In a revenue cycle rut? Get inspired by this year’s award-winning organizations.
It’s not easy staying on top of day-to-day revenue cycle demands. Driving efficiency and effectiveness in patient access, revenue integrity, and claims adjudication takes constant vigilance. And even after reaching desired targets, you’re always navigating new challenges to ensure these performance gains are maintained.
Is it any wonder then that so many hospitals and health systems can find themselves in a “revenue cycle rut,” where they become stuck in the same performance patterns with little room to innovate?
Yet breaking through this mind-set is exactly what the future calls for, notes Sandra Wolfskill, FHFMA, HFMA’s director, healthcare finance policy, revenue cycle MAP. “Hospitals and health systems will need to keep an open mind to new processes, collaborations, and technologies as they address the next era of health care—one that is filled with radical shifts in payment and coverage, demand for a better patient billing experience, and growing need to leverage data to better understand cost and quality across the care continuum,” she says.
Yes, venturing into uncharted territory is never easy. And the strength of any particular revenue cycle strategy will vary by factors unique to an organization’s operational structure, payer relationships, and competitive environment. “But today’s revenue cycle leaders shouldn’t let such dynamics hold them back,” Wolfskill says. “Adherence to traditionally successful practices simply isn’t enough. Organizations need to find new ways to push performance to the next level.”
For inspiration in these efforts, consider the following projects that were undertaken by winners of HFMA’s 2013 MAP Award for High Performance in Revenue Cycle. In each of these instances, leaders addressed a common revenue cycle challenge in a new or remarkable way.
Preparing for ICD-10 Coding Needs
The challenge. Organizations are focusing heavily on educating their coding staff and/or hiring external coding assistance to minimize delays and inaccuracies as the industry transitions to increased levels of specificity required under ICD-10.
This winner’s approach. Baptist Hospital of Miami, a subsidiary of Baptist Health South Florida, takes a novel approach to its training, pulling local candidates from largely untapped areas and ensuring sustainable presence of coding expertise through creation of comprehensive training that is built within a “career ladder” structure.
Key details. In preparing for ICD-10, one of the hospital's primary objectives has been having sufficient coding resources to compensate for the loss of coder productivity anticipated during the transition. Hiring a sufficient number of coders, even in the ICD-9 era, has been a longstanding challenge for the organization. In response, Baptist Health created the coding career ladder program (CCLP).
The program develops a pipeline of experienced coding professionals and establishes a structured collaborative learning environment that allows on-the-job training and mentorship. The program also supports training for newly hired, non-experienced coding staff as well as internal Baptist Health staff or external candidates that meet program eligibility requirements. Soon the program will also begin collaborating with AHIMA-approved coding programs in the local community that offer internship opportunities to students.
Baptist hired dedicated instructors for the CCLP and supports curriculum for three program tracks: outpatient, outpatient surgery, and inpatient. CCLP participants may stay in the program for up to one year. Months one through three are entirely educational. The months that follow involve live coding with intensive quality assurance reviews. Today, the CCLP is fully staffed with both trainers (3) and trainees (12). The first trainees to graduate are achieving quality and productivity rates above the established performance measures, achieving 95 to 100 percent accuracy and exceeding productivity goals by approximately 10 percent.
What they’re saying. “CCLP is an investment,” says Baptist Health South Florida’s Karen Godfrey, corporate VP of revenue management. “The expected migration of new coders will address the decline in coder productivity anticipated with the transition to ICD-10 and reduce outsourced coding expense to generate a favorable ROI.”
Improving Customer Service
The challenge. Hospitals are monitoring patient experience to respond to trends of increasing consumerism and the growing financial importance of patient satisfaction scores.
This winner’s approach. Henry County Health Center, a critical access hospital in Mount Pleasant, Iowa, is recognizing that its “customers” include patients as well as others who could potentially interact with the organization. As such, it has developed systems to help ensure it has support from the community at large.
Key details. Henry County Health Center uses several means to listen to stakeholders: patients, patients’ families, community organizations, medical staff, Henry County Health Center associates, volunteers, and payers.
