Revenue cycle upgrades: increase cash flow and lower expenses

Healthcare Financial Management, July, 2005

* Reino: To get to where we are today, we had to standardize the chargemaster in all of our hospitals. So our labs, our radiology, our emergency department are all standardized. Now, we're working on the pharmacy chargemaster.

We made a lot of changes to make sure that all of the information in our information system is in sync. Then, we centralized the maintenance of that information at the corporate office. We built a lot of tools and utilities so the business office can add or change a code and know it is replicated across all our hospitals. This also dramatically helps with issue resolution, because standardized processes and system flows are easier to troubleshoot and resolve.

We also implemented a business imaging system two years ago. All of our business offices are now paperless. That was a significant investment, and we believe it has increased productivity and dramatically improved access. It allows multiple people in the business office to get hold of the patient folder, and gives collection agencies remote sign-on. It's funny-you bring something like this live and, six months later, everyone takes it for granted. They can't remember what it was like to have to go get a paper chart.

* How are you monitoring and fine-tuning the processes you put in place to increase revenue and/or reduce expenses?

* Hilton: We track our core competencies monthly. Each year we develop both corporate and departmental scorecard metrics. These scorecard benchmarks are broken into four major perspectives: value (or financial performance), customer-patient-physician expectations, internal processes, and learning and growth. The revenue cycle typically has three or four corporate scorecard goals. Each director who reports to me also has two to three major departmental goals.

For example, the patient accounting department may have a goal of reducing the days in accounts receivable in the greater-than-90-day category. Our goal is to reduce the percentage from 20 percent to 18 percent. The director of patient accounting then breaks that down by his manager. So, he tells the manager of the Medicare billing team: "Your A/R greater than 90 days can only be x percent in order for us to reach our goal of 18 percent." We break it down very specifically by manager and reward the managers when they meet their targets.

* Reino: We have a variety of ways that we monitor improvements. But it's really initiative-dependent. Sometimes you intuitively know that a major improvement has occurred. For instance, when we put our business office imaging system in place, we didn't need to measure to see that staff no longer needed to spend time pulling charts. Some things you just have to take at face value. You can spend more time collecting data than you really should.

ROUNDTABLE PARTICIPANTS

Loraine Cincotta, Director of Revenue Cycle, New York Methodist Hospital, Brooklyn, New York.

Bill Hilton, Vice President, Patient Financial Services, Carilion Health Systems, a six hospital system located in western Virginia.