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Avoiding Revenue Crunches During EMR Transitions

Posted on May 23, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Most healthcare leaders know, well before their EMR rollouts, that clinical productivity and billings may fall for a while as the implementation proceeds. That being said, it seems a surprising number are caught off guard by the extent to which payments can be lost or delayed due to technical issues during the transition. This is particularly alarming as more and more hospitals are looking at switching EHR.

Far too often, those responsible for revenue cycle issues live in a silo that doesn’t communicate well with hospital IT leadership, and the results can be devastating financially. For example, consider the case of Maine Medical Center, which took a major loss after it launched its Epic EMR in 2012, due in part to substantial problems with billing for services.

But according to McKesson execs, there’s a few steps health systems and hospitals can take to reduce the impact this transition has in your revenue cycle. Their recommendations include the following:

  • Involve revenue cycle managers in your EMR migration. Doing so can help integrate RCM and EMR technologies successfully.
  • Create a revenue cycle EMR team. The team should include the CFO, revenue cycle leaders from patient access and reimbursement, vendor reps and someone familiar with revenue cycle systems. Once this team is assembled, establish a meeting schedule, team roles and goals for participants. It’s particularly important to designate a project manager for the revenue cycle portion of your EMR rollout.
  • Before the implementation, research how RCM processes will be affected by the by the rollout, particularly how the new EMR will impact claims management workflow, speed of payment and staff workloads. Check out how the implementation will affect processes such as eligibility verification, registration data quality assurance, preauthorization and medical necessity management, pre-claim editing and remittance management.
  • Pay close attention to key performance indicators throughout the transition. These include service-to-payment velocity, Days Not Final Billed, charge trends and denial rates.

The article also recommends bringing on consultants to help with the transition. Being that McKesson is a health IT vendor, I’m not at all surprised that this is the case. But there’s something to the idea nonetheless. Self-serving though such a recommendation may be, it may help to bring in a consultant who has an outside view of these issues and is not blinkered by departmental loyalties.

That being said, over the longer term healthcare leaders need to think about ways to help RCM and IT execs see eye to eye. It’s all well and good to create temporary teams to smooth the transition to EMR use. But my guess is that these teams will dissolve quickly once the worst of the rollout is over. After all, while IT and revenue cycle management departments have common interests, their jobs differ significantly.

The bottom line is that to avoid needless RCM issues, the IT department and revenue cycle leaders need to be aligned in their larger goals. This can be fostered by financial rewards, common performance goals, cultural expectations and more, but regardless of how it happens, these departments need to be interested in working together. However, unless rewards and expectations change, they have little incentive to do so. It’s about time hospital and health system leaders address problem directly.

Did Hospitals Put Off RCM Upgrades for Nothing?

Posted on May 8, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

In December of last year, I wrote a piece outlining a study on revenue cycle management systems by research firm Black Book.  The piece noted that despite hospitals’ desperate need to modernize their RCM platforms, such upgrades were being put off over and over again, largely due to the cost of ICD-10 switchover and Meaningful Use compliance.

It’s hard to say whether ICD-10 prep or  MU compliance have been a greater strain on hospital budgets, but it’s clear that ICD-10 preparations have been a major distraction and a major cost.  Even if a hospital’s EMR has included ICD-10 codes in is platforms or upgrades, hospitals have still had to reconfigure some systems, do revenue impact testing with payers, conduct readiness testing with clearinghouses and train with their claims processing staff, and none of it has been cheap. And the longer hospitals wait to pull the trigger, the worse things get. The American Hospital Association recently estimated that delaying the ICD-10 switchover deadline has cost the hospital industry billions of dollars.

Given the cost of the run-up to the new code set — and the fact that most hospitals report being ready to switch over from ICD-9 — the industry has hoped against hope that the deadline wouldn’t be extended again. In fact, a recently-released survey by software firm QauliTest of more than 150 healthcare executives found that 83% said they think ICD-10 will go live as currently anticipated on Oct. 1.

And that’s where politics enters the picture. While hospitals seem raring to go ahead with the transition and skip any further delays to the deadline,  Texas Rep. Ted Poe (R) has a different outcome in mind.  Perhaps pushed by physicians’ lobbying groups, which still oppose the switch as being too burdensome and costly to handle, Poe has introduced a bill which would actually prohibit HHS from adopting ICD-10 as an ICD-9 replacement.

It’s hard to tell whether the bill will even make it out of the House, as it currently has only six co-sponsors, each fellow Republicans to Poe.  But if it did, hospitals would have plenty to gripe about.

As we’ve pointed out here, one of the major sacrifices hospitals have had to make due to outside forces is to postpone RCM system investment, a lapse which has doubtless cost hospitals plenty due to lost money due to claims processing problems. The longer the need to put off RCM switchovers or improvements lasts, the greater the chance that it hospitals will lose too much to afford on claims old systems can’t handle.

Bottom line, I’d argue that another ICD-10 delay or cancellation of the entire transition would be terribly unfair to hospitals.  If CMS needs to help doctors through the process or even help them pay for it, so be it. Hospitals deserve to be freed to focus on their other IT problems, not wait with bated breath for yet another ICD-10 delay.

