Thought Leader Podcast Series: Revenue Cycle
Full Text Transcript
Below is the full transcript of our podcast with Ken Laliberte, Solutions Manager for Analytics and Population Health, MEDITECH and Kevin Adams, Director of Revenue Cycle, of Anderson Regional Medical Center (Meridian, MS) . Click here to return to the full audio podcast.
Thanks for tuning into our MEDITECH thought leader series podcast. Today’s discussion is all about revenue cycle management. My name is Ken Laliberte and I am a marketing solutions manager here at MEDITECH. Our guest today is Kevin Adams.
Kevin is the director of revenue cycle for Anderson Regional Health System, a 300-bed facility in Meridian, Mississippi. His career experience includes oversight and management of insurance, business office, pre-certification and scheduling, managed care, pre-admissions and admissions, credit and self-pay collections, as well as contracted billing services for non-owned clinics and revenue cycle operations for 10 of Anderson Regional’s clinics. Kevin presented earlier this year at the HIMSS 2017 Revenue Cycle Solutions Summit down in Orlando, about his organization’s success in lowering A/R days by 50% and reducing Anderson’s lost revenue by 90%.
Q: Tell me a little bit about Anderson Regional Health System.
Anderson Regional Health System is located in Meridian, Mississippi. Geographically it’s about halfway up the Mississippi, Alabama State border. We have a level three trauma, we have a helipad, we are a two-hospital system. The primary campus handles mostly the acute care, as well as most outpatient services that are offered probably across most organizations. We always say we do everything with the exception of transplants. We have 10 clinics and some of those clinics are rural health clinics. So, that’s a little bit about our organization and all we encompass. Our second hospital encompasses a swing bed, a geri psych unit, an inpatient rehab, and also a pain center. So, we have the full gamut pretty much of the services that one could offer in healthcare.
Q: We’re seeing organizations that have patients in both fee-for-service and value-based reimbursement programs; things like ACOs, patient-centered medical homes. From your perspective, what are some of the potential challenges living in a hybrid world where you have patients in value-based reimbursement models and then fee-for-service reimbursement models?
Well, there’s challenges throughout the industry as it relates to both sides of the fence, whether it be fee-for-service or value-based reimbursement. What I'm seeing constantly is both worlds continuing to evolve, but obviously, the value-based is the direction that most are going to. Within the evolution of both the models, the fee-for-service and the value-based, you continue to see the medical necessity constantly changing. Policy changes seem to be constant. Increases in the types of bundles and also the mandatory bundles, they seem to have slowed down for the moment, but I definitely think those will pick up steam and continue to move along. And, also gain sharing opportunities. Again, those are just a few of the issues that are going on in both environments, but everything seems to be moving more towards the value-based side of things.
The biggest challenge that we are finding with the value-based is finding a proven model that is standardized, that people have made successful. There seems to be a lot of models out there around the value-based, and just finding one that is a model that can be replicated over and over, that seems to be the biggest challenge for us in locating that. Larger organizations that have been doing value-based for a long time, we have noticed they have a significant investment in human capital and technology to drop those value-based programs. However, you can’t argue with the results of large organizations that have been in the value-based world for any length or period of time. It is proving that there has been great results in those value-based programs and I feel like that's gonna lead us to having to adapt that model to the organization's daily operations.
Q: Kevin, you mentioned the bundled payment initiative, I understand Anderson recently delved into that. Can you speak a little bit more to what your experience at Anderson was and what insights were able to glean from that experience?
We recently completed a CHF bundle. It was one of the few bundles that we looked at that offered an upside. Where we are located in Mississippi, we have some unique challenges. I would think some would argue, maybe not, relative to the socioeconomic issues that we have in the state, the poverty levels, etc., demographics associated with the population that we serve, transportation, compliance with medicine because of the cost associated with those, and I mentioned previously one of our biggest hurdles seems to be the poverty associated with rural Mississippi. We were not financially successful in the bundle, I felt like we did a lot of things right in developing certain programs. We created a CHF clinic, we contacted the patients regularly, we work with our local cardiologist to prevent readmits, but I feel like we missed out on one of the biggest opportunities, and that was as we were getting introduced, trying to develop our own program and so forth, that we didn’t work close enough with the downstream providers, such as your home health, your swing beds, those type of providers.
