Revenue Cycle Exchange: Making Every Penny Count

Changing a healthcare organization's culture, improving its documentation, and involving patients in payment strategies leads to higher margins.

Of the 32 leaders who responded to a pre-event survey, half cited insufficient integration and collaboration between finance and clinical teams as the biggest barrier to revenue cycle improvements. Organizations are addressing this by upgrading outdated and underperforming electronic tools to accurately capture records and complete revenue cycle activities. But state-of-the-art technology demands a sizeable investment and skills to manage its complex implementation.

Higher deductibles, antiquated technology, information gaps, lax documentation, and increasing denials are top issues facing financial executives. More than three dozen healthcare leaders will discuss these challenges, as well as strategies for maximizing reimbursement, during roundtable discussions at the first HealthLeaders Media Revenue Cycle Exchange this week.

Marrying Financial and Clinical Worlds
Catholic Medical Center in Manchester, NH, is overcoming the hurdle of aged technology. It operates numerous diverse systems, acquired over the past 30-plus years; this impedes precise data collection, and the organization plans to move to a single IT platform in the near future.

"Not all of our systems talk to each other," says Donella Lubelczyk, RN, BSN, ACM, director of revenue cycle at Catholic Medical Center. "This requires a lot of manual effort—making it difficult to pull data and measure our successes, as well as [handle] denials and appeals."

Lubelczyk's clinical background, however, gives her insight into how to mesh the financial side with the clinical. To increase efficiencies, Lubelczyk tasks her team to set measurable goals for improvements and submit monthly reports documenting process improvement. To encourage prompt charge transactions, for example, departments are working with the revenue cycle team to determine what an acceptable number of late charges should be and to reduce the frequency of such charges.

Simply relying on advanced technology is not a cure-all, according to Tammy Thomlison, chief revenue cycle officer for University of Mississippi Medical Center in Jackson, MI, who finds that transforming an organization's culture is a key driver of change.

"As an organization, we financially commit to implementing systems to achieve what we want to accomplish. However, systems are only as good as how we balance our people and operations with that technology," she says, explaining that success largely depends on getting physicians, staff, and patients to alter ingrained behaviors.

For example, to maximize Medicare reimbursement, it's crucial for physicians to write appropriate orders. When physicians balk at changing how they typically write an order, Thomlison's team pulls denial data to show how reimbursement depends on the order being written a certain way.

"We have created multiple-layer reports that sort denials by physician, service line, and patient level to illustrate to physicians the revenue lost because we can't bill it [their way] and receive payment," she says.

Even extensive lengths-of-stay at the medical center were largely due to cultural behavior. "Upon examining our top 25 highest and lowest diagnosis-related group codes (DRGs), the main culprit was an inefficient discharge process," Thomlison explains.

"We coordinated with physicians and case management to begin the discharge thought process when the patient is admitted. An example would be to get a patient's labs completed and results back before discharge, instead of waiting until 10 a.m. their day of departure. And we established a 'discharge lounge' where a patient can wait for a ride home, but would no longer be listed as a patient."

When a patient requests a service that is not covered for a particular diagnosis, physicians are informed that their patient will be responsible for payment. "Our financial counselors consult with the physician and discuss the financial impact to the organization should the patient proceed with the test and not pay," says Thomlison. "Patients are also asked to sign a form acknowledging their agreement to pay."

Training financial staff to effectively communicate with clinicians is another proven strategy for optimizing reimbursement.

"The business office used to be able to handle payer problems [straightforwardly], such as capturing proper ID and a patient's insurance eligibility," says Rick Scherich, corporate controller for Ohio Valley Health Systems, a 289-bed system located in Martins Ferry, OH, and comprised of Ohio Valley Medical Center and East Ohio Regional Hospital. "Now, payers are requesting certain documentation, such as tests proving medical necessity."

Scherich is helping business office personnel acquire expertise in probing clinicians about why a certain test or procedure was ordered. "One of the barriers is that clinicians don't like their judgment being questioned," he adds.

Getting to 'Yes;' Avoiding 'No'
To improve collections and reduce denials, 30 respondents responded that performing up-front insurance verifications and pre-authorizations, followed by conducting point-of-service collections with scripts for frontline staff, are powerful measures for capturing every dollar.

A safety-net hospital in Kansas City, MO, Truman Medical Centers has partnered with a third-party vendor that specializes in Medicaid, Social Security disability insurance, and other programs for complex patients to determine coverage eligibility. Historically, more than 30% of its patients have been uninsured.

The company found that some of these uninsured patients actually were eligible for coverage, and as a result, Truman lowered its share of uninsured patients from 36% to 24% over the course of a year.

