3 Tips on Decreasing Payment Denials from Houston Methodist

Houston Methodist is constantly seeking ways to improve performance, says Kevin Burns, the health system's CFO, executive vice president and chief business officer.

"Our goal is to ensure the revenue cycle is performing as efficiently and as effectively as possible," he says. "We're also always trying to prevent denials."

So when the five-hospital, 1,633-bed health system faced increasing eligibility denials, Houston Methodist's team was ready to step up and address the issue. Separated front- and back-end data stood in the way of performance improvement, so the system implemented a data integration effort and a training program to improve front-end insurance coverage verification. During a 10-month period, Houston Methodist decreased its potential for denied payments by $7.2 million, a feat that earned it a 2013 Revenue Cycle Solutions Award from The Advisory Board Company in September.

The system's success hinged on a few different factors, including these three best practices, according to Mr. Burns.

1. Establishing feedback loops and integration within the revenue cycle management process. The main part of preventing payment denials involved establishing consistent feedback loops and communication across the revenue cycle, says Mr. Burns. Previously, communication throughout the revenue cycle was not optimal, resulting in inefficiencies such as reprocessing claims, confusion as to the responsible party and other issues. That meant the system would end up going "back and forth" with the payer or the patient to get everything in order, he says.

"[Now] what we do on the front end is aligned more appropriately with what happens in the rest of the process," he says.

Houston Methodist also installed technology that further automated several aspects of the process from the front end to the back end and better integrated information from many different systems, he says.

"Almost like a dashboard on a car, we're able to see the information in one place," he says. "It's very important that revenue cycle team members not only see their area but also understand what's happening across the system." 

2. Creating a multidisciplinary leadership group. Another aspect of the billing system improvement process was the formation of an interdepartmental leadership group. Houston Methodist brought together finance and IT staff as well as those responsible for insurance verification, Mr. Burns says. They also included physicians and other clinicians to help drive better performance.

"Sometimes, what organizations do is focus on a process solely from a financial perspective, and they forget that everything's interrelated," he says. "It's important to involve individuals from across the organization in this conversation."

The leadership group is also very mindful of serving patients and considers the patients' perspectives and needs. "Ultimately, what we want to do is lessen confusion for our patients," says Mr. Burns. 

3. Having the right approach. A major key to Methodist Houston's success was the "very positive, results-oriented group of people" who carried out the improvement effort, says Mr. Burns.

"We have a very high-performing team," he says. "They want to do things the right way. One of the things that really helps is they weren't focused on what we can't do. They were focused on what we can do."

That team of people pursued an evidence-based approach to convince other members of the organization they needed to change their old revenue cycle processes.

"We used benchmark data from peers," Mr. Burns says. "We also experimented. We said, 'Let's prove that concept.'"

In the end, though, he says it all comes down to having the right team. "I just can't stress enough that a key ingredient is that we have a very energized, high-performing group of people who care about doing the right thing," he says.

More Articles on Hospital Finance:
How to Reduce Costs and Improve Quality: 4 Tips From St. Vincent's Medical Center CFO John Gleckler  
Why Transparency Wins the Day: Insights From St. Joseph's Hospital Health Center CFO Meredith Price  
3 Revenue Cycle Improvement Lessons From Methodist Health System 

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