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The Importance Of Clinical Documentation Improvement (CDI)

The Importance Of Clinical Documentation Improvement (CDI)

Clinical Documentation Improvement (CDI) is a vital health care initiative that all medical facilities should be fully implementing. Learn why Clinical Documentation Improvement is so important to your organization; how not fully implementing CDI can harm your health care facility; and how Nearterm’s medical support staff can assist you with your clinical documentation needs, so you can focus on what’s most important, your patients.

The Importance Of Clinical Documentation Improvement

According to The American Health Information Management Association (AHIMA), CDI is so important in the health care world because it has a direct impact on patient care.

CDI essentially helps “ensure that the events of the patient encounter are captured accurately and the electronic health record properly reflects the services that were provided.” So, it basically ensures that all members of a patient’s care team have the information necessary to properly treat the patient. Clinical Documentation Improvement also ensures that other physicians and/or nurses who treat the patient later down the road have the information they need to provide proper medical care as well.

How Not Leveraging CDI Can Harm Your Health Care Facility

CDI is not only important, but not fully implementing it can actually harm your facility in several ways.

Becker’s Hospital Review indicates that not using CDI can lead to many problems for your facility, including:

  • Improperly documented coding – This is a chain effect because it also leads to other issues, like claim denials and incomplete reimbursement for claims. And, incomplete reimbursement for claims can financially hurt your medical facility.
  • Miscommunication for other providers – Not having a CDI plan in place can harm patients in the long run because other health care providers tending to them won’t get the proper information they need to administer necessary treatment.
  • Fraud accusal – Submitting incorrect documentation of your patients can lead to your facility being accused of medical fraud.
  • Poor facility reputation – If patients don’t get the care they need and deserve, they may complain or post negative reviews of your facility. Additionally, lack of CDI can lead to improper reporting. And, nowadays, this kind of information is available online for the world to see.

And, most importantly, according to Becker’s, lack of CDI can ultimately negatively impact your quality of care.

Need CDI Support But Don’t Have The Right Resources?

Nearterm can help!

We are a medical staffing service and have a large talented pool of medical support staff, including renowned financial consultants, strategists, and healthcare revenue cycle management consultants that assist health care organizations, like yours, every day.

Our CDI staffing resources can help your facility:

  • Enhance medical data collection
  • Resolve documentation and coding conflicts
  • Maximize claim reimbursement
  • Increase revenues
  • Improve quality of care

Our services are also customizable, and we offer open-ended staff contracts. This means you can use our help for as long as you need it. Our support staff can work from 10 hours a week up to as many hours as you need them.

Find The Right Person Today!

If you are interested in learning more about our CDI support staff and how they can help your organization, give us a call at (281) 646-1330 or take our Interactive Survey.

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PCMH vs. ACO in Healthcare – Which is Best?


Many healthcare providers are facing the rising costs of providing medical care. These include drug, material, education, and other expenses.  At the same time, insurance costs for patients are also rapidly increasing.

Deciding how to provide medical care in the most efficient and cost-effective ways is becoming an increasingly complex healthcare management issue. In tandem with these problems is the impact of new technology on healthcare in a variety of ways. Interconnection of providers and standardization of communication methods is allowing for an increase in both transferability and accessibility of medical information and records.

The need for new models of healthcare has prompted a surge in alternative care models that are trending towards value-based approaches. These models can include coordination between healthcare providers to provide more comprehensive care. Two such models are ACOs and PCMHs discussed below.

What Is ACO in Healthcare?

What does ACO stand for in Healthcare? The Centers for Medicare & Medicaid Services (CMS) define Accountable Care Organizations (ACO) as health care providers, including hospitals and doctors, who agree to coordinate care to Medicare patients.

An organization that includes a wide range of providers can help in many ways such as cutting unnecessary costs and providing the right care at the right time for individual patients; balancing affordability with accountability. CMS encourages coordination and compliance with value-based care through the Medicare Shared Savings Program which offers “incentives for health care providers to work together to treat an individual patient across care settings, including doctor’s offices, hospital, and long-term care facilities.”

What Is the Goal of an Accountable Care Organization?

what does ACO stand for in healthcare?

An ACO, which can include many different providers, has the goals of providing the best quality service to patients at the best possible time. They also collaborate to avoid duplication of services, prevent medical errors, and reduce costs. Besides focusing on the value of care provided to a single patient, ACOs also focus on population health.

Some major organizations with many employees are forming or joining ACOs with healthcare providers to manage preventative care and help reduce healthcare costs to employees. Health information management consulting companies cite HIM via electronic data interchange (EDI) as an essential goal that can impact the quality of care between providers.

