Finance and Business Strategy

Why Hospital-Physician Collaboration Must Improve for the Sake of the Revenue Cycle

September 20, 2018 12:13 pm

Note: The author will present “The Intersecting Role of Physician Advisers and Revenue Cycle Leaders” at HFMA’s 2018 Revenue Cycle Conference, which takes place Oct. 21-23 in Denver. For more information and to register, visit

For decades, health care has had distinctly different paths for clinical and finance operations. And the sentiment has been “never the two shall meet.”

Physicians have wanted to do what they do best and to be left in blissful ignorance as to how their decisions and their documentation affect revenue. To them, such concerns are someone else’s problem. Finance folks worry and wring their hands and avoid conversations with practitioners. If the conversations take place, there often is resentment expressed by the physician, and a decision essentially is made to avoid such conversations going forward. Physicians are deemed too difficult to change.

Why Collaboration Matters in the New Landscape

With fee for service getting phased out in many places and value-based care permeating the landscape, the two parallel paths have not just converged; they have collided. Just consider the following examples:

  • For utilization review to be effective, timely, detailed physician documentation is needed.
  • If clinical documentation improvement programs are to succeed, our physician friends must cooperate.
  • When every tenth of a point in case mix index means thousands of dollars of revenue captured or lost, a thorough, accurate assessment of a patient’s complexity of care is vital.
  • If quality measures for a hospital are assessed based on the presence of certain diagnosis codes or reportable data from an electronic health record, then coding accuracy and physician documentation input are critical.
  • With contracting increasingly driven by risk-adjusted data, physician documentation—again—matters more than ever.  
  • If the cost per Medicare beneficiary metric matters, as it soon will in value-based models such as the Merit-based Incentive Payment System, and if part of that measure is based on risk adjustment, then guess what? Physician documentation matters.

In so many aspects of the revenue cycle, physician cooperation is crucial. Too many physician practices do not cooperate with initiatives related to preauthorization, CPT codes at time of procedural scheduling, medical necessity documentation, and accuracy of surgical equipment or product requests. This lack of cooperation is often based on failed physician leadership.

Bringing Physicians Onboard

Without question, physicians need to become more knowledgeable about the revenue side of health care. Finance leaders may want to seek out physician champions who can explain to their colleagues the logistics of the work that physicians can do to enhance the organization’s revenue cycle performance. The hands-off approach to engaging physicians may need to be dropped in favor of a lot more education, an insistence on more medical staff collaboration, and a recognition that citizenship and professionalism are just as important as technical competence as part of hospital privileges for any practitioner.

More physicians should be identified and groomed for executive roles. The best movers and influencers of physicians are other physicians. This approach will lead to better hospital administrative decision making.

Transparency on hospital costs and losses due to denials would be eye-opening for physicians. If a hospital is fortunate enough to have physician advisers, leaders should find ways to get them more familiar with revenue cycle operations and with finances and billing. Have those advisers help with commercial and Medicare Advantage contracting, given that they often understand the day-to-day obstacles that such payers may weave into the typical contract. The advisers can do tough work for you, but you should support them with positive incentives for the medical staff and real consequences for those who make a point of not cooperating.

Yes, change is difficult. But progress cannot take place if change does not happen. We all need to get on the same path. I do not believe that physicians can survive without their community hospitals, but nor can hospitals operate at full capacity without their physicians.

Lisa Banker, MD, FACP, CCDS, CCS, is chief medical officer, value analysis and revenue enhancement, CarolinaEast Health System, New Bern, N.C., and a member of the board of directors of the American College of Physician Advisors.


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