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Leveraging IT to Optimize Revenue Cycle Management

September 29, 2017
by Heather Landi
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A recent survey found that more than half (56 percent) of Americans are delaying payment on medical bills, citing high-deductible health plans and confusion over insurance coverage as the primary reasons. The survey, conducted by Omaha, Neb.-based communications solutions provider West Corporation, also revealed that providers are finding it more difficult to collect payments and reduce bad debt, adding to the financial stress healthcare organizations experience as they attempt to optimize reimbursements and increase revenue, while adapting to new value-based payment models.

In the West survey of 1,000 consumers, 93 percent of patients said healthcare is too expensive and two thirds (67 percent) of patients said their financial situation makes it difficult to pay their medical bills on time. In addition, three-fourths of patients say that cost and high insurance deductibles impact how often they visit their provider. In a second West survey of 236 healthcare providers, 93 percent of provider respondents said they recognize that patients may delay bill payments because of their financial situation.

The West Insights and Impact Study also found, through an analysis of the cost of insurance policies purchased through the Healthcare Marketplace during the 2017 open enrollment period, that the average annual deductible was $8,232 for a family policy, a three percent increase from 2016. Another survey conducted by the Federal Reserve released in May found that 44 percent of Americans cannot cover an unexpected $400 emergency expense without borrowing or selling something.

Patients’ rising concerns about the cost of healthcare, and the trend of delayed payments, has a financial impact on providers who are finding it more difficult to drive timely payments, grow revenue and maximize reimbursements.

“What this survey data is showing us is that patients have strong feelings about the financial aspects about healthcare right now, and that is translating into challenges for healthcare organizations and providers in terms of managing their revenue cycle,” Allison Hart, West’s chief healthcare market research and insights strategist, who led the West survey study, says.

Value-based payment programs that financially reward patient care organizations based on performance are growing in numbers. The Centers for Medicare and Medicaid Services (CMS) has already attested that it has succeeded in tying 30 percent of Medicare provider payments to value, and it is continuing to advance alternative payments as it drives toward the goal of tying 50 percent of payments to value by the end of 2018. The introduction of these new payment programs is forcing healthcare providers and organizations to seek out solutions that will enable them to maximize reimbursements, Hart says.

And yet, at the same time, providers may be missing out on opportunities to leverage existing resources, such as technology-enabled communications, to solve revenue cycle challenges, Hart says,

The West survey found that only 23 percent of providers make it a habit to always discuss each patient’s ability to afford healthcare prior to delivering services, and only 41 percent of providers currently use their appointment reminder technology to prompt patients to pay bills. Hart notes that providers should leverage automated appointment reminder notifications that they are already sending in advance of scheduled appointments to inform patients of potential copayments and out-of-pocket costs. What’s more, providers should automate payment reminder messages following appointments, she says.

“Many providers are not aware that technology-enabled communications platforms have the power to support them in a very simple way that doesn’t require them to add additional staff or resources and can help to fill in those gaps in communication,” Hart says.

Optimizing Financial Performance in the New Healthcare

Physician practices of all sizes are finding that automating RCM and claims management functions can have a significant impact on workflow, efficiency and the bottom line.

Last year, Ninth Street Internal Medical Associates (NSIMA), a Philadelphia-based primary care practice, implemented a complete overhaul of its manual RCM process, and now has a highly-automated claims management and reporting workflow that integrates with multiple systems, including the electronic health record (EHR) system. NSIMA is one of the first physician practices in the country to become certified as a Level 3 patient-centered medical home by the National Committee for Quality Assurance, according to Chauntae Joyner, billing manager at NSIMA. The practice has grown over the years to add new providers and services but hadn’t updated its RCM to meet higher patient volume. What’s more, the slower, manual claims management process meant revenue was being left on the table, Joyner says.

Working with Navicure, a medical claims management solutions provider, the practice set its sights on optimizing efficiency for claims submissions and denial, and rejection workflow through automation and integration. Denials and rejections have benefited from automation, in particular, as staff can track claims denials in real time and receive automated notifications.

“We’re a very analytical office, so we run reports for everything. When there is a new CPT code introduced, we run reports to see how that code is performing. We like how the systems that we use are really helping us to boost our revenue,” Joyner says.

