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Integrating the Health System Revenue Cycle

March 24, 2014

As healthcare CFOs work to protect the fiscal strength of their organizations, they are increasingly aware of the need to engage clinicians from across the continuum of care in the revenue cycle process.

This article appears in the March 2014 issue of HealthLeaders magazine.

Although there has long been a divide between the finance and clinical departments in many hospitals, those days may be coming to an end. As healthcare CFOs work to protect the fiscal strength of their organizations, they are increasingly aware of the need to engage clinicians from across the continuum of care in the revenue cycle process.

Collecting better documentation

In 2012, Southwest General Health Center, a 358-bed institution in Middleburg Heights, Ohio, completed several clinical integration initiatives for a total revenue improvement of $2.8 million. Southwest General reported patient revenues of $291 million that same year.

Mary Ann Freas, the system's vice president and chief financial officer, says the initiatives are important because "so much of the revenue cycle is in the hands of our frontline staff and providers."

Freas says the clinical team often does not gather all the information needed for billing because they are busy managing many other tasks and may not realize the importance of complete and accurate charge capture.

"We want to make sure they know we understand what they are going through and that their priorities are around taking care of patients, but at the same time, we need to collect dollars for the services we provide," Freas says. "One way to do that is to connect the dots and make sure they understand there is a connection between the documentation and our payment."

Among the initiatives Southwest General started in 2012 is the capture of IV administration documentation for observation and emergency department patients. Although many patients in its ED get an IV for drugs or hydration, Southwest General was not always able to bill for this service because nurses were not collecting enough information. "If you don't have the start and stop time, for us particularly the stop time, you can't get paid for the IV," says Jill Barber, Southwest General's director of managed care operations.

Barber says to overcome nurses' objections about the added time needed to document details of an IV infusion, she and her team tried to make the process quick and easy. "We didn't want to take them away from the patient care that they are giving, so we had to figure out how to get their workflow as seamlessly and naturally integrated into the EHR as possible," she says. "We know that even if it is just one more click or one more step, it is still time that adds up throughout the day—but it means big dollars to our organization."

Southwest General is now receiving on average an additional $85 per ED patient because it is successfully billing for IV infusions. "When you add that up for every patient that walks into your ED, that's a big number, and that is money that protects profit margins or that can take care of more uncompensated care cases," Barber says.

Another benefit is the increased efficiency for revenue cycle staff, she adds. "It streamlines the process, and billers are not wasting time chasing down documentation and getting the runaround. … They say it means literally hundreds of emails less a week to solve this problem."

EHR becomes an integration tool

Money Atwal, chief financial officer and chief information officer for the East Hawaii Region of Honolulu-based Hawaii Health Systems Corporation—which operates 1,275 licensed beds in facilities located across five islands and had an operating budget of $538 million in FY 2010—says his organization had a similar experience when it started using its systemwide EHR capabilities to improve its billing documentation.

"We increased our revenue by $1.6 million in a 14-month period" by using the EHR to capture the information required to bill for an IV, Atwal says. He believes this success is just the tip of the iceberg for the East Hawaii Region with regard to the revenue cycle opportunities HHSC will find through better documentation in its EHR.

"People don't realize in the healthcare industry that our billing is only as good as the documentation that is provided. People always try to separate the revenue cycle away from clinical documentation, but it is very clear to me that documentation drives the revenue cycle. … Some of the low-hanging fruit comes in the form of documentation that isn't really DRG-related but has a relationship to charge capture," he says.

Because an EHR allows for all employees to be on one system and have access to the same information, installing the technology is the perfect opportunity to have clinical and finance teams rethink processes together to improve the revenue cycle, Atwal says.

"Integrating the revenue cycle and clinical side is, to me, almost a requirement when an organization goes through an EHR implementation," he says. "It's not that you are going to solve every problem at the beginning, but you make both sides aware of each other's challenges. To me, the EHR is a fishbowl; it makes all your broken processes transparent," he says.

The East Hawaii Region of HHSC also is using its human capital to bring together clinical and financial functions through its integrated Operational Review Forum (iORF) and Medical Informatics Subcommittee; these two groups were formed within the past few years to discuss operational issues and find ways to improve processes, increase productivity, and protect revenue.

