#electronic attachments

What is the key to medical documentation excellence

The solution mitigate these problems – electronic attachments submission. CAQH estimates the cost of paper attachments to be 6.08 per document for claims attachments and as high as $45.94 for authorization attachments. While most of this cost is attributed to the provider, the potential savings cannot be ignored.

By Lindy Benton, CEO of MEA|NEA.

Receiving and responding to medical record requests continues to be one of the primary contributors to lengthy claims processing delays and denials for providers. Health plans request supporting documentation, which can delay processing the pre- and post-payment review up to 45 days, on average. Technology, however, is allowing hospitals and practices the ability to efficiently and securely capture, transmit and store electronic health record information and supporting clinical data to reduce denials and reviews by payers.

Are these solutions really important for payers and providers? At present, it does not seem top of mind for payers even with CMS’ push to (finally) move toward electronic exchange of data between providers being audited by Medicare claims auditors, for example, doesn’t mean the industry – from the payer’s perspective – is moving with gazelle intensity toward the capability of doing so. The reasons are many, and understandable, of course.

Payers have bigger priorities right now with ACA, ICD-10 and other highly complex processes that require their attention. The attachment system that’s currently being used by many payers (manual delivery) works, and the thinking that “if it ain’t broke, don’t fix it” moving attachments to an electronic environment at this point may just not be important enough to these organizations to supersede everything going on at present.

But when it comes time for providers to get paid, the use of simple electronic image files can securely change the way providers get paid and grow their businesses. There are more than a billion ambulatory care visits a year producing claims in which 13 percent of those requiring attachments to support them. Each attachment averages more than three pages that the payer must review before being able to adjudicate the claim and pay the provider, according to a 2010 National Ambulatory Medical Care Survey.

For example, the annual claim denial rate in 2013 was 2.17 percent, meaning more than 70 million attachment pages were required by payers annually. Hospitals, ambulatory care centers, surgery centers, home health agencies and long-term care facilities simply experience significant improvements in their revenue cycles by using electronic attachments for their medical documentation exchange and claim processing time can be greatly reduced – in some cases by as much 60 percent.

So, why do electronic attachments matter in healthcare? Electronic document management improves processes by enabling hospitals and practices to securely capture, transmit and store supporting documentation for medical review. They are secure and HIPAA-compliant for document transfer, require minimal time and training to implement and essentially offer integrated services with some hospital information systems.

The value proposition is simple for health systems, including increased productivity (less phone time spent tracking status of mailed or faxed claims); fewer denials; faster payment; detailed tracking reports; records of every employee who viewed the attachment; and real-time follow-up on claims with attachments.

The solutions allow providers the ability to transmit both solicited and unsolicited documents via an information exchange to all participating health plans. The claim attachments are then able to be viewed and acted upon in a timely manner. According to the American Medical Association, automating the claims process can cut costs, helping organizations save thousands a year while relieving staff members of some of their most tedious and time-consuming tasks. Additionally, automating the claims submission process can:

Minimize claim rejections and resubmissions

Deliver claims to health insurers in real time

Expedite payer responses and boost cash flow

Free up time for other revenue-enhancing tasks

Reduce claims submission costs

An evidence of savings realized can be seen as published by Milliman from 2006. For example, the cost to submit manual claims is $6.63 x 6,200 (6,200 is based on an average of claims submitted for a single physician) equals $41,106 per year. Compare that to the cost to submit electronic claims, which is $2.90 per claim x 6,200 = $17,980. Thus, the average annual savings per physician from automating claims submission: ≈$23,126.

However, even with a cost-savings of more than $23,000, practices saving money may not be the most important factor of the solutions. Security and safe transfer of the information to payers is the priority of all practices, and is possible. Also, the money saved may not mean as much as the efficiencies created or the comfort and reliability of being able to track, monitor and follow claims and attachments throughout the adjudication process.

Additionally, the solutions create a sense of interoperability, a concept much hyped but often difficult to achieve and often lagging in other areas of the hospital or practice. With electronic attachment solutions, information can easily be transferred across multiple systems securely and efficiently, with little effort and implementation time.

HIPAA-compliant data transfer

Even with these benefits, often overlooked is that the technology exists for HIPAA-compliant transfer of electronic data, allowing for information exchange between providers, payers and clearinghouses. Even with the oft discussed lack of exchange capabilities with current solutions, such as between competing electronic health record systems, hospitals and health systems can simply deposit required information into a secure electronic envelope to support the clinical coding on a claim, which can then be easily transmitted to a payer. Though not an exchange of data in the “traditional” sense – between electronic health record and electronic health record, for example – it is possible for hospitals to use their technology and systems to communicate with outside parties, such as payers (including CMS for Medicare/Medicaid,) clearinghouses, and other practices.

