Improve Your Revenue Cycle

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September 16, 2009

Is your organization doing everything it can to improve the revenue cycle? Hospitals featured in the September issue of hfm Magazine realized that they could be doing more. Their case studies demonstrate the potential of a high-performing revenue cycle.

Transforming Revenue Cycle Processes
The flagship safety net hospital in Atlanta's Grady Health System was struggling against a 10-year cycle of steadily decreasing revenues and rising costs. With more than 84 percent of the system's payer mix falling under self-pay, Medicare, and Medicaid, leaders focused their attention on patient access.

What they found wasn't pretty: a registration error rate in excess of 25 percent, no printed materials to explain the credit and collection policy, an estimated 4 percent to 6 percent of self-pay accounts that could have qualified for Medicare and Medicaid, and an antiquated technology infrastructure.

Grady's leaders recognized the need for new technology, but just as pressing was the need for a culture change. Job descriptions were revised to include essential skills, with training offered to ensure staff success. Key performance indicators were tracked in daily, weekly, or monthly reports. And more than 150 new computers were installed in central scheduling, patient access, and patient financial services. The changes are paying off. To date, monthly self-pay collections have increased by more than $650,000.

At John H. Stroger, Jr. Hospital of Cook County, based in Chicago, almost half of the payer mix is made up of self-pay patients. It too has been able to achieve significant improvements in cash flow. Attendees at this year's Revenue Cycle Strategies Conference in Chicago, Nov. 5-7, will be able to experience Stroger's patient throughput first-hand in a special "best practices" onsite tour. Learn more.

Responsibility-Based A/R Reporting
At Greenville Hospital System University Medical Center in South Carolina, revenue cycle leaders were challenged to reduce days in accounts receivable (A/R) from 66 to 57 over nine months. A combined emphasis on analytics and responsibility-based A/R reporting were the keys to their success.

The first step was to define various A/R portfolios based on revenue cycle functions, such as "collections" and "denials." Specific department directors or managers were assigned responsibility for each portfolio and were given targets based on published leading practice comparisons or internal business office goals. Revenue cycle managers were also queried to see what types of reports they needed, and an information-sharing system was introduced to give revenue cycle managers desktop access to up-to-date A/R data.

With clearly defined goals, a new culture of responsibility, and access to current data, Greenville's revenue cycle team brought days in A/R below 57 in FY08, and saw cash hit record levels in the late summer months.

Excellent A/R days have also become the norm at Chelsea Community Hospital in Michigan, following six years of continual improvement. Learn more about the "Critical Factors in Revenue Cycle Leadership" that helped Chelsea achieve this standard, featured in the current issue of HFMA's Revenue Cycle Strategist newsletter.

Protecting Cash Flow During a Revenue Cycle System Install
Many hospitals have put off upgrading or converting revenue cycle systems. A major concern is the potential for cash lost during the typical 12- to 18- month transitional period after system installation. MultiCare Health System, based in Tacoma, Wash., was determined to avoid an extended period of lost income when it installed a new patient accounting system.

MultiCare identified four key financial metrics that would be monitored throughout the process to identify specific actions that would keep the organization on track to meet its goals. System leaders also recognized that success would depend on cooperation and co-ownership between finance and clinical leadership. Project roles were clearly identified and documented, and communication guidelines ensured continuity and common understanding throughout the project. Daily monitoring of key metrics ensured minimal slippage from the organization's goals.

The results were tangible. Seven months after system go-live, Multicare reported improvements in all four cornerstone metrics. In the year following its patient accounting system implementation, MultiCare enjoyed its best financial year to date.

The practices of high-performing hospitals will be a focus of this year's Revenue Cycle Strategies Conference in Chicago, Nov. 5-7. Conference attendees will receive an advance copy of Strategies for a High-Performance Revenue Cycle, a new report from the PATIENT FRIENDLY BILLING® project that will have an exclusive release at the conference. Learn more and register today.

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