The Ultimate Guide to Healthcare Revenue Cycle Management, Claim Scrubbing & Medical Coding Software

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Healthcare Revenue Cycle Management

What is Healthcare Revenue Cycle Management?

As defined by the Healthcare Business Management Association (HBMA), healthcare revenue cycle management (RCM) is “the administration of financial transactions that result from the medical encounters between a patient and a provider, facility, and/or supplier.” These transactions include billing, collections, payer contracting, provider enrollment, coding, data analytics, management, and compliance. In short, healthcare revenue cycle management is the process of identifying, managing, and collecting patient service revenue.


The Many Challenges of Healthcare Revenue Cycle Management

There are myriad challenges associated with healthcare revenue cycle management. Provider burnout is prevalent throughout the healthcare industry, and employees working in all areas of healthcare are overworked and overburdened. Additionally, EMRs perpetuate an abundance of bad electronic billing data, leaving RCM teams struggling to keep up. Detailed below are the three biggest challenges facing RCM teams today.

Bad Electronic Billing Data

Physicians didn’t go to medical school to become coders. They focus on providing the best possible care to their patients, not on the intricacies of coding. When charges aren’t accounted for at the physician level, medical groups lose money. Additionally, RCM teams end up spending significant time sifting through bad electronic billing data from the EMR reviewing and correcting information.

Evolving Payer Requirements

Payer requirements are constantly changing, and it can be tough for revenue cycle management teams to keep up. When updated payer requirements are missed or overlooked, denials increase. The Change Healthcare 2020 Denials Index, an analysis of 102 million hospital transactions, found that the average denials rate is up 23% since 2016, topping 11.1% of claims denied upon initial submission through the third quarter of 2020.

Staffing Shortages

This combination of evolving payer requirements and bad electronic data offers a lot of opportunities for mistakes. In fact, our data indicated that up to 50% of claims have errors. When organizations have insufficient staff, these mistakes compound and can quickly add up. 

Staffing shortages are plaguing the entire healthcare industry, and revenue cycle management teams have been hit hard. According to an MGMA Stat poll conducted in September 2021, 75% of medical practice leaders ranked staffing as their biggest challenge heading into 2022. According to an analysis by Revenue Cycle Intelligence, 25 percent of healthcare finance leaders noted that they would need an additional 20 or more employees to have a fully staffed revenue cycle department.

Free Infographic: Overcoming Staffing Challenges

Combatting These Challenges: Revenue Cycle Integrity is Key to RCM Improvement

What is Revenue Cycle Integrity?

Revenue cycle integrity involves ensuring that clinical encounters are accurately translated into revenue. It includes people, processes, and platforms that work towards operational efficiency, compliance, and optimal compensation.

Achieving Revenue Cycle Integrity

To achieve revenue cycle integrity, medical groups need a strategy in place to prevent revenue leakage. This strategy should have two main components:

  1. Ensuring accurate and full charge capture
    To improve revenue integrity, groups need to have a system in place to review charges for coding completeness and accuracy. While in the past this process has required extensive and expensive staffing, there are now ways to significantly simplify the process by leveraging artificial intelligence.

  2. Maximizing operational efficiencies
    Automation can play a key role in improving operational efficiency. If you’re correcting the same errors over and over again, you’re probably wasting valuable time. By automating this process, you can dramatically improve efficiency. For example, a common error teams may encounter is a missing surgery code. Every time the post-op follow-up visit CPT code is billed, you can leverage AI to look back through the previous global period to make sure the original surgery was also billed. If it was not, the automation can create a task for review so the missed surgical CPT code can be captured, thus preventing a costly mistake.

Claim Scrubbing

What is Claim Scrubbing?

The primary purpose of claim scrubbing is to detect and eliminate errors in billing codes, reducing the number of claims to medical insurers that are denied or rejected. While this is a simple concept, the process itself can be complex. There are many different approaches.


How Claim Scrubbing AI Helps with Revenue Cycle Integrity

There’s a significant need for automation in the claim scrubbing process. Claim scrubbing by nature involves a lot of routine tasks—there will always be minor errors that need correcting time and time again. By leveraging AI to autocorrect these routine errors and streamline the entire workflow, teams can free up staff to focus on the areas where their expertise is most needed.

Automation is also an important part of reducing revenue errors and improving revenue cycle integrity. Billing and coding experts can only catch so much, and as their workloads become increasingly overloaded more opportunities for errors arise. Automation can help ensure that claims go out correctly every time, meaning revenue doesn’t fall through the cracks.

