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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.


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