are avoidable, if you do the right checks,” says Tim Blackmon, chief information officer for New Orleans, Louisiana-based mumms Software. Additionally, he says, of the approximately 7% of claims that are denied, about 40% are never paid.
To combat that, mumms’ clients use its hospice electronic medical record (EMR) and billing tool, Hummingbird, to trim as many avoidable denials as possible. For clients of mumms last year, Hummingbird delivered denials at less than 1%.
Using a conservative denial rate of 4.2%, a hospice with 100 patients is negatively impacted by as much as $5k a month, Blackmon says. “That becomes real dollars.”
Why claims are denied
There are two primary areas where hospice providers typically struggle before turning to mumms, Blackmon says. The first is billing. Either providers are spending too much time doing their billing, or they’re having a higher-than-normal denial rate due to incorrect billing and incorrect data on claims.
“So, their revenue cycle is interrupted from a cash flow standpoint, and from a personnel standpoint,” he says.
Blackmon recalls one client that mumms moved to Hummingbird; the client had 52 National Provider Identifiers, (a unique identification number for covered health care providers, via Centers for Medicare & Medicaid Services, known as an “NPI”), and about 1,200 patients. Their billing team was 10 people. After the move to Hummingbird, it was four.
“So that is one area where hospices really benefit,” he says.
How technology helps hospice
The Hummingbird system is anchored by an automated series of process checks that proactively direct users to errors on a claim before submission. Also contributing to its low denial rates is Hummingbird’s integration with both physician NPI databases and facility NPI databases, as well as payer databases and Core Based Statistical Area (CBSA) codes. Such integrations prevent human error, Blackmon says.
Another area of checks is the removal of non-sequential claims. Submitting claims out of chronological order can lead to a denial.
“Our software will prevent you from doing this,” Blackmon says. “If you get too many denied claims … you may get dinged or audited. Hummingbird will visually show users the correct sequence to release the claims.
For Anthony Hernandez of Americare Hospice & Palliative Care in Mesa, Arizona, that automation makes all the difference.
“Those checks are important to us billers,” Hernandez says. “Before, we used to do it manually, so we had to go through each claim, [with sometimes] 100 to 150 claims per month … with the process that mumms has in their system, you can see on the screen whatever information is missing. And you can go ahead and correct it or put in the necessary information.”
Americare has an average daily census of about 100 to 110 patients, with about 50-60 staff members, all at one location in Mesa.
“The [change from] checking it manually helped a lot,” Hernandez says. Regarding the national average $5,000 monthly loss, Hernandez says Americare has been much healthier financially.
“We’re losing only about $380 per month,” he says.
The other major area of assistance from Hummingbird is in bedside documentation. Nurses no longer finish a shift, go home, open their computers and then log data. They can document everything from the client’s home. This immediacy increases accuracy, which prevents claims denials.
“There were studies that said that clinicians that do their data entry while doing their visits are more likely to put in accurate information than doing the visit and then going home,” Hernandez says.
He was not with Americare prior to its adoption of mumms, but his colleagues told him that the reason the company moved to mumms was the remote patient information data entry capability, which vastly improved data retention.
“With the requirements for [electronic medical records], they had to find a system that would allow clinicians to enter patient data while doing their visits,” he says. “That’s the primary reason for moving to mumms.”
Adds Blackmon: “According to some of the nurses I’ve talked to, it’s changed their life.”
Americare’s denial rate is now 0.3% on at least 100 claims submitted per month.
Unnecessary hospice claims denials don’t need to hamper your business. To learn more about how Hummingbird can help, visit mumms.com.
Written by Jack Silverstein