How revenue cycle technology help small hospitals manage denials

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Smaller hospitals often grapple with issues relating to patient access and overall eligibility denials. Some smaller facilities have been partnering with larger health systems in order to utilize their resources, but the need to shore up revenue cycle processes remains, with the goal of harnessing technology to smooth out some of the rough patches.

A couple of years ago, New York's Southampton hospital tapped automated healthcare solutions outfit Craneware to provide some much-needed technological muscle. Southampton, which recently became a part of the Stony Brook Medicine network, asked Craneware's consultants to look at their revenue cycle, and they did, performing a full assessment from the point of patient access down to collection of claims. They came up with a number of initiatives, two of them related to patient access.

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"Eligibility was not being verified across all of their departments," said Karen Hoppe, Craneware's senior consultant. "They have decentralized registration, and so they have three different major groups of people who are registering patients -- inpatient, radiology and emergency. From there, we found the eligibility was not being performed on any of the patients. They had a patient eligibility tool to get by, but it was limited, and only did three payers. Our assessment was that they should purchase an eligibility tool.

"We also found they were not collecting copays, and just limited copays in radiology. And there was no real push to collect copays, for a number of reasons."

[Also: CFOs will spend more for revenue cycle technology, but providers still struggle to realize benefits]

Because the hospital was not tracking its overall denials, and had no information or feedback about their eligibility denials, the picture was very fragmented. Patient services would fix all of the denials, so there was no feedback from the front end. And no way to fix the front end, either.

Then came Craneware to drive the hospital's denial and revenue cycle management. A revenue cycle management team was created, which met every other week with various hospital departments -- case management, medical records, patient access and the like. Changes started happening from there. The eligibility denial rate, which was very high just a few short years ago, started to dip, and limited point-of-service collections, which were contributing to band debt, slowly started to resolve.

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But because of silos and a general lack of communication, the going was slow. The staff underwent formalized training so everyone was doing registration in the same way, and registration eligibility tool was implemented that could measure the quality of the registration, and ensure standardized registration across the entire hospital.

Jackie Nelms, Southampton's director of patient access, said the picture started improving dramatically when the silos were torn down.

"Communication was key," said Nelms. "Revenue cycle meetings are key. The communication improved. We've worked with a couple of different interns … in researching and developing the training manual. We were also able to develop an internet site geared for patient access, with different tools in place for patients to use at their leisure. We also created an internal process improvement team, consisting of staff."

That improved communication started to trickle down. Where once the registration process was decentralized, the reporting structures started to recentralize, and during the first year of implementation, eligibility denials improved by 25 percent. Point of service collections improved by 75 percent, and from a relationship-building standpoint, Southampton saw a significant improvement in staff morale. Everybody bought in.

"It's been eventful, and I've learned a lot," said Nelms. "The biggest challenge is re-earning people's trust, first and foremost, and their support, because that's the only way people are going to accept change. That's the holy grail of getting anybody onboard and making any changes."

Hoppe said there's been something of a paradigm shift in terms of denials, which previously were all handled by patient financial services. Before the change in approach, there was no information going back to the front-end. The hospital can now analyze denials at the moment they pop up on a remittance device, which then goes back to the relevant department. The staff reviews the denials, works to fix them and gets them back to the patient in a timely manner, increasingly the likelihood that it will be paid.

But it's also important, she said, to look at the root cause of the denials to see how the situation can be improved.

"It has to do with resources," said Hoppe. "Hospitals don't have the resources to deal with all these claims. The only way to deal with the issue is to stop these claims from happening on the first place."

Hoppe and Nelms agreed that technology is crucial to shoring up a smaller hospital's revenue cycle processes, particularly when it comes to the collection and use of data.

"It qualifies the data, and we're able to benchmark based on the data," said Hoppe. "Without technology, we wouldn't be able to to do benchmarking, and compare ourselves to where we were last year. Back in the '90s, when I used to have to track registration efforts, my staff, when they got a denial, would print out the accounts, write their name on top of it and then put them in a basket. I would make spreadsheets and send them to the department. It was a lot of manual processes, a lot of wasted time."

"It's important to be able to run reports and provide real-time feedback to the staff," said Nelms. "Without that, they're not going to know what they're doing wrong and they won't be able to change that process, or change that behavior, without the data."

The challenges facing Southampton are common to most rural hospitals, said Nelms, but despite those challenges, there are some upsides to working for a smaller facility.

"The good side of working in a small organization is the level of support, and being able to work so closely with the C-suite," she said. "Other places, there were a ton of layers. Now, I report directly to the CFO, so I'm able to articulate the needs and the plans to improve the revenue cycle, and I think that makes a huge difference."

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com