One recent decision that came out of the MIS group meetings is that the East Hawaii Region of HHSC will no longer fax documents to community primary care physicians, who will instead be instructed to access the information through the EHR or HIE portal.

"Talk about clinical integration with the revenue cycle," Atwal says. "That has merit to both the clinical team and revenue cycle because we are trying to make our staffs be more productive in an environment of lower reimbursement and cost reductions."

A new sense of urgency

Protecting the revenue cycle through clinical integration is becoming more important than ever because reimbursements are shifting away from a fee-for-service model to payment methodologies based on value, says Jay Picerno, chief operating and finance officer at Barnabas Health in West Orange, N.J.

"New Jersey is a heavy fee-for-service state, and as we migrate to population health, we are seeing the type of revenue begin to shift," Picerno says. "We are starting to have a real problem. … There is definitely a deterioration in the quality of the revenue, with denials and this shift toward bundled payments."

As the $2.5 billion system tries to find ways to mitigate this threat to revenue, it's evident to Picerno that the system can no longer afford to have a separation between key groups.

"We are seeing a real need for clinical and finance to come together and try to figure out the solutions. We are starting to look at how the clinical side can impact the quality of the revenue, and on the revenue side, we are also understanding how it can improve overall clinical care through reduced utilization, reduced variation in care, and improved outcomes," he says.

To that end, Picerno has begun working closely with Barnabas' executive vice president and chief medical officer, Anthony Slonim, MD, to collaborate on integration strategies. Both leaders see the organization's recent $273 million investment in its EHR as an opportunity to bridge the communication gap. Implementation of systemwide EHR and CPOE was completed last June.

Using data pulled from the EHR to show clinicians how revenue is lost due to incomplete documentation is a powerful tool for promoting change, Slonim says.

"As we think about partnership opportunities around the revenue cycle with denials, we can't just be reactive. We have got to be able to put data in front of the clinical team to help them understand why we are being denied."

Data is also an important element in identifying clinicians who are overusing resources without better patient outcomes—something that will be crucial to protecting the revenue cycle in a value-based payment structure, Picerno says.

"The big opportunities now are in reducing variations of care," he says. "We are getting those clinical outliers into a more streamlined environment so we can survive the shift from fee-for-service to bundled payments."

Although Slonim says it's too soon to analyze the impact of the EHR and CPOE on the revenue cycle or clinical outcomes, he believes having the capability to build templates and standardize the way charges are captured is critical to improving both sides of the business.

"We need to be part of an integrated team. Now that we are dancing a waltz that is so highly regulated, we can't do it without integration," he says.

Achieving buy-in

Achieving physician and staff buy-in is often difficult because it involves making changes to ingrained behaviors and processes. To ensure cooperation from the clinical team, hospital leaders must make it clear to physicians why and how new revenue cycle initiatives matter to the organization, Slonim says.

"When working with physicians, there is always pushback no matter what the topic is, even if it is just what flavor of ice cream they want," he says. "So, it's about trying to have them understand why it is important to the organization."

If concern for the overall financial health of the organization isn't enough motivation for physicians to improve their documentation, then worry for their own reputation may do the trick, Southwest General's Freas says.

"Many physicians think of documentation and denials as the hospital's problem, and they don't want to take time out of their very busy day to go through the hoops of providing additional documentation," she says. "But, at some point, the Office of Inspector General is going to do a better job of comparing notes with RAC auditors ... in terms of medical necessity to see if there is a real trend in the denials that should be a cause for concern. Then denials might be considered in a broader context than just payment take-backs."

Additionally, not demonstrating a willingness to improve documentation could also be a reason for a hospital to cut ties with a physician, Barber notes. "It used to be the common thought that all volume is good volume … but we've been forced to take a harder look at that unwritten policy and, in instances where insufficient documentation or other practices put us at risk for nonpayment or noncompliance, we work collaboratively with physicians on addressing specific needs."

Reprint HLR0314-7

This article appears in the March 2014 issue of HealthLeaders magazine.


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