Mending Payer Relations Smooths Revenue Cycle at Northwestern Med

Payers and providers have existed on different sides of the same fence, meeting in the middle once or twice a year to negotiate contracts or resolve major issues. However, technology, revenue cycle optimization, and other trends are ushering in a new era of payer relations for Northwestern Medicine.

“For the first time in my career in healthcare, payers and providers are actually talking to each other as opposed to shouting into the wind at each other,” Bradley Cox, director of patient accounting of physician services, said in recent RevCycleIntelligence interview.

Open communication between payers and providers is rare, according to survey data. About a third of providers responding to a recent Xtelligent Healthcare Media survey reported no communication with their private payers. That percentage jumped to 38 percent for public payers.

Historically, at Northwestern Medicine, this lack of communication led to revenue cycle management challenges.

“For a period of time, we would have denials that would just age, and we weren't really able to draw out why they would be stuck,” Cox explained. “We couldn't get a final resolution, or we couldn't get a final outcome. That's been a big area where we've been able to open channels [of communication].”

At first, Cox and his team thought they could foster more electronic communication with their payer partners to streamline claim denials management. They implemented real-time 276/277 claim status inquiries with the support of Availity and Northwestern Medicine’s EHR system to more quickly identify claims that needed attention, even before the traditional payer response.

And the technology worked. Even after doubling the number of employed physicians – and therefore, claim volume – Cox has yet to add more full-time equivalent staff to his team. In fact, while automation streamlined denial resolution for simple claims, staff were able to hone their skills to focus more on difficult denials that would have otherwise been written off.

That result, which initially prevented staff from having to pick up the phone and call payers about claims, was also the catalyst for better conversations between Northwestern Medicine’s patient accounting team and their payer partners.

“It has allowed us to have more intelligent conversations with the payers because we're not sifting through the garbage write-offs, those claims that, no matter what, are not payable; not that they aren’t medically necessary, it's just a payer policy or an inclusive type of procedure,” Cox said.

Cox’s team was now having more productive conversations with payer partners about difficult claims that were pointing to process challenges for the health system. Staff, for example, were now bringing to the attention of the payer claims that had already gone through follow-up processes and were still not getting reimbursed.

The team was not only asking how to get to a final solution on particular claims but also why payers were upholding certain denials; what was it about the information provided during follow-up that did not convince the payer to reimburse them for the service?

The information coming back from payers was more detailed, allowing the patient accounting and internal managed care teams to make improvements to denial prevention processes and workflows in general.

“It’s honestly not even just denial prevention because, for a lot of these, we’re going to have to provide follow-up information anyway,” Cox elaborated. “It helped to find gaps in what we were doing that was not quite meeting what the payers were requiring.”

These conversations supported efforts to get paid for difficult, higher reimbursement claims, while automation also streamlined the pursuit of lower-dollar, higher-volume claim denials. Together, the strategy helped Northwestern Medicine achieve 106 percent of its net patient revenue target last year, Cox stated.

“We've been able to focus our teams more strategically, allowing them to be more analytical as we become more focused in our work because automation gets rid of a lot of stuff we don't need to touch.”

Improved communication has also supported Northwestern Medicine’s response to COVID-19, which has leaned heavily on the use of telemedicine.

To prevent unnecessary exposure to the highly contagious and deadly coronavirus, public and private payers have temporarily relaxed telehealth reimbursement requirements, even granting payment parity for some virtual care services. Healthcare organizations quickly implemented or scaled-up their telemedicine offerings in response, but such rapid implementation did not give providers much to truly understand new billing policies.

“Payers publish the rules and if we are lucky, we all read the rules and interpret them in the same way. If we’re unlucky, we read them and interpret one way,” Cox explained. “It was helpful to be able to communicate directly with the payer champion and say, ‘This is our interpretation of what you're saying, can you please validate that our interpretation is correct? If we send you a claim this way, is that how you want to see it?’”

Moving forward, Cox anticipates using newfound communication channels to address healthcare’s other most pressing problems, like paper.

Healthcare is notorious for its lack of electronic communication. The most recent CAQH Index found that the healthcare industry could save over $13 billion annually by automating administrative functions related to verifying patient insurance coverage and cost-sharing, obtaining authorization for care, submitting claims and supplemental information, and sending and receiving payments.

The industry is making some progress with automation, CAQH did confirm. But some of those efforts are being thwarted by manual workarounds.

“What we struggle with is, even those payers that allow us to provide the information electronically, we still get information back in a paper format,” Cox said. Those papers added up to 23 million correspondences last fiscal year alone, as well as hours of administrative work for staff, Cox added.

“The good news is, these very honest conversations we've had with the payers show they are fully on board and understand that getting everything to an electronic means of communication is beneficial for all.”

Payers oftentimes did not realize just how many papers they were sending to providers, Cox gleaned from his more honest conversations with payers. Legacy systems would oftentimes still be sending paper correspondences to provider partners despite process and system evolutions.

The patient accounting lead continues to remain “cautiously optimistic” about newly improved relationships with Northwestern Medicine’s payer partners. But having the ability to be, in Cox’s words, “brutally honest” with each other has helped the two sides of the fence at least become friendlier neighbors for the benefit of the entire community.

“We have solved our own internal issues and that has allowed us to have clearer conversations with the payers about the things that we're struggling with,” Cox said. “While having those honest conversations, we’ve been able to help them advance as a payer, and they’ve been able to give us good feedback on some of the issues that we may potentially not be aware of.”