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A new central business office and updated software have helped speed a Pennsylvania system's revenue cycle.

In healthcare finance, nothing gets more attention than the revenue cycle. Of course, that's because it's the way hospitals get the money they're owed in the door. Whether the cycle performs adequately depends on a dizzying array of complex maneuvers by a group of people who aren't quite the best-paid employees in the hospital, to say the least. But their performance can make or break a hospital's finances.

That's why it's so important to make sure those people have the tools they require to make sure hospitals aren't hit by the many potholes that can doom revenue generation, especially in a further weakening economy, says Linda Sheaffer, corporate director of patient administrative services at Wellspan Health System, a two-hospital entity in south central Pennsylvania.

When Sheaffer came to Wellspan in the late 1990s, the then-one-hospital system was using an in-house-developed software program for patient accounting that had no connectivity with the crucial patient registration system. "We had no really good reimbursement management or contract management system, so if we were being underpaid, we really weren't aware of it—and we didn't have a system for contracts and didn't have denial management," she says. That wasn't unusual for the times, but for a system that now takes in more than $1.2 billion in revenues each year, that one shortcoming cost Wellspan a lot of money, even with relatively good accounts receivable days statistics in the mid- to high 50s.

"We didn't have any integration between access and patient financial services, so for any changes, my staff had to do double work," she says. "If they were behind in making the updates, that was a real dissatisfier for our patients."

Along with the establishment of a corporate central business office, the system made a change to an Eclipsys-based system in 2002 and has been adding modules since that transformation. York Hospital, the system's 544-staffed-bed Level II trauma center, had been using parts of the system for some time, but the real progress came from reducing work in the billing and patient registration services in both hospitals that came along with the establishment of the central business office.

But a real key not only to cutting AR days but to getting paid for services rendered, says Sheaffer, was being able to build the myriad payer contracts a big hospital system has into one software program, which helps make automatic adjustments to bills and, in turn, dramatically cut denials.

"I've been able to build all of those contracts into Eclipsys now, so we're able to keep tabs on cash collections, net revenue, and specific payer edits," she says.

Now, Wellspan's AR days are down into the mid-40s for York and 36 for Gettysburg Hospital, a smaller community hospital where billing is not as complex. Those are big improvements considering an AR day represents about $1.8 million in net revenue, says Sheaffer.

"Faster and cleaner is money in the bank."

Philip Betbeze

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