At a Glance

  • Standardized revenue cycle processes should be a key component of the coordinated care delivery strategy organizations will require to complete the transition to population health management. 
  • Integrating hospital and physician revenue cycle operations can help organizations better navigate new payment models, reduce costs, and improve value.
  • The most comprehensive approach involves integrating patient access and registration, coding operations, and receivables management across different settings.

The idea of integrating hospital and physician revenue cycle operations is generating a lot of buzz throughout the industry—and for good reason. 

Several industry trends are prompting organizations to consider combining business processes across diverse settings. With the industry’s increasing emphasis on population health management, for example, the need for organizations to pursue an integrated care delivery model has become paramount, and revenue cycle efficiency is a key component of an integration strategy. Integrated revenue cycle operations also will make it easier to navigate new payment models, realize optimal payment, and improve the value of services being delivered to patients.

Another trend that is prompting organizations to integrate business processes is the industry’s current rate of increase in expenses, which healthcare organizations can no longer afford—and which will be exacerbated by increasing medical needs of baby boomers. Integrating revenue cycle operations can offer substantial cost benefits as revenue cycle leaders seek creative ways to reduce costs, increase value, and eliminate waste. Because an organization’s revenue cycle is typically one of its largest administrative functions, it is a logical target for cost reduction. 

Variations in Integrating Revenue Cycle Operations

An integrated revenue cycle can mean different things to different organizations. 

Some organizations may prioritize integrating business processes across the same setting, such as within multiple hospitals in a health system. Others may focus on integrating one aspect of the revenue cycle across diverse settings—for example, implementing standard approaches to denials management and collections in both physician practices and hospitals.

The most comprehensive approach to revenue cycle integration involves creating shared governance; establishing standard processes and consistent policies; and integrating patient access and registration, coding operations, and receivables management across different settings. 

There are some distinct advantages to completely integrating hospital and physician revenue cycle operations across the continuum of care. In addition to laying the groundwork for emerging payment models, integration can help organizations boost patient satisfaction, reduce waste, and improve performance. 

Boosting patient satisfaction. Streamlining business processes facilitates a single point of entry into an organization, creates consistent communication across the organization, and aids in the production of one bill at the end of the care episode. Such efficiencies can result in improved patient satisfaction, greater patient loyalty and retention, and higher HCAHPS scores (data from the federally mandated patient satisfaction survey that ties payment to patient perceptions). 

Integrating front-end revenue cycle processes, such as patient access and registration, allows organizations to gather information from patients just once during a care episode. “Patients are happier when they only have to give information at the beginning of care instead of periodically throughout the interaction,” says Craig Collins, chair of the revenue cycle for Mayo Clinic in Rochester, Minn. “In our organization, patients register once by mail, by phone, or online. This eases their entrance into the Mayo system. Patients have one point of contact and don’t have to stop at registration when they arrive.”

Integrating the precertification and preauthorization processes ensures an organization has all the information needed to provide and accurately bill for care, limiting the likelihood of claim rejections and downstream rework. Combining revenue cycle operations also fosters more patient-friendly billing, resulting in one bill for the entire care episode as opposed to separate bills for each provider. 

“A chief dissatisfier for patients is receiving multiple bills for the same procedure or visit,” Collins says. “By integrating disparate billing functions, organizations can offer a more streamlined billing and payment experience for patients.”

Reducing waste. When hospitals and physician practices have separate revenue cycle operations, there can be substantial duplication. 

“From patient access to collections, there is risk of duplication and inefficiency if systems aren’t integrated,” says Barbara Tapscott, vice president of revenue cycle for Geisinger Health System in northeastern Pennsylvania. “Having the ability to centrally manage business functions offers several economies of scale, resulting in the opportunity to create more cost effective processes, reduce waste, and limit duplication.”

Centralized business-function management requires an organization to standardize policies and processes, Tapscott says. “This level of synergy between hospitals and physicians drives better performance in terms of both cost savings and revenue capture,” she says.

A prime example of how integrating revenue cycle operations can reduce waste can be seen when hospitals and physician practices integrate their coding functions. “Integrating coding functions enables organizations to code an entire episode of care at once,” Collins says. “Having a one-stop interaction with the medical record, in which you capture both physician and hospital charges and coding details, allows organizations to generate the most accurate and optimal bill in a timely fashion. Should that bill go to the patient, it also limits some of the confusion that comes with receiving multiple bills and can enhance not only satisfaction, but also the patient’s propensity to pay.”

Integration also yields greater staff efficiency. For instance, by integrating self-pay and collections, an organization can focus resources on areas of high volume or critical need. “Our collections staff is spread across three sites, and any staff person can work any account,” Collins says. “This allows us to respond to volume upticks in a seamless way without overloading certain staff while others sit idle.”

