6 tips for lean revenue cycle management

To keep bottom lines healthy, organizations are turning to a process called lean revenue cycle management.

John Gallagher, account manager of Simpler Consulting, helps organizations utilize this efficient form of management.

[See also: 7 best qualities of healthcare's lean leaders]

“Our client base is quickly moving toward a majority immersion in revenue cycle management and we would be surprised if it wasn't 100 percent in the next 12 to 18 months given the cost crisis in healthcare,” said Gallagher.

Here, Gallagher gives Healthcare Finance News six tips on lean revenue cycle management.

1. Stay focused on the mission

According to Gallagher, any expert in the field of lean will tell you upfront that this is not a shortcut or the easy way out. In order to maximize the benefits of lean management, everyone involved in the improvement process must be aligned. “While a part of the objective of revenue cycle management may be to increase revenue, the overall mission is to achieve a cultural transformation within your organization by continuously reducing waste and improving patient care,” he said. This takes time and a lot of hard work, but in the end, it is entirely worth it both financially and culturally, he added.

2. Stay aware of legislation changes 

“With the Affordable Care Act and ICD-10 coming into full effect in 2014, it is more important now than ever to keep up to date with latest legislative decisions,” Gallagher said. He encourages folks to make this a regular discipline of your process to stay aware of any new statutes, guidelines, codes and how they might affect your revenue cycle management.

3. Understand payer contracts 

Gallagher says it’s crucial for those involved in the revenue cycle to fully understand payer contracts. “While eliminating non-value added steps is critical to improvement, organizations do not want to unintentionally impact the various upstream and downstream processes,” he said. Providers with multiple payer types need to understand that not all payer needs are created equally.

4. Scope your value stream correctly

In lean management, a value stream defines all the activities — both value-added and non-value added — required within an organization to deliver a specific service. “A value stream analysis is used to identify waste and create a plan of action to eliminate this waste and improve the service process,” said Gallagher. Something he sees all too commonly in terms of revenue cycle improvements is care providers not scoping the entire process and, ultimately, not maximizing improvement. Revenue cycle from start to finish should be analyzed from moment the patient walks into the door and registers to the point in which you have a zero balance for those services that are provided.

5. Information technology is not a cure-all 

Going out and purchasing what Gallagher calls a “magic” software package is not going solve the problem, revenue cycle management or otherwise. “If organizations don’t have the waste eliminated from your process prior to implementing a technology solution, the technology can actually have the opposite effect and prolong wasteful operations,” he said.

6. Internal transparency 

According to Gallagher, identifying gaps in the financial system can be a bit worrisome to the administration in charge of those operations, however, he said, “it is important to be transparent internally and to not point fingers or play the blame game, but rather to focus on what you can do to fix the process.”