Thomas Eye Group, a 12-location ophthalmology practice based in the Atlanta area, found that implementing patient self-service check-in technology not only improved the patient check-in experience but also has improved point-of-service collections and reduced claims rejections.

Ben Seals, Thomas Eye Group’s chief operating officer, says the practice implemented self-service check-in kiosks with the aim of streamlining the check-in process for patients, while also automating the registration process, which improves workflow for front office staff. With the kiosks, provided by Atlanta-based ClearWave Corporation, patients enter insurance information as well as payment information up-front, which frees up front office staff to be more engaged with patients who need assistance, Seals says.

“We’ve utilized ClearWave's portal and verification process to centralize and streamline our registration process. Our centralized registration team is able to do all the insurance verification, and they pull referrals and pre-authorizations, working 24 to 48 hours in advance of when a patient checks in,” Seal says. The digital patient check-in platform has helped to boost point-of-service collections by 20 percent year-over-year, and just 1.2 percent of claims are denied, reducing the time it takes staff to follow up and resubmit denied claims, Seal reports.

Days in accounts receivable, a revenue cycle metric that measures the length of time between when a service is invoiced and the date it has been paid, is now less than 13 days. And, the clinic’s cost to collect decreased by $17.50 per claim thanks to real-time verification of insurance information, which has led to fewer denials and reduced the need to resubmit claims, Seals says.

Kim Wishon

Similar to other physician practices, Watauga Orthopedics, an orthopedic specialty surgery practice in Kingsport, Tenn., was challenged with redundancy and inefficiency in its manual RCM process. Watauga CEO Kim Wishon says she began looking for RCM technology solutions that would eliminate unnecessary workflows surrounding insurance eligibility and drive financial performance, while also enabling the practice to re-purpose staff from back-end functions to more patient-centric activities.

Checking patient eligibility can be an arduous process for smaller and specialty organizations, contributing to staff burnout, and frustration from patients as they must wait for eligibility to be confirmed before being seen by a physician, Wishon says. At the same time, Watauga, which is a 12-physician orthopedic practice with two locations, recognized that the shift toward value-based care and payment models brings the focus back to operational soundness and financial stability, which requires a thoughtful approach to RCM.

“We do a lot of bundling for hips and knees, and value-based payment models are starting to be very prevalent in orthopedics now, and it’s changing RCM management and billing. We felt that we needed a RCM piece that would enable us to rely on technology, rather than on people, to do the reporting, such as calculating a pain scale, or surgery outcome or patient satisfaction,” she says.

Since implementing a cloud-based RCM system, provided by athenahealth, Watauga has experienced several improvements as a result of new automated processes. “This process has allowed us to drastically reduce our days in accounts receivable. We were able to reduce that by almost 10 days overall; that was a major cash flow influx to our practice. And, we were able to decrease our denials from about 13 percent in orthopedic surgery down to about 3 percent,” Wishon says, adding, “That has made a massive world of difference for the way we operate and the way our billing department operates.

What’s more, the practice has been able to reduce the administrative burden and re-purposed many employees to more patient-centric roles. And, the technology enables Watauga to dig into insights and practice performance metrics, enabling the organization to triple in size over the last three years, Wishon says.

Mitchell Hollander, M.D.

The journey into value-based healthcare has often been described as “one foot in the boat, one foot on the dock,” and the executive leaders at one large Michigan urology group are proactively facing these challenges as they move forward into value-based care. The Michigan Institute of Urology (MIU) operates 26 offices across southeast Michigan with about 52 urologists and 10 extended providers. Mitchell Hollander, M.D., a partner in the Michigan Institute of Urology, says his urology practice is leveraging a revenue cycle management service and a specialty-specific EHR to help smooth the transition to value-based care and optimize clinical and financial performance along the way. Hollander acknowledges that understanding RCM has become increasingly important for practice leaders in the new world of value-based care. MIU is working with Integra Connect, a West Palm Beach, Fla.-based health IT company, to set up the RCM service, and Integra is now the practice's preferred partner for value-based care success, with value-based RCM a core focus, he says.

