Restructuring the revenue cycle team after a period of acquisition helped one North Carolina health system streamline its billing and payment processes.

From 2006 through 2009, Novant Health Medical Group (NHMG) acquired more than 200 physician practices in its core markets of Charlotte and Winston-Salem, N,C., and in Virginia and South Carolina. Part of Novant Health, a Winston-Salem-based not-for-profit health system, NHMG also acquired practices to support its parent health system’s newly acquired hospitals in North Carolina’s triangle and the coastal submarkets. But this exponential growth came with myriad challenges in the central business office (CBO).

As a result of the numerous acquisitions, NHMG was running multiple primary practice management (PM) platforms. Many newly acquired practices, which were already on a stable electronic health record (EHR) system, were allowed to maintain their legacy systems, clearinghouses, and billing staff after coming under the medical group tax ID. By late 2010, more than 90 clinics were maintaining their own billing team members, using a total of 30 different versions of PM/EHR systems, while all sharing a single tax ID.

This situation created a cash-posting challenge for NHMG. Electronic remittances included payments for all systems that shared a tax ID. Worse, although all deposits were going to a central bank account, the clearinghouses’ remittance pick-up process was consistently directed to the independently billed practices, causing remittances to be loaded in systems that were inaccessible to CBO team members. By mid-2009, unposted cash reached $60 million.

A Short-Term Solution

To resolve these issues, NHMG moved to a single clearinghouse and post office box for remittances starting in 2010 to bring payment reconciliation processes for all 227 of NHMG’s clinics into the CBO. This short-term solution was costly, requiring the onboarding of 70 additional team members, the development and maintenance of a system to split and reconcile the payments, and the leasing of more office space for this new team. The consolidation of payment reconciliation led to material increases in cost to collect and a significant backlog of unposted remittances received prior to 2010. Key performance indicators (KPIs) at this time included:

  • 130 days in accounts receivable (A/R), an all-time high for the CBO-billed clinics
  • Cost-to-collect constituting 8 percent or more of cash collected
  • 65 percent or more of the total A/R shown as aged more than 120 days

Because many of the accounts were paid but not posted, it was impossible to use timely filing limits as a reliable basis for accurately measuring performance or focusing follow-up efforts. Team members became frustrated when they would call on accounts only to learn the accounts had been paid months previously. Morale was low, team member turnover was high, and expenses continued to escalate.

The New Solution

Contending with system instability and the HIPAA 5010 compliance deadline, NHMG needed to quickly select a new single-solution PM/EHR. The rapid installation began in February 2011, and all 227 CBO-billed practices went live by October. In addition, the rollout of the EHR system started in August 2011, and both the PM and EHR rollouts were completed in July 2013.

The CBO’s reputation had been tarnished in the minds of NHMG’s physicians during the legacy period, causing team members to be discouraged. In an attempt to improve morale and disassociate from the negativity associated with the term CBO, the team was renamed revenue cycle services (RCS). The team didn’t change in name only, however. New workflows and processes were put in place to align with the capabilities of the new system. The new RCS wanted the message to be loud and clear that operations were no longer business as usual.

The RCS workflows and strategy were determined using the following guiding principles:

  • Processes should be automated wherever possible.
  • It is best to build out as many pre-bill edits as possible.
  • Clinic work queues should be assigned to address errors made during the scheduling/registration process.
  • Clinics should be supported with new workflows.
  • Performance should be monitored in all areas every week.
  • The focus should be on prevention, not correction.
  • The new PM should be used instead of third-party vendor solutions where possible.
  • The primary focus should be to simplify the patient’s billing experience.

The RCS team used high-level reports available within the new system to monitor overall performance. To obtain comparative clinic level reports and manager level “report cards,” the team used Microsoft Access and weekly “data dumps” to create clinic-level KPI reports—which are still used today.

Restructuring the RCS team alone, however, was not enough. True performance improvement required rethinking how the revenue cycle department, IT, and clinics should interact. To support this effort, each RCS leader was assigned a physician partner who could help with decisions that had a clinical impact and act as a trusted voice and communication channel to other providers.

A process was established—still in place today, nearly five years after the first clinics went live—in which RCS and IT team leaders participate routinely in biweekly meetings of the operations department, creating a forum for the three groups to unearth issues for input and direction. The process also includes weekly conference calls between RCS and IT build teams to discuss open tickets and to prioritize new issues, and a full day each month during which the IT build team works with RCS analysts to tweak workflows, troubleshoot, and resolve set-up issues.