One example of its efforts to foster better feedback from its community is the use of four “community advisory groups.” The advisory groups consist of area employers, educators, local government officials, and senior groups that meet to improve on Henry County Health Center’s current operations and customer service delivery and to provide feedback to the organization’s strategic plans. During the meetings, updates are also given on the organization’s performance and availability of services.
The community advisory groups have provided input applicable to a range of actions, including analyzing health needs identified by area employers and identifying potential service lines to meet those needs; identifying and pursuing services that can be enhanced by regional partnerships; and assessing and identifying potential telemedicine opportunities. The groups have also discussed developing and maintaining community partnerships to advance medical fitness by focusing on connections with area employers. In addition, Henry County Health Center has sought guidance on developing new services for the community and ways to increase market shares with current services. Henry County Health Center has been recognized by the American Alliance of Healthcare Providers as one of the top 100 most customer-friendly hospitals in America.
What they’re saying. “Henry County Health Center is committed to enhancing the health of individuals as well as our communities through high-quality, effective, and efficient services,” says CFO David Muhs.
The challenge. Organizations need to improve abilities to identify patients with payment ability and appropriately collect the amounts owed. In recent times, much focus has been on pushing efforts to the front of the revenue cycle to support improved point-of-service collection through determining eligibility status and improving access to financial assistance counseling.
This winner’s approach. Geisinger Medical Center, part of the Geisinger Health System in Danville, Pa., has had strong front-end practices in place for quite some time, providing patients with preservice out-of-pocket expense calculation, supporting multiple channels to make payment and access financial services, and resolving patient billing concerns with a “same day/first call” resolution policy. However, it doesn’t rest on its success. Leaders also have been working to ensure post-service collection opportunities aren’t overlooked. Accuracy isn’t the only aim—the organization is using detailed account analysis and call center technology to refine its back-end collection practices and improve the efficiency and effectiveness of staff’s efforts.
Key details. At Geisinger Medical Center, revenue management staff examined the self-pay portfolio by segment: pure self-pay, no insurance; residual balance after insurance; professional-only charges; hospital-only charges; and professional and hospital charges. Such segmentation has provided greater insight into ways the organization can better educate patients about their financial responsibility and eligibility for financial assistance during front-end efforts. The organization also has leveraged improved distinction between residual balances and those belonging to uninsured patients to adapt its collections approach.
Using predictive dialing technology to determine call optimization (time of day, day of week), the organization increased its contact rate by more than 20 percent over the prior year. In addition, Geisinger applied scoring technology to its patient liability portfolio to identify patients who might qualify for presumptive uncompensated care, which improved patient satisfaction and led to more efficient resolution of patient balances by addressing the collectible inventory. With these strategies, the organization saw patient collections increase from $42.1 million to $53.6 million between FYE 2011-12. During the same period, patient installment commitments grew from $4.3 million to $9.5 million.
What they’re saying. “Self-pay receivables have been growing at a rapid pace,” says Geisinger Health System’s Kevin F. Brennan, executive VP and CFO. “As patient liabilities increase, there is opportunity to improve performance and provide better service to patients by revamping practices associated with collecting self-pay balances.”
Analyzing A/R by Payer
The challenge. As rules regarding payment grow increasingly complex, hospitals and health systems are discovering they need to better monitor payment timeliness and accuracy. Analyzing accounts receivable (A/R) by payer should be a cornerstone of revenue integrity efforts.
This winner’s approach. Hoag Memorial Hospital Presbyterian in Newport Beach, Calif., has created a highly focused, payer-driven follow-up model and adapted its system of performance measurement to provide detailed insight to support revenue integrity.
Key details. Hoag’s revenue cycle team instituted a process redesign around claims follow-up that incorporates use of PODs. A POD (an acronym for “producing results, optimizing workflows, driven to improve”) is a group of skilled professionals that follow claims from start to finish. Each POD is designed by payer and specializes in its assigned functions. This structure allows Hoag to staff each POD with experts on the payers they manage. The goal behind the POD concept is to create a self-directed process that handles anything and everything necessary to expedite resolution through full payment, creating a seamless, uninterrupted workflow without defect. Lean process management played a vital role in designing the PODS, and all professionals staffing the PODs received materials on the concepts that govern Lean.
