Five years ago, Intermountain Healthcare formed a systemwide team to improve revenue integrity—and experienced a 3 percent decrease in charge errors across the organization.
At a Glance
Intermountain Healthcare’s journey toward a modern revenue integrity process began with five key steps:
- Building a multidisciplinary team
- Developing department-specific charge-capture teams
- Providing ongoing education and training on best practices for revenue integrity
- Leveraging new technology and business support services
- Establishing a proactive approach to managing audits and compliance
When Jane Smith underwent surgery at an Intermountain Healthcare hospital seven years ago, she was pleased with the care she received and her outcome, but she was frustrated with the billing process. Her care team was reluctant to discuss charges, and the hospital sent two confusing—and conflicting—bills several weeks following surgery.
Six years later, Jane’s sister, Karen, underwent a similar surgical procedure at the same hospital. She, too, received high-quality care and had a positive medical outcome—but unlike Jane, Karen had a positive experience with the hospital’s billing process. Karen’s care team was able to answer her general questions regarding the cost of her care and connect her with a representative who provided a realistic expectation of out-of-pocket costs prior to discharge. Within a few days after returning home, Karen received a complete bill with a clear explanation of charges and follow-up information.
The difference in these patients’ experiences underscores the importance of an effective revenue integrity program. In today’s highly competitive and service-oriented environment, revenue integrity—where costs and charges are captured correctly and optimal payment is received for services provided—isn’t solely important to maintaining the organization’s financial performance. Ensuring revenue cycle workflows, communications, and processes support revenue integrity is critical to promoting the patient’s overall satisfaction with care.
Intermountain Healthcare, based in Salt Lake City, started its revenue integrity transformation with notable opportunities to improve. Five years ago, the organization conducted a candid evaluation of its charge and billing systems and practices through in-depth internal and external audits. The results were startling, underscoring significant challenges with coding adequacy and accuracy, chargemaster processes, and charge capture.
The audits showed that chargemaster ownership was fragmented among Intermountain’s 22 hospitals as well as its facilities (185 clinics) and service lines. Although Intermountain is widely recognized as a leader in clinical quality improvement and efficient healthcare delivery, its revenue cycle processes were not aligned. Interfacing systems were incongruent. Charge codes were difficult to track and were applied inconsistently. There was a lack of process and procedure control related to activities supporting the revenue cycle, and there was disparity in knowledge of revenue cycle processes among staff, facilities, and service lines. Often, charges were not captured in a timely or consistent manner. Lack of collaboration between financial and clinical staff created an atmosphere of confusion and frustration.
Intermountain has since developed a more modern process for revenue integrity that has enhanced efficiency of revenue cycle processes, improved compliance, and ensured optimal payment for the care and services it delivers. Intermountain’s efforts support its mission to transform health care through high-quality care and service and sustainable costs.
How Intermountain Did It
How did Intermountain Healthcare successfully align its revenue integrity process in such a short time? Five key actions supported the health system’s efforts.
Building a multidisciplinary team for revenue integrity oversight. All too often, revenue integrity initiatives are seen as solely a business office concern. Intermountain recognized that creating a systemwide structure to oversee revenue integrity would foster enhanced collaboration between clinical and financial leaders. Intermountain’s revenue cycle leaders worked with the health system’s chief nursing officer (CNO) to develop a team that could identify areas of risk related to revenue cycle processes and develop action plans for improvement. Key players on this team included the health system’s vice president/controller; vice president, clinical operations; chief compliance officer; regional CFOs; vice president, internal audit; and clinical operations directors in surgery, pharmacy, and imaging.
With this representation, the team could help clinicians better understand how efforts to ensure accurate charging and documentation can play a role in improving both the patient experience and financial performance and how such efforts directly align with the organization’s mission to provide high-quality care. Bringing staff with diverse backgrounds together in this effort has been central to Intermountain’s success.
