On-Demand: Strategic Health Care Financial Management

As we said, feel free to put questions in, but we will be holding questions until the end. That said, into growth strategy. So we wanted to begin with the clear context of COVID, which hopefully we are now beginning to exit. And as you can see from the graph on the right, this is simply an example of the volume of visits in the private sector and in the FQHC sector. I think this underscores a few critical points about COVID and the impact on not-for-profit providers. Economic viability has been challenged, particularly as a result of the dramatic decline in volume. Although there are a few exceptions for that. Second, we've seen a great rise in behavioral health. So that is an example of how the mix of services needs to change or has been changed as a result of COVID and organizations are responding.

Similarly, the emphasis on social or what are often called behavioral determinants of health, and the focus on disparities in healthcare delivery and results across racial lines has also become much more significant where the community of providers have become much more aware of it. These changes as particularly as we're now coming out of COVID create both challenges and opportunities for organizations to consider how to best respond. As one example, I touched on behavioral health. This is one, but certainly not the only area of healthcare delivery that has been impacted by COVID. And we've seen a great deal of response from the not-for-profit community, because emergency rooms are not good places for treating behavioral health. And because in most states, it is relatively hard to find a provider of behavioral health services who accepts insurance. So a significant amount of the burden of dealing with this crisis has fallen to the not-for-profit community.

So again, without going into a huge number of details, you can all read the slide, you can see the point is that there is a dramatic increase in demand for behavioral health. Some of that experts suggest may slack off when we resume normal, but however that will look like in a post COVID world. But most experts agree that the underlying demand for behavioral health and the awareness of people in communities about the need for and availability of treatment is significant. Therefore, an area for those organizations that have expertise directly related to behavioral health, for those who are in a relatively proximate space in primary care needs to integrate behavioral health, et cetera. This is an area of growth and both in terms of care delivery and in terms of advocacy, and public education, these are all opportunities with substantial needs to be met in the community.

And as you can see, in total depression, we use this as one example to underscore the importance of behavioral health. When this data point the cost of major depression is $200 billion, what that often takes into account is not just drugs or missed days at work, but reduced productivity and social consequences, and less money going into the economy as people may be staying at home in depression. So there are multiple impacts of depression, and that's just one example of the range of behavioral health issues that are emerging. So a note worth everyone on the call to be thinking, if it is now in your wheelhouse or potentially in it, great demand for behavioral health. Building on behavioral health. We are probably all aware that during COVID, there has been a great leap in the use of telehealth to obtain care.

Historically, it was in roughly the 5% range compared to before this chart begins, you can see it's jumped significantly. It's fallen back down a bit. We, most experts agree that it will not go away because people have become acclimated to it. It enhances access and laws have changed at the federal and state level to facilitate the use of telehealth. It's also particularly important if you're not-for-profit serving at let's say a rural community where access is very difficult. Telehealth becomes a great compliment to in-person care. So again, an opportunity to use this tool as a way to expand service to your community from a mission perspective, and it is now being reimbursed more effectively. So there is an economic opportunity as well. I want to take a step back here and talk about strategic planning in a broader context. What does it take to either develop a new or update a strategic plan?

And regardless of who does it, we always recommend beginning with a fact base, an understanding of services provided, what providers are delivering those services in your organization and not just in your organization, but in your market. Because strategy planning, planning for growth is always forward looking. And it is always a process that it needs to be grounded in facts. Facts about what the market needs, what your organization is delivering, the service rate, who's delivering it, and then finally how well it's operating. Those are all factors to take into account in thinking about framing, shaping and enhancing your organization's strategy. Once you've established that basis or foundation of facts that will guide your decision making and of course there's financial analysis as well, then you can look at short and long term strategies and think about your population serve, about your geography, about how to conduct outreach for collaborative relationships.

We see many not-for-profits working with, let's say hospitals or academic medical centers increasingly to deliver an array of services to the communities they serve. But it's all, and the last point is an important one, that it's all to be grounded in finance. Now, of course not-for-profits aren't picking a profit by definition, but need to have enough funds from the services provided to cover the cost of delivery up to the extent to which there are endowments to supplement their funding. But we recommend that every three or at most five years, it's important to conduct a strategic planning exercise in order to take a step back from the challenges of day to day operations and to think about where the organization should go. That said, I'm going to quickly walk through a couple examples of recent strategy projects that we've done for not-for-profit providers.