7 Revenue Cycle Management Tips

Posted on December 9, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Healthcare is getting squeezed from every direction. The discussion around the cost of healthcare has exploded and everyone is looking at ways to lower the cost of healthcare. Unfortunately, for a hospital or healthcare organization, lower cost healthcare means getting paid less for the same things. We’re going to need a major shift in our thinking to be able to handle this shift in cost.

While we figure out these major changes, one thing I see happening across all of healthcare is managing an organization’s revenue cycle. NextGen recently put out this whitepaper titled 7 tips to go from “Getting By” to “Thriving” where they talk about a number of ways you can improve your revenue cycle management. Here’s a look at the 7 tips they offer:

1. Self-pay Collections
2. Measuring Performance
3. Claims Scrubbing
4. Track and Prevent Denials
5. Create and Enforce Write-off Policy
6. Remind Patients of Appointments
7. Maximize Electronic Remittance Advice

You can download the full whitepaper for free if you want to see a much deeper dive into all 7 of these tips.

What I’ve found as I’ve worked with hundreds of healthcare organizations is that most of these things aren’t rocket science. In fact, deep down these organizations know how to manage their revenue cycle. However, many of them aren’t doing it. Sometimes it’s a lack of resources available. In other cases, the organization just needs a reminder.

Unfortunately, revenue cycle management isn’t always the most fun thing you can do in an organization. It’s not a really sexy job that you can go home and tell your friends about. However, from a financial perspective it’s one of the best investments a healthcare organization can make.

Health Exchanges Pose Added Stress For Hospital IT Departments

Posted on September 30, 2013 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

There’s no doubt that hospital IT departments have their hands full already, what with Meaningful Use and ICD-10 hovering over them like a huge black cloud. But as one Information Week story reminds us, there’s another big project in the wings which could add even more to their plate.

The IW story, which offers intelligence from the American Hospital Association and several consultants, notes that the coming of health exchanges and the accompanying Medicaid expansion in some states will have a substantial effect on hospital IT departments.

For one thing, the story reports, with a flood of newly insured Americans arriving at the door, hospitals will need to enhance their revenue cycle management systems, as the number of health plans with which they do business should rise meaningfully.

Hospitals will need to deal with the fact that some patients who buy insurance on the exchanges will have high deductibles and copayments, in some cases as high as $5,000 or $6,000. Given these deductibles, it will be crucial for hospitals to determine what kind of coverage patients have. Many hospitals will end up upgrading their RCM systems to better interface with managed care plans.

Unfortunately, even that won’t assure payment. As the IW story points out, even a direct connection to the insurance company in question may not do the job, as eligibility information from health plans is often 30 – 90 days out of date. “So if patients miss two premium payments and are no longer covered — but the data says they are covered, and the hospital proceeds accordingly — the bill never gets paid,” according to Thad Glavin, senior director of the Advisory Board’s RCM division, who spoke with the magazine.

Still, hospitals will need more and better connections with health plans even if the information they get in return is questionable. Sure, despite the risks that come with the change in insurance under the Affordable Care Act, I wager that hospitals’ steely focus on Meaningful Use and ICD–10 will leave RCM projects shortchanged at first. But as the high-deductible bills keep building up, hospitals will squeeze in new RCM system development. I give it six months to twelve months, max.

Top HIS Vendors By 2011 Revenue: Cerner Corp. (CERN)

Posted on April 23, 2012 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Today it’s back to our countdown of the top five HIS vendors, with data courtesy of HealthDataManagement magazine. Today we’re focusing on Cerner, which according to the magazine’s calculations ranks second for HIS sales, edged out only by McKesson.

Cerner claims to be the top EMR vendor in the U.S., despite competitor McKesson’s much larger size, since McKesson is in so many other lines of business. As with McKesson, we’re going to share a very quick overview of Cerner’s position in the overall HIS market, which as noted previously embraces not only clinical tools like EMRs, but also HIM, revenue cycle and access tools.

Cerner holds a very tasty 18 percent of the HIS market, by HDM consultants’ calculations. More interesting, to this audience at least, is that it’s gotten there with a big helping hand from its suite of EMR products. Here’s more to chew on, below.

-Anne

Cerner Corp. (CERN)
2800 Rockcreek Parkway
North Kansas City, MO 64117
Phone: 816-221-1024

Products:  For the purposes of this discussion, let’s just be cute and say “everything HIT.”  That includes its popular Millennium suite of EMR products which are really seeing a big uptake in community hospitals, especially its remote hosted solutions.

2011 HIS Revenue: $2.2 billion

2010 Revenue: $1.85 billion

Summary:  From 2010 to 2011, Cerner’s  HIS revenue grew by 20 percent as Millenium sales yielded annual revenues of $2.2 billion.  Cerner’s overall profit margin for last year was, wait for it, just about 14 percent — and over the last 52 weeks its stock is up 34.3 percent. Yeah, yeah, I’ve been an editor for 20 years but now I know I’m in the wrong business.

Interesting facts:  Cerner has a strong international presence, from Belgium to Bangladesh, the Middle East and South America. Also, it now is offering “Community Works” to Critical Access Hospitals under 25 beds (a move your editor wouldn’t have expected given the predictably high cost of solutions from a company that size).