Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Reimbursement News

Bots Make Claim Status Inquiry More Efficient for Avera Health

As reimbursement rates decline, a health system in the Midwest is improving cash flow by $20 million using robotic process automation for claim status inquiry.

Claim status inquiry and robotic process automation

Source: Getty Images

By Jacqueline LaPointe

- Robots in healthcare do not have to be large human-like machines that replace providers. But bots embedded in software applications can be a key tool for reducing the burden of mundane, common tasks, such as claim status inquiry.

At least that is what Mary Wickersham, Vice President of Central Business Office Operations at Avera Health in the upper Midwest found after implementing a claims management technology that uses robotic process automation to automatedly query pending accounts.

The 33-hospital system based in Sioux Falls, South Dakota recently centralized all of its hospital business offices under one roof. Despite improving efficiency by centralizing key business functions, the health system was still not achieving its overall days in accounts receivable (A/R) goals.

At the same time, the system’s hospitals were getting busier, resulting in increasing unpaid account queues.

“With the number of unpaid accounts growing, we saw the need to follow up starting to rise, too,” she recently told RevCycleIntelligence.com. “We were spending a lot of time on calling and checking on paid or pending accounts, which really isn't a good use of someone's time because they really can't do anything with those accounts.”

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“We started to look at why this was happening and what we needed to do about it. I didn't want to just quickly assume that I needed to hire more people because staff is one of the number one expenses that a hospital incurs.”

Mary Wickersham, VP of Central Business Office Operations, Avera Health, discusses how robotic process automation saved time and money when it came to claim status inquiry.
Mary Wickersham, VP of Central Business Office Operations, Avera Health Source: Avera Health

Not wanting to add to the system’s labor costs, which can account for up to 60 percent of a hospital’s operating expenses, Wickersham looked into how technology could aid Avera’s lagging revenue cycle.

“I had heard about ‘auto claim statusing’ and started to investigate it,” she explained. “Through automating claim status processes, we learned that we would be able to actually follow up on an account before remittance advice was returned to us, meaning we would be able to accelerate cash flow by fixing an account prior to posting a remit into our system.”

The cost of investing in technology versus adding another staff member to get in front of the unpaid accounts volume swayed her decision, she added.

Claim status inquiry automation is increasing. The 2018 CAQH Index shows 71 percent of all claim status inquiries made that year were fully electronic.

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However, claim status inquiry automation still presents a major opportunity for providers and payers to save money. Despite growing adoption and support for automated claim status inquiries, the index revealed that the per-transaction savings opportunity is among the highest reported for claims management processes. The industry could save an average of $9.22 per claim status inquiry by doing away with manual processes.

Not all automation is created equal, Wickersham found. While many vendors offer technology that can automate claim status inquiries, not many companies could provide electronic inquiries that integrated into Avera’s existing workflows.

“I did not want a bolt-on tool where the users had to go out to another system to get the claim status and start the workflow. For us to be efficient, the more we can do in our host system, the better,” she explained. “We looked at three or four different vendors and found that the companies did not have a lot of experience with MEDITECH, our EHR system.”

Avera decided to partner with health IT company Recondo to develop an automated claim status inquiry tool that integrated into MEDITECH. The health system elected to become a beta site for the new technology that would not only work with the system’s EHR, but also leverage the power of robotic process automation to drive meaningful electronic adoption.

Robotic process automation (RPA) uses software, or bots, to eliminate manual processes. Bots are “computer coded software that operate on top of other existing software applications,” writes PricewaterhouseCoopers Manager Christopher Bailey. “They interact with the user interface of existing applications in the same way that an everyday user would.”

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In the case of claim status inquiries at Avera, bots took over manually checking claims on payer websites.

Instead of taking up valuable staff time, bots can now go to a payer’s website a couple of days after Avera sends a claim and they run claim status checks on all claims. Once the bots identify if a claim is received, paid, pending, or denied, they send the status back to Avera’s EHR system where a workflow can be triggered if the account needs additional work.

“For example, let’s say it is day 14 after we have sent a claim to Medicare,” Wickersham elaborated. “Prior to implementing the auto claim status solution, there would be active workflow for us to get a status on it. But with the solution, if there is a status of paid, pending, or in motion, and there's nothing we can do with it, we can now drop that account out of our workflow so that people do not spend time checking on those accounts.”

“But if the account is denied or needs medical records or some sort of action, the solution will activate that account in workflow by posting the status of the account and telling the end user what is wrong with the claim. And those notes go into MEDITECH, so the end user knows what they need to do as a next step to fix the account.”

By using bots to run claim status inquiries, Avera increased the number of followed up claims without adding new FTE (full-time equivalent) staff or hours. As a result, the system saw $260,000 in FTE savings while also achieving a $1.1 million net impact on timely filing improvement.

And the savings are in addition to the $20.6 million in accelerated cash flow Avera achieved shortly after implementation.

“We had staff that were very far behind in their queues. Immediately after turning the solution on, the solution dropped out hundreds of accounts they did not need to spend time on,” she said.

As reimbursement rates decline and operating costs rise, automating business functions is key to boosting the bottom line, Wickersham advised.

“Don't be afraid of using technology to drive your workflows versus people,” she concluded. “If organizations took the chance on something like auto claim status, they would find that they could spend less on the technology compared to adding people. Or they could actually reduce FTEs by bringing in this type of technology into their workflow. It carves out your workload so every account you touch needs your attention versus wasting time on accounts that are already in the ‘set it and forget it’ phase.”

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