Understanding Revenue Cycle Management (RCM)
Revenue Cycle Management (RCM) is the complete financial process healthcare provider organizations use to track and collect revenue generated from seeing patients. From registration and appointment scheduling to receiving full payment, RCM is a complex discipline that involves the utilization and maintenance of clinical data and administrative codes to reduce billing errors and optimize financial outcomes.
We can categorize RCM into three core buckets:
Front-end revenue
This touch point encompasses prior authorizations. If authorization is not obtained prior to a service being performed, a claim may be denied.
Mid-cycle revenue
This touch point encompasses coding at the point of care and medical necessity. If a provider incorrectly codes a condition or does not provide enough specificity, such as laterality, the claim will likely get denied. If a payer disagrees with a physician about which services are medically necessary to diagnose or treat a condition, the claim is also likely to be denied.
Back-end revenue
This touch point encompasses billing and denial resolution. When a payer denies a claim, the provider organization has two options. One, rework the claim and Return to Provider (RTP), which usually involves paying a coder to interrupt and consult with a physician, or two, write-off the claim, which can lead to lost revenue over time.
Aligning payers and providers and navigating a lack of specificity in clinical documentation
The often-contentious relationship between insurance companies and health systems is no secret. Each group has its own priorities and pressures that don’t always align.
Recently, payers have updated certain policies that can result in claim denials because of unacceptable primary diagnosis (UPD) codes that are listed as the primary diagnosis or the use of unspecified codes, frequently related to laterality.
Unacceptable primary diagnosis (UPD)
A UPD is not suitable or appropriate to be designated as the primary reason for a patient’s encounter. This designation is crucial because the primary diagnosis determines the medical necessity of services provided and directly affects claims and reimbursement.
For example, a UPD might look like, W21.02XA: Struck by football, initial encounter – External cause codes are not appropriate as primary diagnoses. The injury itself (from an external cause) should be the primary diagnosis.
Unspecified codes
Unspecified codes refer to diagnosis codes that lack important details, such as the specific site, severity, or side of the body affected. These codes often lead to claim denials because they don’t provide enough information for insurance companies to approve the claim.
A common example is unspecified laterality, where the code doesn’t indicate whether the right or left side is affected. For instance, M25.569: Pain in unspecified knee (M25.561: Pain in right knee would be more specific), or H33.20: Retinal detachment (H33.22: Left retinal detachment would be a better choice).
Leveraging curated value sets for enhanced coding specificity and greater ROI
Value sets, or groups of clinical terms and corresponding administrative codes, are powerful data tools that can help overcome UPD and specificity challenges. Provider organizations can leverage value sets to prevent the use of UPD codes and make sure of laterality when applicable, improving claim specificity and reducing the risk of denials.
Admin coding assistance value sets
IMO Health offers curated value sets designed to assist clinicians, billers, and coders in identifying claims at risk of denial or partial reimbursement at the moment of documentation.
Built and maintained with rich clinical terminology, our solution translates administrative coding and payer logic into clinician-friendly language, triggering alerts and prompting timely corrections. Organizations can also leverage these value sets with the charge master module to scan for UPD or unspecified codes before submitting claims.
The administrative coding assistance value set library has two categories:
Non-primary diagnostic codes – Value sets with all non-primary, manifestation, external cause, and UPD codes; each with a different type of problem with primary diagnosis.
Unspecified codes – Value sets with all unspecified codes, only unspecified laterality codes, and unspecified codes without unspecified laterality codes.
While individual write-offs might seem negligible, they can significantly impact financial performance if incurred at scale. Our administrative coding solution offsets this scale in a highly efficient way, providing the most intuitive, user-friendly way for clinicians to resolve coding issues within the native EHR workflow. Ultimately, this ensures that specific, up-to-date clinical data is integrated within the EHR, reducing the data burden, supporting care, and improving financial performance.