Improving performance. Tapscott says having an integrated physician and hospital revenue cycle helps identify issues and opportunities more globally. 

“Instead of uncovering and resolving issues on a site-by-site basis, you can share knowledge, best practices, and improvement strategies to make enhancements organizationwide,” she says.

The Challenges of Integration

Although combining the hospital and physician revenue cycle may seem like a good idea in theory, it is not an easy task. 

“If it were a straightforward process , more organizations would have fully integrated their revenue cycles by now,” says Todd Craghead, vice president of revenue cycle operations for Intermountain Healthcare in Salt Lake City. “Instead, most organizations are on the cusp of this work, figuring out how to remove roadblocks and overcome hurdles.” 

Although each organization will face its own set of obstacles, there are some common themes. 

Corporate culture. “In many cases, it is the corporate culture that keeps hospitals from integrating with other settings, including medical group practices or home care programs,” Craghead says. “Health care has functioned autonomously for so long, it takes true leadership investment and organizationwide commitment to break down the barriers between physicians and hospitals and foster more collaborative thinking.”

For example, a small physician practice may be concerned that by integrating collection efforts with a hospital, it would not receive much attention. Craghead suggests that the hospital could alleviate the concerns by deploying a practice-focused collections team from the integrated business office that focuses solely on physician practice collections.

Compromise and communication are fundamental to overcoming cultural barriers. “You can’t realize integration just by asking one group to start doing business like the other,” says Ryan Thompson, vice president, revenue cycle services for CHRISTUS Health in Dallas. “You have to look at what is important to all parties and make sure your integration efforts respond to varying priorities. Things like timing of information, data transfer mechanics, and communication between settings are all critical things to think about.”

Disparate systems. A precursor to integration is acquisition. As hospital-based health systems acquire physician practices, home care organizations, and rehabilitation facilities, they often inherit divergent technologies that are difficult—if not impossible—to integrate. “Making sure data can be shared across these systems is key to supporting effective integration,” Craghead says. “Roadblocks emerge when organizations try to ensure accuracy and timeliness while eliminating duplication across settings. For instance, if someone changes information about a patient in the medical group, how does that change make it through to the hospital, home care, and rehab system? Being able to answer this question is fundamental to successful integration.”

Craghead notes that although an integrated technology solution that can be used consistently across the entire care continuum is not required for integration, it certainly can make the process easier. 

Leadership apathy. A lack of leadership support can derail efforts to integrate. “To be successful, senior leaders must be truly committed to the work and back up that commitment with time, staff, and money,” Collins says. “Before we started integrating, our senior leaders met with each site to discuss opportunities for improvement and gather opinions and concerns about integration. The leaders determined that the pluses outweighed the minuses, and made the decision to pursue a global integration initiative. Once the decision was made, senior leaders frequently underscored the importance of the direction and have been very vocal and visible throughout the transition.” 

A lack of strategy. Taking on a project of this size and scope is not possible without a strategic plan to guide the work. Having some form of change management methodology, such as Six Sigma, Lean, or Plan-Do-Study-Act, is critical if an organization wants to make a smooth and effective transition to integrated business processes.

The Payer’s Role 

Although leadership and cultural endorsement, interfaced technology, and standardized processes are all essential for a fully integrated environment, the payer plays a significant role as well. To truly reduce the cost of health care, providers and payers must collaborate, focusing on reducing waste. Because both payers and providers have the same ultimate goal—delivering high-quality care to patients—there are many opportunities to mutually support integration. Without collaboration, achieving value in health care could be limited or impossible. 

“In some ways, payers are ahead of providers in understanding how to work with diverse systems and offer an optimal patient experience,” Craghead says. “Fostering a partnership in which both groups learn from each other and commit to supporting combined business processes will make the road to integration easier. Although providers can accomplish much on their own, payer support may be the differentiating factor between success and failure.” 

Important Considerations

There is no single, correct approach to integrating revenue cycle operations. Each organization should consider its strategic goals, current workflows, and ability to navigate the evolving healthcare landscape in determining a revenue cycle integration strategy. For some organizations, starting small and integrating within a specific setting or focusing on back-end processes may be appropriate. For others, taking a wholesale leap may make more sense.

Success will depend on the organization’s culture and level of senior-leadership support. Organizations able to capitalize on an integrated revenue cycle should experience improved value, reduced cost, and better compliance. The journey will no doubt have its pitfalls, but the ultimate destination will be worth the effort.  

Kevin M. Lockett is vice chair, revenue cycle, Mayo Clinic, Rochester, Minn., and a member of HFMA’s Florida Chapter.

Publication Date: Monday, March 03, 2014

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