In relation to electronic attachments, with a few simple keystrokes, providers can simply upload or capture requested documents whereby a unique tracking number is then assigned to the claim, and it gets transmitted securely to the payer. Once the third party receives the claim, examiners then have the ability to view the supporting documentation. Not only is the data transferable, but the attachment is stored in a secure repository and is accessible to designated payers and providers. Attachments sent by providers can include a number of components, such as adverse drug reaction information, lab and operative reports, ER records, certificates of medical necessity and any other documentation required by a payer to adjudicate a claim. Attachments can be sent along with the initial claim submission (unsolicited) or in response to a request for additional information (solicited).

How the technology is changing healthcare

The technology is changing healthcare in a number of ways. In the near term, organizations will be able to continue achieving clinical and financial excellence as health information becomes more fluid and mobile.

Additionally, automating manual processes makes routine tasks more efficient. Clinical excellence furthered by the use of EHR and other technologies will continue to facilitate the ability for practitioners worldwide to share patient information to enable them to treat patients more efficiently. Additionally, automating billing, claims and attachment processes will reduce lengthy reimbursement periods from payers and reduce unnecessary costs associated with the redundancies in healthcare administrative processes (i.e. refilling claims/documents, manually tracking reimbursements, etc.)

Certain electronic solutions enable providers to electronically respond to RAC, MAC, CERT and ZPIC audits given certain guidelines, for example, by being able to connect through Medicare’s esMD program. The esMD program was launched by CMS to provide an electronic mechanism for providers to respond to audits. Because of these electronic solutions, responding to audits is much quicker, more secure and easier with this technology than when using traditional paper methods to manage the same process.

Additionally, with the technology, providers can import documents using a variety of acquisition methods including scanning, screen capture, file import and print capture. When used to defend against audits, these solutions typically help those in healthcare eliminate faxed or mailed audit responses, ensure timely and confirmed responses, reduce postage and fax charges, decrease administrative time spent copying, eliminate lost submissions and provide HIPAA-secure transmission and storage of files.

The benefit to providers and to health systems is clear, especially in the age of the “wireless” office. With the push toward EHRs, electronic transfer of health information and seamless interoperability, these technologies go hand-in-hand with those developments. Specifically, in regard to this case, the technology can improve acceptance rates for claims requiring supporting documentation, as well as decrease days claims spend in A/R; reduce occurrences of pended and denied claims; eliminate lost attachments; reduce postage and fax charges; eliminate paper-based claims, appeals and audit processes; improve office staff productivity and overall billing efficiency; and provide secure HIPAA-compliant transmission and storage.

All of this supports a more efficient and profitable health system driven by technology. Secure electronic claim attachments improve outdated processes with little intrusion and minimal investment – something many of healthcare’s other IT solutions can’t claim.

There’s no question that the healthcare industry is on its way to completely digitizing business processes. The EHR Stimulus Alliance produced a dramatic increase for healthcare providers to not only adopt EHR, but also to begin digitizing other business practices, such as e-billing and the automation of health insurance claims submission. According to a recent study from CompTIA, half of healthcare providers are currently using EMR/EHR systems, and one in three healthcare practices expects to increase their IT spending by five percent over the next year.

One area experiencing substantial growth, and where technology can have a significant impact on the billing process, is electronic claims submission. A 2006 Milliman study revealed that it costs $6.63 to process a claim manually, compared to $2.90 electronically. Because of this significant cost savings, a number of health insurers are beginning to require claims be submitted electronically. Therefore, it’s not surprising that America’s Health Insurance Plans (AHIP) found that 75 percent of all health insurance claims are now submitted electronically, up from 24 percent in 1995. There are obvious additional benefits to electronic claims submission, such as:

Reduced administration time

Increased accuracy

reduced reimbursement period

The Cost of Attachments

Although electronic claims submission is becoming standard practice, claims that require additional documentation are still primarily being submitted manually. Only 4-10% of all claims require attachments, but they tend to have the most significant impact on the payment cycle. A 2002 Health Insurance Association of America (HIAA) survey found that lack of information was the primary reason for pending claims.

Attachments average 4 pages in length and are traditionally submitted manually via paper. If a medical billing manager does not utilize electronic attachments, they must submit the entire claim and attachment manually, thus taking time away from value-added business processes. Paper claims and attachments submissions take anywhere from 28-120 to be processed by the insurer, however electronic submission are often processed in 7-14 days, greatly reducing the reimbursement cycle.

A typical medical billing organization submits an average of over 750,000 claims annually. If just 4 percent of those claims require attachments, that’s 30,000 claims, and at an average of $6.63 per manual claim, the cost equals almost $200,000. In comparison, it only costs $87,000 to process 30,000 claims electronically at $2.90 cost per claim, resulting in a savings of over 50 percent.

Furthermore, the requirements for attachments are already beginning to rise with The Center for Medicare and Medicare’s (CMS) nationwide RAC audits. CMS can request additional documentation on 1 percent of all claims submitted for every 45 days of the previous calendar year. So for example, if a provider submitted 426,000 claims the previous year, CMS could send up to 532 additional documentation requests every 45 days.