The POD concept has helped Hoag to in-source all of its A/R and manage the asset internally. As a result of bringing the process in-house, revenue cycle staff reduced operating expenses by 18 percent year over year. Also, a new metric, the “net-to-90” score, was also established as part of the POD redesign. Net-to-90 measures how much cash is collected within 90 days from discharge date as a percentage of expected cash. Although Hoag measures this metric on a month-to-month basis, the larger goal is to improve the rolling 12-month total. Hoag uses this measure as the key success metric of the POD redesign. In June 2011, the organization’s 12-month performance was at 86 percent. By September 2012, it had improved to 89 percent. The ultimate goal is to reach and maintain 90 percent, and the organization is well on its way to achieving this result.
What they’re saying. “Team members have embraced the new model as an empowerment tool, providing greater ownership for performance and control of their inventory,” says Hoag’s Randy Ray, executive director of revenue cycle. “The end result has been fewer disputes around A/R.”
Screening for Medicaid
The challenge. Shifts in insurance coverage make robust screening for Medicaid a growing financial and patient satisfaction imperative. Organizations are looking for ways to make financial assistance screening and application processes easier for patients.
This winner’s approach. Spectrum Health is not only ensuring patients have access to onsite application assistance, but also collaborating with its state government to find opportunities to streamline the overall application process.
Key details. Spectrum Health and the State of Michigan are engaged in a pilot program designed to streamline and optimize the Medicaid disability application process. The health system and the state are collaborating on ways to significantly shorten the timeline for Medicaid eligibility determination by assisting patients in efforts to provide more complete application information at the outset of their care and reducing need for rework.
The collaborative efforts have so far resulted in a streamlined process for Medicaid disability applications as well as the development of an updated role of an embedded state worker within a provider delivery system, called a medical contact worker. This individual has broad access to various state resources, beyond a typical county worker, and is highly trained in the application process, and more important, in creating a complete application packet, including all relevant medical and disease state information. Spectrum Health has embedded this resource within the health system workflows to ensure timely and accurate Medicaid disability evaluation for patients, without the use of third-party vendors.
Spectrum Health’s financial counselors assist in screening prospective candidates for the program, and, once a patient enters the program, the medical contact worker becomes a personal contact for the patient to help navigate the application process. The state workflows regarding case evaluation, approval, and appeal have been streamlined, allowing these cases to be presented and a decision rendered in a time-compressed fashion. Shorter turnaround time on coverage determinations allows patients to access care more easily, reducing barriers or concerns resulting from lack of health insurance coverage. An efficient determination process also supports patients proactively seeking care in the appropriate setting, as opposed to delaying necessary attention until an emergent situation results.
To support the program, Spectrum and the state collaborated on current and future state workflows, program policies and procedures, staffing models and guidelines, and technology. Metrics that Spectrum is tracking for the project include patients processed, applications submitted, related timeframes for determination, percentage of deferred applications, and timeline to resolve deferred/pended. In fall 2013, more than 400 applications had been processed under the program, with an average determination time of 43 days. Prior to the initiative, the average was two years.
What they’re saying. “Patients are best served when you can assist them with accessing community resources, state assistance programs, or charity assistance qualification where necessary,” says Ron Knaus, Spectrum’s vice president of finance.
Capturing Patient Information
The challenge. Patient access staff need to collect complete and accurate information to support the integrity of the patient’s health record and ensure insurance and sources of financial assistance can be properly identified and applied.
This winner’s approach. Saint Francis Hospital, the flagship hospital for Saint Francis Health System in Tulsa, Okla., is focused not only on accuracy of patient access processes but also on the patient’s experience. As such, it has taken steps to limit the frequency with which it requests information and to integrate registration systems throughout the organization so patient information can be collected in a unified, consistent manner regardless of setting.