This first one is regarding an actually an FQH feed, which is embarking on a joint venture with an academic medical center. The FQHC will expand dramatically its array of services from purely primary care and pediatrics to a full array of specialties. And then work with a local academic medical center partner to create more access to services that we might call ancillary or secondary, beyond the office visits and ASC ambulatory surgery center, endoscopy suite, and imaging centers. Those will be joint ventured with the hospital. And finally, the FQHC will be working with the academic medical center to think about its inpatient strategy since they have very strong pulse on the needs of the community. Another example I'd like to talk to you about is participation of not-for-profits in accountable care organizations.

Accountable care organizations, in many shapes and sizes. Some are for profits, some are run by hospitals, et cetera. We've seen not-for-profits be partners in those entities or subcontractors. And the poor idea, and this is sponsored by Medicare, but it can also be in the private sector. And that is to make sure that the quality of care delivered is as good or better than it has been at the same or lower cost. Basically making better use of resources in dealing particularly with chronic diseases. I'll touch, whoops, a little fuss there, excuse me. I will touch, the last case I want to share. And I know there's a great deal of data here, but working with another not-for-profit that has a broad, as you can see, portfolio 10 service lines that is taking a step back and trying to assess, what should they be in the future. What should their portfolio of services focus on and how to make sure they are economically vibrant.

These three different cases represent very different issues and opportunities for not-for-profits. And now I'm going to move on and touch very briefly because of our limited time on operations. Obviously there's clinical modeling, what care is delivered how, by whom and how are key metrics tracked to ensure optimal performance. I'm going to spend a little more time on staffing, I'll get back to that. Obviously real estate, some organizations may be facing opportunities to reduce costs.

Others may have real estate that they want to shift that's often an asset of larger not-for-profits. And considering when and how to monetize those assets to create larger endowments or shift to a foundation model is again a set of issues. And when I say foundation, I mean a grant making organization, which may be distinct from, but could be paired with a service delivery entity. I wanted to take a moment because it's so much a current concern for basically all employers, but particularly for not-for-profits, is staff retention. Economists have yet to come to a clear consensus on exactly why it is that the workforce, including at the lowest end of the workforce, it is not rebounding.

People seem to be staying out of work. So it is a challenge for all not-for-profits, frankly, for all companies in the country for profit or not, to aggressively recruit and provide not only attractive compensation, but attractive workplaces. Really paying attention to the needs of employees when we're in a moment in history when the number of people seeking employment is down. With that, and I know we've covered great deal of ground very quickly. I believe it is time for our first polling question.

So, I will jump in and say, at a certain level, each of the answers is correct. Not-for-profits are facing financial demands as a result of COVID and its impact on revenue streams and activity. There is increased attention to behavioral health. There's certainly difficulty hiring and retaining staff. Therefore, the right answer is the, all of the above, not-for-profits are challenged on all of these fronts. With that, it is my pleasure to turn the presentation over to my colleague, Steven Bisciello, our director of revenue cycle and operations management.

Steven Bisciello:Thank you, Bert. Good afternoon everybody. So what we're going to be talking about today is technically what is revenue cycle management. How does it affect, and the importance of it in all healthcare settings, but especially within non-for-profits. We're going to touch upon some examples of non-for-profit revenue cycle work that we've done. I'm going to give some basic understanding and information on what revenue cycle is. And then talk about the specific subsets or offices, as we like to quote them, that are parts and work intertwined together in order to have a revenue cycle function. We've been privileged to work with a number of different nonprofit client types, specifically on revenue cycle, whether it be assessment and understanding their issues, and identifying opportunities for improvement. Providing implementation services, in order to get them from point a to point b, to fill the gaps, implement best practices, help them choose technology, hire new employees, et cetera. We've worked with not-for-profit client types as you see here, hospitals, most recently FQHCs community based nonprofits. Most recently, specifically home health in this region, as well as behavioral health organizations.