As part of the focus on cutting costs and offering efficient care, how providers are reimbursed is changing as well. ACOs also have a joint goal of qualifying for and meeting the standards for value-based care such as the Medicare Shared Savings Program.

Managing costs is a critical component of Revenue Cycle Management for any healthcare provider. Healthcare RCM firms like Nearterm can help you improve processes concerning these financial concerns.

What is a PCMH Provider in Healthcare?

What is a PCMH provider? A Patient-Centered Medical Home (PCMH) is a place and a way of organizing care that can involve coordinating between healthcare providers such as nurses, pharmacists, nutritionists, and social workers. These providers focus more on partnerships with individual patients and their families to provide high-quality care at affordable rates.

The focus on medical homes ranges from assisted living facilities, home health care, nursing homes and larger communities of various models. Since the concern is on patient-centered care, it can be thought of as a bottom-up approach to healthcare. For more information, reach out to the healthcare management consultants at Nearterm today.

What is the Goal of a Patient-Centered Medical Home?

Focusing on value-based patient care involves considering patient needs from the home up. This can include coordinating care between providers for basic and also special home healthcare needs. A key component of PCMH care is the relationship between the patient and accountable health care providers.

Accountable providers can be a primary physician or team of professionals with the joint goal of efficiently managing the patient’s healthcare and even social needs. PCMHs can provide accessible services quicker, offer enhanced personal care around the clock, and alternative methods of communication with providers. This also includes carefully managing evolving patient care such as transitioning from assisted living to more advanced care needs. Coordinating care also carries the potential of reducing costs and passing additional value on to the patients.


what is ACO in healthcare?

Patient-Centered Medical Homes and Accountable Care Organizations are not the same although they both focus on patient care by coordinating services between healthcare providers and can include long-term care. How they approach patient care is fundamentally different.

PCMHs are more centered on the individual patient with consideration to their living accommodations and end of life treatment. A PCMH can join or be a part of a larger Accountable Care Organization.

In contrast, ACOs coordinate services between providers to offer better services at reduced rates that include considering government reimbursement requirements. Their focus is not just on individual patient care but also population health management for larger areas.

To determine which option is the best choice for any provider involves considering many complex elements. Nearterm’s Healthcare Management Consultants will help you decide what factors to review and provide more information. Contact Nearterm today to learn more about how we can help improve your patient care through enhanced management coordination.


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Top Revenue Cycle Key Performance Indicators

physician revenue cycle metrics

Healthcare organizations must manage their revenue cycle with an approach that balances patient care and quality. Due to increasing medical and drug costs paired with higher insurance premiums and deductibles, efficient revenue cycle management (RCM) is more important than ever.

There are many indicators one could use to gauge the effectiveness of various elements of the revenue cycle for their organization. However, these vary based on the type of organization doing the measuring. A pharmacy will value certain indicators more than a hospital might, and vice versa. Therefore, revenue cycle Key Performance Indicators (KPIs) will differ for each organization.

The Healthcare Financial Management Association (HFMA) approached this problem and determined 29 KPIs as a standard for healthcare revenue cycle excellence known as the MAP Keys. Regardless, some of these KPIs will not apply to certain organizations, and some will be valued more than others.

Revenue cycle performance benchmarks found in the MAP Keys can help determine where your company currently performs as well, as track improvements over time to desired levels.

To determine your organization’s best benchmarks and KPIs, you can reach out to one of our experts at Nearterm today.

Healthcare companies come in all sizes, from national pharmacy chains and large hospitals to small-town clinics and stand-alone providers. Some smaller organizations may need to hire additional staff to work on medical billing and revenue cycle management. These costs can add up, especially when considering training and education, turnover rates, and work limitations requiring multiple employees for each role.

Due to these factors, common financial tasks such as collections and medical accounts receivable services are often outsourced to third parties. You can also improve your RCM with the help of healthcare RCM companies. Modern technology allows for more efficient and seamless integration of third-party services (like healthcare clearinghouse services) than ever before.

5 Important Revenue Cycle KPIs

Here are some of the top KPIs to consider tracking now to measure important aspects of the revenue cycle:

  • Point-of-Sale Service (POS) Cash Collections
  • Clean Claim Rate
  • Days in Total Discharged Not Billed
  • Bad Debt
  • Days in Accounts Receivable

Point-of-Service (POS) Cash Collections

This KPI tracks POS collection and relates to payment received before services rendered and up to seven days after. This will help determine the effectiveness of your POS systems and those operating them.

This revenue cycle performance metric can be found using information from your POS system and your accounts receivable records. It can be calculated by taking the POS payments and dividing it by the total self-pay cash collected.

