Building change on a solid foundation

A recent report by Frost & Sullivan found that the market for revenue cycle management applications and services will grow 61 percent between 2012 and 2017 ($1.9 billion to $3.07 billion), as hospitals upgrade platforms to address coming cuts in Medicare and Medicaid payments under the Affordable Care Act.
New technology can do many things for RCM at hospitals, industry experts say, but it can't be wrapped around flawed processes and be expected to solve all problems.
"You need to optimize current systems and processes to know where you are today," said Shane Pilcher, vice president of government services at Stoltenberg Consulting. When considering a new RCM system, hospitals will want to "wrap it around solid and effective processes. You're affecting the lifeblood of the organization."
Experts offered three keys:
• Invest in tools to fix current processes
• Consolidate data collection
• Engage peers

THE RIGHT TOOLS
"The challenge we're seeing right now is in financial stability," said Michael Najera, professional services manager at Crainware, which specializes in software for healthcare billing, auditing, chargemaster management and Medicare compliance. "There's a strong focus on ensuring hospitals are paid accurately."
Najera said the performance improvement so effectively adopted on the clinical side of healthcare needs to be adopted on the revenue side. As more people involved in the revenue cycle better understand their responsibility and contribution to the process, the sooner errors will be corrected, the less costly such errors will be to correct, and the greater the likelihood the organization will be reimbursed accurately.

"About 21 percent of all claims are not paid correctly on the first submission," said Matt Thompson of Medical Management Solutions, a Texas-based firm that provides management and administrative support to healthcare organizations. "As a CFO, I need someone on the back end following up on 21 percent of all claims. To be as efficient as I need to be, that number needs to be 5, maybe 10 percent."

INTEGRATING DISPARATE SYSTEMS
Contributing to that challenge, Thompson said, was the great race over the last two years among hospitals to acquire physician groups. While succeeding in retaining market share, some hospitals seemed to have made some bad deals.
"As they brought groups on, they let physicians dictate terms (regarding electronic medical records)," Thompson said. Instead of requiring new entities to adopt an organization's EMR system, "you have two or three different software systems reporting at the same time. That makes it really hard from a revenue cycle point of view. It's nearly impossible to get the data you need in the same format across those different systems."

ENGAGING PEERS
The biggest change, of course is the looming shift from fee-for-service to global payments, said Stoltenberg's Pilcher.
"It's crucial to marry billing to the clinical data," Pilcher said, "so you can know what costs are."
Given the stakes involved, Pilcher said, hospitals are approaching the shift to a new payment model with great trepidation.
"It's in this new paradigm, you don't know what you don't know," Pilcher said. "You have to use the knowledge and skills of those who have been there before. That knowledge and experience can make a huge impact guiding you through the unknowns."
One resource: peer networks.
"You have to be able to develop relationships with other organizations that have been where you want to go," Pilcher said, "or are further down the road to where you want to be."
CFOs and CIOs are learning from each other's experiences. While not necessarily disclosing dollar amounts, Pilcher said, "they are talking about the process - where to make changes, where the pitfalls are. It's crucial to have peers to bounce ideas off and learn from. In turn, you need to pay it forward and pass your knowledge on to others."