The Path Toward Optimal Cash Posting Performance

By Care Medic Systems

Nationally acclaimed MultiCare Health System (MultiCare) is a not-for-profit, leading-edge, integrated health organization comprising four hospitals, numerous primary care and urgent care clinics, multi-specialty centers, hospice and many other services. Its 93 locations serve patients across four Pacific Northwest counties. MultiCare is currently one of the nation’s few health systems to implement a comprehensive electronic health records system. Despite being a recognized health information technology leader, it faced a never-ending struggle to streamline patient billing posting workflows.

The Challenges

In particular, MultiCare found itself challenged with excessive amounts of unallocated payments. MultiCare, like other providers, receives payment notifications in a variety of formats, including paper-based Explanation of Benefits (EOBs) and electronic ANSI 835 remittance advice transactions. Each transaction can contain remittance information for hundreds of individual patient claims.

MultiCare's billing office managed both hospital and physician cash postings, which meant its billing staff had to manage a lot of unique payer resources. Their existing system required staff to pull up scanned images of paper-based payments and manually key the posting amount into the hospital's patient accounting system.

Compounding the challenges, the department suffered from a necessary reliance on temporary billing staff, varying from as few as five, to as many as nine people, in addition to its full time employees. With high turnover and a lack of available skilled temporary workers-an expensive resource at $30 an hour-overhead costs and cash posting productivity were not up to desired standards.

"Because we were very manual, it required a large quantity of FTEs to post and reconcile payments," said Jason Adams, MultiCare's vice president of revenue cycle. "Our cash posting challenges were resulting in excessive amounts of unposted cash-literally millions of dollars unposted each day. In addition, we might have had patient payments in the bank, but because of our cash posting lag time, our billing follow-up staff didn't know it."

According to Adams, all too often, patient accounting representatives were calling payers to find out why a payment hadn't yet been made, only to find out it just hadn't yet been posted to the account

The Solution
Almost concurrently to MultiCare's recognizing the need to address this issue, CareMedic representatives introduced health system administration to its newest solution offering, Payment Management, an ASP-based, all payer solution for managing remittances. By leveraging CareMedic's expert staff and existing market-leading solutions, Payment Management offers users an efficient solution for managing and automating payment processes and a single point of access to insurance payment data. Eliminating the challenges of managing information in various formats, Payment Management works with the provider's existing lockbox service to offer a totally paperless remittance processing solution from claim adjudication through posting into the provider's patient accounting system. It captures electronic and paper explanations of benefits (EOBs), converts them to the standard electronic format (ANSI 835s), automates posting and provides views of single-patient 835s. Its data mining capabilities provide advanced dashboard reporting that allows management to easily analyze remittance and payer issues, including root causes of denied payments.

MultiCare already had an established and highly satisfactory relationship with CareMedic. The health system had realized tremendous results as a long-timer user of the company's document management and denial management solutions, as well as its Virtual Business Office (VBO) services.

"Statistically, I knew that for every dollar spent on temporary workers, we were spending too much, but without any other viable option, we were prepared to throw more bodies at the cash posting issue," said Adams. "But then we viewed the demo on CareMedic's Payment Management solution. Their offering presented us with a cost-effective, non-disruptive way to automate processes, defer the heavy information technology lifting and steer our staff to work to exceptions."

Adams added that he viewed the decision to adopt Payment Management as a result of CareMedic's established ability to deliver results over the last 10 years.

Putting the solution in place
Working with MultiCare's key senior management, motivated billing staff set about adopting Payment Management at the end of 2007 by developing well-defined goals for completing the implementation in a short timeframe. A cornerstone of the plan and its rollout was to first address the payers with the largest remittance volumes, with a stated objective to transition 80 percent of its payers within six months, and from there, to work in the smaller payers over time.

MultiCare's staff was pleased about the minimal need for support from internal IT staff throughout the implementation, as CareMedic performed the bulk of the transition work. "We used existing resources that we had in place," explained Adams. "We did not incur the typical added expense from a labor perspective in adopting this technology solution."

Once its goals and timeframe were established, MultiCare provided CareMedic's expert staff with the necessary mappings and payer proprietary codes. Next, CareMedic worked on converting unique payer forms into the ANSI standard format, and then the 835s were tested to ensure they could be posted cleanly and directly into MultiCare's patient accounting system (an Epic solution). Because MultiCare already was a user of CareMedic's document management solution, the adoption process was reduced by approximately 20 days, as there was no need to establish scanned document capture.

The organization's first payer was live on the solution in January 2008. With its phased approach, by April 2008, MultiCare had payments from multiple payers running through the Payment Management system.

"The benefits of Payment Management began to feel real within 60 days," said Adams. "As our unallocated cash backlog became smaller and smaller, our permanent staff was able to handle the volume of exception work and we were able to start phasing out our temporary staff in that timeframe."

The Results
Today, MultiCare's paper and electronic lockbox payments are converted to standard 835s and transmitted the next day into its patient accounting system. By adopting CareMedic's full-service, end-to-end solution, MultiCare has reduced its average unposted funds per day to $100,000, versus the millions of dollars it was experiencing before.

What had been 22 positions in cash posting is now down to 15. Because of the streamlined workflow and accelerated posting achieved through the Payment Management solution, MultiCare was able to eliminate seven FTE positions occupied by temporary workers-an immediate savings of approximately $400,000 a year. Moreover, because the department was able to reduce headcount, it successfully avoided permanent staff layoffs to meet 2009 budget reductions.

Softer benefits have been realized in limited turnover, high staff satisfaction due to working accounts by exception, nearly zero backlog, and more effective and targeted communications by patient billing follow-up workers.

In addition, the adoption of Payment Management presented the means to consolidate and integrate the activities of MultiCare's two central business offices into one. 

"After implementing CareMedic's Payment Management Solution, we're operating in an optimal performance environment," reports Adams. "By enabling our staff to work accounts by exception, we've been able to phase out unskilled and expensive temporary staff and vastly improve productivity by avoiding unnecessary follow-up work on payments we had received but just hadn't yet reconciled."

Results
MultiCare's achievements were:

• $400,000 savings in expense from temporary staff workers
• Daily unallocated cash reduced from anon average $1.5 million to $100,000
• Improved posting accuracy
• Elimination of unnecessary follow-up calls to payers
• Elimination of seven FTE positions, with added benefit of averting the need to lay off permanent staff to meet new department budget reductions

Contact details:
Jose Miranda
Sales Analyst
T: 727-329-7872
E: salesinfo@caremedic.com