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Chartis Group Consultants: It’s Time for Patient Care Leaders to Rethink Revenue Cycle

April 7, 2017
by Mark Hagland
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The Chartis Group’s Ormand and Bankhead want patient care leaders to rethink how they frame revenue cycle management

Just as every other area of activity in U.S. healthcare is experiencing major change right now, so is the revenue cycle management area. Historically, revenue cycle management was viewed in a very narrow way, as a departmental function within the finance department. Yet a number of factors are forcing a shift in perceptions of this area of activity, and rightly so, say the authors of a new white paper from The  Chartis Group, the Chicago-based consulting firm.

Last month, Kevin Ormand, Thomas Kiseau, Todd M. Bankhead, and Catharine Wilder published The Chartis Group’s white paper in this area. “The Next Strategic Imperative: Rethinking Revenue Cycle Transformation,” looks at the dramatic changes taking place around payment and operations in U.S. healthcare, and how those changes are impacting revenue cycle management.

Among the areas that the authors see as being particularly impactful, the write that “[R]evenue cycle operations across the nation face ever-increasing pressure to adapt, as the healthcare organizations they exist within move to position themselves in the rapidly evolving healthcare context, complicated by new forces such as:

>  The regulatory ‘alphabet soup’ of ACA, MU, ICD-10, MACRA, MIPS, ACO, and VBC [the Affordable Care Act, the meaningful use program, the ICD-10 coding system, the Medicare Access and CHIP Reauthorization Act of 2015, the Merit-based Incentive Payment System, and value-based care]

>  The rapid consolidation of health systems and physician groups, creating entirely new lines of business for which revenue cycle operations are now accountable;

>  Increased payer complexity (i.e., multiple contract types and new reimbursement vehicles) and new pricing algorithms; and

> The rise of high-deductible health plans and increased patient financial responsibility.

For many organizations, the tidal wave of change in a relatively short period of time has made it even more challenging to manage… the most fundamental attributes and indicators that drive performance,” the authors write.

The white paper’s authors focus on three areas that they believe will be critical for the leaders of patient care organizations: innovation, investment, and integration. With regard to innovation, they write that “Health systems must embrace a necessary (and potentially disruptive) overarching evolutional paradigm shift in conventional revenue cycle practices. Driving this shift is a transformational cultural and environmental change centered on entrepreneurialism and creativity. Such innovation,” they state, “helps to avoid becoming obsolete and creates the ability  to nimbly scale to known and unknown headwinds.”

With regard to investment, they state that “Strategic investments must be made in automation, technological advancements and a robust recruitment and retention program for highly motivated, team-centric and ‘Lean-savvy’ talent. Such investments run counter to short-sighted cost containment exercises by demonstration ROI and recognizing more significant longer-term sustainable reduction in the cost to collect. This ultimately increases net patient services revenue and drives efficiencies.”

With regard to the concept of integration, the white paper’s authors say that “Health systems must move beyond their current view of revenue cycle as a cost center. It is essential to create a holistic governance model that oversees the full integration of revenue cycle, clinical and operational workflows that are truly aligned with patient-centric processes and go above and beyond expected standardization and centralization programs and efforts. The structure,” they assert, “is necessary to avoid being ‘out-gamed,’ outnumbered and at the mercy of payers’ adjudication bureaucracies and denial algorithms.”

Shortly after the publication of the white paper, two of its authors—Kevin Ormand, who is director and leader of the revenue cycle group at Chartis, and Todd Bankhead, who is a principal at Chartis—spoke with Healthcare Informatics Editor-in-Chief Mark Hagland regarding the white paper’s conclusions and their perspectives on where revenue cycle is headed within the U.S. healthcare system. Below are experts from that interview.

It seems as though we’re at a particularly interesting inflection point in terms of revenue cycle management right now, with massive changes in reimbursement triggering the willingness on the part of patient care organization leaders to rethink their approaches to revenue cycle, correct?

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