Experts share best practices

Revenue cycle integrity is critical to financial performance and will be even more so with accountable care organizations, bundled payments and other changes coming with healthcare reform.
Since the revenue cycle is long and errors may not show up for months, new metrics may need to be developed to better understand where processes fail to capture revenue, say experts in the sector.
Management and staff need to be continuously trained and educated to assure revenue cycle integrity, according to Claudia Garabelli, revenue cycle director at the Rybar Group. "After we make a change, it is really important to dedicate resources to monitor and continue to troubleshoot after implementation," she said in a recent webcast sponsored by HIMSS, Healthcare Finance News' parent company. "No matter what is going on, monitor, document and communicate."
A Health Care Advisory Board study reported that up to 5 percent of net revenues can be lost through lack of medical necessity, incorrect place of service, no referral, insurance not verified at the front end, improper follow-up claims payment problems and poor processes. "We have found that staff is not always properly trained to interpret the data that is coming back to them," Garabelli said.
A company may improve its performance by redesigning a revenue cycle process, such as daily charges, point-of-service collections, coding of the final bill, late charges, billing metrics or denial management. For example, many organizations are not effective at tracking and grouping denials to be able to drill down to conduct a root cause analysis, she said.
Garabelli cited a recent survey in which the American Medical Association (AMA) found that payments were as low as 77 percent accurate. "This is an area in which we certainly can make improvements," she noted.
Because it can take up to a year from identifying errors to reimbursement, it's difficult to understand what kind of revenue cycle changes need to be established, said Tyson McDowell, president of Avadyne Health and chair of the HIMSS Medical Banking and Financial Systems steering committee.
He recommended developing metrics or indicators that can be tracked down to the detail level, such as patient loyalty and charge capture, and that map to the broadest categories that the organization can connect with, such as revenue opportunity, bad debt and compliance. That way leadership and line supervisors can understand what is happening.
Accelerated feedback loops are key to maintaining performance. "Even if everyone is doing well in their metrics, it is important to see that they are doing well," McDowell said, adding that scorecards can be simple Excel documents.
And understanding and assessing root cause is critical to driving improved performance. "Metrics or indicators can give you advance notice, such as with bad debt. We're in an environment of cutting staff, and without these root indicators, it's going to be hard," he said.
"Revenue cycle integrity is really about feedback loops and measuring, looking at outcomes and putting some action into place and measuring the results of that action, and doing it iteratively," McDowell said.
Healthcare reform is demanding visibility and data governance, noted Kathy Schwartz, product manager at Craneware, a healthcare revenue integrity software provider. Revenue cycle integrity best practices from the pharmacy world that can bring about increased visibility and data governance include integrating data elements for purchases, formulary and pricing policy; validating pharmacy data; fixing compliance issues and billing gaps; establishing workflow and a data maintenance process; and using technology to assist with data transparency.