“Six years ago, we weren’t thinking about RCM, and now all we talk about is RCM,” Hollander says. He continues, “[With] the analytics, the data tools and certain registries, to move forward in the MIPS and MACRA world, it comes down to, how do you organize this? And that’s where RCM becomes very important. Before we didn’t have to worry as much about it. But, now you really need to keep track of exactly what’s going on, where every dollar is going, and exactly how to pull data and how to do the analytics. On top of that, [there is] the billing, insurance verification, the reminders, all the other things that fit into it, and if it’s all part of one system, it’s much easier to keep track of.”

He adds, “That’s where our goals have been, in terms of reporting, which gives us a boost in value and also gives us a boost in patient quality, because we’ll be able to follow certain pathways and analyze if our providers and extended providers are following those [pathways], which is difficult to do. In the old fee-for-service days and in the paper chart days, it would be near impossible.”

Hollander contends that analytics will be critical to practice leaders as they navigate the new world of value-based care as well as MACRA and MIPS. Hollander and his team are doing the work now to build new information technology platforms to succeed in a value-based world, which puts MIU somewhat ahead of the curve.

“You have to start with a good EHR that has a good analytics tool or an intelligence model that goes with it. And, you’re going to need interaction between your EHR and your practice management systems with an ability to dive in there and extract the intelligence, the data tools, the registries and the analytics of the system. If you want to be in value-based care, you better have a good analytics system,” he says.

“We’re doing everything in our power to react to what’s coming at us; and what’s coming at us is the value-based truck. You either stand in front of it and get run over by it or you get on it, and we’re getting on it,” Hollander says. 

2018 Raleigh Health IT Summit

Renowned leaders in U.S. and North American healthcare gather throughout the year to present important information and share insights at the Healthcare Informatics Health IT Summits.

September 27 - 28, 2018 | Raleigh


Executive Brief: Using Digital Technology to Streamline Claims Management

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In the past few years, numerous audits and investigations have turned up millions in:

► provider overpayments
► incorrect reimbursements
► lost money

Taken together, the costs of delayed, pended, or error-ridden claims add up quickly—and the amounts are staggering.

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MGMA: Physician Compensation Data Illustrates Nationwide PCP Shortage

May 23, 2018
by Rajiv Leventhal
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Primary care physicians’ compensation rose by more than 10 percent over the past five years, representing an increase which is nearly double that of specialty physicians’ compensation over the same period, according to the Medical Group Management Association (MGMA).

Officials from the Colorado-based MGMA, attested that the data “is further evidence of the worsening primary care physician shortage in the American healthcare system.”

A closer look at this data—the 2018 MGMA DataDive Provider Compensation—shows that this rise in compensation is not necessarily tied to an increase in productivity. When broken down by primary care focus, family medicine physicians saw a 12-percent rise in total compensation over the past five years, while their median number of work relative value units (wRVUs) remained flat, increasing by less than one percent. Practices offered more benefits to attract and retain physicians, including higher signing bonuses, continuing medical education stipends, and relocation expense reimbursements.

The data for this survey was based on comparative data from more than 136,000 providers in over 5,800 organizations.

“MGMA’s latest survey has put strong data behind a concerning trend we’ve seen in the American healthcare system for some time—we are experiencing a real shortage of primary care physicians,” Halee Fischer-Wright, M.D., president and CEO at MGMA, said in a statement. “Many factors contribute to this problem, chief among them being an increasingly aging population that’s outpacing the supply of chronic care they require. And with a nearly two-fold rise in median compensation for primary care physicians over their specialist counterparts and increased additional incentives, we can now see the premium organizations are placing on primary care physicians’ skills to combat this shortage.” 

Further supporting this trend, the new survey identified meaningful growth in compensation for non-physician providers over the past 10 years. Nurse practitioners saw the largest increase over this period with almost 30 percent growth in total compensation. Primary care physician assistants saw the second-largest median rise in total compensation with a 25 percent increase.

The research also revealed that over the past five years, rises in median compensation varied greatly by state. In two states, median total compensation actually decreased for primary care physicians: Alabama (-9 percent) and New York (-3 percent). Many states saw much larger increases in median total compensation compared to the national rate, the top five being Wyoming (41 percent), Maryland (29 percent), Louisiana (27 percent), Missouri (24 percent) and Mississippi (21 percent).

