HFMA Executive Roundtable: Optimizing the Revenue Integrity Function

Revenue integrity is the internal process or function of ensuring that revenue is accurate in coding, appropriate in charge capture, contains reasonable pricing for services that are being provided, and complies with laws and regulations. A strong program yields reliable financial reporting and effective and efficient operations. Although some organizations have a dedicated department or group focused on preserving revenue integrity, others address the concept less formally. In this roundtable, sponsored by Besler, senior leaders from several hospitals discuss their approaches to revenue integrity and provide strategies to improve and enhance the function.

What components make up your organization’s revenue integrity program? What are the top two to three areas that are the highest priority for your team?

Gary Breuer: At the moment, Amita Health is focused on charge capture, denials, and underpayments because these have the most material effect on our bottom line. We have formal projects in each area with defined financial targets. Within these projects, we rely on skilled teams that use customized software to identify and respond to improvement opportunities. For example, we have developed algorithms that facilitate proper charge capture, making sure all appropriate charges are present given a certain diagnosis. If something is amiss, then the record is flagged for further review. We have saved considerable dollars using these algorithms.

Jessica Bertucci: At Baylor Scott & White, our top priorities are chargemaster maintenance, charge capture, and pricing strategy. Chargemaster maintenance involves coordinating, monitoring, and approving any and all chargemaster changes, with the key data element being current procedural terminology (CPT) codes. We make sure everything is compliant with regulatory guidelines and our payers’ contract rules and terms. We also maintain relative value unit (RVU) assignments with professional charges to track physician productivity and payment.

Regarding charge capture, we strive to ensure charges are documented sufficiently and captured as services are provided. To do this, our revenue integrity department aligns and integrates with our service line leaders to enhance each clinical department’s focus on accurate charging.

Finally, the revenue integrity department is responsible for developing a pricing strategy and establishing prices for our chargeable services. We look at market data and perform annual defensibility studies to make sure our pricing is rational and consistent, which is particularly important when it comes to increasing pricing transparency with our patients.

Cathy Dougherty: Gwinnett Health System started a revenue integrity department about 15 years ago before the concept was widespread, and it has been evolving ever since. Revenue integrity departments within health systems are not always set up in the same manner with the same focus. Our initial focus was CDM maintenance, quality reviews, charge audit, and training. Our current focus is charge capture and charge audit. We have nurses and charge analysts who work in this department, with one being a certified coder who serves as our CDM coordinator.

Kristi Morris: Auditing is extremely important because that’s where your clinical partners receive feedback on their performance. A nurse auditor should be looking at charges daily, reviewing the documentation, and providing information to each department to ensure it meets the organization’s established guidelines. Of course, you can’t audit every single charge for every single department every day, but I would suggest picking maybe two or three high-volume areas, such as neuroscience, cardiovascular, and trauma. That’s an easy way to start targeting the most impactful departments.

Monitoring charge entry is also valuable to make sure you are recouping the dollars that your hospital spends on performing services. If you are missing charges due to lack of staffing or knowledge, it can have a detrimental effect on the services your facility can offer. Charge auditing should go hand-in-hand with your nurse auditing because when your nurses are reviewing the documentation, they can see whether the charges are appropriate.

Martin Hutson: In addition to what my colleagues have mentioned, St. Mary’s also checks that we are being paid accordingly for services rendered. We have a company that comes in quarterly to review our coding. We use another one to look at our zero-balanced accounts to confirm we are receiving complete payments.

Bertucci: Overall, the role of the revenue integrity function is growing. We’re constantly expanding our scope to meet our organization’s needs. I’ve worked in revenue integrity for almost seven years, and I’ve seen the department change from primarily focusing on the chargemaster to examining broader categories around charge capture and auditing.

Do you have a dedicated revenue integrity department or staff position? If so, how does that group interact with the rest of the organization?

Tim Pollard: A portion of New Hanover Regional Medical Center’s revenue integrity program is centralized, but we also have point people within the various clinical departments. When we implemented our electronic medical record several years ago, we went through a significant change in how revenue was recognized at the individual department level. We created a functional responsibility within each department called a revenue steward, and this person reviews and reconciles charges daily. If there are issues, then he or she reports those to the revenue integrity department. We built guard rails that show historical revenues for each department, so the stewards know whether their current revenue is in line with what’s expected. If it isn’t, then they report that to our centralized department. If a department is constantly reaching out, then the revenue integrity nurse does an evaluation of the documentation and digs for root causes. The revenue integrity nurse also periodically audits all departments to make sure processes are being followed.

