Mid-cycle losses have healthcare focusing on coding, predictive analytics to improve revenue cycle

More hospital and health systems are turning their attention to their revenue cycle's mid-cycle operations as cost pressures force providers to shore up areas where systems are losing money.

"It's very difficult to estimate how much money you're losing through the mid-cycle," said Frank Danza, senior vice president and chief revenue officer at New York-based Northwell Health. "You have all this activity going on… and virtually all of that has to come through the mid-cycle to get categorized or coded. The coding rules are becoming much more complex. On the hospital side, coding is very important, more so than it ever was, in order to get properly reimbursed. If you code incorrectly, the deficiencies can be significant."

In general terms, the mid-cycle is defined as the phase in the revenue cycle process between patient access and the care provider's business office.

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Coding quality is more important than ever, and many large systems have coders that are assigned to coding validation or audits. Northwell segments how many charts will be audited for each coder. And their job descriptions are very specifically defined. Simply put, coders code.

"Our philosophy is that coders are a highly skilled resource," said Danza. "Anything that's not coding needs to be kept away from the coders. For the most part, they're coding seven-and-a-half to eight hours a day. They'll occasionally place a query to a physician… but for the most part, they're coding."

The impact is in quality. Many large systems, including Northwell, strive for a 95 percent accuracy rate or better. A 1 percent accuracy change is worth millions of dollars to an organization of a certain size. And from a compliance perspective, they don't want to undercode and lose revenue.

In-house vs. outsource

Investment in the mid-cycle can be significant, not only to get skilled coders -- and enough of them -- but also to keep them trained and skilled. That's why smaller systems and individual hospitals are turning to outsourcing to get the job done. Even a system the size of Northwell outsources certain pockets of their coding because the coding is especially complex.

Two main factors drive the decision to outsource. One is cost. Another, said Danza, is critical mass: A small practice or smaller system may not have enough of a particular type of service to build up the necessary expertise to keep up high quality.

Sometimes it's a third-party tool than can help with mid-cycle processes.

[Also: Value-based reimbursement leads providers to externalize revenue cycle management]

Harriet Johnson, assistant director of revenue integrity at Novant Health, has been a vocal proponent of the ZirMed revenue cycle management tool to streamline some of Novant's mid-cycle processes. With it, the organization can make sure that the charges being entered are correct and timely.

"The reimbursement specialist team, they work with that component, making sure we're charging accurately and in a real-time manner," said Johnson. "That has helped us a great deal, because if there are issues, it's easier for the clinical team to address them as opposed to waiting until time has passed."

Johnson said it's impossible to get things right every single time; normal human error will occur, and policy and regulatory changes come fast. But the tool has provided Novant with an easy way to determine whether there are missing opportunities that exist, and whether the system is charging appropriately. Using the tool, Novant's data management specialists have been able to pinpoint opportunities for charging.

"If you don't have a tool in place, it becomes more challenging to streamline down to that level of detail to find where those opportunities are, or to determine, 'This is not an opportunity,'" said Johnson. "It allowed us to say, 'If we have these issues now, we may still have these issues with new facilities. So what do we do to eliminate that?' It really allows you to be more proactive and think ahead in how we solve problems and address workflow opportunities."

What many of these mid-cycle tools can do, said Johnson, is focus on a year's worth of data -- which provides the predictive analytics component. The past, she said, will give you a glimpse into your future.

"In doing that, we had instances where they changed a workflow, and in the change of that workflow, the responsibility of who entered a specific level charge was altered," she said. "We immediately saw an uptick in cases entering the system where the charge was being missed on a large scale. As we started to enter that information, we engaged with that clinical area, and as a result of that immediate conversation, they said, 'Yes, our workflow has changed.' For us, it pinpointed the need for us to do re-training. The volume of those areas dropped drastically."

Johnson said Novant is always on the lookout for opportunities to be more nimble in its charging policies. By making adjustments based on the data, the team can perform an analysis to see whether the charging policy can or should be altered, or whether the right charges are in place for the right items.

Always improving

ZirMed is among a clutch of clinical documentation improvement programs that have gained popularity in recent years, and according to Lydia Stewart, system director of denials and variances at Franciscan Missionaries of Our Lady Health System in Louisiana, they're a boon when it comes to maximizing the codes.

"Most people now have a CDI program." said Stewart. "That program should be working with those docs to improve the actual coding of the medical record, as well as improving and educating on the requirements for documentation -- making the record as strong as possible, so if there is a denial for that specific code, you'll have the meat, or the teeth, to fight or appeal those accounts."

[Also: CMS says 10% ICD-10 claims rejected, but only a fraction due to coding issues]

Ultimately, it's cost pressures that make tightening of the mid-cycle necessary.

"ICD-10 is quite a bit more complex than ICD-9 was," said Danza. Getting people ready, keeping them current, keeping them sharp in coding rules -- it's certainly more challenging than it was in the past. Our expectation is that when we hire a new coder, we're going to have to invest some time in their training in order to consider them an expert. There's definitely investment there."

Stewart expects the mid-cycle focus to continue as the risk of ignoring it are too high.

"It's critical," she said. "I don't think anyone has the dollars or excessive revenue or profit margins that they had in the early 2000s. Most facilities are challenged today to make sure that their revenue cycle is performing at 100 percent."

Twitter: @JELagasse