Inpatient Facility Coding & Compliance Alert

With hospitals fighting harder for every dollar they receive, your facility may be looking at forming a revenue integrity team (RIT). Keep these points in mind when you’re ready to establish a group -- or department -- to oversee and manage the revenue cycle.

1. Understand the Team’s Purpose

The RIT shouldn’t simply focus on how to reduce the hospital’s expenses. The team’s purpose is to study business processes and analyze the causes of repeat problems. Understanding and improving processes such as workflow, communication, and accountability on both the front and back ends will lead to revenue integrity down the road: increased operational efficiency, lower compliance risk, and optimized reimbursement. Hospital management and members of the RIT should also understand that reimbursement isn’t only about sending claims to insurers as quickly as possible. You want to be sure that all charges are accurate, and that all charges are included on bills the first time.

Advice: "The way I usually indicate the distinction with types of activities is with ‘efficiency’ vs. ‘effectiveness’," explains Duane Abbey, Ph.D., president of Abbey and Abbey Consultants, Inc., in Ames, Ia. "For instance, efficiency involves getting things done more quickly while effectiveness addresses doing the right thing. In other words, make sure you have the correct process and then make the process more efficient."

2. Choose the Best Players

Experts agree that building a diversified RIT works best. Members of the core team might work in areas such as:

Case management

HIM

Nursing

Patient admissions/registration

Patient financial services/billing

Chargemaster coordinator

Internal audit/compliance

Managed care.

3. Expand the Team When Needed

Keeping the RIT to six or seven members can increase its productivity, but sometimes other help might be beneficial. For example, if the team is tackling an issue in the lab, it could be worthwhile to invite a lab employee to temporarily join the group. That employee who understands the daily responsibilities, challenges, and information in the department can be a valuable resource for the RIT.

4. Include Coding Expertise

Coders play a significant role in revenue integrity, particularly because of their expertise regarding diagnosis guidelines, inpatient and outpatient procedures, and modifier usage. The ability to capture all of a patient’s comorbidities helps document the level of patient acuity. That, in turn, is essential to ensuring the hospital receives appropriate reimbursement. Because coders know what is and isn’t working from a reimbursement perspective, they can help identify aspects of documentation and registration that can prove beneficial in the long run.

As more facilities implement revenue cycle teams, coders’ roles could expand into other areas of reimbursement, such as chargemaster coordinator.

5. Set Realistic Expectations

Once a foundation for revenue integrity practices is in place, the RIT can focus on reimbursement. Hospital administrators and stakeholders should know that the typical U.S. hospital can easily experience an initial annual denial rate of 7 percent or higher on its claims, according to information from Karen Bowden, senior vice president at Craneware InSight in Atlanta. Lowering that denial rate is a time- and resource-intensive commitment. She gives these examples of benchmarks a well-performing hospital might set to move toward improvement:

Initial denials less than 4 percent of charges rejected on remittance advice, measured monthly

Rejected claims are worked within five days of receipt

Write-offs are less than 0.4 percent of gross revenue.

Look for more on compliance and revenue integrity in future issues of Inpatient Facility Coding and Compliance Alert.