How redesigning the Medical Billing Process can improve Health Care Services

The healthcare industry is one of the most regulated sectors of the economy, and is therefore highly resistant to changes and new technological implementations. This is particularly unfortunate as this industry presents incredible potential for changes that could benefit millions of people.

One of the most exciting innovations in healthcare is wearable technology, especially products that allow for monitoring vitals with continually increasing accuracy, from heart rate and blood pressure, to blood glucose levels in diabetes patients. But however impressive these innovations may be, the most significant and immediate benefits for patients, healthcare providers, and payers alike can be accomplished by improving processes and workflows within and between all these stakeholders.

When looking at such a healthcare process, as it can be found in Medical Clinics in North America and beyond, three areas of vulnerability can immediately be identified.

  • Firstly, most Medical Clinics use multiple systems for managing patient records, scheduling, prescriptions, and billing that don’t talk to each other. And others don’t even have a system in place for all these areas. Many smaller clinics and healthcare facilities are still partly paper based, which opens up a whole other dimension, especially human error.
  • Secondly, because these systems don’t talk to each other, or some parts are paper based and others are digital, there is a massive administrative effort involved that doesn’t only take time and is very prone to error, but also costs healthcare providers a lot of money.
  • And thirdly, there are a number of regulatory and certification standards that need to be fulfilled in order to implement such a system.

A few years ago I was involved in creating a cloud-based electronic medical record system where we addressed exactly the three areas listed above, focusing on process and workflow, to create a solution for the benefit of over 20,000 health care professionals and millions of patients across North America.

It was crucial to design a system that pulled together all areas of the health care workflow and that reflected how health care professionals actually work. With that in mind, we also looked at potential sources of human error and identified ways how to prevent them, or at least significantly reduce them. We accomplished that by consolidating the health care experience, fully automating all manual administrative tasks and implementing validation controls along the way to decrease the probability of human mistakes and to flag inaccuracies immediately. What have traditionally been separate systems is now a unified system that integrates practice management such as patient registration and check-in, appointment scheduling and follow up, with patient records and medical billing. On top of it, we also integrated a document management system.

Another important consideration we had to pay special attention to in unifying the health care experience, was access rights. Because there were so many different stakeholders involved in the whole process, such as front desk staff, nurses, lab personnel, specialist practitioners, and billers, care had to be given to the extent of information and data each user group was able to view and edit. On the one hand, each user profile had to be able to access sufficient data in order to fulfil their tasks efficiently, on the other hand, we could not offer more data than necessary in order to stay within the legal and regulatory boundaries. Medical data is very personal and deserves to be treated with the utmost care and protection. We were really fortunate to have brilliant Business Analysts and Product Managers on board, many of whom had worked in the medical field for years. It was them who provided all the research and data necessary to create this system and educate us of what data must be available to each user group.

The following is a brief case study of how we redesigned the medical billing process to not only assure the financial well being of a healthcare facility, but also to enhance the patient / provider experience and quality of service by focusing on workflow instead of system features.

The Medical Billing Process

The billing and payment system is one of the most backward aspects of the health care experience, still largely dependent on pen and paper, telephone calls, and postal services. This has proven to be challenging on many levels.

Healthcare Business & Technology, an online information platform for medical professionals, reported that it is estimated that around 125 billion dollars are left on the table each year in the US alone by healthcare providers due to poor billing practices, of which 80% are the result of errors in filling out and submitting the claim.*

The diagram below shows a simplified version of the billing process and all the actors and user groups that are affected along the way. I created this diagram as part of the discovery phase to gain a better understanding of the various systems and stakeholders involved. In addition, I find these flowcharts quite helpful in creating shared understanding within the team.

The medical billing process as it can be found in clinics across North America and all actors involved along the way.

Traditionally, each of these user groups would have their own system, some parts paper-based, others automated, some connected, others separate.

In my opinion, the two most critical parts in accomplishing our goal of enhancing productivity and efficiency of the clinic as well as improving the quality of care for patients at the same time, are creating the superbill, which is the foundation for creating the claim, as well as identifying and resolving issues that result in non-reimbursement by the payer. A payer in the medical context can either be a public insurance program such as Medicare in the US, a private insurer, or the patients themselves. For this presentation I’d like to focus on these two key areas in order to demonstrate how we tackled these challenges.

Creating the Superbill

A superbill is a kind of invoice that is required in order to receive reimbursement from an insurance company and it lists all details of a patient encounter including service codes, diagnosis codes as well as patient and provider information. Filling out this superbill is the responsibility of the health care provider, such as a GP.

Below is an example of how a paper superbill looks like that is still commonly used today**. The provider would fill out all the information and check-off all services that have been performed on a patient. She or he would then, at the end of the day, hand this paper form over to the biller who would later create the claim based on this information.

Superbill — Courtesy of American Academy of Family Physicians, Web. 18 March 2016.

