Billing and Collections

Combining Hospital and Physician Billing

November 18, 2016 4:05 pm

CentraCare, Memorial Sloan Kettering, and Coteau des Prairies Health Care System share their integration stories.

Depending on hospital or health system size, the process of combining hospital and physician billing can be a manageable project or an enormous undertaking. Either way, the transition touches virtually everyone in the organization―IT, facilities, administrators, billing staff, and clinicians.

To understand the challenges of integrated billing and the necessary strategies for a successful transition, we spoke with administrators who have led this process at three very different health systems.

Multi-Location Health System

In 2013, Kathy Parsons, system director of revenue cycle and managed care, CentraCare Health, began leading the integration of billing departments across six hospitals and 18 health clinics that are part of the St. Cloud Minn., health system.

“We were able to combine hospital and physician payment posting, collections, and customer service reasonably quickly, and we now jointly address payers’ claims payment issues. Hospital billing staff still work on either hospital or physician claims, but they have access to all claims and can communicate easily with their counterparts, so they can look at both sides during a patient phone call,” she says. “The transition has been extremely successful, resulting in about $1.5 million in savings since we completed the integration in 2014. Patients now interact with CentraCare as a single entity, and we’ve decreased the potential letters sent to patients from 300 to 100.”

Although CentraCare had integrated a number of the health facilities by 2010, financial departments still worked independently on payer research and negotiations, as well as billing. Its leadership wanted the system to become one seamless entity, inside and out, and they tapped Parsons, who led managed care and patient billing at CentraCare’s largest hospital, to pull it together.

“I began by gathering the top leadership in revenue cycle from each site. Over a series of meetings, we developed guiding principles for integration that allowed us to articulate where we wanted to go philosophically and how integration would help the organization,” Parsons recalls. “My job was to take these principles on the road. I presented them to leadership at all sites, beginning with administrators, and listened to their concerns. I also communicated our confidence that training would allow us to use staff to the best advantage with no layoffs. This process gave us the all-important buy in from our employees, who would need to embrace this change to make it work.”

Integration was not without its challenges, says Parsons. “There were struggles with us-and-them thinking, but employees eventually recognized that they are all CentraCare. Logistically, there were IT changes, new job descriptions, relocated offices, and plenty of training.” Parsons and her team piloted collections at three sites to start; now the integration is system-wide.

“Physician billing now occurs primarily out of one location with a group focused on professional services billing,” she says. “We brought our collections and customer service together in one physical location, where they share information, meet jointly with payers, and carry out integrated collections and customer service. The managers of these two areas work together and share budgets.”

The revenue cycle project at CentraCare continues today, its early success providing encouragement for Parsons and her team. “We are pulling in other aspects of the complete revenue cycle, which takes time. The results are excellent so far. We believed we could make $5 million in revenue cycle improvements in time, and we have made about $2 million since we completed integration in 2014.”

Urban Cancer Care System

Five years ago, Memorial Sloan Kettering Cancer Center in New York City began integration of some parts of its billing operations. “It took a year to combine the patient-facing billing staff for physician practices and the hospital. We’re also working to enhance communication and workflow between the two back-end areas,” says Ruth Landé, senior vice president of patient care revenue.

In the past, when Memorial Sloan Kettering patients had questions about bills or financial needs, they had to call the hospital and physician practices separately. Staff in those two settings used two different billing systems. Landé and her colleagues chose to centralize them, both physically and from patients’ perspectives.

“We knew that with everyone working together, we would be able to give patients a better quality experience while gaining some efficiencies,” Landé explains. “Now all billing departments report to me, and soon they will operate on the same software platform. Whether a patient calls about a specific claim, a coverage update, or financial need, they make a single call to us.”

The transition was not easy, Landé says, because staff needed to learn a lot in order to become proficient in both kinds of billing as well as the two software applications. Before integration, staffs operated in isolation, resulting in mishandled handoffs and casting blame, but integration has resulted in a cohesive team that generates positive collaborations and good ideas. This evolution was encouraged by Landé’s strong belief that employers should provide ample opportunities for career growth.

“We encourage career growth across department lines to increase the number of opportunities available to our staff and take full advantage of the good people we have,” she says. “There are opportunities for line staff and managers, and I’m a big proponent of lateral moves to grow expertise.  Staff working on claims and denials, and even staff in the separate receivables area, have opportunities to work together on performance improvement projects, which encourages career growth. Recent cross-departmental projects focused on bone-marrow transplant reimbursement and insurance eligibility workflows.”

Single-Hospital Health System

David Usher, CFO at Coteau des Prairies Health Care System in Sisseton, S.D., has consolidated billing practices at several health systems. Today, he leads the transition at Coteau des Prairies, whose single hospital, four clinics, and nursing home serve an area population of approximately 20,000.

Based on his experience, what’s the most challenging aspect of billing consolidation? History.

“The billing departments of these units spent years operating separately without much communication, and each developed its own procedures. When the hospital purchases a practice, doctors and their staffs are used to how the practice does things, and they want to operate as separate business units. We have to break through those barriers.”

Usher finds that although major systemic changes are tough to implement, people are generally adaptable in the healthcare environment because they are accustomed to constant change. At Coteau des Prairies, he began by bringing in an outside consultant to explain the transition to employees, with the view that people are more open to hearing about a new change from a new person.

The transition has necessitated some IT changes. “Traditional IT systems for a facility this size were compartmentalized. As we’ve moved to a single electronic health record across the health system, it has eased the transition to a single billing system. From appointment scheduling to payment, every aspect of a patient’s interaction with us is contained in the system.”

Today, most of Usher’s efforts on this project go into building engagement. “Almost everything comes down to engagement―getting leadership on board up front, bringing along billing employees, and educating doctors and medical staff. We’ve worked hard to engage doctors and staff, explaining the health system’s business needs and challenges and how an integrated approach would help.

“We talk to our people about how hospitals and health systems must work hard to integrate many aspects of the patient experience so that patients deal with one system, not a jumble of practices, services, and laboratories. That singular identity has to extend to billing,” Usher says. “Not only does it simplify patients’ experience, but it also increases our efficiency. We can see more patients with the same number of staff. We can move bills from visit to payer more quickly, which means we get paid more quickly, and patients get billed more quickly, not six months after their services.”

In addition to the health system’s regular communication channels, Usher and his colleagues have brought in consultants and used town hall-style meetings to engage staff, focusing on changes in healthcare―particularly the change to a value focus. While engagement takes time and commitment, Usher is very positive about its efficacy. “If everyone understands the benefits and where we’re headed, it’s easy. So far the process is going extremely well here at Coteau des Prairies.”

Erin Murphy is a freelance writer in the Philadelphia area.

Interviewed for this article:

Ruth Landé is senior vice president, patient care revenue, Memorial Sloan Kettering Cancer Center, New York City, and is a member of HFMA’s New York Metropolitan Chapter. 

Kathy Parsons is system director, revenue cycle and managed care, at CentraCare Health, St. Cloud, Minn., and is a member of HFMA’s Minnesota Chapter. 

David Usher is CFO, Coteau des Prairies Health Care System, Sisseton, S.D. , and a member of HFMA’s South Dakota Chapter.

Discussion Starters

Forum members: What do you think? Please share your thoughts in the comments section below.

  • What challenges and successes have you encountered while integrating your hospital and physician billing?
  • Are there any scenarios in which you believe hospital and physician billing should not be integrated?


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