Summary:

A fast-growing independent practice association in California wanted to cut down on medical billing expenses, particularly with regards to claims that did not match the level of care provided to patients. Their new software successfully flags unclean claims as soon as they come through the system, saving the organization time and money.

Background:

Physicians Integrated Medical Group (PIMG) is an independent practice association serving San Francisco and San Mateo County in California. The multi-specialty association of more than 500 physicians was established in 1995. During a recent period of rapid business growth, the association’s staff of seven claims auditors struggled to manage the growing workload. Meanwhile, medical expenses were on the rise.

Situation:

“We were auditing all of our claims manually,” said Jim Rodriguez, chief executive officer of PIMG. “We knew that in order to see substantial improvement to our bottom line, we would need to automate our claims adjudication process.” PIMG’s claims auditors frequently encountered CPT codes and ICD-9 codes that did not match up correctly. In order to determine appropriate reimbursement for the claims, they had to verify that the codes were consistent with the level of care provided. Eventually, the volume of work became more than they could handle efficiently. “We needed something more foolproof that would take the human element and guesswork out of it,” added Rodriguez.

PCG Solution:

In June of 2007, PIMG installed PCG Software’s Virtual Examiner®, a claims auditing solution designed to monitor an organization’s internal claims process to identify unclean claims and reduce payment for improper or erroneous coding. Within three months, the association realized a return on investment. “We certainly experienced a decrease in medical expenses,” said Rodriguez. “The savings were fairly immediate, because we were uncovering errors that we hadn’t found using the manual claims auditing process.” But Virtual Examiner® doesn’t only help PIMG strengthen its claims adjudication process, it also enhances the communication between the independent practice association and its providers. Each time an inconsistency is detected in a claim, Virtual Examiner® prepares a remittance report, explaining why the claim is reduced or denied. In the process, providers often become aware of state and federal rules governing claims submissions for the first time. “Providers need to correct these types of claims errors before they encounter problems with regulators,” added Rodriguez. “Virtual Examiner® helps us to better educate our providers so the same errors don’t appear over and over again. For PIMG, the Virtual Examiner® solution delivered immediate results, identifying approximately 325 to 350 unclean claims per month and currently yields a monthly savings of $25,000 to $30,000.