Billing and Collections

Embedding Revenue Cycle Leaders Into Physician and Hospital Operations

May 23, 2017 10:23 am

Increasing complexity, system decentralization, operational growth, and payment uncertainty are affecting healthcare organizations everywhere. In 2016, Ochsner Health System in New Orleans developed a revenue cycle strategy to offset many of the communication and performance gaps that have persisted amid the ongoing changes to the healthcare landscape. These gaps included operations and revenue cycle disconnects between role clarity and expectations, understanding of downstream impact from front-line errors, difficulty in real time transparency, and accountability and best practice behaviors not being shared across the system.

Ochsner’s strategy focused on one key goal: embed revenue cycle personnel, data tools, and educational efforts directly into physician and hospital operations. This approach was the result of structured efforts around improving data acquisition of denial and administrative write-off information.

Objectives and Process

Ochsner’s strategy had four main objectives:

  • Standardize the write-off information derived from improved data acquisition
  • Focus on high-dollar, high-risk areas of the health system
  • Deploy revenue cycle assets directly into the areas identified
  • Build physician and operations leader trust

The initial assessment identified three departments that offered the most opportunity: cancer services, cardiology, and surgical services. The strategy began with placing a single point of contact from the revenue cycle department directly into the service area. Candidates for this “practice specialist” position were identified by service-line expertise as well as exposure to revenue cycle. With the position residing directly in the medical setting, the ability to competently discuss the intricate nature of the care delivery and its downstream impact on billing adjudication went a long way in building a culture of trust and credibility between operations and the revenue cycle department.

Once deployed to their targeted clinical areas, practice specialists were tasked with spotlighting four or five specific functions of the operations staff that affect revenue cycle performance. Common errors and poor workflows would be identified as project management opportunities. For example, the practice specialist in cancer services identified as areas for improvement daily charge reconciliation (not only drug capture but also drug units charged), drug pricing and chargemaster compliance, medical necessity administrative write-offs, revenue code billing compliance, and authorization processes between clinicians and pre-service.

The idea of a liaison working as an advocate for best practices between the point of care and the revenue cycle was cemented quickly as a critical component for success with key performance indicators (KPIs). The practice specialist was an essential participant in department meetings, identifying areas for root-cause improvement, standardizing service line workflows across facilities, and providing education on new service offerings or compliance requirements for their designated clinical areas.

As project lifecycles progressed, enhanced reporting on key metrics provided a new layer of transparency between operations and revenue cycle. Progress reports touting the teamwork among operations, clinicians, and the revenue cycle department were shared with executive leadership. As word of these successes spread to executive and physician leaders, other clinical departments reached out to the revenue cycle department to request assessments. The continuous pursuit of nonpunitive, solutions-driven process improvement broke down the existing barriers between divisions, resulting in a true culture change.

Beyond Targets

The next evolution of this culture change centered on spreading revenue cycle leaders beyond targeted service lines. Ochsner enhanced this strategy by establishing another new position—the revenue cycle strategic business partner (SBP). The scope for SBPs would expand dramatically to involve entire hospital facilities as well as whole regions of the health system. This expansion took place over a year and a half and remains a fixture going forward.

SBPs are embedded in hospital, physician, and finance operations settings around the system, identifying opportunities to correct root causes of performance shortfalls. An SBP’s aim is to target efforts that will:

  • Increase net collections
  • Reduce denials
  • Decrease administrative write-offs
  • Decrease edit volume
  • Decrease accounts receivable (A/R) days
  • Streamline workflows
  • Increase transparency using electronic health record (EHR) technology and improved reporting

Collaboration is essential to the partnership strategy. In many instances, SBPs are able to identify and target initiatives solely because clinical and physician leaders provide them with the access to information they need in the target environment. Operations and the finance team have developed a successful partnership and have become advocates for the revenue cycle department, and that collaboration has yielded tremendous results. Collaborating with physician champions also has helped drive transformations.

Initiatives and Results

In the first year of the initiative, as a result of SBP-led efforts, Ochsner’s gross revenue was enhanced by $18.5 million, and the health system obtained roughly $3.1 million in additional net revenue. Several high-level initiatives contributed to these sums.

Surgical change of procedure. Ochsner began real-time, electronic-driven escalation of surgery cases where the performed procedure changed in some way from the procedure that was previoulsy authorized. Results included reduced denials and a $2 million annual net increase and 13.25-day decrease in surgery-specific A/R.

Inpatient-only procedure downgrade warning. Government payers require certain procedures to be discharged in an inpatient status regardless of the patient’s length of stay. A pop-up alert was built into the EHR to recognize these procedure codes on the case request and warn any user attempting to downgrade these accounts to an outpatient status. A real-time audit report was created to identify bypassed alerts so users could receive targeted education and amounts could be corrected immediately. In the first year after implementation, this alert prevented administrative write-offs amounting to $650,000 through manual tracking and correction, and helped avoid an additional $1 million in administrative write-offs as a result of users correcting their errors after receiving the warning.