Insurance follow-up teams were aligned by specialty, and each manager began receiving a weekly report card measuring A/R days, edit days, denial days, and aging for the specialties they managed. Stoplight color formatting benchmarks the team on each KPI. A second weekly report breaks out each clinic’s insurance days, edit days, denial days, self-pay days, rejection days, and no-response days with color coding benchmarking performance for that specialty. The report also includes ending A/R and average daily revenue so managers can easily determine priority and impact.

Sample Novant Health Medical Group Report Card
Sample Novant Health Medical Group Report Card

Similar reports were created for clinic leaders to monitor outstanding clinic edits both in terms of dollar amount and edit age. These reports ensure each clinic leader is managing his or her corrections. Monthly denial reports also are sent for clinics with denial rates that exceed 3 percent of gross average charges.

The RCS team also expanded its scope of services. The customer service contact center was reorganized so that it could handle escalated patient calls requiring more extensive research instead of having to transfer the calls to another team to resolve. The team was provided with internal training on how to handle escalated calls and angry patients. Standard operating procedures also were developed to assist with the workflow when concerns could not be resolved during the initial call. The result was a dramatic drop in hold times and faster turnaround of accounts that required research. The center also added an email box and chat feature to Novant Health’s online billing portal and assumed responsibility for patient support calls related to the new EHR’s patient-facing online portal.

Two new teams were created, composed of relationship managers and revenue cycle advocates, to enhance the patient experience and provide additional support to NHMG clinics. The members of these teams are regionally located so they can provide in-person support to both the clinics and the patients. The revenue cycle advocates’ primary responsibilities include educating the clinics on how to resolve edits and improving the processes that had have been shown to result in demographic-, eligibility-, and authorization-related denials. These localized resources have been invaluable as clinics have adapted to new workflows and responsibilities related to the new PM. As clinics began to be more comfortable with the new workflows, the revenue cycle advocates were able to shift their focus to the patients, assisting with billing questions, payment plans, and financial assistance applications. The advocates report to the relationship managers, who regularly attend clinic and operational meetings, round on clinics, and ensure clinics’ revenue cycle needs are being met.

The RCS team also created a central preverification department to assist with “exception” work queues (created by the new system) for scheduled patients whose insurance information is expired or incorrect. These work queues had not been a priority for the clinics, with the result that they had been largely unworked.

Through a process of trial and error, the RCS team found that the most efficient workflow is to have the preverification department work the exceptions of scheduled appointments while the clinics are charged with determining eligibility in real time for walk-ins and same-day appointments. A one-day “retro” batch process was implemented to scrub the prior day’s patients for errors not fixed by the clinic or for which eligibility was not completed. This process allowed the preverification department to assist the clinics and improve the patient experience by reducing check-in times.

As a final step, the RCS team’s leadership assumed responsibility for oversight of coding in mid-2012 due to confusion and gaps in the new system’s coding workflows. The original coding team was restructured into primary care and specialty coding review teams, a surgical coding team, and a team of coding audit response specialists to work coding-related denials. Ambulatory payment classification coding certification now is mandatory, and insurance follow-up experience is required for all coders.


Within six months, the RCS team saw positive results. By the end of 2013, the following improvements were achieved:

  • Core RCS costs were reduced by 49 percent.
  • A/R days dropped by 93 days.
  • A/R aging past 121 days was only 7.27 percent, down from 65 percent.
  • Gross collections increased by 2.6 percent.
  • Contractuals were reduced in 44 percent of the clinics.

The RCS team leaders believed further improvements were achievable and embarked on an optimization journey with internal IT partners in 2014. Two new technology functions were added: automatic posting of credit-card payments and interest-free payment plans through a third party.

Meanwhile, automatic capabilities developed in the initial implementation were optimized, including the following:

  • Automatic balance-due reminder calls
  • Propensity-to-pay scoring
  • Automated patient refunding of $50 or less
  • “Virtual wallets” in which patients could store credit cards and set up payment plans
  • Payroll deduction for Novant Health employees
  • Occupational health billing, fully transitioned to the new system
  • Enhanced productivity and quality tracking for all departments

Optimization made it possible to reduce RCS staffing by 30 percent. More specifically, most of this reduction came through attrition and reassignment. The RCS team expanded to offer four new services: contract variance management, price estimation for specialty practices, prescreening for self-pay patients with financial assistance, and inpatient charge reconciliation.