Filling out these forms after each patient visit is not the main focus of a provider, because it takes time away from attending patients. Our research has shown that in most clinics each provider sees between 8 and 10 patients an hour to make it economically viable. That’s about 7 minutes per patient. Filling out these paper based encounter forms and superbills takes about 90 seconds. This leaves about 5 minutes spent with each patient. Not to mention the administrative effort involved for medical billers who then have to enter this information into their system, generate the claim, print it, and send it out to payers.

Because caring for patients can be a high pressure environment, the risk of errors in filling out these forms is relatively high. For example, a slightly out of place checkmark next to a service code can lead to a faulty claim and rejection from the payer. Another common scenario is, for example, mixing up the code for a hip x-ray on the initial encounter with that of a hip x-ray on a subsequent encounter, which is different. Service codes and diagnosis codes are quite complex and paper forms don’t allow for validations and additional information on what these codes stand for.

To solve these challenges, we have created a superbill administration area within the EMR (Electronic Medical Record) system that allows administrators to set up superbill templates and assign them to providers. According to the provider’s specialty each superbill template could have different service sections on them. The layout of these templates mirrors the paper-based bill. This is especially important as it matches the mental model of users and reduces their cognitive load. We don’t want to force busy professionals to learn new ways of filling out these superbills.

Once set up, this superbill is then integrated into the patient encounter on the provider side of the system, where all the basic details such as patient and provider information are already part of the bill and only the service codes and diagnosis codes have to be checked off; a task that can be completed within 10 seconds. Validation controls would flag down any wrongly or questionable entered codes, adding additional security to the process.

As soon as the encounter is electronically signed by the click of a button, the superbill is then automatically transmitted to the biller into their part of the system, where the claim is being generated and passed on to payers.

This integrated solution already solves the issue of manually transmitting information from one system to the other and to a large extent the likelihood of human error. It also increases efficiency and the quality of each patient visit by freeing up valuable time for the encounter.

The second critical area on our quest was to make sure all submitted claims are actually getting paid. To facilitate this process we created a tool to manage outstanding claims within the billing area of the system that is interconnected with the rest of the EMR system.

Managing outstanding Claims

Outstanding claims pose a massive financial burden on health care facilities that rely on a constant cash-flow to maintain the quality of their operations. It is absolutely crucial for clinics to have the ability to monitor its revenue cycle and identify and resolve outstanding accounts in a timely manner. With this objective in mind, we created a solution to firstly monitor all accounts that have not been paid, and secondly, to identify and analyse the reason of why these accounts are outstanding. At the same time we wanted to empower medical billers by enabling them to resolve any errors that might have caused non-reimbursement.

The biggest pain points for billers are manual and time consuming processes such as updating patient and service information, and following up with payers on claim statuses which can take up to 20 minutes on the phone per claim. This can be a very frustrating experience for billers and payers alike, not to mention patients who inquire about bill details and reimbursements.

Having this burden lifted takes a lot of pressure off billers who often are being judged by the amount of balanced accounts they’re responsible for.

There are various reasons to why a claim gets rejected or denied. First, let me explain the difference between rejected and denied claims. As a rule of thumb, rejected claims are claims with errors in them, that can be resubmitted after correction. Denied claims, on the other hand, are mostly invalid claims that cannot be resubmitted and won’t be reimbursed. An example for a denied claim would be one with a procedure listed that is not covered by the insurance policy.

In our solution, billers are further able to set reminders and follow up notes for any claim within the system. All accounts are being monitored automatically and status updates are displayed in real time. Accounts that require attention are flagged down and details communicated that allow billers to resolve issues themselves right away. Various filters and search controls assure that information can be accessed reliably and effectively.

Most importantly, the system does all the thinking and heavy lifting for the user. User intervention and attention is reserved for discrepancies. That way we have assured that billers can focus on their core tasks and need not be occupied with digging up claims, manually tracking payments, and sticking post-it notes all over their desks with reminder notes to follow up on outstanding accounts.

Conclusion

While new technology such as wearables together with a wide range of health apps is very exciting and has the potential to improve our well being, the real game changer for health care clinics, patients, and payers lies in improving processes, workflows, and the automation of manual tasks by utilising traditional technology.

When designing complex systems, nothing is independent from another, everything has some influence on the whole. The macroeconomic model of linear input/output and supply/demand relationships cannot be applied to systems that have a whole set of variables, which might not be obvious at first, however, each part influences other areas and with it the behaviour of the entire system. In a similar fashion, the medical billing process influences not only the financials of clinics and providers, but also increases productivity, and efficiency, decreases the likelihood of human error, and improves the quality of health care services for patients. Redesigning the billing process actually has the potential to save lives.

And this is also my motivation to keep doing what I’m doing, namely, improving the lives of people around the world by focusing on the entire system and being aware of how parts affect each other and humans, identifying weaknesses and opportunities alike.

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* White, Jess and Cocchi, Renee (2014), “Medical Billing”.http://www.healthcarebusinesstech.com/medical-billing. Web. 12 April 2016.

** Superbill Template.http://www.aafp.org/dam/AAFP/documents/journals/fpm/fpmsuperbill.pdf. Web. 18 March 2016.

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Christoph is an experience designer with a background in Business Administration and Financial Analysis who enjoys solving complex problems with the human in mind.

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