Government payer-specific accommodation codes for billing. Contracts revealed that Medicaid pays pediatric intensive care unit (PICU) accommodation codes at twice the rate as general ICU accommodation codes. Documentation was sufficient to justify the PICU level of care, but the accommodation codes driving the room charges were not being reconciled. Charges were posting with a different revenue code and thus paid at the lower rate. Ochsner received $258,000 in additional payment after rebilling accounts within the timely filing limit. Reconciliation procedures were put in place for operations leadership to verify the accommodation codes each day.

Anesthesia critical care workflow. Inadequate documentation and charge capture processes were causing anesthesia providers who performed critical care functions for admitted patients to lose professional revenue. To address this problem, provider workflows in the EHR were updated, charge capture templates were enhanced with smart phrase options to facilitate compliant documentation, and a real time self-audit function was created for each provider, resulting in a 77 percent increase in net revenue. Finally, a monthly charge reconciliation process was created to identify and validate the provider self-audits.

Clinical trials billing workflow. Before the SBPs intervened, all professional and technical charges for patients enrolled in clinical trials were held for manual review. Analysis showed only 15 percent of the patient visits included charges related to a study, but a 66 percent annual increase in patients enrolled in clinical trials (along with a directive from leadership to continue this trend) and limited staff to review their accounts made the billing process unsustainable.

The process was changed to require that clinical trial holds be visit-specific. The clinical trial nurse coordinators most familiar with each patient identified the specific visits in advance of charges being posted. This change also created a greater continuity of care with the clinical trial nurse coordinators as their patients moved through the health system. Within six weeks of implementation, the project achieved a 90 percent decrease in the volume of accounts needing review and a sustained 91 percent decrease in average A/R pending for clinical trials billing review.

To ensure that existing and new staff and physicians follow the new procedures, SBPs now serve as the principal trainers on how to apply best practices.

Work in Progress

Revenue cycle and operations leadership are committed to continue building relationships and uncovering new and creative ways to influence KPI performance by engaging all the areas in the clinic or hospital flow that affect a patient encounter. In addition to the physician and clinical teams, areas of focus include utilization management, the operations finance and decision support teams, durable medical equipment, and supply chain.

The SBPs use standing meetings with more than a dozen service lines to highlight the efforts and opportunities being vetted for workflow improvement. In these revenue cycle “finance councils,” clinical leaders, physicians, and technical staff collaborate with revenue cycle experts. These meetings serve the following purposes:

  • Review standard revenue cycle metrics, trended over time (A/R days, denial percentage, write-offs, A/R aging)
  • Share findings from the denials research division, whose purpose is to spotlight new and/or patterned issues causing denials and risks of nonpayment
  • Provide clarity and updates on current projects happening within the service line
  • Seek buy-in for upcoming projects and of workflow enhancements
  • Listen to clinical stakeholders and offer them assistance in circumventing existing obstacles or inefficiencies
  • Gain early insight into anticipated department growth to appropriately staff corresponding revenue cycle functions

Lessons Learned

Ochsner’s decision to embed high achievers from its revenue cycle department directly into operations areas around the system was a purposeful and structured strategy. The following key actions contributed to this strategy:

  • Commit to a pursuit of culture change in how the revenue cycle seeks to resolve root causes of performance problems.
  • Identify high-caliber, dynamic team members who operate effectively in a clinical environment and can coach physicians and clinicians on improving workflows and net revenue performance.
  • Produce focused reporting and data analytics targeting the largest write-off threats throughout the organization.
  • Identify four or five specific high-risk areas of a practice that require immediate attention based on the findings from data collection.
  • Seek buy-in from key operations and physician leaders by providing a clear vision of the goal of embedding revenue cycle assets into their daily flow.
  • Share immediate wins with all stakeholders to keep momentum for cultural change.
  • Hold routine meetings with stakeholders to develop trust, share workflow improvements, and identify future areas of opportunity.

Along with an early ROI in the high-yield/high-exposure areas come the pressure to expand this model to areas with revenue opportunities that are not as easily identified. It is important in a strategy like this one to find the right people, pick the right areas of concentration, and constantly focus on building trust and partnership among all operating divisions. Having executive and clinical leadership deliver a clear, consistent message in support of the initiative is imperative to this model’s success.

Once both operations and revenue cycle leaders develop trust in each other, the initiatives and successes inevitably will come. The collaboration that comes by embedding revenue cycle leaders directly into hospital and physician operations can help usher in a culture change and produce big financial wins for the organization.

Greg Douglass is director, revenue cycle strategic partner, Ochsner Health System, New Orleans.

William Thacker is director, revenue cycle strategic partner, Ochsner Health System, New Orleans.


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