This month, HCI begins what will be an ongoing, series of in-depth, one-on-one interviews with CIOs, regarding their experiences with revenue cycle management automation. In this first interview, HCI Editor-in-Chief Mark Hagland interviews Charles (Chuck) E. Christian, CIO of the 232-bed Good Samaritan Hospital in Vincennes, Ind., regarding his experiences in this important area.
Healthcare Informatics: Tell me about your organization's journey with regard to revenue cycle management (RCM) automation?
Chuck Christian: We've actually been doing revenue cycle redesign for a long time. Our current CEO, who started out as an internal auditor, was CFO for eight years, and recently became CEO. And he and I have a great working relationship (I reported to him), and we're always looking to maximize our effort to get appropriate levels of reimbursement. A few years ago, we installed a new patient accounting system. But we had terrible days in AR (accounts receivable), and terrible cash flow, and I said, in response to our now-CEO who was then internal auditor, in 1995, well, let's do some analysis. And during the analysis, we learned that we were actually trying to use the new system the way we had used the old system, and not taking advantage of any of the new functionalities.
THE REALITY IS THAT IT'S ABOUT WORKFLOW, AND MAKING SURE PEOPLE ARE DOING THE APPROPRIATE THINGS.
HCI: So, clearly, success means more than simply automating old processes?
Christian: The reality is that it's about workflow, and making sure people are doing the appropriate things. It's easy to collect $10, but let's focus on accounts involving $12,000. So in 1996, we began a CQI [continuous quality improvement] process in the revenue cycle area, and we've never stopped. It truly is continuous improvement, using a plan-do-check-act cycle. As part of that initiative, we initiated a series of processes, and have continued to refine those processes over time. First, we educated the staff on everything, and not just on the software that they used every day. So basically, we did comprehensive training. We actually put the billers and the follow-up staff in a room and mapped our processes.
And what we found was that we had had no standard practices until that time. Each biller had their own process, and each follow-up person had their own process; so we created opportunities for those standard processes to be created. And we gave the staff ownership of it, which was extremely powerful, because they had this “aha” moment around that experience. And once that awareness was created, we were able to begin to streamline processes. Among the key advances was that we figured out how to use some of the workflow capabilities in the system to improve their day. And on the AR side, that meant that we were working those accounts much earlier in the cycle, thus directly impacting days in AR. And lastly, we took a look at billers' workspace. When we looked at their workspace, we found that, at any given time, we had between 80,000 and 100,000 file folders at some point in process; and each day, we were producing an absolute tsunami of paper, and that was nuts. So we bought and implemented a document imaging system, even before it was the cool thing to do. And we imaged the documents at their point of origin.
Then we moved all the patient accounting department out of their space and into a new workspace, with new lighting, new ceilings, new PCs, new cubes, everything. And it was amazing to watch the transformation. Rather than having the piles of paper and the misfiles and the hunting down of paper, it was all at their fingertips. And the good thing is, through attrition, we eliminated four FTEs right off the bat. And over the course of time, we've actually eliminated seven positions out of about 35. And so we were able to reduce overhead and at the same time increase volume and decrease our days outstanding in AR. And so once we were able to create those best practices and standards, and we've been honing the process ever since. What's more, we were doing this before it was a cliché thing to do.
HCI: There is a broader context here, too, in that your organization is a county hospital.
Christian: Yes, we're owned by the Knox County Hospital Authority, though we take no public money [from the county]. So one thing that's very powerful in this for me is that we're in southwest Indiana, we're a referral center, and our government insurers, Medicare and Medicaid, run to 67 to 70 percent of our revenues, and yet we're still able to maintain a margin. So we're capturing appropriate charges, and claims are going out appropriately. And we do the analysis on our Chargemaster, because the rules change so frequently. We're also trying to capture as much in the patient charge mechanism when the work is actually done. We used to, in pharmacy, charge patients for medications as they were prescribed; today, that patient isn't charged for the medication until it's given to them at the bedside; because we've had an eMAR [electronic medication administration record] for 10 years. The same thing is true with respiratory treatments.
So we're matching up the documentation that will support the charges, which helps us appropriately manage the RAC audits [Medicare recovery audit contractor audits].
HCI: And you've had this same revenue cycle management product this whole time?
Christian: That's right.
HCI: So, once you get beyond automation, the optimization element is all about process, then?
Christian: Yes, it absolutely is all about process. The technology is just a tool. Now, you can have bad tools. You have to do your homework and choose well. And I've been here 21 years as CIO. It's about change management and process, and how you create the efficiencies using these tools.
We use McKesson for our core clinical information system, QuadraMed for our patient financials, and Lawson for our general financials [products from the Alpharetta, Ga.-based McKesson Corp., the St. Paul, Minn.-based Lawson Software, and the Reston, Va.-based QuadraMed Corp. It's about how well you can reengineer your processes and better manage your tools. It's one of the reasons we did bedside-based barcoding first, before implementing CPOE (computerized physician order entry). We said, we want to stop the errors that get to the patient. We changed a lot of process to eliminate some of the holes in the Swiss cheese, if you will.
HCI: Does that mean that, basically, any relatively good revenue cycle management will work?
Christian: In theory, yes; I've only had experience with two. But it really is about the processes around the technology. And all the products now are all about workflow. And the core truly is about workflow-about making sure you're putting the right things in front of the correct staff to address. And if you're not working your oldest and largest accounts, you're not getting your bang for your buck. We had started out in high 70s to 80s [in days receivable], and it's dropped down to 50 days and below. The other thing we constantly are striving for is finding ways to lower our discharge-but-not-final-bill days, meaning the patient has been discharged from the hospital, but we have not yet produced a bill for the insurers. The more days you have out there, the more those add to your days in AR.
Healthcare Informatics 2010 November;27(11):42-44