How Norton Consolidated its Revenue Cycle Model

Shifting from an old-school "back office" to a consolidated revenue cycle model is hard work, but well worth the effort, says a senior revenue cycle executive at KY-based Norton Healthcare.

"It was an extremely difficult process, but when you put the patient first, you find a way to do it," says Jim Meyers, system vice president of revenue cycle at Louisville, KY-based Norton Healthcare.

Norton Healthcare is a not-for-profit health system with five hospitals and more than 90 physician practice locations in Kentucky and southern Indiana. In 2011, Norton's leadership team decided to adopt EPIC as the health system's electronic medical record system and to simultaneously create a consolidated revenue cycle organizational structure.

In a recent exchange of questions and answers with HealthLeaders Media, Meyers shared the essential ingredients of Norton's secret sauce for consolidated revenue cycle success. The transcript below has been edited for clarity and brevity.

HLM: Describe the challenges of transitioning to a new EMR while simultaneously revamping your organization's revenue cycle.

Meyers: The transition to any new [EMR/EHR] system is always a game changer, but for the revenue cycle team this took on a whole new meaning as we decided to move forward with the relatively new idea of what EPIC calls a 'single business office.' The idea is to simplify the billing process for patients so they receive just one bill for all hospital and employed physician services.

In concept this seems fairly easy, but the reality was really something else. First and foremost, hospital revenue cycles have evolved tremendously over the past 10 years, becoming well-oiled machines that maximize technology and standardization.

The medical practice side, in contrast, is just starting to take form. The employment of physicians by health systems has exploded, and what used to be done fairly manually by people in an office is now moving to the centralized environment, where there is a new focus on automation.

HLM: What are the primary elements of Norton's consolidated revenue cycle model?

Meyers: There are three main areas. Patient access, which is only on the hospital side now, includes functions such as patient registration and centralized diagnostic scheduling. Revenue integrity includes coding, charging, audit, and charge master. And patient financial services includes billing, collection, and customer service.

HLM: What were the main drivers behind Norton's decision to adopt the consolidated revenue cycle model?

Meyers: The patient was the main driver. The ability to reduce the number of statements a patient receives from the organization and provide a single customer service number for them to call was too big of an incentive for us to pass up, even though we knew it would be a very difficult journey.

The physician revenue cycle had made great strides since beginning to centralize several years before this revenue cycle "merge," but the hope was that the consolidation would take them to another level from an operational and efficiency perspective.

HLM: Describe how the creation of Norton's consolidated revenue cycle model played out.

Meyers: Norton essentially had three distinct revenue cycles – there was the hospital, the oncology physicians, and the rest of the physicians. There was little to no interaction [among them], separate vendor contracts, and different cultures.

Once it was established what processes needed to change and what could stay the same, the organizational structure had to be established. In a lot of ways, this was the biggest decision to be made because without it, all future decisions were potentially in jeopardy. The structure we ended up developing made it as easy as possible to make quick decisions and align system goals.

Once the organizational chart was complete and the teams were notified, the next biggest decision was physically moving them to a central location. In some cases, teams were integrated together, such as vendor services or customer service, while others, such as hospital and physician billing, remained separate, but [were relocated to] the same floor.

The physical move itself screamed change, and the fact that the independent teams now interacted together on a regular basis just by proximity, started to move the cultural dial in ways we could not have done otherwise.

HLM: Norton has achieved significant gains in monthly posted payments. How has the health system's consolidated revenue cycle model helped achieve these gains?

Meyers: In nearly every metric we are tracking, we are meeting or exceeding the goals we have put forth on both sides of the house… The consolidated revenue cycle lets the physician and hospital groups work as a team toward a common goal instead of different agendas, and it gives us the ability to take the best of both worlds to improve the overall process.

HLM: Have you seen other benefits from having a consolidated revenue cycle model?

Meyers: Absolutely.

• Patients get a single bill for hospital services and employed physicians.
• There is a single customer service number for patients.
• Consolidated vendor contracts [mean we can] obtain better products and services at lower rates.
• We think more strategically as a system.
• Consolidated registration processes, with hard stops and forms ensure compliance and consistency.
• Standardized policies, procedures, job descriptions, and job grades.

HLM: "Single bill" appears to be the Holy Grail of revenue cycle. For Norton, which providers are still sending bills outside the consolidated revenue cycle teams?

Meyers: Any of those physicians who are not employed by the health system are still sending their own bills. It's mainly emergency room physicians, anesthesiologists, and radiologists.

HLM: What was the full-time equivalent employee impact of implementing Norton's consolidated revenue cycle model? How did Norton manage the FTE impacts?

Meyers: When we combined the revenue cycle teams, we noticed the physician team was actually understaffed. The number of employed physicians had grown quickly in the few years leading into the consolidation, and the number of people coming from the practices to the central business office had not kept pace.
Having such a large variance going into to the structure change posed a risk to the project, so we pulled benchmarks, ran the numbers, and asked leadership for another 20 people, which was approved. Leadership saved the day… I can't imagine what would have happened had that not been approved.

HLM: What are the major learning points from Norton's adoption of the consolidated revenue cycle model that could be applied to other health systems?

Meyers: What we really did, at the highest view, is combine the organizational chart:

• Senior leadership must be in agreement with the direction of the process.
• Determine your "future-state" revenue organization structure before you do anything else. If leadership is not in place when key decisions need to be made, the project quickly can become at risk.
• Get the right people in the right leadership positions. What we went through was all about change, and having the right team for the job will make up for a lot of mistakes you make along the way.
• Get a consultant who knows your health system inside and out. The biggest problem we had was the intersection of process and technology. Having a consultant who can pull those two things together and only focus on future-state and not day-to-day operations can pay big dividends.

Always think of the patient first. How will this benefit them?