Key details. Saint Francis Health System consists of multiple entities—hospital and practice-based—with multiple entry points, so leaders examined when and how the organization was gathering various types of patient information. The analysis showed patients were being asked multiple times for the same insurance information, card copies, and demographic information, and often on the same dates of service. With this knowledge, the organization enhanced its IT system to allow users to populate information flows to and from the organization’s owned clinics, outreach lab areas, and hospital entities —thus minimizing how many times patients were asked to present their information. The result was a more user-friendly experience for patients and improved accuracy of billing information in all areas of the health system.
The organization also achieved another notable benefit: Improved electronic reporting capabilities meant that patients no longer had to submit financial application materials separately by setting. The organization could ensure that once a patient became approved within the health system, the individual would be approved for all services. This change has been significant, helping to decrease bad debt and minimize care delays due to coverage issues.
What they’re saying. “Not only did cross department collaboration occur, but we were able to include our owned physician practices in this process, which proved to be key in patient satisfaction and ensuring health system information was not different due to human error or failure to verify accuracy,” says Eric Schick, VP of finance, Saint Francis Health System. “Regardless of how patients enter the system, they are less likely to have different information in their hospital- and physician-based financial record.”
Driving Engagement in Revenue Cycle Performance Improvement Projects
The challenge. Organizations are continually looking for opportunities to improve quality and efficiencies in revenue cycle. Yet many hospitals and health systems find it difficult to get leadership and staff engaged in ongoing performance improvement.
This winner’s approach. Centra Health in Lynchburg, Va., supports formal performance improvement techniques throughout the organization to create a common language for improvement and structures aspects of employee recognition and personal development around project pursuit.
Key details. Centra uses the Six Sigma DMAIC (define, measure, analyze, improve, control) method to support performance excellence and system optimization. It stratifies performance metrics based on role to drive individual accountability and performance. Employees receive monthly reports on their progress. To lead improvement initiatives and encourage employee development, Centra has a process improvement department staffed with Six Sigma black belts.
Every year, the improvement department provides yellow and green belt classes to all managers interested in obtaining Six Sigma certification. Within the revenue cycle department, all directors are certified yellow belts, and two are certified green belts.
Departments are required to establish annual performance goals and performance projects that are aligned with Centra’s strategic goals and/or core principles. Departmental performance projects are showcased each year during a performance improvement fair. Those attending the fair view story boards, presentations, and demonstrations while enjoying a setting with decorations and food. It’s not unusual to see more than 80 booths displaying performance improvement projects across Centra. The event spans two days, with the first day devoted to the Centra leadership team, and the second day open to all employees. The department with the best performance project, as judged by a group of board members, wins an award that can be shared with the entire department. All performance improvement projects follow Six Sigma methodology and are selected based on Centra’s six core principles.
What they’re saying. “Once projects are implemented, the work does not stop,” says Lewis Addison, Centra’s senior vice president and CFO. “To manage ‘creep,’ it’s important for leaders to continue with an improvement cycle.”
The challenge. Hospitals and health systems are seeking ways to cut costs as they face tightening payment. Many organizations have focused on line-item cuts, and now are looking for ways to drive year-over-year savings from process-based change.
This winner’s approach. Texas Health Resources in Arlington, Texas, is two years into a rollout of a “virtual centralized business office” model whereby many of the revenue cycle staff work from home. Results have been year-over-year savings and notable improvements to productivity.
Key details. More than 300 business office staff currently work from home several days a week, with the ultimate rollout goal of teleworking five days a week.When developing the program, leaders identified eligibility criteria for positions/employees, established policies for acceptable home work space, supplied appropriate hardware by need (laptop, headset, phone, and internet connection/speed), and developed a virtual time clock for onsite and offsite usage. Management meetings are conducted online using a service that allows users to share documents and interact.
All CBO employees have productivity standards. Teleworking staff agree to productivity standards that are 5 percent higher than those onsite, with the understanding the increase is due to reduction in normal office distractions and interruptions. Management reviews productivity and quality of CBO employees daily and weekly.
