How to pick revenue cycle vendors: Research, network and jump in

Photo of Moses Cone Health System from greshamsmith.com.

Mike Simms should have listened to his gut the first time when he chose one revenue cycle vendor for his healthcare organization.

Simms, vice president of revenue cycle for the North Carolina-based Cone Health, initially picked a different company to handle patient statements but quickly cancelled that contract when things started to sour. Turns out, his first instinct was to select Patientco, a smaller vendor he discovered on social networking site LinkedIn that he initially panned because it lacked experience in working with Epic, the system’s main revenue cycle vendor.

“We went back to Patientco because we had a gut feeling about them,” he said, adding that patients have been very happy with the choice.

For Simms, it was the promise of open dialogue between Cone and Patientco that sealed the deal.

“This vendor is allowing us to make solutions to improve the platform,” he said. “You don’t want a vendor who tells you how to run your business, you want a vendor that’s open and wants to share in the success.”

On April 12, Simms will give a presentation at the Revenue Cycle Summit at HIMSS 15 in Chicago about vetting vendors and getting the most return out of revenue cycle. The event is sponsored by Healthcare Finance.

[Register: Revenue Cycle Solutions Summit]

Of course, you can’t pick vendors on gut alone. Aside from research and demonstrations, Simms said networking is perhaps the best tool for finding partners. He recommends joining organizations for hospital finance pros and talking frequently with other managers about revenue cycle.

For Cone Health, a nonprofit health system that runs six hospitals and 75 physician practice sites among other facilities, scale was important when choosing their main vendor. In 2012, they chose Epic, one of the largest in the field. And though Epic was in place when Simms started in 2013, much of the cleanup needed to streamline the system happened under his watch.

“In the past year we’ve cut our accounts receivable days from 70 down to 48,” he said.

Cone also selected vendor Recondo for its patient access platform.

[Also: What CFOs think about revenue cycle]

But improving patient statements so that they were easier to understand was a major focus for Cone, and that’s where Patientco came in. Their service not only includes streamlined patient statements, he said, but it also features a web portal and a self-pay option so patients can make their payments online.

Simms said that improvement ties right in with recent patient engagement initiatives.

“These quality measurements are very important,”said Simms. “If a patient had a wonderful experience on the clinical side but a poor experience with revenue cycle, that can result in them scoring us very negatively.”

Confronting big issues

Patient engagement isn’t the only challenge hospital face in the billing department, Simms said. In fact, one of the largest problems has an October start date.

When ICD-10 coding takes over on Oct. 1, Simms said health systems are going to face a wave of denials that could come with coding errors. To prepare, health systems must decide whether they will manage those denials in-house or contract with a separate vendor to handle that, though he admits the vendor route is more likely a luxury that a large health system can afford.

Cone has already begun testing ICD-10 with Medicare, Medicaid and Blue Cross, Simms said. They are also staffing a denials team to handle any rejected claims.

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Another major issue is on the collection front, especially since the Affordable Care Act has placed more out-of-pocket pressure on patients. For Cone, the answer was to bring more collection in-house. The health system created a loan system that scores patients based on their abilities to cover their balances. Patients with higher scores are eligible for no-interest extensions, while higher-risk patients can join a payment plan that includes interest, through the help of a credit service.

“We implemented that in July 2014 and we’ve gotten about $2 million in recourse funding,” Simms said,

When it comes to streamlining revenue cycle, Simms said you can’t downplay how important it is to choose vendors smartly and invest in the technology that will ultimately save systems money.

“We can be a lot more efficient with the technology that’s on the marketplace now,” he said. “With margins so thin because of the ACA, and Medicare and Medicaid, we have to do what we can to tighten processes.”