When it comes to healthcare claims, cleanliness is next to, at the very least, fiscal fitness. Producing claims that are “clean” and therefore immediately reimbursable is an important factor in reducing cost-to-collect, especially in an environment where the growth of costs (7.5%) are outpacing revenue (6.6%).[i] While some denials are inevitable, reducing your denial exposure is all about producing claims that can be paid, and can be paid now.
Two metrics important to the discussion of creating claims most likely to be immediately reimbursable are Clean Claim Rate (CCR) and First Pass Rate (FPR). Though sometimes confused for one another, these are separate statistics, each worthy of optimization.
HFMA identifies the value of CCR as an indicator of the quality of data collected and reported. This measure is captured through your claims processing tool, and is calculated as the number of claims that pass edits requiring no manual intervention divided by the total number of claims accepted into the claims processing tool for billing.
A high CCR indicates that the data collected and processed by the EHR may be presumed to be high-quality. That quality may be attained in one of a few ways. Well-defined processes throughout the revenue cycle, from patient intake through coding on to accurate claim production processes in the EHR, will be reflected in a high CCR. Another way to achieve a high CCR is by applying a meticulous routine of incoming claim data conversions within the claim processing tool to overcome EHR shortcomings and human error. Or, a combination of both factors may be in play. In any case, the effect is faster time to payment with reduced manual labor for reduced operational expense.
Another important metric is the first-pass rate (FPR): the percentage of claims which are accepted for adjudication by payers on the first transmission. This measure indicates the reliability of your claims management system: the quality of its claim editing routines is critical; so is the accurate generation of 837s to meet each payer’s unique specifications, including the correct placement of each data element. The most common reason for claim rejections is missing/incorrect data. By catching those errors – and even better, by facilitating automated correction of such errors – the claim processing tool with a high first-pass rate also contributes to faster time to payment, and impacts manual labor expense by reducing manual correction and resubmission. For a provider processing 100,000 claims per month, a variance as little as 1% in your first-pass rate can mean an additional 1,000 claims that must be manually reviewed.
Some organizations make the choice to abandon the pursuit of an exceptionally high CCR in favor of moving claims out the door as quickly as possible. Follow-up staff must then be mobilized to handle the resulting rejections (bounced back to the clearinghouse with errors flagged, never having made it into the payer’s adjudication system) as well as denials. Other organizations choose to weight the process at the billing stage, examining every claim prior to release to head off the potential for follow-up work down the road.
An imbalance favoring either manual pre-work or post-work is likely to add to the cost of claims management. Greater value can be realized by balancing quality and quantity with a holistic approach to creating cleaner claims and reducing denials that incorporates intelligent efficiency and automation.
- Work toward data accuracy throughout the revenue cycle to contribute toward a higher CCR.
- Make use of automation in your claims management tool to apply data conversions to overcome known shortcoming in your system or process during claim intake to achieve an even higher CCR.
- Rely on a clearinghouse with a high FPR, like Quadax, to get your clean claims into adjudication as quickly and reliably as possible.
Learn more about streamlining your claims management process in our free infographic that cues you into Roadblocks, Pile-ups, and Bottlenecks in Claims Processing.
Would you like to learn how much improvement your business office would see with an improved CCR and an industry-leading FPR rate? Click here to get in touch with us – we’d love to talk!
[i] “Moody’s: Preliminary FY 2016 US NFP hospital medians edge lower on revenue, expense pressure,” Moody’s Investors Service, May 16, 2017. https://m.moodys.com/research/Moodys-Preliminary-FY-2016-US-NFP-hospital-medians-edge-lower--PR_366813