Given the above, it’s no surprise that medical groups across the country are turning to automation now more than ever. According to a survey commissioned by AKASA, the number of health systems using revenue cycle automation increased by 12 percent in 2021 over 2020.  In all, 78 percent of the health systems surveyed were already using or were in the process of implementing revenue cycle automation.

Download Now! Free eBook: Simplify Your Revenue Cycle Workflow Through Automation

Different Approaches to Claim Scrubbing

Administrative vs. Clinical Coding

As defined by the AAPC, clinical coding is the transformation of healthcare diagnoses, procedures, medical services, and equipment into universal medical alphanumeric codes. Software types commonly used in a clinical coding context include Computer Assisted Coding (CAC) and Natural Language Processing (NLP), which are technologies used to scan a provider’s clinical note and recommend codes based on what was documented.

The other approach is administrative coding. Administrative coding deals with the administrative accuracy of claims. This involves ensuring claims meet a payer’s specific requirements. 

Front End vs. Back End

One of the most common and widely used types of administrative medical coding software is a claim scrubber. Claim scrubbers help ensure the correct ICD-10 and CPT codes are included on a claim, among other administrative payer requirements. Traditional claim scrubbers work on the back end of the billing process. This means that claim data review takes place after a claim is created in the RCM system but before going to the payer. If the claim scrubber detects an error, a task is typically created for a biller or coder to work within the RCM tasking system. The coder or biller then has to make the correction and repost it into the RCM system.

Conversely, charge scrubbers work on the front-end of the process—before the claim goes out. Since charge scrubbers review charges before they enter the RCM system, they’re a better area in which to leverage AI. If an error is identified by the AI software, it is flagged so that a coder or biller can make the corrections before a claim is created. In this model, the scrubbed charges enter the RCM system accurately and are ready to be submitted as a claim.


Results to Expect When Automating the Claim Scrubbing Process

Decrease Denials

By automatically reviewing all claims with software instead of manually reviewing each claim individually, teams can catch more errors in less time. Not only does this decrease denials right off the bat, it also allows organizations to gather data about their common denial causes and proactively approach problem areas. Groups who proactively identify these frequently occurring errors and tackle them before claims go into the payer can drastically reduce claim denials in the long run.

Capture Lost Revenue

According to a recent Revenue Cycle Survey from Advisory Board, health systems and hospitals wrote off 90 percent more claim denials as uncollectable compared to six years ago. For a hospital with a median of 350 beds, this increase would add up to a $3.5 million loss over the past four years.

Automation can help prevent these costly denials and can also find revenue that might otherwise slip through the cracks. For example, a provider might immunize a patient but forget to add the CPT code for administration of an immunization when entering the charge into the EMR. An AI solution can automatically detect this error and add the necessary code to the encounter, thus capturing the potential missed revenue.  

Maximize Staff Efficiency

Claim scrubbing automation reduces the time it takes to review claims. By automatically processing claims that are error-free and don’t need review, automation solutions significantly reduce the burden on billing and coding staff. By acting as a knowledge repository for all payer requirements, these solutions can also reduce the training period for new staff. Staff can focus on only those encounters that require modifications, and revenue cycle leaders can rest assured that everyone on their team handles billing and coding issues exactly as instructed for every encounter.

Christi Garriott, Senior Vice President of Business Intelligence and Revenue at Peak Vista, a nonprofit federally qualified health center (FQHC) in Colorado, explains the impact of the RCxRules Revenue Cycle Engine automation on her staff’s efficiency: Now out of 3,000 tasks a day, we probably have to manually review about 100. Everything else automatically posts. Clean claims go out the first time without the need to review them.” 

Improve AR Days

The natural outcome of increased staff efficiency and decreased denials is an improvement in AR days. Getting paid quickly and efficiently helps teams hit financial targets and provides the peace of mind of reliable, predictable, and surprise-free revenue generation.

Medical Coding Software and Systems

Other Benefits of Medical Coding Software

Improve Staff Happiness

Morale is a key element of staff retention. Ensuring that employees have a manageable workload is one piece of the puzzle, but it’s also important for that workload to feel meaningful. If highly trained coding professionals are spending their days correcting the same routine errors over and over, they’re more likely to burn out and move on. Medical coding software can combat this issue and help medical groups retain key staff members.