Tracking this and related revenue cycle metrics can identify problems in POS operations that are impacting RCM. Decreased efficiency in up-front payments may lead to increased collections and thus a loss of revenue. However, organizations with typically higher payments that require long-term payment options (greater than seven days average) may not benefit from this metric as much.

Clean Claim Rate

The clean claim rate corresponds to the claim denial rate in that it helps reveal problems and inefficiency in claims submitting and processing. Rejected claims require time to correct and may incur extra charges. The longer it takes to submit claims and resolve them, the longer it takes to determine eligibility and receive payments.

While there are many KPIs that relate to claims processing efficiency, the clean claim rate will show the average daily number of claims that pass without needing editing compared to the total number of claims accepted. This metric reveals the effectiveness of your claims processing and medical billing team. You can usually obtain this information from your claims management system or RCM Company.

Days in Total Discharged Not Final Billed (DNFB)

This healthcare key performance indicator helps determine revenue cycle performance by focusing on the claims-generation process. Variations of this metric will show the impact on cash flow due to claims inputting, and it can include issues related to delayed claims. A higher rate may reveal that claims are not be submitted promptly and warrants further investigating.

For example, if staffing issues are keeping claims from being submitted in a reasonable time-frame, it impacts your revenue cycle. You can calculate this metric by dividing the gross dollars in DNFB by the average daily gross patient service revenue, which is determined by the income statement and unbilled accounts receivable.

Bad Debt

Another useful KPI to consider is Bad Debt, which shows the effectiveness of collection efforts. It can also be used to determine the effectiveness of pre-service financial counseling or similar programs. It is important to note that this is not debt that has already been written off as lost.

Higher bad debt indicates inefficiency in previous areas of the revenue cycle including POS collections and financial counseling. It can be calculated by dividing bad debt from the income statement by gross patient service revenue over a set period.

Days in Accounts Receivable (A/R)

Finally, Days in A/R reveals how long it takes to get paid for services on average. This is useful in determining the effectiveness in obtaining payment for services, and how well the account receivables are being managed.

To find this KPI divide the total A/R by the average daily net patient service revenue using information from the balance sheet and income statement. To get the average daily net patient service revenue, you can also divide total annual sales by 365.

revenue cycle key performance indicators


There are many different performance indicators that healthcare businesses can use to benchmark and track various aspects of their revenue cycle. The key performance indicators to focus on will vary by organization type.

The Healthcare Financial Management Association developed 29 KPIs for healthcare companies and an additional six physician revenue cycle metrics. Of those, there are several that stand out as closely related to revenue cycle management. These are POS Cash Collections, Clean Claim Rates, Days in Total Discharged Not billed, Bad Debt, and Days in Accounts Receivable.

Calculating and tracking these revenue cycle KPIs will help identify problems or areas of improvement for your revenue cycle. However, it is not always practical or cost-efficient for a healthcare company to manage their revenue cycle in-house. Besides the various RCM metrics that could be tracked and identifying which are most important, there is also the need for quick and efficient medical billing, claims work, and financial management. On top of this is the need for constant training and education for staff working in these areas. Because of these factors, many healthcare organizations choose to outsource these important functions to qualified experts or healthcare management consulting firms like ours.

To find out more about how you can improve revenue cycle management efficiency and save on costs, contact our experts at Nearterm today.


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What is a Healthcare Clearinghouse & Why Use One?

Modern medicine in the United States includes a complex relationship between healthcare providers and insurance payers. Technology plays a critical role in electronic data interchange (EDI) between payers and providers, but the wide variety of software systems used can make seamless connection difficult.

The Health Insurance Portability and Accounting Act (HIPAA) addresses the importance of patient privacy regarding the protection of health information as well as the need for secure electronic data interchanges (EDI). Due to these factors, it is necessary for healthcare providers to consider their billing practices carefully.

Part of that billing process involves the option to submit claims to a healthcare clearinghouse rather than directly to insurance companies. Let’s break down the clearinghouse meaning in medical and hospital billing.

What is a Healthcare Clearinghouse?

A medical claims clearinghouse is a third-party system that interprets claim data between provider systems and insurance payers. According to the Department of Health & Human Services, a health care clearinghouse is a “public or private entity, including a billing service, repricing company, or community health information system, which processes non-standard data or transactions received from one entity into standard transactions or data elements, or vice versa.”

Typically, a healthcare claims clearinghouse will “scrub” or check a claim for errors before submitting. Once a response is received, the electronic claims submission clearinghouse transmits either a denial or acceptance back to the healthcare provider.

National health insurance clearinghouses allow providers to confidently outsource a vital function of the billing process whose difficulty is one of the current issues in healthcare administration.