We should have put more time and effort into setting expectations from those downstream providers, as well as developing quality standards so that we could hold the downstream providers more accountable. And, that is something that, even though we’re not in the bundle now, that we are starting to work with from our case management and quality department so that we set ourselves up for success as we look down the road to see what bundles we may participate in next.
Q: In addition to population health, one of the other really ubiquitous words that we're seeing in healthcare is consumerism. With the rise of high deductible insurance plans, what's your experience been managing this? How are you finding patient behavior changing? Are patients asking for bill estimates at the point-of-service or shopping their services around different facilities?
Well, yes, I’ll break those questions down. High deductible health plans continue to be a concern, for not only us, for all healthcare organizations as I speak to my peers across the state and across the country at different types of forums. It's not uncommon nowadays to see deductibles that are $5,000, $10,00, we've even seen some that are as high as $12,000. And, obviously, one begins to wonder is that truly insurance or is it just catastrophic care type insurance. We feel this has definitely made an impact on the patients receiving care. Most patients feel that if the services are not immediately needed, then they're deferring that care until they can financially afford it. The unfortunate part of that is that most patients don't understand their plans benefits when they acquire the plan or when the employer provides the plan to them, and then they're left with a policy that truly only covers major or catastrophic medical events.
We as an organization do ask for payment at the time of service; however we offer several financial programs to help our patients. We offer an interest-free hospital-based payment plan that can go up to 36 months, low interest rate loans through a bank locally if you need to extend those payment plans beyond the 36 months, and we also have a financial assistance program. If this individual meets federal poverty limits or HUD, which is Housing and Urban Development guidelines, then we’ll offer financial assistance which discounts the majority of the countdown to where it’s just a small co-pay associated with the type of visit. We do strive to help the patients, we feel like the high deductibles are more driven by the insurance companies and again feel that sometimes the patients are at a disadvantage because they don't understand exactly what their policy is and how it works and how the high deductible portions are part of that.
We also provide patients with online estimations. We have a tool that's on our website so an individual can go out there, select the service that they're having, and get an estimate provided based on what our charges are. Now what one would struggle with is that we would, at that time, ask them to communicate to us to refine that estimate down to that charge level, down to what their insurance would actually allow. We do everything possible to make sure that individual can speak with a representative here at our facility to get an accurate estimate of what their medical cost will be.
Q: Once they get that estimate are there any prompt pay discounts that you offer?
We do offer some prompt pay discounts associated with the services. We have policies and guidelines around those, so yes.
Q: Could you speak a little bit to what your thoughts are on patient portals as they relate to consumerism?
Sure. I feel healthcare consumers, they expect healthcare facilities to offer portals so that they can see the results of their latest test, or previous healthcare events that would be in their medical history, or even the ability to be able to pay their bills online and not have to mail a check or come to the organization in person, and we still have people that do that, they’re more comfortable doing that then accessing the portals. Our organization offers many online opportunities for patients, as we have previously discussed the patient estimation tool, online bill pay, our financial assistance policy is posted there. They have the ability also to engage a human being at the organization, we actually have financial counselors here within our organization as opposed to calling somebody at an 800-number. So, they can actually speak to somebody within the organization if they have any billing disputes or if they just have general questions. We believe that there's value in that human interaction and not having to call someone that may route you to either another state or outside the country, which we see that a lot now.
I feel that these are now expectations of our patients and some would say even requirements nowadays. You know, the patients, they expect it and require it. I think it's necessary to make the patient feel comfortable when they're engaging us to find out either about previously performed services or services that they'll be having in the near future. So, I think the portal is very integral to the communication with the patient.
Q: One of the primary reasons we had you on the podcast today was to talk about how Anderson Regional was able to reduce your AR days in half. Could you speak to that and how you were able to cut those AR days by 50%?