Developing department-specific charge-capture teams. Intermountain also established charge practice teams that could address areas where accurate charge capture was most at risk. Specific goals and projects are created by each team related to charge practices, with each team creating a charter document that outlines the mission of the team, including roles and responsibilities of those asked to participate. The teams focus on developing, recommending, and implementing accurate charging and coding practices that minimize compliance risk and better support appropriate payment for services, such as in surgical services (see the sidebar below), wound care, pharmacy, and imaging. For example, the goal of Intermountain’s pharmacy charge team is to ensure that costs and charges are captured correctly and in a more timely fashion, improve management of medication billing, and minimize compliance risk within pharmacy services at all facilities (including retail). Through its efforts, the pharmacy charge capture team identified a $2.5 million opportunity to reduce costs related to pharmacy waste—such as medications that were purchased, but are missing from the chargemaster, or variances between the purchased volume and the billed volume—and developed action plans for improvement. The team also simplified the number of charge codes used for pharmaceuticals.
The charge practice teams consist of 10 to 15 members that meet at least monthly, with a clinical program leader directing the efforts. Each team includes front-line clinical managers and clinicians, revenue cycle professionals, corporate compliance representatives, and other individuals who lend support in the development of systemwide standard coding and charging practices. For example, Intermountain’s pharmacy charge practice team is led by a doctor of pharmacy who oversees pharmacy operations at the system level. Other team members include a chargemaster analyst, revenue cycle compliance professional, pharmacy compliance professional, pharmacy information systems manager, and pharmacy managers from each of Intermountain’s five hospital regions.
Providing ongoing education and training on best practices for revenue integrity. Programs that provide ongoing educations and training are important given routine changes in coding and charging principles, as well as clinical turnover. Intermountain has developed a best-practices approach to revenue cycle education and training that supports sustainable revenue integrity. Under Intermountain’s program, new clinicians receive training that helps them better understand billing and collection practices, increases their awareness of revenue cycle functions, and shows them how inaccuracies in the documentation or charging of services can impact the health system as a whole. This training, combined with ongoing education in clinical departments, has helped Intermountain continually improve charging practices and accuracy standards.
Leveraging new technology and business support services. Intermountain is leveraging software to help enhance consistency and decrease variation in developed processes across all hospitals. The software includes self-acting chargemaster management tools, workflow audit and reporting tools, and tools that automate business charging and the application of coding rules. All of these technologies help Intermountain staff accurately code, price, and charge for services.
For example, Intermountain developed an internal software tool with rules-based logic to identify pre-bill accounts that may have been coded inaccurately (for example, emergency department patient types with no emergency evaluation and management code; accounts where a drug administration code was charged, but a charge for the drug itself was not included). Such accounts are then reviewed by a clinically based auditor who identifies issues that should be corrected. As of August 2013, these audits have led to the review of more than 90,000 patient accounts—and have added $3.8 million to the organization’s bottom line.
Establishing a proactive approach to managing audits and compliance. To proactively identify potential adverse audit outcomes, Intermountain uses technology that highlights areas with elevated risk. Staff members then review related accounts to isolate and resolve any errors before an audit occurs.
Intermountain has created an infrastructure that focuses on exception-based audits, leveraging staff trained to identify compliance risk as well as revenue leakage. When adverse audit outcomes are found, Intermountain follows a consolidated approach that enables the organization to implement corrective action plans in the same manner across all hospitals.
Improved Processes—and Value
The results achieved from Intermountain’s revenue integrity program are significant: In fewer than five years, Intermountain reduced the time required to enter patient charges by at least 20 percent while reducing error rates for charges by an average of 3 percent across the system.
Through its revenue integrity program, Intermountain also has improved its ability to control costs of care and advance its mission to serve patients. In 2012, Intermountain’s hospitals, clinics, and other facilities provided more than $252 million in medical care assistance, spread among 239,000 cases, to people in the health system’s service area who were unable to pay for needed care. That’s more than $690,000 in charity care for 650 individuals, on average, each day.
Looking ahead, Intermountain has set aggressive goals for containing the trajectory of healthcare cost increases to lowest-sustainable levels, with an aim of limiting average commercial health insurance premium price increases to the consumer price index plus 1 percent by 2016.
