Relative to these complexities, the hospital charge capture process is often difficult and subject to a variety of breakdowns. After patient services are rendered, it is commonly the responsibility of clinical staff to precisely document the five Ws: “who”, “what”, “when”, “where”, and “why” of that patient encounter and then accurately translate the complete patient encounter to charges.  While it is often clinically clear what patient services have been rendered, specific payer billing requirements and government regulation frequently drive “how” services should be documented in the patient record and subsequently reported on the patient bill (claim) in order to be paid.    The ability to satisfy payer documentation and coding requirements necessary to receive appropriate payment is difficult to administer.   It is these intricacies related to charge capture and billing processes that create a plethora of opportunities for breakdowns in the revenue cycle which often result in the loss of reimbursement.

This document specifically addresses some of the common contributing factors for lost charges in the middle revenue cycle and how some organizations are mitigating this risk.

Download the full white paper to read more. (PDF:638KB)

Close to Home

Eris Medical found the right resources in Northeast Ohio to launch its health care billing management software.

Jennifer Wexler and Kelly Bucci are on a mission: They are the finders of lost revenue.

The two former health care consultants created Eris Medical Technologies to help health care providers analyze bills to spot missing charges.

And those mistakes are costing everyone. The average American paid approximately 10 percent more for health care last year than they did in 2006, according to the National Coalition on Health Care.

Some of those escalating costs are due to lost revenue from hospitals and doctors’ offices forgetting to charge patients for tests or procedures. With health insurance companies fighting every claim down to the last dollar, health care providers say these errors are eating into their bottom lines.

For example, the total cost of a routine procedure, such as caring for a broken arm, may include charges from multiple departments for devices, supplies and treatments that would be billed to the insurance company. This requires multiple IT systems and unrelated personnel to work in harmony, which doesn’t always happen.

So Eris’ software system, erisRx, links individuals in every department to the entire computer network, holding them each accountable for catching mistakes.

“We’re very niche,” says Bucci, a principal at the firm. “We’re very focused on charge capture while our competitors have their hands in a few different areas.”

Charge capture isn’t new. Hospital systems have departments dedicated to just those duties. What is unique, however, is a software system that uses complex statistical formulas to spot errors or inconsistencies in bills before and after they are sent to the insurance company for payment.

On average, erisRx has found errors in 50 to 60 percent of the bills it analyzes. The duo estimates health care providers can add 1 to 2 percent to their bottom line by using Eris’ product. With $2.7 trillion spent on health care in the U.S. last year, that’s a huge market.

“The business process that we use in this tool is patent‐pending,” says Wexler, a Warren native who worked as a department manager for an Orlando hospital system. “It’s not out there, even among our competitors.”

Before branching out on their own in 2007, Wexler, 34, also principal at the firm, met Bucci, 33, at Deloitte Consulting after Wexler left Florida. They realized the potential market for Eris, but developing health care software is expensive because it must meet numerous federal regulations for Medicare and the Health Insurance Portability and Accountability Act.

To this point, they have been able to support the venture with about $500,000 of their own funds. Yet they still needed to keep costs low and find business expertise and health care contacts to help grow the company. They found both solutions close to home.

This year, Eris Medical earned a spot in the Youngstown Business Incubator, a downtown Youngstown startup accelerator that provides abated rent, office space and equipment and free Internet services.

Eris is also a portfolio company of BioEnterprise, a Cleveland‐based economic development group that links young companies in the medical and bioscience fields to funding, networking and business growth resources such as the Cleveland Clinic, Case Western Reserve University Hospitals and Summa Health System in Akron.

In May, Eris Medical scored a major milestone by landing Youngstown‐based hospital system Humility of Mary Health Partners as its first beta client. Humility of Mary is part of Catholic Healthcare Partners, which is one of the largest nonprofit health systems in the United States and the largest in Ohio.

“We’re very excited to get started with them,” says Wexler, whose software was to be implemented at the hospitals in June. “That will give us an opportunity to show the results we know we can deliver.”

