California HealthFax: Hospital Group Launches Effort to Improve Claims Processing

Doug Desjardins

Blue Shield program could involve up to 185 hospitals

The Hospital Council of Northern and Central California has entered a collaborative agreement with Blue Shield of California designed to improve claims processing and reduce claim denials.

The effort will be modeled after a similar plan Blue Shield launched three years ago with the Hospital Association of Southern California (HASC) and other hospitals in the state. The plan called POET (Partnership in Operational Excellence and Transparency) encourages hospitals and insurers to share claims performance data and use that information to develop changes designed to improve the claims processing system.

Blue Shield spokesman Johnny Wong said the new program doesn’t have a name but will take an approach similar to POET to “iron out some operational kinks” in the claims processing system. “It will involve sharing data and developing a better understanding of clinical policies,” said Wong.

The Hospital Council, which represents 185 hospitals in northern and central California, expects most of its members to participate in the voluntary program, which officially launched on Feb. 28.

The POET program has worked well for HASC and other hospitals that have taken part in it since it was launched in 2008. Hospitals have reported that, on average, claim denials have decreased from 22.8% to 17.4% of total claims and that claim cycle times have dropped from an average of 31.9 days to 28.1 days. “HASC’s collaboration with Blue Shield is a true partnership that has enhanced both the payer and provider’s understanding of the claims adjudication process at the operating level,” said George Mack, vice president of payer/provider and member relations for HASC. “We continue to probe other elements of the process to gain more positive results and, hopefully, serve as a model of best practices for health plans and providers nationally.”

John Muir Health, a Bay Area health system that includes hospitals in Walnut Creek and Concord, has been participating in POET since 2010 and has reported a similar decline in denial rates. Chris Pass, vice president of revenue cycle for John Muir, said the program has shown that a majority of problems with claim denials are related to minor errors in claim reports.

“We’ve had great success with it and great success in getting more claim denials overturned,” said Pass, who co-chairs the workgroup heading the effort at the Hospital Council. “From working with Blue Shield, we found there were rarely any major issues when it came to claim denials but that there were a few small issues and mistakes that were repeated a thousand times.”

The back and forth with Blue Shield has also helped John Muir improve claims processing with other insurers. “We found that we were making some of the same errors with other payers, so the fact that our processing improved with insurers other than Blue Shield was a big plus,” said Pass. Hospitals that participate in the program will meet and share information on a quarterly basis as the program gets under way this year.

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