So what is revenue cycle management? So I like to put it as, it is the second most importance to patient care. It is the administrative work that is done by a number of different offices and a number of different individuals within your organization in order to ensure that the organization is billing and collecting fees for the services provided. And all of the items that lead up to an actual billable invoice that are required for a clean billing and for a better outcome. Specifically, there are a number of different areas, a number of different processes that need to be done in order for revenue cycle to function. Inclusive of data collection and administrative processes, working hand in hand with your providers, your physicians, your physician extenders in order to gather, collect, and appropriately document and build for these services. Working within the confines of your contracts that you have with your participating insurance payers, whether it be state, governmental, individual or private, Medicaid, Medicare, managed care, commercial, et cetera.

And then obviously ensuring and talking about these offices that you see here, the marrying and the cohesion of these offices, which I'll break out and give you some more detail on shortly. But the three main offices within revenue cycle as we like to call them are the front office, middle and back. And this back office, which we'll talk about shortly as well, can come in the form of both an insource or an outsource model. And in some cases, portions of the front office can be done via an insource or an outsource model. So again, why is it important? We want to ensure that we are able to bill and collect income for the provision of the patient encounters and outcomes that our providers have performed and worked towards. And obviously bluntly said, this is the income that pays for the organization's overhead, its employees, its supplies. It allows the practice to continue and if done properly to take these funds and reinvest for further growth.

Some of the key terms you've heard or will hear whether you work in revenue cycle or not, which you'll hear as well as on this presentation today, I've laid out for you. So just to pick a couple of them. And these terms are taken from all the different offices, the front, middle, and back. So from the front office, identifying patient insurance eligibility verification. Understanding and ensuring that the patients that we are treating, one, know that whether we participate or not with their plan. Two, that we, the organization verify that the insurance that they present is in fact correct and active. And what those benefits and what the patient responsibility is for those types of insurance plan so we can properly and ensure we build timely, as well as advise the patient of what their patient responsibility may be.

Building on that, patient responsibility is typically the out of pocket cost that the patient's responsible for, that their insurance plan does not cover. Typically, in the form of a co-payment or depending on their deductible, if they're in a high deductible plan, this is all cash outlay. And there are different points of service of collections for this, whether it be pre-visit or at the check in time, as well as after an insurance, a patient's insurance has been billed. We've gotten collections from the insurance and the remaining balance is the patient's responsibility. Proper identification of such and follow through to obtain that payment from the patient.

A payer mix. So going to what I referenced earlier about the different types of insurances that our organizations participate with and they have contracts with. And understanding that payer mix for a number of reasons, one, to understand the high versus medium or low paying insurances. Being able to understand where our patient population comes from so we can plan accordingly. To understand and identify the right times for potential renegotiations with our payers. Also understanding the specific timelines that each of these payers provide to us in our contracts, the timelines of what we would call their timely filing statutes. How long do we have to bill after the encounter has been completed and what the timing is if and when we bill and we get what we would call a rejection or a denial. What is the prop timeline we have to fight that denial for an overturn of payment.

So the offices, as I referenced earlier, the front, middle and back. I wanted to break these out further for you. So those of you in rev cycle will obviously understand those of you who will not to have you a better understanding of what is incorporated within these offices, specifically what processes. So on the front office, there are different terms for this, patient access, patient intake, registration, and preregistration. This is properly identifying our patient population, ensuring that we have templated schedules, depending on what types of specialties we are providing. The types of providers that we have within our organization and ensuring that our scheduling, our templates are built so that we can service both new and established patients in a timely and an effective manner. Scheduling our patients. Ensuring that we are booking and obtaining the correct information from them, everything from their demographics, their insurance information, identifying patient responsibilities upfront.

And ensuring that we perform follow up with them pre-visit to remind them of their appointment. A registration. This is typically when the patient is presenting at the front office or other terms what we would call check in. Taking the time to validate all of the information we have taken pre-visit. Their identification, their insurance card, validating the insurance is still active and effective. And again, giving us an opportunity of a point of service collection to try and collect any copays or any previous patient balances that they've left behind from previous visits if they're an established patient.