Yeah, I’d be glad to. That’s one of the things we're extremely proud of with our update that we did in April 2015 to the MEDITECH 6.1x platform. I’ll shorten it down, I literally could speak for about 30 minutes individually about this, but I’ll shorten it down to a real concise synopsis of what we did. We're very proud of the accomplishments that we made relative to our accounts receivable. The journey started with our implementation of MEDITECH 6.15 platform, and I was offered the opportunity to come and lead our business office about 12 months prior to April 2015. That's been almost three years ago now. We had a lot of opportunities when I joined the Billing & Accounts Receivable team relative to previous revenue cycle and some deficiencies that were identified there. We had the opportunity to improve our AR. Our AR was greater than 95 days at that time. Our credit balances reached over 7,000 accounts that had credit balances for a value of about $7 million. Not all that was patient money refunding but the vast majority of that were issues with contractual payments not being posted correctly, etc.
So, a lot of that was broken processes that need to be fixed, so we began just deploying lean principles and tools to analyze the current workflow and how we envision the workflow to work at an optimal level. That's what we did as we took the current and then developing new workflows. We also built processes that we wanted to see evolve around the MEDITECH standardized workflow. We didn't get into customization a lot. We didn’t want the customization to compromise our future workflows because typically whenever you have changes or updates or new releases, any customization has the potential to break and then have to be refixed and we wanted to stay away from that as much as possible, so we rebuilt all of her dictionaries that drove the workflows, reeducated billing staff on the new workflows.
One key component is our team members had significant input into each component of the redesign. We wanted to take those individuals that were day-to-day in the trenches, as one would say, and make them an integral component of the development of the new workflows. This allows us as management now to be able to drive accountability, and the processes, because individuals that are doing the processes now had input and buy-in into it, and so that's that helped with our team and the design of everything that we’ve done.
I’m proud to say that a little over two years later our AR has stabilized and today, I looked at it this morning, it was actually 45 days and that's pre-contractual. We do not take our contractuals out prior to looking at our AR days, so that's prior to any contractuals. Our credit balances today I think are around 750 accounts or so and running a credit balance of about 500 to 600K. So, very, very proud of those results. It was a long journey with the implementation but well worth the end of the road we traveled to be where we are today and have some really strong AR days and credit balance accounts. We track a lot of other key performance indicators that are reaching HFMA's, best in KLAS or some other MAP key award winners on some of those levels of performance.
Q: How did the MEDITECH Financial Status Desktop help with all of this?
We leverage that heavily. As a matter of fact that’s used on a daily basis by myself as well as the other management within the revenue cycle department. Each morning when I come in, I review the financial status relative to the previous day's activities, what's happens as far as what was billed, what the receivables were, payments, adjustments. All of those are captured in a summary screen which is a very nice quick snapshot to identify any areas.
At that point I begin, as well as the management staff does, drilling down into individual components. What tasks are left for the day that the system generated that the billers need to be doing. Are the billers caught up. Are there any deficiencies or anything overdue. We also review the account checks that are associated with the accounts to determine whether or not we have a pattern of issues going on. Account checks all those things that the system stops based on parameters that we have built so that we can identify what needs to be corrected prior to moving into our claim scrubbing software. AR days are tracked. Cash flows are tracked there. Just about any major key performance indicators you're looking for are tracked there.
We take that information downloaded into a more visually presenting type graphs. FST does offer graphs, but we like to take those actually, change up the colors, make them look a little more robust. We track those key performance indicators we would do somewhere in the neighborhood of 12 to 15 a day are posted for the staff to review. They’re compared to their peers so they know where they stand and then also understand that any deficiencies are identified they're held accountable for those. Again because they had a part in designing the process and they understand that they are part of a bigger picture, but if their parts are not what it needs to be each day, then the rest of the team suffers. So I think a lot of the peer pressure, accountability, transparency that is driven helps the team work together better so that we are able to reach the results that we have.
Q: I know you're a big proponent of lean six sigma so, you know, you look at MEDITECH as tools and technology that are enabling that the various roles and processes workflows at your organization. How has lean six sigma helped Anderson on your journey?
