Advisory Board Company Leader: Time to Rethink Revenue Cycle in the New Healthcare | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Advisory Board Company Leader: Time to Rethink Revenue Cycle in the New Healthcare

July 5, 2017
by Mark Hagland
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The Advisory Board Company’s James E. Green explains the dramatic shift taking place around RCM right now in U.S. healthcare

With the advance of developments related to the MACRA (Medicare Access and CHIP Reauthorization Act of 2015) law, including under the MIPS (Merit-based Incentive Payment System) program, and the potential for Medicare and Medicaid cuts to hospitals and physicians, particularly if the Affordable Care Act (ACA) is fully or partially repealed, U.S. physicians and hospitals face considerable impacts to their federal healthcare reimbursement. Meanwhile, private health insurers are becoming far more demanding and rigorous in their claims management, with outright claims denials accelerating now.

What do physicians and hospital executive need to do? In short, it’s time (or even past time) for anyone responsible for getting healthcare provider claims paid, to move forward rapidly to develop a comprehensive revenue cycle management (RCM) strategy, with effective tactics attached to that strategy, says James E. Green, a managing partner at The Advisory Board Company, the Washington, D.C.-based research and advisement organization. Green, who has spent 17 years at The Advisory Board, is the national partner in its Revenue Cycle Service Line. He spoke recently with Healthcare Informatics Editor-in-Chief Mark Hagland about the current moment in U.S. healthcare around revenue cycle management, and what it means for patient care leaders across hospitals and physician practices. Below are excerpts from that interview.

It seems as though there’s never been a better time to talk about revenue cycle management, with the entire U.S. healthcare system going through intense change right now, correct?

Yes, both on the public payer side and the private payer side. And the government has been getting all the attention, so it somewhat overshadows what’s been happening on the private side.


James Green

When you look at the federal payer side of this issue for hospitals and physicians, what do you see?

On the physician side, physicians are going to have to become savvier at managing their businesses. Physicians are realizing this, and they’re starting to entertain more partnerships with larger healthcare organizations. And they’re doing so for reasons that are obvious to me. Number one, physicians realize that the business of healthcare is far more complex now than it was 20 years ago. The procedures are more complex, the payment processes around office-based procedures is more difficult; and they’re doing more procedures outside of facilities than 20 years ago, when many of these doctors got into practice. And they’re realizing that if they’re not incredibly meticulous about their billing processes and revenue cycle around those procedures, they’re leaving tons of money on the table.

And historically, physicians in smaller practices didn’t even do revenue cycle management, really, correct?

That’s correct. And many procedures are now moving out of the hospital. So your typical PCPs [primary care physicians], who used to do checkups and lighter procedures in their offices, are now doing more actual procedures in the office. So running a medical practice now involves doing procedures that require specific documentation—not just symptoms, but diagnoses that match these procedures. And that’s far more complex than it was in the past, and they actually need revenue cycle expertise to manage that. And MACRA’s here now; and the majority of physicians really don’t know what payment model they should actually practice under. We did a poll at The Advisory Board, and asked physicians what they believed MACRA would do to their business, and nearly 80 percent said that MACRA would drive them to join larger organizations. And the main reason for that was that most didn’t understand how they would drive revenue through the MIPS program, and the APM proposition is even more formidable than that.

So in the typical old-fashioned physician practice with one or two doctors, historically, you had Dottie, the doctor’s wife, working as the office manager. She was very sharp, and could manage Medicare fee-for-service billing issues, as they stood before MACRA/MIPS. But that model of medical-practice billing and claims management just will no longer be sustainable under MACRA/MIPS, correct?

Yes. Just think about the reporting needed to improve practice performance. First of all, Dottie now has to have a full command of the EMR, and to be able to understand what data is going into the EMR. And she has to report that data out of that EMR to the Medicare program. So we have to understand hierarchical condition codes, HCC, and am I actually accurately reporting the HCCs from my visit? And then a risk adjustment factor score, a RAF score, is incredibly important. And the risk adjustment factor doesn’t apply this year, it applies next year. And if I’m not reporting correctly and getting all my RAF scores in alignment, I’ll be penalized next year.

So in other words, non-specialist-level revenue cycle management is simply no longer sustainable, in physician practice?

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