5 Ways to Improve a Hospital's Bottom Line Through the Revenue Cycle

A hospital's revenue cycle management team has to balance a large amount of tasks at once every day: preauthorization, precertification, underpayment collection, delays in payments, ICD-10 transition and more. With so many tasks to juggle at once, methods for improvement might get pushed on the backburner in the quest for simply finishing projects now. Becky Black, vice president of revenue cycle at Saint Joseph's Hospital of Atlanta, gives five ways any hospital can improve its revenue cycle, overall bottom line and efficiency.

1. Documentation of communication. While it's common for hospitals to document all conversations and communication in a patient's case, it's also common for those documents to be misplaced. Saint Joseph's Hospital of Atlanta recently installed the Trace communication platform, which is a centralized portal that stores various forms of revenue cycle communication such as phone conversations, patient eligibility information, emails, incoming and outgoing faxes and more and indexes it by patient account.

Ms. Black says this has been a lifesaver for her hospital's revenue cycle because it allows them to go to one location to find all forms of communication regarding a patient's account and removes the "he said/she said" of reimbursement disputes. For example, the system can immediately pull up how the payor was contacted, who contacted the payor and if any authorization number on the patient's claim was obtained. In a way, it's like an electronic medical record for the revenue cycle as it eliminates paper records and hand-written notes and electronically stores all information on the business side of patient care. Within nine months of implementing this process, the hospital was able to use records to overturn more than 100 denials, resulting in nearly $200,000 in cash collections.

While those are the primary benefits of that type of repository, Ms. Black says it also keeps the management team attentive. "It also underscores the professionalism of our staff," she says. "They know when they are using that system, they are being recorded as well, and it puts the onus on us to exhibit professionalism at all times."

2. Precertification of patients. Reviewing a patient's preadmission status blends the "business with the clinical excellence," Ms. Black says. Patient satisfaction isn't scored from the clinical side only, and making sure the patient is financially clear to come into the hospital puts all minds at ease. "What you do before the patient shows up is good for the organization and the patient," Ms. Black says. "It takes the financial worry off the patient, and it sets the stage on the front end for what the patient can expect to encounter on the clinical side." Additionally, by capturing this communication with patients on the front-end, hospitals can review conversations to ensure patients receive clear instructions before coming to the hospital.

Some younger patients take advantage of preregistration online, but Ms. Black emphasizes that a hospital must know its audience when it comes to utilizing technology to accomplish tasks such as patient preregistration. For example, some patients may want to sit with hospital staff and may prefer the direct contact to complete complex paperwork because that might fit their preference, whereas other patients may prefer to do this online without an interview process "You have to gauge what your patients need," Ms. Black says. "We're not in the business these days of 'It's my way or the highway.' We are actually an extension of the marking and business development efforts of the hospital."

3. Payment estimates. When a patient is scheduled for a hospital procedure, Ms. Black says it is paramount the team gives the patient an estimate of their out-of-pocket costs. Recording these conversations can also ensure estimates are communicated clearly prior to service, and if questions arise once the patient receives a bill, the hospital can reference those estimate records to resolve any misunderstandings. While giving estimates may be difficult for complex or exploratory procedures, she says patients who will be receiving planned procedures with case histories should get a reasonably accurate estimate.

For example, an estimate for a patient with UnitedHealthcare PPO receiving a hip replacement can be researched and refined, giving the patient a solid figure to contemplate. "Help the patient if it's far enough ahead of time, and do it as soon as a procedure is scheduled," Ms. Black says. "Patients are footing a lot of costs out-of-pocket today and are shopping around at different hospitals, so every effort needs to be made to make such estimates as accurate as possible."

4. Meticulous managed care contract negotiation. Ms. Black says in a perfect world, there would be one agreed-upon managed care contract methodology, but unfortunately, this is not a perfect world. To lower administrative costs, she says every good organization should review every managed care contract for clauses that are executable (e.g., the managed care company says they cannot pay for a certain type item unless it is billed a certain way even though doing so may not be a commonly accepted billing practice).

All accounts must also be religiously reviewed to detect underpayments and underpayment trends. When finding trends on underpaid claims, the revenue cycle team should take these back to contracting and then sit to review these disconnects with the payor. Documenting these discussions and the details of contract interpretation also assist in battling denied or underpaid claims. "Part of this is just the way that our current system works," Ms. Black says. "The question is: Is your staff good enough to seek and find all of these underpayment opportunities, or do you hand the underpaid claim off to someone else and pay them a finder's fee?"

5. Education on ICD-10. Ms. Black considers the conversion to ICD-10 as one of the biggest nail biters hospitals must confront today. Hospitals have to pay the inevitable costs to make the transition, but she says mass-scale education of hospital staff and clinical providers could help mitigate the hiccups that will occur when it goes into effect on Oct. 1, 2013. Weathering the storm for the first few months will be key to the hospital's bottom line, and the amount of work to do with ICD-10 simply should not be overlooked. "There are so many coding-specific things that need to be laid out. There's a lot to do, and you must retrain your hospital staff, especially your physicians and anyone else that documents within the record," she says.

Related Articles on Hospital Revenue Cycle:

ICD-10: Bracing for the Storm and the Coding Update Freeze
Identifying and Collecting Underpayments: 7 Ways to Increase Your Success
5 Top Ways Hospitals Lose Accounts Receivable

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