With the advent of policy-driven changes under healthcare reform, the traditional revenue cycle management practices based on encounter-based billing activities are being swept aside. With that inevitability, provider organizations are considering how to best realign their accounts receivable processes to maximize those revenues that are pegged to data-driven quality outcomes in patient care.

Dan Marino, president and CEO of Health Directions, LLC, Oak Brook Terrace, Ill., says that clinical integration between hospitals and physicians is key to making a successful transition to new payment models, because it allows organizations to look across the continuum of care, measuring both cost and quality. “As you start to do a better job of managing the clinical outcomes and managing the costs of patients, you then have an opportunity to align incentives with payers,” he says. “Clinical integration allows for funding and financial incentives to help providers manage the care of the patient outside of the traditional care model.”

Dan Marino

Marino foresees a closer alignment between the patients, the programs, and the accounts receivable departments in provider organizations. As hospitals move forward on value-based contracting, they will need to categorize patients in shared savings or value-based programs, and manage their revenue cycle practices around that, he says. That move requires plenty of planning on the part of provider organizations, but also on the part of the software vendors as well. He notes that some vendors have been upgrading their practice management solutions to track patients by program.

In his view, the ability to aggregate and analyze data is critical to success. Organizations will need to aggregate their quality measures and process measures, which typically are claims data, he says. Over the last several months, software has been evolving rapidly to help analyze this data. In fact, technology aimed at care coordination and care management has been evolving to help providers manage care around different care settings, he adds.

Even for hospitals with the aspects of data aggregation and care management in place, challenges remain on how to leverage what they do well to support their next steps. This means putting together a technology plan to support their clinical integration goals.

Opportunities for Providers and Payers

Stephanie Davis, a practice consultant with Halley Consulting Group, Westerville, Ohio, is an expert in revenue cycle who is focuses on physician practices and integrated delivery systems. She sees opportunities for providers and revenue cycle teams under healthcare reform, both in the large increase in the numbers of insured patients as well as new payment models. Payer contract language has already changed to reflect pay for performance, regulatory changes in benefits regarding what is covered by insured payers, and the rise of health insurance exchange, she says.

Davis says that with healthcare reform will alter the relationship between physicians and revenue cycle teams into a much more team-based approach. Both will use data analytics and business intelligence tools to create risk scorers and manager the patient population better, she says. “At no other time has primary care been more important,” she says. “When we talk about ACOs [accountable care organizations] and patient-centered medical homes, we are really talking about collaboration and coordination of care, which is done within the walls of the physician practice,” she says.

One concern she has from a revenue cycle perspective is whether providers have the right infrastructure in place to negotiate managed care contracts or negotiate risk sharing. To that end, the involvement and support of revenue teams partnering with managed care representatives on behalf of providers will be critical to success, she says. “Providers really have to work closely with revenue cycle because revenue cycle has the data and the ability to leverage those contracts to negotiate those rates,” she says.

Davis says the participation of clinicians is mission-critical to maximizing revenue based on pay for performance and better outcomes. She believes that clinical information will be more and more fully integrated in the electronic health record (EHR). Working together, clinical and revenue cycle teams are moving to a better understanding of how to use data to bring quality care to patients and drive down costs, she says.

She adds that bundled payment contracting will also support more cohesive care in the future, because it is based the coordination of care across the continuum. “With coordination of care, it makes sense that reimbursement is aligned with how care should be delivered, versus the current fragmented process,” she says.

Davis notes that budget constraints and reduced fee schedules are going to be a fact of life for the foreseeable future, even for managed care. Using data to cut costs and allow physicians to be more efficient without compromising care quality will be the next step in the healthcare evolution, she says.

A Provider Organization's Perspective

Efficiency is a key goal of St. Luke’s Boise Medical Center in Idaho, according to Sharon Litchfield, the organization’s systems manager, cash management. The hospital is currently undergoing a system-wide transition to an integrated EHR (supplied by Epic Systems Corp.), using lean strategies to eliminate waste, she says. Since starting the project two years ago, for example, the hospital has combined 14 different practice management systems from its clinics into a single billing office. One major revenue cycle challenge, in her view, has been to make sure that the correct patient information is captured at the beginning of the admissions process, and to eliminate late charges. “If you get things right at the front end, it eliminates a lot of work at the back end,” she says.

Litchfield says her director has challenged her team to evaluate productivity through metrics. Part of the process was to examine what their vision was for revenue cycle management, and consider it from patient check-in, through the entire value chain through discharge. (The hospital uses a document management solution from Hyland Software, Westlake, Ohio.) “We look at imperatives for our whole department, where we felt we needed to work, and then collaborate with other departments,” she says. She views the clinical staff as partners in driving quality and efficiency. Overall, she says, the hospital is undergoing a culture shift away from silos and toward collaboration with two goals: a better patient experience and better processes through teamwork.