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Beyond Billing

March 21, 2007
by root
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Today's revenue cycle management joins analytical tools with cash flow to improve patient care and identify new reimbursement opportunities.

Experts say that revenue cycle management ? long a mainstay in hospitals ? is increasingly being employed in physician practices, as they look to reduce billing errors and payment times.

Nowadays, a wider variety of software tools fit the bill. These programs go beyond billing to help physicians improve patient care, identify underused revenue opportunities, and rein in administrative costs in an environment of shrinking reimbursements. They also help physicians adapt to the broad trend toward consumer-driven healthcare, for example, by including management tools for Health Savings Accounts (HSAs) and other direct-pay interactions.

Improved revenue cycle management "can reduce denials, increase reimbursements, reduce compliance exposure, and increase customer satisfaction," says Suzanne Lestina, technical manager, patient financial services and revenue cycle, at the Westchester, Ill.-based Healthcare Financial Management Association. [c1] "No job is sacred in the revenue cycle," Lestina says.

Coded for Profit
Coding software, an important practice-management tool in its own right, is a must-have in any effective revenue-cycle solution. It helps correct errors in Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) and other codes[c2] . Coding vendors keep track of regulatory changes and update the software so it can automatically spot mismatched codes, freeing administrators for other work.

"The rules that relate to codes are highly dynamic," says Jim Keleher, B2B director at CodeCorrect, an Accuro Company (Yakima, Wash.), whose RevenueSource Pro Suite is typically embedded in practice-management and electronic medical record (EMR) software from other vendors. "If coding is done right the first time, then the practice can get paid right the first time."

Vicki Meyer, office manager at Richard Vanik's (M.D.) Houston, Texas, practice, says CodeCorrect's software reduced payment cycles from 45-60 days to an average of 16 days. "It's a financial and a labor savings," says Meyer, who uses the software inside the Providence, R.I-based LighthouseMD practice-management system. "You know it's going to be correct when you send it, and you don't have any claims coming back," she says, adding she also uses KnowledgeSource PRO from CodeCorrect (a Web service designed to expedite research on codes, regulations, and compliance information) to research conditions and determine whether unfamiliar procedures are at risk of being denied reimbursement.

Outsourcing applications ? and expertise
Many software vendors offer application service provider (ASP) delivery (also called on-demand), running the software on their own servers and off-loading installation and maintenance hassles from the practice, often at significant savings. But some ASPs take the "service" part of their name more seriously by taking over the specialized, labor-intensive tasks of "claim scrubbing," coding, and billing.

"Outsource the whole darn thing," Lestina says she recommends to clients. "We're not in the business of billing, we're in the business of providing care."

She nonetheless cautions physicians and administrators to take full responsibility for their revenue processes ? whether handled in-house or not ? because the risks of sanctions for false claims are too great.

"You can't outsource compliance," Lestina says. "You can't outsource due diligence. You better be managing that system and make sure it's doing what it's supposed to do."

Alpharetta, Ga.-based Per-Se Technologies sells an integrated practice management EMR and billing solution that provides information and business-intelligence tools used to analyze revenue-generating processes.

The company's consulting wing shows practices how to increase collections, sometimes just by getting better use out of existing software and low-tech procedures, according to Ken Carr, Per-Se's vice president of consulting for physician solutions.

Common problems, according to Carr, include improper setup of fee schedules and physician files, and failing to prioritize tasks to favor the highest revenue generators. "Lots of billing managers start at the top, but they should really jump right to the higher-value bills," he says. "It's usually a process breakdown by the people, not the technology."

The real bottom line
Patrick Hampson, chairman and CEO at software and service provider Pittsburgh-based MED3000, says the leading edge of revenue-cycle management is driven by today's "pay-for-performance mentality" and high-performance physician and provider networks, which goes far beyond claims processing. "The payers and the government want to see results," Hampson says.

Physician and financial administrators are more interested in analyzing the information in billing systems both to identify new revenue opportunities and better serve patient populations.