"One of the biggest problems in health care reimbursement is the adversarial provider-payer relationship," says Steve Schaefer, vice president of finance at Virginia Mason Medical Center in Seattle. "You're never going to unsnarl the claims process unless you work together.
Virginia Mason's CEO took the initiative of reaching out to the CEO of one of its biggest payers, Premara Blue Cross, to streamline all the steps involved in getting paid. The CEOs and other executives from the two organizations took the extraordinary step of traveling together to Japan to tour the factories of automaker Toyota, where lean manufacturing principles were first applied.
The provider and payer have worked together for four years on a series of workshops designed to improve the many processes involved in paying a claim.
For example, the payer wanted to increase the number of claims that could be adjudicated automatically, without review by a staff member, says Kacey Kemp, Premera's vice president of operations. The payer devised a way to better educate Virginia Mason, and eventually other providers, on precisely what information was needed to complete a claim. Plus it added business logic in its claims adjudication system, from The TriZetto Group Inc., Newport Beach, Calif., so that more claims could be auto-adjudicated. For example, the logic enables the system to search for a discrepancy between patient gender and the procedure code, she explains.
As a result, 20% of claims now require manual intervention, down from 28%.
In another project, Premera worked with Virginia Mason to identify ways to help the provider avoid submitting claims a second time with extra information. Teams from both organizations reviewed every step involved in these redundant claims. They then devised a process to help prevent hospital staff members from assembling claims based on partial information, Kemp says.
As a result of these joint efforts, and others, the medical center now averages 17 days in accounts receivable for Premera accounts, down from 64 days before the lean manufacturing exercises, Schaeffer says.
Denied Claims
In a similar effort that's just getting rolling, executives at 40-hospital Christus Health in Dallas sat down with their counterparts at United Healthcare, Minneapolis. The goal was to reduce the number of claims denied in the first pass, says Kaycee Orman, the hospital chain's executive director for revenue cycle.
The payer reviewed 300 denied claims to analyze the root causes and is now helping the provider to come up with ways to avoid claims problems that lead to denials, Orman says.
"United has a department dedicated to lean manufacturing, and they approached us to do this," she says.
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