5 Revenue Cycle Game Changers
By Ken Congdon
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Ask any leader of a hospital or group practice what their number one priority is, and most will say “providing quality care to our patients.” However, a close second would likely be “generating revenue.” After all, whether a for-profit or not-for profit facility, all health providers need to make money to ensure they can employ quality clinicians and invest in world-class medical facilities and services. Over the years, many providers developed sophisticated processes and invested in cutting-edge technologies to maximize reimbursement in a payer-dominated, fee-for-service environment. However, the financial landscape providers have become so accustomed to working within is currently going through a pretty dramatic overhaul that includes a new payment model, a major coding transition, reimbursement cuts for several medical procedures, and a shift in the payer mix. Health providers will need to adjust their processes accordingly to ensure they can reap the financial rewards of this new healthcare system — or, at the very least, avoid being crushed by it. This was the focus of ANI 2013, the annual conference for the HFMA (Healthcare Financial Management Association) National Institute. The following were some of the key messages delivered at the event:
Be Prepared For ICD-10 — As expected, ICD-10 was a hot topic at ANI 2013. The general consensus is that the ICD-10 deadline will not be postponed again, so health providers better be ready to use the new code set by October 1, 2014. According to most experts in attendance, preparation starts with the proper education and training of your staff.
“When training physicians on ICD-10 changes, emphasis should be placed on the physician specialty,” says Melinda Tully, senior VP of clinical services and education for J.A. Thomas & Associates, a clinical documentation specialist and subsidiary of Nuance. “In other words, focus on the codes that will be used most frequently by your physicians first, and establish an environment where physicians train their peers. Finally, physicians can’t be expected to remember all of the new codes. Invest in the documentation specialists necessary to support your doctors through this transition.”
While much of the focus for ICD-10 support focused on investing in sufficient training and coding resources leading up to the October 2014 deadline, at least one ICD-10 authority warned providers not to overlook the need for post-transition support. “The service most people aren’t talking about is that of post ICD-10 remediation services,” says Jim Morrison, senior VP of operations at McKesson. “The pain associated with an ICD-10 transition won’t end in October 2014. Support will be needed long after the deadline to ensure a smooth transition.”
Address The Rise In Patient Self-Pay — With healthcare reform, more than 30 million newly insured patients will enter the health system. Many of these patients will opt for high-deductible health plans (HDHPs) to keep their premiums low. It’s also likely that more currently insured patients will move to HDHPs as their employers change plans in an effort to control costs. Health providers will need to tweak their current collections processes to address this shift in payer mix.
“More insured patients will result in more claims, and more claims mean more denials,” says Steve Scibetta, director of channel sales for Ontario Systems. “Providers need to address this increased volume with automation tools such as claims management software and automated collections workflow engines. Furthermore, the increase in patients with HDHPs will place an emphasis on upfront eligibility and collections solutions. Providers need to know what each patient’s responsibility will be and make every effort to collect this payment (or make payment plan arrangements) prior to the service being rendered or at the point of delivery.”
Another big part in addressing the rise in patient self-pay will be provider-driven patient education. “A health provider can’t expect patients to fully understand their plan and what they will owe,” says McKesson’s Morrison. “Providers need to ensure the patient knows his or her financial responsibility at the point of service to avoid surprises and unfavorable patient satisfaction scores. Educating patients about their financial responsibilities will be a key step in successful revenue cycle management processes going forward.”
Be Able To Justify Your Prices —The open data initiative by HHS has made inpatient and outpatient chargemaster data available for public consumption for the first time. This, combined with the rise in HDHPs, provides the foundation for comparison shopping for healthcare services. Health providers need to see how their pricing stacks up to competitors and be able to justify their pricing to inquisitive healthcare consumers.
“Healthcare pricing is no longer clouded in secrecy,” says Ann Marie Brown, executive VP of marketing for Craneware. “Providers can’t simply raise their service pricing by 3% across the board year over year and expect to remain competitive and retain patients. Hospitals and other healthcare facilities will need to lean on technology tools such as pricing analysis solutions to help them succeed in this era of growing price transparency. These tools can not only help providers justify their prices by analyzing existing payer contracts and fee schedules, but they also provide benchmark data that help hospitals and physicians practices to compare their pricing with competing facilities, and adjust accordingly.”
Drive More Revenue Per Bed —From an inpatient perspective, one of the key messages at ANI 2013 was dead simple — get more revenue out of your existing assets. From a hospital perspective, one of the biggest revenue-generating assets is beds. However, these assets only generate optimal revenue if ill patients fill open beds and healthy patients are effectively discharged. According to some experts at ANI, many hospitals are painfully inefficient at discharging patients and other patient flow processes.
“Just as the hospitality industry drives revenue by turning tables in restaurants, healthcare providers need to be more efficient at turning beds,” says Craig Herrod, president of MEDHOST. “Patient flow automation technologies can help providers achieve this goal, but a cultural change is really at the heart of it. A lot of inefficient patient discharges are the result of poor timing. In other words, the patient is scheduled to be discharged during a shift change and is inadvertently delayed as a result. Health providers need to stop having a shift mentality when it comes to patient discharge. This can have a tremendous impact on the incoming revenue a hospital collects.”
Expand Your Use Of Data Analytics — Business intelligence and data analytics tools are not necessarily new to health providers. Many hospitals are currently using these technologies to better visualize their costs and income, and make changes to optimize revenue. However, many experts at ANI stressed the importance of using analytics tools for more than just internal evaluations.
“The shift from pay-for-service to pay-for-performance places an emphasis on quality improvement,” says McKesson’s Morrison. “This isn’t isolated to improvement within your own facility on an annual basis, but extends to how your facility stacks up against the competition. Even if a provider improves its performance year over year, its reimbursement can still be cut if it doesn’t outperform other providers. More health providers need to start leveraging data analytics solutions to compare themselves with their peers and modify their processes with this competitive set in mind.”