To Improve Hospital Collections, Move Revenue Cycle Up Front

, April 15, 2013

Redesigning the revenue cycle to make it a more front-end driven process is one strategy hospitals and health systems should consider when looking for ways to improve collections.

That's what MetroHealth System, a 731-bed health system based in Cleveland, set out to do when it launched its pre-service center in Q4 2012. The concept seems relatively simple: Once a patient is scheduled for an appointment, a representative in the pre-service center automatically receives the information from the scheduling department and begins the work of verifying insurance information and eligibility, requesting preauthorization approvals, and determining the patient liability.

"The pre-service center picks up where scheduling leaves off," says Craig Richmond, MetroHealth's vice president, revenue cycle. "The patient may have insurance, but that doesn't mean it will cover a particular procedure, or we might need to obtain some type of authorization. If we don't get that prior to when the patient arrives, we won't get reimbursed."

Although the idea of collecting money up front—or at least verifying insurance details to be certain the payer will ultimately reimburse for services—seems basic, it's surprisingly uncommon in the healthcare industry, where much of that work is typically done on the back end.

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MetroHealth's new approach is a "paradigm shift," Richmond says. "The objective here is about shifting more to the front end of the revenue cycle… If you get it right on the front end and secure payment on the front end, you are reducing your cost to collect, and you are reducing your bad debt exposure."

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