Reduce Overwork and Cut Down on Overtime

Streamlining a revenue cycle team’s workflow through automation frees up significant staff time.  Reviewing and correcting charges before creating a claim eliminates the extra work and time required to delete, fix, and repost after the fact. Automating your processes can dramatically reduce cycle times, empowering your team to submit cleaner claims faster while reducing stress, overtime, and backlogs of work.

Elevate Day-to-Day Experience

The more you can automate dull, repetitive processes, the more time your team can spend on interesting, higher-level work that engages their expertise and critical thinking—making it easier to attract and retain the best, most in-demand employees. With technology automating high-volume, mundane work like manual charge review (and, in some cases, charge correction), billers and coders will be free to perform work that is consistent with their level of expertise. 

According to a recent survey, 40% of employees said that automation made them happier at work because they now have the ability to engage with more rewarding strategic tasks. 


How to Choose the Right Medical Coding Software

The team at Healthcare Financial Management Association (HFMA) worked with a large medical group to identify some of the criteria that make up an effective medical coding software solution. These criteria include:


Healthcare organizations should have the ability to make changes and customize the solution to meet their unique needs. The right medical coding software will enable users to create custom rules to address specific payer requirements and organizational needs. It’s important that these custom rules can be easily created by anyone in-house, without the need to involve IT or wait for assistance from support representatives.

Simplified, User-Friendly Interface 

The medical coding system should be easy for clinical team members to use.  The technology should be flexible enough to either distribute tasks into the RCM system’s workqueues or distribute tasks via the medical coding system’s tasking system. The interface should be intuitive and shouldn’t require extensive training before use. Look for user-friendly features like a section for custom notes so users can leave clear instructions for other team members. 

Full Workflow Integration

By automating the workflow, AI can reduce the burden on providers and clinical staff. Automation means less back and forth between coding staff and clinicians, which saves everyone time while ensuring claims go out correctly the first time.


Medical organizations need to be able to grow and adapt. The right medical coding solution can easily grow alongside an organization—and can enable them to handle a higher volume of claims without hiring additional staff.


Medical Coding Software Security

In addition to the above criteria, it’s always important to verify the security credentials of any medical coding software you’re considering. As all healthcare professionals are aware, it’s critical to ensure the medical coding software you work with protects your healthcare information. Partnering with a vendor that has defined security protocols is the best way to ensue this. One of the highest and most comprehensive security measures to look for in a vendor is HITRUST certification.


What Else Can Medical Coding Software Do for You?

Medical coding software can also help you to create a centralized knowledge bank with all the coding and billing review criteria your team needs to succeed. Revenue cycle teams know their business better than anyone. Their extensive training and institutional knowledge often lives entirely within their heads—it’s not usually documented for other team members to leverage.

There are millions of billing and coding criteria that need to be referenced to ensure clean claims, including industry-standard rules such as general ICD-10-CM and CPT guidelines, specialty-specific rules, and information that is unique to a practice and to payers. Add constantly changing billing and coding requirements to the mix and training and consistency become challenging. Staff turnover further complicates the process. Having one location to host all your organization’s billing and coding knowledge is an efficient way to keep data updated and ensure clean claims.


Does Your Medical Coding Software Set You Up for Future Success with Value-Based Care?

The impact of value-based care on the bottom line of medical groups across the country is continuing to grow. In 2022, approximately 28 million people (43% of Medicare beneficiaries) are enrolled in Medicare Advantage plans; by 2025, Medicare Advantage is projected to be the dominant way people receive their Medicare benefits.

Claim scrubbers are a proven technology that work to help medical groups ensure their fee-for-service claims meet various requirements. But do they measure up in a value-based care context? Traditional claim scrubbers often fall short with value-based care contracts that utilize HCC coding and Risk Adjustment Factor (RAF) scores. For a claim scrubber to support value-based care contracts, more robust functionality is needed.

It's a good idea to choose a medical coding solution that incorporates the CMS HCC coding methodology, including diagnosis code mapping, categories, and hierarchies. Medical coding software with these features can help improve RAF score accuracy by catching common HCC coding errors


Simplify Your Revenue Cycle Workflow with Medical Coding Software

Looking for medical coding software that works on the front end to review every charge for coding completeness and accuracy immediately after it leaves the EMR before a claim is created? To learn more about effective and efficient technology that integrates with systems you already use, contact us today.


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