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Driving Practices in the Right Direction

Howard Drenth, for HealthLeaders Media, June 10, 2008

Hospital groups around the country are looking for better ways to meet the needs of specialty practices and still profitably provide the best community healthcare possible. However, as these organizations acquire medical practices and form integrated delivery systems, they must also assume much of the responsibility for managing the practices. This is not always a simple task.

Like many hospitals, Greene Memorial Hospital of Xenia, OH, found itself in the middle of a myriad of modern healthcare IT and financial challenges. This was due in part to having two distinct, independent medical groups using four different software systems and compounded by having multiple services for billing and collections for the various physicians. The fact that each software package also had its own unique way of reporting financials added to the challenges. At the end of each month, Greene Memorial would begin the labor intensive process of trying to balance the accounts for each of the various practices. Again, not a simple task.

Facing a series of credentialing errors and omissions that had also been made, the administration realized they had inherited an infrastructure of fragmented, inefficient systems and decided to make some major changes. At first, the easiest solution would have been to unify all of the billing under one of the existing vendors. However, upon further evaluation, it was discovered that none of the solutions was able to meet the specific needs of this multi-specialty group.

The Greene Memorial team knew it had to streamline the revenue cycle, but also recognized it needed a system that would provide the flexibility, control, and consistency required to effectively work with all of the physician practices in a number of separate locations.

Realizing that it was almost impossible to standardize management and reporting across all of the practices, Advanced Medical Group (AMG), the physician practice subsidiary of Greene Memorial Hospital, formed a task force made up of physicians and administration. Our charter was to find a single solution that all the practices would use for their practice management, billing, and collection service needs, a critical part of the process. The task force ultimately had to determine what the physicians wanted in a unified solution that would also meet the needs for each practice.

Early in the evaluation and selection process, the task force decided to survey the physicians to understand their needs. Each strongly expressed opposition to having the hospital manage billing internally. They were concerned they would be managed like a hospital A/R; meaning Greene Memorial wouldn't pay attention to smaller dollar claims—a prime source of revenue in primary care.

In January 2007, AMG issued an RFP for an integrated system that could be installed to replace the fragmented legacy setup. The RFP produced an initial list of more than 20 possible vendors that were then scrutinized by the task force. From this initial list, only a few of the vendors submitting proposals were found to be capable of potentially meeting the organization's needs and the rest were eliminated from consideration because of price or product limitations.

After further evaluation, it became apparent that there were two distinct roads to choose from—select a billing service and have them implement their software program, or select practice management software that was best for the practices and then engage a billing service that used that software under a completely separate agreement. AMG chose to do the latter. We would have greater flexibility in holding each respective party accountable for what they were hired to do and best meet the needs of the practices. Case in point—before, if AMG wanted to change a particular billing service, the software was also eliminated. It was an "all or nothing" deal and everything would have to change. By electing to separate the responsibilities, AMG hoped to get the best of both worlds: a robust software solution and first-rate service. Fortunately, the process resulted in a really great outcome.

In May 2007, AMG selected AdvancedMD as its practice management system. AdvancedMD provides Web-based medical billing software and comprehensive practice management solutions. Having made the selection, AMG began the process of converting its practices over to this new technology, a process that standardized the revenue cycle in all practices.

Knowing that converting practices to a new, unfamiliar, system could prove to be difficult, AMG first set up a formal training program to help build internal expertise. This was very important to the success of the whole effort. Because of the multiple system scenario of the past, proficiency wasn't available across the practices. To further ensure the success of the implementation, AdvancedMD also dedicated a project manager to the conversion process helping to train and roll out the new Web-based practice management, billing, and collections software services.

After just a few short months of implementation, AMG is already seeing a return on our investment. These system changes have allowed AMG to reduce annual billing costs by close to $200,000, a substantial amount that will drop straight to the bottom line.

AMG is also seeing savings on a real-time basis. In addition to changing software, AMG implemented "charge entry" into each practice and every physician and related staff member was trained on proper coding methods. This was done because originally, using the old process, it took an average of 12–14 days from date of service to get charges into the system. Claims are now dropping in one to four days from the date of service. The revamped process has allowed each practice a significant improvement in the timeliness of claims dropping, which ultimately has improved cash flow.

The key to successfully implementing new revenue cycle management software in a multi-specialty, multi-location operation is to keep open lines of communication with the staff and physicians. What an administrator likes in a system will be different than those physicians or their office staff. They each have very different sets of needs and each is important! It is critical to spend the appropriate time early in the process outlining the needs and expectations of all those that will be impacted by the scope of the project. Getting input up front, providing regular communication, and planning ahead for the needs of the users are all required to meet the ultimate goal: a system that will help make an office run better, a practice that is more profitable, and a physician's primary focus returned to patient care.


Howard Drenth serves as director of Advanced Medical Group in Xenia, OH. AMG currently employs more than 40 physicians in a multi-specialty group environment. Drenth has over 15 years of experience in physician practice management in a variety of private and hospital-based settings. He can be reached at HDrenth@greenehealth.org.
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