Summary:

This physician-hospital organization urgently needed a new claims code auditing system. PCG Software implemented a solution that was up and running within a month and has since led to a 56 percent savings increase on fee-for-service claims.

Background:

Naperville Health Care Associates is the Physician-Hospital Organization of Edward Hospital in Naperville, Ill., a suburb of Chicago. Some 200 primary care and specialist physicians are independently contracted with NHCA. The organization’s infrastructure and support is administered by a relatively small operation of 19 total employees, including three claims examiners. NHCA’s claims examiners are responsible for roughly 23,000 covered lives and nearly 8,000 patients per examiner – an exceptionally large workload.

Situation:

To make the daily workload more manageable, NHCA is moving toward a paperless system. Seventy percent of claims now come in electronically. The organization also instituted a claims code auditing system as part of its cost containment strategy and to save examiners from the process of manual claims review. In January 2006, the software vendor NHCA was using to manage the claims code review process was purchased by a larger competitor, which subsequently announced it would no longer support the old system. Because the new system would be prohibitively expensive, NHCA set out to find a new claims-code auditing vendor.

PCG Solution:

Representatives from PCG Software gave NHCA a trial review of Virtual Examiner®, a claims code auditing system that can run more than 30 million edits per claim. Using a 12-month sample of the organization’s claims from the previous year, PCG found dozens of specific examples where the existing system had failed. “We were floored,” says Donna Levigne, executive director of NHCA. “The very next day, we used PCG’s test results to recoup those dollars that we missed from the past year!” Since implementation in February 2006, NHCA has realized a 56 percent increase in claims savings on fee-for-service claims and more than a 500 percent increase in savings on capitated services, including facility and primary care claims. Virtual Examiner® has retained thousands of premium dollars for NHCA, and the organization realized a return on investment in just five months. Above and beyond the cost-savings, NHCA has also seen a dramatic increase in the organization’s capacity for growth without adding staff because of new workflow efficiencies.