Texas Health Resources has reduced its cost-to-collect ratio to 0.8 percent. The virtual CBO will result in a savings of $400,000 per year ($4 million over a 10-year lease). The approach also has resulted in increased productivity: Total accounts worked per week averaged 52,000 before the virtual CBO, and 70,500 after. This heightened productivity will enable future staff reductions, again lowering the cost-to-collect ratio and promoting greater efficiency. Also important, the virtual CBO is creating a happier workforce, which has additional financial benefits of reducing cost associated with turnover (e.g., training, downtime, recruiting expense). Texas Health’s Press Ganey score rose to 82.5 after implementing the CPO, putting the organization in the 98th percentile nationwide. The organization also has been recognized as a top place to work at both state and national levels.
What they’re saying. “Expense reductions are critical, as all healthcare organizations soon will be required to ‘live on a Medicare margin,’ as our CFO often reminds us,” says James Logsdon, VP revenue cycle operations/strategic revenue services at Texas Health Resources. “It is no longer good enough to focus on revenue and revenue cycle improvements—expense reductions are needed across all departments. The virtual CBO initiative has been a win-win for employer and employee. We’re not only supporting our efforts to be a cost-effective organization, but we also are seeing significantly happier employees.”
The challenge. Ability to successfully transition to ICD-10 will be driven by specificity of physician documentation and timely physician response to queries. Many priorities compete for the physician’s time, so efforts around education are at risk of not gaining traction.
This winner’s approach. Columbus-based OhioHealth is making use of multiple channels for education and targeting efforts where they will be most meaningful.
Key details. OhioHealth uses a three-pronged approach to physician ICD-10 education: online courses, custom education sessions addressing diagnoses and procedures most likely to be affected, and medical staff peer education.
The organization has invested in online education and audit software that helps identify greatest opportunity for documentation improvement by facility, service line, and diagnosis/procedure. Armed with both of these tools, a cross-department team of medical education and coding experts developed a “physician briefs” program, in which instructors attend various existing physician meetings to present around ICD-10 concepts related to at-risk documentation associated with the top 40 diagnoses by specialty.
Each physician brief consists of the targeted diagnosis and related ICD-10 concept information, an example of current and future documentation, an example of impact to severity of illness and risk of mortality, and a summary of the ICD-10 concepts related to the diagnosis. To provide even further support to educational efforts, the HIM department worked with clinical documentation and compliance departments to build a companion query that reinforces education whenever documentation does not support ICD-10 for the diagnoses already presented. The query also contains a link to an OhioHealth physician portal, where the physician brief pertaining to the issue is made available for reference. Briefs also are accessible via an ICD-10 web page posted on OhioHealth’s intranet.
To support accountability, OhioHealth is tracking query rate and accounts pending queries, physician response rates, documentation improvement as measured by change in case mix and complications and comorbidities (MCC/CC) capture rate, and impact in days to discharged not final billed (DNFB) and A/R due to pending queries. Medical staff leadership is kept informed of query rates and particular areas of challenge. Physician scorecards contain statistics on query rates by physician and specialty. Also, physicians receive direct feedback on their own queries and areas for improvement.
By fall 2013, approximately 200 physicians had attended sessions where staff presented briefs focused on ICD-10 and/or existing documentation improvement needs.
What they’re saying. OhioHealth’s Jane Berkebile, system vice president of revenue cycle, notes: “ICD-10 represents a massive change for health care and physician organizations due to the extent of the modifications to the ICD code structure and to the many entities that are affected by these changes in one way or another. Physicians will certainly have a key role to play in this transition. Adapting the education approach so that it is scalable and meaningful for the physicians is a key factor in future success.”
Establishing a Culture that Recognizes Revenue Cycle Importance
The challenge. With so many organizational initiatives focused on improving clinical quality, achievements associated with financial operations can often be overshadowed. Many organizations struggle with establishing a culture that elevates the importance of revenue cycle across all levels of the enterprise.
This winner’s approach. Baylor Health Care System, based in Dallas, has developed systems to engage leadership in revenue cycle performance and developed high-visibility recognition programs focused around revenue cycle achievements.
Key details. Highest-level engagement in the revenue cycle is seen in how Baylor structures its core values and systems for performance tracking and accountability. Baylor’s five core values—integrity, servanthood, quality, innovation, and stewardship—are incorporated into annual evaluations of every employee in the health system. Finance officers for all of the hospitals carry at least one revenue cycle-related goal. Also, multiple departments use revenue cycle performance metrics.
