Beyond optimization: A revenue cycle “post-live” story

How does a large academic medical center and health system integrate its EMR and various revenue systems without decreasing patient satisfaction or losing gross revenue? And how does it plan for long-term continuous improvement rather than optimizing once and moving on?

The University of Michigan Health System (UMHS), a multi-site academic medical center and health system that handles 2.1 million outpatient visits and 47,000 hospital stays yearly, grappled with these questions in the late 2000s when a rise in self-pay prompted reconsideration of existing revenue cycle management practices. It underwent an EMR implementation in 2012, and then sought a partner to optimize its post-live revenue cycle management. Recently, UMHS reconfigured that partnership to help inform and sustain the energy around continuous improvement.

Reasons for Integration

According to a 2013 J. P. Morgan Healthcare Banking report, from 2004 to 2011 the U.S. market experienced a 10-fold increase in the number of covered lives under High Deductible Health Plans (to more than 11.4 million people).1 The Commonwealth Fund found that premiums for family coverage increased 62% across states over nearly the same period (from 2003 to 2011).2 Acknowledging this dramatic increase in out-of-pocket payments, UMHS leadership sought to adapt revenue cycle operations to better fit the shift in financial accountability from employers to individuals.

Another driving reason for integrating the revenue cycle across the enterprise was to improve the interactions patients had around billing processes. One of the biggest complaints UMHS faced was patient frustration and confusion around their bills. Patients came to see the doctor and ended up with two statements—one from the hospital, one from the professional service. Although the eventual task of combining these largely fell to IT, everything is connected in a large health system: patient scheduling and registration, back-end revenue cycle operations, and UMHS's statement service all had to come together to meet patient expectations for comprehensive billing in a single statement. In fact, while the tendency for health systems is to focus on the front-end impact of integration—scheduling and registration particularly—UMHS found that hospital and professional collaboration, back-end accuracy and synchronization, and/or customer service knowledgeable about billing statement variances were just as important as reliable front-end service.

Collaboration vs. Prescription

UMHS had brought on a consultant to help with the initial EMR implementation, but was looking for a different type of assistance for its post-live optimization. In 2012, UMHS engaged McKinnis Consulting Services (MCS)3 to perform a revenue cycle assessment and optimization of the newly implemented EHR. While the resources of a larger consulting company were attractive, the complexity of optimization across several revenue cycle systems required flexibility and a genuinely collaborative ethos. The engagement began with MCS getting to understand the culture and existing practices of UMHS, and then working in partnership to identify areas for improvement and the organizational structure and resources necessary to achieve best practice metrics.

What the UMHS revenue cycle management operations did not need was another group telling them what to do. MCS earned organizational buy-in by delivering real collaboration, not prescription -- they helped form a bona fide team by rolling up their respective sleeves to get the hard work done. This meant sharing their post implementation experience, skills, and expertise.

Revenue Cycle Optimization

In the case of UMHS, the enterprise-wide systems integration effort began with revenue cycle operations. Bringing together the array of distinct state-of-the-art revenue applications being used across UMHS was a massive undertaking. Keeping an eye on gross revenue and net revenue during the project required the creation of a revenue integrity unit to communicate issues and solutions across departments. In particular, these groups analyzed expected versus actual payment, helped build the workqueues that drive automation, and created an infrastructure to follow up on these workqueues to address any leakage. They applied the same process to denial management. While the revenue integrity unit model is becoming the norm, UMHS was at the forefront of this approach to optimization.

Specific metrics that improved over UMHS's initial optimization include:

Candidate for Final Bill (CFB)
One of the first things that UMHS focused on with the help of MCS was to improve performance around CFB (candidate for final bill), a key measure that dictates when the organization can send a claim out the door. Over the initial engagement, UMHS's CFB timeframe went from 21 days, then to 10. Currently at 7 days, UMHS is now aiming to get that timing to 5 days.

Charge Lag Process
Typically, academic medical centers have a longer timeframe than desired against best practice for charge entry. UMHS's revenue operations worked to change this by creating a broader conversation about the influences and impacts of charge entry, seeking out clinical leadership in particular. They explained how more timely entry affects patient satisfaction as well as organizational sustainability, discussing the connection between timely entry and the chance of a denial or a missed charge downstream. These conversations established a collaborative blueprint that helped with the CFB metric mentioned above, and it has also paid dividends in terms of organizational culture.

Beyond Optimization

The theme of revenue cycle operations at UMHS is "what have you done for me lately?" So even with its great strides towards best practice metrics, UMHS is focused on continuous improvement—which means, first and foremost, the objective and ongoing assessment of performance. Having an external, third-party partner generate those assessments on a quarterly basis helps the organization increase accountability, reward accomplishment, and focus new efforts appropriately.

Circling Back to Patient Satisfaction
Knowing that patient complaints about pay was one of the early reasons for integration in the first place, UMHS returned to this concern after optimization. Making the case that patients are increasingly interested in the financial aspect of care, the revenue department was able to interview an institutional patient focus group to gather feedback about post-live billing and statement changes. The feedback about the changes was consistently positive. And on a quantitative level, UMHS's customer service call abandonment rate fell to a best-practice metric of 4% from 80%, a dramatic improvement to this important element of patient satisfaction.

While feedback was indeed positive around the statements (no more complaints about "turfing," where patients were sent from one office to another without getting a clear answer), patient concerns have since shifted: now the complaints are about actual costs, not administrative issues.

Analytics-Driven Improvements
In the world of revenue cycle, you can act from an anecdotal perspective or you can base decisions on good data presented clearly with carefully constructed dashboards. Our revenue analytics group had devised numerous dashboards that give us new ways to look at our performance data. These dashboards help MCS guide a "denial management task force," consisting of key people who discuss and decide whether to move forward with a payer on a problem or recalibrate. This ongoing, data-driven task force is one way UMHS has structured continuous improvements, devoting internal and external resources to assessing and adapting to the actions of payers.


With 400 academic medical centers in the U.S., the experience of UMHS is not unique. Peer institutions looking to move from a collection of best-in-breed systems to an enterprise system that synthesizes hospital billing, physician billing, and other applications need to think beyond optimization. After aligning these systems, organizations must secure the perspective and help they need to hardwire sustainability in a post-live environment.

1 Jeffrey D. Eyestone, “Key Trends in Healthcare Patient Payments,” J.P. Morgan Healthcare Banking 2013, p. 3.
2 C. Schoen, J. Lippa, S. Collins, and D. Radley, State Trends in Premiums and Deductibles, 2003–2011: Eroding Protection and Rising Costs Underscore Need for Action, The Commonwealth Fund, December 2012.
3 McKinnis Consulting Services, LLC (McKinnis) was acquired by Navigant Consulting, Inc. (Navigant), effective December 31, 2015. The results detailed in this case study were derived through an engagement McKinnis conducted with UMHS prior to its acquisition by Navigant.

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