Case Study: Achieving transformational revenue cycle results for a California-based Mental and Behavioral Health Provider
Understanding California, Payer, and Behavioral health-specific nuances and diligent focus on enrollment, timely filing, and payments reconciliations reduced denial rates and increased collections by 52%.
Customer Situation
Our client, a renowned billing company, was facing difficulties managing receivables for a California-based Mental health services provider group. The practice focused on Psychiatry and Neurology with ten (10) providers.
Lack of understanding of submitting claims for mental and behavioral health for different led to high DSO and lost revenue.
The practice had stopped submitting claims through the Los Angeles County web portal, as the lack of awareness of guidelines for submitting claims to the County led to a high denials rate.
Further, the practice did not have clear updates for the Medi-Cal managed care programs and their county systems and commercial payers.
These factors led to many pending claims and associated amounts across payer groups across different aging buckets. The practice had not received any payments from the County for over seven months.
At the time of MBW taking over the revenue cycle processes, the practice saw about 1500 patients with an average charge amount of $370 K and average payments of $171 K each month.
Challenges
At MBW, we take an analytical view to resolve revenue cycle issues. Our approach focuses on identifying specialty, payer, state, provider, and facility-specific issues. When it comes to the California state, billing and collections for Mental Health services can be challenging. With a higher number of physician medical groups and IPAs (Independent Practice Associations), the state's revenue cycle works very differently from the rest of the country. We identified the following issues right at the outset:
High A/R balance with commercial payers
Identification of the right payer was a challenge
Treatment Authorization Requests
A high percentage of denials and aged A/R
Los Angeles County Department of Mental Health (LACDMH)
Solution
To resolve the A/R situation and create a sustainable approach, we focused on the following areas.
Adopt a Payer-specific approach
Create process maps to understand the root causes
Resolving Credentialing issues
Robust processes for submitting claims to the live County, specifically, Los Angeles County Department of Mental Health (LACDMH)
Result
With increased awareness of critical state-specific issues, new business rules, and identification of the essential problems at the front office, we created a well-documented sustainable process for improved collections.
Improved clean claims ratio to over 99%. Made it to the Trizetto 99% club
Improved collections % from 26% to 60%
Improvement in aged A/R
Reduced the Days in AR is 25, consistently hitting the MGMA benchmark
Reduced denied claims to less than 2%
