Beyond bolt-ons: breakthroughs in revenue cycle information systems: next-generation revenue cycle information systems go well beyond niche functionality

Healthcare Financial Management, Feb, 2008 by David Hammer, Debra Franklin

* Online insurance updates and bill payment

The other side of the consumer-friendly face of consumer-directed health care, however, is the financial risk associated with high-deductible health plans. Pure self-pay and balance before/after insurance accounts are estimated to cost 300 percent more to collect than other accounts, and to require three times longer to do so (healthcare bills have long been at the bottom of consumers' payment-priority lists). Further, almost 100 percent of bad debt arises from this segment of a provider's payer mix. Consequently, next-generation systems have incorporated address- and medical credit-checking functionality, which can help to:

* Reduce returned mail

* Assess credit risks

* Identify open credit lines available to pay self-pay balances

* Segment self-pay receivables into categories, thus reducing collection costs

Users will need to shift resources toward upstream financial clearance activities and away from more traditional financial settlement functions. With the combination of workflow rules, clinical integration, and advanced analytics, all this can be accomplished with less overall cost.

Single-Database Structures

Billing has become less about the transmission of financial information and more about the submission of voluminous clinical detail about a patient's care and treatment. Without this information, claims are subject to delay, rejection, and denial. Further, as medical care has become more complex, so too has charge capture.

A next-generation revenue cycle solution, by contrast, will ensure that:

* Charges flow to claims as a natural byproduct of the care delivery process, thus greatly reducing late and lost charges

* Clinical data flow to claims as a byproduct of the EMR, without requiring health information management (HIM) intervention

* Clinically relevant detail is incorporated on bills, without interfaces between disparate systems--registration, HIM, and patient accounting

Modern revenue cycle solutions accomplish these objectives by applying up-to-date database architecture for both their clinical systems and their revenue cycle solutions. Thus, there is no longer a need for data duplication, interfaces, or manual charge feeds, the last of which has long been a problem for the claim submission process.

WellStar's Evins says better charge capture needs to be the prime consideration of any single-database solution. Although vendor advertising and recent journal articles tout the ability to mine clinical records for data required for pay for performance, Evins believes "there needs to be more of a marriage between financial and clinical systems. Specific to the effect of clinical departments on the revenue cycle, typically the industry in the past worried, 'Will charges migrate to the financial system?' Frankly, improvements in even that basic business transaction can be made."

Roland Funsten, vice president of finance/revenue cycle at St. Vincent Health System in Indianapolis, has been guiding the implementation of a next-generation solution for the past two years. Although he says the solution, recently installed in two of St. Vincent's critical access hospitals, is "working as planned and expected," he notes the system is "predicated on clinical system applications being present for charge feeds." Where this clinical/financial harmony is lacking, Funsten says his revenue cycle employees report "no easy entry for manual keying of charges, payments, and diagnosis information."