Cross-department meetings are regularly held to review revenue cycle performance and trends. Twice a month, a revenue cycle operations committee meets to review overall revenue cycle performance indicators, discuss organizational initiatives, and operationally assess external developments that are anticipated to affect revenue cycle functions. This committee includes the organization’s executive leadership as well as representatives from access services, care coordination, HIM, the CBO, managed care, information services, and strategic financial planning.
Baylor also has implemented several recognition programs that include revenue cycle participation. Each month, every department across the healthcare system selects service award-winning staff members who are nominated through a formal process. The award winners receive a pin and cash bonus. Each quarter, the executive leadership for each major division of the organization nominates a select few employees who have won the monthly service excellence award to receive a chief executive officer service excellence award. These employees receive a larger cash award and are treated to lunch with all of the system’s senior executive leadership, where a speech is made recognizing their achievement.
Baylor’s revenue cycle team also has instituted its own programs of recognition. For example, the access services department began a monthly award program of its own, recognizing the “patient satisfaction champion.” Access services directors from all 12 facilities come together and select a champion staff member from written nominations collected from each hospital. The employee is then recognized during a formal ceremony at their facility, which is attended by the corporate access services director and the entity’s finance officer. In similar fashion to the service excellence program, all champions attend an annual lunch where they are recognized before the entire access services leadership group. The year’s patient satisfaction champion is announced during the lunch as well, and this individual is honored with a trophy and cash bonus.
What they’re saying. “Leadership engagement and recognition programs such as these have helped encourage employees to go above and beyond normal operating procedures to deliver exceptional patient service, whether clinical or administrative in nature,” says Fred Savelsbergh, Baylor’s CFO.
Every improvement initiative begins with having the right idea. Next time you’re looking for ways to challenge the status quo, consider where some MAP Award winners got their start.
Peers. Attending revenue cycle conferences, technology user meetings, or webinars can provide insight into cutting-edge practices happening elsewhere in the country. Hoag Memorial Hospital Presbyterian in Newport Beach, Calif., first heard about a “POD” approach to working accounts from another health system that was successfully pursuing the approach. After interviews with the health system’s leadership and site visits, Hoag was able to adapt the approach to support its own needs.
Front-line employees. The best ideas often come from those in the trenches. To make sure these voices are heard, Arlington-based Texas Health Resources has developed a “process improvement project” in its central business office. Using forms the system developed, employees provide directors with suggestions for improving a process, advancing quality, decreasing waste, reducing cost, or strengthening performance. If the suggestion is implemented, the employee receives a $50 thank-you award. Employees who submit an idea that is implemented are also placed in the running for a “best idea of the year” grand prize of $1,000.
Formal systems and training to support innovation. Some organizations have dedicated staff—or even departments—for process improvement, such as Baylor Health Care System in Dallas. Baylor’s Office of Health Care Improvement, a department at the corporate level, offers a development class for all new leaders throughout the organization where they learn process improvement techniques and must complete a project before the end of the term. Even when such resources are absent, however, many organizations are able to pursue performance improvement-focused education through specialized coursework, consultant engagement, or distance learning.
Those little “uh ohs” and “oh nos.” Minor annoyances or common pain points for patients are another great springboard for ideas. As an example, OhioHealth in Columbus does a great job at visioning all of the details that contribute to an optimal patient experience, from ensuring its billing statements can be read on iPhones to putting numeric key pads in the emergency department so patients’ Social Security numbers aren’t said aloud.
HFMA’s 2013 MAP Award Winners by the Numbers
Winners represent organizations of diverse size, payer mix, and market dynamics. Yet they have one thing in common: measurable revenue cycle excellence. The following top quartile performance was demonstrated among the group.
Net Days in A/R
Point-of-Service Cash Collection
Aged A/R 90 Days and Greater
Days in Total Discharged Not Final Billed (DNFB)
Final Billed Not Submitted to Payer (FBNS)
Days in Total Discharged Not Submitted to Payer (DNSP)
Bad Debt Write-Off Percentage
Publication Date: Tuesday, October 01, 2013