Eligibility and authorization. So eligibility we touched upon earlier, is that identification of the patient's insurance and ensuring that it is active. The selective EMRs that our organizations utilize have typical automated tools that they can do a real time verification while the patient is on the phone making that appointment. As well as doing a real time or a batch verification of a number of patients that are coming in 24 to 48 hours prior to the visit. What this does again, it gives us a heads up to identify, are we going to have any types of billing delays or do we need to reach out to our patients either pre-visit or when they present to ensure we have their most recent up to date insurance information and, or have to advise them that their insurance is no longer active.

And if they would in turn then become for this visit or for the next number of visits, a self-pay patient paying out of their pocket. The middle office. So now the patient is checked in. The patient has been seen by the medical assistant. The patient is now being seen by the provider. So the coding and documentation, which our colleague Nancy Clark will talk to you about shortly thereafter, but the documentation of the visit, the charge capture and entry of that visit. It is basically charting, so to speak, in our EMR notifying that the patient visit has in fact occurred. We have taken down the reason for the visit. We have documented the patient's medical history and present illness, their vitals, their medication. We've diagnosed them and selected a correct diagnosis or multiple diagnoses codes, as well as documenting the types of procedures or visit types that have occurred.

This is all going to be documented in the patient chart and then trickle down once it's been coded into an actual billing invoiced. So now post visit, this has occurred. We are now getting ready to bill the respective insurance carrier or the patient, if they're a self-pay patient, for the encounter, for the visit that occurred utilizing those diagnosis and procedure codes that were selected during the charge capture in entry process. Ensuring that what our providers are doing is in a timely and accurate fashion and are being audited as well on a routine basis. Once we bill, depending on our EMR, depending on whether we're an insourced or an outsourced model, the connection from our office to the payers is typically done from what we call a clearing house, where we will send batches of claims electronically to our respective payers. Within the clearing house, we have the ability to ensure that the invoices have in fact gone out successfully.

Whether or not they've been held up or rejected by our internal clearing house and there are some items on the invoice that need to be fixed or amended. And, or they've made it to the payer and the payer is noting certain rejections of items that are missing that need to be fixed for the payer to adjudicate or review the claim for a possible payment and or denial. We also will do this for our manual claims. There are still small number of insurances that request manual invoices be sent to them. So same process is done here in terms of the audit of the claim or the scrubbing of the claim to ensure that all of the fields required, all of the documentation required is present and correct before a bill goes out. Depending on the payer. So our different payers have different adjudication timelines. The quickest can be anywhere from seven to 12 days, then moving on to, depending on your contract and payer, 30 days, 45 days, in some cases, 60 days.

So once that adjudication is completed, the payer will send back a notification. Typically, on an explanation of benefits, an EOB, which can be sent via electronically via what was called an 835 file. Or if you're not set up for electronic payments via a hard copy EOB or a notification, a hard copy EOB is available on a payer portal to be downloaded. And that EOB is explaining and communicating back to the organization on an encounter per encounter basis, what has been paid, what that payment amount is, what patient responsibility is left over after that payment. And in fact, if the payment has been, excuse me, if the encounter has such been denied, they will provide what they call either a RARC or a CAR Code or like we'd like to call a denial reason. The reason why they have chosen not to pay that claim. And those denial reasons could be anything from improper diagnosis coding, billing wrong place to service, or improper use of a modifier.

What we would call a technical denial. Or they could deny it for something known as medical necessity. That the encounter, the procedure, what was done by the provider to the patient, they do not deem to be medically necessary based on the patient's medical illness or in the setting in which the care was provided. So extremely important here on the back office is to be able to identify once these payments and or denials come in. So two things can happen. One, we are reviewing those payments that have come in and ensuring that the funds that have been transferred to our respective bank account or the hard copy check, if applicable, matches to what is on the explanation of benefits. Two, we are reviewing that those that have been paid that the payment is correct in terms of what our reimbursement rates are with our insurance carriers that we are participating with.

