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How to Make Millions in Hospital Revenue Reappear

 |  By kminich-pourshadi@healthleadersmedia.com  
   January 24, 2011

An Indian folktale: Once upon a time, there lived a Brahmin in a village on the outskirts of a jungle. A devotee of the Hindu God Shiva, he started his day by visiting Shiva’s temple which sat amidst the thick jungle. So challenging was it to get to, that few other devotees visited the site. Nevertheless, the Brahmin went there every day to pay homage and each day he left a silver coin for Shiva as part of his morning ritual. Unbeknownst to him, a thief would follow him every day to the temple and wait for him to depart and then steal the coin.  

Both the Brahmin and the thief were steadfast in performing their daily ritual—both were consistent in their devotion; the Brahmin to leave a coin and the thief to steal it. One day there was a torrential rain that left the village nearly submerged, so the Brahmin could not visit the temple. The thief, however, thinking that the Brahmin would not miss his trip to the temple, decided he must go to the temple. When he arrived the temple was nearly sunk, but he nevertheless swam to the temple, bowed his head to the statue as he had done in the past, and searched for the silver coin. It is said that Shiva was so delighted by the thief’s steadfast consistency that the deity placed a silver coin for the thief to steal away.

The moral of the story: If you unfailingly follow a path, even against all odds, your consistency will bring your due.

Why do I share this tale? I’ve written more than my share of articles about cost cutting, and I’ve read a lot about it. But what I rarely write or see in print is about the role consistency plays in the process. Consistency really is the backbone of all things healthcare, but even more so in finance, because if you are inconsistent, especially with your payers, you’re likely to lose money.

This brings me to Christus Health in Irving, TX one of the largest Catholic Health Systems, which decided to prioritize consistency in the charge capture of its emergency department levels and injections/infusions and wound up recovering a whopping $29 million in net revenue.

The ability correctly and consistently do charge capture for the ED and with injections and infusions confounds everyone from physicians and nurses to billing staff at many hospitals, and Reggie Allen, MBA, RN, system director of quality and clinical operations at CHRISTUS, knew that was the case at his facility.

“We noticed we were inconsistent in our charges across the emergency department and when we looked the situation, we realized that all of our facilities were all using different paper based tools to do their EM coding and charging. When we plotted this out, we found that not only were many of them not charging for things they could, but they were selecting a lower level code to charge the patient,” Allen explains.

With more than $4.1 billion in assets—$3.1 billion in net revenue—and over 40 hospitals and other healthcare facilities in six U.S. states and Mexico, all those missed charges were adding up. This was also a compliance issue, Allen says, they needed to improve their documentation and consistently charge what was appropriate for the patients’ care or risk government and payer scrutiny.

“We thought we were possibly losing around $10 million,” Allen says, and that was only for the emergency department level charges—accounting for more than 577,550 visits a year. With 21 ED and outpatient clinic sites to track they knew these areas could offer them a swift return on investment, but would also be a good testing ground for whatever solution they selected. Now they just needed to figure out how to correct the problem. Allen began searching for a program that could help his staff consistently bill for infusions and injections.

Allen, who had worked in the emergency department earlier in his career, knew that the solution they needed had to account for the speed at which clinicians work in those departments. “Whatever we deployed had to be simplistic and couldn’t consume a lot of time. We needed something with a lot of intellectual knowledge, but with check marks for the staff,” he explained.  After attending a conference, Allen narrowed his search to two products one by San Francisco-based McKesson and the other by Picis, from Wakefield, MA.

Allen brought both systems back and tested each with the ED staff. After hearing their feedback, they settled on Picis LYNX, taking the system live in October 2008.

“A year later, after we’d tracked all the results, we found we weren’t losing $10 million [in the ED], we were leaking $29 million. We were absolutely floored,” says Allen.

Their ability to consistently bill payers not only was gleaning greater revenue, but also was helping them document their files to defend against payers refusing to pay. “Some of our payers noticed right away that they were paying us more money than in the past and they wanted the documentation. The fact that we were able to send them the documentation they needed right away and that it was now so consistent helped us, It also has helped us go through three to four audits from other companies,” adds Allen. “Now we know we’re in compliance.”

For other hospitals thinking of launching this type of project, Allen offers this advice, “You need to coordinate this with your whole revenue cycle from admitting to the business office—you must be willing to change processes and you must have support from senior leadership. With any change there’s a lot of pain, so this buy-in is really important.”

The moral of the story: Consistency pays dividends (and no trip to a jungle temple required).

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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