"For the last few years, we've focused on point-of-service collections and changing the culture from being known for 'free care' to one in which patients feel they have some financial responsibility," says Doug Brandt, associate chief financial officer at

Truman. "We've become aggressive in getting individuals qualified for coverage.

"Even for the poorest patients who qualify for full financial assistance, we ask for a $5 copay, so they make an effort to pay something," says Brandt. "For those who qualify for healthcare insurance exchanges, we ask for a $25 copay. This [initiative] has added $4,000 per week and has helped us pay the bills."

Catholic Medical Center has taken the tactic of establishing a patient responsibility subcommittee, which meets regularly to review point-of-service collections. The organization has also developed scripts to help staff who are uncomfortable with talking to patients about copays and outstanding payments.

Uncovering Obstacles with Technology
IT-enabled activities also aid in reducing denials. Thirteen surveyed executives said technology helps identify areas that generate a higher-than-average denial rate.

To capture missing documentation and errors and track denials, University of Mississippi Medical Center loaded 2,500-plus payer remittance advice and remark codes into its system to track denials and billing edits as they go through the billing cycle. The system alerts the billing department to investigate a suspicious claim before it's submitted for payment. Thomlison also mapped these remittance codes to clinical and technical denials, enabling the organization to route specific accounts to the appropriate party to address. Within the first year, denials dropped from 13% to 8%, with a future goal of meeting industry standards of less than 5%.

"Prior to mapping, these claims were hanging out in our system and not assigned for immediate follow-up," she says.

After identifying its top 20 denials and the responsible party or department, Truman tasks teams to conduct problem-solving analysis and implement process improvements for each one—such as refined coding or better utilization management—which has saved millions of dollars.

Catholic Medical Center accesses denial management software to drill down to its top five denials and corresponding areas. The revenue cycle group devises solutions and generates a "lost revenue action log"—applying an action item to reduce denials.

"Many payers now require preauthorization for things that previously didn't, which isn't always known until we receive a denial," Lubelczyk says. She employs a software program to alert the responsible party that a procedure needs preauthorization or that a payment needs a report attached to the bill.

Scherich, meanwhile, teaches his team how to dive deep into medical records to uncover evidence to reverse a denial.

Partnering with Patients
Almost all survey respondents are developing a customer-friendly staff and culture in the revenue cycle team to engage patients as financial partners. A majority (25 of 32) also employ financial counselors to help with collections.

Ohio Valley Medical Center helps make the payment process easier and friendlier by educating patients about their insurance coverage "so they can make informed decisions and will understand that they will receive a bill," says Scherich. The hospital also instituted an interest-free loan program to help with payment plans.

With a payer mix of mostly Medicaid, followed by Medicare, commercial, and managed care, University of Mississippi Medical Center provides health benefit coordinators (HBC) and financial counselors who know state and federal rules and regulations.

"Individuals who are not insured or are underinsured meet with our HBC team, who works with patients to qualify them for government-assisted programs, the healthcare exchange programs, and the Mississippi division of Medicaid's Hospital Presumptive Eligibility program," says Thomlison.

Providing financial counseling and trying to obtain up-front payment are among the strategies that Catholic Medical Center employs.

"We also offer a prompt-pay discount, in which we notify patients about their balance. If they pay right away, then we give them a 35% discount," Lubelczyk says. "Getting a portion of the payment immediately is preferred over chasing it forever."

In addition to answering survey questions, respondents were invited to comment on revenue cycle software and clinical documentation.

I wish our revenue cycle software tools would …

• [Have] automation for functions to make the job easier for the end user. Provide more opportunities for grouping accounts going through similar issues, work listing, etc.

• More seamlessly integrate with one another. There are too many disparate systems and it is challenging to get the data to interface across all systems.

• Provide true denial information by line item, in order to more efficiently provide reports back to clinical areas.

• Provide real-time meaningful data. Easily combine clinical and financial data that enables revenue cycle to take action on variations.

• Provide cost data to better assess charges versus reimbursement and establish better data for patients who are uninsured.

• Be more robust so we could have fewer bolt-ons and be able to know the status of an account at any moment.

For clinical documentation, I wish our physicians would ...

• Understand the difference between the volume of what they document versus the quality of what they document.

• Know the rules relating to documentation that would minimize denials and maximize reimbursement.

• More universally understand the impact that their diagnosis selection has on mortality rates.

• Provide constructive feedback on how we can improve our CDI program and appropriately respond to (and learn from) queries and educational sessions.

• Contact the CDI specialist real-time when questions arise.