Issues in Processing Healthcare Claims

Billing for hospital and provider services and supplies can be a challenging process in this complex environment. The International Classification of Diseases Tenth Revision Clinical Modification (ICD-10-CM) coding system includes over 68,000 diagnosis codes to identify procedures and treatments to be used in health care claims. Frequently, the use of medical coding services is required for the accurate coding of healthcare claims.

what is a healthcare clearinghouse?

In 2016, there were 5,977 insurance companies in the U.S. with “$507.7 billion, or 2.7 percent, of gross domestic product,“ (, 2018). Those thousands of insurance companies were exceeded by the number of healthcare providers such as hospitals, doctors, nurses, dentists, chiropractors, pharmacists, and durable medical suppliers across the country. Matters get more complicated when considering that many providers and insurance payers use incompatible software or systems of communicating protected health information (PHI). Also, different states have non-matching regulations regarding insurance and claims submission.

Problems in claim submissions can result from human error, mismatched diagnosis codes, improper calculations, coverage denials, or invalid EDI address and payer information to name a few. Issues can also arise over the mismatch between software used and establishing a secure connection between healthcare entities. Claims correction and denial management in medical billing adds to the workflow and can delay or negate payments.

Recent changes in U.S. healthcare laws and subsequent effect on insurance companies has resulted in tightening cash flows for many providers. Rising healthcare costs have greatly impacted provider profitability.

On the other hand, insurance company philosophy might consider the importance of encouraging patient responsibility for healthcare management by passing on a greater share of the medical cost as a co-pay or deductible. This has the possible negative effect of pushing patients away from costly but necessary procedures or medicine. The patient might instead follow through on treatment and slide into debt or possibly fail to pay the provider by way of personal bankruptcy. This could leave the provider eating the cost of care which impacts revenue.

Why Use a Medical Billing Clearinghouse?

Efficient claim submission involves many steps starting with the hospital that prepares a claim for services. In order to maximize revenue, it is necessary to optimize the claims process and the revenue cycle continuum. This involves analyzing the claims and billing process for possible improvements.

Contact Nearterm for more information on our healthcare revenue cycle management services today.

Error checking or claim “scrubbing” is one of the primary functions of an electronic claims clearinghouse. This allows a provider to quickly check if a claim will pass the basic requirements to be accepted by an insurance company. Insurance-specific error scrubbing decreases the time needed to successfully process a claim from days or weeks to seconds or minutes.

electronic claims submission clearinghouse

Providers, especially smaller ones, don’t have the knowledgeable staff or resources to match this third-party scrubbing efficiency for each insurance type. Larger electronic medical billing clearinghouses have established relationships with multiple insurance payers by ensuring software compatibility and learning their systems over long periods of time. This can help the medical clearinghouse companies explain rejections to providers and offer guidance to meet the insurance company claim expectations.

Medical clearinghouses can process single or multiple transactions and allow quick claim updates on client dashboards. There is also the added benefit of only needing one portal to manage claim information rather than a separate account for each insurance company for direct billing. Faster and more reliable healthcare coverage determination and claim submission allows providers shorter payment cycles, and as a byproduct, more accurate financial forecasts. Using an electronic healthcare clearinghouse also reduces the number of paper claims needed with subsequent positive effect on the environment.

Final thoughts on Clearinghouses and Health Insurance
While the healthcare industry is complex and has many issues, a health system or hospital can improve the efficiency and speed of electronic medical billing by using a healthcare clearinghouse. These HIPAA-covered entities can process multiple claims to a variety of insurance companies to overcome software incompatibility.

The main benefits offered by insurance billing clearinghouses are fast payment, error scrubbing and assistance, reductions in administrative costs, and finally a single source of handling claim submissions and status. The faster Medicare, Medicaid or a commercial payer are billed correctly, the faster they pay. The faster a patient is provided an accurate bill for an amount not covered by insurance, the quicker the money can be collected and utilized to improve another patient’s health.

Contact Nearterm Today for More Information

Contact the experts at Nearterm today for more information on how to optimize your billing process and medical accounts receivable.


References (n.d.) How to Select a Good Clearinghouse – 7 Things You Must Know. Retrieved from: (2015) Healthcare Common Procedure Coding System (HCPCS) Level II Coding Procedures. Center for Medicare & Medicaid Services. Retrieved from: (2017) Disclosures for Emergency Preparedness – A Decision Tool: Is the Source a Covered Entity? U.S. Department of Health & Human Services. Retrieved from: (2018) Facts + Statistics: Industry overview. Insurance Information Institute. Retrieved from:

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