Leveraging RCM solutions to succeed in a value-based world

Healthcare industry experts discussed the evolving landscape of revenue cycle management during a panel titled, "Revenue Cycle Solutions and Trends" at Becker's 2nd Annual CIO/HIT + Revenue Cycle Conference.

The panelists included:

  • Brad Cook, vice president of revenue cycle management at Albuquerque, N.M.-based Presbyterian Healthcare Services 
  • Rosemary Sheehan, vice president of revenue cycle operations at Boston-based Partners Healthcare 
  • Jonathan Wiik, principal of revenue cycle management and healthcare solutions at Parker, Colo.-based TransUnion

"The industry is changing dramatically right before our eyes and I think we have to really need to shift and have a healthy blend of technology assisting our personnel and being successful," said Mr. Cook. "We as a revenue cycle group of leaders generally react."

High-deductible health plans & service estimates
Ultimately, high-deductible health plans have created a debt issue for hospitals, said Mr. Wiik. Patient education, therefore, is critical in the billing process. Mr. Wiik said his previous hospital made patient calls for any bills more than $500. Patient financial engagement bodes well for a hospital's RCM.

"It's not transparency and consumerism — those are two buzz words — it's about making [the industry] like everything else, making that consumer experience happen," said Mr. Wiik.

Ms. Sheehan jumped in, adding a person wouldn't have his or her car repaired without knowing the cost beforehand, yet "we expect patients to show up, blindly trust providers and then pay these massive deductibles."

Mr. Wiik believes the industry will have to transition out of the paradigm in which hospitals don't collect payment up front, because that shift will make "patients conditioned to pay."

To address this billing issue, Ms. Sheehan said Practice Partners now offers requesting patients estimates for every scheduled elective service. Within the next couple of years, they hope to offer estimates for every service.

Estimates are ballpark numbers, and if patients go in for one service and end up receiving a slightly different service, that estimate could be off the mark. Teaching patients why pricing variability exists in hospitals is critical, and helps them understand that medicine is an art and "not a science," said Mr. Wiik.

Hospitals may also find deposits helpful when dealing with high-deductible health plans, said Mr. Cook. Even though the hospital doesn't know the exact amount of a service on the day, the estimate steers the provider to collect at least a portion of the cost on the day of rendered services. "At least [patients] have some skin in the game, and we have some opportunity to true it up," said Mr. Cook.

"We're between a rock and a hard place in healthcare," said Ms. Sheehan. "We want to do the right thing, we want to be as transparent as possible with our patients…But when it doesn't work out for all the right reasons, we can't be held liable."

Collecting copays
Practice Partners has also jumpstarted a program to "reenergize the process of collecting co-pays," said Ms. Sheehan. Failing to collect copays may significantly impact a hospital's financial health, as copays now compose a larger portion of the overall contractual allowable.

A main barrier of copay collection involves a lack of accountability, which further confuses patients as they face copay collection inconsistency from one provider to the next.

"It's really, ultimately, broader than just high-deductible plans, it's really about creating a seamless appropriate patient experience that's consistent across the board," said Ms. Sheehan.

Simplifying patient bills
High-deductible health plans have stressed the patient billing cycle, with revenue cycle management teams seeking ways to simplify the billing process.

Mr. Cook recommended creating simplistic billing statements that read like credit card statements. On the first page, alert the patient of the payment amount and financial assistance. On the second page, dive deeper and list the line item physician services. Ensure these line items are as basic as possible, and don't inspire confusion, which could result in patients arguing they never received those precise services.

"Take that language and further simplify it, so if it's a lab test, we just put lab test," explained Mr. Cook. "We try to really simplify the terms on that billing statement to that fifth-grade reading level, and reduce some of that complexity."

Evolving relationships with physicians
Physicians look to hospitals and corporate to establish a solid, streamlined process for administrative tasks. "Physicians don't want to hold staff accountable, so administration has to hold them accountable," said Ms. Sheehan.

Because of this environment, Practice Partners created actionable dashboards that drive down the hierarchy from the CFO all the way to department administrator. The practice manager then drills down to the user, explained Ms. Sheehan, all along collecting better data. This data will allow the hospital to pinpoint which staff members are completing crucial tasks.

Engaging physician leaders to drive change within physician groups has worked well in Mr. Cook's hospital, focusing on functionality that enhances workflow at the point of care.

"We're working with those physician leaders to help one, work with their peers to identify solutions that work really well for them, and then work with our revenue cycle leadership to implement those and help communicate that change," said Mr. Cook.

Capturing accurate diagnosis codes
Ms. Sheehan said her hospitals have a lock on inpatient diagnosis codes, but they do not have the same infrastructure in place to capture ambulatory diagnosis codes.

"In an ambulatory setting, we have a physician who is trying to get through their day as fast as possible, and they're selecting a code," explains Ms. Sheehan. "But unfortunately, what that's created is an appearance of a very healthy patient population."

With the shift toward value-based care, Ms. Sheehan's hospitals are assuming full risk and they must base their budgets on how sick their patients are. So, they developed a risk coding team that flags a number of patients and code them post-visit, pre-bill. With this coding team, Practice Partners increased its overall risk score by 1.5 percent.

Armed with a more specific coding process, the team added an amount of diagnostic codes as well as removed unneeded diagnosis codes.

Mr. Wiik added some electronic health record systems now include machine learning, which prompts codes as providers input information.

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