Steps to Aligning Acute Care and

Physician Revenue Cycle

Sheldon A. Pink, MBA, CHFP

Corporate Director of Revenue Cycle

Overview

Healthcare Revenue Cycle

• Revenue Cycle Facts

• Challenges in Healthcare

• Strategies to Control Costs

• Reasons for Change

Move Towards Alignment

• Advantages to Alignment

• Challenges to Alignment

• Fundamental Components

• Keys to Success

Points of Alignment

• Front Line Alignment

• Mid Line Alignment

• Back End Alignment

• Vendor Management Alignment

Steps to Alignment

• Executive Commitment

• Strategic Objectives

• Organizational Assessment

• Project Plan Execution

2

HEALTHCARE REVENUE

CYCLE

3

Healthcare Revenue Cycle

• Healthcare Financial Management Association

(HFMA) Definition: All administrative and clinical

functions that contribute to the capture, management, and

collection of patient service revenue.

4

Revenue Cycle Facts 5

Revenue Cycle helps trend resources that makes high quality care a reality.

$0.15 of every U.S. dollar goes to Revenue Cycle inefficiencies.

$400 Billion dollars a year is spent on claims processing, payments, billing and bad debt.

Rebills cost an average of $25.

Revenue Cycle Alignment will save U.S. Hospitals an estimated $2 Billion dollars a year.

Challenges in Current

Healthcare Environment

• Declining

Reimbursement

• Narrow Networks

• Pressure for cost

efficiencies

• Technology limitations

• Rise of hospitality in

healthcare industry

• High deductible Health

Plans

• Obtaining national

benchmarks

• Price Transparency

• Exchange plans in

receivership

• Manage Care

Consolidation

6

Strategies to Control Costs 7

Full Outsourcing

Reduction in Force (RIF)

Mergers & Acquisitions

Reduce Service Lines

Expansion of GPO Networks

Process Improvement

Reasons for Change

• Bottleneck with Clinical Departments

• Ability to Track Performance

• Non-standard Definitions

• Vertical Silos

• Limited Usefulness of Benchmarks

• Lag Time for Measuring Performance Improvement

• Compliance

8

THE MOVE TOWARDS

ALIGNMENT

9

Revenue Cycle Alignment

• Revenue Cycle Alignment - the consolidation of revenue

cycle related staff, processes, and structures across a

health system’s various sites of care, including hospitals

and associated medical groups.

Ellie Stoler – The Advisory Board

10

Advantages to Alignment 11

Financial Navigation Business Intelligence (Technology)

Balanced distribution of Revenue Cycle

responsibilities

Center of Excellence Operating Model

Economies of Scale

Advantages to Alignment 12

Standardization of Policies & Procedures

Reduction of Touch Points

Broaden Scope of Revenue Cycle

Enhanced Data Integrity & Decision

Support

Unified Work Culture

Change Management

“Culture Drives Great

Results” – Jack Welch

13

Challenges to Alignment 14

Employee concern of job security

Changing Roles

Addition of new service lines

Recruitment of Revenue Cycle team members

Development of complex positions

•i.e. training staff to be multidiscipline

Disparate processes & departments

May increase cost to collect

Payments linked to quality

Fundamental Components of

Revenue Cycle Alignment

• Investment in appropriate Time

& Resources.

• Highly disciplined Pilot

Project.

• Commitment to consistent

metrics.

• Detailed staffing plans for

milestone targets.

• Appropriate Technology.

• Avoiding productivity slow

down.

• Creating environment for

process improvement.

• Establish common goals,

targets and initiatives.

• Full Transparency.

• Understanding of Core

Competencies of Revenue

Cycle.

15

Keys to Success 16

Joint Accountability

Understanding Organizations Revenue Cycle

Shared Decision Making

Leadership Training

Department Focused on

Revenue Cycle

Aggressive Goals

Open Line of Communication

Developing Career

Ladders

Organizational

Communication 17

Present new

practices to site leaders

Collect Feedback

on proposed changes

Bring feedback

to corporate meetings

Field site leaders’ requests

for assistance

POINTS OF INTEGRATION

18

What to Align ? 19

Patient Financial Navigation

Revenue Integrity

Health Information Management

Case Management

Billing & Collections

Vendor Management

Patient

Satisfaction

Front Line Alignment 20

Patient Financial Navigation

Pre- Registration

Scheduling

Insurance Verification

Medical Necessity

Point of Service Collections

Patient Experience

Mid Line Alignment 21

Charge Description Master

Charge Entry & Charge Capture

Organizational Compliance

Revenue Integrity

Utilization Management

Discharge Planning & Care Coordination

Denial Appeal Process

Case Management

Coding

Medical Records

Discharged Not Final Billed

Health Information Management

Back End Alignment

CBO Core

Competencies

• Clean & Complete

Claims

• Bill Accounts Timely

• Collector Productivity &

Workflow Automation

• Technology

• Standardization

• Accountability

CBO Goals

• Admitting Data Accuracy

• Specialization

• Claims Follow Up

Specialization

• Facility Accountability &

Communication

• Denials &

Underpayments

22

Vendor Management Alignment 23

Self-PayThird Party

Liability

Workers

CompensationDenials Aged Balances International

STEPS TO ALIGNMENT

24

Alignment Approach 25

Step 1 • Executive Commitment

Step 2• Develop Strategic

Objectives

Step 3 • Organizational Assessment

Step 4 • Project Plan Execution

Step 1: Executive Commitment

"None of us is as smart as all of us." --Ken Blanchard

26

Reduce Costs

Improve Efficiency

Explanation of Decision

Change Management

Education

Organizational Awareness

Step 2: Develop Strategic Objectives 27

Revenue Cycle Vision

Global oversight of Revenue Cycle areas

Consistency & Accuracy of tasks

Single point of contact

Single Patient Bill

Training & Development

Standardized Responsibilities & Job Titles

Change Management

Step 3: Organizational Assessment 28

Technology Limitations

Level of Change Required

Audit Benchmarks Compared to Industry

Standard

Identify Standardization and

Process Change Opportunities

Collect Qualitative & Quantitative Data

Assess Risk Levels

Identify Value Creation Opportunities for

Current & Future State

Step 4: Project Plan Execution 29

Phase I • Development & Project Planning

Phase II • Process Standardization across departments

Phase III • Relocation of Infrastructure

Phase IV • Statement Redesign

Phase V • Continual Efforts

30

Measurable Results

• Indiana University Health

• Recognized 300% ROI on RCM

Investment

• GDRO Reduced 5.5 Days

• Expanded RCM FTE Responsibility

from 550 to 1700

• Piedmont Healthcare

• AR Days reduced from 58 - 48

• Clean Claim Rate increased 8%

• POS Cash increased $1.5 million per

month

• US Department of Veteran Affairs

• 18.4% increase in reimbursement

• Reduction in AR Days (56-41)

• Decrease in AR over 90 Days

(31% - 17%)

• Princeton Baptist Medical

• DNFB Reduced to 3.7 Days

• Denials less than .25% of Gross

Revenue

• Cost to Collect less than 3%

• Touchette Regional Hospital

• Exceed Cash Goal of 102% by $2 .5

million

• Decreased Uncompensated Care

charges by 16%

• Reduced Bad Debt by 48.6 %

• Baylor Health

• Reduced Cost to Collect by 2.5%

• AR Days decreased from 68 – 40 days

• Consistently achieved 100% of cash

31

“I Never Lose, I Either Win or Learn”

Nelson Mandela 32

Fully Integrated Model 33

Questions 34