Have they been paid correctly, underpaid or overpaid, so we can identify the correct follow up step that's next. And that we can post those payments to the individual patient account within the EMR so that we know that our patient charts from a financial portion are up to date and correct. Showing encounters that have been completed, encounters that have been paid, encounters that are may be in denial that require follow up. As well as patient payments, so we ensure that we are properly billing patients on a timely manner, as well as identifying patient payments to bring their accounts either to zero or to an updated amount.

In order to make sure we are getting the payments that is deserved for the care, as well as to identify any errors that are being made by the individuals, be it clinical or administrative in any of the offices we've described, front or middle or in the case back for billing, denial management becomes extremely important. Because it helps us to one, identify the claims that we need now to take an action on to resubmit in order to get payment, to fix the error, or to fight that denial and say, we did not make an error we in fact, did this correctly.

Be it medical necessity, which provide in clinical documentation, et cetera. But doing so in the correct timeframe so that the claim stays open and can be reprocessed for payment. So denial management is extremely important from an identification standpoint. Being able to assign those denials to your proper staff, either insourced or outsourced for follow up, as well as creating what's now known as an accounts receivable. An accounts receivable is a collection of patient encounters that we've serviced over a specific timeframe that remain open and unpaid either because we have not gotten a response from the payer or the payer has responded with a denial, we need now to work that, to get that pay. So that back office management being able to keep on top of what is open and unpaid for proper follow up.

So I'm going to touch upon this quickly for time purposes. So the insource and outsource model. The insource model, where the staff that are employees of the organization are responsible for the billing and collection. I'll just pick on the back office for a second. You are employing the staff that is doing your billing, your denial management, your collection, your payment posting. And why do people do that? Typically, they want to have control. They understand that everything is being done behind their firewall for HIPAA protection. And they've had the ability to hire and bring in the correct credentialed staff members for their specialty. Be it certified coders, as well as certified billers and collectors who have experienced knowing the specific place to service, CPT and diagnosis codes utilized, as well as correct modifier usage.

Why do people use an outsource model? They use an outsource model for some reasons, in order to control costs. To take advantage if they're not able to find the correct workers or depending on their geographic region are finding it difficult to bring in seasoned billers, collectors, certified coders. And they also want to take advantage of seasoned outsourced vendors, as well as being able to leverage their vendors technology, from a billing collection, as well as from a key performance indicator or a management reporting standpoint.

So one example I will quickly touch upon of recent work we've done in revenue cycle for an FQHC. And why is it extremely important revenue cycle? As Bert pointed out before, what has COVID done? COVID has put an extra emphasis on revenue cycle as we saw patient volume, go down, back up, go down, back up. So it was extremely key for us to make sure that we were billing and collecting for the services that we provided. And we are seeing, even as we are coming out of COVID, our FQHC as well as our home care community based nonprofit clients, again, wanting to take another look at their revenue cycle as we're coming out to make sure that they have the correct processes, staff members and, or the correct model, insource or outsource model in place. And from an FQHC standpoint, there are other wrinkles that are thrown into the revenue cycle here. Specifically that depending on your status, you are open to receive what we call the FQHC perspective payment, an alternate payment model.

And that involves sending claims not only to the seat, but sending claims to the individual payers you are contracted with thus having you make sure you are billing, charge capturing and following up with all of these entities on a correct and timely basis. So just showing those wrinkles here, in ensuring we are providing eligibility to our MCO and for the supplemental payment. We are billing timely and accurate and making sure that the invoices are identical in going out for these types of payments. Ensuring collection, payment posting of such, denial identification, as well as proper accounts receivable follow up for all. What we found in our most recent work here is that our clients had us go in and perform what we call a revenue cycle assessment, as they had had a downturn in collections, but it was not due predominantly to a downturn in volume.

And what we found, that there were breakdowns in each of these different areas, specifically in the front office on their eligibility and proper registration. Significant delays we found in the charge, capture and entry. So post visit providers were documenting and coding anywhere from 48 hours after the visit, which is typical best practice, two weeks and months down the line and in some cases, not at all. So missing on billable opportunities, as well as on timely and effective denial management. They were not categorizing the denials correctly, thus assigning them to the right staff for follow up. And the staff was not a well-versed staff on what the proper denial responses should be. So we were able to find some significant income improvement opportunities, both one time and annual ongoing.

