Revenue Cycle Software: A Practical Guide for Purchase
In the healthcare industry, an organization’s choice of products and services—including software, measurement tools, revenue cycle management vendors, and medical equipment—can have serious implications for its effectiveness, productivity, and ability to deliver value. Revenue cycle operations, in particular, demand sophisticated software programs that will sync seamlessly to fully support the organization’s efforts to effectively systematize and operationalize billing, registration, coding, accounting, and charge capture. However, an organization whose software solution cannot deliver the necessary functionality could face serious consequences if, for example, prospective future patients go to a competitor because they had bad experiences due to simple issues such as billing and registration errors.
Some organizations have a dedicated department for revenue cycle management, while others outsource operations to decrease the burden on staff to keep up with health plan guidelines and analyze data trends regarding problems such as claims denials and coding and registration errors. Whatever an organization chooses, having an efficient revenue cycle management system and data analysis program can facilitate improved contract and payment negotiations. Errors can lead to denied or delayed payments. An effective revenue cycle management tool can help an organization maintain its financial well-being, deliver an outstanding patient experience, and reduce its cost of care.
The Crucial First Step
An organization that is seeking a new revenue cycle system or software must first determine why a change is required. Possible reasons include organizational expansion, a change in organizational goals, technological advancement, or problems experienced with the current system. It also is imperative that leaders clearly and accurately perceive the organization’s needs in determining whether they require a new tool. Engagement with stakeholders—including staff who will be using the software—is necessary.
Further, leaders require a clear idea of the new software will be used to fulfill the organization’s mission and goals. For example, if the organization’s mission and goal is to make health care more accessible and affordable, the organization should invest in software that patients will find user-friendly and appropriately interactive when they engage with it in activities such as paying bills, scheduling appointments, and viewing lab results. The organization should steer away from expensive options so resources can be allocated to patient care and improvement of clinical results than being invested in the tool or software.
A wide variety of revenue cycle management tools are available, making the selection process daunting if strong guidelines are not in place. A good way to streamline the process is to submit a request for proposal (RFP) to software vendors. The crucial piece of this process is to qualify the requirements of the software/tool so it will be fully integrated, comprehensive, and operational and will help achieve the mission, vision, and goals of the organization. Key stakeholders who should be involved in the process include revenue cycle, clinical, finance, operations, and IT leaders.
In addition to securing the buy-in from upper management, it is crucial to have a balance of experience and skills across departments and functions—end-users in clinical, IT, finance, and patient services. The selection team requires all these perspectives to be able to define scope of the functionality of the software, project deliverables, evaluation criteria of the selection process, special conditions and customizations, and all relevant and general instructions.
An essential charge for the team at this point is to firmly establish the intended purpose and scope of the software, how it would fit into the organization’s larger goals, and how long it is likely to be used.
Once proposals have been received, the team should review the vendor’s healthcare experience, which is a primary indicator of whether it can properly serve the organization. The company should have a background in healthcare systems and be certified within the industry. An important vendor qualification to check is whether the vendor is certified by the Health IT Certification Program of the Office of the National Coordinator for Health Information Technology (ONC). The certification program is voluntary. ONC-certified organizations tend to be more compliant with government regulations and security threats. a
It is during this selection process that organizations determine whether outsourcing is the best alternative; however, the predominant trend today is toward buying and owning the tools.
Post-Proposals: Tips for Choosing the Right Software
Once proposals have been received, organizations should review them, taking several key issues into consideration.
Consider short- and long-term goals. An organization’s revenue cycle software must serve both the present and future needs of the organization. The software program should be flexible enough so it can be customized to allow for differences in preferences and operations within the organization.
Check compatibility. The software program should be able to interface and allow for interchange with other systems the organization is using or may use in the future.
Plan for training. The software should be user-friendly and include tutorials. The contractual agreement should include information on whether the vendor will train all users. Ideally, the cost of training should be included in the fees for implementing the system.
Track the development of the software. It is important to check the software’s certifications and longevity in the industry. The system should have a traceable record of success. The vendor should at least have some high-profile clients. It is crucial to ask for references within the industry.
Talk to current users. Organizations already working with the software can provide information about the company’s after-sales service and turnaround time on requests from customers as well as what the organization’s bottlenecks and frustrations with the software could be.
Look for hidden costs. The contract should cover all costs, including the software license, staff training, maintenance updates, post-live support, system upgrade costs, and other costs as recommended by the legal department. The organization should be aware of the costs for repairing and maintaining certain aspects of the system. The term of the contract also is important; financial benefits may come from a longer contract, but only if the organization intends to use the software for the full period.
Determine who owns the data. This information should be specified in the contract. The vendor should never claim ownership of the organization’s data, even in cases where it intends to provide analytics. HIPAA presents many complications with an arrangement where vendors partially own records and data. All the data should be retained and owned by the purchasing organization. There are, however, arrangements in which a vendor might include confidentiality clauses, hold harmless, indemnities, and the requirement of vendor approval to achieve interoperability with others. In such instances, it is important to seek legal advice and to deal with such provisions on a case-by-case basis.
Try before you buy. If a trial version of the system is available, an organization should make use of that provision. During this period of testing, it is crucial to make sure that all the services/features the organization needs are available in the software.
Privacy and security issues. HIPAA violations are costly both financially and to the brand of the organization. A revenue cycle management tool should provide comprehensive security features for patient data and records based on functionality. The Health Information Technology for Economic and Clinical Health Act makes business associates, including vendors, liable for compliance under HIPAA. It is important to choose software or a tool that is HIPAA-certified and compatible, especially if the software or tool is cloud-based.
Implementation can present challenges and depends on the technical skills of the staff, the system build, and—in some instances—implementation partners. Project managers play a huge role in interpreting the needs of all the sides involved and can have a significant influence on the success of the implementation. It is also important to make sure that project managers do not keep understanding of the software to themselves at the expense of the end users. End users should be fully involved and knowledgeable participants in the implementation phase. The post-implementation phase should include stabilization and optimization of the system and the sign off.
Above all, an organization should consider its own needs in selecting a revenue cycle management tool. Referrals can be useful for validation of a product, but it also is important to develop a good relationship with the software provider. In many cases, the purchasing healthcare organization becomes a development partner and even helps design future software modules—a partnership that reduces the costs to the organization and ensures the health system’s needs will be met.
a. Office of the National Coordinator for Health Information Technology, “Justification of Estimates for Appropriations Committee,” 2018.