3 Revenue Cycle Improvement Lessons From Methodist Health System

Finance officials from Omaha, Neb.-based Methodist Health System share how their organization revamped its front-end revenue cycle management.

Last year, Omaha, Neb.-based Methodist Health System decided to create a road map for its ICD-10 adoption process, with the assistance of The Advisory Board Company. In the process, they discovered an opportunity to revamp their front-end revenue cycle management, says Methodist CFO Linda Burt.

money"We said when the ICD-10 adoption was delayed by a year that  we need to just keep working, and we need to use this as an opportunity to really improve our processes," she says.

Methodist took steps including standardizing scheduling, improving precertification management, automating medical necessity checking and increasing collections at the point of service to $1.87 million by September 2013, double the level collected in the same period of 2012, when the Advisory Board recognized the health system with a 2013 Revenue Cycle Solutions Award.

The decision to construct a map for ICD-10 preparation has not only led to Methodist's revenue cycle functioning more smoothly but has also helped forge new connections between clinical and financial staff and increase fiscal awareness for their patients, says Bob Wagner, Methodist's director of revenue cycle. He and Ms. Burt shared three of the key lessons they learned from the overhaul process.

1. Standardize scheduling. Part of Methodist's improvement project involved making scheduling forms and documents uniform, so physicians know what information the system needs to facilitate the scheduling process, according to Mr. Wagner.

That, in turn, had a positive impact on other aspects of the revenue cycle. He says having consistent information every time a patient is scheduled helped them tweak the medical necessity process and ensure they met payer requirements. It also made the registration and check-in process easier, since the health system now collects more accurate information about the patient's health insurance coverage and benefits.

It's also led to more financial knowledge for patients.

"It gave us the opportunity to identify what the out-of-pocket expenses were going to be and have financial counselors call patients ahead of time and let them know what their out-of-pocket expenses were going to be," Mr.  Wagner says.

2. Inform patients about their financial obligations in a nonthreatening way. When Methodist's financial counselors call patients to discuss the cost of care, they've found it's crucial to approach the subject in a "nonthreatening way," Mr. Wagner says.

Methodist uses two key phrases when informing patients about out-of-pocket costs, he says. They introduce the topic with a phrase such as "As a service to you, we called your insurance company and verified your coverage." Additionally, they say, "Your insurance company determined you owe this much," so it's clear the hospital didn't determine the out-of-pocket expense, he says.

They also make it clear that the phone calls are merely informative, not a demand for payment. Methodist doesn't require advance payment.

"We're not starting from a premise, from the patient’s perspective, that this is a collection phone call," he says. "It doesn't make it as threatening for the patient. And our clinical people see that too, because they don't see us as getting in the way between them and the patient’s treatment."

When they know about the cost of care up front, patients also make more well-informed decisions about their treatment, according to Mr. Wagner.

"They might say something like, 'I didn't know it was going to cost that much. I'm going to talk to my doctor and see if there's a less expensive alternative,'" he says. 

3. Get clinical and financial people together. Team members from scheduling, registration, imaging support and IT as well as staff members who focus on the revenue cycle were part of the revenue cycle improvement project. Staff members from the clinical side and the financial side had not convened to standardize processes previously, according to Ms. Burt.

"They all seemed to be engaged and working together well," she says. "They seemed to be a really good team."

Mr. Wagner added that  caregivers and financial workers felt good about collaborating to come up with revenue cycle solutions.

"One of the things that was key for our successes was having clinical and financial people together," he says. "It's a lot easier to achieve success because they understand why you're doing some of the things you're doing. You get a lot better buy-in when you're working together instead of independent of each other." 

More Articles on Revenue Cycle Improvement:
4 Key Lessons From Blessing Hospital's Revenue Cycle Overhaul  
Cashing in on Revenue Cycle Improvements
5 Hospitals That Saved Money Through Revenue Cycle Improvements 

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