Our client, a leading independent provider of outpatient behavioral health services in the United States, was facing significant difficulties in securing timely payments for their services. This challenge led to a substantial backlog of unpaid invoices, primarily due to inefficient billing processes and inadequate follow-up procedures.
The billing and collections teams were struggling with the volume of claims, resulting in frequent errors, lack of timely follow-ups, and insufficient knowledge of changing insurance regulations. These inefficiencies delayed payments and increased the backlog of unpaid claims.
Moreover, the teams had difficulties in effectively communicating with insurance companies and patients, further complicating collection efforts. This mounting backlog strained the organization's financial stability and diverted resources away from patient care, impacting the overall quality of service.
Challenges
Success rate of eligibility verifications was below 80%
High front-end rejections resulting in delays in payments
Lower revenue per encounter was denting their profitability
Backlog volume across all billing processes
Days in A/R stood at 52 days
Total outstanding 120+ day A/R was at 28%
Solutions
We recognized the need for a comprehensive transformation and adopted the Six Sigma DMAIC approach to improve their metrics. Initially, we streamlined eligibility checks by obtaining provider credentials and assigning specialized verification staff, significantly reducing related denials. We restructured the team based on required skills and developed a knowledge base for managing denial categories, deploying trained specialists for each type.
To further reduce avoidable claim denials, we educated clinicians and RCM leaders, sharing specific work instructions and business rules tailored to each plan and denial cause. A feedback loop was established for the front-end team, focusing on denial prevention, and educating staff on avoidable causes. For clinical denials, we trained the team on coding standards and insurance guidelines, implementing SOPs for effective management.
Enhancements were made to the appeal process within the software, ensuring smoother operations. To institutionalize best practices, we improved tracking, reporting, and feedback mechanisms. Additionally, structured workflows for timely follow-up on submitted claims were implemented, ensuring immediate action after 21 days from submission. This comprehensive approach significantly improved their operational efficiency and reduced the backlog of unpaid claims.
Results
Reduced the days in A/R from 52 days to 30 days
120+ days in A/R decreased from 28% to 15%
Eligibility success rate improved from 80% to 95%
Overall billing backlog reduced from over 8 days to 0-1 days
Improved revenue per encounter by 4%
Improved collections per month from $5.1 million to $5.4 million