Related Insights For: Revenue Cycle Management


Survey: Healthcare Orgs with Multiple RCM Systems Have More Challenges with Denials

May 15, 2018
by Heather Landi
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More than two-thirds of health systems (about 70 percent) use more than one vendor for revenue cycle management, and those organizations that do use more than one solution report larger issues with denials, a recent survey found.

For the survey, Dimensional Insight, an analytics and data management solutions company, collaborated with HIMSS Analytics to poll 117 senior-level decision makers in hospitals and health systems, including CEOs, CIOs, directors of IT and finance and heads of revenue cycle management. The survey examines the state of revenue cycle management, and highlights the difficulty in integrating data, and the impact it is having on revenue collection.

The survey found that more than two-thirds (70.9 percent) of hospitals use their EMR solutions for revenue cycle management. In addition, most hospitals utilize multiple vendors for RCM purposes. This is true of hospitals that leverage their EMR for RCM and those that use other solutions.

The survey also revealed relatively low levels of analytics-based automation in RCM, with 36 percent of hospitals say less than a quarter of their revenue cycle process is automated using analytics. Another 24 percent report that 51 to 75 percent of their RCM process is automated.

As healthcare delivery continues to evolve, hospitals are struggling to make the most of their revenues. The shift to value-based care, increased patient pay, and a flurry of mergers are creating new challenges within the financial ecosystems of health systems. Many organizations are looking for ways to improve their revenue cycle management.

According to the survey respondents, denials continue to be the biggest RCM challenge for health systems today, cited by 76 percent of respondents. Healthcare senior executives also identified revenue integrity (37 percent) and patient pay (34 percent) as top RCM challenges.

Organizations using more than one vendor mostly report bigger issues with denials than those using one RCM solution. Close to 70 percent of health systems using three or more vendor solutions report that denials are their biggest challenge, with only 63 percent of health systems using one vendor solution said denials topped the list of challenges within revenue cycle management. The highest rates of problems with denials (100 percent) were reported by health systems using their EMR plus one or two other solutions.

What’s more, nearly all respondents (98 percent) say collecting data from disparate sources is a challenge for revenue reimbursement. Of them, 65 percent said it was moderately challenging, while 33 percent said it is extremely challenging. The survey also asked health systems which areas within the revenue cycle posed the biggest challenges for collecting data. Performance tracking (27 percent), inability to identify billing errors (25 percent), and keeping up with variances (24 percent) were the top three responses, with another 14 percent citing difficulty monitoring trends.

And, 96 percent of health systems say the way data is collected is a challenge, with 58 percent calling it a moderate issue and 37 percent citing it as a big issue.

The survey drilled down into how disparate data sources can contribute to issues with revenue integrity. About two-thirds of healthcare senior executives cited “lack of interoperability” as an ongoing issue, and the same percentage cited “some systems are left in silos” as an issue that impacts revenue integrity. Another 30 percent of respondents cited another issue—“key stakeholders do not trust the data.”

The survey also examined organizations’ RCM governance processes. A majority of hospitals of all sizes reported that their RCM governance is centralized. Overall, 69 percent of hospitals have centralized RCM governance, with the highest percentage (73 percent) among hospitals with more than 500 beds and the lowest (50 percent) among hospitals with 50 – 100 beds. Overall, 16 percent report having no RCM governance process. The bigger the hospital, the less likely it had no RCM governance in place

The report authors concluded that health systems are struggling with interoperability, and the associated challenges have effects throughout the enterprise. “The survey revealed a patchwork of solutions, an arrangement that does not seem to be working particularly well. In addition to highlighting the challenge of collecting and integrating data from disparate sources, the survey shows a real financial impact. Lack of interoperability does not just affect clinical and operational decisions. It is hurting the bottom line. Health systems need solutions to bring data together and make it useful throughout the entire revenue cycle,” the report states.

 “Many hospitals and health systems are undergoing mergers in hopes of increasing efficiencies. Or they implement several different technologies as band-aids to compensate for the deficiencies of systems,” Fred Powers, president and CEO of Dimensional Insight, said in a statement. “Unfortunately, what they’re finding in many cases is that the different technology systems in place are hard to integrate, and now this is impacting the bottom line.”


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