Issue Date: July 2008 Issue, Posted On: 7/7/2008

Many Americans – including providers of health care – find their bills confusing and frustrating to understand, not just irrationally expensive. Hospitals and clinics fail to bill all that health-insurance companies should pay, resulting in lost collections. These lost collections distort their real costs of providing various health care services.

Enter Eris Medical Technologies, a limited liability corporation in the Youngstown Business Incubator founded by Jennifer Wexler and Kelly Bucci. The company has developed revenue justification software to help hospitals bill health insurers all they should. The advantage Eris software offers, say Bucci and Wexler, is that it not only helps hospitals keep better tabs on what they’re owed, it also complies with Medicare regulations.

The program doesn’t look at pricing, Bucci emphasizes. It reconciles what should have been collected with the sums that were.

“While big items get charged,” Bucci explains, “little items get missed.” That’s because hospitals don’t use the same computer systems internally. It’s also because of the ever-changing billing rules and regulations, she says.

Bucci adds, “It is improbable that all of any hospital’s systems are in synch, that its clinical documentation is comprehensive, that all of its staff understands the billing rules, and that they routinely turn out clean comprehensive claims on deadline.”

On average, Bucci and Wexler estimate, hospitals fail to collect on at least one procedure performed on a quarter of the patients they treat.

“A nurse or doctor enters a treatment on a patient’s record,” Bucci elaborates, often in a computer terminal, which may or may not be near the patient’s bed. Entering information is “very manual,” Bucci notes, because while treatments and examinations may be uniform, every patient has different needs and different schedules.

Say the patient has been sent to radiology. The doctor thinks he has entered the relevant information on the treatment or examination given. But, “there are many different systems in a hospital,” Bucci says. “They’re supposed to talk to each other but often don’t.”

Her point: Doctors may enter all the documentation they should. Then a staffer has to enter the charges. Then the charges have to be transferred from the clinical system to the billing system. “If there is a disconnect between the systems, Wexler says, “the intended charges might not make it to the final bill.”

She has firsthand experience. Wexler earned her baccalaureate in 1998 in allied health at Youngstown State University after spending two years in X-ray school at Trumbull Memorial Hospital, graduating in 1994.

“All payers have different records systems and different payment schedules,” she says. A hospital charges the same prices for its procedures regardless of a patient’s ability to pay and whether the patient has insurance.

But each insurer negotiates with the hospital how much it will pay of the charges, how much the patient is responsible for and how much the hospital will write off. “They base their payments on the uniform pricing in the American Medical Association’s common procedural technology code [CPT],” Wexler says. “Medical centers and insurers accept the CPT code to identify the procedures they’ll pay for.”

The codes are uniform for all insurers but how much the insurers pay hospitals is not.
The software program Eris offers examines patients’ bills and uses 250,000 algorithms or rules to learn whether a hospital has been paid all that insurers should reimburse it for. The software looks at a patient’s bill and flags discrepancies, that is, “where the combination of services on the bill does not meet typical industry practices or falls outside federal billing guidelines,” Wexler says.

The software is geared toward outpatient bills and Eris performs its services at night so the examined bills will be available to a hospital billing staff when they arrive at work in the morning.

“Outpatient bills are different from inpatient bills,” Bucci notes, and more outpatient charges are liable to fall between the cracks.

Besides working to ensure a hospital or medical center receives full reimbursement from insurers, the Eris algorithms “also look at how a hospital charges, to make sure it’s in compliance,” Bucci says. “The compliance aspect looks to make sure that services that shouldn’t be billed together [bundled] aren’t and those that should be are.”

Eris software will identify a service considered routine that should not be billed separately. “At this point,” she elaborates, “the only thing the software does to hospital pricing is flag an item where a charge is below full Medicare reimbursement or exceeds it.”

Eris has uncovered keystroke errors, Wexler says, the usual source of erroneous billings. The system of reviewing bills and catching errors or omissions and inadvertent commissions should allow medical systems to more than pay for their use of Eris, she says.

The program is Web-based, Bucci says, and “is very secure. Our level of security must be the same as that of a financial institution.”

By Dennis LaRue 11.DEC.07
As printed in Youngstown Business Journal