Payer/Provider Initiative Cures Claim Denials by Saying “Yes” To Collaboration
A consortium of 18 hospitals and health systems (Consortium) throughout Michigan got together for the purpose of examining the areas where their health systems were losing money.
The CFOs that comprised the Consortium decided that reduction in rejected claims was an immediate priority since claims denials sidelined money which their healthcare systems could allocate for other resources. An intermediary was needed to help them devise a strategy and create a more collaborative business model with the area’s largest payer, Blue Cross/Blue Shield of Michigan (BCBSM).
The Solution:
The Consortium’s CFOs engaged Capgemini to quantify opportunities for improving claims management. Capgemini concluded that denied claims, billing errors, and the subsequent reworking and handling of inquiries created a liability for both payers and providers. Capgemini and the Consortium approached BCBSM to help resolve the situation.
In a revolutionary move, Capgemini facilitated a two-day collaborative session at its Detroit Acceleration Solution Environment (ASE) facility bringing executives from the Consortium and BCBSM together so each could hear the other’s concerns firsthand. Both parties became willing participants when they understood the initiative regarding denied claims was in everyone’s best interest.
The Result:
Through candid discussions, both groups came to trust each others’ motives and were willing to provide unprecedented access to internal processes and databases. Today, the Consortium and BCBSM are reaping the rewards of their successful collaboration in terms of financial savings, process improvements, and better provider/payer relations. From 2002 to 2004, the Consortium achieved a fifteen percent drop in overall denial rates.
“Without collaboration, we would not have been successful. We can contact a hospital to understand what their perspective might be on a certain issue. And sometimes, I get calls from a hospital representative. It might be about something I have no involvement in, but he or she feels comfortable enough to call me and say, ‘Chris, I have a problem. Who at BCBSM can we talk to?’”
Chris Maier, Director of Business Analysis and Improvement, Blue Cross/Blue Shield of Michigan
How Capgemini, the Consortium, and BCBSM worked together
Healthcare providers and payers have generally perceived each other with outright mistrust and having competing agendas. Early in the project, Capgemini was instrumental in getting the health system CFOs and the senior-level executives from BCBSM to come to the table, speak openly, and collaborate.
“They had to understand that it wouldn’t work if they didn’t think it was important,” says Tom Biggs, Senior Associate Director of Operations and Support Services at University of Michigan Health Systems.
For the provider, the loss of revenue from denied, reworked, or resubmitted claims was obvious. And while it costs virtually nothing for a health plan to reject a claim, the payer had expenses associated with handling subsequent inquiries from the patient and provider, and with reprocessing the claim.
During a two-day brainstorming session facilitated by Capgemini, both sides enthusiastically engaged in the project, understanding better how decisions impacted each other. Trust became an important factor in the project’s success.
“The biggest surprise was the camaraderie that was developed among all the hospital [CFOs] that participated,” Biggs said. “There was also a wonderful camaraderie between BCBSM and hospital staff.”
Since neither side wanted to launch an initiative that required retooling their technology or processing methods, the collaborative effort focused on policy and procedure adjustments and minor technology changes. Three key focus areas were:
- Coordination of Benefits (COB) and benefit policy and eligibility
- Medicare recoveries
- Payer limitations and control
The CFOs provided executive level support and active participation by task forces comprised of patient account managers and registration managers with firsthand knowledge of claims processing. BCBSM modified its existing business intelligence tool to add a provision for collecting provider data.
The revamped denial-management database allowed BCBSM and its providers to view confidential rejection data by individual hospital, health system, and across all systems. It also allowed users to identify and compare variations among hospitals to other hospital networks, and compare denial or rejection rates of individual hospitals or systems to norms.
“If we didn’t have a collaborative effort with the hospitals, it would limit what we could control to reduce denials,” said Chris Maier, BCBSM’s Director of Business Analysis and Improvement. “With access to the hospitals and their willing participation, we’re able to expand our ability to reduce denial rates.”
Today, BCBSM and its provider health systems share more current and historical information. By having access to a shared database, they collaborate more to remedy policies or billing practices that can result in denial or adjustment of claims. Fewer claims are now denied and reworked; and the number of days a bill spends in accounts receivable has declined throughout all the participating health systems.