Our organization is that one is very much ingrained in the lean six sigma. We actually take a group of 10 to 12 leaders every six months and run them through a lean six sigma class that is driven by one of our local colleges. It’s something that our CEO drives from the top down and this is an expectation that as you identify different issues or problems within the department, that a team is developed to help expedite the process. Obviously we do the A3s and then we pull out the different tools that are needed. And that accountability is driven, as I stated earlier, all the way to the CEO level, even to the point that as the individual graduates from the classes for the lean six sigma they have to do their presentation in front of all other leaders within the organization as well as the CEO. So again the accountability is there within the organization.
As far as revenue cycle, we constantly have lean projects going on. Seems to be every week we’re looking at developing another lean project based off deficiencies that we have. At the recent Denials meeting, identified deficiencies as far as claims that are going out and denials coming back. That’s something we can put a lean process in place, I think to prevent the claim from ever getting out to the payer prior to being screened for the deficient information. Constantly on a daily basis utilizing lean principles throughout the organization and in the revenue cycle to operationally continue to optimize our performance.
Q: Beyond the financial status desktop, what other revenue cycle areas of functionality or products help you as a revenue cycle leader the most?
Currently our facility’s most heavily utilized tool is the charge master software that we use. The financial reporting desktop that you mentioned we discussed just a few minutes ago. And our claims scrubber. All of the previously mentioned tools are used daily. They’ve become a necessity for the optimization of revenue cycle functions. I would say they all have an equal value in our daily operations.
One of the tools that we feel brings us to the next level of revenue cycle is currently a vendor we are engaging to validate underpayment from our contracted payers. The underpayment that we're looking at here is not necessarily denials, it's more around payers just not paying the contracted rate. We’re expecting to implement that over the next three to four months and we’re expecting to uncover some significant net revenue opportunities by reviewing those payments to identify that there may be deficiencies. There may be a lot of large organizations that already have that in place. We previously had a homegrown model of that like payer methodology gets so complicated that it was difficult to maintain that internally so we look externally. We also will be utilizing this tool to develop contract modeling which in turn will hopefully provide us a more strategic approach when negotiating with the managed-care contracting payers.
We expect to hopefully use the same tool to springboard off of these two modalities. It'll bring and engage commercial payers around value-based contracts that we talked about earlier. That seems to be growing more and more within the commercial world. Things that are being done in the Medicare world relative to value-based programs are getting replicated out into the commercial payers and they're there adopting those. I think we’ll be utilizing this tool more and more as the advanced payment methodologies come about.
To truly evaluate the value-based propositions that we’re faced with in these programs that are being brought to us, both Medicare and commercial side, you know you gotta know your true cost. You gotta be able to control risk and the point which financial reward outweighs the risk you gotta be able to weigh that, so that you truly can get a picture of what your cost is. I feel the industry all providers must be able to analyze this type of data and make strategic decisions in order to continue to survive in the market which continues to change at a rapid pace.
Q: Speaking of data we talked a little bit about the financial status desktop and some of the metrics that you look at when you come in first thing in the morning, but along those lines of big data and analytics you know many organizations say it's important, but they don’t give concrete examples. When you look at bringing data, storytelling to life, what are two or three metrics that you look at on a daily, weekly, monthly basis to really tell a story for your organization for your executives to really take your revenue cycle to the next level?
We look daily at about 12 to 15 different metrics. Those are tracked and we have a knowledge board that we post that out to our staff where they can see. Some of the metrics they’ve even asked themselves, how many claims do we bill a day; what is the value associated with the number of those. We listen to our staff if they feel that something is of value that we don't currently measure that they would like to see, we do that.
We have primarily three drivers. They’re probably not that different than most other facilities. That is the AR days, the number of outstanding account-related tasks for each biller to resolve that they work on a daily basis, and the number of system-generated account checks. Those are previously mentioned but those are internal checks to ensure deficiencies or errors are caught prior to entering our claims scrubber, and those stay internal to MEDITECH. We’re fortunate that all our KPIs are gathered at midnight within MEDITECH and displayed on the financial status desktop. And then provided the following morning as I mentioned earlier for both management and non-management to be able to see. This allows us to be very agile in our daily focus on AR.
