Waterfall Billing is the term Echo uses to describe the process of balance billing a subsequent Payer after the primary or previous Payer has paid or otherwise responded to a claim. Remittance entry plays a key role in determining the actions that take place once a Payer responds to a claim. Self Pay is considered a Payer and can also be the recipient of a Waterfall Billing charge. EchoVantage automates this process!
A successful Unprocessed Remittances job triggers the Waterfall process. In order for this to happen, important Client Payer Setup and Payer Configuration must be defined. The following sections detail the entire billing process for a single client service to demonstrate how Waterfall Billing is implemented in EchoVantage. Subsequent Waterfall Billing Sections will contain examples of 1) a Contractual Adjustment that triggers a Waterfall to a secondary payer and 2) a Commercial Payer that Waterfalls to Self-Pay at the beginning of the process.
Client Setup
- The client must have more than one Payer defined for charges to Waterfall.
- In the example above, the client has three Payers defined.
- Anthem BCBS of NH is Priority 1 making it the Primary Payer.
- NH Medicaid is Priority 10 making it the Secondary Payer.
- Self Pay is Priority 99 making it the Tertiary, or in this example the final, Payer.
- For demonstration purposes, all Payers will Bill without an Authorization.
Payer Configuration
For contracted Rates to waterfall to the next Payer, the Contractual Adjustments Waterfall to the Next Payer(s) checkbox must be selected in the Configuration > Services/Payers > Payers > Rates tab. When this is checked all subsequent Payer's contractual and expected adjustments are ignored when processed.
The Contractual Adjustments Waterfall to the Next Payer(s) box is selected, indicated by the check mark, for Anthem BCBS of NH.
The Contractual Adjustments Waterfall to the Next Payer(s) box is selected for NH Medicaid.
Because Self Pay is expected to be the last or final payer for a client, there are no Processing options other than whether to Allow Service Bundling. The balance remains outstanding under Self Pay until paid or written off. There are instances where Self Pay could be active from the start such as for the Copay required by a Commercial Payer. This Copay would not waterfall to another payer so it also remains outstanding until paid or written off.
Create Service
A one hour group therapy service is created for Bailey Lautenschlager. Note that the Service is marked Ready so it will be available under Unprocessed Services in Fiscal Overview once saved.
Create Charge in Unprocessed Services
The filters were used to display the newly created service. The single service was selected and a job was created.
The single service job created without errors.
Finalizing will make the charge available in Unbilled Charges, change the Status to Done, and the charge may also be viewed in Claims Management.
View in Claims Management
Once a service is processed and becomes an unbilled charge, it can be viewed in Claims Management found under Claims on the main application menu.
For this example, it is assumed that all charge information is correct and no action needs to be taken on this screen. For more information about Claims and Claims Management, click HERE.
Create Charge in Unbilled Charges
The Filters were used to display just the newly created charge. The single charge was selected to Create a job.
The Create Bills job is error free and ready to be Finalized.
Finalize and view job details by clicking on the blue Report icon. The bill to Anthem BCBS for group therapy has been created and a remittance from the Payer can be posted when received.
Post Remittance
Navigate to Remittances on the main application menu. Then click the blue plus "+" to add a new remittance.
A Payer Payment of $30.00 was entered. Note the circled information. The Proceed to Next Payer must be selected in order for the application to Waterfall the charge balance to the next payer. Marking this Remittance entry Ready and selecting SAVE will make it available in Unprocessed Remittances in Fiscal Overview.
Create Remittance Job in Unprocessed Remittances
Select the payer payment to process and Create the Remittance Job.
The Create Remittance job processed without errors and is in Preview Status. Selecting Finalize will process the job (posts the payment from Anthem & creates a BZC (balance zeroing charge) adjustment of $30 to clear the amount due on Anthem's bill) AND create a Ready Service in Preview mode of the History tab in Unprocessed Services for the next payer, NHMDCD in this example.
Create Charge in Unprocessed Services for Secondary Payer
The Waterfalled service displays "Waterfall:" in front of the job message entered during the Create function in Unprocessed Remittances. Note in the detail at the bottom that the charge still shows the $60.00 original charge amount but that the balance is $30.00.
Just as before select Finalize to make the charge available in Unbilled Charges and change the Status to Done. The charge may also be viewed in Claims Management.
Create Waterfall Charge in Unbilled Charges
The Filters were used to display just the newly created Waterfall charge. The single charge was selected to Create a job.
The Waterfall Create Bills job is error free and ready to be Finalized.
Finalize and view job details by clicking on the blue Report icon. The bill to NH Medicaid for group therapy has been created and a remittance from the Payer can be posted when received.
View in Claims Management - Claim Details
Now that there is more than just the initial charge for the single service, viewing the Claim Details will provide quite a bit more information. Navigate to Claims Management, locate the claim, and left click on the claim row to view. Claim Details shows the original charge to Anthem of $60.00, a payer payment of $30, and a balance zeroing credit of $30.00 PLUS a new charge to NH Medicaid of $60, a paid by other amount of $30, and a balance due of $30.00. Also note that the Billing History has two payers listed. On a production database, the billing dates would likely be different.
Post Remittance from Secondary Payer (Waterfall Payer)
A Payer Payment of $28.00 is entered from NH Medicaid and the Proceed to Next Payer is again selected so that the $2.00 balance will Waterfall to the next Payer which is Self-Pay in this demonstration. Marking this Remittance entry Ready and selecting SAVE will make it available in Unprocessed Remittances in Fiscal Overview.
Create Waterfall Remittance Job in Unprocessed Remittances
Select the NH Medicaid payment to process and Create the Remittance Job.
The Create Remittance job processed without errors and is in Preview Status. Selecting Finalize will process the job (posts the payment from NH Medicaid & creates a BZC (balance zeroing charge) adjustment of $2 to clear the amount due on NH Medicaid's bill) AND create a Ready Service in Preview mode of the History tab in Unprocessed Services for the next payer, SELF in this example.
Create Charge in Unprocessed Services for Tertiary Payer
The Waterfalled service displays "Waterfall:" in front of the job message entered during the Create function in Unprocessed Remittances. Note in the detail at the bottom that the charge is now $2.00 and the balance is $2.00.
Just as before select Finalize to make the charge available in Unbilled Charges and change the Status to Done. The charge may also be viewed in Claims Management.
Create Waterfall Charge in Unbilled Charges for Tertiary Payer
The single charge for the third Waterfall for Bailey Lautenschlager was selected to Create a job.
The Waterfall Create Bills job is error free and ready to be Finalized.
Finalize and view job details by clicking on the blue Report icon. A statement for Bailey Lautenschlager in the amount of $2.00 has been created.
View in Claims Management - Claim Details
One more look at Claim Details shows the complete Waterfall cycle beginning with the initial charge of $60.00 billed to Anthem for the single service and ending with the $2.00 charge billed to the client, Bailey Lautenschlager. Since the $2.00 charge is billed to a Self Pay Payer, the amount will remain outstanding until paid or written off.