To ensure RCS staff members would remain engaged, the RCS team rolled out a new monthly bonus structure in 2015 in which staff members receive the bonus if they achieve each of the following three goals:

  • The department cash collection goal
  • The department KPI goal for a staff member
  • An individual productivity and quality goal

This structure fosters both shared and individual responsibility for achieving the bonus.

By the end of 2015, the RCS team had reduced NHMG’s cost to collect by 50 percent, saving Novant Health an estimated $55 million in revenue cycle costs over four years. NHMG received the PM/EHR vendor’s “most valuable player” award for success in professional billing and achieved top-tier performance, as demonstrated by its KPIs.

RCS Cost as a Percentage of Cash Collected
RCS Cost as a Percentage of Cash Collected

Acute RCS Integration

NHMG clinic implementations preceded those of the acute division, which began in October 2014. As the hospital implementations began, Novant Health’s RCS leaders quickly identified a need to standardize revenue cycle processes across all entities owned by the health system. Although separate billing offices were maintained for acute and ambulatory care areas, leaders wanted to leverage the benefits of a single billing office while avoiding a rebuild of the newly installed system, which would have been required to utilize the single billing office platform.

Approximately six months after the first hospital implementation, leaders of both the acute care and ambulatory care RCS teams initiated eight patient-focused initiatives selected by the team members as having the highest potential impact for patients:

  • Preregistration/verification
  • Price estimation
  • Financial counseling, including bankruptcies and estates
  • Operation of the customer service contact center
  • Collection of patient payments and refunds
  • Management of payment plans and payroll deductions
  • Patient collections and bad debt
  • Management of patient-facing websites/portals

Each of the eight taskforces assembled to undertake these initiatives included a mix of acute and ambulatory leaders.

With the goal of having a consistent and seamless process for patients seeking services from Novant Health’s various divisions, team leaders from both areas worked together to formulate their plans and timelines, taking an incremental approach where necessary to ensure team member buy-in.

Because the teams were already housed in the same building, the first area to fully be integrated under a single leader was customer service. The goal was to train agents to provide single-call assistance for Novant Health patients regardless of which division served the patient. To achieve this goal, the taskforces undertook a four-phase process over a one-year period, scheduled to be completed later this year. The phases are:

  • Relocating teams to the same floor
  • Developing a single patient number with a voice tree to specify acute or ambulatory
  • Designating one director for both acute care and ambulatory care teams
  • Cross-training all team members so the voice tree distinction can be eliminated

Three initiatives were completed in 2015 by consolidating processes and policies between the two RCS departments: management of patient-facing websites, collection of patient payments and refunds, and management of patient plans and payroll deductions.

Patient-facing websites. The taskforce charged with patient-facing websites and portals worked with IT to create a single website and online payment experience.

Patient payments and refunds. This taskforce focused on developing policies and training to allow any Novant Health department that has direct contact with patients to collect and post payments for any Novant Health entity. The taskforce also worked with IT and finance to enable both the acute and ambulatory refund departments to transfer patient overpayments between the new system’s acute care and ambulatory care components, thereby helping to ensure no patient receives a refund from one department while receiving a bill from another.

Payment plans and payroll deductions. This taskforce selected a third-party vendor that facilitates the combining of patients’ ambulatory and acute balances into a single payment plan. The taskforce also worked with Novant Health’s payroll department to automate a process for payroll deduction across both systems.

The remaining initiatives are on track for completion in 2016.

Salutary Effects

NHMG noticed immediate and sustained positive results from the revenue cycle restructuring. The combination of a restructured approach, an integrated EHR and billing system, and a single billing office for all clinics has garnered dramatic improvements in all KPIs. The exhibit below demonstrates how successful this approach has been by highlighting revenue cycle KPIs from before and after the undertaking.

Results of Restructured RCS
Results of Restructured RCS

Despite the addition of the coding department as well as the RCA and preverification teams in 2011 and 2012, in which 149 of NHMG’s 416 current FTEs work, overall staffing for the NHMG revenue cycle department was reduced by 9 percent. Moreover, excluding the two new departments, the organization realized a 42 percent reduction in overall FTEs.

In 2015, NHMG’s revenue cycle department was able to refund providers for excess billing fees for the first time in Novant Health’s history, resulting in reduced billing fees for 2016.

Kelly B. Baker, MBA, 
is vice president of revenue cycle service, Novant Health, Charlotte, N.C., and a member of HFMA’s North Carolina Chapter.

Publication Date: Thursday, September 01, 2016