So again, just for timeframe, I'm going to touch upon very quickly giving you some further subsets of the front office, but mostly what the best practices are in these. So we touched upon eligibility verification before. So the methodologies on using real time applications through our EMR, as well as paid for, or in some cases free websites, and also state portals to properly identify our patient's eligibility. Pre-visit confirmation, either automated depending on your patient population, through text, email, automated phone calls, and obviously doing reruns of these in batch formats pre-visit, 24 to 48 hours pre-visit. As well as making efforts to identify as well as collect either pre or at the point of service. On the middle office, we touched upon this in our case example, but on timely and accurate identification, diagnoses, charting, coding, and documentation charge capture and entry, that enables the billing, whether it's your outsourced billing vendor or back office, to bill timely and accurately in order to expedite payment, to bring in funds.

And on the back office, understanding the denials, being able to code them accurately within our system via the, excuse me, the denial codes that our payers utilize. And more so tying them to, in the event of we have bad debt write offs, that we can understand where our bad debt write-offs are coming from so we could proactively make changes or fixes from where these are originating from, whether they're in our middle or front office. Being able to follow up with them on a timely manner. Also being able to calculate our reserves properly for each fiscal year based on previous bad debt or write-offs. As well as be able to track our insource or our outsource back office productivity and how well our performance is.

Finally, the last part before I turn it over to my colleague Nancy Clark, is ensuring, whether it is from an insource or an outsource model, that we are properly measuring and managing our performance. And we do that through what we would call management reports or key performance indicators, KPI. They are measuring our success as well as our failure rates. Examples that we have is our charges versus collections, our net collection percent. What we should have collected versus what we did. How many of our claims that are either being rejected or denial, our denial rate, our clean claims rate and how quickly we are identifying and attacking them. Our denial overturn rate. Of all the denials that come in, what percentage are we turning them into cash and why. Our lag time. From the time of encounter, how long is it taking for our providers to code and document, as well as our insource or outsource model being able to bill and collect. With that, we come to our next polling question.

Thank you very much. So roughly 90%, well done. The answer is to identify a sign and follow up on open unpaid accounts. This is to ensure that we are tracking that all of the services we have provided have in fact been billed and whether or not we've been paid or denied. Making sure that we are identifying these, assigning these to our staff or our outsource model and ensuring tracking both the quality and the quantity of accounts that are being worked. So with that being said, we'll turn over to my colleague Nancy Clark.

Nancy Clark:Thank you so much Steven. That was absolutely phenomenal insight on revenue cycle management. Let's continue with a deeper look into an area in which revenue impacts the bottom line profoundly, medical coding. We'll take a look at what coding is and then identify how different code sets impact different payment types. Then we'll discuss the current audit environment and how to mitigate your internal risk of revenue loss. And finally, we'll talk about current changes that may very well be impacting your revenue. Coding falls right in the middle of the revenue cycle, prior to billing and subsequent to front end work. It includes both the charge capture process, as well as coding and documentation, which if done accurately will identify all billable services rendered to allow for maximum appropriate reimbursement and ensure coding compliance. And coding compliance refers to the process of ensuring that the assignment of diagnosis, procedure and other data codes comply with all coding rules, laws, and guidelines. And that all codes selected are supported by medical record documentation.

So then, what exactly is medical coding? It's the process of translating clinical concepts from the medical record into universal alpha-numeric codes that identify the service performed, patient diagnosis and any supplies or injected medications. Originally ICD codes were created for accurate tracking of diseases within a population. And we still do that now; that's where our current COVID data comes from. In addition, though, we now use codes to communicate to payers what was done during the encounter and why it was done. The key to coding is medical record documentation for which the provider of service is responsible to ensure its accuracy. It both serves as evidence of care provided as well as a legal document that supports the level and intensity of care billed. This documentation is also required to support the medical codes billed. This slide illustrates the basic type of medical codes and how each set impacts revenue.

