From a hospital CFO's perspective, money-saving initiatives help out the hospital's operational budget, but it won't necessarily save the operations. However, there are instances where the budget can be salvaged while additional revenue can also be captured. Janie Patterson, senior vice president of revenue cycle management at Conifer Health Solutions, gives five ways that a hospital CFO can save money and find revenue that perhaps had not been thought about before.
1. Centralize points of registration. An area that is always overlooked is the first thing a patient sees: the hospital registration section. Some hospitals may have up to 20 points of registration, Ms. Patterson says. This overabundance of where patients can check in rips away at both money and efficiency for a hospital. To save money and improve the patient experience, she suggests hospitals reduce those points and create a compact, centralized hub.
2. Consider outsourcing. Capital for investments in hospitals is very limited in non-clinical areas, especially if the hospital is a standalone facility or part of a smaller health system, Ms. Patterson says. These facilities face challenges to leverage scale to make their revenue cycles more efficient, such as investing in new health IT systems.
If hospitals look at outsourcing for some of those challenges and investments, such as billing and food service, they wouldn't have to incur additional costs for temporary staffing, a large money-eater at hospitals. "Outsourcing can take care of investments of technology, leverage scale and receive engagements from a more specialized talent pool of people," Ms. Patterson says.
3. Understand denials management. Most of a hospital's reimbursements are contracted rights, Ms. Patterson says. Government programs like Medicare and managed care companies have set, contracted rates for reimbursement, but a hospital may not always understand how much it should be expecting dollar for dollar due to the large jungle of payor contracts.
Hospitals need to realize or capture additional net revenue through "denials management," Ms. Patterson says. Denials management, more or less, explains the process where a payor gives a certain reimbursement for a particular claim, but it's not the right figure — or there is no reimbursement at all. For example, a contracted rate for a certain procedure warrants a $2,000 reimbursement. The payor only disperses $1,700, but the hospital doesn't realize it was shortchanged $300. Ms. Patterson says hospitals must have adjudication systems in place to monitor contracted rates for different claims. This could lead to finding cash for the bottom line.
4. Collect at point of service. Ms. Patterson says this is an area where hospitals have an opportunity to both reduce bad debt expense and also reduce operating costs. "Whatever dollars that could be collected at the point of service reduces work on the back end," she says.
Hospitals usually are not a patient's top priority if he or she is having financial difficulties, but the best time to ensure collections is at the time of service. Of course, time-of-service collections are not always feasible. For example, people going through the emergency department or patients who have to shell out large out-of-pocket costs due to their health plans can't be expected to pay cash immediately, Ms. Patterson says. However, the longer a bill is left on the books with zero collected initially, the more it dramatically increases a hospital's bad debt figure. Additionally, operational costs are reduced if patients are able to pay in full at the time of service because hospitals would not have to send statements out and provide excessive back-end labor.
5. Conduct zero balance reviews. Zero balance reviews, or checking to see which accounts are paid in full, are essential to the fiscal health and can give hospital CFOs financial insight to their organization's lost net revenue. Whether the hospitals conduct the reviews themselves or lean on outside help, combing through the accounts shows whether they have been paid appropriately. Ms. Patterson notes that some type of adjudication system for accounts receivable can help capture those missed dollars and reduce work on the back end later on.
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1. Centralize points of registration. An area that is always overlooked is the first thing a patient sees: the hospital registration section. Some hospitals may have up to 20 points of registration, Ms. Patterson says. This overabundance of where patients can check in rips away at both money and efficiency for a hospital. To save money and improve the patient experience, she suggests hospitals reduce those points and create a compact, centralized hub.
2. Consider outsourcing. Capital for investments in hospitals is very limited in non-clinical areas, especially if the hospital is a standalone facility or part of a smaller health system, Ms. Patterson says. These facilities face challenges to leverage scale to make their revenue cycles more efficient, such as investing in new health IT systems.
If hospitals look at outsourcing for some of those challenges and investments, such as billing and food service, they wouldn't have to incur additional costs for temporary staffing, a large money-eater at hospitals. "Outsourcing can take care of investments of technology, leverage scale and receive engagements from a more specialized talent pool of people," Ms. Patterson says.
3. Understand denials management. Most of a hospital's reimbursements are contracted rights, Ms. Patterson says. Government programs like Medicare and managed care companies have set, contracted rates for reimbursement, but a hospital may not always understand how much it should be expecting dollar for dollar due to the large jungle of payor contracts.
Hospitals need to realize or capture additional net revenue through "denials management," Ms. Patterson says. Denials management, more or less, explains the process where a payor gives a certain reimbursement for a particular claim, but it's not the right figure — or there is no reimbursement at all. For example, a contracted rate for a certain procedure warrants a $2,000 reimbursement. The payor only disperses $1,700, but the hospital doesn't realize it was shortchanged $300. Ms. Patterson says hospitals must have adjudication systems in place to monitor contracted rates for different claims. This could lead to finding cash for the bottom line.
4. Collect at point of service. Ms. Patterson says this is an area where hospitals have an opportunity to both reduce bad debt expense and also reduce operating costs. "Whatever dollars that could be collected at the point of service reduces work on the back end," she says.
Hospitals usually are not a patient's top priority if he or she is having financial difficulties, but the best time to ensure collections is at the time of service. Of course, time-of-service collections are not always feasible. For example, people going through the emergency department or patients who have to shell out large out-of-pocket costs due to their health plans can't be expected to pay cash immediately, Ms. Patterson says. However, the longer a bill is left on the books with zero collected initially, the more it dramatically increases a hospital's bad debt figure. Additionally, operational costs are reduced if patients are able to pay in full at the time of service because hospitals would not have to send statements out and provide excessive back-end labor.
5. Conduct zero balance reviews. Zero balance reviews, or checking to see which accounts are paid in full, are essential to the fiscal health and can give hospital CFOs financial insight to their organization's lost net revenue. Whether the hospitals conduct the reviews themselves or lean on outside help, combing through the accounts shows whether they have been paid appropriately. Ms. Patterson notes that some type of adjudication system for accounts receivable can help capture those missed dollars and reduce work on the back end later on.
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