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Analysis

3 Tweaks to Revenue Cycle Assembly Line That Saved $68.7M

By Alexandra Wilson Pecci  
   January 08, 2019

Streamlining the revenue cycle governance structure helps create an assembly line that works together and reports to the same leaders.

When different revenue cycle functions don't communicate well or don’t operate under the same leadership umbrella, organizations can experience high denial rates, unresolved coding queries, and much more.   

That was the case for University of Alabama at Birmingham (UAB) Medicine, which integrated its hospital and physician practice revenue cycles, as well as its HIM and hospital patient access functions under a single governance structure and saved $68.7 million in the process.

"Without having everything under one leadership you had the different functional areas potentially going in different directions," says Sandra Peterson, executive director of revenue cycle management for UAB Medicine.

UAB Medicine entered into a seven-year partnership with Navigant to streamline the entire revenue cycle from top to bottom.

The revenue cycle assembly line
 

"The revenue cycle is really nothing more than a true, robust assembly line," says Kemberly Blackledge, vice president of revenue cycle for Navigant. "We're trying to maximize performance through improvements in our assembly line."

From when the partnership began in October 2016 through June 2018, UAB Medicine has realized $68.7 million in savings through a combination of cash acceleration, reduced costs, and net revenue increases, according to a new case study.

Streamlining the governance structure
 

At the heart of the changes is a new governance structure that includes an executive committee for high-level and strategic functions; a program committee and subcommittees for managing ongoing operations; and a revenue cycle committee that deals with tasks such as action plans and benchmarking.

Each of the committees includes representatives from throughout the system who meet regularly. For instance, the program committee meets three times a week for huddles in which they discuss hot topics and issues that need immediate attention.

"There's just a lot more access to bringing the right person in, where it might have been a bit more fragmented before," Peterson says.

The open and ongoing communication that the new governance structure provides, as well as other changes to different revenue cycle functions, have led to big improvements in a relatively short amount of time.

Here are three areas UAB improved because of the new governance structure that contributed to the $68.7 million savings tally.

1. Denials management: Denials management was one of the topics of conversation within the program committee, Peterson says.

For instance, the committee identified that Blue Cross was issuing a lot of denials regarding infusion therapy. A bit of digging revealed that many of the denials stemmed from one of the clinic protocols regarding when infusion drugs were administered.

So the team worked with the clinic leaders to change the protocols to be in line with Blue Cross.

Doing so has "drastically" reduced the denials they were getting for infusion therapy drugs, Peterson says.

Overall, denials are down across the system, not just for infusion therapy drugs. Hospital initial denials as a percentage of net revenue are down 41%.

2. Discharge not submitted to payer: The revenue cycle committee tackled discharge not submitted to payer issues through a combination of data analytics, clear communication, and increased accountability.

"There was conversation around it for years, but there was not a lot of visibility in what exactly are the dollars, what are the buckets that they're sitting in, and who's responsible for each area," Peterson says.

For instance, it might have been unclear how many accounts were discharged but not coded; how many are waiting for additional documentation; and which departments and leaders were responsible for each of those issues.

Using Navigant analytics tools, UAB created high-level reports to parse that information. Armed with the data, the committee could ensure the work was completed, and that leaders in each area could hit their respective benchmarks.

"How much does revenue integrity need to work? How much does coding need to work? How much does the back office have edits they need to work?" Peterson says. "That's one of the KPIs that's probably moved the most as a result of this collaboration."

Specifically, hospital discharged not submitted to payer dropped 35% and physician discharged not submitted to payer dropped 12%.

3. Uncompensated care: After years of outsourcing, UAB decided to bring its financial counseling services back inhouse.

Between the analytics tools and the all-hands-on-deck strength of UAB's new governance structure, uncompensated care as a percentage of hospital gross revenue is down 23%.

In addition, self-pay collections are up 25%.

"It wasn’t really that hard to figure out how to put improvements in place when you've got everybody working together," Peterson says.

Using analytics tools during bedside visits with patients, financial counseling representatives talk with patients about their out-of-pocket costs, whether they might qualify for insurance, and what kinds of financial assistance is available.

"We're doing it in person. When they're in-house, in a bed, we're visiting with them," Blackledge says, allowing the system to identify early who potentially may need some assistance.

UAB hired 12­–16 new employees for this financial function, and their education and training included teaching them new technology tools; having trainings with representatives from SSI and the state Medicaid office; shadowing to ensure that patients were comfortable with the conversations; and how to follow up with the correct documentation.

One stop in the road
 

Blackledge says this case study is "just a stop in the road" along the way to other improvements.

One of the next initiatives is measuring patient financial satisfaction.  

"One of the key concerns from the leaders in the organization was…what the patient touches were going to be like and making sure that we built into this collaboration some measurement of patient satisfaction," Peterson says. "We're all driving toward that same goal."

Alexandra Wilson Pecci is an editor for HealthLeaders.


KEY TAKEAWAYS

Convene committees with representatives throughout the system to identify issues, create action plans, and increase accountability.

Work directly with clinicians to align clinical practices with payer expectations to improve denial rates.

Analyze and segment data to correctly identify, sort, and resolve discharge not submitted to payer issues.

Visit patients at the bedside to discuss financial matters early and improve uncompensated care.


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