First, CPT, or current procedural terminology impacts provider reimbursement. The code set includes quality reporting codes, such as MIPs or Merit-Based Incentive Payment System, and consists of five numeric or alpha numeric characters. Then we have ICD-10, the International Classification of Diseases, Clinical Modifications 10th revision, which addresses the diagnosis of the patient. What was wrong, or why was the reason for this encounter today. While it doesn't impact physician reimbursement in a fee-for-service model, it will absolutely impact reimbursement in accountable care organizations, inpatient hospitalizations through diagnosis related groups or DRGs, and many of the value-based care and alternate payment models.

ICD-10-PCS, the procedural coding system is reported by facilities and includes payment for overhead, such as nursing staff and operating room cost. Either ICD-10-PCS or CM contribute to the DRG code assignment. The Healthcare Common Procedure Coding System whose acronym is pronounced, “hicks picks” includes CPT codes and it's actually the overarching umbrella for these codes. They represent a large variety of services and supplies such as injected drugs or durable medical equipment. And sometimes they're used by a carrier such as Medicare or Medicaid to represent specific services for them only. And last, modifiers alter the meaning of these CPT or HCPCS codes by breaking them down to professional and technical components or even identifying that the services are distinct from others performed within the so-called global period. And these two digit characters are very important because incorrect appendage can result in the practice being an audit target, or missing out on revenue. Let's move to address the concern for audit risk. Providers’ can claims are generally processed in good faith.

That is, there's usually no requirement to submit documentation along with the claim. Reimbursement might be subject to front-end edits such as contractual allowances, or codes that are considered inclusive of each other. But we frequently see that they're not denied initially; it is the documentation that may not support the codes billed. And insurance carriers have turned to periodic random medical record audits to ensure that their payments correspond to the services rendered, not just the billed codes.

A single review might not result in future actions, but once a payer determines a provider to have documentation that doesn't substantiate the code submitted on the claim, his or her future claims from both this payer and other payers may be tracked. And that carrier then has the right to either retract the payment or withhold the amount from future claim payments. Now, if future audits also identify problematic documentation and patterns of non-compliance are detected, then the provider faces possible extrapolation of similar claims going back many years. And here is where your organization may stand to lose a hefty portion of its previous revenue. There may also be a prepayment review, where future claims have to be submitted with documentation before a payment is even considered. And that takes a toll on your staff resources and holds up your payment.

As I mentioned earlier, the provider of service is responsible for the medical record. For Medicare or Medicaid, or commercial insurance, the practitioner signs an agreement attesting that his claims are accurate and only those that are accurate will be submitted. Every practitioner is responsible for his or her claims submitted under their National Provider Identifier or NPI. CMS says, when billing for the patient's visit, select codes that best represent the services furnished. While a billing specialist may review the provider's documented services and they can help select codes, the provider must ensure that the submitted claim accurately reflects the services provided and supports the level of service to a payer. They should not use the volume of documentation to determine which specific level of service to bill. Let's take a look at this recent data from government payer audits. Improper payments measure payments made that did not meet statutory, regulatory or administrative requirements upon retroactive review. This chart in millions of dollars represent both overpayments and underpayments made to Medicare and Medicaid programs in 2021.

These improper payments include overpayments in which the documentation received identifies discrepancies such as incorrect coding or the beneficiary being ineligible for either the service or program. There's also under payments in which the documentation supports a higher reimbursement than was previously made. As we review the chart, we can see that Medicare fee-for-service, which represents payments to providers or suppliers, had $24 billion in overpayments, representing more than 6% of the total payments and nearly 450 million in under payments. Medicaid identify a 21% error rate of over 98 million and the children's health insurance program had a 31% error rate. From a provider and organization perspective, when we speak of overpayments, we address compliance risks and underpayments represent lost revenue to the organization.

Nancy Clark:So, everything here is correct. They were all improper payments, but the largest portion was insufficient documentation and it was on the slide we were just interrupted on. So maybe it wasn't a fair question. And insufficient documentation includes any documentation that did not support the codes billed, hence the importance of the documentation.

And that is absolutely correct. It is the performing provider. So no matter who codes it, who advises, it is the provider. And I know that we've actually run short on time. What I will say to everyone is if you have any questions on our deck, feel free to reach out to us individually. But I am going to turn this back over to Bella, and thank you all so much for your participation today.