HFMA Roundtable: no-nonsense tactics for revenue-cycle improvement

Healthcare Financial Management, Feb, 2004

With reimbursement pressures continuing to intensify, technologies changing, and hospitals and health systems going through tremendous organizational and operational change, how can healthcare finance leaders help their organizations move toward their strategic and financial goals? One key area that has increasingly become a focus is revenue-cycle management, because of its centrality to hospital financial health, and because of its vast opportunities for process improvement.

Through individual interviews, we've culled some opinions and perspectives from those out in the trenches who are trying to improve revenue-cycle management. We hope you will find these perspectives useful and thought-provoking as you help your organization make process improvements and move toward process optimization.

The members of this HFMA Roundtable are:

* Jeff Brownawell, vice president of managed care and government reporting, Memorial Hermann Healthcare System, Houston. Memorial Hermann is an integrated delivery system that encompasses nine acute care hospitals, two long-term acute care hospitals, a physician network for primary and specialty care, retirement living and nursing homes, rehabilitation and home health programs, and an air ambulance service. The system has 3,171 licensed beds.

* Patrick Buckley, president and founder of OSI Systems, based in Atlanta, a wholly owned subsidiary of MedAssets, also of Atlanta. OSI Systems provides revenue solutions by offering strategic pricing, prebilled charge capturing, and ongoing charge master management.

* Ryan J. Fischer, managed care manager, Truman Medical Centers, Inc.. Kansas City, Missouri. Truman Medical Centers, Inc. is a 551-bed integrated delivery system composed of three entities--Truman Medical Center Hospital Hill, Truman Medical Center Lakewood. and the Behavioral Health Network-in the Kansas City area.

* Roland Funsten, assistant vice president of finance, St. Vincent Health. Indianapolis. St. Vincent Health is a 12-facility. 1,700-bed multihospital system.

* JoAnne Tucker, vice president of business services, Hoag Hospital. Hoag Hospital is a 409-bed community hospital in the Southern California community of Newport Beach. It has seven additional health centers throughout Orange County.

If you only had one day to improve your revenue cycle, what would you focus on?

Jeff Brownawell: If all I had was one day to look at things and then a little extra time to get them sorted out, and if the majority of my managed care business was on a percent-of-charge basis, I'd do a charge master analysis, and then optimize my charge master for managed care business. This would include correct coding and rate review. If the majority of my contracts were per diems, case rates, or DRGs, I would be going through my contracts to make sure I had carve-outs for high-cost drugs, implants, and prosthetics, and that I had stop-loss thresholds in all of those contracts.

Roland Funsten: For me, the key area would be patient access--scheduling, preregistration, and registration--and what needs to be done differently there to improve the revenue cycle, as far as getting quality data captured and improving data integrity for the billing system and billing purposes.

JoAnne Tucker: There are really two questions there. One, to improve the whole process, what would you do? And the other question is, going after the most money, what would you do? For the whole cycle, we need to focus on delays in the cycle, whether coding, charging, things that slow payment down. On the other side, where I am going to get the most bang for my buck is to get into contracts and identify where we're not being paid correctly.

Patrick Buckley: Often there is plenty of "low-hanging fruit" that can be solved pretty quickly. For instance, cleaning up your charge master may significantly improve billing rejections, ensure complete and accurate APC reimbursement, and help ensure that all appropriate services are being billed for. The total benefit of cleaning up the charge master is often not fully appreciated, and the financial benefits of doing this are substantial.

Ryan Fischer: I would focus on the follow-up, reviewing all information, making sure that every dollar that is due to your organization for rendering services in good faith is collected. Ideally, your patient accounting department would be reviewing remittance advice, kicking in the whole denial management part of the revenue cycle to effectively deal with those denials, and appeal them if necessary. Then you get into the whole tracking and trending of denials. You want to target those areas where you're not collecting the revenue, so that you can go out and improve the process.

Where are hospitals falling down the most?

Tucker: I think internal processes fall apart, and we don't understand how what we do impacts others.

What is the biggest misconception providers have about improving the revenue cycle?

Fischer: A lot of times, the biggest misconception has to do with follow-up processes and resources. You see a lot of literature that discusses the importance of entering patient information correctly during registration. Certainly that's a part of the first stages of the revenue cycle, and that gets focused on. Clearly, getting information in correctly is important, as insurance information will dictate the whole revenue cycle. But to some extent, people are looking at just one piece; you've got to step back and look at the whole cycle in order to see the results and to make sure that enough resources are being allowed to conduct appropriate follow up. In addition I would recommend that the more traditional follow-up processes be coupled with a system for reviewing underpayments, as well. I go back to the question, at the end of the day, is every dollar accounted for, and have you collected all revenue to which you are entitled?