HCS/325 Week 5: Administrative Processes and Health Care Management, sample paper

Fixing the Front End of the Revenue Cycle: An Administrative Process Analysis of Claim Denials in a Multispecialty Practice

[Student Name]

University of Phoenix

HCS/325: Health Care Management

Week 5 Assignment

[Instructor Name]

[Date]

The practice, staff and figures are a composite written for a model paper.

Administrative processes rarely appear in health care mission statements, yet they determine whether an organization can pay its staff and whether patients receive surprise bills. A composite multispecialty practice with 45 physicians and about 180,000 visits a year found that 11.8% of its claims were denied on first submission, and its billing office carried a backlog of more than 1,900 denied claims awaiting rework. The billing office was working harder every month to fix problems that were being created, every morning, at the front desk. This paper analyzes the administrative process behind the denials and describes a redesign.

Why Administrative Processes Matter

Billing and insurance-related work consumes a large share of health care resources in the United States. Tseng et al. (2018), using time-driven activity-based costing at an academic health system, found substantial administrative costs attached to billing and insurance-related activities for each physician encounter, ranging from about $20 for a primary care visit to more than $200 for an inpatient surgical procedure. Gottlieb et al. (2018) estimated that billing and payment complexity consumes a meaningful fraction of physician practice revenue and that claim denials and resubmissions are a significant part of that burden. For a practice, denials mean delayed cash, added staff work, write-offs when claims are never corrected and, for patients, confusing statements and unexpected balances.

Mapping the Process

The revenue cycle begins long before a claim is submitted. The practice's manager mapped the front-end process in five steps: appointment scheduling, insurance eligibility verification, prior authorization for services that require it, patient registration at check-in and charge capture after the visit. Each step had an owner: call center schedulers, a two-person eligibility team, clinical staff for authorizations, front desk representatives and providers for charge capture.

Measuring the Failures

A review of three months of denials, about 5,300 claims, sorted them by reason. Eligibility and coverage problems, such as inactive insurance or the wrong payer on file, accounted for 38%. Missing or invalid prior authorization accounted for 22%. Registration errors, such as a misspelled name, wrong date of birth or incorrect subscriber information, accounted for 17%. Coding and documentation issues accounted for 15%, and other reasons for 8%. Roughly 77% of denials, the first three categories, originated before the patient saw a provider.

Root Causes

The manager and a team of schedulers, front desk staff and billers traced each major category to its causes. Eligibility failures occurred because verification was done only for new patients and only at scheduling, often weeks before the visit; established patients' coverage changes, especially at the start of each year, were missed. Authorization failures occurred because clinical staff learned of authorization requirements only when a claim was denied; the practice had no list of which services required authorization from which payers. Registration errors occurred because front desk staff typed information from insurance cards under time pressure, and there was no check before the claim left the practice.

These causes were process problems, not individual failings. The staff involved were busy and conscientious; the process gave them no way to catch errors before they became denials.

The Redesign

The redesign targeted each cause. First, eligibility verification was automated for all scheduled patients through the practice management system's real-time eligibility check, run three days before each visit and again on the morning of the visit, with exceptions routed to the eligibility team. Second, the practice built an authorization matrix listing services requiring authorization by payer, integrated it into the scheduling screen so that schedulers were prompted to start authorization at booking, and assigned a dedicated authorization coordinator. Third, front desk staff began scanning insurance cards and identification at check-in, and a claim scrubber, software that checks claims against payer rules before submission, was configured to flag missing or inconsistent data. Fourth, a weekly denial huddle of front desk, scheduling and billing staff reviewed the top denial reasons and fixed their causes.

Managing the People Side of the Change

The redesign changed daily work for about thirty people, and the manager treated that as part of the project. Front desk staff initially saw card scanning as one more task in an already rushed check-in. The manager timed check-in before and after the change with the staff and found that scanning added about thirty seconds per patient but eliminated the most common callbacks from billing, which had interrupted the front desk several times a day. Sharing those numbers turned resistance into support. Schedulers worried that authorization prompts would lengthen calls; the authorization coordinator took over the follow-up work so schedulers only had to flag the need. Billers, whose jobs had centered on rework, were retrained to analyze denial trends and coach the front end, which gave them a more skilled role rather than threatening their positions. Explaining the purpose of each change, measuring its real effect on workload and adjusting roles helped the new process stick.

Results

After six months, the first-pass denial rate fell from 11.8% to 6.9%. Eligibility-related denials fell by more than half, and authorization-related denials fell by about 40%. The rework backlog dropped below 700 claims. Days in accounts receivable fell from 48 to 41. Patient complaints about unexpected bills declined, because coverage problems were identified before visits, when patients could update their information or reschedule.

Connecting to the Management Functions

The project drew on each management function covered in the course. Planning set a measurable goal, a denial rate below 7% within six months. Organizing assigned clear owners, including a new authorization coordinator. Leading involved front desk and scheduling staff in finding causes, which built their ownership of the solution. Controlling used monthly denial reports and the weekly huddle to monitor performance and correct course (Buchbinder et al., 2021).

Conclusion

Claim denials at this multispecialty practice were a symptom of a front-end administrative process that let errors pass unchecked from scheduling to billing. Mapping the process, measuring denials by cause and tracing them to root causes revealed that most originated before the patient saw a provider. Automated eligibility checks, an authorization matrix, card scanning, a claim scrubber and a weekly huddle reduced denials substantially and improved the patient experience. Administrative processes deserve the same disciplined management as clinical ones, because they determine whether a health care organization has the resources to care for anyone at all.

References

Buchbinder, S. B., Shanks, N. H., & Kite, B. J. (Eds.). (2021). Introduction to health care management (4th ed.). Jones & Bartlett Learning.

Gottlieb, J. D., Shapiro, A. H., & Dunn, A. (2018). The complexity of billing and paying for physician care. Health Affairs, 37(4), 619-626. https://doi.org/10.1377/hlthaff.2017.1325

Tseng, P., Kaplan, R. S., Richman, B. D., Shah, M. A., & Schulman, K. A. (2018). Administrative costs associated with physician billing and insurance-related activities at an academic health care system. JAMA, 319(7), 691-697. https://doi.org/10.1001/jama.2017.19148