Six Sigma in Medical Billing

Six Sigma can change the Medical billing process 100% error free industry, since medical billing process involved lot of human work  from the scratch, so effective quality process should be implemented to run the industry smoothly, I personally recommend  Six Sigma is the methodology to erode the error in Medical billing process completely. In all the manufacturing industry we can sell the product if small error occurs in production process, in worst case we can sell it as a scrap, but in medical billing if something goes wrong we cannot collect a single penny from the insurance carrier that too with in a limited time (filling & appealing limit), so as a medical billing person i suggest that Six sigma is the best solution.

 This document wholly belongs to Satheesh Kumar, please don’t copy without permission.

What is Six Sigma

Six Sigma is the measure of quality that strives for near perfection. It is a disciplined, data-driven methodology focused on eliminating defects. A Six Sigma defect is defined as anything that falls outside of a customer's specifications. Six Sigma is a reference to a statistical measuring system, equivalent to just 3.4 defects per every million opportunities.

In Medical billing customer can be defined in two types (Applicable only for third party billing & Capitation)  

·         Patient

·         Hospital, Physicians, Clinic etc., 

Patient:

As a medical billing person we have very minimum chance to get direct conduct with the patient, still if patient get wrong bill or over charged, patient will never turn back to our physicians to whom we are working for, indirectly it will affect our physicians and monthly collections.   

Hospital, Physicians, Clinic:

So our direct customers are Physicians, Hospital and Clinic to whom we are working for.

The thump rule for Six Sigma is to satisfy the customer as best in the industry, best in the industry means should be in top as far as the whole process concern.

This document wholly belongs to Satheesh Kumar, please don’t copy without permission.

Below are the five heads of Six Sigma:

·         Define

·         Measure

·         Analyze

·         Improve

·         Control

Define:

•          Identify projects that are measurable

•          Define projects including the demands of the customer and the content of the internal process.

Define – how relates to Medical billing

Identify projects that are measurable – with the help of advanced technology we can measure each and every steps involved in medical billing process, denials that will pinch your collections so we need to define which is the main process to define. In medical billing process we can define denials are the main concern. And demand of the customer will be the same need collection and less denial

Measure:

•          Define performance standards

•          Measure current level of quality into Sigma. It precisely pinpoints the area causing problems.

•          Identify all potential causes for such problems.

Measure-how relates to Medical billing

Define performance standards need to measure the current performance (percentage of denials, for example in 100 claims we can able to collect 92 claims with 120 days) and check the current level of quality into six sigma

                               DPMO                    % Accuracy                                                        

One Sigma          691,500                  30.85%

Two Sigma          308,500                 69.15%

Three Sigma       66,810                    93.32%

Four Sigma          6,210                    99.38%

Five Sigma           233                      99.977%

Six Sigma             3.4                      99.9997%

Seven Sigma      0.020                    99.999998%

Also identify the potential causes for a denial, may be insurance related, coding related or human error, we need to measure all such denials.

Analyze:

•          Establish process capability

•          Define performance objectives

•          Identify variation sources

Tools for analysis

•  Process Mapping
•  Failure Mode & Effect Analysis
•  Statistical Tests
•  Design of Experiments
•  Control charts
•  Quality Function Deployment (QFD)

Analyze – How it relates to medical billing

First we need to analyze process capability and identify various sources for  the process with the help of above tools , why our claims are denied for insurance eligibility we need to drill down till we get final answer, by analyze we can group the problems in category.

Improve:

•          Screen potential causes

•          Discover variable relationships among causes and effects

•          Establish operating tolerances

•          Pursue a method to resolve and ultimately eliminate problems. It is also a phase to explore the solution how to change, fix and modify the process.

•          Carryout a trial run for a planned period of time to ensure the revisions and improvements implemented in the process result in achieving the targeted values.

Improve-how it relates to medical billing

Once we classified our denials, we need to go for improve phase by experience we need to pursue a solution for the classified denials, for example if we receive more denials because of human error we need to train the resource are we need to change the process, this way we need to improve.

Control:

•           Monitor the improved process continuously to ensure long term sustainability of the new developments.

•          Share the lessons learnt

•          Document the results and accomplishments of all the improvement activities for future reference.

Control – how it relates to Medical billing

We need to monitor the improved process continuously to ensure long term sustainability, also need to share the lesson which learnt to the resources who are all involved, also need to document all the results & trial and error everything, in later stage we can use the documents as expert advice.

Thanks,

Satheesh Kumar

This document wholly belongs to Satheesh Kumar, please don’t copy without permission.