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Capture That Charge

May 29, 2008
by Daphne Lawrence
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The future of successful revenue cycle management is the integration of clinical and financial systems.

Rich temple

Rich Temple

Most hospitals using IT for revenue cycle management (RCM) have seen improvements in their cash flow. But how well are they integrating with the EMR?

“The clinical information system in our world is the precursor to the financial system,” says Rich Temple, CIO of four-hospital Saint Clare's Health System in Denville, N.J., that recently became a member of the Denver-based Catholic Health Initiatives network. “The financial system can't live anymore without having the clinical information feed it information. That's where the charges are coming from.” Most agree that to optimize those charges, the two systems need to communicate.

With regulatory changes like HIPAA claims attachments and severity-adjusted DRGs looming, CIOs need to take a closer look at integration. “The act of placing an order within a clinical system is the precipitating event for generating a charge,” says Temple. “In your most ideal world, you ought to be able to capture 100 percent of your charges 100 percent of the time.”

But the world, especially in hospital IT, is not ideal. Mike Davis, a partner at Chicago-based HIMSS Analytics, says that in addition to claims attachments, as mandates like pay-for-performance become more prevalent, the integration of clinical and finance will become even more important. “A lot of these people are getting into pay for performance and they're going to need the clinical information to back that up,” he says. “If the RCM environment is different from the EMR, you have to write all these complex interfaces.”

William Phillips, CIO of University Health System in San Antonio, is not fazed by those complex interfaces. His hospital recently attained Stage 6 in the HIMSS Analytics EMR Adoption Model, one of only 13 hospitals in the United States to reach that stage. University Health System uses a nine-year-old U.K-based GE IDX system that integrates with Atlanta-based Eclipsys. “Every time there's a billing change, whether it's a HIPAA change or a legislative change, we make those changes in IDX,” says Phillips. “I have a small integration team and a Quovadx (Irving, Texas) interface engine — everything is written through Quovadx.”

Philips says it's key to make sure that data sent is data received, and to verify the accuracy. He also feels strongly that holding vendors accountable for these complex interfaces is one way to ensure success. “You have to make clear expectations upfront that these two products need to talk to each other,” he says. “We hard write that in our contracts, and we put a lot of that on the vendor.”

No matter how much the vendor helps, though, most agree that the clinical-financial interface can be a minefield. Temple's pragmatic approach takes this into account, from the initial patient registration in San Francisco-based McKesson Series, out to Kansas City, Mo.-based Cerner via HL7.

“You place an order by going to an order catalogue in Cerner,” says Temple. “The challenge at that point is you've got to have every order you could ever want to write — and then some — loaded into your clinical system.” Once those orders are loaded, the challenges are far from over. “When you're building, you may wind up pointing orders to inaccurate or inappropriate CDMs (charge description master) which could cause you not to get paid at all. So that's an issue.”
Mike davis

Mike Davis

William phillips

William Phillips

The CIO also has to consider the timing. “At what point do I actually fire the charge off?” asks Temple. Should the charge be generated at the time an order is placed, at the time a result comes back, or when a certain test is completed? “In many cases, there are a multitude of points to say, ‘I can drop the charge now.’ And if you set up a charge point for an order that is not going to ever get hit due to the real live workflow getting used in the unit, you're not going to charge anything.”

With challenges like these, Davis says many of the vendors are creating interoperability through service oriented architecture. “CIOs are spending a lot of their time and budget on interfaces unless they have everything from one vendor,” says Davis. “The problem is that there are not a lot of vendors that have really good integrated RCM and EMRs at this point in time. Part of the challenge is that the architectures are not there yet.”

Can older systems rise to the challenges of clinical-financial interoperability, or does this mean it's time to think about a change? “Many of these RCM applications are 10-12 years old, and they're getting long in the tooth,” says Davis. Because of that, many CIOs are wondering if their older best-of-breed RCM systems will be able to make it through the transition to a more closely integrated clinical system, or if perhaps it's the time to make a change.

Davis says the architectures in many older systems are not the best to try to do these changes or upgrades. Specifically, changes like the severity-adjusted DRGs will necessitate upgrading the coding systems. “A lot of people ask, ‘What's the big deal about that?’” says Davis. “Well when you update the coding system it has an impact on the billing system, so there is a cross walk between those two environments. For some architectures that may not be a big deal, and for others it may be a little more difficult than you think it is.”

But not everybody is ready to switch out a financial system that they're heavily invested in.

Philips says he plans to remain with GE IDX even though his clinical system is Eclipsys. “You won't believe how many times a day I'm asked, ‘Are you going to change out your patient financials?’” he says. “And the answer is no.” He considers it fully integrated — and his Stage 6 designation backs that up. “I'm very successful in our EMR, but I'm also very successful in our revenue cycle. I also want to protect my capital investment. We bought IDX many years ago, and I have no plans to change it out.”

Many hospitals, even using older applications like SMS Invision, have driven down AR days though re-engineering. “There's no silver bullet,” says Davis. “There are all kind of things that impact revenue, like payer mix, the amount of Medicare you have, commercial payers. You have to have a different process or procedure for all those different payers to make sure that you know exactly what they want in those claims and how to code so you don't get denials. It's something that each organization has to sit down with.”

Temple agrees that working through the process between clinical and financial systems helps ensure success. One of his lessons learned is to run analyses of CDM codes a few months before and after any clinical information system goes live. He looks for codes that had activity before go-live and none after, or which are showing an appreciable drop in activity. “You can go back and trace the individual CDM,” he says. “You need to be very vigilant and stay on that. Once you get all those things together, then I think you are really in a great place because you will generate the right charge every single time.”

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