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In other podcasts and articles, we’ve mentioned that most revenue cycle management systems or medical billing systems can’t generate a report that shows denials data. So it can’t show you the specific remittance codes and that kind of information. Even if you can see some of those things, whether individually or in some aggregated report, very few of them can export it out of the system. By the way, a positive note: On one of those systems, AdvancedMD, you can do it. On most systems like eСlinicalWorks and others, you cannot.
One of the challenges that many organizations then run into is when you are running denials analysis (or when somebody wants to run denials analysis for themselves). You’re trying to identify patterns and solve problems. If you can’t get it out of the system, you’ve got to get it somewhere else.
We frequently go and get those electronic remittances, the ERAs, 835 files from the clearinghouse. We can get them in large batches. Often, we can get large, large batches. All of them do a giant dump. Or we can do a regular secure FTP, which is a file transfer protocol, where they come over automatically.
Select the right billing system
When you get all those 835 files, you can process them. You can go in and grab the information out of them. You’ve essentially parsed those files and remittances. That means we can load all the data about the payer or the individual patient, the payment, denial, denial codes, remittance codes. All that kind of stuff all comes out and gets extracted, put into each respective field in the database. Then, you can run all of your denials analysis very quickly.
What do you do about paper EOBs? Because the clearinghouse doesn’t have that information. When you get a denial on paper, most organizations enter some data into the billing system. Again, it depends upon the method on what you can join, but some information that says it didn’t get paid, that there’s some note where you have to do a follow-up or something like that. Again, the system to the system varies.
Retrieve missing denial data
Typically, even if you could enter the denial information specifically about the denial code, that information isn’t available in a report. So you can’t get that out of the system, which means now it’s lost. It’s not in that denials analysis because you can’t get it from the clearinghouse. After all, the clearinghouse never got the paper EOB.
Some billing companies and departments have very high percentages of electronic remittances. We’ve seen some in the high 90s in terms of shares (97-98%), which is excellent. That’s almost to the point where you can effectively not worry about paper EOB denials and do the analysis without the paper EOBs because you’re only ignoring 2-3%.
There are so many problems to overcome that are just going up that Pareto. Tackle the ones that are in the 97-98%. Don’t even worry about the 2-3%. If you’ve solved all of your problems in the 97-98%, then tackle the 2%. But I don’t see that ever really happening.
Determine the percentage of denials
We still want to get those paper EOB denials if we can, in part, because what you don’t know is, a very high percentage of denials may be coming on paper EOBs. You might get, for example, a 5%, 6%, 7%, 8%, 10% denial rate on the electronic remittances, while you’re getting 30%, 40%, 50%, perhaps even 70% (something ridiculous) on the paper EOBs. Part of that is because there is a correlation between payers who are still on older systems and their unwillingness to pay you.
It’s not uncommon to see very high denial rates in paper EOBs. Of course, we want to be complete, get everything, and have all the information loaded in, so at least you know what’s going on. Even if you don’t tackle the problems in that 2-3%, at least you know what it’s coming from because it might be disproportionate.
By the way, it might not even be 2% or 3% of the remittances that are coming on paper EOBs. Maybe, it’s 5% or 10%. If 10% of your remittances are coming on paper EOBs and they have a disproportionately high rate of denials, it’s easily possible that 20-30% of your denials are coming on paper EOBs.
What do you do? That’s the question. Further, we’ve seen many different solutions. Also, there’s a lot of options you can do. I think the critical thing is just to take a step back and first figure out what percent of your remittance information coming back is coming on paper EOB. Then, put together a plan on how you will capture that information. We’ll tackle in the next podcast some suggested solutions on how to deal with this problem on paper EOB denials and how to capture that information.