The significant results that Intermountain’s revenue integrity program is achieving will be a key component in supporting these efforts.
Todd Craghead is vice president, revenue cycle organization, Intermountain Healthcare, Salt Lake City, and a member of HFMA’s Utah Chapter.
Eric Liston is COO, central lab, and former director, revenue cycle organization, Intermountain Healthcare, Salt Lake City, and a member of HFMA’s Utah Chapter.
How Intermountain Improved Charge Capture and Enhanced Revenue for Surgical Services
Intermountain Healthcare’s charge practice team set a goal of decreasing the amount of time required to enter patient charges into its financial system, such that one-day charge entry was achieved more than 86 percent of the time.
Finance leaders communicated with their clinical partners that more timely charge entry would:
- Provide more timely and accurate data for use with staffing best practice and productivity tools
- Drive more accurate charge entry, since entry was being done closer to when services were provided
- Enable Intermountain Healthcare to receive payment for services in a more timely and accurate manner
- Improve the ability to manage job functions, simplify charging methodologies, and build continual improvement tools related to charge capture
“Historically, there has been a division between clinicians and financial or billing staff members,” says Jeannette Prochazka, director of Intermountain’s surgical services clinical program. “Intermountain’s surgical services charge practice team in particular worked hard to change that.”
The team first worked with Intermountain’s surgical services line toward the end of 2010 to develop a plan to outline charge-entry processes and flows for all 22 Intermountain hospitals and to discover barriers to timely charge entry.
As part of this process, Intermountain’s revenue cycle teams gathered feedback from front-line charge-entry staff in the operating room to identify and overcome barriers related to charging. Some of the barriers included lack of information from suppliers, missing information in Intermountain’s supply chain and financial information systems, and incongruent working schedules for charge-entry personnel.
Eliminating barriers. To remove these barriers, revenue integrity representatives worked with surgical services leaders and physician partners to reduce the number of items requiring wait times for suppliers to provide information that was necessary to enter charges. Intermountain’s information systems team developed access and training to allow charge-entry staff to create new items in the organization’s materials management system. Staff no longer had to wait for supply-chain personnel to enter items in the system, thus speeding up charge entry.
The team also worked with Intermountain hospitals to ensure that charge-entry staff schedules allowed for charge entry on the weekends, without adding extra resources or paying overtime.
“By collaborating as clinicians, financials experts, and billing specialists, we were able to simplify the charges, so clinicians could easily understand and capture all line items with one simple charge,” Prochazka says. “We accomplished this as everyone involved talked, tested, tweaked, and kept coming back to the end metric until we were successful. Front-line caregivers also benefited from this collaboration by better understanding that the roles of clinicians and financial specialists are interlinked; we are partners. When decisions are made that may have an impact on charges or billing, all involved make decisions together.”
Results. These efforts and other process improvements allowed Intermountain to exceed its system goal, arriving at entering 86 percent of charges within one day of service. Intermountain realized a systemwide average improvement for surgical services charging timeliness of more than 20 percent. In doing so, the health system not only improved charge timeliness, but also documented and standardized many of the charge-entry staff processes. By decreasing the time it took to enter charges, Intermountain also reduced the charge-error rates in surgical services, on average, by 3 percent across the system, with one Intermountain hospital having a reduction in its charge-entry error rate from 16.95 percent to 1.43 percent.
Further, Intermountain worked to simplify the chargemaster for surgical services. The health system changed charging methods from itemized charges for procedures, interventions, or supplies to charges by categories. This change allowed one charge code to represent multiple services of similar type and expense.
As a result, the surgery chargemaster was streamlined from more than 67 charge codes to 12 charges for procedures. Surgical supplies decreased from more than 220 charge codes to 82 charges. The endoscopy chargemaster was reduced from more than 100 charge codes to 54 charges. Other areas such as same-day surgery and the post-anesthesia care unit also reduced their charges by almost half. Making these simplifications allowed Intermountain to better clarify when and how to apply charges. Staff were then able to report charges more quickly and accurately.
Publication Date: Monday, March 03, 2014