Breuer: Amita Health does not have a defined revenue integrity department per se. We have more of an internal revenue cycle consulting team that is made up of 10 analysts and a director. This group works on a number of different revenue cycle projects, including revenue integrity. I’m a big believer that it’s better to spend $30 per hour and bring the consulting in-house versus spending $200 per hour and hiring things out. Because the internal team is working on multiple projects at the same time, if one of the projects hits a snag, the team member can focus on a different initiative instead of waiting until the roadblock is resolved. A consultant may wait—charging me for the time—so it’s less productive.

Bertucci: We have a fairly expansive revenue integrity department. For example, regarding charge capture, we have an analyst assigned to each service line, and these individuals stay current on concerns related to the service line. The analysts also deliver one-on-one trainings on charge capture processes, charge reconciliation, and our charge entry tool. This group also administers enterprise-wide auditing programs to make sure our clinicians and providers are following established processes. We check that they are documenting sufficiently and capturing charges for services rendered. We share auditing results with the CNO and CFO so that everyone is on the same page about the issues we’re facing and how we can address them.

What are the risks of underperforming in this area?

Breuer: When an organization doesn’t perform well with revenue integrity, it can translate into several percentage points in lost revenue per year to the health system—which can mean tens of millions of dollars on the income statement. If you are not consistently working charge capture, denials, and underpayments, then you are leaving money on the table. I guarantee it. On the other hand, if an organization commits to finding out where the money hides and fixing the problems, it can substantially add to its bottom line.

Bertucci: In addition to net revenue leakage, an organization without a strong program can open itself up to compliance problems and external audits. You must make sure you’re following state and federal regulations, as well as commercial contract terms. We build our chargemaster off the Centers for Medicare & Medicaid Services (CMS) regulations, but we also pay close attention to our commercial payers’ requirements.

Dougherty: There’s also a risk for cash slow-downs if you have late charges that are delaying billing or are causing re-billing. You want to be certain your processes are accurate, compliant, and efficient so you can put yourself in the best position to take advantage of new opportunities, such as value-based payment arrangements.

What are some challenges you face?

Bertucci: There is so much change right now; it can be difficult to keep up. Regulations are continuously evolving, contracts are changing, and the services we bill for are shifting. A hospital may have received a new piece of equipment or launched a new service line, and those require different codes and charges.

Another challenge is uncovering the various sources of revenue leakage: They can vary by service line and facility, are constantly changing, and sometimes are hard to identify. In certain situations, we know there’s a problem, and it can be challenging to identify the source. It may take interviewing several folks or reviewing numerous reports before we can get down to the root cause.

Late charges are also something we wrestle with. So much of our success or failure in this area is tied to providers closing encounters in a timely manner. Automated charge capture is starting to close this loop, but we will always have opportunity to improve efficiencies in this area.

Pollard: As I mentioned earlier, we rely on revenue stewards to review and reconcile charges. The function is not a full-time job, and these individuals are squeezing the work in with competing priorities. It can be challenging to sustain their focus and ensure they monitor charges on a consistent basis. With revenue steward turnover, it can be tough to keep these individuals trained.

Dougherty: We struggle with—and constantly work on—keeping our revenue-generating departments focused on revenue integrity. At times, some may give lip service to the fact that revenue integrity efforts are important, but they often don’t fully understand what’s involved or consider the work to be as vital as clinical care. Engaging them with report cards and metrics that show their performance versus other departments is how we keep things top of mind. In addition, charge capture and charge audit results are shared with senior leadership.

Could you provide a few strategies for enhancing revenue integrity?

Morris: As a first step, organizations should create a team—or at least a task force—to tackle the issue. This may include someone from your patient financial services department, revenue cycle team, and health information management group. A nursing leader is important to make sure you have the clinical perspective. You want to be certain that any changes you put in place will work for clinical staff—a clinical leader can let you know what’s possible and realistic. Along with the clinical perspective, you should also have an executive financial leader on the team so he or she can reinforce the criticality of the work and ensure the organization takes it seriously.

Once you establish a team, make sure you have clear expectations about what you want to accomplish. One thing that throws a lot of revenue integrity departments off track is that they don’t have a complete understanding of what their goals are—what their No. 1 objective is. If that is spelled out in the beginning, it’s a lot easier to achieve the desired outcomes.

Also, you should have a plan for education and follow up. Organizations frequently do a good job on initial education, but there is a lot of turnover in health care, especially in leadership positions, and there needs to be a process for educating a new leader when he or she arrives. This can involve having the new leader meet with the revenue integrity director to review department objectives, helping the new leader appreciate the importance of the revenue integrity function. By building the relationship early on, the two leaders can work collaboratively to reach desired outcomes. It’s also helpful for the new leader to share any solutions and best practices that he or she brings from previous experience. A lot of times, the best ideas come from other organizations, and a new leader can be a great resource.

