Business-office challenges of small and rural hospitals

Healthcare Financial Management, April, 2004

* Shutak: Staff communications is not a problem in our office. We are located on a campus separate from the hospital. That move to a separate location was daunting because of the uncertainty of being able to communicate with our key revenue cycle related support departments: registration, health information services, and information services. Thanks to e-mails, phones, faxes, and our own interdepartmental courier service, the concerns regarding separation from the hospital have proven to be groundless. In fact, operationally, we are far more productive now that we are physically separated from the main building.

* What are your most pressing challenges related to the revenue cycle processes?

* Shutak: Keeping up to date with changes in the payer community. Because we are a small, rural facility, it is doubly important for us to be aware of these changes and implement the necessary adjustments as quickly as the payers mandate them. This is especially important with CMS issues. We cannot afford to put a process change on the back burner. The Memorial Hospital is a recognized leader in receivables management and the revenue cycle within the state. We have the lowest A/R days in New Hampshire--they range in the mid-40s.

* Massi: A key challenge is to appreciate everything that it takes, every step in the process, to get cash in the door. That's saying it at the macro level. Now, when you reverse engineer it from bringing in the cash, what needs to have happened? First and foremost are all the steps from admissions to the business office just to admit the patient properly and to have accurate and complete data collection, data capture. Then of equal importance are the processing steps in the business office to get the bill out and to have proper follow up cues. Are attachments required from medical records? Is there a denial that can be reworked? Should I send another claim? One more "ripple" from that is, do other departments in the facility appreciate their role in getting the cash? Are charges entered expeditiously and correctly? Is Medical Records backlogged to the detriment of cash flow? Analyzing and reworking the process as necessary is extremely important.

* Under what circumstances does outsourcing a business office make sense? Under what circumstances might it not be a good option?

* Diaz: In a hospital environment, you have to look at the full range of issues. Are you able to staff and recruit effectively? If you're spending all your time just trying to train your staff and keep up with staff turnover, it takes away from your core business and your core customers. If we eve r have more standardization within the industry, in terms of uniform transaction codes for example, it would make sense to outsource a lot of our IT functions, as well as some billing functions. Billing does not have to be as complex as it is. But the business office includes other components. In terms of admitting and registration, it depends on the culture of your organization, and whether your staff embraces those functions as an integral part of the hospital. If the organization sees admitting and registration as a barrier or as a strictly clerical, impersonal function, then I think you should outsource it. If you embrace those functions as a customer service to the patients, to the community, and to the hospital departments, then it makes sense to keep them within the hospital.