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RCM in the New Healthcare: How Hospitals and Health Systems are Adapting to Change

July 28, 2016
by Rajiv Leventhal
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Last month, to supplement the Healthcare Informatics 100 list of top earning health IT vendors, our editors further broke down the top revenue earners in seven product segments. For the Financial Information Systems category, Scott Pillittere, vice president of Naperville, Ill.-based healthcare consulting firm Impact Advisors, and director of the firm’s revenue cycle management (RCM) practice, gave his thoughts on how the segment has changed. “There has been a large push to implement new electronic health records (EHRs) over the last few years, in which ‘foundation’ solutions were implemented for the revenue cycle with most of the focus being on the clinical side of things. Given this, healthcare organizations were left with revenue cycle systems that would work, just not well,” Pillittere says.

Serving as an extension of that product segment breakdown, Pillittere, tasked at Impact Advisors for the last year with growing the practice and making the firm a major player in the revenue cycle consulting market—and before that holding a similar role at Stockamp & Associates (eventually bought by Huron Consulting Group) for 13 years—spoke further with Healthcare Informatics Managing Editor Rajiv Leventhal about the biggest revenue cycle challenges hospitals and health systems are facing today, RCM’s changing role in the new healthcare, and what organizations need to do to better their revenue cycle strategies. Below are excerpts of that interview.

What are you working on now to help hospitals with revenue cycle?

What’s selling heavy for us now is that a lot of organizations have either [just] gone through a major EHR implementation or are actively going through one. Or, they are still feeling the pain from going through one five years ago. In all three of those settings, we are selling a team coming in to help transform that revenue cycle into a new environment. And that can mean several different things around optimizing what they put in place, and not just optimizing the system but everything around it. It goes back to the four core bubbles: people, process, technology, and culture change. You need to hit on those pieces to advance them in their financial performance.

When you say the “new” environment and RCM’s role in it, what are you specifically referring to?

Most of the conferences you go to now talk about value-based payment and what will happen in the future. I still find that there is very much a “back to the basics” need in the industry. The environment has changed, and people are not quite sure what to do in it, so they just want to get back to the basic blocking and tackling they were used to be able to manage the revenue cycle. There aren’t as many discussions around “what about value-based payment?” but more around not being able to bill and collect appropriately.

One client we have in Minnesota did create an ACO-focused organization to be an advanced player in it, but I don’t think it ever got fully ramped up. Good data analysis came out of it, but nothing stellar. And they were the only client of mine who even took a step towards something like that. Most of my clients don’t have the appropriate decision support systems or data to be able to provide them with what they need to strategically think about services and reimbursement.

What do organizations need to better transition and evolve?

They need two things: focus and data analytics. When you go live or if you have gone live on a new EHR or revenue cycle system, you generally have the standard report that comes out, but there are so many standard reports that you probably have not gone through and appropriately inventoried to understand what the new reports were going to be and how you were going to use them. Organizations that have been on Epic for four or five years are still trying to figure out “point one,” so they haven’t even advanced to “point two,” which is to prove the data analytical function of “we have a trend, let’s research the trend, understand it and solve it.” But you need the data to understand what’s happening, and they are not at the point yet since they are still scrambling to get what’s needed from upfront.

I was on a call with a CFO recently and they have been live on Epic for about a year, on a community connect model, meaning they are using someone else’s Epic, and they have an 80-report backlog, no one to create reports, and haven’t even thought of the data analytics and what will be required to advance them. One of the things I always recommend is having a data analytics team off to the side of the revenue cycle. They should control it for both the hospital and the medical group, so they can truly understand what’s happening and where they need to go to.

Scott Pillittere




Health care organizations should be the subject to the same requirement of insurers

that requires a larger percentage of costs be spent on care not administration. If this 

was the case, all the HIPAA business transactions would have been implemented and 

driven the costs down in the revenue cycle. The benefits that could have been accrued 

since 1996 of potentially 300 billion dollars. However hospitals have prioritized their 

investments in favor of clinical systems as revenue cycle leadership sat on the sidelines.

I find it revealing that the article does not reference the greatest potential to improve

the revenue cycle. Organizations like HFMA continue to minimize the impact of this 

technology. Maybe what is missing is revenue cycle leaders who are willing to change the