A provision of the health care reform legislation requires that any overpayments from Medicare patients to providers must be refunded within 60 days.

To facilitate meeting this requirement--as well as some similar state laws already on the books--the Cleveland Clinic automated a small piece of its revenue cycle, one that was once labor intensive and expensive. Suzanne Tschetter, director of patient financial services-financial reporting, explained the effort at the Healthcare Financial Management Association's annual conference being this week in Orlando.

In 2007, the clinic identified some 24,000 patient refunds that needed to be transacted. The total owed was just under $900,000. Cleveland Clinic hired a vendor, CDR Associates, to develop the automated refund process.

The clinic wound up processing the 24,000 checks at an overall cost of $27,000--or about $173,000 less compared to manual systems. The manual system involved file searches, distribution of paper documents, approvals and re-entry of data into patient accounting systems along the way. With the automated method, a software program scans patient accounts and uses an algorithm to identify who should be refunded. For example, a refund due on one account might be offset by pending payments due on another. The set-up also automated the approval process, with the patient accounts being transferred among systems as necessary.

Tschetter explained that the effort helps the clinic uphold its relationships with its patients. Cleveland Clinic now processes about 6,000 refunds each month.


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