One other point I’ll make is the financial status desktop is something that we have trained all of our revenue producing department heads on. So any given time in the day the following day's work then snapshots captured at midnight, the following day they can look at the previous day’s revenue. We encourage our department heads to go in on a daily basis and look at previous day’s revenue to ensure that lost charges are not an issue within their area. Because so many charges nowadays are driven from the clinical documentation not necessarily the old days of the chargesheets or somebody entering charges for them.
Q: You’ve been working in the revenue recycle department for a long time. If you were to look back, how was the revenue cycle changed over the years and then really where you see revenue cycle going in the next 5 to 10 years?
Healthcare continues to change at lightning speed. Seems like each day, week, month, there are new ideas, new policies, new technology and the new technologies that are coming out they're life-changing they truly are. The difficult part is managing the revenue side of that equation. Each month, new policies around medical necessity requirements are published. What was paid yesterday is packaged today and what met medical necessity now doesn’t, and then tomorrow we may have a new device that cost you know $20,000 or greater and it’s necessary for the care of patients, but there's no reimbursement structure to support that new device when it comes out and it’s new. This has been our organization’s greatest administrative challenge. Keeping up with the change and trying to balance the patient care aspect as well as the opportunity for payment associated with these previously mentioned three things that continue to change. I think keeping up with the changes and making the changes to revenue cycle workflows to accommodate what all changes are is a constant exercise. We mentioned lean and six sigma, it’s a continuous improvement cycle for our team here at Anderson.
Q: The two things that come up the most when we’re speaking with clients, customers, going to conferences, we already talked about point-of-service bill estimation, the other is propensity to pay. Basically, how do you focus your collection efforts around your different patient populations. How is Anderson Regional addressing that?
As we talked about that a little bit previously, we do have a point of service collection for all services. Excluding those that are covered by Impala. Obviously we do the medical screening, then we do our point-of-service collection there. But we strive to give our patients multiple options for the healthcare expense. There's been a lot of articles published around this topic. One of the most recent articles of that I’ve seen suggests that collections, if they’re not addressed at the point-of-service, then there’s a 70% or greater probability that the balance will result in a bad debt balance with the patient. Obviously that is something that organizations have to address, is how do you work that on the front side so that those balances can be either resolved or a payment plan can be established. It's very challenging to manage, but we want to be there to help our patients navigate through those financial challenges associated with if it’s the insurance plan that they’ve chosen or if they are true self-pay patients, we want to be there for them to give them options because we all know that healthcare is an extremely expensive proposition related to having to pay for it. Whether you have insurance or not, as we previously mentioned, with the extremely high deductibles that are out there now.
Q: The last question I had Kevin was you look at the revenue cycle department and it's not just the patient accounting departments. It’s one of those areas that really touches so many different parts the hospital from scheduling, registration, coding, nursing, physician documentation from a charge capture perspective, right through the pharmacy, lab. As the revenue cycle leader at Anderson, how do you interact across the organization to ensure a smooth and efficient optimized revenue cycle?
It is challenging as with most functions of revenue cycle, as I’ve stated several times. Seeing the continued growth in the value-based purchasing world with more bundles and more creative payment models; continued growth of the high deductible health plans and hopefully you'll see more employers buy into contributing to the employees’ healthcare savings accounts to aid in paying for the healthcare services. I think you’ll continue to see the emerging of the health plans. I think you'll see health plan as well as facilities.
I do think that based off of the conversations being held in Washington now, that there will be an evolution and replacement of Obamacare. I think it's anybody's guess now as to what that may look like, but I think it's just not sustainable, the current model. I think we'll see some change there, and who knows, some people think I'm crazy in saying this in the industry, but I think we all agree the current state of the healthcare industry relative to policy and so forth seems to be broken and single-payer, when at other countries does not seem what’s best for the patient. However it seems to be the most sustainable model economically relative to the country’s fiscal responsibility in taking care of debt and so forth.
Who knows, five years, 10 years whatever it maybe down the road, it seems to be with consolidation and mergers we’re seeing relative to the healthcare payers, that we may end up with a single-payer system. I’m not advocating that’s the best, but that may be where we end up. One thing’s for sure, change is gonna continue to happen and it seems to be inevitable in healthcare whether we like it or not.