If the responsibility of the medical billing department is to maximize the revenue per claim and minimize the cost per claim, it only makes sense to employ an electronic attachments clearinghouse to completely automate the claims submission process. Most electronic attachment service providers, like MEA|NEA, Renaissance, or Jopari, are secure and HIPAA compliant, and do not require software upgrades.

Eliminate Paperwork and Phone Tracking

With lack of documentation often causing pending payments and denials, more administration time must be dedicated to rework, follow-up, and resubmit claims. When filing a claim that requires an attachment, the billing manager must fill out the 837 claim form on the computer, but then also print out that form along with the required documents and images for the attachment, which can range from 4 to 20 pages in length. The claim and attachments must then be either faxed or mailed, and receipt and approval of claim must be verified with the insurance company via phone. The average paper claim takes 20 to 30 minutes to track and costs $3.70 to verify via phone, whereas an electronic claim and attachment can be verified and tracked on a web portal without ever having to pick up the phone.

Imagine time and cost savings if paper and phone tracking were completely eliminated from your administration tasks. By employing electronic attachments, PHI and other Healthcare Documentation can be submitted, tracked, and stored through the electronic attachment clearinghouse secure web portal.

Increase Accuracy

According to the National Healthcare Exchange Services, one of the top reasons claims are denied is because additional documentation is required. Adding electronic attachments to the claims process not only further reduces the room for human error, but also allows you to submit attachments with the initial electronic claim submission, thus greatly increasing the first-pass rate on many claims.

Being that most providers are using EHR, claim attachments that are processed by paper increases the likelihood for duplicate claims, which not only doubles the claim compilation costs but also the administration time to identify and delete the duplicate claim. Attachments also create more documentation that must be generated and reviewed by several claims processors, and increase the probability that information could be entered incorrectly.

When submitting attachments electronically, the required documentation is scanned or uploaded into standard formats, so errors and omissions are more easily identified and information loss is minimized. Furthermore, the attachment can be viewed by up to five processors at the same time, and some electronic attachment clearinghouses will also prompt the billing manager to recognize when additional documentation is required for a claim.

Overall Improved Payment Performance

Attachments are a small piece of the claims process, but can have a dramatic impact on the speed of the payment process. The average billing cycle for a clean electronic claim is 7 to 14 days compared to the 28 days for a clean manual claim. Attachments create extra administration steps, additional documents and images to gather, and more room for data entry error, which means a higher probability for claim rework and a longer billing cycle.

With electronic attachment submissions reducing administration tasks and time, as well as improving first-pass rates, it’s no surprise that overall payment performance will improve. For example, Emblem Health dental division processed almost 20,000 electronic attachments last year, and when calculating the average cost per claim, they’ve saved close to $74,000. Because of these dramatic costs benefits, Emblem Health is currently expanding electronic claims and attachment services to their medical division.

It is rare that we come across a medical office or facility that is still submitting their medical claims manually on paper to the insurance companies. Most are submitting their claims electronically because it is easier, cheaper and exceedingly more efficient than mailing or faxing their claims. Many insurance companies encourage their providers to submit claims and additional documentation electronically because it is also easier, cheaper and more efficient for them to process provider paperwork electronically. On average it costs a payor $6.63 to manually process a paper claim, whereas an electronic claim costs a payor $2.90 to process; a saving of $3.73 per claim. The savings on the provider level are equally impressive because they are able to eliminate faxing/mailing, paper and additional administrative costs associated with paper claims submissions. However, even with all of these savings, it is rare that we come across a provider that is also submitting their claim attachment’s electronically. Instead, providers are dropping all claims that require attachments to paper and are faxing/mailing the claim with the paper attachment. This leaves room for lost attachments, delays in payor processing and slower reimbursement cycles. Electronic attachments enable providers to fully automate their claim submission process by allowing them to submit all claim substantiation documentation electronically, eliminating the need to manually submit paper documentation. Payor’s also benefit from accepting electronic attachments because the majority of their claims and attachments are received electronically, thereby greatly reducing their processing costs. Consider this: in 2010 there were 12,871,500,000 medical claims filed in the U.S.* and 10-30% of those claims required attachments; that’s 1,287,150,000– 3,861,450,000 attachments. If all of those claims and attachments were submitted manually, it cost payors $4,801,069,500-$14,403,208,500 more to process those paper claims and attachments. Plus, the average medical provider can spend $7,000-$21,000 annually filing paper claims and attachments**. Even though many do not consider attachments to be a costly endeavor for payors or providers, the figures above should change their mind. Removing paper from the claims and attachment process has proven to increase efficiency thus dramatically reducing all costs associated with the claims process.

  *U.S. Healthcare Efficiency Index 2010