Bertucci: Leveraging technology is crucial as organizations try to do more with less. Automated solutions facilitate detailed and accurate reporting, freeing staff from mining through volumes of data to identify root causes. Data analytics can reveal insights that are almost impossible to find manually. Organizations that use technology and big data can often get in front of issues, rather than waiting for a payer, regulatory body, or other entity to bring the problem to the organization’s attention.

Technology can also enable better charge capture. The last thing clinicians want to worry about when they’re providing patient care is capturing the correct charges. Organizations need to move away from the days of superbills, charge sheets, tick sheets, and process lists and instead embrace the idea of charges dropping in the background based on provider documentation. This requires less physician time, so doctors can focus more on patients.

Dougherty: In our organization, the revenue integrity department serves as a resource for any business-related questions a clinical department has. In some cases, we refer the person to a different department, such as patient access, finance, or accounting, but the clinical staff know they can call us first and we will help them find the right resource because we’re the business department they talk to every day. Each clinical department is paired with a nurse and an analyst for support.

What role can an external partner play? What does that relationship look like?

Pollard: A third-party resource can be quite valuable in staying abreast of regulatory updates and what’s new in the marketplace. We use a vendor to keep our chargemaster current. It can be overwhelming to handle that on our own.

Bertucci: Third parties can also be beneficial in sharing industry best practices, giving insight into issues that you currently may not be considering. They bring a fresh set of eyes, which sometimes can be just what you need. They can provide multiple suggestions or solutions to a given problem because they know how other organizations are addressing the issue.

Hutson: Outside vendors can also remain neutral, and that’s helpful because internal departments can develop tunnel vision and either miss opportunities or overlook mistakes. Bringing a third party in to do audits and check for improvement opportunities is certainly valuable.

Morris: Within a revenue integrity department, there are so many objectives to focus on—it is easy to spread yourself thin. However, with an external partner, you can dig deeper in areas where you are a little weak. If your organization is light on coding compliance or auditing, for example, an outside organization can help because that’s where their expertise is. These vendors also know where the nuances are and where revenue can be found.

When bringing in an external partner, make sure you look for a company that’s interested in a true partnership. You want someone who appreciates what your priorities are and is committed to helping you meet your objectives. This organization also should deliver timely and accurate reports that demonstrate the work they provide. When you need a last-minute report or data for the CFO or senior vice president, you want to make sure you can have access to easily understandable information. If a vendor can’t provide that type of information at least monthly, then you are going to be crippled in your efforts and not know how well you are doing at any point in time.

What lessons learned can you share with other organizations looking to establish or revamp the revenue integrity function?

Breuer: Spend time figuring out how to track the results of your revenue integrity efforts so you can prove to yourself and others that the work is adding value. It’s an area where there’s a lot of obscurity, so having clear metrics that demonstrate accomplishments is key. I’ve seen too many organizations do a lot of work, but then they don’t measure the results of whatever their initiative is and they struggle to communicate their value. In the case of revenue integrity, think about whether you’re overturning denials, identifying underpayments, ensuring proper coding, and so on. If possible, tie a dollar amount to the work so you can plainly convey what the group brings to the table.

Hutson: Revenue integrity is a big topic, and it can be overwhelming setting up a program. Don’t panic. Aim to pursue a methodical approach and start small. You’re not going to get it all done in one day. Look for your biggest opportunities in terms of revenue and start there. For example, making sure your chargemaster is accurate and consistent across all your different hospitals is low-hanging fruit that can deliver strong results.

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Participants in the HFMA Executive Roundtable

Jessica Bertucci  is system director, revenue integrity for Baylor Scott & White in Dallas.

Gary Breuer  is vice president of revenue cycle management for Amita Health in Arlington Heights, Ill.

Cathy Dougherty  is vice president, revenue cycle management for Gwinnett Health System in Duluth, Ga.

Martin Hutson  is CFO for St. Mary’s Health in Athens, Ga.

Tim Pollard  is vice president, revenue cycle operations for New Hanover Regional Medical Center in Wilmington, N.C.

Kristi Morris  is director, revenue integrity services for Besler in Princeton, N.J.

 

 

 

 

 

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About Besler

Besler combines best-in-class healthcare finance expertise with proprietary technology to help hospitals recover more revenue. Our reimbursement and recovery solutions have delivered more than $2 billion of additional revenue to hundreds of hospitals across the United States. We serve as advocates for hospitals so that they, in turn, can better advance the health and well-being of their patients.