Hospital and health system executives thinking of updating their revenue cycle management systems should consider these four best practices for a successful overhaul.
In 2012, about two-thirds of hospitals said they planned to replace or upgrade their revenue cycle management systems within 24 months. However, some still haven't started the process due to various other clinical and technology projects demanding their attention, according to a survey from healthcare market research firm Black Book Rankings. The survey found 28 percent of CFOs hadn't fully upgraded to new systems because of other priorities. Still, 88 percent of CFO respondents believed their management system need to be replaced.
Rather than overshadowing revenue cycle management system upgrades, these other priorities, such as the transition to ICD-10 and the implementation of electronic health records should motivate hospital and health system CFOs to revamp their revenue cycle management process to increase efficiency, says Kathy Keenan, delivery director of CTG Health Solutions, a healthcare IT consulting and business solutions and services company.
Money Atwal, CFO and CIO of Honolulu-based Hawaii Health Systems Corporation's East Hawaii Region, revamped his systems by integrating the clinical documentation and revenue cycle management systems starting in 2010 and saw a charge capture increase of more than 10 percent. He says education, clinical alignment efforts and viewing the overhaul as an ongoing project helped his organization — which encompasses five regions in Hawaii — successfully implement a new system and increase financial efficiency.
"We've taken an innovative approach to our revenue cycle," he says. "We're continuously optimizing."
Mr. Atwal and Ms. Keenan shared four tips for hospital CFOs looking to replace their revenue cycle management systems.
1. Examine the current management system. Before hospital and health system executives dive into replacing their revenue cycle management systems, they should take a good look at what they already have and determine if a complete overhaul is truly necessary or if they could enhance their current system, Ms. Keenan says.
"They need to look at their efficiencies first and try to eliminate the waste in their process to see if there are some benefits in that," she says.
Hospitals should also assess how much money they have in their accounts receivable and determine how they will reduce that amount before beginning the system replacement process, she says.
2. Test and plan each process. "The theory is just plan, plan, test, test," Ms. Keenan says. One hospital she holds up as an example looked at "a day in the life of the patient" when conducting their testing, tracking what happens from the time the patient is scheduled onward and giving the hospital the opportunity to examine what happens to a charge as it moves through the system.
"If you don't understand the way the work feeds to the different areas, you don't understand how your system works," says Ms. Keenan.
Providers should also test general mapping from the legacy system to the new system, and they should conduct live testing with their payers to make sure remittances are coming in correctly. Hospitals that don't test comprehensively commonly run into issues with remittances, she says.
Concerning how long providers should take to test, plan and carry out the implementation, she says most vendors recommend about two years. "The hospitals that I've seen that have done a two or three year implementation are the ones that are successful," she says. "It's the ones that do the rush implementations — a year or under a year — that have huge problems on the back end, and those are usually the facilities that don't map out their processes."
3. Educate your staff, but not too soon. Hawaii Health Systems emphasized education as part of the overhaul process.
The first and easiest aspect was teaching staff members how to use the application, Mr. Atwal says. The second was getting the staff and patients up to speed on the new workflows, such as bedside verification for medication.
The third and "by far the most difficult" was explaining to the clinical staff why certain documentation parameters are required and why the new process is important for the practitioners and the organization as a whole, he says.
"We started at ground zero, explaining hospital finance at a very basic level," he says. This revealed a disconnect between the finance staff and the clinical staff, with the latter group thinking all payments were bundled or diagnosis-related-group oriented. In reality, Mr. Atwal says aspects of an episode of treatment such as IV drugs are charged separately and therefore must be documented.
Now the system aims for continuous education about documentation and the revenue cycle. "When new nurses arrive on campus, they go through a two-day training," he says.
Ms. Keenan agrees that staff members should be educated, but she cautions hospitals and health systems not to get too eager and train their workers long before a new system gets implemented. "Facilities do their training on the new system, and employees don't get into the system for four or five months," she says. "They don't remember a thing they've learned."
4. Align financial and clinical workflows. When considering revenue cycle management, it's crucial to take clinical workflows into account in addition to charge capture workflows, Mr. Atwal says. "You have to look at the nursing workflows and physician workflows and have them brought into the organizational goal that you're trying to strive for," he says.
IT workers and accountants may not be able to accomplish this if they can't relate to clinical practitioners, he says. For that reason, healthcare organizations should form an informatics or project management team made up of people who understand technology, understand the management system and understand financial and clinical workflow.
Mr. Atwal co-chairs a medical informatics sub-committee for Hawaii Health. The committee includes representatives from each physician department and specialty who make recommendations to a medical executive committee concerning changes to physician workflows and systems, he says.
Conclusion
Overall, the most important part of revamping revenue cycle management is realizing it's not just about installing the new system and walking away, Mr. Atwal says.
"It's not a start-to-finish project but an ongoing project," he says. "It's an iterative process. We're always trying to improve the workflow."
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